[Note: This item comes from reader Randall. DLH]

From: Randall Webmail <rvh40@insightbb.com>
Date: March 19, 2009 7:04:00 PM PDT
To: johnmacsgroup@yahoogroups.com, dewayne@warpspeed.com, dave@farber.net
Subject: They’re certainly not short on chutzpah

March 19 (Bloomberg) — Citigroup Inc. plans to spend about $10 million on new offices for Chief Executive Officer Vikram Pandit and his lieutenants, after the U.S. government injected $45 billion of cash into the bank.

Affidavits filed with New York’s Department of Buildings show Citigroup expects to pay at least $3.2 million for basic construction such as wall removal, plumbing and fire safety. By the time architect’s fees and expenses such as furniture are added, the tally for the offices at the bank’s Park Avenue headquarters will be at least three times as high, according to a person familiar with the project who declined to be identified because he’s not authorized to comment. Citigroup said the project will help it save money over time.

Pandit, criticized by lawmakers over Citigroup’s use of U.S. bailout capital, canceled an order for a company jet in January and told Congress on Feb. 11 that, “I get the new reality and I’ll make sure Citi gets it as well.” Of the biggest U.S. banks that received federal aid, only Citigroup has turned to the government three times for rescue. The company, once the biggest U.S. bank by assets and market value, has agreed to limit perks and restrict executive pay.

“In this environment, it absolutely sends the wrong message,” said Charles Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware, referring to the office renovations. “Timing in life is everything.”

Cost Savings

Citigroup said in a statement that the construction is part of a global space-saving initiative. The bank plans to reduce its office space worldwide by more than 10 million square feet to help save $15 billion over the next few years, according to a company official who declined to be identified. Pandit has already slashed Citigroup’s dividend and sold units to free up capital. He said in November that he would cut 52,000 jobs, about 15 percent of the firm’s headcount as of Sept. 30.

“Senior executives in our corporate headquarters are moving from two floors to smaller, simpler offices on a single floor,” the company’s statement said. “Based on estimates made when the project was initiated, we expect to generate savings in the next few years well in excess of the project costs.”

The company said in a statement today that consolidating its office space will save $20 million over the life of its lease. Citigroup began planning the renovation last June and obtained demolition permits in September, before the bank received any bailout funds, said a person briefed on the process.

Sub-Zero Fridge

Some city approvals for the project weren’t issued until after Citigroup got its first $25 billion from the U.S. in October, under the Troubled Asset Relief Program, or TARP, according to records available at the New York Department of Buildings.

The new executive suite will be located on the second floor of Citigroup’s office on 399 Park Avenue, a floor below the one Pandit, 52, inherited when he took over as CEO from Charles “Chuck” Prince in December 2007. The second floor previously contained offices, which are being demolished, as well as boardrooms and executive-dining quarters. The floor being vacated will be subleased, Citigroup said in its statement.

[snip]

<http://www.bloomberg.com/apps/news?pid=newsarchive&sid=adLGVE_YzvUU>

<http://snipurl.com/e6ipz>

[Note: This item comes from friend Jack Unger. DLH]

From: Jack Unger <junger@ask-wi.com>
Date: March 19, 2009 2:45:15 PM PDT
To: Dewayne Hendricks <dewayne@warpspeed.com>
Subject: Computerized Voting is Unconstitutional in Germany

<http://www.bbvforums.org/forums/messages/1954/79633.html>

[Note: This comment comes from reader Mike O'Dell. DLH]

From: Michael O’Dell <mo@ccr.org>
Date: March 19, 2009 8:19:21 PM PDT
To: Dewayne Hendricks <dewayne@warpspeed.com>
Subject: Re: [Dewayne-Net] Re: Sirius founder doesn’t think company will do too well in the future in face of Internet-streamed content

Dewayne Hendricks wrote:

[Note: This comment comes from friend Bob Frankston. DLH]

