Krugman: "Once you realize that [Social Security] privatization really means government borrowing to speculate on stocks, it doesn't sound too responsible, does it?"

{ 10:46 AM }

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Soldiers are not an ATM machine. First Command is starting to get its comeuppance (Diana B. Henriques, NYT):

First Command Financial Services, a financial company that caters to military officers, has stopped selling an archaic type of mutual fund with upfront sales charges that can eat up half of an investor's first-year contributions.

First Command, based in Fort Worth, had sold the funds, called contractual plans, to hundreds of thousands of military families over the years, marketing them as a disciplined way for service members to invest a fixed monthly amount over as many as 20 years.

Because of their high fees, the funds largely vanished from the civilian market decades ago. An article in The New York Times in July reported that they were still being sold to military families, and the House passed a bill in October that, among other things, would have barred the sale of new contractual plans. A similar Senate bill did not come to a vote before Congress recessed for the year.

First Command also acknowledged yesterday that it expected to face disciplinary action soon by regulators at NASD and the Securities and Exchange Commission.

[...]

Supporters of the bipartisan bill that passed the House in October said yesterday that First Command's decision, while welcome, did not eliminate the need for Congressional action to protect military families from expensive and unsuitable financial products.

The House Financial Services Committee "would have preferred the outright ban contained in the legislation which passed the House," said Peggy Peterson, a spokeswoman for the committee. "Nonetheless, the decision moves the marketplace in the right direction."

Representative Rahm Emanuel, an Illinois Democrat on the committee, said, "A lot of questionable financial companies and products, besides these funds, are being marketed to enlistees on the base. We still have to make it clear that these enlistees are not an A.T.M. machine."

Lamar C. Smith, First Command CEO, said that his company's decision to stop selling the plans did not mean that it regarded the products as improper or unsuitable.

Neither are they illegal. What the products are, however, is a cruel and calculated abuse of the relative youth and financial inexperience of American soldiers held captive to their sales pitches.

Okay, so they've stopped selling them. What about the "hundreds of thousands" they have sold already? What happens to the financial prospects for those accountholders? You guessed it — FUBAR.

What First Command calls a "disciplined investment" is actually a rigorously planned, orderly way for soldiers to screw themselves. Not alone, but with an awful lot of help from the people who gave First Command, and only First Command, face-to-face access to meet with men and women in uniform. Somebody somewhere gave the go-ahead for First Command's financial "planners" to sell crazy-expensive mutual funds and unnecessary life insurance to enlistees. That kind of exclusivity comes at a price. You have to ask yourself: What kind of hidden reward is waiting for the ones who gave First Command access to soldiers in the first place?

You would expect the American government to protect soldiers, those whose mission is to protect Americans. But who is "up-armoring" them against unscrupulous life insurance salesmen?

Is it any wonder that Lamar C. Smith is a Bush-Cheney 2004 contributor?

See more First Command links at the top of this page.

{ 8:59 AM }

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How family values are destroying America. Put corruption and cronyism inside a family and you've got a dynasty. A parent giving a child an unfair advanatge is the ultimate abuse of "affirmative action" — look in the White House if you want to see what I mean.

Dynasty behavior is screwing everything up on every level. Watch as billions vanish because Darleen Druyun's kid had asthma (WSJ):

Darleen Druyun's acid tongue and hardball negotiating style were famous among Pentagon contractors when she was a top Air Force acquisition official. But it was family loyalty that helped send Ms. Druyun to prison and set off the biggest Pentagon procurement scandal since the 1980s.

Even as she hammered out multibillion-dollar weapons deals, Ms. Druyun took time out to keep bedside vigils when her elder daughter, Heather, was hospitalized for asthma and her other daughter broke both arms in a horseback-riding accident. At the Pentagon, where she browbeat generals and defense-industry executives alike, former co-workers recall Ms. Druyun pausing during meetings to beam with pride over a framed charcoal drawing of an eagle in her office. "That's Heather's work," she would say.

