Key Murdoch Minion Tapped for Top Newark Public Schools Job

Newark, New Jersey has a long history of "troubled" public schools. All the king's men and all the king's horses have not been able to put the Garden State's largest K-12 system together into something approaching satisfactory performance. It got to the point where the state took over the school system. Local voices were pushed away, while Newark's public education efforts attracted the attention of political opportunists and wealthy "we-know-what's-best-for-you" ideologues.

Cami Anderson
(Image: state.nj.us)

Ironically, bellicose GOP governor Chris Christie and liberal media darling Cory Booker found common ground regarding Newark's schools. During Booker's tenure as Newark's mayor, Christie installed Cami Anderson as Newark's superintendent of schools. This was done with Booker's blessing. Ms. Anderson was no stranger in the night in the movement to "reform" K-12 education. She had served in executive capacities with Teach for America, an organization which used marginally trained, well-intended college grads as instructors in some of the nation's most desperate urban schools. (The teachers work like dogs, last about a year or two, and then in the vast majority of cases find another career.) This 21st Century version of a children's crusade also provided administrators with leverage against teachers' unions. Later, Anderson worked in New York for Wireless Generation, which later became Amplify, a Rupert Murdoch-owned enterprise whose ostensible purpose is K-12 "reform" via data-driven imperatives (supplied and managed by Amplify). Murdoch's education biz, through former NYC Education Commissioner Joel Klein, established a lucrative beach head in Gotham. Among Klein's key associates was Chris Cerf.

Chris Cerf
(Image: nj.com)

Cerf supervised Anderson's work with the NYC Department of Education. He later crossed the Hudson and worked as Governor Christie's Acting Commissioner of Education. His key hire was...ta da...you guessed it, Cami Anderson, as Newark's K-12 boss.

In 2014, according to The Star-Ledger reporter Bob Braun, Amplify Education (one of Amplify's corporate entities) received three contracts totaling about $2.3 million contract from the Newark public school system. At the time, Cerf was in the midst of a transition between his role as the state's top education dog, and jumping onto Amplify's payroll.

Recently, Ms. Anderson decided to call it quits in Newark, about eight months before her contract would have expired. A new mayor, a pissed off community whose wishes were consistently ignored by Booker and Christie, and a governor who would be king were three strong reasons for her departure. The new superintendent? Chris Cerf. He'll get a three-year deal to run the system his way. Cerf, to no one's surprise, advocates more charter schools, defanging the teacher's union, installing data-driven "solutions," and lots and lots of electronically-based testing. He'll also feel at home with "concerned" billionaires who have their own education "solutions." As it happens, Newark is an ideal petri dish for these social experiments.

Chris Christie, Oprah Winfrey, Corey Booker, Mark Zuckerberg
at the announcement of the Facebook boss' $100 million stock "donation"
to improve Newark's public schools.

We'll see if Cerf engages the parents of Newark children, something Anderson did not manage to accomplish to anyone's satisfaction. It will also be interesting to follow the money. Power brokers, notably Booker and Christie, have stonewalled any attempt at transparency regarding the Newark school system's finances and program decisions. Will Cerf be different? His political and corporate connections suggest that will not be the case.

Christie and Cuomo Deliver Tag-Team Veto to Port Authority Reform Drive

Batman vs. Penguin mayoral election debate
(Image: dtvusaform.com)

Just before midnight on a holiday Saturday, the political patronage machine known as the Port Authority of New York and New Jersey (PANYNJ) received, figuratively speaking, two governors' pardon. The issue was the reform of the bistate agency in the wake of the Bridgegate scandal. Curiously, the Republican Chris Christie and Democratic Andrew Cuomo, both of whom have presidential ambitions, found common ground in their respective vetoes. They cited their alternative reform plans, which critics asserted would water down the effort to shine light on the PA's often opaque award and management of lucrative contracts.