From: “Bob Frankston” <Bob19-0501@bobf.frankston.com>

Date: March 19, 2009 7:42:39 PM PDT

To: “‘Dewayne Hendricks’” <dewayne@warpspeed.com>, “‘Dewayne-Net Technology List’” <xyzzy@warpspeed.com>

Subject: RE: [Dewayne-Net] Sirius founder doesn’t think company will do too well in the future in face of Internet-streamed content

Duh

From <http://www.satn.org/archive/2002_03_31_archive.html#75049065>:

“… we see doomed efforts like XM Satellite radio which would have seemed wonderful twenty years ago. But now I can just buy a 160GB disk drive for the price of an XM receiver and easily carry around my 100,000 favorite songs and playlists.”

RSS Feed: <http://www.warpspeed.com/wordpress>

160GB of historical weather data is no match for Sirius Weather
realtime data stream (or XM Weather)

Sirius Weather is *incredible*. i have it on my boat and would
love to have it everywhere else.

The service includes current NEXRAD radar imagery, current data
from the National Lightning Detector Network, temp field, precip
fields, and wind fields as well as observations from official
stations and data buoys.

It also has wave height and period, and water surface temp.
these last ones are not too useful in cars but very useful for
finding fish or wall of the Gulf Stream.

all this is done as a graphic overlay of the map data on
a GPS chartplotter. It could easily work with your car’s
nav system, too.

i know of no way other than satellite such a service can be delivered
with the performance and coverage ubiquity provided by Sirius Weather.
(the more remote the location, the more one needs the information and
the less likely you’ll get it any other way.)

I’d gladly sign-up for Sirius Weather alone, but given that I
have a 160GB iPod which is half-full, i still enjoy listening
to Jimmy Buffet concert broadcasts that don’t exist as MP3s,
and discovering new blues artists i haven’t heard before.
in fact, there’s a world of music on the Sirius XM that I
don’t own because I haven’t discovered it yet.

that is *very* hard to do (or very expensive) on an iPod of
any capacity.

-mo

[Note: This comment comes from friend Bob Frankston. DLH]

From: “Bob Frankston” <Bob19-0501@bobf.frankston.com>
Date: March 19, 2009 7:42:39 PM PDT
To: “‘Dewayne Hendricks’” <dewayne@warpspeed.com>, “‘Dewayne-Net Technology List’” <xyzzy@warpspeed.com>
Subject: RE: [Dewayne-Net] Sirius founder doesn’t think company will do too well in the future in face of Internet-streamed content

Duh

From <http://www.satn.org/archive/2002_03_31_archive.html#75049065>:

“… we see doomed efforts like XM Satellite radio which would have seemed wonderful twenty years ago. But now I can just buy a 160GB disk drive for the price of an XM receiver and easily carry around my 100,000 favorite songs and playlists.”

[Note: This item comes from friend John McMullen. I'm in agreement with John here. That said, I heard on MSNBC tonight that the bill is unconstitutional as is and is unlikely to ever become law. It seems that Pelosi did a neat Jedi mind trick on the GOP, which got about half their caucus to vote for a major tax increase, something that they've taken a blood oath not to do. DLH]

From: “John F. McMullen” <johnmac13@gmail.com>
Date: March 19, 2009 6:40:38 PM PDT
To: “johnmac’s living room” <johnmacsgroup@yahoogroups.com>
Cc: Lauren Weinstein <lauren@vortex.com>, Commonweal Mailing List <commonweal@yahoogroups.com>, mary.shaw@gmail.com, agrosso@att.net, mb@blacknell.net, David Farber <dave@farber.net>, Declan McCullagh <declan@well.com>, Dewayne Hendricks <dewayne@warpspeed.com>
Subject: Lauren Weinstein: Congress’ reaction to AIG bonuses — am I the only one concerned? — with comments

(johnmac — All, with the exception of my comments, are from Dave Farber’s IP list (a list that all might wish to belong to) — I have copied all the authors of the comments with tjhis (with the exception of Chris Savage who reads his mail on here).

