Sunday, November 30, 2014

ANS -- People don’t actually like creativity.

Here is a very interesting article about creativity, and how people don't really like it.  I recommend you read the article, but I cannot recommend that you try to comment at Slate, where it came from.  I have a very negative experience trying to comment there. 
So, I commented on my experience, and here is what I said:

I typed a comment.  Then got a pop-up asking me to sign in -- there was no way to close the pop-up to save what I had written.  So, I figured, they must save it for me.  So, against my will, I signed up.  Then they made me open an account too.  Also against my will, with no way to refuse.  Then, after a long wait, it turns out that they didn't save my post after all, and it's gone. 
Not only will I never try to post here again, but I will warn everyone I know not to trust Slate.  And I am the person who does that -- I tell these stories over and over.  I am your bad publicity nightmare.

Find it here:   

Inside the Box

People don't actually like creativity.

By Jessica Olien

Illustration by Rob Donnelly

In the United States we are raised to appreciate the accomplishments of inventors and thinkers­creative people whose ideas have transformed our world. We celebrate the famously imaginative, the greatest artists and innovators from Van Gogh to Steve Jobs. Viewing the world creatively is supposed to be an asset, even a virtue. Online job boards burst with ads recruiting "idea people" and "out of the box" thinkers. We are taught that our own creativity will be celebrated as well, and that if we have good ideas, we will succeed.

It's all a lie. This is the thing about creativity that is rarely acknowledged: Most people don't actually like it. Studies confirm what many creative people have suspected all along: People are biased against creative thinking, despite all of their insistence otherwise.

"We think of creative people in a heroic manner, and we celebrate them, but the thing we celebrate is the after-effect," says Barry Staw, a researcher at the University of California–Berkeley business school who specializes in creativity.

Staw says most people are risk-averse. He refers to them as satisfiers. "As much as we celebrate independence in Western cultures, there is an awful lot of pressure to conform," he says. Satisfiers avoid stirring things up, even if it means forsaking the truth or rejecting a good idea. 

Even people who say they are looking for creativity react negatively to creative ideas, as demonstrated in a 2011 study from the University of Pennsylvania. Uncertainty is an inherent part of new ideas, and it's also something that most people would do almost anything to avoid. People's partiality toward certainty biases them against creative ideas and can interfere with their ability to even recognize creative ideas.

A close friend of mine works for a tech startup. She is an intensely creative and intelligent person who falls on the risk-taker side of the spectrum. Though her company initially hired her for her problem-solving skills, she is regularly unable to fix actual problems because nobody will listen to her ideas. "I even say, 'I'll do the work. Just give me the go ahead and I'll do it myself,' " she says. "But they won't, and so the system stays less efficient."

In the documentary The September Issue, Anna Wintour systematically rejects the ideas of her creative director Grace Coddington, seemingly with no reason aside from asserting her power.

Social rejection is not actually bad for the creative process­and can even facilitate it.

This is a common and often infuriating experience for a creative person. Even in supposedly creative environments, in the creative departments of advertising agencies and editorial meetings at magazines, I've watched people with the most interesting­the most "out of the box"­ideas be ignored or ridiculed in favor of those who repeat an established solution.

"Everybody hates it when something's really great," says essayist and art critic Dave Hickey. He is famous for his scathing critiques against the art world, particularly against art education, which he believes institutionalizes mediocrity through its systematic rejection of good ideas. Art is going through what Hickey calls a "stupid phase."

In fact, everyone I spoke with agreed on one thing­unexceptional ideas are far more likely to be accepted than wonderful ones.

Staw was asked to contribute to a 1995 book about creativity in the corporate world. Fed up with the hypocrisy he saw, he called his chapter " Why No One Really Wants Creativity." The piece was an indictment of the way our culture deals with new ideas and creative people:
In terms of decision style, most people fall short of the creative ideal … unless they are held accountable for their decision-making strategies, they tend to find the easy way out­either by not engaging in very careful thinking or by modeling the choices on the preferences of those who will be evaluating them.

Unfortunately, the place where our first creative ideas go to die is the place that should be most open to them­school. Studies show that teachers overwhelmingly discriminate against creative students, favoring their satisfier classmates who more readily follow directions and do what they're told.

Even if children are lucky enough to have a teacher receptive to their ideas, standardized testing and other programs like No Child Left Behind and Race to the Top (a program whose very designation is opposed to nonlinear creative thinking) make sure children's minds are not on the "wrong" path, even though adults' accomplishments are linked far more strongly to their creativity than their IQ. It's ironic that even as children are taught the accomplishments of the world's most innovative minds, their own creativity is being squelched.

All of this negativity isn't easy to digest, and social rejection can be painful in some of the same ways physical pain hurts. But there is a glimmer of hope in all of this rejection. A Cornell study makes the case that social rejection is not actually bad for the creative process­and can even facilitate it. The study shows that if you have the sneaking suspicion you might not belong, the act of being rejected confirms your interpretation. The effect can liberate creative people from the need to fit in and allow them to pursue their interests.

Perhaps for some people, the pain of rejection is like the pain of training for a marathon­training the mind for endurance. Research shows you'll need it. Truly creative ideas take a very long time to be accepted. The better the idea, the longer it might take. Even the work of Nobel Prize winners was commonly rejected by their peers for an extended period of time.

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I think people tend to discount the hard work required to demonstrate that something creative has merit. Creative people want credit just for coming up with something different, before it has been tested and proven.  More...


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Most people agree that what distinguishes those who become famously creative is their resilience. While creativity at times is very rewarding, it is not about happiness. Staw says a successful creative person is someone "who can survive conformity pressures and be impervious to social pressure."

To live creatively is a choice. You must make a commitment to your own mind and the possibility that you will not be accepted. You have to let go of satisfying people, often even yourself.

Jessica Olien is a writer and illustrator living in Brooklyn, N.Y. You can follow her on Twitter at @jessicaolien.

Tuesday, November 18, 2014

ANS -- Hydrogen Cars Join Electric Models in Showrooms

Here's the latest on hydrogen cars.  They are arriving. 
find it here:   

A Road Test of Alternative Fuel Visions

Hydrogen Cars Join Electric Models in Showrooms


LOS ANGELES ­ Remember the hydrogen car?

A decade ago, President George W. Bush espoused the environmental promise of cars running on hydrogen, the universe's most abundant element. "The first car driven by a child born today," he said in his 2003 State of the Union speech, "could be powered by hydrogen, and pollution-free."

That changed under Steven Chu, the Nobel Prize-winning physicist who was President Obama's first Secretary of Energy. "We asked ourselves, 'Is it likely in the next 10 or 15, 20 years that we will convert to a hydrogen-car economy?'" Dr. Chu said then. "The answer, we felt, was 'no.' " The administration slashed funding for hydrogen fuel cell research.

Attention shifted to battery electric vehicles, particularly those made by the headline-grabbing Tesla Motors.

The hydrogen car, it appeared, had died. And many did not mourn its passing, particularly those who regarded the auto companies' interest in hydrogen technology as a stunt to signal that they cared about the environment while selling millions of highly profitable gas guzzlers.

Except the companies, including General Motors, Honda, Toyota, Daimler and Hyundai, persisted.

After many years and billions of dollars of research and development, hydrogen cars are headed to the showrooms.

Hyundai has been leasing the hydrogen-powered Tucson sport utility, which it describes as the world's first mass-produced fuel cell car, since June, for a $2,999 down payment, and $499 a month. (That includes the hydrogen. A lease on a gas-powered Tucson is about half as much.) This week, Toyota is introducing a sedan called Mirai, which means "future" in Japanese.

"It's a no-brainer that I think the next evolution is to go to fuel-cell based technologies," said Nihar Patel, the vice president for North American business strategy at Toyota, at a conference here last week.

The Mirai will go on sale in California this year for $57,500 ­ cheaper than the Tesla Model S.

California is spending millions of dollars to build hydrogen fueling stations, aiming to increase the network from nine today to 50 by the end of next year, mostly around Los Angeles and the San Francisco Bay Area. Japan and Germany, two other early markets for hydrogen cars, are building a similar number of stations.
Continue reading the main story

Hydrogen Powered

The major components of the Toyota Mirai, a hydrogen-powered car.


Manages the fuel cell stack and battery.


Stores energy from deceleration.


Runs on electricity from the fuel stack and the battery.


Generates electricity from hydrogen fuel.


Stores hydrogen fuel under high pressure.
Image by Toyota

By The New York Times

"We really believe that we're at a turning point here," Mr. Patel said.

The combustion of one gallon of gasoline releases almost 20 pounds of carbon dioxide. In 2012, some 1.8 billion tons of carbon dioxide were discharged by cars and trucks in the United States, or more than a quarter of the nation's greenhouse gas emissions. Concerns about climate change are intensifying discussions about alternatives to gasoline and diesel engines.

Battery electric cars and fuel cell cars are, at their cores, both electric cars with the inherent advantages of electric motors ­ jack rabbit acceleration, near silence and zero tailpipe emissions of greenhouse gases.

