Previous month:
March 2010
Next month:
May 2010

Is the Southern District of New York Wall Street's Patsy?

For decades Bernard Madoff ripped off investors.  He cost many retirees everything.  Although the United States Department of Justice received conclusive proof that Madoff was cheating investors, they did nothing.  They fiddled while old people had their savings burned.  It wasn't until Bernie Madoff made a full confession to the FBI that DOJ moved forward.

Let's flip the script: What happens when Wall Street calls the police on the little guys?  

We haven't forgotten about Sergey Aleynikov, the former Goldman Sachs computer programmer who was arrested 48 hours after Goldman Sachs called the Department of Justice.  

Aleynikov's pound of flesh is not enough for S.D.N.Y. DOJ.  They want Aleynikov to have a cell mate:

A former trader with Societe Generale was arrested and charged with stealing the code from the bank's high-frequency trading program, federal prosecutors said. Samarth Agrawal worked with the high-frequency trade group, which uses a multimillion-dollar computer system to perform sophisticated securities trading within milliseconds.

(Hat tip: Business Insider.)  Two sets of rules: If you're a Wall Street bank, the Southern District of New York will answer your calls.  They will serve as your personal lawyers.  They will file criminal charges in cases that are almost always handed through civil lawsuits.

If you're someone whom Wall Street has robbed, don't bother picking up the phone.

The case is USA v. Agrawal, Docket No. 1:10-mj-00779-UA-1 (indictment currently unavailable).  Wall Street's patsy in the case is:


Thomas G. A. Brown 
U.S. Attorney's Office, SDNY (St Andw's) 
One St. Andrew's Plaza 
New York , NY 10007 
(212) 637-2194 
Fax: (718) 422-1718 
Email: thomas.ga.brown@usdoj.gov 
LEAD ATTORNEY


Procreating is Narcissism

Bryan Caplan is a weird dude who has the goofy-eye look.  There's no doubt he has a character disorder.  He wants to clone himself, because he loves himself:

I confess that I take anti-cloning arguments personally. Not only do they insult the identical twin sons I already have; they insult a son I hope I live to meet. Yes, I wish to clone myself and raise the baby as my son. Seriously. I want to experience the sublime bond I'm sure we'd share. I'm confident that he'd be delighted, too, because I would love to be raised by me. I'm not pushing others to clone themselves. I'm not asking anyone else to pay for my dream. I just want government to leave me and the cloning business alone. Is that too much to ask?

People are attacking him for wanting to clone himself.  Why?  Well, because only a narcissist would love himself so much that he'd want to clone himself.

What about the rest of you parents?  Aren't your narcissists, too?

Isn't procreating an inherently narcissistic act?  

What makes you and your spouse so special that you need to combine your genetic material to create a new living being?  It's not as if there is a shortage of children, and thus we'd hit a huge collective action problem if people stopped breeding.

There is, however, a huge shortage of parents.  Millions of children need adopting.  Many of these children, absent absent intervention vis-a-vis adoption, will be sold into sex slavery.  Best case: Their life is merely miserable as they find themselves in prisons and foster homes and living in poverty.

That procreation is natural is hardly a defense.  Selfishness and self-love are also natural.  When children go unadopted because you and your spouse are so self-involved and special that you must produce your own child, then the self-love becomes anti-social and destructive.

If you want children, adopt.  If you won't adopt, then lay off the people who want to clone themselves.  They aren't any more narcissistic than you are.


Unethical Bedfellows: Goldman Sachs and the United States Department of Justice

"If you don't want to disclose it, it's material." - Gentlemen's Code of Ethics.

Goldman Sachs faces a civil lawsuit for failing to disclose a material fact to an investor.  While Goldman's propaganda agents are attempting to confuse people with immaterial facts, the case against Goldman is crystal clear to anyone with a sense of ethics.

A hedge fund dealer went to Goldman Sachs and said, "I have created an investment that I am certain will lose value.  If I set this investment up correctly, it will lose 100% of its value.  Here is $15 million.  Go sell this to one of your clients."

