Across the Great Divide

Joe Stack: A Terrorist or a Trend?

I'm not going to expend too many pixels on the question of whether Joseph Stack was a terrorist or just a tax-hater for flying his airplane into a building containing IRS offices. He clearly had serial difficulty paying his taxes, based upon the diatribe attributed to him, and maybe that frustration was enough to drive him postal.

Reading between the lines, his troubles may have started when he fell in with a group of people who were convinced the income tax was unconstitutional and believed they had a legal basis for avoiding taxes. The anti-tax extreme has spawned other "martyrs" like Gordon Kahl and Robert Beale.

In the sense Stack bought into and acted on behalf of this movement, he might be considered a terrorist, but I think the truth might be simpler and more disturbing: That he is one of many damaged (financially and emotionally) Americans who attempt to elevate their unresolved personal pain into a grandiose purpose.

And fighting taxes right now is a popular purpose.

In this, he has something in common with the dispossessed young men Muslims who are recruited as suicide bombers. They are fed selective knowledge and myths about immortality and are given a chance at glorious  resolution as they strike a blow at the enemy.

The enemy they hold responsible for their own failures.

In America, the cause becomes Liberty or Freedom. While these sad figures can arise from either end of the political spectrum, those on the right seem now ascendant. The ideas that sustain them are gaining something approaching mainstream credibility. "Taxes are theft!" "It's your money!" "Time to go rogue."

Those media figures, as well as the Palins and Pawlentys who pander to the same audience, help connect personal psychosis to a Great Cause — which makes it more likely some will act out in public instead of in their own garage.

Whether he was connected to a movement or not, Stack may represent a dangerous trend in American political life. Because for all his financial troubles, he didn't have to hijack the airplane he flew into the IRS office.

He owned it.

UPDATE:

And, to be clear, people on both sides are trying to make Stack out as a political figure. They just don't agree whether he was a populist, a communist or a teabagger. I think he was a Stackist, who absorbed anti-government and anti-establishment rhetoric from wherever he found it to shore up his own sense of persecution.

Let's just say Karl Marx isn't getting much play these days, except from the right wing.

Running out of Xs for the XXLs?

Are men the new women?

This is totally unscientific, but I think men's sizes have started to go the way of women's.

Today, I bought a medium basic long-sleeved shirt made from a "performance fabric." Back in the day when I was actually performing, a medium t-shirt fit snugly but not at all constrictingly.

This shirt is not quite baggy, but let's say I could add another 20 pounds to the 20 pounds or so I've added to my marathoning weight before this shirt would fit me like a medium did in the old days.

Weather Hysteria.

I wonder how much overblown forecasts cost the economy.

How many people will miss work, cancel appointments or skip going to movies or out to eat, bag Christmas shopping, etc.?

Because of a prediction. It's "supposed" to snow bigtime.

I know a medical clinic that can't properly serve its patients tomorrow, whether the snow is bad or not, because the courier service that hauls blood tests to  the lab announced its drivers won't work tomorrow.

So patients can't get the right care, doctors and staff waste their time, labs have lower than normal workloads, and on it ripples.

I guess now we should hope it really does sock it to us.

Will Chinese Banks Repeat Our Sins?

In a subscribers-only story, the Wall Street Journal describes a troubling lender practice that Chinese banking regulators are starting to examine more closely.

The banks temporarily sell their loans to Chinese trust companies with a promise to repurchase the loans within a few years. This gives the banks more money to lend, while moving the loans off their balance sheets, making their loan exposure appear less than it is. The trusts repackage the loans into financial instruments for their clients.

If this sounds similar to the mortgage securitization practices in the U.S. that helped pump more money into risky loans, that's because it is similar, although the motivation also appears to be a way to reduce the banks' loan balances at a time when China's regulators are pushing banks to increase reserves to protect against bad loans, the article says.