According to The New York Times' report on the vetoes, the far stronger reforms had received unanimous approval votes from each state's respective legislatures. Due to the arcane nature of the PA's charter, change requires approval from both states' governors and legislatures. Unanimously positive votes are extremely rare. However, the shadow vote -- the fixers and deep pockets who appear on the PA's board of directors and executive positions -- was most likely unanimously negative.

Recently, I've been reading Italian crime fiction. The works often offer a window into the corruption that characterizes the Italian political process. Unlike Italians, Americans largely remain in denial of its embrace of a wink-and-nod society. While "networking" has become a watchword in American life, the implications of that concept, especially in relation to back-door deals and opaque transactions, has largely gone unexplored. The Port Authority reform episode demonstrates that "networked" crony corruption remains very alive and well, and transcends left-wing or right-wing rhetoric.

FCC Chairman Offers Sketchy Defense of Non-Net Neutrality Policy

FCC Chairman Tom Wheeler
(Image: The New Yorker Magazine)

When we last left FCC Chairman Tom Wheeler, he was producing new Internet policy that provided for pay-to-play "fast lanes" that upended net neutrality guidelines. Recently, the former cable TV lobbyist has been defending his position. One broadside included Wheeler's claim that he would regulate the Internet along the lines of a utility such as an old-fashioned telephone company if distributors (such as Comcast) misbehaved. Of course, he would the principal arbiter determining when that legal structure should be proposed, never mind implemented.

Wheeler's weaving and dodging is neatly summarized by Sean Hollister in theverge.com. The writer views the FCC chairman's assertions skeptically, as well he should. Wheeler's proposal would quickly become entrenched policy. Overturning Wheeler's new regulations, in the face of fierce opposition lobbying from deep pocketed media and high tech firms who benefit from the "fast lane" scenario, seems a very unlikely path to change.

Federal Grand Jury Indicts Pearl Arts-and-Crafts Chain Owner In Tax Fraud Case

Pearl/Canal Street

Just around the time when the current generation of hipsters was born, New York artists often purchased their supplies at the store everyone called "Pearl." The Canal Street location and somewhat funky interior made the store something of an icon. However, there were frequent whispers about Pearl's solvency, one wondered about the strength of its vendor relations, and the store couldn't or wouldn't escape a vaguely corrupt aura. (That feeling was hardly an unusual one in New York stores of that time.)

Over the years, Pearl expanded beyond Canal Street, but somehow lost its soul. Recently, I walked past the Canal Street branch. It looked sadly off its game, without the ragged verve that characterized its better years.

Pearl will need something more than pixie dust to recover its mojo. A number of years ago, a federal grand jury indicted Pearl's Florida-domiciled owner, Robert Perlmutter, his East Meadow, NY store manager, and nine others, including Mr. Perlmutter's accountant. The East Meadow store manager has quite a bit of explaining to do. According to the Fort Lauderdale-based Sun-Sentinel, which broke the Pearl story, the caper became a crime investigation due to a snafu at UPS. It's alleged that the East Meadow store manager routinely shipped boxes of cash from his store to Perlmutter via "Brown." One of the boxes broke during shipment. The money flowed out and UPS notified law enforcement authorities. The Feds became quickly interested in the matter.

Federal indictments are characteristically bad news for the accused. The Feds usually win the cases. Since that was the situation in la cause Perlmutter, then it's likely Pearl is kaput. That event wouls spell fini to an era that truthfully died long ago, partly from the very corruption that the federal indictment has targeted.

New HGTV Series Celebrates House Flipping

Less than a decade ago, the American housing market was going up, up, up. At one point, the National Association of Realtors, through a spokesperson, dishonestly maintained house prices would "inevitably" increase during one's lifetime. The gold rush in housing made flipping a common practice; television networks such as HGTV capitalized on the fever that encouraged homeowners to sink lots and lots of money into one's domicile. Alas, the 2008 crash and subsequent revelations about CBOs, dogshit mortgages, and robo-signed foreclosures forced The Land of the Free and The Home of the Brave to take a hard look at the whole creepy, corrupt residential housing business.