The difference is where the electricity comes from.
Continue reading the main story

Instead of storing their charge in batteries, the fuel cells in hydrogen cars are miniature power plants, generating a flow of electricity in the chemical reaction of combining hydrogen and oxygen into water. The oxygen comes from the air; the hydrogen, compressed at 10,000 pounds per square inch, is stored in tanks.

The exhaust from the tailpipe? Water that is clean enough to drink.

Toyota officials talk of selling a "portfolio" of vehicles that includes hybrids and battery electric cars. But hydrogen fuel cells are front and center.

Not surprisingly, the strategy has its critics, particularly from competing Tesla. Elon Musk, the billionaire chief executive of Tesla, mocks fuel cells as "fool cells" that will lose in the marketplace to battery electric cars like his. Battery electrics are more efficient than fuel cells and are cheaper to operate. And there are currently many more places to plug in than places to top off a tank of hydrogen.

But battery electric cars have major technological shortcomings, too. They take time to recharge, they do not go as far as hydrogen cars between refueling, and the batteries required for larger vehicles make building them impractical, because the current lithium-ion batteries simply cannot hold enough energy to take larger vehicles over longer distances.

In California, Toyota sells an electric Rav4 sport utility vehicle that is powered by Tesla batteries and has a range of only 103 miles. That collaboration was limited to 2,600 vehicles and ends this year.

After a point, adding more batteries has diminishing returns; the additional power just goes to lugging the additional weight.

That is why most battery electric cars have been small, like the Nissan Leaf, aimed at commuters. For batteries to be practical in minivans, pickup trucks and larger S.U.V.s, "the next chemistry has to be better," said Craig Scott, the manager of advanced technologies at Toyota USA. "No one even knows what that chemistry is."

Hydrogen fuel cells readily scale up, even to trucks and buses.

A kilogram of hydrogen contains as much chemical energy as a gallon of gasoline, but fuel cells are more efficient than internal combustion engines, so fuel-cell cars like the Mirai have a 300-mile range, comparable to present-day gasoline cars. Filling up at a hydrogen pump takes about the same few minutes as filling a tank of gas, instead of hours plugged in to an outlet. Even Tesla's high-powered superchargers need 20 minutes to give a Model S half a charge.

"It's the technology that lets people act the way they normally drive without making any compromises," Mr. Scott said.

The questions surrounding hydrogen fuel cells have always been "How expensive?" and "Where does the hydrogen come from?"
Ed Heydorn with a hydrogen-powered Hyundai Tucson at a station in front of a wastewater-treatment plant in Fountain Valley, Calif. Hydrogen is generated there from human waste. Credit Mike Danese

Building a fuel cell small enough to fit in a car, operate for years and not cost a million dollars posed challenges that the carmakers say they have conquered.

A fleet of 119 fuel cell-powered Chevrolet Equinoxes that General Motors introduced as a demonstration project in 2007 has covered more than three million miles, with the odometers on some of the vehicles passing 120,000 miles.
Continue reading the main story Continue reading the main story
Continue reading the main story

"Since 2010, we've gotten to where we've checked off most of the technological challenges," said Charles E. Freese, the head of G.M.'s fuel cell efforts.

The cost has come down, too, in large part from reducing the amount of expensive platinum required. The platinum is used as a catalyst to bring the oxygen and hydrogen together.

Mr. Patel said the fuel cell in the Toyota Mirai was smaller than the previous generation and 95 percent cheaper.

Nonetheless, Toyota likely will lose money on each Mirai it sells, but it also initially lost money on the Prius, its now-successful electric-gasoline hybrid.

The fuel-cell market will start small. Toyota said it could build 700 Mirais next year. Hyundai said its production line has the capacity to build a few hundred fuel-cell Tucsons a year. About 60 Tucsons will be leased in Southern California by the end of the year.

As economies of scale grow and the technologies improve, the hope is that fuel cell cars will follow the trajectory of the Prius, which evolved from a money-losing oddball to a profitable mainstream offering. "If that's an example of a test, we want to repeat that test going forward," Mr. Patel said.

Some of the most vociferous objections to hydrogen cars have been made over environmental concerns.

In an interview with MIT Technology Review in 2009, Dr. Chu said fuel cell cars needed "four miracles," including an economical, renewable source of hydrogen. Most hydrogen today comes from stripping hydrogen atoms off natural gas molecules. That produces carbon dioxide as a byproduct and undercuts the goal of reducing greenhouse gases. Solar-powered electrolyzers to split water into hydrogen and oxygen would eliminate greenhouse gases but would be more expensive.

Hydrogen advocates say that in California, where a large percentage of electricity already comes from solar and wind, hydrogen cars would help reduce greenhouse gas emissions. But electric-battery supporters dispute that analysis and say bigger gains would come from putting the electricity directly into batteries.

Skeptics also doubt that billions of dollars would be spent building a nationwide hydrogen infrastructure.

Dr. Chu, now a professor at Stanford University, is still among the skeptics ­ he, like Mr. Musk, sees electric batteries as the more promising path. But he said advances in solar and wind technologies made producing hydrogen by splitting water more economical. "I began to see more possibilities of clean hydrogen production," he said in an interview last month.

Other technologies could emerge, too. A hydrogen station in Fountain Valley, about 45 minutes from downtown Los Angeles, is in front of a wastewater treatment plant, because the hydrogen comes from human waste.

After bacteria digest what has been flushed down toilets to produce a mix of carbon dioxide and methane, the gases are cleaned up and fed to a different type of fuel cell that produces electricity, heat and hydrogen, and the hydrogen is piped to the pump.

That demonstration project, producing about 200 pounds of hydrogen a day, helps fulfill California's mandate that a third of the hydrogen for cars come from renewable sources.

Scott Samuelsen, the director of the National Fuel Cell Research Center at the University of California, Irvine, said some drivers reported, given the cycle of human waste to energy, "There is something comforting about fueling here, that they are actually contributing to the fuel."

A version of this article appears in print on November 18, 2014, on page D1 of the New York edition with the headline: A Road Test of Alternative Fuel Visions. Order Reprints |Today's Paper | Subscribe

Saturday, November 15, 2014

ANS -- Rosebud Sioux Tribe: House Vote in Favor of Keystone XL Pipeline an Act of War

Here's an interesting development.  The Sioux really don't want that Keystone Pipeline to go through their land.  What happens next?  Very short article.
Find it here:   

Rosebud Sioux Tribe: House Vote in Favor of Keystone XL Pipeline an Act of War


By Mark Hefflinger - November 15, 2014
Tagged Keystone XL, Rosebud Sioux

Rosebud Sioux Tribe chairman Cyril Scott at the People's Climate March in New York City on Sept. 21, 2014 (Photo by Jenna Pope)

For Immediate Release: November 14, 2014

Contact: Aldo Seoane, 855-942-2669 Ext 701
Wica Agli / Rosebud Sioux Tribe

Rosebud Sioux Tribe: House Vote in Favor of the Keystone XL Pipeline an Act of War

Rosebud, SD – In response to today's vote in the U.S. House of Representatives to authorize the Keystone XL tar sands pipeline, the Rosebud Sioux Tribal president announced that the Rosebud Sioux Tribe (Sicangu Lakota Oyate) recognizes the authorization of the this pipeline as an act of war.

The tribe has done its part to remain peaceful in its dealing with the United States in this matter, in spite of the fact that the Rosebud Sioux Tribe has yet to be properly consulted on the project, which would cross through tribal land, and the concerns brought to the Department of Interior and to the Department of State have yet to be addressed.

"The House has now signed our death warrants and the death warrants of our children and grandchildren. The Rosebud Sioux Tribe will not allow this pipeline through our lands," said President Cyril Scott of the Rosebud Sioux Tribe.

"We are outraged at the lack of intergovernmental cooperation. We are a sovereign nation and we are not being treated as such. We will close our reservation borders to Keystone XL. Authorizing Keystone XL is an act of war against our people."

In February of this year, the Rosebud Sioux Tribe and other members of the Great Sioux Nation adopted tribal resolutions opposing the Keystone XL project.

"The Lakota people have always been stewards of this land," added President Scott. "We feel it is imperative that we provide safe and responsible alternative energy resources not only to tribal members but to non-tribal members as well. We need to stop focusing and investing in risky fossil fuel projects like TransCanada's Keystone XL pipeline. We need to start remembering that the earth is our mother and stop polluting her and start taking steps to preserve the land, water, and our grandchildren's future."

The Rosebud Sioux Tribe, along with several other South Dakota Tribes, stand together in opposition to risky and dangerous fossil fuel projects like TransCanada's Keystone XL. The proposed route of TransCanada's Keystone XL pipeline crosses directly through Great Sioux Nation (Oceti Sakowin) Treaty lands as defined by both the 1851 and 1868 Fort Laramie Treaties and within the current exterior boundaries of the Rosebud Sioux Reservation and Cheyenne River Sioux Reservation.