Ms. Druyun, 57 years old, admitted in October that she steered billions of dollars worth of contracts to Boeing Co. out of gratitude for Boeing's hiring of Heather, Heather's future husband and eventually herself. That confession, in a signed statement to the court, came as a shock to many because previously she had admitted only to breaking conflict-of-interest rules in her job talks with Boeing -- the crime for which she has been sentenced to nine months in prison. Ms. Druyun pleaded guilty partly to protect her daughter, whom prosecutors had threatened to charge over her role as a conduit in the illegal job talks.

The government is now conducting its biggest Pentagon corruption investigation since bribery marred Ronald Reagan's defense buildup in the 1980s. Investigators are scouring dozens of contracts, trying to determine how many of Ms. Druyun's deals were tainted. They're also trying to figure out how to stop civil servants from building fiefdoms as Ms. Druyun did over a decade.

[...]

In late 2000, Ms. Druyun's professional and personal lives began to overlap. According to court statements by Ms. Druyun and others, she contacted Mr. [Michael] Sears, Boeing's chief financial officer, and asked him about a possible job for Heather's then-boyfriend and future husband, Michael McKee, who had a doctorate in aeronautical engineering from Ohio State University. Mr. Sears promptly met the young man, and he was hired into Boeing's prestigious Phantom Works defense research unit in St. Louis.

Within two months, Ms. Druyun sought Mr. Sears's help again, this time to find a job for Heather. In a puzzling move, Ms. Druyun called Mr. Sears a few days later attempting to withdraw the request, according to the Air Force general counsel's office. But Mr. Sears had already set the wheels in motion. Heather, then 24 years old with a degree in communications, was hired by Boeing's defense unit as a college recruiter.

Around the same time, Ms. Druyun approved a $412 million contract modification for Boeing's C-17 -- the same plane she had helped save a decade earlier when it was a McDonnell Douglas project. She dealt with Mr. Sears on the contract modification. Then in June 2001, Ms. Druyun awarded Boeing a $4 billion upset win over Lockheed to upgrade Lockheed's own C-130 cargo planes. She now admits she "was influenced by her perceived indebtedness to Boeing" and that an "objective" decision maker "may not have selected Boeing." It is illegal for government officials to allow personal benefit to impact their official duties.

In 2002, Heather became afraid that she might lose her job -- it's not clear why -- and she conveyed those fears to her mother, according to Ms. Druyun's court statement. Ms. Druyun again contacted a high-ranking Boeing executive with whom she was negotiating contracts. Heather was transferred to another post in the human-resources department.

Lockheed and other Boeing rivals didn't protest the now-suspect contract decisions while Ms. Druyun was in power, and officials of those companies say they didn't suspect favoritism. Nonetheless, Ms. Druyun made clear to associates that she admired Boeing. In 2001, she briefed Air Force Secretary James Roche on the contest between Boeing and Lockheed to build the F-35 Joint Strike Fighter, a multipurpose plane slated to be the biggest Pentagon program ever. She started by extolling the virtues of Boeing's management, says a participant at the meeting. "After 20 minutes, Roche interrupted and asked her, 'Are you going to actually talk to me about the airplane?' " this person says. The Air Force chose Lockheed a few months later on the strength of its airplane design.

"She started by extolling the virtues of Boeing's management."

That is so fucking sad. The chief procurement officer of the Air Force is a billion-dollar shill so her asthmatic daughter Heather can get a job. It was June when I first took a look at Dragon Lady's daughter, Heather McKee.

The long article (3,000 words!) in today's Journal by Andy Pasztor and Jonathan Karp is good reporting with a lot of details I haven't seen before, and I'm tempted to excerpt a lot more. But despite all the hand-wringing about the family's medical conditions (Druyun has diabetes; her husband has a heart condition), Druyun was the sole reason that billions in taxes were wasted in diverted contracts. Those billions belonged to Americans, millions of whom also have diabetes and asthma and heart conditions. And they don't have the US Treasury at their beck and call as Druyun did.

The cost of dynasty behavior is incalculable. Billions from taxpayers in the case of Boeing; thousands of lives in the case of Iraq.

