What Silicon Valley Has Planned for Public Education

What Silicon Valley Has Planned for Public Education

Alison McDowell (2017

This troubling presentation concerns a well-advanced plan by corporate America to gradually replace public schools with 100% digital education. The attack on American schools is multi-pronged – with anti-public school forces closing schools, laying off teachers and neglecting crumbling infrastructure while stealthily increasing the availability of digital notepads, Chrome books and other digital platforms in existing schools.

Education Reform 2.0 would build on high stakes testing and school closures to replace teachers with digital learning platforms designed to incorporate “cradle to grave” tracking of students’ skill sets and online activity. Increasingly employers would rely on this information to determine suitability for employment.

The institutional backers of this digital revolution include some of the most powerful corporations and foundations in the US. Prominent names include the Gates Foundation, the MacArthur Foundation, the American Legislative Exchange Council (ALEC), Goldman Sachs, the Institute for the Future (offshoot of Rand Corporation), Amazon, Google, Dell (the company Snowden worked for), and Halliburton.

The US military is also involved and planning and development of 100% digital learning with Army Research and DARPA (Defense Advanced Research Projects Agency) assuming responsibility for the “behavior modification” (ie mind control aspects) that reward students for appropriate engagement with the digital platform.

McDowell describes how many schools across the US are already replacing class time with Skype sessions with Halliburton “mentors” and on-line math lessons with carton “peers.”

Proponents of 100% digital learning are working closely with focus groups to “market” this new technology that tracks and mind controls children to skeptical Americans who value their privacy.

At 38 minutes, McDowell shows a promotional film for “tracked online learning.” It explains how high school and adult learners are earning “edu-blocks for a variety of learning experiences (including reading books, volunteer work, watching videos and “teaching” skills to other learners. Also how companies are already using your ledger blocks to evaluate potential employees’ suitability for specific projects or even investing in their university education by paying their tuition. One edu-block enthusiast describes how participating in the online program is enabling her to reduce her student loan debt.

The ledger is designed to keep track of all the YouTube videos you watch and even all the texts you send (and delete).

Senators Seek to Sink Lame Duck TPP Approval


According to BuzzFeed journalist Rick Hamby, a dozen senators have signed a letter urging Obama to remove the Investors State Dispute Settlement Clause (ISDS) from  the highly controversial Trans-Pacific Partnership (TPP). Obama is pushing Congress to ratify the TPP during a lame duck session of Congress following the November election.

The senators — including Sherrod Brown, Bernie Sanders, and Elizabeth Warren — object to a private legal system established by the ISDS that would empower foreign companies to sue the US government before a panel of arbitrators. The panel would likely be made up of corporate lawyers.

The letter throws a major wrench in Obama’s plans. Under the Fast Track Authority Congress granted earlier this year, Congress can only approve or reject TPP – they can’t amend it.

TPP has been strongly condemned, both by the libertarian right and the progressive left as being less about trade than a Wall Street effort to dismantle all healthy and safety, labor and environmental regulation in the 12 countries that have signed up to it.

Both Trump and Clinton “publicly” oppose the TPP, but the latest Wikileaks dump of Clinton’s Goldman Sachs speeches manifests the glowing support she expresses to funders in private. See leaked emails

To read more about the senators’ letter, see Senators Call to Remove ISDS from TPP

To join the #NoLameDuckUprising Nov 12-23, go to #Nolameduckuprising

Wall Street: More Deeply Corrupt than We Thought (No Really)

flash boys

Flash Boys: A Wall Street Revolt

By Michael Lewis

W W Norton (2015

 Book Review

 Flash Boys is a true story about front running, the unethical practice of a stockbroker executing orders on a stock while taking advantage of advance knowledge of pending orders from elsewhere in the market.* From the bleak picture Lewis paints, it appears that investors – whether institutional or private – have virtually no way of protecting themselves against front running.

Like Lewis’s 2010 book The Big Short, Flash Boys reads just like a thriller, complete with exquisitely drawn heroes and villains. In this case, the heroes are crusading Canadian banker Brad Katsuyama and the assorted geeks and nerds who helped him start his own stock exchange. Katsuyama started IEX in 2013, after the Royal Bank of Canada and the Securities and Exchange Commission (SEC) refused to support his efforts to expose and end the practice of front running. By purposely slowing their transmission rates, IEX makes it impossible for high frequency traders to “front run” the trades occurring on the exchange. This has enabled Katsuyama to protect investors who use his exchange, while simultaneously collecting data on suspicious trades.