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Friday, November 14, 2014

ANS -- The Dutch Village Where Everyone Has Dementia

This is an upbeat story of a new way to treat patients with dementia and Alzheimers.  We couldn't do it in the US because of fundamentalist capitalism, but it's a lovely idea for a more sane place. 
Find it here:   

The Dutch Village Where Everyone Has Dementia

The town of Hogeway, outside Amsterdam, is a Truman Show-style nursing home.
Josh Planos Nov 14 2014, 7:20 AM ET
Gabriel Rocha/Flickr

When Yvonne van Amerongen received a phone call from her mother two decades ago, relaying that her father had died of a heart attack­sudden and painless­one of the first things she thought was, Thank God he never had to be in a nursing home.
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Van Amerongen was working as a staff member at a traditional Dutch nursing home at the time, getting a front-line view of what she never wanted for her parents. That call from her mother spurred Yvonne into action as she became committed to making nursing homes more livable and less of a departure from reality for their residents. She envisioned a setup as far away as possible from the nondescript buildings and polished floors of her workplace, where everything carried the scent of a dentist's medical cabinet. Over the next 20 years, she worked to secure the funding she'd need to make the idea a reality.

Today, the isolated village of Hogewey lies on the outskirts of Amsterdam in the small town of Wheesp. Dubbed "Dementia Village" by CNN, Hogewey is a cutting-edge elderly-care facility­roughly the size of 10 football fields­where residents are given the chance to live seemingly normal lives. With only 152 inhabitants, it's run like a more benevolent version of The Truman Show, if The Truman Show were about dementia and Alzheimer's patients. Like most small villages, it has its own town square, theater, garden, and post office. Unlike typical villages, however, this one has cameras monitoring residents every hour of every day, caretakers posing in street clothes, and only one door in and out of town, all part of a security system designed to keep the community safe. Friends and family are encouraged to visit. Some come every day. Last year, CNN reported that residents at Hogewey require fewer medications, eat better, live longer, and appear more joyful than those in standard elderly-care facilities.
There are homes resembling the 1950s, 1970s, and 2000s, accurate down to the tablecloths.

There are no wards, long hallways, or corridors at the facility. Residents live in groups of six or seven to a house, with one or two caretakers. Perhaps the most unique element of the facility­apart from the stealthy "gardener" caretakers­is its approach toward housing. Hogeway features 23 uniquely stylized homes, furnished around the time period when residents' short-term memories stopped properly functioning. There are homes resembling the 1950s, 1970s, and 2000s, accurate down to the tablecloths, because it helps residents feel as if they're home. Residents are cared for by 250 full- and part-time geriatric nurses and specialists, who wander the town and hold a myriad of occupations in the village, like cashiers, grocery-store attendees, and post-office clerks. Finances are often one of the trickier life skills for dementia or Alzheimer's patients to retain, which is why Hogewey takes it out of the equation; everything is included with the family's payment plan, and there is no currency exchanged within the confines of the village.

Residents are only admitted if they're categorized as having "severe cases of dementia or Alzheimer's disease." Vacancies are rare, given that a spot only opens when a current resident passes away, and the village has operated virtually at full capacity since it opened in 2009. Hogewey was primarily funded by the Dutch government and cost slightly more than $25 million to build. The cost of care is nearly $8,000 per month, but the Dutch government subsidizes the residents­all of whom receive private rooms­to varying degrees; the amount each family pays is based on income, but never exceeds $3,600.

To put it into perspective, a private room at a U.S. nursing home cost an average of $248 per day in 2012, or more than $90,500 annually­a figure that's even more staggering when applied to the rapid increase in dementia patients globally. By 2030, the number of people suffering from dementia around the world is expected to hit 76 million, which some estimate will cause an 85 percent increase in dementia-related healthcare costs worldwide. By 2050, the U.S. alone will pay a projected $1.2 trillion.

Often, nursing homes are linked to poor quality of life for their residents: Issues of patient mistreatment and low levels of morale have plagued U.S. assisted-living facilities, and a recent report from the Dutch Alzheimer's Association found that nursing-home residents in the Netherlands go outside for an average of just 96 seconds per day. By contrast, Hogewey's staff promotes an active lifestyle for residents.

"The environmental approaches to reducing both cognitive and behavioral problems associated with dementia are really the key to improving quality of life for these patients without excess medication," Dr. Paul Newhouse, director of Vanderbilt University's Center for Cognitive Medicine, told ABC News in 2012.

The act of engaging in community isn't just about promoting better healthcare; it's about developing a more personable and comprehensive way of treating disease. Often those with the most severe mental-health issues end up being isolated, so that less complicated cases can benefit from institutional resources. However, a study from the journal Nature Neuroscience found that isolation actually reduces the production of myelin­a fiber that maintains our nerve cells­meaning these segregating treatments may only make mental illness worse. The countless studies reinforcing how many dementia patients feel lonely or isolated, juxtaposed with Hogewey's considerable success with these residents, call into question how much of dementia is a result of disease, and how much is a result of how we treat it.

In traditional nursing homes, with their clinical appearance, the situation is openly communicated to residents­you're sick, you can't take care of yourself, you're forgetting things again. But in Hogewey, the residents live in a place that looks and feels like home, even though it's not; what others know to be a fa├žade, they see as reality, which may help them to feel normal even in the midst of their disease. Psychologist Donald Spence defines the concept of "narrative reality" as the ways in which stories and places help link the "true" world to one that a person is better able to understand, using storytelling as a vehicle to understand the truth­you're in a place that's holistically normal, you're not lost, etc.
How much of dementia is a result of disease, and how much is a result of how we treat it?

In the years since Hogewey's founding, dementia experts from the United States, United Kingdom, Ireland, Germany, Japan, Norway, Switzerland, and Australia have all flocked to the unassuming Dutch town in the hopes of finding a blueprint for handling the global problem. While dementia-only living facilities have been created outside the Netherlands, none of them have offered the amenities or level of care per patient that Hogeway provides. Last year, inspired by Hogewey, a nursing home in Fartown, England, built a 1950s village for its residents; a similar project is underway in Wiedlisbach, Switzerland. But because cost is one of the greatest barriers to making self-contained villages the standard in dementia care, it would be extremely difficult to implement in a non-socialized healthcare system­meaning that in the U.S., a facility like Hogewey might be impossible for the forseeable future.

A few years ago, I watched my grandmother's memory erode in a nursing home of the kind that Yvonne van Amerongen had tried to get away from. My grandmother had the medicine cabinet of a septuagenarian, and the progression of her dementia was predictable and not altogether different from the experience of numerous others. But she spent her last days in a nondescript building where doctors told her what she wasn't, rather than what she was. She couldn't live on her own, but she decimated us at Scrabble (like always) a few days before she passed away.

Glimpses of lucidity like that make the relatives of people with dementia yearn for an environment built around life rather than death. Hogewey hasn't found a cure for dementia, but it's found a path that's changing ideas of how to treat those who can no longer take care of themselves.

"This is a terrible disease, but this place makes me a little less scared of it," Elly Goedhart, the daughter of a Hogewey resident, told Time in February.

Sometimes it truly does take a village.

Friday, November 07, 2014

ANS -- Democratic Strategies Lost Big. Here's an Alternative.

Here is a good short article about what the Dems should have done, and should do, by George Lakoff.  He really makes sense.  You should read it, and start practicing it.  (Easier said than done.)
Find it here:   

Democratic Strategies Lost Big. Here's an Alternative.

By George Lakoff, Reader Supported News

07 November 14


[] t is time to shine a light on the strategies used by Democrats, and on the Democratic infrastructure that uses those strategies.

Democratic strategists have been segmenting the electorate and seeking individual self-interest-based issues in each electoral block. The strategists also keep suggesting a move to the right. This has left no room for the Democrats to have an overriding authentic moral identity that Americans can recognize.

Those strategists form an infrastructure that all Democrats have come to depend on; not just the candidates, but also the elected officials, Democrats in government, and citizens who either do, or might, find progressive policies morally and practically right. The strategic infrastructure includes PR firms, pollsters, consultants, researchers, trainers, communication specialists, speechwriters, and their funders.

It is an important and powerful infrastructure and we all depend on it. I believe it is vital to separate this infrastructure from the strategies it has been using. I believe the strategies can be greatly improved so as to give a true, deep, and moral picture of what progressive politics is about -- one whose content and authenticity will resonate with, and inspire, a majority of Americans.

I have just published a book about how to do this: The All New Don't Think of an Elephant! It is an updated and much expanded version of the original, which introduced the concept of conceptual framing, which is about ideas, not just about slogans. The present book includes what I have learned over the past decade by bringing to bear results in my academic discipline, the Brain and Cognitive Sciences. The book is short, easy-to-read, and inexpensive.