Instead of being good, the banks are just trying to look good. That usually turns into a mess, whether you are Enron, Bernie Madoff or Tiger Woods.

As I wrote in this piece about the empty villas in one Chinese city, there may be good reason for regulators to be concerned about banks getting overexposed to bad loans.

One reason Chinese banks weren't so badly hurt in financial crisis — those nasty commie regulators wouldn't let them play the games the big boys in the west were playing.

[h/t Fran in Spokane]

Letters and Petters.

Had a letter in the Strib today responding to this. I'll save you the trip and the pop-up ads.

Rep. Keith Downey's "Jobs task force is stirring the wrong pot" (Opinion Exchange, Nov. 10) asserts that state government "has been growing twice as fast as the economy," but by what measure?

In fact, the portion of personal income we invest in services and infrastructure through state and local governments has fallen -- from around 17.5 percent throughout the 1990s to about 15.5 percent in 2008.

Downey also asks us to consider how much smaller our budget would be if only "spending had grown at the healthy rate of inflation plus population growth." Colorado already tried that. Voters and the Republican governor who'd enacted a constitutional amendment limiting budget growth finally cried for a halt to such "healthy" spending restrictions before the Rocky Mountain state hit rock bottom.

Finally, Downey claims "businesses are voting with their feet" because more businesses moved out of Minnesota than moved in. But studies consistently show business migration is a trivial factor in job loss or creation. Using the database Downey cites, Minnesota's net job loss from relocations was only -0.3 percent of the state's total jobs, compared with -0.1 percent for low-tax Florida.

Downey's suggestions about the discussions Minnesotans ought to be having about outcomes are much better and more constructive than his economic analysis.

I don't know that Downey's solutions would be all that great for Minnesota, but he is at least talking about many of the right things when he says "Minnesota businesses don't need gimmicks, handouts or corporate welfare -- but with a level playing field." 

• Tax reform [I think he means down; I mean different]
• Close the achievement gap [Do I hear vouchers?]
• Control dramatically increasing costs in health and human services [With equal or better outcomes, I hope]
• Renew local institutions by reducing the size and control of state government [Unfortunately, shrinking state government contributes to local institutions' troubles]
• Have a plan that focuses on long-term reforms with lasting benefit [Amen]

*****

In the same edition, from the Petters trial, this implied investment tip: Don't take investment advice from a guy you met who was in prison on money-laundering charges.

A witness testified "she felt reassured by seeing merchandise in one of the [Petters Warehouse Direct] stores in her neighborhood."

I'd like to hear from others who have ever set foot in a Petters store and felt anything except a desire never to return. You'd find better merchandising, product quality and selection in your average Halloween Store on November 1st.

Petters: How to Know When He's Cheating.

Apparently some of Tom Petters' business associates never read those popular features on "How to tell your guy is cheating." Or asked a psychic. Or read a book on how to recognize the signs.

In yesterday's fraud trial testimony, one of Petters' dupes described how he "planned to go to California to inspect the inventory [he was asked to invest in], but Petters said no because it was in a locked facility available only to the insurers of the merchandise."

Right. Available to insurers but not investors.

That excuse sounded to me remarkably like what the married guy says to his girlfriend when she wonders why they never spend any time at his place. 

Some of the other behavior sounded familiar, too. For example:

Tells stories that don't make sense. Paul Feehan, GE Capital's manager of corporate lending at the time, testified that he called Petters directly to discuss his company's mounting financial troubles. "I got a series of promises. There was always a new excuse and the excuses kept piling up," he said.

Accuses you of infidelity. Feehan said he and Marrone wrote Costco to check on the inventory of electronics goods that Petters claimed to have bought with the money he borrowed. Petters immediately called back and "read me the riot act," Feehan said. "He was very adamant that I stay away from Costco."

Takes offense when you make normal and natural inquiries and may demand to know why you are checking up. When Colburn told Petters he intended to call the companies that were supposed to sell the TVs, Petters was adamantly opposed. He said Petters left a voice mail message saying, "You won't get the satisfaction that you're looking for."

