Understanding the Evil and Nefarious Schemes of Marketers

Here is truth laid bare...



I was well into my twenties before I had this level of sophisticated understanding of the evil marketing schemes of merchandisers.

Where Truth is Not Wanted

Here is an interview with Elizabeth Warren. She should have been appointed head of the new Consumer Financial Protection Bureau. She got to help set it up, but she isn't going to be allowed to run it. Why? Because she is too honest, too concerned about the bottom 90% of the American public...

Obama Flubs Another One

Back two years ago I excused the "misteps" of Obama to his being new to the job, stressed for so many issues on his plate, and misguided by his aides. But after two and a half years, these "misteps" are regular and recurring, so they are the real deal. This is Obama. He is a centrist who simply ignores the left of his party. He happily used the enthusiasm of the left to get elected, but he has continued to stiff them ever since. The left in the Democratic party need to run their own candidate for President.

Here is more evidence in the form of a post by Paul Krugman in his NY Times blog:

As expected:

President Obama said Sunday that he would nominate Richard Cordray, the former attorney general of Ohio, to lead the new Consumer Financial Protection Bureau, passing over Elizabeth Warren, the Harvard law professor who was the driving force behind the agency’s creation.

Was this a decision that “reflects political realities”, as the report says? Well, the report itself refutes that claim:

While Ms. Warren received the brunt of the scrutiny, Wall Street executives also bristled at the selection of Mr. Cordray to lead the bureau’s enforcement team. Seen as a zealous prosecutor of financial crime, Mr. Cordray is a similarly contentious figure among bankers and lobbyists.

Republicans made it clear on Sunday that they were no more likely to confirm Mr. Cordray than Ms. Warren. Forty-four Republican senators have signed a letter saying they would refuse to vote on any nominee to lead the bureau, demanding instead that the agency replace a single leader with a board of directors.

What’s going to happen, then, is no director for the CFPB in any case. But meanwhile Obama has passed up a chance to symbolically align himself with the public and against the banksters.

Sad. Really sad.

The Republicans are going to fight anybody Obama appoints. The fact that Obama passed over Elizabeth Warren indicates his deep commitment to the Wall Street banks and his failure to lead the country out of the financial mess of the 2008 meltdown. The Consumer Financial Protection Bureau is the one hope of giving ordinary people a chance against the rapacious banks. But Obama has sided with the banks. He will treat this bureau as a sop to the left wing and will never give it the power to rein in the greed of the big banks.

Meet Elizabeth Warren

Business Week has a good article on Elizabeth Warren, here are some key bits:

Elizabeth Warren’s admirers often refer to her as a grandmother from Oklahoma. This is technically true. It’s also what you might call posturing. Warren, 62, is a Harvard professor and perhaps the country’s top expert on bankruptcy law. Over the past four years she has managed to stoke a fervent debate over the government’s role in protecting American consumers from what she sees as the predatory practices of financial institutions, and she has positioned herself as the person to oversee a new federal agency to rewrite the rules of lending. Warren is a grandma from Oklahoma in roughly the same way Ralph Nader is a pensioner with a thing about cars.

...

Warren’s aides say she first pitched the idea of a consumer financial protection agency to then-Senator Barack Obama’s office months before her fateful meeting with the executive. Whatever the idea’s provenance, there’s no doubting its influence. In a summer 2007 article in the journal Democracy, Warren outlined what her guardian agency would look like. “It is impossible to buy a toaster that has a one-in-five chance of bursting into flames and burning down your house,” she wrote. “But it is possible to refinance an existing home with a mortgage that has the same one-in-five chance of putting the family out on the street—and the mortgage won’t even carry a disclosure of that fact to the homeowner.” One was effectively regulated. The other was not.

...

On July 21, exactly a year after Dodd-Frank became law, the CFPB is scheduled to open for business with a broad mandate to root out “unfair, deceptive, or abusive” lending practices. Consolidating functions previously scattered across seven different agencies, the bureau will have the power to dictate the terms of every consumer lending product on the market, from mortgages and credit cards to student, overdraft, and car loans. It will supervise not only banks and credit unions but credit-card companies, mortgage servicers, credit bureaus, debt collectors, payday lenders, and check-cashing shops. Dozens of researchers will track trends in the lending market and keep an eye on new products. Teams of examiners will prowl the halls of financial institutions to ensure compliance. The bureau is already at work on its first major initiative: simplifying the bewildering bank forms you sign when you buy a house.