At this point, some details are in order. Here is what is widely done according to present strategies. Not everyone uses all of these, but most are common.
  • Use demographic categories to segment the electorate, categories from the census (race, gender, ethnicity, age, marital status, income, zip code), as well as publicly available party registration.
  • Assume uniformity across the demographic categories. Poll on which issues are "most important," e.g., for women (or single women), for each minority group, for young people, and so on. This separates the issues from one another and creates "issue silos." It does not include segmentation for moral worldviews that differ between conservatives and progressives.
  • Assume language is neutral and that the same poll questions will have the same meaning for everyone polled. In reality, language is defined relative to conceptual frames. And the same words can be "contested," that is, they can have opposite meanings depending on one's moral values.
  • Assume that people vote on the basis of material self-interest and design different message to appeal to different demographic groups. In reality, poor conservatives will vote against their material interests when they identify with a candidate and his or her values.
  • In polling, apply statistical methods to the answers given in each demographic group. This will impose a "bell curve" in the results. The bell curve will impose a "middle" in each case.
  • Assume that most voters are in the middle imposed by the bell curve. Move to the middle. If your beliefs are on the left of the "middle," move to the right to be where most voters are. You will be helping conservatives, by supporting their beliefs. And you may ne saying things you don;tje
  • Check the polls to see how popular the present Democratic president is; if he is not popular, design you message to dissociate yourself from the president. It will reinforce the unpopularity of the president when members of his own party, as well as the opposition, disown him.
  • Attack your opponents as being "extremists" when they hold views typical of the far right. This will help your opponents, as they will appear standing up for what they believe in among those of their constituents that share any of those views.
  • Attack your opponents for getting money from rich corporations or individuals. This will help your opponent among Republicans (and some Democrats) who respect the values of the wealthy and successful.
  • Argue against your opponents by quoting them, using their language and negating that language. Negating a frame reinforces the frame, as in the sentence "Don't think of an elephant!" This practice will mostly reinforce the views of your opponent.

Such strategies miss the opportunity to present an overriding moral stand that fits the individual issues, while saying clearly what ideals Democrats stand for as Democrats. There happens to be such an overriding ideal that most Democrats authentically believe in.

I work in the brain and cognitive sciences. I study how people think and how language works. The most basic result is that most thought is unconscious -- about 98 percent (a reasonable ballpark figure). My job here is to do my best to make the unconscious conscious. Here goes!

All politics is moral. When a politician says to do something, he is implicitly claiming that it is the right thing to do. No politician will over say, do what I say because it's wrong -- pure evil! None will ever say, "Do what I say, though it doesn't matter." When politicians' policy prescriptions differ widely, it is because their sense of what is right is very different. In short, they have different moral systems. That is true of progressives and conservatives alike. The political proposals conservatives and progressives make are based on different moral systems.

Progressive and conservatives have very different understandings of democracy. For progressives, empathy is at the center of the very idea of democracy. Democracy is a governing system in which citizens care about their fellow citizens and work through their government to provide public resources for all. In short, in a democracy, the private depends on the public.

Elizabeth Warren says it out loud. If you have a business it depends on public resources: roads, bridges, the Interstate highway system, sewers, a water supply, airports and air traffic control, the Federal Reserve, a patent office, public education for your employees, public health, the electric grid, the satellite communication system, the Internet, and all the government research behind computer science. You can't run a business without these. Private enterprise depends on the public.

The same is true of individuals, who depend on public resources like clean air, clean water, enough food, safe food and products, public safety, access to education and health care, housing, employment -- as well as those roads, bridges, sewers, satellite communication, electric grid, and so on. And most important -- voting in free elections, choosing the government to provide those resources. Private life depends on the public.

What public resources provide is freedom. Most progressive issues are freedom issues.
    Voting: Without the ability to vote in free elections you are not free.
  • Health: If you get cancer or even break a leg and don't have health care, you are not free.
  • Education: Without education, you lack the knowledge and skills not just to earn a decent living, but also to even be aware of the possibilities of life. Without education, you are therefore not free.
  • Women: If you are denied control over your body, you are not free.
  • Marriage: If you are in love and are denied the ability to marry with a publicly declared lifetime commitment, you are not free.
  • Vast income inequality: When the economic gains that most people have worked for go not to those who worked for them, but only to the wealthiest of the wealthy, those who did the work -- most people -- are not free.
  • Race: When you are treated with suspicion and disdain, you are not free.
  • Corporate Control: When corporations control your life for their benefit and not yours, you are not free.
  • Privatization: When significant public resources become owned or controlled by private corporations, the public has lost an essential element of freedom.

And one more, which had a major effect in the 2014 election:
  • Fear: When you are emotionally gripped by fear, you are not free.

As FDR pointed out, Freedom From Fear is a vital freedom. In the 2014 election, conservatives played on fear -- of Isis and Ebola.

Every progressive instinctively knows all this, but very few say it. Instead, progressives tend to talk not about such values, but instead about facts, policies, and programs.

Conservatives, on the other hand, have a very different view of democracy. For them democracy is supposed to provide them with the liberty to do what they want, without being responsible for others and without others being responsible for them. For them, there is only personal responsibility, not social responsibility. Indeed, providing public resources is, to a conservative, immoral, taking away personal responsibility, making people dependent, lazy, unable to take care of themselves. Removing public resources is seen as providing incentives, and individual liberty is seen as the condition in which you can carry out your incentives.

This is very much what conservative morality is about. If you cannot succeed through personal responsibility, you deserve what you get.

But these are not just two equally valid, though opposite, moral systems. Because the private really does depend on the public, because personal responsibility without public resources gets you nowhere, the conservative view of democracy has radically false consequences. It is immoral because it lacks empathy, but it also just plain false.

If Cartesian rationalism were true, we wouldn't be in the mess we're in. If all reason were conscious, and if being human were, by definition, being a rational animal, and if rationality were logic, then the facts would set us all free. But human reason doesn't work that way. We use embodied brains, whose neural structures constitute frames and conceptual metaphors.

All thought is physical. We think using the neural systems in our brains. Thought works by frames -- neural circuitry that we use to comprehend the world. The sad fact is that we can only understand what our brains allow us to understand. As a result, just pointing out the facts to conservatives cannot work. Facts are crucial, but they make sense primarily relative to their moral importance.

Our hope lies in biconceptualism. Most of us are partly conservative and partly progressive -- mostly one but partly the other, so far as issues are concerned. There is no ideology of the moderate. Moderate conservatives have some progressive views, and conversely. Circuitry for both moral systems are present in the biconceptual brain, applying to different issues.

All words are defined with respect to frame-circuits. The more one hears conservative language, the stronger the conservative moral system gets in your brain. The same for progressive language. The more progressives speak in their own language, the stronger their frame circuitry gets in the brains of bi-conceptuals who hear them, who already have a version of that system.

The moral: Progressivism supports freedom. The private depends on the public. If you believe it, say it. Moral ideals matter. Authenticity matters.

A Note on Organization

It takes some training to avoid the common strategy problems, to get insight into what your unconscious beliefs really are, and to learn how to express those beliefs effectively. Democratic strategists, like Republicans, offer trainings. The training should focus on the new, not the old, strategies, and should be more widely offered to citizens who want to speak publicly in their communities.

ANS -- The $9 Billion Witness

Here is a fairly long, very interesting, highly upsetting article by Matt Taibbi, on the big banks getting away with financial murder.  it's about a whistle-blower whom no one wants to listen to.  We should all know about this.  I've included the comments too because they are pretty good. 
I've highlighted one particular thing for you.
Find it here:   

Chase whistle-blower Alayne Fleischmann risked it all. (photo:  
Chase whistle-blower Alayne Fleischmann risked it all. (photo: Andrew Querner/Rolling Stone)

The $9 Billion Witness

By Matt Taibbi, Rolling Stone

06 November 14

Meet the woman JPMorgan Chase paid one of the largest fines in American history to keep from talking

[] he tried to stay quiet, she really did. But after eight years of keeping a heavy secret, the day came when Alayne Fleischmann couldn't take it anymore.

"It was like watching an old lady get mugged on the street," she says. "I thought, 'I can't sit by any longer.'"

Fleischmann is a tall, thin, quick-witted securities lawyer in her late thirties, with long blond hair, pale-blue eyes and an infectious sense of humor that has survived some very tough times. She's had to struggle to find work despite some striking skills and qualifications, a common symptom of a not-so-common condition called being a whistle-blower.

Fleischmann is the central witness in one of the biggest cases of white-collar crime in American history, possessing secrets that JPMorgan Chase CEO Jamie Dimon late last year paid $9 billion (not $13 billion as regularly reported – more on that later) to keep the public from hearing.

Back in 2006, as a deal manager at the gigantic bank, Fleischmann first witnessed, then tried to stop, what she describes as "massive criminal securities fraud" in the bank's mortgage operations.

Thanks to a confidentiality agreement, she's kept her mouth shut since then. "My closest family and friends don't know what I've been living with," she says. "Even my brother will only find out for the first time when he sees this interview."

Six years after the crisis that cratered the global economy, it's not exactly news that the country's biggest banks stole on a grand scale. That's why the more important part of Fleischmann's story is in the pains Chase and the Justice Department took to silence her.