I agree with Lauren — I am appalled by the Congressional action. I think it is total posturing and an abuse of Congressional power. Strings should have been attached to the bailouts all the way back when Paulson was saying “No oversight by Congress and waving a three page memo around (speaking that weekend with Stephenopolous, Newt Gingrich said “Secretary Paulson doesn’t understand the Constitution”) — from that day on, through two administrations, there has been a lack of oversight and transparency — now, faced with these ill-conceived and outrageous bonuses, as Joe Scarborough said this AM, “Congress sends the gladiators into the the the Colusium to fight the lion to distract the people from the real problem — mismanagement by Congress and two administrations”.

To fool with the tax law capriciously and single out one group of people (I know — they expanded it from just penalizing AIG employees to encompass employees with a family income of $250,000 that work for a firm taking a government bail out) is just plain wrong. Aside from the fact that the employees signing the agreements did not know at that time that AIG would be getting a bailout and it is thus an “ex-post facto action”, there is much more wrong with this initiative — it is very scary for Congress to single out a group in this manner — what is to prevent it from singling out New Yorkers or individuals working for a company that pollutes the atmosphere or .. etc.

Congress and two administrations blew it in the first place –they should now enact a “Bailout Surveillance Law” specifying oversight that will be taken in the future over any firm accepting government bailout money.The present actions is simplt posturing and pandering to the nth degree.

———- Forwarded message ———-
From: David Farber <dave@farber.net>
Date: Thu, Mar 19, 2009 at 5:19 PM
Subject: [IP] Congress’ reaction to AIG bonuses — am I the only one concerned?
To: ip <ip@v2.listbox.com>

I disagree djf

Begin forwarded message:

From: Lauren Weinstein <lauren@vortex.com>
Date: March 19, 2009 2:04:08 PM EDT
To: dave@farber.net
Subject: Congress’ reaction to AIG bonuses — am I the only one concerned?

Dave,

I can’t be the only person feeling increasingly disturbed by Congress’
reaction to the obnoxious AIG bonuses controversy.

I believe we all pretty much agree that the bonuses were utterly
inappropriate to be contracted when they were … but the fact is that
they *were* contracted, and work was done on the basis of those
contracts (much of which is now completed, and the relevant persons
departed as planned). We now know it was the Obama Treasury
Department that requested the language honoring those bonuses (despite
righteous indignation we’re hearing now from the administration about
the bonuses — after the story blew up).

It’s particularly chilling to hear Congress talking about special
targeted 90% or 95% taxes to try suck back the bonuses from
individuals at this stage of the game. It’s completely appropriate to
recover the funds from AIG, but retroactively going after the
individuals who worked under legal contract terms — in expectation of
being paid under those terms — seems to me to set a terrible
precedent. Emotions are running wild over logic.

I’m a big supporter of Obama, but the AIG situation seems to me to
have become overly personalized, and now members of Congress are
trying to out posture each other with “get tough” reactions, some of
which seem to be very poorly thought out (surprise! surprise!) and
could do even more damage.

Am I alone in thinking that the situation is becoming chaotic, with
many of the negative ramifications associated with such chaos?

–Lauren–
Lauren Weinstein
lauren@vortex.com
Tel: +1 (818) 225-2800
http://www.pfir.org/lauren
Co-Founder, PFIR
- People For Internet Responsibility – http://www.pfir.org
Co-Founder, NNSquad
- Network Neutrality Squad – http://www.nnsquad.org
Founder, GCTIP – Global Coalition
for Transparent Internet Performance – http://www.gctip.org
Founder, PRIVACY Forum – http://www.vortex.com
Member, ACM Committee on Computers and Public Policy
Lauren’s Blog: http://lauren.vortex.com

—————————————————————————————————-

Begin forwarded message:

From: “Savage, Christopher” <ChrisSavage@dwt.com>
Date: March 19, 2009 5:25:43 PM EDT
To: <dave@farber.net>
Subject: RE: [IP] Congress’ reaction to AIG bonuses — am I the only one concerned?

