Thursday, September 15, 2016
That Time I Published a Personal Essay on the Internet
Bleary-eyed at three in the morning, I submitted the personal essay I’d spent months crafting. When I woke up, an email was awaiting me with the subject THIS ESSAY IS EVERYTHING!
“Ur writing is srsly #OnFleek!” wrote the editor. “I need 2 tweak a little and then we can publish it on the site. Nothing cray-cray — just some bling 4 more eyeballs/shares/RTs.”
Publish? I shakily set down my cup of coffee, my body buzzing with adrenaline and caffeine.
The essay was titled “The November of Her Years: My Mother’s Final Thanksgiving at Her Brother’s House.”
“Love the stuff about ur mom… it gives me ~ all ~ of the feels,” my editor later wrote via Instant Messenger (“my editor” — just thinking about her like that gave me goosebumps). “Quick fact-check: what does ur uncle do 4 CA$$$H?”
“Tim’s a retired nurse, but he’s gotten into computers and now does volunteer work with hospitals up in Maine to improve their databases and keep down costs — the state has hit a rough financial patch.”
“BROGRAMMER ahahahahaha… ur next-level HILARIOUS… u do u,” she wrote. “You mentioned ur mom and uncle were ✝.”
“Yes, they were lapsed Catholics, but they found some comfort in religion at the end of my mother’s life.”
“So Tim didn’t invite any1 Jewish to the dinner smh?”
“Anyone Jewish? Technically speaking, no — we were keeping it to just our immediate family, because Mom was so sick. But he wasn’t intentionally trying to—”
“Lolwut!” she wrote. “It’ll be up super-1st thing tomorrow.”
“Wait — don’t you want to give me a chance to look over your edits?”
“Kthxbai!” came on-screen before she logged off.
The next morning the essay was the lead feature on the site. The headline was “I Can’t, I Just Can’t: My Coder Uncle, Who’s THE WORST, Had an Epic Anti-Semitic Meltdown at Thanksgiving.” Here was the beginning:
“U mad?” she wrote. “Tbh, those parts of the essay were kinda ¯\(ツ)/¯, because death.”
Then the comments section began filling up.
“Ur writing is srsly #OnFleek!” wrote the editor. “I need 2 tweak a little and then we can publish it on the site. Nothing cray-cray — just some bling 4 more eyeballs/shares/RTs.”
Publish? I shakily set down my cup of coffee, my body buzzing with adrenaline and caffeine.The essay was titled “The November of Her Years: My Mother’s Final Thanksgiving at Her Brother’s House.”
“Love the stuff about ur mom… it gives me ~ all ~ of the feels,” my editor later wrote via Instant Messenger (“my editor” — just thinking about her like that gave me goosebumps). “Quick fact-check: what does ur uncle do 4 CA$$$H?”
“Tim’s a retired nurse, but he’s gotten into computers and now does volunteer work with hospitals up in Maine to improve their databases and keep down costs — the state has hit a rough financial patch.”
“BROGRAMMER ahahahahaha… ur next-level HILARIOUS… u do u,” she wrote. “You mentioned ur mom and uncle were ✝.”
“Yes, they were lapsed Catholics, but they found some comfort in religion at the end of my mother’s life.”
“So Tim didn’t invite any1 Jewish to the dinner smh?”
“Anyone Jewish? Technically speaking, no — we were keeping it to just our immediate family, because Mom was so sick. But he wasn’t intentionally trying to—”
“Lolwut!” she wrote. “It’ll be up super-1st thing tomorrow.”
“Wait — don’t you want to give me a chance to look over your edits?”
“Kthxbai!” came on-screen before she logged off.
The next morning the essay was the lead feature on the site. The headline was “I Can’t, I Just Can’t: My Coder Uncle, Who’s THE WORST, Had an Epic Anti-Semitic Meltdown at Thanksgiving.” Here was the beginning:
“I’m chowing down on stuffing gravy turkey (om nom nom) while trying to tune out my Silicon Valley creeptastic uncle as he victim-blames the economy on the Jews.”“Thanks for running the piece,” I emailed my editor. “However, I notice you attributed various remarks to my uncle that weren’t in the original essay and removed all the references to my mother and her passing away the next week.”
“That moment when you’re at my family’s literally insane Thanksgiving. HOLIDAY FAIL.”
“U mad?” she wrote. “Tbh, those parts of the essay were kinda ¯\(ツ)/¯, because death.”
Then the comments section began filling up.
by Teddy Wayne, McSweeny's | Read more:
Image: uncredited
Wednesday, September 14, 2016
Welcome to the Dark Net
[ed. See also: Someone is learning how to take down the internet.]
His name is not Opsec, but I will call him that to guard his privacy. In webspace he is known as a grand master of the dark art of hacking. He is one of a small elite—maybe a hundred, maybe fewer—all of whom are secretive and obsessed with security. They do not talk about their work with their families. They generally do not talk to the press. Nonetheless, through friends of friends, Opsec agreed to speak and to introduce me to his perspectives. In “meatspace,” as he and others like him call the real world, Opsec lives in a metropolitan area in a little wooden house by a railroad track. He is in his mid-30s, physically imposing, and not a geek. He hangs out in a local bar, where the regulars know vaguely that he works with computers.
He is a fast talker when he’s onto a subject. His mind seems to race most of the time. Currently he is designing an autonomous system for detecting network attacks and taking action in response. The system is based on machine learning and artificial intelligence. In a typical burst of words, he said, “But the automation itself might be hacked. Is the A.I. being gamed? Are you teaching the computer, or is it learning on its own? If it’s learning on its own, it can be gamed. If you are teaching it, then how clean is your data set? Are you pulling it off a network that has already been compromised? Because if I’m an attacker and I’m coming in against an A.I.-defended system, if I can get into the baseline and insert attacker traffic into the learning phase, then the computer begins to think that those things are normal and accepted. I’m teaching a robot that ‘It’s O.K.! I’m not really an attacker, even though I’m carrying an AK-47 and firing on the troops.’ And what happens when a machine becomes so smart it decides to betray you and switch sides?”
Opsec lives in a hall of mirrors. He understands that webspace and meatspace, though connected, remain largely distinct. Given sufficient motivation and time, Opsec can break into almost any secure network without setting off alarms. Breaking in used to thrill him, because once inside he could roam as he liked, but success comes too easily now: with such an attack, he has to find only a single way in. By contrast, defense presents the challenge of out-thinking every aggressor. This appeals to him, and he works now on the defending side. Usually this means protecting company networks from criminal attacks, or reacting to attacks after damage has been done. Opsec does not do the routine stuff. He is the man for the serious cases. He has seen some big ones. But even he was taken aback when, late last year, he stumbled upon a hack—a sliver of alien software on American shores—which suggested that preparations were being made for a cyber-attack of unprecedented scale.
I will call his client the Company. It is an Internet behemoth. It streams entertainment online and makes direct regular connections to more than 70 million personal computers worldwide. The Company does not charge for the connections but rather for the services it provides. It is very profitable. And it is under frequent attack from many parts of the world. Most of the attacks are drive-by shootings—spray-and-prays that succumb harmlessly to the defenses that Opsec has helped design. But some are carefully aimed and have threatened the Company’s existence.
He first intervened six years ago, after a data center had been hacked (as Opsec puts it) in a fucking major way. The intruders had gone after key systems, including the central payment processor and the C.E.O.’s computer, and had stolen credit-card and financial data as well as the Company’s proprietary source code—the secret formula upon which the business is built. Opsec worked for nearly six months to clean up the mess. By backtracking he discovered that the hackers were a group associated with the Chinese army. They operated out of a specific building near Shanghai, which he was able to locate, and specialized in targeting entertainment companies. Eventually he was able to identify some of the individuals involved, and even to obtain pictures of them. Nominally, that was the end of it. Opsec told me that because a government was involved, and legal recourse in China was unrealistic, no further action was taken.
What do you do when there is no law? Counter-hacking is a temptation, but can be dangerous. The Russian mob, for instance, has a poor sense of humor, and Colombian drug cartels are not much fun, either. Also, among independent hackers there is no small number of psychopaths. Over the years the Company has endured death threats, rape threats, and bomb scares. It gets personal. In a world without privacy, home addresses as well as the names of spouses and children are easily found. As the Democratic National Committee recently discovered, it is better not to get hacked in the first place.
After the original breach by the Chinese, Opsec had urged the company’s management to establish a vigorous information-security program, which it did by building three NASA-like control rooms scattered in data centers around the world. Collectively, they are staffed around the clock. The sole purpose is to catch intruders, and to catch them as quickly as possible. The average industry delay in detecting a malicious hack is 188 days. For the Company, Opsec was hoping to reduce the delay to minutes or even seconds. But late last year, when the operations manager called him at home and urgently requested his presence at the Company’s high-tech campus, about 20 miles away, he knew that those defenses had failed. Almost as disturbing, the alarm had been raised not by the security team but by an ordinary technician, a system administrator doing the drudgery of a routine review.
by William Langewiesche, Vanity Fair | Read more:
Image: Matthieu Bourel
His name is not Opsec, but I will call him that to guard his privacy. In webspace he is known as a grand master of the dark art of hacking. He is one of a small elite—maybe a hundred, maybe fewer—all of whom are secretive and obsessed with security. They do not talk about their work with their families. They generally do not talk to the press. Nonetheless, through friends of friends, Opsec agreed to speak and to introduce me to his perspectives. In “meatspace,” as he and others like him call the real world, Opsec lives in a metropolitan area in a little wooden house by a railroad track. He is in his mid-30s, physically imposing, and not a geek. He hangs out in a local bar, where the regulars know vaguely that he works with computers.