Flash Boys, a bestseller, originally came out in 2014. The 2015 edition includes an afterward in which Lewis describes being viciously attacked by the big Wall Street banks and brokers. He also enumerates a number of prosecutions of high frequency traders and brokerage firms (by the FBI, SEC and Financial Regulatory Authority) resulting from from Katsuyama’s work publicity from Flash Boys’ publication.

*The way this works in practice is you order 10,000 shares of a stock at a given price and a high frequency trader somewhere buys 10,000 shares at that price and resells them to you at a slightly higher price. Complex computer algorithms enable high frequency traders to exploit minute differences in transmission frequency to execute these secret trades – which usually take place in “dark pools” – private stock exchanges which keep no public record of their trades. All the major investment banks (Goldman Sachs, JP Morgan, Bank of America etc) have dark pools and high frequency traders pay for the privilege of trading in their dark pools.

Goldman Sachs the Vampire Squid

money and power

The Secret is Not Getting Caught

The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming it’s blood funnel into anything that smells like money.” Matt Taibbi, Rolling Stone 2009

In his classic Rolling Stone article, Matt Taibbi blames Goldman Sachs for causing the Great Depression, the Internet bubble and the skyrocketing price of gasoline. Author William D Cohan dismisses the article as a “screed” and “conspiracy theory journalism.” Yet after reading Cohan’s 604-page Money and Power: How Goldman Sachs Came to Rule the World, I have to agree with Taibbi. For over 133 years, the secret of Goldman’s success has been an uncanny ability to extract a fee from any transaction involving human need.

It’s hard to read a book like this without understanding the complicated derivatives trading responsible for the 2008 Wall Street crash. Cohen does a credible job of explaining these complex financial trades. What comes across loud and clear is that derivatives trading is merely a sophisticated form of gambling. Like the owner of a Las Vegas casino, Goldman knows exactly how to turn the odds in their favor. This almost always entails unethical and illegal conduct. Goldman executives excel at not getting caught, which seems to be the main reason they receive such massive bonuses. They’re also really good at maximizing their high level connections in the federal government.

After reading Money and Power, I’m more convinced than ever that the only way to end Wall Street corruption is to break up the big banks by ending their ability to create money out of thin air. Once the creation and control of our money supply is rightfully restored to public control, no bank will ever be too big to fail.*

US Justice System Too Slow and Cumbersome

Goldman’s history is filled with a litany of criminal indictments and civil lawsuits stemming from unethical and illegal activities. Although both federal and state government’s have a wealth of anti-corruption laws they could use to prosecute Goldman and other Wall Street banks, the American criminal justice system is far too slow to inflict severe enough penalties the criminal activity. The close involvement of Goldman chief executives in federal government (which Cohan refers to as “government Sachs”), most notably Robert Rubin in the Clinton administration and Hank Paulson in the Bush junior administration, is also be a major factor in the bank’s enduring financial success. Remaining limited Goldman partners while holding cabinet appointments, both men were responsible for a range of federal initiatives favorable to their “former” employer.

Goldman’s Role in 1929 Crash

The first federal indictment against Goldman was lodged in 1947, an antitrust lawsuit related to the fraudulent and speculative activity by Goldman and sixteen other Wall Street banks which caused the massive 1920s stock market bubble and 1929 crash. In 1929 alone, Goldman created $1.7 billion of market value through a pyramid scheme in which they resold the same shares of stock seven times. The lawsuit was dismissed in 1950 – the Department of Justice couldn’t produce convincing evidence the seventeen banks actively colluded.

Finding Charges that Would Stick

In 1970 Goldman faced over twenty lawsuits and a SEC complaint for selling commercial paper (from Penn Central Railroad and Mill Factors Corporation) when they knew it was worthless. This time the court found for the SEC and Goldman was forced to settle the civil cases.

In 1986 two Goldman vice presidents pleaded guilty to insider trading.

In the late 1980s and early 1990s, Goldman lost a series of sexual discrimination suits by female traders.

In 1994, two pension funds sued Goldman for disposing of Maxwell Communications Assets and disturbing the proceeds to Maxwell’s estate rather than the pension funds. Goldman settled for $400 million after the Justice Department threatened them with criminal charges.