What did Americans learn from this sorry episode? Apparently nothing, if a story in today's siliconvalley.com is any indication. The article discusses a new HGTV series which celebrates house flippers. That this style of risky investing is now considered fascinating entertainment, especially in light of the recent housing disaster, is incredible. However, like it or not, these dumb shit TV shows offer a window into what's currently acceptable to consider.

Some people assume house flipping is an easy, foolproof get-rich-quick scheme. In fairness, the HGTV reality TV participants note the risk and hard work they endure to achieve their profitable ends. Of course, the success of house flipping depends upon a "hot" real estate market in which property values indefinitely soar. That this scenario harms society as a whole does not dawn on HGTV or its "reality" participants. But who would want to burst HGTV's reality TV bubble with....well, reality?

FCC Backs "Pay to Play" Internet Access

FCC chairman Tom Wheeler
(Image: newyorker.com)

Later this week, the FCC will propose new Internet access regulations which will effectively cost consumers a lot of money. As siliconvalley.com's Levi Sumagaysay noted, the new "pay-to-play" Internet will open high-speed access to the top bids and more or less compel the likes of Netflix to pay for preferential treatment. The new FCC chairman, Tom Wheeler, certainly understands the issues underlying the proposals. After all, he was a former cable TV lobbyist. As it happens, firms such as Comcast and Verizon stand to make a bonanza from the new regulations' impact.

In fairness, the FCC was pushed into a corner via recent judicial decisions that effectively punctured Net neutrality as a legal concept. What's striking is the unwillingness of Congress, or any power structure, to maintain an Internet that retains a sense of individual freedom and a sense of unpredictability. Well, it was nice while it lasted, eh?

NY Times' "Exclusive" on Elizabeth Gilbert's House Sale, or "What's Wrong With This Picture?"

Elizabeth Gilbert

Good Friday was certainly good for Eat Pray Love author Elizabeth Gilbert. In a piece many people would have gladly paid thousands of dollars to place, The New York Times' online edition today included an "exclusive" (the Times' own characterization) on Ms. Gilbert's impending house sale. This article's teaser and link appeared on the Times' splash page (thank you), included a generous photo of the rural New Jersey home on which Gilbert has put a "for sale" sign (thank you, again), and rambled for hundreds of words about the structure and of course, the wonderful Elizabeth Gilbert (one more time, thank you).

The piece's most shameless part was its inclusion of the listing agent's name, contact phone number, and asking price for the house. It even included the current property taxes on it and open house dates! Now, if you're thinking of selling your home, you should seriously consider getting cozy with someone at the paper that insists it selects "All the News That's Fit to Print." Now that I'm thinking about it, perhaps the Times put out its own "for sale" sign for feature stories. Favors and crony corruption come in many forms, as the Times knows only too well.

The Elizabeth Gilbert story comes on the heels of the Times' dismal showing at this year's Pulitzer Prize awards. If one has even minimal journalistic standards, the Gilbert piece is nothing less than a black eye for a once-proud newspaper. What's wrong with the Times? The thinking and execution of the puff piece on behalf of Elizabeth Gilbert is a good place to start one's exploration.

Obama Money Man Gives Pro-Comcast Merger Testimony to US Senate

David Cohen
(Image: corporate.comcast.com)

The name "David Cohen" may not be a household word. However, the company he represents -- Comcast -- is in more households than nearly any other cable television provider. Cohen recently testified on behalf of his employer during Senate hearings on the Comcast-Time Warner Cable (TWC) merger.

While many US mainstream media outlets reported the proceedings in a desultory way, only the British Financial Times bothered to connect the insider dots related to Cohen. Reporter Matthew Garrahan wrote that Cohen, a Comcast executive vice president, happens to be one of President Obama's financial "bundlers." He also hosted a fundraiser for 44 at the EVP's home.