Dave:

A few points:

1. Any comments about whether the bonuses were or were not appropriate
under the contracts are without foundation unless one has read the
contracts.

2. Even if the bonuses were paid in accordance with the contracts, that
does not mean that the contracts themselves are valid and enforceable.
There are any number of possible grounds for attacking them in the
abstract although, again, without seeing the contracts and knowing the
circumstances, it’s hard to know which if any might apply.

3. Lauren’s comments assume that the individuals who received the
bonuses were, in effect, innocent of wrongdoing, either with respect to
the underlying mess or with respect to what would be needed to clean it
up. If that is true then he might have a point. I have not seen
information to show that it is true, however.

Chris S.
———————————————————————-
Begin forwarded message:

From: Mary Shaw <mary.shaw@gmail.com>
Date: March 19, 2009 7:46:27 PM EDT
To: dave@farber.net
Subject: Re: [IP] Congress’ reaction to AIG bonuses — am I the only one concerned?

Assuming that the bonuses are indeed outrageous under the standard of your choice, I would far rather see the contracts invalidated directly than go down the path of writing special punitive legislation. I’m not a contract lawyer, but can’t contracts be invalidated if they’re contrary to the public interest?

Better, of course, would have been to provide government subsidies only to companies that have used up all of their own resources, including resources that might be used for junkets and bonuses, and to cap total compensation, no matter how packaged or disguised.

Mary Shaw
—————————————————————————————-

From: Paul Robichaux <PaulR@3sharp.com>
Date: March 19, 2009 6:40:19 PM EDT
To: “dave@farber.net” <dave@farber.net>, ip <ip@v2.listbox.com>

Subject: Re: [IP] Congress’ reaction to AIG bonuses — am I the only one concerned?

For those who haven’t seen it, Phil Greenspun has an excellent idea: fire a
significant portion of AIG’s management.

<http://blogs.law.harvard.edu/philg/2009/03/18/fire-the-aig-management/>
- Show quoted text -

————————————————————————————————-

From: Mark Blacknell <mb@blacknell.net>
Date: March 19, 2009 6:31:50 PM EDT
To: David Farber <dave@farber.net>, <ChrisSavage@dwt.com>, <lauren@vortex.com>

Subject: Re: [IP] Congress’ reaction to AIG bonuses — am I the only one concerned?

Chris raises fair points in response to Lauren’s concerns. Relevant to the
first and second points, you can find a copy of the compensation agreement
here -
http://www.talkingpointsmemo.com/documents/2009/03/aig-bonus-contracts.php?p
age=1

You’ll see that they became effective Dec 1, 2007 (when I think it’s
reasonable to say that management at AIG had a clue as to what was going
on), and that there’s next to no “performance” component to it. It’s simply
a schedule for large payments. Not really the sort of arrangement most
people would understand for bonuses.

Finally, while I would understand Lauren’s concern in another context, those
that are targeted by this bill have profited handsomely by exploiting the
goodwill and trust of others. I’ll save my tears for someone else.

Cheers,

Mark

~
Mark Blacknell
Washington, DC
+1.202.270.5909
http:/blacknell.net/dynamic/
———————————————————————————————————–

From: agrosso@att.net
Date: March 19, 2009 6:55:27 PM EDT

To: “David Farber” <dave@farber.net>
Subject: Re: [IP] Congress’ reaction to AIG bonuses — am I the only oneconcerned?
Reply-To: agrosso@att.net

I take a different tack entirely. The issue is not whether the bonuses were earned, or were subject to a legal contract.

The issue is more simple: once you require govenment funds to continue to operate, there can be no such thing as business as usual. The taxpayer does not pay high six, or seven figure compensation packages. If you don’t like the rules, leave. There are plenty of quants out there looking for employment who will take your job. This is the real world of the taxpayers who are paying your salary. And you can’t take what you learned at your old job and put it to use against your old company – that’s a criminal violation of the federal trade secrets act.