Enter Eliot Spitzer**

In 2002, Goldman faced a series of federal and state indictments related to their role in the dot com bubble. Specifically the SEC and New York attorney general Eliott Spitzer charged them with bribing independent analysts to issue favorable reports on worthless Internet stocks, as well as with “spinning and laddering”*** to drive up the share price. Goldman eventually settled with the SEC for $40 million and with the state of New York for $110 million.

The following year Spitzer charged them with fraud and “front running” (ie insider trading) in trading in non-traditional insurance products and reinsurance. Goldman settled for $800 million.

Goldman faced a rash of new indictments and lawsuits stemming from the 2007-2008 crash. In December 2007 the Massachusetts attorney general cited Goldman for selling mortgage backed securities without informing them that the mortgagees were at high rate of delinquency. Goldman settled for $10 million, as well as spending another $50 million to alter the terms of the mortgages to reduce the risk of default.

Later in 2007, a Mississippi pension fund (representing 300,000 pensioners) sued them for knowingly selling worthless mortgage backed securities.

The 2008 Wall Street Collapse

In 2010, the Securities and Exchange Commission (SEC) sued Goldman for incorrectly forecasting the performance of mortgage backed securities they sold to clients while betting against the MPS’s by purchasing credit default swaps (CDS)**** on them. Goldman began purchasing credit default swaps in February 2006 as soon as they realized the mortgage market was unraveling. Goldman settled this suit for a record $800 million.

Goldman was the only Wall Street bank not to suffer major losses in 2007 and 2008. Because of their massive holding holdings in credit default swaps, they easily absorbed losses from mortgage backed securities that became worthless when real estate values crashed and mortgages became delinquent.

In 2007 they had a net profit of $11.4 billion, despite a $1.2 billion loss in their mortgage backed securities. In 2008, their net profit was $2.3 billion, despite a $1.7 billion loss in their mortgage division.

Goldman CEO Lloyd Blankfein argued against receiving a TARP bailout because they obviously didn’t need it. Treasurer Secretary Hank Paulson insisted they take a $10 billion bailout anyway to “inspire investor confidence.” Goldman repaid it with a 23.5% annualized dividend in July 2009 – banks with outstanding TARP loans were restricted in the size of CEO bonuses they could pay.

Goldman would also receive $14 billion of the bailout AIG insurance received. This covered the credit default swaps AIG had sold them.

*See An IMF Proposal to Ban Banks from Creating Money
**Eliot Spitzer was one of the few government prosecutors willing to go after Wall Street banks for white collar crime. His popularity resulted in his election as governor of New York in 2007. The banks fought back behind the scene and forced his resignation in 2008 by exposing his involvement with a high end prostitution ring. This is described in the 2010 documentary The Rise and Fall of Eliot Spitzer
***”Spinning,” which is illegal, is defined as the offering of free or discounted IPO (initial public offering) shares to executives of an outside company, in the hope they will influence the company to buy additional shares at an inflated price. “Laddering” is another illegal practice in which underwriters and clients collude to drive up share prices (by trading them at inflated prices) and selling them once they hook in enough suckers. Many analysts suspected laddering occurred in the Amazon initial public offering (IPO), with the share price bottoming out when all the insiders sold their shares.
****A credit default swap (CDS) is a type of insurance, a bet that pays off if a particular security goes belly up. CDS’s are traded like other derivatives and you don’t have to own the security for the CDS to pay off.

Also posted at Veterans Today

Profits, Not Crime, Drive Incarceration Rates

prison-call-centerInmate-run call center

This second post deals with the corporatization of US prisons and the private companies who profit from high incarceration rates.

US rates of violent and property crime have been declining steadily since 1990. Logically dropping crimes rates should produce a drop in incarceration rates. Yet until 2009, when 26 states acted to reduce prison populations, the exact opposite was true. As crime rates declined in state after state, the number of people they locked up skyrocketed.

Presently the US “enjoys” the highest incarceration rate in the world. At 500 per 100,000 population, it’s  five times higher than other developed countries.

A number of factors contribute to this disgrace. In my view, the first and most important is the enormous profit potential of American’s prison industry, resulting in major pressure on state legislatures from private for-profit prison companies and their friends at the American Legislative Exchange Council place on state legislatures. The second is a raft of tough-on-crime legislation driven by deliberate neoconservative race-based fear mongering. The third is the systematic defunding of mental health services in the US, leading to the warehousing of mentally ill patients in federal and state correctional facilities.