US Senator Al Franken (D-MN)
(Image: wikipedia.com)

Comcast and Obama are cozy bedfellows. The FT noted that, since 1989, Comcast's employees and PAC gave more campaign contributions to President Obama than any other politician. It should be noted that Comcast and NBC merged during the Obama presidential years. Today's Comcast-TWC shotgun marriage hearings in the Senate notably did not provoke any substantive pushback from the solons, except from the former entertainer and current senator from Minnesota, Al Franken. Unsurprisingly, Cohen did not think the merger would lead to any consumer savings. However, he did chat up the potential for "innovation" that the Comcast-Time Warner Cable smerge would supposedly generate.

Whenever a media or tech company uses "innovation" as their justification for rate or price increases, one should be suspicious. I'm curious just what "innovations" Comcast could reliably project as a result of the merger. Just don't expect the US Senate -- and certainly not the Obama Administration -- to ask that question.

Alleged DC Charter School Scam: Who Says There's No Money in Education?

The mantra about how "there's no money in education" keeps encountering inconvenient details which question the chant's veracity. Elements of the for-profit world, which has eyed the taxpayer funded education funding as so many chickens to be plucked, has entered the K-12 school arena. Its alliances with politicians, "committed" millionaires, and dim media reporting (The Today Show, come on down) offer formidable clout, especially against a fragmented collection of interested parties, such as local interest groups like the characteristic school district PTO.

According to a report in The Washington Post, attorneys for the District of Columbia Office of the Attorney General have filed new allegations against a local charter school enterprise. The filing claims corporate officers of Options Charter Public School (OCPS) "diverted more than $3 million from the Northeast Washington school for at-risk teens to companies they founded." The brief noted a parade of self-dealing including a school bus "ridership bonus" of $100,000.

J.C. Hayward
(Image: wusa9.com)

The accused apparently owned a firm called Exceptional Education Services (EES), which effectively served as a shell company designed as a collection device for skimmed funds. One key player in the OCPS/EES scheme was J.C. Hayward, a very visible DC television personality who happened to be board chair and part-owner of EES. The TV talking head's attorney has claimed his client had no knowledge of any illegal activity. That's a curious claim for someone deeply connected to DC's power structure and is presumably worldly wise.

LAUSD students using iPads
(Image: ktla.com)

The larger issue in this story goes beyond a cautionary tale of local corruption. The K-12 education "reformers" have made a case that strong CEO-style business management and teacher "accountability" would lead to improved K-12 education. All of this would be accomplished through increased online content, data-driven teaching and supervision, and relentless testing. The goal of redirecting the flow of public funds to private gain goes unstated. Meanwhile, the imperative to make technology and its products a key educational tool has gone forward without any serious vetting.The stampede into gadget purchases has led to some troubling situations, such as the Los Angeles Unified School District (LAUSD) purchasing hundreds of thousands of iPads at consumer market rates. At the same time, LAUSD did not buy keyboards for the devices. Oops...that would be "an extra expense," which the school district had to add on after the fact. Software? Well, various programs were sold as a three-year lease, after which LAUSD would have nothing to show for its rental costs.


Where was the strong CEO management in the LA and DC episodes? How did these initiatives advance the cause of K-12 education "reform"? Where was the senior management accountability? Where was the "community input" reformers are so keen to advance as one of their positive developments?

Image: mainepressherald.com

Bottom line: who says there is no money in K-12 education? The record suggests there's plenty of gold in the K-12 hills, and it's being mined now. The fact that the gold is taxpayer money, largely committed without genuine transparency or community participation is kept largely quiet. (Cory Booker and Facebook boss Mark Zuckerberg's money to the Newark, New Jersey schools comes to mind as Exhibit A. It took a Freedom of Information Act request to obtain any useful information about this situation.) The understanding of the profit motive in the K-12 world could illuminate inconvenient details, the knowledge of which would interfere with profitable revenue streams that could continue for a generation. Now, who would want that situation brought to light?