He is a fast talker when he’s onto a subject. His mind seems to race most of the time. Currently he is designing an autonomous system for detecting network attacks and taking action in response. The system is based on machine learning and artificial intelligence. In a typical burst of words, he said, “But the automation itself might be hacked. Is the A.I. being gamed? Are you teaching the computer, or is it learning on its own? If it’s learning on its own, it can be gamed. If you are teaching it, then how clean is your data set? Are you pulling it off a network that has already been compromised? Because if I’m an attacker and I’m coming in against an A.I.-defended system, if I can get into the baseline and insert attacker traffic into the learning phase, then the computer begins to think that those things are normal and accepted. I’m teaching a robot that ‘It’s O.K.! I’m not really an attacker, even though I’m carrying an AK-47 and firing on the troops.’ And what happens when a machine becomes so smart it decides to betray you and switch sides?”Opsec lives in a hall of mirrors. He understands that webspace and meatspace, though connected, remain largely distinct. Given sufficient motivation and time, Opsec can break into almost any secure network without setting off alarms. Breaking in used to thrill him, because once inside he could roam as he liked, but success comes too easily now: with such an attack, he has to find only a single way in. By contrast, defense presents the challenge of out-thinking every aggressor. This appeals to him, and he works now on the defending side. Usually this means protecting company networks from criminal attacks, or reacting to attacks after damage has been done. Opsec does not do the routine stuff. He is the man for the serious cases. He has seen some big ones. But even he was taken aback when, late last year, he stumbled upon a hack—a sliver of alien software on American shores—which suggested that preparations were being made for a cyber-attack of unprecedented scale.
I will call his client the Company. It is an Internet behemoth. It streams entertainment online and makes direct regular connections to more than 70 million personal computers worldwide. The Company does not charge for the connections but rather for the services it provides. It is very profitable. And it is under frequent attack from many parts of the world. Most of the attacks are drive-by shootings—spray-and-prays that succumb harmlessly to the defenses that Opsec has helped design. But some are carefully aimed and have threatened the Company’s existence.
He first intervened six years ago, after a data center had been hacked (as Opsec puts it) in a fucking major way. The intruders had gone after key systems, including the central payment processor and the C.E.O.’s computer, and had stolen credit-card and financial data as well as the Company’s proprietary source code—the secret formula upon which the business is built. Opsec worked for nearly six months to clean up the mess. By backtracking he discovered that the hackers were a group associated with the Chinese army. They operated out of a specific building near Shanghai, which he was able to locate, and specialized in targeting entertainment companies. Eventually he was able to identify some of the individuals involved, and even to obtain pictures of them. Nominally, that was the end of it. Opsec told me that because a government was involved, and legal recourse in China was unrealistic, no further action was taken.
What do you do when there is no law? Counter-hacking is a temptation, but can be dangerous. The Russian mob, for instance, has a poor sense of humor, and Colombian drug cartels are not much fun, either. Also, among independent hackers there is no small number of psychopaths. Over the years the Company has endured death threats, rape threats, and bomb scares. It gets personal. In a world without privacy, home addresses as well as the names of spouses and children are easily found. As the Democratic National Committee recently discovered, it is better not to get hacked in the first place.
After the original breach by the Chinese, Opsec had urged the company’s management to establish a vigorous information-security program, which it did by building three NASA-like control rooms scattered in data centers around the world. Collectively, they are staffed around the clock. The sole purpose is to catch intruders, and to catch them as quickly as possible. The average industry delay in detecting a malicious hack is 188 days. For the Company, Opsec was hoping to reduce the delay to minutes or even seconds. But late last year, when the operations manager called him at home and urgently requested his presence at the Company’s high-tech campus, about 20 miles away, he knew that those defenses had failed. Almost as disturbing, the alarm had been raised not by the security team but by an ordinary technician, a system administrator doing the drudgery of a routine review.
by William Langewiesche, Vanity Fair | Read more:
Image: Matthieu Bourel
Don’t Panic, But There’s An Asteroid Right Over There
An asteroid no bigger than a school bus whizzed past Earth at 18,000 miles per hour on Sept. 7, harmlessly continuing its cosmic journey after paying our planet an exceptionally close visit. The rock, dubbed 2016 RB1, made its closest approach just 25,000 miles from the Earth’s surface. That’s just a tad farther out than the orbit of weather satellites — an extremely close shave, in space rock terms. Scientists spotted it just two days before it passed.
There’s no chance 2016 RB1 will hit us, and even if it did, Earth would barely notice. It would be statistically most likely to explode over an unpopulated area, and it’s too small to make a dent; the asteroid is 25 to 50 feet wide, a range that’s hard to pin down because 2016 RB1 is so small and moving so fast. It’s probably at least 10 feet narrower than the rock that exploded over Chelyabinsk, Russia, in February 2013. Still, this wimpy asteroid is notable for two reasons: its close passage and the fact that scientists saw it at all.
The solar system is full of crumbs left over from the birth of the sun and the planets. Some of them hold clues to the formation of the Earth and, potentially, the beginning of life, which is why NASA just launched a spacecraft to a nearby coal-dark rock called Bennu. Some asteroids hold precious metals, which private companies would like to mine someday for use in electronics and catalytic converters on Earth. And some asteroids occasionally make their way to our planet, where they explode in the atmosphere or excavate giant craters and, sometimes, cause global catastrophes.
NASA and other space agencies are trying to find as many asteroids as they can, but most of them remain unknown to us. Many are too small, too dark, too distant or in the wrong place in the sky for our telescopes to catch them. Yet some of them are big enough to pose a threat to people on Earth, so figuring out where they are is a key part of NASA’s mission.
There is good news: Gigantic space rocks like the one that probably killed the dinosaurs will not arrive anytime soon. Using infrared telescopes in space, as well as sophisticated ground-based telescope networks, scientists are confident they’ve found more than 90 percent of the Earth-killer asteroids out there — the ones about half a mile wide or larger, which would cause global extinctions if they crashed into Earth. None of those threaten our livelihoods in the next few centuries.
But there are plenty of small and mid-size asteroids, and they can do a lot of damage, too. Congress mandated that, by 2020, NASA is supposed to have found 90 percent of asteroids measuring 460 feet across, roughly the size of a football stadium, which would cause regional havoc if not global devastation. Scientists think there are about 25,000 such asteroids, and they have located some 20 percent to 25 percent of them. Asteroid-hunting surveys find about 500 a year, and NASA has said it won’t hit the deadline for that 90 percent mark without more funding. Then there are the house-size and bus-size rocks, like Chelyabinsk and 2016 RB1. More than a million asteroids like those are thought to exist, but scientists have details on maybe 1 percent of them.
by Rebecca Boyle, FiveThirtyEight | Read more:
Image: uncredited
There’s no chance 2016 RB1 will hit us, and even if it did, Earth would barely notice. It would be statistically most likely to explode over an unpopulated area, and it’s too small to make a dent; the asteroid is 25 to 50 feet wide, a range that’s hard to pin down because 2016 RB1 is so small and moving so fast. It’s probably at least 10 feet narrower than the rock that exploded over Chelyabinsk, Russia, in February 2013. Still, this wimpy asteroid is notable for two reasons: its close passage and the fact that scientists saw it at all.The solar system is full of crumbs left over from the birth of the sun and the planets. Some of them hold clues to the formation of the Earth and, potentially, the beginning of life, which is why NASA just launched a spacecraft to a nearby coal-dark rock called Bennu. Some asteroids hold precious metals, which private companies would like to mine someday for use in electronics and catalytic converters on Earth. And some asteroids occasionally make their way to our planet, where they explode in the atmosphere or excavate giant craters and, sometimes, cause global catastrophes.
NASA and other space agencies are trying to find as many asteroids as they can, but most of them remain unknown to us. Many are too small, too dark, too distant or in the wrong place in the sky for our telescopes to catch them. Yet some of them are big enough to pose a threat to people on Earth, so figuring out where they are is a key part of NASA’s mission.
There is good news: Gigantic space rocks like the one that probably killed the dinosaurs will not arrive anytime soon. Using infrared telescopes in space, as well as sophisticated ground-based telescope networks, scientists are confident they’ve found more than 90 percent of the Earth-killer asteroids out there — the ones about half a mile wide or larger, which would cause global extinctions if they crashed into Earth. None of those threaten our livelihoods in the next few centuries.
But there are plenty of small and mid-size asteroids, and they can do a lot of damage, too. Congress mandated that, by 2020, NASA is supposed to have found 90 percent of asteroids measuring 460 feet across, roughly the size of a football stadium, which would cause regional havoc if not global devastation. Scientists think there are about 25,000 such asteroids, and they have located some 20 percent to 25 percent of them. Asteroid-hunting surveys find about 500 a year, and NASA has said it won’t hit the deadline for that 90 percent mark without more funding. Then there are the house-size and bus-size rocks, like Chelyabinsk and 2016 RB1. More than a million asteroids like those are thought to exist, but scientists have details on maybe 1 percent of them.
by Rebecca Boyle, FiveThirtyEight | Read more:
Image: uncredited
The People Walker
[ed. Great ideas are sometimes the simplest.]
Chuck McCarthy recently auditioned as a homicidal biker for a TV show, but the actor is finding glimmers of fame, and possibly a business franchise, with another role: Los Angeles’s first people walker.
He walks humans for $7 a mile around the streets and park near his home, pioneering an alternative to dog walking that requires no leash, just an ability to walk, talk and, above all, listen.
The idea initially struck the underemployed actor several months ago as a joke, an imaginary way to make extra cash, until it became real.
“The more I thought about it, the less crazy it seemed,” said McCarthy, draining a bottle of water – he now takes hydration seriously – and heading out into the sunshine for another walk, this time with the Guardian trotting in step.
A homemade scrawl across his T-shirt declared him The People Walker, low-budget, mobile advertising. “I’ve been doing walks almost every single day for the past week and I’m getting repeat clients, which is what you want.”
A stroll with this soft-spoken, hirsute hulk seems to be what much of LA wants, judging by the response to his Facebook page and homemade flyers.