Goldman Sachs sold the investment to one of its clients.  Goldman Sachs never disclosed that the investment was designed to fail.  

Goldman's client took Goldman at its word: Goldman said this was a thoroughly researched, triple-AAA investment.  Goldman Sachs never disclosed that a hedge fund dealer created it.  Instead, Goldman hired an outside firm to use as a shell for the investment.  Goldman did everything possible to prevent the client from learning the true nature of the investment.

The client lost $1 billion.

Now, we can blah-blah-blah about securities laws, making the issues seem complicated when they are simple.  Under federal securities laws, Goldman Sachs was required to disclose all material facts to its client.  Goldman is going to fight over the definition of materiality.  Hence, the $1,000 an hour blah-blah-blah that Goldman's lawyers will treat everyone to.

Ethics aren't that complicate.  If you don't want to disclose a fact to an investor, there's a good reason: The fact is material.  Otherwise, you'd disclose it, right?

A similar war is ongoing with the United States Department of Justice.  After the head of its Public Integrity Section was found to have withheld material evidence favorable to Senator Ted Stevens, many federal judges started demanding reform.  

Under current federal criminal law, a prosecutor gets to decide whether to disclose evidence to the defense.  A prosecutor must disclose all material, exculpatory evidence.  In other words, if it will help the defense, it must be disclosed.

Anyone with a sense of ethics would realize something very quickly: If you don't want to disclose something, then that something probably is probably material.  After all, prosecutors don't sit on a defendant's confession.  Prosecutors will gladly turn over DNA evidence inculpating a criminal defendant.

Like Wall Street, the United States Department of Justice opposes any real reform.  Under a current proposals, federal prosecutors would be required to do what many state prosecutors have done for years: Disclose everything in your case file other than your own personal thoughts.  

Open-file discovery has been used for years, and works well for everyone involved.  The prosecutor need not agonize over whether something is material.  (Though, again, if you're agonizing, then by definition it is material.)  

It seems that Goldman Sachs and the United States Department of Justice share the same code of ethics - the Ethics of Having No Ethics.


Valor Cannot Be Stolen

In 2005, President George W. Bush signed the Stolen Valor Act.  Under the Stolen Valor Act, it's illegal for a person to wear unearned military rank or medals.  Since the law's enactment, about a dozen posers are indicted each year.  

The Stolen Valor Act sends the wrong message to soldiers.

One cannot steal valor.  That a poser pretends to have done something meaningful does not minimize the accomplishment.  Valor is not something anyone can give you.  

Valor, like self-respect used to be taught as someone you - and only you - possessed.  "When you look in the mirror, what do you see?"  The man or woman looking back at you in the mirror is what mattered.

Today, the opposite is true.  What do others see in you?  What is your brand presence?  What is your persona?  How many hits did your blog get; how many people follow you on Twitter; how many Facebook friends do you have?

We have changed from a society where a person's self-worth was something she determined based on her own acts.  Now, what others deem important is what matters to you.

That some loser wears medals does not diminish a soldier's accomplishments.  An impostor cannot dilute valor if the valor is self-possessed.  An impostor dilutes prestige only when one seeks the validation of others.   

Yet consider the source of the dilution.  Why be upset that other people do not view you as valuable as you'd like them to.  Doesn't that mean you've surrendered yourself to others - that you do not possess true self-respect?


Levi Johnston and the Myth of the Deadbeat Dad

If you really want to witness injustice in America, spend a day in family court.  As the blog's tagline reminds us: Everything you know about family law is a lie.  Let's start with deadbeat dads.

Levi Johnston sired a child with the white-trash daughter of Sarah Palin.  Even though Sarah Palin is taking care of the daughter, and even though Sarah Palin is rich, the 20-year-old man-child has been ordered to pay nearly $2,000 a month in child support.

This $2,000 is not tax deductible.  Moreover, it's not taxable income to the baby's mama.  Although Johnston is paying child support, he is not even allowed to claim the child-tax credit on his tax return.  He pays for everything, and receives nothing.