Wall Street's Entry Into Residential Rental Market "Might Not End Well"

When the Great Recession struck the nation with full fury, the residential housing market suffered some serious blows. The most significant damage was done in the low-end residential segment, where strung out owners found themselves staring at foreclosure. At the time, the reigning thought was that foreclosures would depress housing prices. That event did not happen, with certain exceptions. What stemmed the foreclosure tsunami was Wall Street intervention. No, this was not done for the benefit of the Republic. Rather, sharp-eyed financiers saw an opportunity to buy low and, presumably, sell high at some point down the road. In the meantime, Wall Street firms such as Blackstone became landlords. The irony, as Prashant Gopal points out in a thoughtful Bloomberg opinion piece, is that the foreclosed owners have often become rent paying tenants.

Image: daytondailynews.com

The deal for Wall Street is a sweet one, as firms such as Blackstone have access to Federal Reserve funds at a rate roughly half of what mere mortals pay for a routine home mortgage. The chutzpah does not end there. Another Bloomberg article notes how Magnetar Capital, an Illinois-based alternative asset manager that's a new player in the foreclosed residential rental world, demanded a tax rollback on the foreclosed properties it recently purchased in Huber Heights, Ohio. Magnetar real estate representatives promised the money would be used to spruce up the acquired properties. Of course, unstated was that the "improvements" would benefit Magnetar rather than Huber Heights' neediest citizens.

Placing much faith in the promises of indifferent, Olympian financial firms does not seem a way for a community to survive, never mind thrive. Should one trust Magnetar's promises? The Bloomberg report on Dayton noted that

In 2006 and 2007, Magnetar helped banks create complex securities backed by risky mortgages. At the same time, the hedge fund [Magnetar] made bets that would profit if the homeowners defaulted. The U.S. Securities and Exchange Commission investigated the deals after housing imploded and has fined some of the banks involved. The government hasn't filed a complaint against Magnetar.

The notion that one should trust the lofty sentiments of a hedge fund that created dodgy mortgage-backed securities and bet against them seems downright stupid. The reality is that the Huber Heights tenants' financial assets are essentially being strip mined. Meanwhile, this dark scenario is being played out against a steady drumbeat of  economic "recovery" assertions from East Coast major media players, DC politicians, and Wall Street spokespeople. A glance at Huber Heights' new tenant class strongly argues otherwise.

A Look Ahead to 2014's Surveillance Politics

Tech's high priests and their financial enablers continue to squirm under the harsh light the Snowden surveillance revelations cast on their activities. Naturally, Silicon Valley, which has viewed the developed world as its experimental animal, has decided to publicly stand tall against the alleged bad actors at the NSA.

A few caveats should make one pause in that convenient posture. Peter Thiel, Pay Pal principal and leading libertarian light in the Valley, happens to be a major investor in a firm called Palantir. This company was characterized in a recent Financial Times piece as "a secretive data-mining company that made its name working for the CIA..." Jeff Bezos' Amazon, which has been quiet in the entire NSA-Valley imbroglio, has a cloud computing contract with the Central Intelligence Agency. As for other tech firms, do you want to guess how many have federal contracts?

Peter Thiel

Meanwhile, the usual hypocritical "rule of law" arguments high tech trots out to defend its global interests and ruthless invasion of personal privacy have notably not emerged to protest the NSA's own data "extraction" efforts. After all, the NSA is a federal agency with broad mandates to protect and serve the nation. And that's the law, too.

A recent article in Wired suggests that diminished expectations for "business development" is a significant reason the Valley was shocked to discover gambling in its data collection and exploitation casino. Chris Finan's opinion piece -- "What To Expect From Surveillance Politics in 2014 (Hint: It's Not Reform)" -- asserts high tech's public outrage partly stems from anticipated international business losses as a consequence of the Snowden expose. Finan contends

it’s safe to say that American tech executives are angry. And they have good reason to be: U.S. companies’ association — via cooperation, coercion, or simply unwitting victimization — with government surveillance programs have cost them huge shares of the IT services market internationally.Forrester Research has projected that the overall impact to the U.S. cloud computing industry could be as high as $180 billion, or 25% of IT service provider revenues over three years. While many companies will try to convince policymakers of the the significant costs of intrusive surveillance and the need for reform — as a group of tech execs tried to do this week in a meeting with President Obama — expect companies to take matters into their own hands.