Lives a changed or more extravagant life style. The dapper Petters funded his philanthropy, gambling and world travel with money from investors.

Signs of unexplainable exhaustion or restlessness. Petters was notoriously fidgety and had a short attention span, so any change there would be in matter of degree.

Hides or “loses” bills. A classic symptom. Instead of hiding paperwork about his transactions, Petters forged it.

Withholds affection and/or sex. When one lender questioned Petters too closely, he terminated the relationship, saying they were too hard to do business with.

Concocts alibis calculated to elicit empathy instead of scrutiny. At one point in August 2008, Petters told one of his investors that he had a family emergency and would repay the investor "within days," the government said, noting that Petters then sent an e-mail to Coleman that said, "Dancing...my sh[o]es have holes i[n] them."

Petters is still dancing. His defense claims he was victimized by others while he was distraught over the death of his son.

Western Union Traveler Scam.

Thank goodness for literate friends. Although we do have this friend away on vacation now, she couldn't possibly have written this message:

Did you get my previous message,I sent you an email some hours ago, I had traveled to Uk for a school seminar,  Unfortunately for me all my money was stolen at the hotel where I  lodged, I am so confused right now, I don't know what to do or where to go,I didn't bring my phone  here, I have access to only emails,Please can you  send me $1500 today through western union  so I can return home , As soon as I get  home I would refund it immediately,Here is the information you need to send the  money to me.
 
Receivers Name:[NAME]
Location/Address: 28, Vauxhall Rd , Boston Lincolnshire , PE21 0JB ,UNITED KINGDOM.
 
As soon as you send the money please scan and send me a copy of the western union receipt or you just send me the mtcn number and the senders full information used when sending the money. I would be waiting.
Best regards,

The address is a pub in the UK. The email was sent to a hijacked yahoo address book, and the reply was to go to a lookalike version of the friend's email. (An extra letter was added to her name to make the reply look legit.)

In addition to the poor punctuation and the too-specific school reference, the writing leaves something to be desired. If I were scamming strangers, I'd go more with something like this.

I feel like an idiot! I left all my stuff in the hotel room today and came back to find everything gone — wallet, cell phone, laptop, even my suitcase. Did I tell you I was going to the UK? Can't remember. Anyway, I'm sitting in the hotel lobby sending this out because I don't know what else to do. I can access email and that's it.

I wouldn't ask this except that I am totally at a loss here. Is there any chance you could wire me some money? I still have a few days in the UK, and was supposed to be in London tomorrow, but with no credit cards, there's no chance of getting there or into my hotel. Even tickets are gone and am not sure if I have to rebook. Is $1500 too much to ask? I can pay you back as soon as I get home.

Best thing, they tell me, is to wire via Western Union here: 28, Vauxhall Rd , Boston Lincolnshire , PE21 0JB ,UNITED KINGDOM. Since I've got no ID, I'll need the Money Transfer Control Number to get the funds, so please email it to me here. 

Thanks, I owe you big time.

I'll be very interested to hear from our friend when she gets back in the U.S.

Killing the Albino: Bachmann and Blood Oaths.

What do pagans, witches, heathens, Mafia, unhinged cultists, Klingons, investment fraudsters, death metal bands and evangelical Congresswomen have in common?

If you are considering joining a group, grove, coven, or magical order, which requires a blood oath, do not take this requirement lightly. There is a reason why it is has the history that it does among criminal brotherhoods, secret societies, martial ryu, and ancient religions.

– Blood Oaths: Making and Breaking Them

R. Allen Stanford’s relationship with the chief regulator of his Antigua bank was closer than most.

At a meeting in 2003, they became blood brothers, cutting their wrists and mixing their blood in a “brotherhood ceremony” that Mr. Stanford’s chief financial officer said promoted an elaborate scheme to hide a multibillion-dollar fraud from American and other regulators.