She was blocked at every turn: by asleep-on-the-job regulators like the Securities and Exchange Commission, by a court system that allowed Chase to use its billions to bury her evidence, and, finally, by officials like outgoing Attorney General Eric Holder, the chief architect of the crazily elaborate government policy of surrender, secrecy and cover-up. "Every time I had a chance to talk, something always got in the way," Fleischmann says.

This past year she watched as Holder's Justice Department struck a series of historic settlement deals with Chase, Citigroup and Bank of America. The root bargain in these deals was cash for secrecy. The banks paid big fines, without trials or even judges – only secret negotiations that typically ended with the public shown nothing but vague, quasi-official papers called "statements of facts," which were conveniently devoid of anything like actual facts.

And now, with Holder about to leave office and his Justice Department reportedly wrapping up its final settlements, the state is effectively putting the finishing touches on what will amount to a sweeping, industrywide effort to bury the facts of a whole generation of Wall Street corruption. "I could be sued into bankruptcy," she says. "I could lose my license to practice law. I could lose everything. But if we don't start speaking up, then this really is all we're going to get: the biggest financial cover-up in history."

Alayne Fleischmann grew up in Terrace, British Columbia, a snowbound valley town just a brisk 18-hour drive north of Vancouver. She excelled at school from a young age, making her way to Cornell Law School and then to Wall Street. Her decision to go into finance surprised those closest to her, as she had always had more idealistic ambitions. "I helped lead a group that wrote briefs to the Human Rights Chamber for those affected by ethnic cleansing in Bosnia-Herzegovina," she says. "My whole life prior to moving into securities law was human rights work."

But she had student loans to pay off, and so when Wall Street came knocking, that was that. But it wasn't like she was dragged into high finance kicking and screaming. She found she had a genuine passion for securities law and felt strongly she was doing a good thing. "There was nothing shady about the field back then," she says. "It was very respectable."

In 2006, after a few years at a white-shoe law firm, Fleischmann ended up at Chase. The mortgage market was white-hot. Banks like Chase, Bank of America and Citigroup were furiously buying up huge pools of home loans and repackaging them as mortgage securities. Like soybeans in processed food, these synthesized financial products wound up in everything, whether you knew it or not: your state's pension fund, another state's workers' compensation fund, maybe even the portfolio of the insurance company you were counting on to support your family if you got hit by a bus.

As a transaction manager, Fleischmann functioned as a kind of quality-control officer. Her main job was to help make sure the bank didn't buy spoiled merchandise before it got tossed into the meat grinder and sold out the other end.

A few months into her tenure, Fleischmann would later testify in a DOJ deposition, the bank hired a new manager for diligence, the group in charge of reviewing and clearing loans. Fleischmann quickly ran into a problem with this manager, technically one of her superiors. She says he told her and other employees to stop sending him e-mails. The department, it seemed, was wary of putting anything in writing when it came to its mortgage deals.

"If you sent him an e-mail, he would actually come out and yell at you," she recalls. "The whole point of having a compliance and diligence group is to have policies that are set out clearly in writing. So to have exactly the opposite of that – that was very worrisome." One former high-ranking federal prosecutor said that if he were taking a criminal case to trial, the information about this e-mail policy would be crucial. "I would begin and end my opening statement with that," he says. "It shows these people knew what they were doing and were trying not to get caught."

In late 2006, not long after the "no e-mail" policy was implemented, Fleischmann and her group were asked to evaluate a packet of home loans from a mortgage originator called GreenPoint that was collectively worth about $900 million. Almost immediately, Fleischmann and some of the diligence managers who worked alongside her began to notice serious problems with this particular package of loans.

For one thing, the dates on many of them were suspiciously old. Normally, banks tried to turn loans into securities at warp speed. The idea was to go from a homeowner signing on the dotted line to an investor buying that loan in a pool of securities within two to three months. Thus it was a huge red flag to see Chase buying loans that were already seven or eight months old.

What this meant was that many of the loans in the GreenPoint deal had either been previously rejected by Chase or another bank, or were what are known as "early payment defaults." EPDs are loans that have already been sold to another bank and have been returned after the borrowers missed multiple payments. That's why the dates on them were so old.

In other words, this was the very bottom of the mortgage barrel. They were like used cars that had been towed back to the lot after throwing a rod. The industry had its own term for this sort of loan product: scratch and dent. As Chase later admitted, it not only ended up reselling hundreds of millions of dollars worth of those crappy loans to investors, it also sold them in a mortgage pool marketed as being above subprime, a type of loan called "Alt-A." Putting scratch-and-dent loans in an Alt-A security is a little like putting a fresh coat of paint on a bunch of junkyard wrecks and selling them as new cars. "Everything that I thought was bad at the time," Fleischmann says, "turned out to be a million times worse." (Chase declined to comment for this article.)

When Fleischmann and her team reviewed random samples of the loans, they found that around 40 percent of them were based on overstated incomes – an astronomically high defect rate for any pool of mortgages; Chase's normal tolerance for error was five percent. One mortgage in particular that sticks out in Fleischmann's mind involved a manicurist who claimed to have an annual income of $117,000. Fleischmann figured that even working seven days a week, this woman would have needed to work 488 days a year to make that much. "And that's with no overhead," Fleischmann says. "It wasn't possible."

But when she and others raised objections to the toxic loans, something odd started happening. The number-crunchers who had been complaining about the loans suddenly began changing their reports. The process she describes is strikingly similar to the way police obtain false confessions: The interrogator verbally abuses the target until he starts producing the desired answers. "What happened," Fleischmann says, "is the head diligence manager started yelling at his team, berating them, making them do reports over and over, keeping them late at night." Then the loans started clearing.

As late as December 11th, 2006, diligence managers had marked a full 33 percent of one loan sample as "stated income unreasonable for profession," meaning that it was nearly inevitable that there would be a high number of defaults. Several high-ranking executives were copied on this report.

Then, on December 15th, a Chase sales executive held a lengthy meeting with reps from GreenPoint and the diligence team to examine the remaining loans in the pool. When they got to the manicurist, Fleischmann remembers, one of the diligence guys finally caved under the pressure from the sales executive. "He had his hands up and just said, 'OK,' and he cleared it," says Fleischmann, adding that he was shaking his head "no" even as he was saying yes. Soon afterward, the error rate in the pool had magically dropped below 10 percent – a threshold that itself had just been doubled to clear the way for this deal.

After that meeting, Fleischmann testified, she approached a managing director named Greg Boester and pleaded with him to reconsider. She says she told Boester that the bank could not sell the high-risk loans as low-risk securities without committing fraud. "You can't securitize these loans without special disclosure about what's wrong with them," Fleischmann told him, "and if you make that disclosure, no one will buy them."

A former Olympic ski jumper, Boester was such an important executive at Chase that when he later defected to the Chicago-based hedge fund Citadel, Dimon cut off trading with Citadel in retaliation. Boester eventually returned to Chase and is still there today despite his role in this affair.

This moment illustrates the most basic element of the case against Chase: The bank knowingly peddled products stuffed with scratch-and-dent loans to investors without disclosing the obvious defects with the underlying loans.

Years later, in its settlement with the Justice Department, Chase would admit that this conversation between Fleischmann and Boester took place (though neither was named; it was simply described as "an employee . . . told . . . a managing director") and that her warning was ignored when the bank sold those loans off to investors.

A few weeks later, in early 2007, she sent a long letter to another managing director, William Buell. In the letter, she warned Buell of the consequences of reselling these bad loans as securities and gave detailed descriptions of breakdowns in Chase's diligence process.

Fleischmann assumed this letter, which Chase lawyers would later jokingly nickname "The Howler" after the screaming missive from the Harry Potter books, would be enough to force the bank to stop selling the bad loans. "It used to be if you wrote a memo, they had to stop, because now there's proof that they knew what they were doing," she says. "But when the Justice Department doesn't do anything, that stops being a deterrent. I just didn't know that at the time."

In February 2008, less than two years after joining the bank, Fleischmann was quietly dismissed in a round of layoffs. A few months later, proof would appear that her bosses knew all along that the boom-era mortgage market was rotten. That September, as the market was crashing, Dimon boasted in a ball-washing Fortune article titled "Jamie Dimon's SWAT Team" that he knew well before the meltdown that the subprime market was toast. "We concluded that underwriting standards were deteriorating across the industry." The story tells of Dimon ordering Boester's boss, William King, to dump the bank's subprime holdings in October 2006. "Billy," Dimon says, "we need to sell a lot of our positions. . . . This stuff could go up in smoke!"

In other words, two full months before the bank rammed through the dirty GreenPoint deal over Fleischmann's objections, Chase's CEO was aware that loans like this were too dangerous for Chase itself to own. (Though Dimon was talking about subprime loans and GreenPoint was technically an Alt-A pool, the Fortune story shows that upper management had serious concerns about industry-wide underwriting problems.)