What's fascinating is the Valley's relentless determination to transform the world into a global data colony which these firms are free to exploit as they please. An essential piece of that initiative is the evisceration and degradation of personal privacy. Anyone who has received unwanted "targeted" advertising on their phones, tablets, or computers can grasp this concept. Why does the Valley insist it qualifies for an exemption from criticism over its arrogant, anti-privacy activities? The NSA, in this case, is a convenient pinata for actions high tech has developed, exploited, and tried to wink and nod its way through legal action and protest.

One wishes the Valley, in its collective sense, had a conscience that went beyond IPO "success" and an unwavering faith in "progress" (as defined by improved data mining and consumer gadgets). Those sentiments are rarely displayed. At least the NSA has a mission to guard our nation. The Valley's primary mission is to guard its own interests, its own egos, its own financial opportunities. Who do you trust, baby?

Amazon, USPS Sign Sunday Delivery Deal

The Amazon-friendly Obama Administration has just concluded another Amazon-friendly deal with the secretive tech company. According to a story in today's Seattle Times, the PO and Jeff Bezos' firm will begin Sunday deliveries in time for the Christmas shopping season. The arrangement is currently limited to the New York and Los Angeles metropolitan areas, the two leading retail markets in the United States.

The deal gives Amazon a significant commercial advantage, in that it can use the USPS infrastructure and staff to deliver goods. The extra available delivery day is also another arrow in Amazon's competitive quiver.

How taxpayers benefit from this agreement was not exactly spelled out, although Amazon will pay for the privilege of going postal. It's public knowledge that the USPS is desperate for money. Amazon has the cash, and the clout with the Obama Administration, to make a deal. According to the Seattle Times story, any firm could have negotiated with the Postal Service for a Sunday gig. However, USPS officials acknowledged only Amazon pursued a deal. One wonders why.

Amazon's Chattanooga, TN facility,
cited by President Obama as an example of
"middle-class" job creation

Of course, as with all things Amazon, the contract is under seal. Inquiring minds would like to know why a federal contract not connected to national security should be a closely guarded secret.

This is Amazon's second federal contract coup this year. Earlier in 2013, the Seattle-based enterprise signed a contract to provide the CIA with cloud-based data systems and management.

DC School Agency Pays Consultancy $89,000 For One Day of Work

Think about all the times you've heard "there's no money in education." Well, it's not quite that simple, as District of Columbia residents recently discovered to their regret. According to a Washington Post' story, a politically connected consultancy received nearly $90,000 for one day of work.

Some of the more salient details of this outrageous sham are worth noting:

• The contract (which was technically a grant) was no-bid
• The winning firm -- the publishing arm of SPC Consulting -- is owned by a husband-wife team. The wife is a former US Department of Education official; the husband is the chairman of the Illinois State Board of Education
• The DC bureaucrat responsible for signing the consultancy had done prior business with the firm in Chicago
• The DC fee paid for a half-hour speech, three 45-minute workshops, and (heaven help us) a book signing of the wife's book!
• The books cost $30 per unit
• SPC charged DC $250 per person for its workshops, with 300 participants included in the grant. The same product was offered to Chicago public schools for $70 per person less than what DC was levied. Why the spread for DC? According to consultancy spokespeople, the seventy dollar per head toll covered travel and expenses for three people. In this case, the math isn't complicated: $70 x 300 = $21,000
• An SPC spokesperson defended its fees, characterizing them as "below normal industry rates."

What's wrong with education in the United States? Beats me.

Chicago University's $1 Million Investment in Chancellor's House: A Cautionary Tale

A dreadful trend of the new millenium is how few middle-class American families' kids can afford to attend college. University tuition and fees march ever upward, well in defiance of inflation. Academia typically sings the blues over funding, and notes how its charges for services are necessary and even prudent.

Fewer people are accepting the U's well-rehearsed, arrogant financial song-and-dance. Stories such as one the Chicago Tribune reported today are among the reasons why.