“Need motivation to walk?” they ask from lamp posts. “Scared to walk alone at night? Don’t like walking alone at all? Don’t want people to see you walking alone and just assume you have no friends? Don’t like listening to music or podcasts but can’t walk alone in silence, forced to face thoughts of the unknown future, or your own insignificance in the ever expanding universe?”
For many, the answer to one or all of the above seems to be “yes”. McCarthy is fielding hundreds of emails from the lonely, the curious and the adventurous, all seeking a stranger’s ambulatory company.
“I try to listen more than talk,” he said this week, striding past handsome houses in Los Feliz, a leafy neighbourhood near Hollywood. (...)
“Awesome concept, plenty of screwed up lonely people out there,” said one of his Facebook commenters, suggesting the job is more people whisperer than walker.
But according to McCarthy, paying to be walked does not mean people are friendless. It just means they cannot always coordinate leisure time with friends, a product of fluid schedules in the gig economy, leaving them isolated. “We’re on phones and computers constantly communicating but we’re not connecting as much. We need that human interaction.”
We also need exercise. McCarthy has slimmed down two notches on his belt since starting the professional walking. “I try not to run because it could ruin my brand,” he deadpanned.
Chuck McCarthy recently auditioned as a homicidal biker for a TV show, but the actor is finding glimmers of fame, and possibly a business franchise, with another role: Los Angeles’s first people walker.
He walks humans for $7 a mile around the streets and park near his home, pioneering an alternative to dog walking that requires no leash, just an ability to walk, talk and, above all, listen.
The idea initially struck the underemployed actor several months ago as a joke, an imaginary way to make extra cash, until it became real.“The more I thought about it, the less crazy it seemed,” said McCarthy, draining a bottle of water – he now takes hydration seriously – and heading out into the sunshine for another walk, this time with the Guardian trotting in step.
A homemade scrawl across his T-shirt declared him The People Walker, low-budget, mobile advertising. “I’ve been doing walks almost every single day for the past week and I’m getting repeat clients, which is what you want.”
A stroll with this soft-spoken, hirsute hulk seems to be what much of LA wants, judging by the response to his Facebook page and homemade flyers.
“Need motivation to walk?” they ask from lamp posts. “Scared to walk alone at night? Don’t like walking alone at all? Don’t want people to see you walking alone and just assume you have no friends? Don’t like listening to music or podcasts but can’t walk alone in silence, forced to face thoughts of the unknown future, or your own insignificance in the ever expanding universe?”
For many, the answer to one or all of the above seems to be “yes”. McCarthy is fielding hundreds of emails from the lonely, the curious and the adventurous, all seeking a stranger’s ambulatory company.
“I try to listen more than talk,” he said this week, striding past handsome houses in Los Feliz, a leafy neighbourhood near Hollywood. (...)
“Awesome concept, plenty of screwed up lonely people out there,” said one of his Facebook commenters, suggesting the job is more people whisperer than walker.
But according to McCarthy, paying to be walked does not mean people are friendless. It just means they cannot always coordinate leisure time with friends, a product of fluid schedules in the gig economy, leaving them isolated. “We’re on phones and computers constantly communicating but we’re not connecting as much. We need that human interaction.”
We also need exercise. McCarthy has slimmed down two notches on his belt since starting the professional walking. “I try not to run because it could ruin my brand,” he deadpanned.
by Rory Carroll, The Guardian | Read more:
Image: Noah Smith
Tuesday, September 13, 2016
If You Build It . . .
Among Bernie Sanders’s many proposals during his presidential run was a plan for Washington to spend $1 trillion on public infrastructure. Progressives love such proposals. Just tax the rich enough, they say, and we can build superfast trains, new roads, revamped airports, and other things that (purportedly) will bring widespread prosperity and greater equality from California to Montana to Maine. President Barack Obama has done his best to further this vision. He began his first term pumping $48.1 billion into infrastructure spending, via the 2009 American Recovery and Reinvestment Act (otherwise known as the stimulus package), and is ending his second term with a proposal to spend $73 billion more on infrastructure.
The progressive romance with infrastructure spending is based on three beliefs. First is that it supercharges economic growth. As President Obama put it in his 2015 State of the Union address: “Twenty-first century businesses need twenty-first century infrastructure.” Further, by putting people to work building needed things, infrastructure spending is an ideal government tool for fighting unemployment during recessions. Infrastructure should also be a national responsibility, progressives believe, led by Washington and financed by federal tax revenues.
None of this is right. While infrastructure investment is often needed when cities or regions are already expanding, too often it goes to declining areas that don’t require it and winds up having little long-term economic benefit. As for fighting recessions, which require rapid response, it’s dauntingly hard in today’s regulatory environment to get infrastructure projects under way quickly and wisely. Centralized federal tax funding of these projects makes inefficiencies and waste even likelier, as Washington, driven by political calculations, gives the green light to bridges to nowhere, ill-considered high-speed rail projects, and other boondoggles. America needs an infrastructure renaissance, but we won’t get it by the federal government simply writing big checks. A far better model would be for infrastructure to be managed by independent but focused local public and private entities and funded primarily by user fees, not federal tax dollars.
Building infrastructure is no surefire way to stimulate economic growth, as Japan’s example shows. After decades of strong economic expansion, Japan experienced a massive asset bubble in the late 1980s, with the Nikkei 225 reaching 38,500 in December 1989. The next year, the bubble burst and the index began falling precipitously, dipping below 15,000 by August 1992 and never recovering—indeed, by 2001, it had dropped below 10,000. Even today, the index is only slightly above 17,000. Japan’s dismal stock-market performance has been matched by little or no economic growth. Per-capita GDP, in constant U.S. dollars, was no higher in 2009 than in 1991, according to OECD data. The Japanese economy picked up slightly this year, but it’s fair to say that Japan has lost a quarter-century of growth.
To help fight this economic sluggishness, Japan has invested enormously in infrastructure, building scores of bridges, tunnels, highways, and trains, as well as new airports—some barely used. The New York Times reported that, between 1991 and late 2008, the country spent $6.3 trillion on “construction-related public investment”—a staggering sum. This vast outlay has undoubtedly produced engineering marvels: in 1998, for instance, Japan completed the Akashi Kaiky¯o Bridge, the longest suspension bridge in the world; just this year, the country began providing bullet-train service between Tokyo and the northern island of Hokkaido. The World Competitiveness Report ranks Japan’s infrastructure as seventh-best in the world and its train infrastructure as the best. But while these trillions in spending may have kept some people working, no one can look at the Japanese numbers and conclude that the money has ramped up the growth rate. Moreover, the largesse is part of the reason that the nation now labors under a crushing public debt, worth 230 percent of GDP. Japan is less, not more, dynamic after its infrastructure bonanza.
Infrastructure spending is a form of investment: just as building a new factory can boost productivity, laying down a new highway or opening a new airport runway can, at least in principle, generate future economic returns. But the relevant question is: How do those future returns compare with the costs? Just because infrastructure is a form of capital doesn’t mean that spending a lot on it is always smart. When a firm estimates the rate of return for a new factory, it can calculate the expected net profits and compare those with the expense. The analog for, say, new or improved roads is to estimate the benefits to users from reduced travel times, add the likely modest spillover benefits to nonusers, and then subtract the spending needed to construct and maintain the infrastructure. The results can differ significantly across projects. A well-known 1988 Congressional Budget Office survey found that spending to maintain current highways in good shape produces returns of 30 percent to 40 percent—but that new highway construction in rural areas showed a much lower return. A clever study that used firm inventories estimated that the rate of return to new highways was sizable during the 1970s but sank below 5 percent during the 1980s and 1990s.
Returns can vary substantially for other forms of infrastructure, too. One study found that adding a new runway to New York’s hectic LaGuardia Airport would generate considerable value, but adding one to San Antonio’s less frantic international airport would bring little benefit. Busy airports are likely to be worth improving; others, less busy, may not be. California’s huge investment in high-speed rail was justified by a 2014 cost-benefit analysis that Parsons Brinckerhoff, the firm building the rail system, had prepared. The report predicted that total benefits from the project would range from $66 billion to $80 billion over several decades. That number looked reasonable when the projected price tag for the project was $35 billion, but the budget has already swollen to $68 billion—and is still expanding. In 2009, I calculated a rough cost-benefit calculation for a (fictional) high-speed rail link between Houston and Dallas and found that costs outweighed benefits by an order of magnitude. The returns to high-speed rail tend to be limited because air travel will still be faster and driving a lot cheaper. Outside the East Coast, meantime, train travelers would typically still have to rent a car once they arrived at their destination. President Obama’s grand vision of “walking only a few steps to public transportation, and ending up just blocks from your destination” is at odds with reality in car-centered America. Has the president never been to Houston?
The existence of plausible transportation alternatives and the law of diminishing returns have also tended to reduce the benefits of infrastructure investment over the past two centuries. The opening of the Erie Canal in 1821 brought enormous value because the inland transportation options at the time were dismal. In the early nineteenth century, it cost as much to ship goods 30 miles over land as to send them across the entire Atlantic Ocean. Yet the very existence of canals, as much of a breakthrough as they represented, reduced the benefits of the later rail system, as Nobel economist Robert Fogel has shown. The returns for new transportation infrastructure in places with terrible roads, such as much of Africa and India, will be much higher than in the United States, which already enjoys an impressive, if under-maintained, array of mobility options.