The remedy for AIG is either outright, short term nationalization, or a congressionally structured reorganization. For other organizations that haven’t crossed the line yet, more stringent bailout terms will be needed. The taxpayers set the rules when they are paying your salary.

We should take over 100% of AIG, clear house of management and board who allowed this to occur, and set future compensation at a reasonable rate. If we operated the RTC, we can do this. Sorry for the private shareholders, but they lost their equitable right to equity a long time ago.

The tax bill passed by
the House is probably unconstitutional, and if enacted into law will be held as such by the courts. It will only serve as a short term CYA for politicians and as an ill timed mess for the market place.
Sent from my BlackBerry® wireless device

[Note: If you ever hear of me predicting anything happening ten years from now, just shoot me! DLH]

What’s in store for the web?
<http://news.bbc.co.uk/2/hi/technology/7951798.stm>
Technology industry leaders have gathered in Austin, Texas for the South by Southwest Interactive Festival.

The BBC caught up with some of them to hear their views on what the next big developments on the internet will be.

US Lawmakers Want Inventory Of Wireless Airwaves

Thursday March 19th, 2009 / 21h28

By Fawn Johnson
Of DOW JONES NEWSWIRES
<http://www.easybourse.com/bourse-actualite/marches/us-lawmakers-want-inventory-of-wireless-airwaves-637204>

WASHINGTON -(Dow Jones)- Several lawmakers are calling on the Federal Communications Commission and the U.S. Commerce Department to catalogue how wireless airwaves are being used by their licensees.

Four senators on Thursday introduced a bill requiring the FCC and Commerce to provide a thorough inventory of the radio and TV spectrum managed by each agency.
The bill is considered the first step in a comprehensive review of the nation’s airwaves. Regulators could then figure out how to make more efficient use of the valuable channels, possibly freeing up more spectrum for private industry or government.
Sponsors hope the bill will move in Congress because consumer advocates and telecom companies alike are clamoring for access to airwaves to launch new wireless services and promote competition.

Spectrum licenses also can put money in government coffers. Verizon Communications Inc. (VZ) and AT&T inc. (T) together paid some $20 billion for access to TV airwaves that will be freed up when all stations transition to digital broadcasting this June.
The bill was introduced by Sens. John Kerry, D-Mass., Olympia Snowe, R-Maine, Bill Nelson, D-Fla., and Roger Wicker, R-Miss.

-By Fawn Johnson

Sirius founder doesn’t think company will do too well in the future in face of Internet-streamed content

by Nicholas Deleon on March 19, 2009
<http://www.crunchgear.com/2009/03/19/sirius-founder-doesnt-think-company-will-do-too-well-in-the-future-in-face-of-internet-streamed-content/>

You’d be hard-pressed to find someone who’s bullish on Sirius XM. Yes, the company’supcoming iPhone application should better position it for of mobile, always-on audio entertainment future, but that may not even be enough if the company doesn’t get its act together. (Assuming you don’t subscribe to Sirius XM for shows like Howard Stern and Opie and Anthony, there’s so many free alternatives for streaming music nowadays that a $15 subscription fee may be hard for some folks to justify in this economic environment.) But the company’s founder? Yeah,she doesn’t think the company will do too well in The Future.

[snip]

NTIA SCALES BACK PLANS FOR BROADBAND GRANT PROGRAM MEETINGS

As a result of the overwhelming demand from interested parties for meetings and the expedited time frames in the Recovery Act for making the broadband grant, loan, and loan guarantee funds available, NTIA will not able to accommodate all meeting requests received. The agency, however, does reserve the right to schedule such ex parte meetings as necessary to fulfill the needs of the Broadband Grant Program.