University of Illinois-Chicago chancellor Paula Allen-Meares
(Image: University of Illinois-Chicago)

The article notes how the University of Illinois-Chicago spent over one million dollars to refurbish a house for its chancellor. The deal was that the school's boss, Paula Allen-Meares, would hold frequent receptions and other activities at her home. Her scorecard for the past four years shows a grand sum of eleven events.

When the Trib journalists raised pointed questions about this curious arrangement, the university tried its best to deflect the issue, misrepresent activities associated with the house, and wish the whole episode away. Chancellor Allen-Meares did not deign to answer any reporters' inquiries, even though she works for a public institution.

Universities generally don't like this sort of spotlight. They're uncomfortable explaining why their chosen few enjoy privileged lives while students and their families get financially squeezed. Chancellor Allen-Meares earns over $400,000 annually. That's over and above the free housing UIC maintains for her, while the school pays annual maintenance charges of approximately $100,000 on it. Allen-Meares is on the last legs of her five-year contract. If the university's board gives her a clean bill of employment health, she stands to earn a $375,000 bonus. The UIC chancellor does not get a cash housing allowance. However, the chancellors of the other two University of Illinois campuses do. Those yearly stipends range from $24,000 to around $30,000. Considering these are very highly compensated employees, the allowance is akin to throwing money at the chancellors. Why do they need a housing allowance at all?

Ah, but in the corrupt world of senior academic administration, these payoffs are part of the game. The next time someone tells you about the financial struggles of Alma Mater, tell them what the U really needs is financial transparency, responsible executives, and a commitment to end corruption. Then ask them how quickly the U will act on those initiatives. And, yes, "never" is an answer.

Wall Street Firms Concoct Bond Backed By Home Rental Income

Like a moth to a flame, Wall Street has returned to creating dodgy real estate securities. In this case, Blackstone and Deutsche Bank are about to market a bond backed by home rental income. However, as the Financial Times reported, the two firms are not packaging Manhattan residential building income. Rather, they are using rental income from foreclosed homes Blackstone and others purchased for pennies on the dollar and transformed into "affordable" housing, often marketed to those who lost homes via the rancid, corrupt foreclosure process.

Blackstone has been a major player in the foreclosure/rental market. The general sense was that Blackstone would rent the homes and sell them for enormous profit when real estate "recovered." In the meantime, Blackstone and Deutsche Bank can leverage their property ownership into funky securities. One catch in the process is the need for a credit agency to provide appropriate blessing to the bonds. Apparently, and unsurprisingly, one such firm has been found.

Let's see if federal regulatory agencies, which have essentially played matador to Wall Street's bulls, ask questions about this new scheme.

Is Florida The Wackiest State in the Union?

Florida governor Rick Scott

Two generations ago, the prevailing wisdom maintained that California was filled with strange people, odd beliefs, and weird activities. One really doesn't hear that about the Golden State these days. Perhaps that's due to Florida supplanting California for sheer goofiness.

Ah, yes, the Sunshine State. It's a cozy home for drug lords, Medicare cheats, communities filled with the nearly dead, and wacky politicians. I took a glance at the Miami Herald (a relatively sane, South Florida oasis of journalism), and here's a sampler of today's stories:

• Republican governor Rick Scott cancelled a $25,000/head fund raiser, which featured a live alligator hunt. Keep in mind that 'gators are a federally protected species.
• Polk County sheriff's deputies arrested Pastor Terry Jones today. He intended to burn thousands of Qurans as a protest to the events of September 11, 2001.
• The former CEO of a South Florida psychiatric hospital was sentenced to 25 years for milking the Medicare system out of $67 million. The now-convicted felon is 60 years old.

These are not particularly unusual stories to emerge from the Sunshine State. Trust me: California has nothing on Florida when it comes to wackiness.