What about the economic value of the shorter commuting times that new infrastructure can bring? Between 2009 and 2014, the Texas Transportation Institute estimates that the annual cost to Americans from traffic rose from $147 billion to $160 billion and that hours wasted in traffic increased from 6.3 billion hours to 6.9 billion hours, despite the surge in federal transportation funding. The time wasted has been particularly egregious in America’s more successful metropolitan areas, like San Jose, where delays per auto commuter jumped from 56 hours in 2009 to 67 hours in 2014. Yet it’s hard to see how substantially reducing time lost to traffic congestion will turbocharge the economy. Imagine that America gets its act together and cuts traffic time sufficiently to save $80 billion—a pretty miraculous improvement. That would still represent less than one-half of 1 percent of America’s $18 trillion GDP.
by Edward L. Glaeser, City Journal | Read more:
Image:George Washington Bridge, The Museum of the City of New York /Art Resource, NY
The progressive romance with infrastructure spending is based on three beliefs. First is that it supercharges economic growth. As President Obama put it in his 2015 State of the Union address: “Twenty-first century businesses need twenty-first century infrastructure.” Further, by putting people to work building needed things, infrastructure spending is an ideal government tool for fighting unemployment during recessions. Infrastructure should also be a national responsibility, progressives believe, led by Washington and financed by federal tax revenues.None of this is right. While infrastructure investment is often needed when cities or regions are already expanding, too often it goes to declining areas that don’t require it and winds up having little long-term economic benefit. As for fighting recessions, which require rapid response, it’s dauntingly hard in today’s regulatory environment to get infrastructure projects under way quickly and wisely. Centralized federal tax funding of these projects makes inefficiencies and waste even likelier, as Washington, driven by political calculations, gives the green light to bridges to nowhere, ill-considered high-speed rail projects, and other boondoggles. America needs an infrastructure renaissance, but we won’t get it by the federal government simply writing big checks. A far better model would be for infrastructure to be managed by independent but focused local public and private entities and funded primarily by user fees, not federal tax dollars.
Building infrastructure is no surefire way to stimulate economic growth, as Japan’s example shows. After decades of strong economic expansion, Japan experienced a massive asset bubble in the late 1980s, with the Nikkei 225 reaching 38,500 in December 1989. The next year, the bubble burst and the index began falling precipitously, dipping below 15,000 by August 1992 and never recovering—indeed, by 2001, it had dropped below 10,000. Even today, the index is only slightly above 17,000. Japan’s dismal stock-market performance has been matched by little or no economic growth. Per-capita GDP, in constant U.S. dollars, was no higher in 2009 than in 1991, according to OECD data. The Japanese economy picked up slightly this year, but it’s fair to say that Japan has lost a quarter-century of growth.
To help fight this economic sluggishness, Japan has invested enormously in infrastructure, building scores of bridges, tunnels, highways, and trains, as well as new airports—some barely used. The New York Times reported that, between 1991 and late 2008, the country spent $6.3 trillion on “construction-related public investment”—a staggering sum. This vast outlay has undoubtedly produced engineering marvels: in 1998, for instance, Japan completed the Akashi Kaiky¯o Bridge, the longest suspension bridge in the world; just this year, the country began providing bullet-train service between Tokyo and the northern island of Hokkaido. The World Competitiveness Report ranks Japan’s infrastructure as seventh-best in the world and its train infrastructure as the best. But while these trillions in spending may have kept some people working, no one can look at the Japanese numbers and conclude that the money has ramped up the growth rate. Moreover, the largesse is part of the reason that the nation now labors under a crushing public debt, worth 230 percent of GDP. Japan is less, not more, dynamic after its infrastructure bonanza.
Infrastructure spending is a form of investment: just as building a new factory can boost productivity, laying down a new highway or opening a new airport runway can, at least in principle, generate future economic returns. But the relevant question is: How do those future returns compare with the costs? Just because infrastructure is a form of capital doesn’t mean that spending a lot on it is always smart. When a firm estimates the rate of return for a new factory, it can calculate the expected net profits and compare those with the expense. The analog for, say, new or improved roads is to estimate the benefits to users from reduced travel times, add the likely modest spillover benefits to nonusers, and then subtract the spending needed to construct and maintain the infrastructure. The results can differ significantly across projects. A well-known 1988 Congressional Budget Office survey found that spending to maintain current highways in good shape produces returns of 30 percent to 40 percent—but that new highway construction in rural areas showed a much lower return. A clever study that used firm inventories estimated that the rate of return to new highways was sizable during the 1970s but sank below 5 percent during the 1980s and 1990s.
Returns can vary substantially for other forms of infrastructure, too. One study found that adding a new runway to New York’s hectic LaGuardia Airport would generate considerable value, but adding one to San Antonio’s less frantic international airport would bring little benefit. Busy airports are likely to be worth improving; others, less busy, may not be. California’s huge investment in high-speed rail was justified by a 2014 cost-benefit analysis that Parsons Brinckerhoff, the firm building the rail system, had prepared. The report predicted that total benefits from the project would range from $66 billion to $80 billion over several decades. That number looked reasonable when the projected price tag for the project was $35 billion, but the budget has already swollen to $68 billion—and is still expanding. In 2009, I calculated a rough cost-benefit calculation for a (fictional) high-speed rail link between Houston and Dallas and found that costs outweighed benefits by an order of magnitude. The returns to high-speed rail tend to be limited because air travel will still be faster and driving a lot cheaper. Outside the East Coast, meantime, train travelers would typically still have to rent a car once they arrived at their destination. President Obama’s grand vision of “walking only a few steps to public transportation, and ending up just blocks from your destination” is at odds with reality in car-centered America. Has the president never been to Houston?
The existence of plausible transportation alternatives and the law of diminishing returns have also tended to reduce the benefits of infrastructure investment over the past two centuries. The opening of the Erie Canal in 1821 brought enormous value because the inland transportation options at the time were dismal. In the early nineteenth century, it cost as much to ship goods 30 miles over land as to send them across the entire Atlantic Ocean. Yet the very existence of canals, as much of a breakthrough as they represented, reduced the benefits of the later rail system, as Nobel economist Robert Fogel has shown. The returns for new transportation infrastructure in places with terrible roads, such as much of Africa and India, will be much higher than in the United States, which already enjoys an impressive, if under-maintained, array of mobility options.
What about the economic value of the shorter commuting times that new infrastructure can bring? Between 2009 and 2014, the Texas Transportation Institute estimates that the annual cost to Americans from traffic rose from $147 billion to $160 billion and that hours wasted in traffic increased from 6.3 billion hours to 6.9 billion hours, despite the surge in federal transportation funding. The time wasted has been particularly egregious in America’s more successful metropolitan areas, like San Jose, where delays per auto commuter jumped from 56 hours in 2009 to 67 hours in 2014. Yet it’s hard to see how substantially reducing time lost to traffic congestion will turbocharge the economy. Imagine that America gets its act together and cuts traffic time sufficiently to save $80 billion—a pretty miraculous improvement. That would still represent less than one-half of 1 percent of America’s $18 trillion GDP.
by Edward L. Glaeser, City Journal | Read more:
Image:George Washington Bridge, The Museum of the City of New York /Art Resource, NY
Monday, September 12, 2016
Wells Fargo Exec Who Headed Phony Accounts Unit Collected $125 Million
[ed. So, just to get this straight: 5300 employees were fired over a five year period even though the criminal practices they allegedly were fired for were still being actively encouraged by management? How did that work? And the company could have saved $45 million by firing this "sandbagger-in-chief" but let her retire instead, thus protecting her serverance payout? And the company explains this by saying it's because of their consistent "commitment to customers"? See also: Why It’s Unlikely Anyone Will Go to Jail Over Wells Fargo’s Massive Fraud Scheme.]
Wells Fargo & Co’s “sandbagger”-in-chief is leaving the giant bank with an enormous pay day—$124.6 million.
In fact, despite beefed-up “clawback” provisions instituted by the bank shortly after the financial crisis, and the recent revelations of massive misconduct, it does not appear that Wells Fargo is requiring Carrie Tolstedt, the Wells Fargo executive who was in charge of the unit where employees opened more than 2 million largely unauthorized customer accounts—a seemingly routine practice that employees internally referred to as “sandbagging”—to give back any of her nine-figure pay.
On Thursday, Wells Fargo agreed to pay $185 million, including the largest penalty ever imposed by the Consumer Financial Protection Bureau, to settle claims that that it defrauded its customers. The bank’s shareholders will ultimately have to swallow the cost of that settlement. The bank also said it had fired 5,300 employees over five years related to the bad behavior.
Tolstedt, however, is walking away from Wells Fargo with a very full bank account—and praise. In the July announcement of her exit, which made no mention of the soon-to-be-settled case, Wells Fargo’s CEO John Stumpf said Tolstedt had been one of the bank’s most important leaders and “a standard-bearer of our culture” and “a champion for our customers.”
On Thursday, Richard Cordray, the head of the CFPB, said, “It is quite clear that [the actions of Tolstedt’s unit] are unfair and abusive practices under federal law. They are a violation of trust and an abuse of trust.”
A spokesperson for Wells Fargo said that the timing of Tolstedt’s exit was the result of a “personal decision to retire after 27 years” with the bank. The spokesperson declined to comment on whether the bank was considering clawing back Tolstedt’s back pay.
In a statement following the settlement, Wells Fargo said, “Wells Fargo reached these agreements consistent with our commitment to customers and in the interest of putting this matter behind us. Wells Fargo is committed to putting our customers’ interests first 100% of the time, and we regret and take responsibility for any instances where customers may have received a product that they did not request.”
Shortly after the financial crisis, big banks in the nation, including Wells Fargo, promised that their top bankers would not be able to keep large paydays if it was found that those rewards were gained through harmful conduct. It was supposed to be the stick to the carrot of Wall Street bonuses. But the latest example of fraud at Wells Fargo shows that the big banks are unwilling to wield those sticks, especially when it comes to their top executives.
It is not clear how closely, or at all, Tolstedt was responsible for or even aware of the widespread abusive tactics at the bank. Neither the CFPB nor the Los Angeles City Attorney’s office, which sued the bank, named Tolstedt directly. Wells Fargo said the 5,300 firings happened over five years, and included managers as well as employees. It’s likely that Tolstedt managed as least part of that purge. But in bringing the charges, an official from the CFPB said Wells Fargo was aware of the behavior for longer than it should have, without putting a stop to it.