In January 2010, when Dimon testified before the Financial Crisis Inquiry Commission, he told investigators the exact opposite story, portraying the poor Chase leadership as having been duped, just like the rest of us. "In mortgage underwriting," he said, "somehow we just missed, you know, that home prices don't go up forever."

When Fleischmann found out about all of this years later, she was shocked. Her confidentiality agreement at Chase didn't bar her from reporting a crime, but the problem was that she couldn't prove that Chase had committed a crime without knowing whether those bad loans had been sold.

As it turned out, of course, Chase was selling those rotten dog-meat loans all over the place. How bad were they? A single lawsuit by a single angry litigant gives some insight. In 2011, Chase was sued over massive losses suffered by a group of credit unions. One of them had invested $135 million in one of the bank's mortgage--backed securities. About 40 percent of the loans in that deal came from the GreenPoint pool.

The lawsuit alleged that in just the first year, the security suffered $51 million in losses, nearly 50 times what had been projected. It's hard to say how much of that was due to the GreenPoint loans. But this was just one security, one year, and the losses were in the tens of millions. And Chase did deal after deal with the same methodology. So did most of the other banks. It's theft on a scale that blows the mind.

In the spring of 2012, Fleischmann, who'd moved back to Canada after leaving Chase, was working at a law firm in Calgary when the phone rang. It was an investigator from the States. "Hi, I'm from the SEC," he said. "You weren't expecting to hear from me, were you?"

A few months earlier, President Obama, giving in to pressure from the Occupy movement and other reformers, had formed the Residential Mortgage-Backed Securities Working Group. At least superficially, this was a serious show of force against banks like Chase. The group would operate like a kind of regulatory Justice League, combining the superpowers of investigators from the SEC, the FBI, the IRS, HUD and a host of other federal agencies. It included noted anti-corruption- investigator and New York Attorney General Eric Schneiderman, which gave many observers reason to hope that finally something would be done about the crimes that led to the crash. That makes the fact that the bank would skate with negligible cash fines an even more extra-ordinary accomplishment.

By the time the working group was set up, most of the applicable statutes of limitations had either expired or were about to expire. "A conspiratorial way of looking at it would be to say the state waited far too long to look at these cases and is now taking its sweet time investigating, while the last statutes of limitations run out," says famed prosecutor and former New York Attorney General Eliot Spitzer.

It soon became clear that the SEC wasn't so much investigating Chase's behavior as just checking boxes. Fleischmann received no follow-up phone calls, even though she told the investigator that she was willing to tell the SEC everything she knew about the systemic fraud at Chase. Instead, the SEC focused on a single transaction involving a mortgage company called WMC. "I kept trying to talk to them about GreenPoint," Fleischmann says, "but they just wanted to talk about that other deal."

The following year, the SEC would fine Chase $297 million for misrepresentations in the WMC deal. On the surface, it looked like a hefty punishment. In reality, it was a classic example of the piecemeal, cherry-picking style of justice that characterized the post-crisis era. "The kid-gloves approach that the DOJ and the SEC take with Wall Street is as inexplicable as it is indefensible," says Dennis Kelleher of the financial reform group Better Markets, which would later file suit challenging the Chase settlement. "They typically charge only one offense when there are dozens. It would be like charging a serial murderer with a single assault and giving them probation."

Soon Fleischmann's hopes were raised again. In late 2012 and early 2013, she had a pair of interviews with civil litigators from the U.S. attorney's office in the Eastern District of California, based in Sacramento.

One of the ongoing myths about the financial crisis is that the government is outmatched by the legal talent representing the banks. But Fleischmann was impressed by the lead attorney in her case, a litigator named Richard Elias. "He sounded like he had been a securities lawyer for 10 years," she says. "This actually looked like his idea of fun – like he couldn't wait to run with this case."

She gave Elias and his team detailed information about everything she'd seen: the edict against e-mails, the sabotaging of the diligence process, the bullying, the written warnings that were ignored, all of it. She assumed that it wouldn't be long before the bank was hauled into court.

Instead, the government decided to help Chase bury the evidence. It began when Holder's office scheduled a press conference for the morning of September 24th, 2013, to announce sweeping civil-fraud charges against the bank, all laid out in a detailed complaint drafted by the U.S. attorney's Sacramento office. But that morning the presser was suddenly canceled, and no complaint was filed. According to later news reports, Dimon had personally called Associate Attorney General Tony West, the third-ranking official in the Justice Department, and asked to reopen negotiations to settle the case out of court.

It goes without saying that the ordinary citizen who is the target of a government investigation cannot simply pick up the phone, call up the prosecutor in charge of his case and have a legal proceeding canceled. But Dimon did just that. "And he didn't just call the prosecutor, he called the prosecutor's boss," Fleischmann says. According to The New York Times, after Dimon had already offered $3 billion to settle the case and was turned down, he went to Holder's office and upped the offer, but apparently not by enough.

A few days later, Fleischmann, who had by then moved back to Vancouver and was looking for work, was at a mall when she saw a Wall Street Journal headline on her iPhone: JPMorgan Insider Helps U.S. in Probe. The story said that the government had a key witness, a female employee willing to provide damaging testimony about Chase's mortgage operations. Fleischmann was stunned. Until that moment, she had no idea that she was a major part of the government's case against Chase. And worse, nobody had bothered to warn her that she was about to be effectively outed in the newspapers. "The stress started to build after I saw that news," she says. "Especially as I waited to see if my name would come out and I watched my job possibilities evaporate."

Fleischmann later realized that the government wasn't interested in having her testify against Chase in court or any other public forum. Instead, the Justice Department's political wing, led by Holder, appeared to be using her, and her evidence, as a bargaining chip to extract more hush money from Dimon. It worked. Within weeks, Dimon had upped his offer to roughly $9 billion.

In late November, the two sides agreed on a settlement deal that covered a variety of misbehaviors, including the fraud that Fleischmann witnessed as well as similar episodes at Washington Mutual and Bear Stearns, two companies that Chase had acquired during the crisis (with federal bailout aid). The newspapers and the Justice Department described the deal as a "$13 billion settlement," hailing it as the biggest white-collar regulatory settlement in American history. The deal released Chase from civil liability. And, in what was described by The New York Times as a "major victory for the government," it left open the possibility that the Justice Department could pursue a further criminal investigation against the bank.

But the idea that Holder had cracked down on Chase was a carefully contrived fiction, one that has survived to this day. For starters, $4 billion of the settlement was largely an accounting falsehood, a chunk of bogus "consumer relief" added to make the payoff look bigger. What the public never grasped about these consumer--relief deals is that the "relief" is often not paid by the bank, which mostly just services the loans, but by the bank's other victims, i.e., the investors in their bad mortgage securities.

Moreover, in this case, a fine-print addendum indicated that this consumer relief would be allowed only if said investors agreed to it – or if it would have been granted anyway under existing arrangements. This often comes down to either forgiving a small portion of a loan or giving homeowners a little extra time to pay up in full. "It's not real," says Fleischmann. "They structured it so that the homeowners only get relief if they would have gotten it anyway." She pauses. "If a loan shark gives you a few extra weeks to pay up, is that 'consumer relief'?"

The average person had no way of knowing what a terrible deal the Chase settlement was for the country. The terms were even lighter than the slap-on-the-wrist formula that allowed Wall Street banks to "neither admit nor deny" wrongdoing – the deals that had helped spark the Occupy protests. Yet those notorious deals were like the Nuremberg hangings compared to the regulatory innovation that Holder's Justice Department cooked up for Dimon and Co.

Instead of a detailed complaint naming names, Chase was allowed to sign a flimsy, 10-and-a-half-page "statement of facts" that was: (a) so short, a first-year law student could read it in the time it takes to eat a tuna sandwich, and (b) so vague, a halfway intelligent person could read it and not know anyone had done anything wrong.

The ink was barely dry on the deal before Chase would have the balls to insinuate its innocence. "The firm has not admitted to violations of the law," said CFO Marianne Lake. But the deal's most brazen innovation was the way it bypassed the judicial branch. Previously, federal regulators had had bad luck with judges when trying to dole out slap-on-the-wrist settlements to banks. In a pair of celebrated cases, an unpleasantly honest federal judge named Jed Rakoff had rejected sweetheart deals worked out between banks and slavish regulators and had commanded the state to go back to the drawing board and come up with real punishments.

Seemingly not wanting to deal with even the possibility of such a thing happening, Holder blew off the idea of showing the settlement to a judge. The settlement, says Kelleher, "was unprecedented in many ways, including being very carefully crafted to bypass the court system. . . . There can be little doubt that the DOJ and JP-Morgan were trying to avoid disclosure of their dirty deeds and prevent public scrutiny of their sweetheart deal." Kelleher asks a rhetorical question: "Can you imagine the outcry if [Bush-era Attorney General] Alberto Gonzales had gone into the backroom and given Halliburton immunity in exchange for a billion dollars?"