Alberto Moravia, Italian Fascism, and the NSA Security State

Alberto Moravia
(Image: raistoria.rai.it)

Lately, I've been reading about the life and work of the 20th century Italian novelist Alberto Moravia. His novels and short stories, often exploring middle-class puzzlement or conformism in the face of Fascism, seem eerily connected to today's political and social situation in the United States. Two years ago, The New York Times' Rachel Donadio wrote a telling piece about Moravia's work and Silvio Berlusconi. As with the United States under the NSA shadow, the Berlusconi regime had taken, as Donadio noted, "all the oxygen out of the room."

Donadio cites a passage from Moravia's Two Friends, in which a character "attributes his lack of conviction -- about his career, his lover, his politics -- to his formation under Fascism." To quote Moravia's work, it had

wormed its way into his blood, not in the form of political allegiance, but rather as a kind of torpor and moral passivity, like a poison that slowly intoxicates and weakens the body. He was confronted once again with his feeling of impotence, but this time it not only affected his personal life but encompassed the destiny of the nation and humanity as a whole.

Torpor and moral passivity? Sounds like the American public's response to the devaluation of personal privacy, brought to you by the Feds and the military-technological complex.

Moravia's books remain in print. Many are translated into American English. The works of the author who wrote The Conformist remain strong and vital today. Can we say the same about our own society?

Leanin.Org Suddenly Finds Money For One Paid Internship

Image: npr.org
FYI: NPR has yet to file a report
on the Leanin.org intern story.

This week's public storm over Sheryl Sandberg's Leanin.org's posting of an opportunity to work gratis for the organization has led to some reconsideration of the offer at the women's empowerment nonprofit. Since the story broke, Leanin.org somehow found money to create a paid internship position, according to a piece in today's New York Times.

Times writer Vindu Goel left the best observation for last:

No word yet on how much the new internship will pay, but odds are that it will be less than the $6,000 or so a month that engineering interns at Facebook generally make.

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Feds Award IBM $1 Billion Cloud Computing Contract

IBM, which howled when Obama Administration-friendly Amazon won a lucrative CIA cloud computing contract, recently won a consolation prize from the federal government. Big Blue won a 10-year, $1 billion deal to provide the Interior Department with cloud computing services. The Interior pie was divided up more or less equally among a number of DC corporate power players, including Lockheed Martin, Verizon, and ATT. The story, originally posted by Bloomberg News, appeared in today's siliconvalley.com.

Why the Interior Department needs a multi-billion dollar, long-term investment in cloud computing was not stated. However, what has become evident is the federal government's role in creating the new millenium's version of the military-industrial complex. This juggernaut requires that tech heavyweights get de facto government subsidies via sweetheart contracts, often generated through corrupt business dealings. As long as Americans remain enthralled with technology and "the promise of tomorrow" (whatever that means), this corrosive situation is unlikely to change.

Former Versace Mansion in Miami Beach Facing Auction

Casa Casuarina
(Image: forbes.com)

Some mansions have more changes than a Las Vegas chorus line dancer. In the case of 1116 Ocean Drive, Miami Beach FL, that "evolution" includes a noirish sense of murder and corrupt financing. The address, better known as Casa Casuarina, gained notoriety as the late Gianni Versace's playpen. The Italian fashion designer was murdered on the Casa's steps in 1997. A fast-money telecom player named Peter Loftin later purchased a majority share in the mansion. He displayed poor judgment concerning business partners, as approximately ten percent of the mansion's ownership included one Scott Rothstein.

Mr. Rothstein was later convicted of conducting a Ponzi scheme. This left Mr. Loftin holding a rather heavy financial bag. He has attempted to sell Casa Casuarina without success. Meanwhile, Versace's former Miami Beach escape now faces the auction hammer, according to a report in today's Miami Herald.

Clearly, the auction is strictly for "global citizens," the one-percenters who are "makers." Rothstein and Loften were once in Mitt Romney's preferred category in his conveniently polarized view of society. However, Rothstein's felony convictions and Loftin's fire-sale antics seems to place them in the "taker" category. What a difference a bankruptcy and a guilty plea make!