...

One other person she has not yet won over: Barack Obama. The President has not nominated her to head the bureau. Instead, last fall he gave her the title of special assistant to the President and special adviser to the Treasury and tasked her with getting the place up and running. For now, she is the non-head of a non-agency. The White House refuses to say whether Obama will eventually put her up for the job, allowing only that he is considering several candidates. In the coded language of appointment politics, it is a signal that they are seriously considering passing Warren over for someone else. A White House official says the Administration would like to have a nominee in place before Congress leaves for its August recess.

...

The bureau is less willing to discuss the specifics of what will happen when it finds evidence of wrongdoing. The press office refused to make the head of enforcement, Richard Cordray, available for an interview. Like other enforcement agencies, the CFPB will have a variety of measures at its fingertips: It will be able to give firms a talking-to, or issue so-called “supervisory guidance” papers on problematic financial products. It will be able to send cease-and-desist orders. And if all else fails, the bureau will be able to take offenders to court.

Go read the whole article.

I'm a big fan of Elizabeth Warren. I hope she has the effect that the writers for Business Week think she has. I'm afraid that the banking industry and insurance industry and retail industry, etc. will find ways to cut her off at the knees, disarm her, wrap her proposed agency in red tape, and effectively "deregulate" themselves. They are paying lots of money under the table to buy off the politicians. I don't give the agency much chance to have any real teeth or do anything significant to rein in corrupt business practices. But I desperately hope I'm wrong.

I also believe that centre-right Obama has decided to pull a Caylee Anthony on her, i.e. put duct tape over her mouth and bury her in some swamp to rot. He is too cosy with his business friends to really want this new agency to succeed. It would upset his business "buddies". Who cares that US consumers are raped and robbed. So long as he gives heart-felt speeches and shows his pearly whites at photo-ops, the voters will be too dumb to realize they have been snookered by this "socialist" Obama who is tighter with his business peeps than a pimp is to his "girls".

Debating What's Needed to Fix the US Economy

Charlie Rose has a good round table discussion with Paul Krugman of The New York Times, Jared Bernstein of The Center on Budget and Policy Priorities, David Walker of Comeback America Initiative, and Ken Rogoff of Harvard University. These four broadly agree on what is needed. Watch the video.

What is utterly obvious to me from watching these guys kick ideas around: Barack Obama has failed utterly in providing the necessary leadership to reboot the economy.

Businesses Don't Know What is Good for Them

Here is a bit from an article in The New Yorker by James Surowiecki looking at how politicians and businessmen hate Elizabeth Warren.

While some bankers accept the need for consumer protection, they maintain that the C.F.P.B. will go too far and end up strangling financial innovation. But, over the past century or so, new regulatory initiatives have inevitably been greeted with predictions of doom from the very businesses they eventually helped. Meatpackers hated the Meat Inspection Act of 1906, but it rescued the industry from the aftereffects of the publication of “The Jungle.” Wall Street said that the creation of the S.E.C. would demolish stock trading, but the commission helped make the U.S. the world’s most liquid and trusted stock market. And bankers thought that the F.D.I.C. would sabotage their industry, but it transformed it by effectively ending bank runs. History suggests that business doesn’t always know what’s good for it. And, at a time when Americans profoundly distrust the financial industry, a Warren-led C.F.P.B. could turn out to be the friend that the banks never knew they needed.

Read the whole article to find out who hates Elizabeth Warren and why, e.g.:

The core principle of Warren’s work is also a cornerstone of economic theory: well-informed consumers make for vigorous competition and efficient markets. That idea is embodied in the design of the new agency, which focusses on improving the information that consumers get from banks and other financial institutions, so that they can do the kind of comparison shopping that makes the markets for other consumer products work so well.

Doctors are Now Copyrighting Your Thoughts

The horrors of George Orwell's 1984 are arriving a tad late, 2011 instead of 1984, but they are definitely here. Here is a bit from a story on Ars Technica about a dentist demanding that you sign away rights to any opinions about the service he provides -- he is copyrighting your thoughts as "his property"!!! -- before he will agree to treat you:

When I walked into the offices of Dr. Ken Cirka, I was looking for cleaner teeth, not material for an Ars Technica story. I needed a new dentist, and Yelp says Dr. Cirka is one of the best in the Philadelphia area. The receptionist handed me a clipboard with forms to fill out. After the usual patient information form, there was a "mutual privacy agreement" that asked me to transfer ownership of any public commentary I might write in the future to Dr. Cirka. Surprised and a little outraged by this, I got into a lengthy discussion with Dr. Cirka's office manager that ended in me refusing to sign and her showing me the door.