What was this massive child support payment based on?  Child support payments are based on a combination of truth and judicial magic-making.

Child support is calculated as a percentage of Johnson's six-figure income.  How is that fair?  It might make sense if a child had become accumsted to a certain lifestyle that Johnston had provided.  But the baby never lived with Johnston.  If Johnston only earned $10,000 a year, the child support obligations would be much less.  How is taking a straight percentage of Johnston's income fair to him?  

And what justifies this windfall to Johnston's baby's mama?  Sarah Palin's daughter has a nearly $40,000 a year annuity (the income to her, while a net ascension to wealth, is non-taxable) for allowing a high earn to impregnate her.  Talk about jackpot justice!

It gets much more interesting.  The child support obligation was based on Johnston's 2009 windfall earnings.  In 2009, Johnston earned a substantial amount of money posing for Playgirl.  What if he doesn't earn as much money in 2010?

A man who loses his job runs into the brick walls of imputed income and the Bradley Amendment.

Under family law, a judge may, in her discretion, conclude that Johnston isn't earning enough money or looking hard enough for a job.  Even if Johnston only earns $50,000 in 2010, the judge may impute $100,000 or more in earnings to him.  She then has the power send Johnston to jail as a deadbeat dad.  The decision whether to impute income rests in the sound discretion of the trial court.  If you draw an unfriendly judge, pack a toothbrush.

Then there is the Bradly Amendment (Wiki) to consider.

What if Johnston's loses his job on May 1, 2010.  He asks for a hearing to reduce his child support payments.  Sarah Palin's high-paid and well-connected lawyers can delay a child support hearing for months.

Every day that the Palin's lawyers delay the hearing, child support obligations accrue.  The trial judge may not retroactively reduce accrued child support payments.

Even if in August, 2010, the trial court reduces his monthly payments, Johnston remains liable for $2,000 each month that the hearing was delayed.  With child support payments, the meter is always running, and the fee can never be reduced.

It's easy to see how a man acting in good faith could easily fall behind on his child support obligations.  Could you afford $2,000-a-month child support payments?  Could you fight against well-connected family lawyers?  What if you're ignorant of the Bradley Amendment, unable for afford a lawyer, and fall for the trap of taking the "first available court date"?  

Soon enough you'd have five- or six-figure debts without any way of paying them.  If sent to jail, you'd have an even harder time finding work.  The Bradley Amendment has no exceptions, and would mean that while in jail you'd be gut punched with even more debt.

How would you ever dig yourself out of such a hole?

And so we see that most dead beat dads are not what a anti-male media portrays them to be.  Many deadbeat dads are simply unsophisticated men who lose jobs and then lose in court before being shipped off to jail.  

How is this fair?  How is it misogynistic of me to slay these myths?  

If I'm a misogynist for opposing debtor's prisons: What shall we start calling those of you who support them?


Is Sex Hysteria Anti-Male?

I'd let the picture speak for itself, but suspect that most C&F readers are too sophisticated to know what Twilight is.  Twilight is a book series about teenage boys who are vampires and werewolves.  Grown women read these books.  They stand in line for the latest release.  They stand in line and scream like school girls at the movie premier.  They then call the police when they see a "strange man" walking in the neighborhood or talking to their children.  

And so one is left wondering whether the most recent sex hysteria - calling it sex-offender hysteria is imprecise, as most of the hysteria involves men engaging in normal male bonding - is yet another part of the ongoing War Against Men.

Twilight Moms  


The Myth of Corporate Speech

When Citizens United v. Federal Election Commission (holding that corporations have the right to make campaign contributions) was announced, libertarians went "Wheeeeeeeeee!  Corporations have free speech rights, too!"  As with with most sentiments underlying modern-day libertarianism, the rejoicing was childish.  The latest Goldman Sachs fraud case demonstrates why.