What’s more, Tolstedt ran the community banking division of the bank, which included its retail banking and credit card divisions, during the entire period in which the customer abuse was alleged, which goes back to 2011. The CFPB said about three quarters of the unauthorized accounts opened by employees of Wells Fargo were bank deposit accounts. Another 565,000 were unauthorized credit card applications. Tolstedt took over the division in 2008, after Wells Fargo merged with Wachovia during the financial crisis. (...)
Tolstedt was regularly praised for her unit’s ability to get customers to open numerous accounts. For a number of years, Wells Fargo’s proxy statement, which details executive pay, cited high “cross-selling ratios” as a reason that Tolstedt had earned her roughly $9 million in annual pay. For instance, in Wells Fargo’s 2015 proxy statement, the company said that its compensation committee had authorized Tolstedt’s $7.3 million stock and cash bonus that year, because “under her leadership, Community Banking achieved a number of strategic objectives, including continued strong cross-sell ratios, record deposit levels, and continued success of mobile banking initiatives.”
Later that year, the L.A. City Attorney’s office sued the bank because of its sales tactics, saying that many of the abusive practices came from intense pressure on Wells Fargo’s employees to get customers to open up numerous accounts. A separate class action of former employees alleges they were fired for not meeting cross-selling goals, or going along with the aggressive sales tactics.
Earlier this year when Wells Fargo released its annual proxy statement, it once again said that in order to justify her multimillion dollar bonus, Tolstedt’s division had “achieved a number of strategic objectives.” But this time, for the first time in years, cross-selling wasn’t listed as one of them.
When Tolstedt leaves Wells Fargo later this year, on top of the $1.7 million in salary she has received over the past few years, she will be walking away with $124.6 million in stock, options, and restricted Wells Fargo shares. Some of that hasn’t vested yet. But Tolstedt gets to keep all of it because she technically retired. Had she been fired, Tolstedt would have had to forfeit at least $45 million of that exit payday, and possibly more.
by Stephen Gandel, Fortune | Read more:
Image: Istock
Wells Fargo & Co’s “sandbagger”-in-chief is leaving the giant bank with an enormous pay day—$124.6 million.
In fact, despite beefed-up “clawback” provisions instituted by the bank shortly after the financial crisis, and the recent revelations of massive misconduct, it does not appear that Wells Fargo is requiring Carrie Tolstedt, the Wells Fargo executive who was in charge of the unit where employees opened more than 2 million largely unauthorized customer accounts—a seemingly routine practice that employees internally referred to as “sandbagging”—to give back any of her nine-figure pay.
On Thursday, Wells Fargo agreed to pay $185 million, including the largest penalty ever imposed by the Consumer Financial Protection Bureau, to settle claims that that it defrauded its customers. The bank’s shareholders will ultimately have to swallow the cost of that settlement. The bank also said it had fired 5,300 employees over five years related to the bad behavior.
Tolstedt, however, is walking away from Wells Fargo with a very full bank account—and praise. In the July announcement of her exit, which made no mention of the soon-to-be-settled case, Wells Fargo’s CEO John Stumpf said Tolstedt had been one of the bank’s most important leaders and “a standard-bearer of our culture” and “a champion for our customers.”
On Thursday, Richard Cordray, the head of the CFPB, said, “It is quite clear that [the actions of Tolstedt’s unit] are unfair and abusive practices under federal law. They are a violation of trust and an abuse of trust.”
A spokesperson for Wells Fargo said that the timing of Tolstedt’s exit was the result of a “personal decision to retire after 27 years” with the bank. The spokesperson declined to comment on whether the bank was considering clawing back Tolstedt’s back pay.
In a statement following the settlement, Wells Fargo said, “Wells Fargo reached these agreements consistent with our commitment to customers and in the interest of putting this matter behind us. Wells Fargo is committed to putting our customers’ interests first 100% of the time, and we regret and take responsibility for any instances where customers may have received a product that they did not request.”
Shortly after the financial crisis, big banks in the nation, including Wells Fargo, promised that their top bankers would not be able to keep large paydays if it was found that those rewards were gained through harmful conduct. It was supposed to be the stick to the carrot of Wall Street bonuses. But the latest example of fraud at Wells Fargo shows that the big banks are unwilling to wield those sticks, especially when it comes to their top executives.
It is not clear how closely, or at all, Tolstedt was responsible for or even aware of the widespread abusive tactics at the bank. Neither the CFPB nor the Los Angeles City Attorney’s office, which sued the bank, named Tolstedt directly. Wells Fargo said the 5,300 firings happened over five years, and included managers as well as employees. It’s likely that Tolstedt managed as least part of that purge. But in bringing the charges, an official from the CFPB said Wells Fargo was aware of the behavior for longer than it should have, without putting a stop to it.
What’s more, Tolstedt ran the community banking division of the bank, which included its retail banking and credit card divisions, during the entire period in which the customer abuse was alleged, which goes back to 2011. The CFPB said about three quarters of the unauthorized accounts opened by employees of Wells Fargo were bank deposit accounts. Another 565,000 were unauthorized credit card applications. Tolstedt took over the division in 2008, after Wells Fargo merged with Wachovia during the financial crisis. (...)
Tolstedt was regularly praised for her unit’s ability to get customers to open numerous accounts. For a number of years, Wells Fargo’s proxy statement, which details executive pay, cited high “cross-selling ratios” as a reason that Tolstedt had earned her roughly $9 million in annual pay. For instance, in Wells Fargo’s 2015 proxy statement, the company said that its compensation committee had authorized Tolstedt’s $7.3 million stock and cash bonus that year, because “under her leadership, Community Banking achieved a number of strategic objectives, including continued strong cross-sell ratios, record deposit levels, and continued success of mobile banking initiatives.”
Later that year, the L.A. City Attorney’s office sued the bank because of its sales tactics, saying that many of the abusive practices came from intense pressure on Wells Fargo’s employees to get customers to open up numerous accounts. A separate class action of former employees alleges they were fired for not meeting cross-selling goals, or going along with the aggressive sales tactics.
Earlier this year when Wells Fargo released its annual proxy statement, it once again said that in order to justify her multimillion dollar bonus, Tolstedt’s division had “achieved a number of strategic objectives.” But this time, for the first time in years, cross-selling wasn’t listed as one of them.
When Tolstedt leaves Wells Fargo later this year, on top of the $1.7 million in salary she has received over the past few years, she will be walking away with $124.6 million in stock, options, and restricted Wells Fargo shares. Some of that hasn’t vested yet. But Tolstedt gets to keep all of it because she technically retired. Had she been fired, Tolstedt would have had to forfeit at least $45 million of that exit payday, and possibly more.
by Stephen Gandel, Fortune | Read more:
Image: Istock
Sunday, September 11, 2016
How I Moved On From My What Not To Wear Style
[ed. Never saw What Not To Wear, but I like this woman's perspective. See also: Designers refuse to make clothes to fit American women.]
At my age, if you aren’t Oprah or a man, the stigma of getting older starts to take shape. I’m 47. I am seriously and officially middle-aged. Like, deep into it. I'm here, but heck if I know how I got here so fast. I certainly don’t feel it. In a sense, I’ve grown up without becoming a conventional grown-up. Meaning, I’m not married. I don’t have kids, a second home, or a mortgage. I don’t run an office full of employees. I don’t go to the same job every day. And because of this, sometimes people (myself included) find it hard to measure my value without the traditional milestones of a life lived or a collection of identifiable CliffsNotes at the ready.
There are moments when this unconventional approach to aging feels freeing, and I can romanticize it. Not being able to be labeled so easily has its advantages. I’m a curiosity of sorts. I’m a mystery. An enigma. People seemingly want to know more about me, because I haven’t played by conventional social rules. I don’t “act” my age. That was cute when I was the precocious youngest woman in the room. It can be equally as enticing as the oldest. But my point is that I am usually the oldest in the room these days. Almost all my friends are younger than I am. I simply don’t have as much in common with friends my age who got married and had kids. My younger friends haven’t had to make these life choices yet. They enjoy the kind of freedom that I do. But for all my freedom, as I age, I’m not always sure where or with whom I belong. I’m a new classification of person, really. And like anything new, the unknown can feel a bit scary.
Don’t get me wrong. I'm happy with where I'm at. I am very proud of my career and all that I’ve accomplished. I get joy from work, and that probably keeps me somewhat youthful in disposition. But there seemed to be so much time back when I was 32. It wasn’t this “decision” written in stone that I wouldn’t get married or have kids. Maybe I still will. What has happened is I’ve had to let go of the age when all things were possible (32) and started to look at what is (47). I am part of the first generation of women not truly dependent on anyone. My feminist mom was married, had kids, got divorced, and made a career for herself. Does only being able to check the last box make me a pariah or a pioneer? Because in my opinion, they dress differently, I can tell you that.
One thing I am sure of: I didn’t really start to think about my age until I started to feel that all clothes were not appropriate for me. Now, of course, not all clothes and not all trends are appropriate for everyone. I spent years and years telling everybody yes to this, no to that. But when I started to ask myself if a dress was too short or showed too much skin or the eyeshadow I wanted was a little too bright, I realized my style wasn’t in Kansas anymore. (Or maybe it was only allowed in Kansas. Hard to say. Not sure where I was going with this metaphor.) I’ve been dying to wear that LoveShackFancy pink cotton tiered halter minidress that I got at the sample sale. But every time I put it on I laugh, proof positive that my brain has NOT caught up to my age. She (my young girl brain) still loves too much sparkle and skirts that twirl. But at 47, I really don’t want to go for a Suicide Squad-Harley Quinn-looking pouf skirt. (I know, she wears underwear most of the movie, but you get my point.) For me, that dress simply reinforces that I may not act my age, but I can’t avoid aging. I can make choices that allow me connections with people younger than myself, but I am no longer young. (...)