– ‘Blood Oath’ Sealed Stanford Deal, Court Is Told

The group's greatest adversary, a man known as the Albino, has been located, and the foursome can now fulfill the blood oath they made decades ago to kill him. Dax is unsure of whether or not she can go through with the oath that Curzon made. Kang reminds her that as a Trill, she has no obligation to fulfill what her symbiont promised.

– Star Trek Deep Space Nine, "Blood Oath"

What we have to do today is make a covenant, to slit our wrists, be blood brothers on this thing. This will not pass. We will do whatever it takes to make sure this doesn't pass.

– Rep. Michelle Bachmann

Hal Davis thought maybe the Heaven's Gate cult — Hale Bopp, here we come — might also qualify as blood covenanters, but despite their creepy oathiness, they don't appear to have gone the blood route (voluntary castration doesn't count).

Actually, they sound more like socialists.

They were found lying neatly in their own bunk beds, with their faces and torsos covered by a square, purple cloth. Each member carried a five dollar bill and three quarters in their pockets. All 39 were dressed in identical black shirts and sweat pants, brand new black-and-white Nike Windrunner athletic shoes, and armband patches reading "Heaven's Gate Away Team."

Bachmann is on track with the fact that blood oaths have arisen as a way of fighting government power. But such pacts have a way of going too far. Sicilian resistance to outside rulers was what led to the Mafia, for example. 

And cultism simply doesn't have a great record when it comes to making life better, plus it can be bad for property values. Hal points to the account of Heaven's Gate again:

While the press never knew it, the cult had sent a suicide letter to [the owner of the 9,000-square-foot mansion the cult rented]. The tone of the letter suggested that they were actually doing the owner a favor by creating a famous event that would make the house an invaluable shrine. In reality, after the house was cleared of the bodies and their belongings, significant physical damage remained, which amounted to well over $200,000. Looking for some kind of break, the home owner tried to appeal his property taxes, only to receive a letter in return from the San Diego Assessor's Office that rejected his appeal on the grounds that a mass suicide in his property did not qualify as a disaster. Eventually, he was forced to give the property back to the bank. The bank sold it at a deep discount to a nearby neighbor who promptly had the house bulldozed.

Who Says the Stimulus isn't Creating Jobs?

Hat-tip to Hal Davis, for sending this job posting by Thomson Reuters seeking a financial crimes correspondent [emphasis Hal's].

The successful candidate will take the lead in writing major aspects of the financial crimes story from Washington. The emphasis will be on building strong sources to break news important to investors about U.S. Justice Department and FBI investigations of white-collar crimes growing out of the financial crisis. You will also help to lead a team of other correspondents in Washington, New York and elsewhere who are covering financial crimes within the companies and with correspondents on political and general news teams. You will also coordinate with correspondents and editors around the world, in particular with financial industry centres such as London, Zurich and Hong Kong, often writing cross-border stories. Some travel will be involved as you chase down leads. The beat will include criminal fraud linked to U.S. mortgage and banking schemes and an expected wave of fraud and corruption cases from the federal government's multitrillion-dollar effort to stimulate the economy and bail out weakened banks.

Fiddling While Goldman Sacks America.

For me, the blot of all blots on Pres. Obama's approach to the economy is using the crooks to fix the mess the crooks helped create while allowing the crooks to keep at it.

James Howard Kunstler calls it "Evil Syndicated":

Readers of this blog know I'm allergic to conspiracy theories. But surveying the scene out there, it is hard to not conclude that Goldman Sachs has become the "front-runner" of a criminal syndicate defrauding US taxpayers.  This isn't the first time in American history that business veered into extremely antisocial behavior on the grand scale.  The last quarter of the 19th century was just as bad, with frauds, swindles, sociopathic trusts, and predatory corporations preying on people trying desperately to make an honest living.