Family values will kill us all — until we realize that the family is the human species itself.

HANDY LINK LIST
Darleen Druyun's $5.7 billion surprise (with photo)
Spawn of the Dragon Lady: Heather McKee
Dragon Lady's multibillion dollar retirement party
Stealing through turbulence: Boeing CFO Michael Sears's book on business "ethics"

{ 9:36 AM }

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Singing the Blues. Vote with your money. We noted Choose the Blue last week. Now we call your attention to Buy Blue.

{ 9:20 AM }

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Dressing for a man date. Here's a late entry in the competition for gayest picture of the year:


In costume, son of wimp entertains the Village People.
Inspired by Digby.

{ 1:34 PM }

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Digby hits another one out of the ballpark with his examination of fundamentalism, and the implications it has for a post-Lakoff strategy by the Left.

{ 11:10 AM }

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Paul Krugman on Social Security:

...Social Security is a government program that works, a demonstration that a modest amount of taxing and spending can make people's lives better and more secure. And that's why the right wants to destroy it.

He also identifies the specific battle in the class warfare that's being waged by the right today as having its roots a couple of decades ago. If, as Republican operatives would like us to believe, the Social Security trust fund isn't an entity indepedent of the federal government, then "...[the] Greenspan-sponsored tax increase in the 1980's was nothing but an exercise in class warfare: taxes on working-class Americans went up, taxes on the affluent went down, and the workers have nothing to show for their sacrifice."

Typical GOP strategy: profit by getting someone else to sacrifice. Does that strategy sound familiar to anyone serving in Iraq? Vietnam veterans who couldn't get into the Texas Air National Guard? Uninsured minimum-wage employees? Blue States that pay the expenses of the Red States?

{ 1:42 PM }

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Alternatives to First Command Financial Planning. In the last year or so over 1,500 soldiers have to come to this site looking for more information about First Command Financial Planning, the financial services firm that is force-fed to Americans in uniform. According to my traffic stats, so far this morning the Army, Navy and Marine Corps have all come a-knockin', and it's only 0900.

First Command is notorious for charging exorbitant fees that have been outlawed from the civilian world where there is more competition for individual investments, and for selling inappropriate and overpriced life insurance to young men and women who are putting their money in as much danger as their lives. See the earlier posts "First Command, last resort, Parts 1, 2, and 3" for more details.

The good news is this — you can do better. Your best defense against unscrupulous profiteers sticking their hands into your pockets is to educate yourself. Since you're already on the Internet looking for more information, you might consider taking a look at these sites:

360 Degrees of Financial Literacy covers a lot of the basics of managing your money.

Military.com offers an overview of money management and investing.

That's just education, which is useless unless you follow it with action. When you're ready to start plunking down some money, take a look at the firms that offer investments:

USAA has a miilitary-friendly approach to investing with none of the baggage that First Command has.

Vanguard is another stable company known for solid management and low expenses, in stark contrast to First Command which is known for the exact opposite.

If you want me to cover something more specifically on this site, leave a comment or email me. I can't give individual advice but I can try to point you in the right direction.

{ 9:17 AM }

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Sex in the reality-based community. It's been a while since I ponied up $9.50 to see a movie, so I figured it ought to at least be a sex movie. Kinsey is worth your time: a solid portrayal of a controversial figure who was unafraid to speak up in a world that hated and denied its own reality.

The central struggle that Kinsey represents is normality vs. "morality," with science elbowing religious concepts of sexual morality across the line into realm of the abnormal, which of course they are in the statistical sense of the word. In the real world, then and now, acts of missionary-position sex between a husband and wife for the purpose of procreation are relatively rare and statistically deviant. Norms of behavior can only be declared once they have been measured, and Kinsey was indeed a true pioneer in his persistence to measure them. Did he go too far in researching (and therefore validating) certain practices such as pedophilia? Hell if I know. I only saw a movie. But there is no doubt that his initial impulse — to free sex from its medieval shadows and to bring it into the light of rationalism — was as politically threatening then as it is today to those who hate reality-based norms.