At my age, if you aren’t Oprah or a man, the stigma of getting older starts to take shape. I’m 47. I am seriously and officially middle-aged. Like, deep into it. I'm here, but heck if I know how I got here so fast. I certainly don’t feel it. In a sense, I’ve grown up without becoming a conventional grown-up. Meaning, I’m not married. I don’t have kids, a second home, or a mortgage. I don’t run an office full of employees. I don’t go to the same job every day. And because of this, sometimes people (myself included) find it hard to measure my value without the traditional milestones of a life lived or a collection of identifiable CliffsNotes at the ready.
There are moments when this unconventional approach to aging feels freeing, and I can romanticize it. Not being able to be labeled so easily has its advantages. I’m a curiosity of sorts. I’m a mystery. An enigma. People seemingly want to know more about me, because I haven’t played by conventional social rules. I don’t “act” my age. That was cute when I was the precocious youngest woman in the room. It can be equally as enticing as the oldest. But my point is that I am usually the oldest in the room these days. Almost all my friends are younger than I am. I simply don’t have as much in common with friends my age who got married and had kids. My younger friends haven’t had to make these life choices yet. They enjoy the kind of freedom that I do. But for all my freedom, as I age, I’m not always sure where or with whom I belong. I’m a new classification of person, really. And like anything new, the unknown can feel a bit scary.Don’t get me wrong. I'm happy with where I'm at. I am very proud of my career and all that I’ve accomplished. I get joy from work, and that probably keeps me somewhat youthful in disposition. But there seemed to be so much time back when I was 32. It wasn’t this “decision” written in stone that I wouldn’t get married or have kids. Maybe I still will. What has happened is I’ve had to let go of the age when all things were possible (32) and started to look at what is (47). I am part of the first generation of women not truly dependent on anyone. My feminist mom was married, had kids, got divorced, and made a career for herself. Does only being able to check the last box make me a pariah or a pioneer? Because in my opinion, they dress differently, I can tell you that.
One thing I am sure of: I didn’t really start to think about my age until I started to feel that all clothes were not appropriate for me. Now, of course, not all clothes and not all trends are appropriate for everyone. I spent years and years telling everybody yes to this, no to that. But when I started to ask myself if a dress was too short or showed too much skin or the eyeshadow I wanted was a little too bright, I realized my style wasn’t in Kansas anymore. (Or maybe it was only allowed in Kansas. Hard to say. Not sure where I was going with this metaphor.) I’ve been dying to wear that LoveShackFancy pink cotton tiered halter minidress that I got at the sample sale. But every time I put it on I laugh, proof positive that my brain has NOT caught up to my age. She (my young girl brain) still loves too much sparkle and skirts that twirl. But at 47, I really don’t want to go for a Suicide Squad-Harley Quinn-looking pouf skirt. (I know, she wears underwear most of the movie, but you get my point.) For me, that dress simply reinforces that I may not act my age, but I can’t avoid aging. I can make choices that allow me connections with people younger than myself, but I am no longer young. (...)
It isn’t simply that I no longer play by the gender rulebook, it’s that the rules suddenly feel stacked against me. We still live in a culture where men grow more handsome, distinguished, and even trustworthy with age. Women are not afforded the same. Sociobiologically speaking, in caveman days, if we could no longer bear children our use-value dropped sharply and inevitably. And it was rather convenient that our lifespans were short enough that we would generally die soon after childbearing age anyway. So what’s a modern-day woman, who could live to be 120, going to do with all this extra time in the middle? In the middle of the middle? Current culture leads me to believe I’m supposed to attempt to look 25 for the next 50 years. Even if we’re past bearing children, are we meant to look as if we still can? Is that what Botox and fillers and peels and exercising 11 times a week are meant to do for us? Hang on. What?
What’s so bad about growing older when it’s revered in almost every society except ours? (All of you who hate my gray streak because you say it makes me look "old"? I don’t see why that can’t be a compliment.) Of course we want to stay strong and healthy as long as possible, but young? Why don’t we embrace age for all of its positive attributes? Because to value those things above youth and a particular kind of beauty requires a change in thinking (and seeing) much like changing the way we perceive a woman like me. You don’t need to ask me about my feelings on marriage or children. You can invite me over to dinner parties, even when it’s just married couples. (I have a boyfriend, but even if I didn’t!) Really! It’s okay! You can ask me about politics, the stock market, the best movies of the 1970s, what I think of this election, and of course whether or not you should keep the dress you wore once three years ago. (The answer to that is OF COURSE NOT.) I don’t want to be defined by my age. But I consider it to be a great asset. You can ask me about heartbreak and disappointment, about triumph and fear and courage. I’ve had more experience with it because I’ve had more TIME to have experience. And I want my style to reflect that experience.
What’s so bad about growing older when it’s revered in almost every society except ours? (All of you who hate my gray streak because you say it makes me look "old"? I don’t see why that can’t be a compliment.) Of course we want to stay strong and healthy as long as possible, but young? Why don’t we embrace age for all of its positive attributes? Because to value those things above youth and a particular kind of beauty requires a change in thinking (and seeing) much like changing the way we perceive a woman like me. You don’t need to ask me about my feelings on marriage or children. You can invite me over to dinner parties, even when it’s just married couples. (I have a boyfriend, but even if I didn’t!) Really! It’s okay! You can ask me about politics, the stock market, the best movies of the 1970s, what I think of this election, and of course whether or not you should keep the dress you wore once three years ago. (The answer to that is OF COURSE NOT.) I don’t want to be defined by my age. But I consider it to be a great asset. You can ask me about heartbreak and disappointment, about triumph and fear and courage. I’ve had more experience with it because I’ve had more TIME to have experience. And I want my style to reflect that experience.
by Stacy London, Refinery29 | Read more:
Image: Winnie Au
Banned in the USA
I’ll never forget that day,” says C.J. Pierce, guitarist for Dallas metal band Drowning Pool, of the day no one can forget. “I was laying in my bunk on the bus — a little hungover from the night before, of course, this is rock ’n’ roll, I had a couple drinks, whatever — and Clint Lowery from Sevendust comes running on my bus: ‘They’re bombing our country!’ I just remember him yelling, ‘They’re bombing our country!’”
Their bands were scheduled to play a show in Wisconsin. “It was an arena. It was a big show. And a lot of people showed up. The fans showed up, so we’re gonna play. I remember, we did a moment of silence. Each band. We still played the show.”
It seemed obvious. Maybe it was. “What else can you do?”
The idea, after the terrorist attacks of September 11, 2001, was to do exactly what you’d done before, and listen to whatever you liked to listen to while you did it. Or the terrorists win.
For example. Jennifer Lopez’s “I’m Real,” featuring Ja Rule, was the no. 1 song in America. Maxwell’s Now was the no. 1 album. Jay Z’s The Blueprint, Bob Dylan’s Love and Theft, and Slayer’s God Hates Us All came out that very day. If you’re inclined to view history through the prism of the music that inadvertently soundtracked it, 9/11 is unbeatable for tragedy, absurdity, and pitch-black comedy. But 15 years later, it’s the songs the radio wouldn’t play that tell you the most.
In the week after the attacks, Clear Channel Communications, the Texas-based radio empire then controlling nearly 1,200 radio stations reaching 110 million listeners nationwide, drew up an informal blacklist of sorts — more than 150 songs its DJs should avoid, so as not to upset or offend anyone. As a Snopes investigation subsequently revealed, adherence was voluntary, and many stations ignored it; at the time, sheepish anonymous employees described it to The New York Times as a corporate memo gone wrong, snowballing thanks to an “overzealous regional executive” who kept adding more songs and soliciting more input. A wayward reply-all email debacle made sentient.
And then the list leaked, and became an invaluable source of mild outrage and desperately needed comic relief.
“Imagine.” “Ruby Tuesday.” “Rocket Man.” Rage Against the Machine’s entire catalog. Seven AC/DC songs, from “TNT” to “Dirty Deeds Done Dirt Cheap.” “American Pie.” “Free Fallin’.” “Rock the Casbah.” “Dancing in the Streets.” “It’s the End of the World as We Know It (And I Feel Fine).” The list is uncomfortably corporate and painfully human, as notable for what it omits (there’s very little country, and no rap) as what it includes. It’s usually presented in alphabetical order, but you can plot the stages, follow the bonkers logic.
Phase one: Contemporary hits from various rock and metal bands, some with violent imagery, some just with the wrong vibe. Metallica. Godsmack. Soundgarden. Third Eye Blind’s “Jumper.” Tool’s “Intolerance.”
Next, pop hits of any era with vaguely confrontational, or war-adjacent, or morbid imagery. Pat Benatar’s “Hit Me With Your Best Shot” and “Love Is a Battlefield.” The Gap Band’s “You Dropped a Bomb on Me.” “Great Balls of Fire.” “Dust in the Wind.” “Knockin’ on Heaven’s Door,” both the Bob Dylan and Guns N’ Roses versions.
Then, songs about aviation: Lenny Kravitz’s “Fly Away.” Red Hot Chili Peppers’ “Aeroplane.” Foo Fighters’ “Learn to Fly.” Steve Miller Band’s “Jet Airliner.” Peter, Paul and Mary’s “Leaving on a Jet Plane.”
Finally, and most hilariously, the irony tier: songs so peaceful and utopian they might scan now as oblique taunts. “What a Wonderful World.” “Bridge Over Troubled Water.” “Ob-La-Di, Ob-La-Da.” And just to be safe, Alanis Morissette’s “Ironic.”
At the time, this story was an uneasy delight — in the teeth of the alleged Death of Irony, with Saturday Night Live and The Onion and all the late-night talk shows respectfully silent, you took your laughs where you could get them, and not much back then was funnier than “things are so bad out there they banned ‘Imagine.’”