The deal was widely considered a good one for both sides, but Chase emerged with barely a scratch. First, the ludicrously nonspecific language surrounding the settlement put you, me and every other American taxpayer on the hook for roughly a quarter of Chase's check. Because most of the settlement monies were specifically not called fines or penalties, Chase was allowed to treat some $7 billion of the settlement as a tax write-off.

Couple this with the fact that the bank's share price soared six percent on news of the settlement, adding more than $12 billion in value to shareholders, and one could argue Chase actually made money from the deal. What's more, to defray the cost of this and other fines, Chase last year laid off 7,500 lower-level employees. Meanwhile, per-employee compensation for everyone else rose four percent, to $122,653. But no one made out better than Dimon. The board awarded a 74 percent raise to the man who oversaw the biggest regulatory penalty ever, upping his compensation package to about $20 million.

While Holder was being lavishly praised for releasing Chase only from civil liability, Fleischmann knew something the rest of the world did not: The criminal investigation was going nowhere.

In the days leading up to Holder's November 19th announcement of the settlement, the Justice Department had asked Fleischmann to meet with criminal investigators. They would interview her very soon, they said, between December 15th and Christmas.

But December came and went with no follow-up from the DOJ. She began to wonder: If she was the government's key witness, how was it possible that they were still pursuing a criminal case without talking to her? "My concern," she says, "was that they were not investigating."

The government's failure to speak to Fleischmann lends credence to a theory about the Holder-Dimon settlement: It included a tacit agreement from the DOJ not to pursue criminal charges in earnest. It sounds outrageous, but it wouldn't be the first time that the government used a wink and a nod to dispose a bank of major liability without saying so publicly. Back in 2010, American Lawyer revealed Goldman Sachs wanted a full release from liability in a dozen crooked mortgage deals, while the SEC didn't want to give the bank such a big public victory. So the two sides quietly agreed to a grimy compromise: Goldman agreed to pay $550 million to settle a single case, and the SEC privately assured the bank that it wouldn't recommend charges in any of the other deals.

As Fleischmann was waiting for the Justice Department to call, Chase and its lawyers had been going to tremendous lengths to keep her muzzled. A number of major institutional investors had sued the bank in an effort to recover money lost in investing in Chase's fraud-ridden home loans. In October 2013, one of those investors – the Fort Worth Employees' Retirement Fund – asked a federal judge to force Chase to grant access to a series of current and former employees, including Fleischmann, whose status as a key cooperator in the federal investigation had made headlines in The Wall Street Journal and other major media outlets.

In response, Dorothy Spenner, an attorney representing Chase, told the court that Fleischmann was not a "relevant custodian." In other words, she couldn't testify to anything of importance. Federal Magistrate Judge James C. Francis IV took Chase's lawyers at their word and rejected the Fort Worth retirees' request for access to Fleischmann and her evidence.

Other investors bilked by Chase also tried to speak to Fleischmann. The Federal Home Loan Bank of Pittsburgh, which had sued Chase, asked the court to force Chase to turn over a copy of the draft civil complaint that was withheld after Holder's scuttled press conference. The Pittsburgh litigants also specified that they wanted access to the name of the state's cooperating witness: namely, Fleischmann.

In that case, the judge actually ordered Chase to turn over both the complaint and Fleischmann's name. Chase stalled. Later in the fall, the judge ordered the bank to produce the information again; it stalled some more.

Then, in January 2014, Chase suddenly settled with the Pittsburgh bank out of court for an undisclosed amount. Months after being ordered to allow Fleischmann to talk, they once again paid a stiff price to keep her testimony out of the public eye.

Chase's determination to hide its own dirt while forcing Fleischmann to keep her secret was becoming more and more absurd. "It was a hard time to look for work," she says. All that prospective employers knew was that she had worked in a department that had just been dinged with what was then the biggest regulatory fine in the history of capitalism. According to the terms of her confidentiality agreement, she couldn't even tell them that she'd tried to keep the bank from committing fraud.

Despite it all, Fleischmann still had faith that the Justice Department or some other federal agency would make things right. "I guess I was just a trusting person," she says. "I wasn't cynical. I kept hoping."

One day last spring, Fleischmann happened across a video of Holder giving a speech titled "No Company Is Too Big to Jail." It was classic Holder: full of weird prevarication, distracting eye twitches and other facial contortions. It began with the bold rejection of the idea that overly large financial institutions would receive preferential treatment from his Justice Department.

Then, within a few sentences, he seemed to contradict himself, arguing that one must apply a special sort of care when investigating supersize banks, tweaking the rules so as not to upset the world economy. "Federal prosecutors conducting these investigations," Holder said, "must go the extra mile to coordinate closely with the regulators who oversee these institutions' day-to-day operations." That is, he was saying, regulators have to agree not to allow automatic penalties to kick in, so that bad banks can stay in business.

Fleischmann winced. Fully fluent in Holder's three-faced rhetoric after years of waiting for him to act, she felt that he was patting himself on the back for having helped companies survive crimes that otherwise might have triggered crippling regulatory penalties. As she watched in mounting outrage, Holder wrapped up his address with a less-than-reassuring pronouncement: "I am resolved to seeing [the investigations] through." Doing so, he added, would "reaffirm" his principles.

Or, as Fleischmann translates it: "I will personally stay on to make sure that no one can undo the cover-up that I've accomplished."

That's when she decided to break her silence. "I tried to go on with the things I was doing, but I just stopped sleeping and couldn't eat," she says. "It felt like I was trying to keep this secret and my body was literally rejecting it."

Ironically, over the summer, the government contacted her again. A new set of investigators interviewed her, appearing to have restarted the criminal case. Fleischmann won't comment on that investigation. Frustrated as she has been by the decisions of the higher-ups in Holder's Justice Department, she doesn't want to do anything to get in the way of investigators who might be working the case. But she emphasizes she still has reason to be deeply worried that nothing will be done. Even if the investigators build strong cases against executives who oversaw Chase's fraud, Holder or whoever succeeds him can still make the whole thing disappear by negotiating a soft landing for the company. "That's the thing I'm worried about," she says. "That they make the whole thing disappear. If they do that, the truth will never come out."

In September, at a speech at NYU, Holder defended the lack of prosecutions of top executives on the grounds that, in the corporate context, sometimes bad things just happen without actual people being responsible. "Responsibility remains so diffuse, and top executives so insulated," Holder said, "that any misconduct could again be considered more a symptom of the institution's culture than a result of the willful actions of any single individual."

In other words, people don't commit crimes, corporate culture commits crimes! It's probably fortunate that Holder is quitting before he has time to apply the same logic to Mafia or terrorism cases.

Fleischmann, for her part, had begun to find the whole situation almost funny.

"I thought, 'I swear, Eric Holder is gas-lighting me,' " she says.

Ask her where the crime was, and Fleischmann will point out exactly how her bosses at JPMorgan Chase committed criminal fraud: It's right there in the documents; just hand her a highlighter and some Post-it notes – "We lawyers love flags" – and you will not find a more enthusiastic tour guide through a gazillion-page prospectus than Alayne Fleischmann.

She believes the proof is easily there for all the elements of the crime as defined by federal law – the bank made material misrepresentations, it made material omissions, and it did so willfully and with specific intent, consciously ignoring warnings from inside the firm and out.

She'd like to see something done about it, emphasizing that there still is time. The statute of limitations for wire fraud, for instance, has not run out, and she strongly believes there's a case there, against the bank's executives. She has no financial interest in any of this, no motive other than wanting the truth out. But more than anything, she wants it to be over.

In today's America, someone like Fleischmann – an honest person caught for a little while in the wrong place at the wrong time – has to be willing to live through an epic ordeal just to get to the point of being able to open her mouth and tell a truth or two. And when she finally gets there, she still has to risk everything to take that last step. "The assumption they make is that I won't blow up my life to do it," Fleischmann says. "But they're wrong about that."

Good for her, and great for her that it's finally out. But the big-picture ending still stings. She hopes otherwise, but the likely final verdict is a Pyrrhic victory.

Because after all this activity, all these court actions, all these penalties (both real and abortive), even after a fair amount of noise in the press, the target companies remain more ascendant than ever. The people who stole all those billions are still in place. And the bank is more untouchable than ever – former Debevoise & Plimpton hotshots Mary Jo White and Andrew Ceresny, who represented Chase for some of this case, have since been named to the two top jobs at the SEC. As for the bank itself, its stock price has gone up since the settlement and flirts weekly with five-year highs. They may lose the odd battle, but the markets clearly believe the banks won the war. Truth is one thing, and if the right people fight hard enough, you might get to hear it from time to time. But justice is different, and still far enough away.


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+43 # Dust 2014-11-06 15:32
Gotta love that "Free Market Capitalism" in which corporations (and the governments that they buy) are the benevolent, compassionate, well-meaning kindly old grandparents we all love.

I suggest a public stock, and NOT the kind that is subject to purchase, options, or put.
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+29 # brux 2014-11-06 17:46
These legal deals to keep details of situations secret should be illegal. If entities resort to using the American legal system then the results of that interaction should all be public knowledge.
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-18 # brux 2014-11-06 17:55
I just feel that it is too complicated to adjudicate these financial corruption issues, and there would be no objective eye on the effort anyway, so it would not be likely to work.