John Paulson & Company paid Goldman Sachs $15 million to fool some investor's to take a sucker's bet.  Paulson created a pile of subprime mortgages that were guaranteed to default.  He then told Goldman, "Tell your clients that I am going to invest in these securities, and need additional investors."  Instead of investing in the securities, Paulson shorted them.  

Now, back to Citizens United:

In 2005, 2007 and 2008, John Paulson & Company spent between $30,000 and $90,000 each year on federal lobbying.  (Details here.)

Furthermore, along with his wife, Jenny, Paulson has contributed more than $213,000 to federal candidates, parties and committees during the past decade, according to a Center for Responsive Politics review of campaign finance reports filed with the Federal Election Commission.

Of that amount, about 60 percent has gone to Republicans and about 40 percent has gone to Democrats.

When regular people - that's libertarians - make a campaign contribution, it means something.  It's a show of support to a candidate.  It is a way of expressing speech: "I believe in this cause." 

When people like John Paulson and his corporation give money to candidates, speech has nothing to do with it.  It's all about buying access.   Thus, Paulson donates money to Democrats and Republicans alike.  Indeed, most monied interests and large corporations donate to both parties.  To a large corporation, it doesn't matter which candidate wins: It only matters that the corporation wins.


Sex Hysteria is Killing Mentorship

I would never coach youth basketball.  When a kid stops to pet my dog, Amicus, I cringe and step away.  I simply want nothing to do with children.  While I'd make a great mentor and would otherwise enjoy volunteering, I never will.  Here's reason number #1,045 why

 The evidence against a Port Authority bus driver accused of fondling a boy while on his route was so scant that an Allegheny County judge on Tuesday not only cleared the man of all charges, he also criticized the district attorney's office for bringing the case in the first place.

So what led to criminal charges being filed against an innocent bus driver?  The man let his son play in his bus:

Instead, Mr. Leffler had taken his son on his route with him that afternoon. The video showed the boy standing in the passenger compartment of the bus next to his dad -- hanging off the bar that separates the driver, playing and acting like he was on monkey bars.

What did a society of sex-obsessed perverts see?

In a criminal complaint, police said that surveillance video from the bus showed sexual activity -- including Mr. Leffler pushing the boy's head toward his lap several times, patting his buttocks, and reaching inside the back of the boy's pants.

I do not consider pedophilia a disease to be treated, and believe a person convicted of child rape should be executed.  A wolf acts with no malice when it rips a child's face off, but acts only to its nature.  That does not mean the wolf should not be segregated from society or put down.  The same applies to pedophiles.  It doesn't matter why you rape a child: That you did rape a child earns you death, or life in a leper's colony. 

Yet we live in a society where perverts outnumber the pedophiles.  The perverts project their own fears and desires onto reality.  A father cannot even bring his own son to work without having a pervert view it as dirty or creepy.

We live in a society where 26% of children are born to single mothers.  The statistics are pretty clear: Children from single family homes are more likely to go to prison.  Children need role models.

In a society of sexual hysteria, a man who volunteers his time helping to make society better is inviting himself into a prison cell.  Sex hysteria is keeping good men home, and in another generation, we're going to see the consequences.  


Feminists Encourage False Rape Accusations Against Men

Many people roll their eyes at the idea that feminism is waging a war against men.  Yet here is what one of the supporters of the Violence Against Women Act said about false rape accusations: 

Catherine Comins, assistant dean of student life at Vassar, also sees some value in this loose use of "rape."...Comins argues that men who are unjustly accused can sometimes gain from the experience. "They have a lot of pain, but it is not a pain that I would necessarily have spared them. I think it ideally initiates a process of self-exploration. 'How do I see women?' 'If I didn't violate her, could I have?' 'Do I have the potential to do to her what they say I did?' Those are good questions."

Isn't that great?  If a man said that a woman can learn from being raped, he'd be irrelevant.  Who here would dare say - in public, anyway - that a woman who gets raped after taking Jell-O shots at a frat house should seriously reconsider her life choices?   

Catherine Comins, however, did not lose her job.  Her close ties with with many Democrat politicians were not undone.  She also helped draft the Violence Against Women Act.