<http://edocket.access.gpo.gov/2009/pdf/E9-5838.pdf>

Courtesy of the Benton Foundation <http://www.benton.org>

No Return to Normal

Why the economic crisis, and its solution, are bigger than you think.

By James K. Galbraith

<http://www.washingtonmonthly.com/features/2009/0903.galbraith.html>

Barack Obama’s presidency began in hope and goodwill, but its test will be its success or failure on the economics. Did the president and his team correctly diagnose the problem? Did they act with sufficient imagination and force? And did they prevail against the political obstacles—and not only that, but also against the procedures and the habits of thought to which official Washington is addicted?

The president has an economic program. But there is, so far, no clear statement of the thinking behind that program, and there may not be one, until the first report of the new Council of Economic Advisers appears next year. We therefore resort to what we know about the economists: the chair of the National Economic Council, Lawrence Summers; the CEA chair, Christina Romer; the budget director, Peter Orszag; and their titular head, Treasury Secretary Timothy Geithner. This is plainly a capable, close-knit group, acting with energy and commitment. Deficiencies of their program cannot, therefore, be blamed on incompetence. Rather, if deficiencies exist, they probably result from their shared background and creed—in short, from the limitations of their ideas.

The deepest belief of the modern economist is that the economy is a self-stabilizing system. This means that, even if nothing is done, normal rates of employment and production will someday return. Practically all modern economists believe this, often without thinking much about it. (Federal Reserve Chairman Ben Bernanke said it reflexively in a major speech in London in January: “The global economy will recover.” He did not say how he knew.) The difference between conservatives and liberals is over whether policy can usefully speed things up. Conservatives say no, liberals say yes, and on this point Obama’s economists lean left. Hence the priority they gave, in their first days, to the stimulus package.

But did they get the scale right? Was the plan big enough? Policies are based on models; in a slump, plans for spending depend on a forecast of how deep and long the slump would otherwise be. The program will only be correctly sized if the forecast is accurate. And the forecast depends on the underlying belief. If recovery is not built into the genes of the system, then the forecast will be too optimistic, and the stimulus based on it will be too small.

Consider the baseline economic forecast of the Congressional Budget Office, the nonpartisan agency lawmakers rely on to evaluate the economy and their budget plans. In its early-January forecast, the CBO measured and projected the difference between actual economic performance and “normal” economic performance—the so-called GDP gap. The forecast has two astonishing features. First, the CBO did not expect the present recession to be any worse than that of 1981–82, our deepest postwar recession. Second, the CBO expected a turnaround beginning late this year, with the economy returning to normal around 2015, even if Congress had taken no action at all.

With this projection in mind, the recovery bill pours a bit less than 2 percent of GDP into new spending per year, plus some tax cuts, for two years, into a GDP gap estimated to average 6 percent for three years. The stimulus does not need to fill the whole gap, because the CBO expects a “multiplier effect,” as first-round spending on bridges and roads, for example, is followed by second-round spending by steelworkers and road crews. The CBO estimates that because of the multiplier effect, two dollars of new public spending produces about three dollars of new output. (For tax cuts the numbers are lower, since some of the cuts will be saved in the first round.) And with this help, the recession becomes fairly mild. After two years, growth would be solidly established and Congress’s work would be done. In this way, the duration as well as the scale of action was driven, behind the scenes, by the CBO’s baseline forecast.

Why did the CBO reach this conclusion? On depth, CBO’s model is based on the postwar experience, and such models cannot predict outcomes more serious than anything already seen. If we are facing a downturn worse than 1982, our computers won’t tell us; we will be surprised. And if the slump is destined to drag on, the computers won’t tell us that either. Baked into the CBO model we find a “natural rate of unemployment” of 4.8 percent; the model moves the economy back toward that value no matter what. In the real world, however, there is no reason to believe this will happen. Some alternative forecasts, freed of the mystical return to “normal,” now project a GDP gap twice as large as the CBO model predicts, and with no near-term recovery at all.

[snip]