I think we just have to look at this problem in the macrocosmic level, that the marginal, set the tone and acting as the example, people who are running our public and private institutions now at all levels are corrupt and working more actively than ever to corrupt the rest of the government and institutionaliz e that corruption as the norm.

So, the way we get past this ... we knew how to in the past ... is to raise taxes on upper incomes progressively, finance all elections publicly, and disallow all gifts and donations to politicians, trips, dinners, drinks, whatever.

The the extra income we get from the 1% and the extra extra income we get from the 0.01% and use it subsidize the income of citizens, as long as they do not commit crimes, or have children they cannot pay for. People living off subsidies could afford to get work experience by volunteering with companies, so we could get rid of the minimum wage and let people then work as they please and hire as they please.

Or they could go to school and get a stipend for that as long as they graduate.

There are a lot of things we could do to encourage and incentivize good behavior instead of what we do now which is to inventivize bad behavior.
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-8 # The Buffalo Guy 2014-11-06 23:14
Quoting brux:
I just feel that it is too complicated to adjudicate these financial corruption issues, and there would be no objective eye on the effort anyway, so it would not be likely to work.

I think we just have to look at this problem in the macrocosmic level, that the marginal, set the tone and acting as the example, people who are running our public and private institutions now at all levels are corrupt and working more actively than ever to corrupt the rest of the government and institutionalize that corruption as the norm.

So, the way we get past this ... we knew how to in the past ... is to raise taxes on upper incomes progressively, finance all elections publicly, and disallow all gifts and donations to politicians, trips, dinners, drinks, whatever.

The the extra income we get from the 1% and the extra extra income we get from the 0.01% and use it subsidize the income of citizens, as long as they do not commit crimes, or have children they cannot pay for. People living off subsidies could afford to get work experience by volunteering with companies, so we could get rid of the minimum wage and let people then work as they please and hire as they please.

Or they could go to school and get a stipend for that as long as they graduate.

There are a lot of things we could do to encourage and incentivize good behavior instead of what we do now which is to inventivize bad behavior.

I like your thinking. It beats what we have now!
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-4 # brux 2014-11-06 23:18

I'd call it the social economy of scale ... right now, we have thousands of things in court ... how much of a fair reasoned response do you think society can give when it cannot find good judges and cannot afford to adjudicate things.

When you look at white collar crime the average fine is something like 20% of the stealing ... how is that working for us?
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+11 # babalu 2014-11-07 05:42
"cannot find good judges" Actually where they get elected we have the STRONG ON CRIME judges who only throw poor people in jail for the max and ignore white collar crime 'cuz they are bad at math!
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+5 # WestWinds 2014-11-07 03:38
You call this "thinking"?

I call it mind boggling.
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+5 # babalu 2014-11-07 05:40
"subsidize the income of citizens, as long as they do not commit crimes, or have children they cannot pay for.
But Republicans are now in power in Congress and the Supreme Court, so more people WILL be having children they cannot pay for. Their recent laws put roadblocks in the way of responsible parenthood. 1) making it harder to get birth control (pharmacists imposing THEIR conscience on patients) and 2) when birth control fails, making it impossible for many women to get an abortion.
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-1 # jcdav 2014-11-07 06:33
Both this comment and the one below (TBG) registered a minus when I clicked the plus(green) button...
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+27 # Ken Halt 2014-11-06 19:12
Starting with RR, the conservative ascendancy, which is ever at the beck and call of big biz, pulled the fangs of federal regulation by underfunding and downsizing agencies and commoditizing politicians through campaign finance laws that favor the $$$ of lobbyists over the votes of citizens. This is the irresponsible but very predictable and profitable end result of Norquist's "smaller gov't": total domination of federal gov't by large corporations. The 1% has cynically played on anti-federalist sentiment, particularly of southerners and approved by 5 ideological dimwits on the SCOTUS, to dismantle democracy and replace it with a plutocracy that serves their interests. We've just been through an election where the deck was stacked by gerrymandering and voter suppression. The questions I often ask myself are "When will the US electorate become tired of self-flagellati on? When will they wake up and realize how they've been duped and led down the primrose path by a bunch of sweet-talking sociopaths. Are we just more stupid than people in other countries that have strong unions, universal healthcare, and real, working democracies?" IMHO, change is starting to happen, but the wreckage of US regulatory agencies and the SCOTUS are going to take decades to clear away if the US is to once again reclaim itself as a representative democracy.
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+10 # John S. Browne 2014-11-07 02:15

Most of the "Amerikan" people are never going to awaken. They don't want to, and won't, admit that they've been so extremely duped, and that they've literally paid for the crimes, and are still paying for them. They want to keep living in their "American dream" (really, nightmare) la-la-land fantasy world and keep acting like everything's fine. They ignore everything that bespeaks reality; and, even as the entire U.S. is being militarized and "Gestapoized" from coast to coast, and turned into a totalitarian corporate-fasci st militarized police state by U.S. Government, Incorporated; and True Liberty and Freedom are quickly becoming a thing of the past that is no more; they ignore that as well and convince themselves that it's all for our best good. What gross sheople they are. They are the worst "drug addicts" in the entire history of the world, and more deeply in avoidance and denial of what's really going on than anyone has ever been before them. "Shut up about reality, and pass me more of the 'denial drug'", is their mantra. Thus, God help us, because most of the citizenry is aiding in our own demise, going as willing cattle to the slaughter like lemmings follow- ing their fellow-lemmings over the edge of the cliff to their doom, like willing followers of the "Pied Piper" following him to their destruction, and/or like blind follows of the blind to their downfall. What willful idiots, and increasingly-re signed slaves, have most of the populace been turned into.

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+3 # babalu 2014-11-07 05:44
And the "circus" of football is only half over for the year!
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+34 # Activista 2014-11-06 20:13
excellent detailed report how our "government" "protects" US citizens.
And the political corruption is getting worse ..
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+11 # Sisddwg 2014-11-07 01:28
There is the moral of all human tales;
'Tis but the same rehearsal of the past.
First freedom and then Glory - when that fails,
Wealth, vice, corruption, - barbarism at last.
- Lord Byron

This time . . . the barbarians are not waiting beyond the
frontiers; they have already been governing for quite some time.
- Alisdair MacIntyre

We have this ability in Lake Wobegon to look reality right
In the eye and deny it.
- Garrison Keillor
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+47 # artistinaspen 2014-11-06 20:21
Her courage makes her a hero to millions of millenials. God bless this woman and Carman Segarra for speaking truth to power.
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+55 # teachnet 2014-11-06 22:57
Great to see Matt Taibbi back again!
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+14 # cordleycoit 2014-11-07 00:01
The depositors at the Bank of New York got scammed in 98 by the Russians and then then they got screwed again in dot com and then of course in 2006 tens of thousands lost their life savings so the bankers could play games with derivatives. The bank went under and had to be sold. The Fed did not blink.
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+32 # Texas Aggie 2014-11-07 00:07
If the Democrats want to know what they could have done to avoid the recent disaster, they should read this story. Having a bunch of Wall St. scalps on their belts would have been a strong defense against charges of cronyism and people would have loved seeing someone stand up to the big moneybags on behalf of We the People.

Thanks so much, Holder. You more than anyone else has personal responsibility for the fall of the Democratic Party and the people of this country.
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+12 # Blackjack 2014-11-07 01:02
Well, Holder had a lot of help from his boss, who just couldn't be bothered to do anything about the "too big to fail" screed. That would have meant actually taking a stand on something and that just isn't his style.
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+6 # grouchy 2014-11-07 02:24
Torches and pitchforks to the barricades!
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+9 # jlmorin 2014-11-07 02:43
Why would a rich, white-collar banker risk going to jail? Because for every one that's caught, there are thousands that get away with it. ­JL Morin, Author of TRADING DREAMS,
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+3 # Vegan_Girl 2014-11-07 06:57
Too big to fail? Let's make them smaller.

I long stopped being angry with Chase and the other banks. It is like being angry with a tornado.

What pisses me off is the people who still bank with Chase. They are enabling these criminals and for what? It isn't so hard to close an account and open another one.
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# Kimc 2014-11-07 10:07
Yes, preferably in a member-owned credit union instead of a bank.
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+1 # cloonan 2014-11-07 07:52
If anyone believes that capitalism and the the two political parties acting as security guards have any redemptive qualities, taibbi reassures that such is not the case.
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# Kimc 2014-11-07 10:06
This stinks. Our entire government is corrupt, and big business is even more corrupt.
We can't look for a governmental solution to this, because the government has sold out, and is no longer under any control by The People. We have to take things into our own hands.
The solution is to make locally sustainable economies. Businesses should be worker owned and controlled. Banks and utilities should be publicly owned. We need to restore checks and balances. We can only do this in our local communities. Do it.
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