Profit, Not Crime, Drives Prison-Building Spree

Prison privatization, which began under Reagan in the 1980s, has turned incarceration and immigration detention into a multibillion dollar growth industry with its own trade shows, conventions, mail order catalogs and state and federal lobbyists. Unsurprisingly Corrections Corporation of America (CCA), Wackenhut and the 16 other for-profit prison companies are major campaign donors to federal and state lawmakers who advocate tough-on-crime and tough-on-immigrant policies. These are usually the same legislators who sponsor bills to replace state prisons with private for profit correctional facilities.

Who’s Making Big Bucks Off Prison Privatization?

The booming private prison industry provides numerous opportunities for banks and other corporate interests to skim off profits at taxpayer expense:
1. The Wall Street investment banks (e.g. Goldman Sachs) who issue the bonds to finance the building of state and local prisons.
2. The private companies who run prisons – Corrections Corporation of America (CCA) and Wackenhut are the largest, but there are now 18 altogether. CCA also operates our federal immigration detention facilities and helped write Arizona ‘s controversial immigration law.
3. Private companies that provide food services, health care, and assorted security paraphernalia to prisons.
4. Bed brokers who, in Texas, earn $2.50 – 5.50 per man-day (for the duration of a prisoner’s sentence) by recruiting prisoners from out of state.
5. Major corporations who save on labor costs in 37 states by contracting cheap prison labor.

The list of corporations employing cheap prison labor is extensive: IBM, Boeing, Motorola, Microsoft, AT&T, Wireless, Texas Instrument, Dell, Compaq, Honeywell, Hewlett-Packard, Nortel, Lucent Technologies, 3Com, Intel, Northern Telecom, TWA, Nordstrom’s, JC Penny, Best Western Hotels, Honda, Chevron, BP, Victoria’s Secret, Revlon, Macy’s, Pierre Cardin, Target Stores, and many more.

Virtual Slave Labor

Inmates in state penitentiaries generally receive the minimum wage ($7.25). Not all do, though. In Colorado state prisons, they get about $2 per hour. In private prisons, they receive as little as 17 cents per hour. The highest-paying private prison is CCA in Tennessee, where prisoners receive 50 cents per hour.

As Vicky Pelaez writes in Global Research, thanks to dirt cheap prison labor, manufacturing jobs that corporations previously outsourced to third world sweatshops are returning to the US. She gives the example of a company operating a maquiladora (Mexican assembly plant near the border) that closed down operations and relocated to San Quentin State Prison in California.

The virtual slave labor that occurs in state prisons also drives down wages in neighboring communities. Pelaez gives the example of a Texas factory that fired its 150 workers and contracted the services of prisoners at the private Lockhart Texas prison, who assemble circuit boards are assembled for IBM and Compaq.

BP also made profitable using of cheap prison labor in cleaning up Deepwater Horizon disaster in the Gulf of Mexico.

Many US corporation employ prison labor to staff their call centers. According to NBC News, If you recently called your motor vehicle department or received a telemarketing call from Microsoft or Hitatchi, it’s likely the person on the other end was a prisoner.

Another great resource on the scandalous prison industrial complex are is the excellent series Nation at Risk  at Deconstructing Myths.

photo credit: The Politics of Information

To be continued.

Is Your Boss Pocketing Your State Income Tax?

corporate flag

Corporate Welfare for Goldman Sachs, Walmart and 2,700 Other Companies

According to investigative journalist David Cay Johnston, more than 2,700 companies have secret agreements to keep the state income tax they withhold from your paycheck.

Goldman Sachs, Walmart, Chrysler, Ford, General Motors, Nissan, Mitsubishi, Motorola, Proctor and Gamble, AMC Theaters, Toyota and Electrolux are but a few of the big name companies involved.

As Johnston writes in a 2011 Reuters column:

“Instead of paying for police, teachers, roads and other state and local services that grease the wheels of commerce, Illinois workers at these companies will subsidize their employers with the state income taxes they pay. The deal to let employers keep half or all of their workers’ state income taxes represents a dramatic expansion of a little-known trend in the law: diverting taxes from public purposes to private gain.”

As of April 2012, the states which have signed these secret agreements included Colorado, Connecticut, Georgia, Illinois, Indiana, Kansas, Kentucky, Maine, Mississippi, Missouri, New Jersey, New Mexico, North Carolina, Ohio, South Carolina, Utah.