But for the active artists who made the list, however unofficial and well-meaning it might’ve been, it had a profound effect. (The company, since rebranded iHeartMedia and still the medium’s dominant power, declined comment.) It bumped singles, stalled albums, derailed promising careers. And to listeners, to the American people, it was a whimsical interlude to the grim dystopia of George W. Bush’s war years, clearly signaling that the major corporations dominating the music industry were susceptible to panicked censorship and misguided patriotism.
It was a clumsy, confusing message to a shocked and thoroughly shook populace just when it needed music the most. Any music. Whatever you’re into. Whatever works. And it’s hard to interpret the act of banning every Rage Against the Machine song as anything but a quick and dirty attempt to manufacture a chilling effect on protest songs overall; indeed, with dismayingly few exceptions, prominent protest songs were sorely lacking as the wars in Afghanistan and Iraq unfolded. Songs that did directly address the national mood tended toward the pandering, the jingoistic, the geopolitically disingenuous: Think Toby Keith’s alarmingly brazen “Courtesy of the Red, White, and Blue (The Angry American),” or Darryl Worley’s syrupy strawman broadside “Have You Forgotten?”
Music was hardly the biggest focal point or the hardest-hit entity after 9/11, but the ripple effect was profound and dismaying all the same. The Clear Channel list was mostly comic relief, but the mood had changed dramatically two years later, when the Dixie Chicks dissed George W. Bush onstage in London, and triggered an instant, near-total blacklist so thorough and visceral they made a movie about it. This list was the first indication that both fallible, well-meaning humans and at least slightly less benevolent megacorporations had enormous influence over who and what you heard and saw. And as the national mood got darker and heavier, that influence grew more sinister in turn.
Here, in their own words, are recollections from five of the artists whose songs made Clear Channel’s 9/11 memo.
by Rob Harvilla, The Ringer | Read more:
Image: Getty Images/Ringer illustration
Their bands were scheduled to play a show in Wisconsin. “It was an arena. It was a big show. And a lot of people showed up. The fans showed up, so we’re gonna play. I remember, we did a moment of silence. Each band. We still played the show.”
It seemed obvious. Maybe it was. “What else can you do?”The idea, after the terrorist attacks of September 11, 2001, was to do exactly what you’d done before, and listen to whatever you liked to listen to while you did it. Or the terrorists win.
For example. Jennifer Lopez’s “I’m Real,” featuring Ja Rule, was the no. 1 song in America. Maxwell’s Now was the no. 1 album. Jay Z’s The Blueprint, Bob Dylan’s Love and Theft, and Slayer’s God Hates Us All came out that very day. If you’re inclined to view history through the prism of the music that inadvertently soundtracked it, 9/11 is unbeatable for tragedy, absurdity, and pitch-black comedy. But 15 years later, it’s the songs the radio wouldn’t play that tell you the most.
In the week after the attacks, Clear Channel Communications, the Texas-based radio empire then controlling nearly 1,200 radio stations reaching 110 million listeners nationwide, drew up an informal blacklist of sorts — more than 150 songs its DJs should avoid, so as not to upset or offend anyone. As a Snopes investigation subsequently revealed, adherence was voluntary, and many stations ignored it; at the time, sheepish anonymous employees described it to The New York Times as a corporate memo gone wrong, snowballing thanks to an “overzealous regional executive” who kept adding more songs and soliciting more input. A wayward reply-all email debacle made sentient.
And then the list leaked, and became an invaluable source of mild outrage and desperately needed comic relief.
“Imagine.” “Ruby Tuesday.” “Rocket Man.” Rage Against the Machine’s entire catalog. Seven AC/DC songs, from “TNT” to “Dirty Deeds Done Dirt Cheap.” “American Pie.” “Free Fallin’.” “Rock the Casbah.” “Dancing in the Streets.” “It’s the End of the World as We Know It (And I Feel Fine).” The list is uncomfortably corporate and painfully human, as notable for what it omits (there’s very little country, and no rap) as what it includes. It’s usually presented in alphabetical order, but you can plot the stages, follow the bonkers logic.
Phase one: Contemporary hits from various rock and metal bands, some with violent imagery, some just with the wrong vibe. Metallica. Godsmack. Soundgarden. Third Eye Blind’s “Jumper.” Tool’s “Intolerance.”
Next, pop hits of any era with vaguely confrontational, or war-adjacent, or morbid imagery. Pat Benatar’s “Hit Me With Your Best Shot” and “Love Is a Battlefield.” The Gap Band’s “You Dropped a Bomb on Me.” “Great Balls of Fire.” “Dust in the Wind.” “Knockin’ on Heaven’s Door,” both the Bob Dylan and Guns N’ Roses versions.
Then, songs about aviation: Lenny Kravitz’s “Fly Away.” Red Hot Chili Peppers’ “Aeroplane.” Foo Fighters’ “Learn to Fly.” Steve Miller Band’s “Jet Airliner.” Peter, Paul and Mary’s “Leaving on a Jet Plane.”
Finally, and most hilariously, the irony tier: songs so peaceful and utopian they might scan now as oblique taunts. “What a Wonderful World.” “Bridge Over Troubled Water.” “Ob-La-Di, Ob-La-Da.” And just to be safe, Alanis Morissette’s “Ironic.”
At the time, this story was an uneasy delight — in the teeth of the alleged Death of Irony, with Saturday Night Live and The Onion and all the late-night talk shows respectfully silent, you took your laughs where you could get them, and not much back then was funnier than “things are so bad out there they banned ‘Imagine.’”
But for the active artists who made the list, however unofficial and well-meaning it might’ve been, it had a profound effect. (The company, since rebranded iHeartMedia and still the medium’s dominant power, declined comment.) It bumped singles, stalled albums, derailed promising careers. And to listeners, to the American people, it was a whimsical interlude to the grim dystopia of George W. Bush’s war years, clearly signaling that the major corporations dominating the music industry were susceptible to panicked censorship and misguided patriotism.
It was a clumsy, confusing message to a shocked and thoroughly shook populace just when it needed music the most. Any music. Whatever you’re into. Whatever works. And it’s hard to interpret the act of banning every Rage Against the Machine song as anything but a quick and dirty attempt to manufacture a chilling effect on protest songs overall; indeed, with dismayingly few exceptions, prominent protest songs were sorely lacking as the wars in Afghanistan and Iraq unfolded. Songs that did directly address the national mood tended toward the pandering, the jingoistic, the geopolitically disingenuous: Think Toby Keith’s alarmingly brazen “Courtesy of the Red, White, and Blue (The Angry American),” or Darryl Worley’s syrupy strawman broadside “Have You Forgotten?”
Music was hardly the biggest focal point or the hardest-hit entity after 9/11, but the ripple effect was profound and dismaying all the same. The Clear Channel list was mostly comic relief, but the mood had changed dramatically two years later, when the Dixie Chicks dissed George W. Bush onstage in London, and triggered an instant, near-total blacklist so thorough and visceral they made a movie about it. This list was the first indication that both fallible, well-meaning humans and at least slightly less benevolent megacorporations had enormous influence over who and what you heard and saw. And as the national mood got darker and heavier, that influence grew more sinister in turn.
Here, in their own words, are recollections from five of the artists whose songs made Clear Channel’s 9/11 memo.
by Rob Harvilla, The Ringer | Read more:
Image: Getty Images/Ringer illustration
Saturday, September 10, 2016
Apocalypse Tourism
On Aug. 16, the Crystal Serenity set out from Seward, Alaska, carrying 1,700 passengers and crew, and escorted by a comparatively minuscule, 1,800-ton icebreaker. She circled west and north around the Alaska Peninsula and through the Bering Strait before heading east into the maze of straits and sounds that constitute the Northwest Passage. For centuries, explorers tried to establish a sea route here between Europe and Asia. Many met with ruin. A few stranded sailors famously ate their boots—and each other. When the Crystal Serenity emerged free and clear of the maze on Sept. 5, there were no accounts of scurvy or cannibalism, only tales of bingeing on themed buffets and grumbles from shutterbugs about the Arctic’s monotonous landscape.Operated by Crystal Cruises, the Serenity became on that day the first passenger liner to successfully ply the Northwest Passage. As climate change melts Arctic sea ice twice as fast as models predicted, more and larger ships have made their way along these fatal shores. In 2013, the Nordic Orion was the first bulk cargo carrier to transit the Passage, hauling a load of coal.
Rates on the Serenity started at around $22,000 per person. For that, passengers were anointed, by Slate, “the world’s worst people”—for venturing into a vulnerable ecosystem in a diesel-burning, 69,000-ton behemoth. Canada’s National Post described the cruise as an “invasion” of indigenous communities. Britain’s Telegraph hinted at Titanic hubris, asking, Is this “the world’s most dangerous cruise”?
by By Katie Orlinsky and Eva Holland, Bloomberg | Read more:
Image: Katie Orlinsky
Letter of Recommendation: Glass Bricks
Like so many seemingly innocuous things, glass bricks were created to make the world a better place. They were invented at the turn of the 20th century to provide factory workers with more natural light. Soon they moved beyond the world of industry, as Art Deco architects took to their sleek modernism, using them to adorn building exteriors and divide interiors. A 1930 issue of Popular Science speculated about a future in which skyscrapers would be made almost entirely of glass bricks.
Today glass bricks are most closely associated with the decadence of 1980s architecture, which channeled the elegance and streamlined surfaces of Art Deco — an ’80s callback to the retro future imagined in the ’20s. Though they are designed to look pristinely high-gloss forever, time and dirt take their toll on most. There’s something kind of sleazy about them and not just because they show up in the background of so many scenes shot in Encino porn houses. You find them in corner bars and mini-malls, reflecting neon or LED light. They’re often installed to replace windows, providing translucency but keeping the outside firmly out. If they once signaled progress, nowadays glass bricks signify an oddly compelling sort of decline. And for me, they evoke my own Los Angeles childhood. At some point, I became completely obsessed.