The agreement is based on a template supplied by an organization called Medical Justice, and similar agreements have been popping up in doctors' offices across the country. And although Medical Justice and Dr. Cirka both claim otherwise, it seems pretty obvious that the agreements are designed to help medical professionals censor their patients' reviews.

The legal experts we talked to said that the copyright provisions of these agreements are probably toothless. But the growing use of these agreements is still cause for concern. Patients who sign the agreements may engage in self-censorship in the erroneous belief that the agreements bar them from speaking out. And in any event, the fact that a doctor would try to gag his patients raises serious questions about his judgment.

I love how lawyers bend and twist things into completely cruel and criminal red tape. A person has a right to their own thoughts. A person has a right to express opinion. "Copyright" was never intended as a vehicle to control opinion. It was meant to protect artists from having their works stolen by publishers who refused to pay for the right to profit from another person's work.

Funny... the legal system does nothing to stop torture and abuse of the law. But it enables idiots like the above dentist to tie up court time on frivolous cases where they are trying to suppress the ability of patients to have a free opinion. Nutty!

The Real Problem with the Media

Dean Baker has a post on his blog Beat the Press that zeros in on the real problem with contemporary media (and probably explains why people are tuning out, stopping subscriptions, and going elsewhere for "news"):

It is difficult to understand why newspaper editors think that their typical readers have more time to evaluate the truth of politicians' claims that reporters who have a full time job to do such things. However these seems to be a widely held view, since so often articles are devoted to telling us what the politicians claim without including any effort to uncover what is true.

Today's he said/she said in the Post and the NYT is about high gas prices. The Democrats are looking to take back tax breaks from the oil industry while the Republicans are pushing to "drill here, drill now." It would have been useful to include a bit of analysis so that readers could judge the likely impacts of the two policies.

There is more. Go read the whole post.

The press presents the news as stenography, not analysis, i.e. "he said/she said" instead of checking facts, explaining motives/intentions, and providing a true account.

The press treats political elections as beauty contests and not as a fight for ideas based on platforms and specific promises. More time is spent on assessments of "chances" to win and "standings in the polls" than on political platforms or specific proposals.

The press treats "the news" as simply the ephemera of today and never bothers to provide historical context, provide real alternative interpretations, and an assessment of future impact.

The press is "fishwrap", i.e. it is a media to sell advertising and the media companies want to spend as little as possible on "news" and focus on selling ads. If this means that a big corporation gets to be treated with gloves by media, well, revenue is the lifeblood of the industry. So you lose a few readers or subscribers. There are plenty more suckers who will mistake the fishwrap for real "news".

Is This a Seminal Moment in American History?

From the August 2009 TED conference...

He claims that consumers are building a better American as they lead the US out of the Great Recession.



It is a lovely story, but I don't believe it. He is an "advertising" guy. He is goo at giving you all you ever wanted to know about dentists, vasectomies, guns, and shark attacks. But I don't think he has uncovered a real new thrust in consumerism.

While I listened to him gush about "mommyverse" from Johnson & Johnson I knew I was listening to an advertising guy. I did a web search. Nothing. If it ever existed it was ephimeral. The J&J I know is the one that in 2010 had factories closed down for scams and quality control problems.

This talk was given 19 months ago, but much has changed. He talks about oil prices down from $150 to a $50-$70 range. Well, they are back up to over $100. He makes a big deal about how consumers were saving more (i.e. getting back to the 10% savings rate). Well, that has ended. It peaked at about 5% and it is headed down again. The fact is that most families are not making good enough wages to save money. It isn't about "discretionary dollars" and the idea to direct them toward socially uplifting causes. It is the scramble to make an inadequate wage cover the necessities.

When I want fables, I'll read Mother Goose and not watch John Gerzema with his feel good "values-driven consumers will make corporations better" stories.

So... to answer the question posed in the header to this posting. No. This is not a seminal moment. It is "more of the same". It is snake oil salesmen selling "the dream" but using Madison Avenue to repackage it and sell it for the umpteenth time to the same poor consumer who wants to believe.