Read more at Taxed by the Boss


photo credit: watchingfrogsboil via photopin cc



Speculating with our Food

In 2011, “food derivative” speculation replaced financial derivatives as the hot new investment promoted by major investment banks like Goldman Sachs and JP Morgan. According to numerous studies, food speculation rather than shortages, are the main reason for skyrocketing food costs.

The really scary news is that in addition to speculating heavily on food commodities, these same private equity funds are also buying up huge tracts of land in the third world.

The Great Land Grab

A 2009 research project by the Oakland Institute (The Great Land Grab) reveals startling facts about the corporate land grab in the third world – another major factor in skyrocketing food prices.

According to the International Food Policy Research Institute (IFPRI), foreign investors have secured more than 50 million acres of African farmland to develop factory farms for export crops. In addition to investment banks and private equity funds, multilateral agencies, such as the International Financial Corporation (the private sector branch of the World Bank), are also major players in the “corporatization” of global agriculture.

The IFC plays a dual role in increasing private investment in the third world – via direct investment and by pressuring developing countries to create “business enabling environments.” Another World Bank agency, The Foreign Investment Advisory Service (FIAS ), also plays a role by pressuring third world governments to improve their “investment climate,” by relaxing environmental, tenant rights and food security laws and abolishing tax and duties on foreign investments.

Africa is the major target, both for western investment banks and booming Asian economies, driving tens of thousands of subsistence farmers off land they have farmed for generations.

Corporatizing the Global Food Supply

A UK company started in 1997, called  Emergent Asset Management, claims to be the largest speculative fund investing in African industrial agriculture. It uses private equity to take control of large tracts of African farm land. Their prospectus attracts investors by predicting a armed conflict between the West and China will trigger mass food shortages – accompanied by price spikes that guarantee a handsome return to investors. Emergent’s founders, Susan Payne and David Murrin are former high level traders for Goldman Sachs and JP Morgan – well-known as the architects of food derivative speculation.

Emergent’s direct control of large amounts of agricultural land – combined with its ability to attract investors through its equity fund – puts unprecedented control of the global food supply in private hands. It does so by creating a new type of vertical integration, in which a single company controls vast amounts of land, food production and processing — while simultaneously inflating global food prices due to the speculative nature of the fund. As you can see in the video Emergent uses in their pitch to investors:

The Perp Walk – the 1% Have Names

In 2011, the Oakland Institute fingered other millionaires and billionaires grabbing African land via unscrupulous deals with corrupt village leaders (who sign away communal land rights without community consultation) – and by helping to orchestrate armed attacks on families who refuse to leave their land. At the top of the list are

Bruce Rastetter — CEO of Pharos Ag, which has bought more than 300,000 hectares in Tanzania for large-scale food crop, beef, poultry, and biofuel production. This project will displace tens of thousands of civil war refugees awaiting Tanzanian citizenship.

Leonard Henry Thatcher and David Neiman — runs Nile Trading and Development (NTD), which has bought 600,000 hectares in South Sudan through a secret agreement with influential locals who went behind the backs of other community members.

Kevin Godlington — (close associate of former prime minister Tony Blair) CEO of Crad-l and Director of Sierra Leone Agriculture (SLA) and its parent company, the UK-based CAPARO Renewable Agriculture Developments. SLA has bought 43,000 hectares in Sierra Leone to plant palm oil plantations.

Enter the Bill and Melinda Gates Foundation

The March 31 Guardian reports that the Bill and Melinda Gates Foundation (along with USAID and the Dutch and Danish governments) are backing a new World Bank scheme to further industrial agriculture at the expense of the smallholder farmers who produce 80% of the food consumed in the developing world. The new program is a ranking system called the Benchmarking the Business of Agriculture (BBA).

Here’s what the Our Land is Our Business campaign, organized by the Oakland Institute and like-minded food rights groups, has to say about the BBA:

“Despite a language that claims concerns for small farmers, the goal of this new agriculture-focused ranking system is far too clear: [to] further open up countries’ agriculture sectors to foreign corporations. The doing business [rankings] give points to countries when they act in favor of ‘ease of doing business’. This consists of smoothing the way for corporations’ activity in the country by, for instance, cutting administrative procedures, lowering corporate taxes, removing environmental and social regulations or suppressing trade barriers.”

People can sign on at Our Land is Our Business to send a message to the World Bank about looking after people rather than corporations.