My fixation was fueled, in part, by a fear that glass bricks were becoming endangered. Los Angeles has morphed in recent years. Ritzy apartment buildings and trendy hotels went up in formerly decaying areas like downtown and Hollywood, turning decrepit blocks into lavish playgrounds. This year it was announced that the Los Angeles Memorial Sports Arena, in Exposition Park, would be bulldozed to make way for a more modern stadium. The arena had been around since 1959, and in Los Angeles, a building from 1959 is considered fairly historic. But its datedness was exactly what I loved about the arena; it felt like a portal to a Los Angeles I’d never seen, whose ghosts I could sense. It was also full of glass bricks, and I feared they would be ground to crystalline dust.
I started taking long, aimless drives down major city-spanning thoroughfares like Beverly Boulevard and through suburban neighborhoods like Glendale, searching for glass bricks that I could capture with my camera phone. I started to see them everywhere in Los Angeles, and through Twitter, I learned that they were actually everywhere. A #glassbricks hashtag I started as a joke became real when people began sending me photos of their own sightings from all corners of the world: Amsterdam, Tokyo, Zurich. Last week, a friend sent me a shot of some glass bricks near Chernobyl that probably haven’t been touched since 1986. There are glass bricks at the end of the world.
Today glass bricks are most closely associated with the decadence of 1980s architecture, which channeled the elegance and streamlined surfaces of Art Deco — an ’80s callback to the retro future imagined in the ’20s. Though they are designed to look pristinely high-gloss forever, time and dirt take their toll on most. There’s something kind of sleazy about them and not just because they show up in the background of so many scenes shot in Encino porn houses. You find them in corner bars and mini-malls, reflecting neon or LED light. They’re often installed to replace windows, providing translucency but keeping the outside firmly out. If they once signaled progress, nowadays glass bricks signify an oddly compelling sort of decline. And for me, they evoke my own Los Angeles childhood. At some point, I became completely obsessed.My fixation was fueled, in part, by a fear that glass bricks were becoming endangered. Los Angeles has morphed in recent years. Ritzy apartment buildings and trendy hotels went up in formerly decaying areas like downtown and Hollywood, turning decrepit blocks into lavish playgrounds. This year it was announced that the Los Angeles Memorial Sports Arena, in Exposition Park, would be bulldozed to make way for a more modern stadium. The arena had been around since 1959, and in Los Angeles, a building from 1959 is considered fairly historic. But its datedness was exactly what I loved about the arena; it felt like a portal to a Los Angeles I’d never seen, whose ghosts I could sense. It was also full of glass bricks, and I feared they would be ground to crystalline dust.
I started taking long, aimless drives down major city-spanning thoroughfares like Beverly Boulevard and through suburban neighborhoods like Glendale, searching for glass bricks that I could capture with my camera phone. I started to see them everywhere in Los Angeles, and through Twitter, I learned that they were actually everywhere. A #glassbricks hashtag I started as a joke became real when people began sending me photos of their own sightings from all corners of the world: Amsterdam, Tokyo, Zurich. Last week, a friend sent me a shot of some glass bricks near Chernobyl that probably haven’t been touched since 1986. There are glass bricks at the end of the world.
by Molly Lambert, NY Times | Read more:
Image: Coley Brown
Thursday, September 8, 2016
Wells Fargo Fined for Fraudulently Opening Accounts for Customers
[ed. It never ends. Will anyone higher up ever be prosecuted? One guess. The fact that there's a done deal before news ever reached the public should tell you everything you need to know - either about the regulators enforcing banking regulations, or the regulations themselves (and Wells Fargo, who somehow thought it wasn't important enough to disclose the investigation in recent regulatory filings.]
For years, Wells Fargo employees secretly issued credit cards without a customer’s consent. They created fake email accounts to sign up customers for online banking services. They set up sham accounts that customers learned about only after they started accumulating fees.
On Thursday, these illegal banking practices cost Wells Fargo $185 million in fines, including a $100 million penalty from the Consumer Financial Protection Bureau, the largest such penalty the agency has issued.
Federal banking regulators said the practices, which date back to 2011, reflected serious flaws in the internal culture and oversight at Wells Fargo, one of the nation’s largest banks. The bank has fired at least 5,300 employees who were involved.
In all, Wells Fargo employees opened roughly 1.5 million bank accounts and applied for 565,000 credit cards that may not have been authorized by customers, the regulators said in a news conference. The bank has 40 million retail customers.
Some customers noticed the deception when they were charged unexpected fees, received credit or debit cards in the mail that they did not request, or started hearing from debt collectors about accounts they did not recognize. But most of the sham accounts went unnoticed, as employees would routinely close them shortly after opening them. Wells has agreed to refund about $2.6 million in fees that may have been inappropriately charged.
Wells Fargo is famous for its culture of cross-selling products to customers — routinely asking, say, a checking account holder if she would like to take out a credit card. Regulators said the bank’s employees had been motivated to open the unauthorized accounts by compensation policies that rewarded them for opening new accounts; many current and former Wells employees told regulators they had felt extreme pressure to open as many accounts as possible.
“Unchecked incentives can lead to serious consumer harm, and that is what happened here,” said Richard Cordray, director of the Consumer Financial Protection Bureau.
Wells said the employees who were terminated included managers and other workers. A bank spokeswoman declined to say whether any senior executives had been reprimanded or fired in the scandal.
“Wells Fargo is committed to putting our customers’ interests first 100 percent of the time, and we regret and take responsibility for any instances where customers may have received a product that they did not request,” the bank said in a statement. (...)
Banking regulators said the widespread nature of the illegal behavior showed that the bank lacked the necessary controls and oversight of its employees. Ensuring that large banks have tight controls has been one of the central preoccupations of banking regulators after the mortgage crisis.
Such pervasive problems at Wells Fargo, which has headquarters in San Francisco, stand out given all of the scrutiny that has been heaped on large, systemically important banks since 2008.
“If the managers are saying, ‘We want growth; we don’t care how you get there,’ what do you expect those employees to do?” said Dan Amiram, an associate business professor at Columbia University.
It is a particularly ugly moment for Wells, one of the few large American banks that have managed to produce consistent profit increases since the financial crisis. Wells has earned a reputation on Wall Street as a tightly run ship that avoided many of the missteps of the mortgage crisis because it took fewer risks than many of its competitors. At the same time, Wells has managed to be enormously profitable, as other large banks continued to stumble because of tighter regulations and a choppy economy.
Analysts have marveled at the bank’s ability to cross-sell mortgages, credit cards and auto loans to customers. The strategy is at the core of modern-day banking: Rather than spend too much time and money recruiting new customers, sell existing customers on new products.
For years, Wells Fargo employees secretly issued credit cards without a customer’s consent. They created fake email accounts to sign up customers for online banking services. They set up sham accounts that customers learned about only after they started accumulating fees.
On Thursday, these illegal banking practices cost Wells Fargo $185 million in fines, including a $100 million penalty from the Consumer Financial Protection Bureau, the largest such penalty the agency has issued.
Federal banking regulators said the practices, which date back to 2011, reflected serious flaws in the internal culture and oversight at Wells Fargo, one of the nation’s largest banks. The bank has fired at least 5,300 employees who were involved.In all, Wells Fargo employees opened roughly 1.5 million bank accounts and applied for 565,000 credit cards that may not have been authorized by customers, the regulators said in a news conference. The bank has 40 million retail customers.
Some customers noticed the deception when they were charged unexpected fees, received credit or debit cards in the mail that they did not request, or started hearing from debt collectors about accounts they did not recognize. But most of the sham accounts went unnoticed, as employees would routinely close them shortly after opening them. Wells has agreed to refund about $2.6 million in fees that may have been inappropriately charged.
Wells Fargo is famous for its culture of cross-selling products to customers — routinely asking, say, a checking account holder if she would like to take out a credit card. Regulators said the bank’s employees had been motivated to open the unauthorized accounts by compensation policies that rewarded them for opening new accounts; many current and former Wells employees told regulators they had felt extreme pressure to open as many accounts as possible.
“Unchecked incentives can lead to serious consumer harm, and that is what happened here,” said Richard Cordray, director of the Consumer Financial Protection Bureau.
Wells said the employees who were terminated included managers and other workers. A bank spokeswoman declined to say whether any senior executives had been reprimanded or fired in the scandal.
“Wells Fargo is committed to putting our customers’ interests first 100 percent of the time, and we regret and take responsibility for any instances where customers may have received a product that they did not request,” the bank said in a statement. (...)
Banking regulators said the widespread nature of the illegal behavior showed that the bank lacked the necessary controls and oversight of its employees. Ensuring that large banks have tight controls has been one of the central preoccupations of banking regulators after the mortgage crisis.
Such pervasive problems at Wells Fargo, which has headquarters in San Francisco, stand out given all of the scrutiny that has been heaped on large, systemically important banks since 2008.
“If the managers are saying, ‘We want growth; we don’t care how you get there,’ what do you expect those employees to do?” said Dan Amiram, an associate business professor at Columbia University.
It is a particularly ugly moment for Wells, one of the few large American banks that have managed to produce consistent profit increases since the financial crisis. Wells has earned a reputation on Wall Street as a tightly run ship that avoided many of the missteps of the mortgage crisis because it took fewer risks than many of its competitors. At the same time, Wells has managed to be enormously profitable, as other large banks continued to stumble because of tighter regulations and a choppy economy.
Analysts have marveled at the bank’s ability to cross-sell mortgages, credit cards and auto loans to customers. The strategy is at the core of modern-day banking: Rather than spend too much time and money recruiting new customers, sell existing customers on new products.
by Michael Corkery, NY Times | Read more:
Image: Eric Thayer
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