In 2004, of course, that means the Republican Party with its never-ending parade of closeted homosexuals, adulterers, voyeurs, serial philanderers and pedophiles. Cast any light on their private lives and they scuttle like cockroaches. Kinsey's scientific solution: Study the cockroach. Their cultural solution: Hate the light.

The acting: Liam Neeson's earnest geek is a compelling mixture of determination and vulnerability. For most of the movie his single-mindedness is charming and convincing in its depiction of the passion behind rationality. As Kinsey's wife, Laura Linney is given less to do than she probably deserves, but she makes the most of it. John Lithgow: requisite parental evil. Oliver Platt: wasted in a thankless role.

Amiable period production design. Nicely directed, including some very interesting transitional montages covered with a good score by Carter Burwell and better than average musical supervision.

Biographies are hell to film for two reasons. One is the straitjacket of chronological history ("he did this, then he did that, and then..."), which imposes a rigor that is extremely difficult to avoid without the reflex of flashbacks.

The second and more problematic area in filming a biography is The Importance of All Events. In life you never know which events are going to be formative or profound. Not so in film biographies: a movie must be dramatically economical while a book can be expansive and discursive and exploratory. In the movie, when Young Kinsey encounters someone, you just know it's got to be so damn important because he's Young Kinsey and his career hasn't even gotten off the ground yet and so the whole world he inhabits seems poised to deliver the Kinsey We Know and every little thing we see is Setting the Stage for Why He Is So Famous, which drains most scenes of narrative zest. The resulting lack of suspense is dramatic naturalism at its most unnatural.

There are a couple of interesting attempts to minimize these hurdles cinematically. In one sequence, when Kinsey and his staff start racing around the country to gather the data for the first book on male sexuality, a nice animation of a racing red line criss-crossing the map of America overlays on the film's essential stylistic device, an interview motif, as hundreds of interview subjects appear as destinations on the map, all talking at once. On top of that, the classic Ella Fitzgerald rendition of "Too Darn Hot" by Cole Porter is played ("according to the Kinsey report...") and what should be a mess of cacophony and visual chaos, or a weatherbeaten cliché, turns out to be a charming solution to a routine cinematic problem — how to depict the passage of time.

Although the talk is frank and there are a couple of jolts, Kinsey isn't especially sexy. That's one of the things I liked about it, because it assumed the freedom to rise about the ostensible subject matter, the study of sex, and to look at how sex threatens power.

One of the film's strongest theses is that the regulation of sexual attitudes is a class struggle — not the kind of pronouncement you expect from a Hollywood biopic. Kinsey's rise and fall had everything to do with his bondage to wealth in the form of the Rockefeller Foundation. The whims of Big Money determine his fate more than the quality of his work itself. Who can't identify with that?

{ 1:11 PM }

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Ministry of Infinite Propaganda nearing completion. Merchants of gung-ho stupidity, rejoice! (WSJ):

News Corp.'s Fox News has reached an agreement to become the primary news provider to radio giant Clear Channel Communications Inc.

The pact stands to greatly boost the radio presence of Fox News, which rolled out its service last year, as it looks to compete with the much more entrenched CBS Radio, a unit of Viacom Inc., and Walt Disney Co.'s ABC Radio.

Under the terms of the five-year deal, which starts next year, as many as 172 of Clear Channel's news and talk stations could eventually carry Fox's radio service, which includes news updates of up to five minutes per hour and syndicated talk shows by some of its cable news personalities, including Alan Colmes.

The Clear Channel partnership will give Fox News's nascent radio unit close to 300 stations, including 37 in the top 40 markets. There are options in the deal that could increase the number of Clear Channel stations affiliated with Fox News over time. Fox News said that if all options are exercised, its service could have more than 500 affiliates by mid-2005.

The teaming of Fox News and Clear Channel is sure to raise eyebrows among some media-watchdog groups. With about 1,200 radio stations, Clear Channel of San Antonio has become a lightning rod for concerns about consolidation in that industry. Fox News, for its part, often is accused of having a conservative bias, although Mr. Colmes is among the news operation's liberal commentators.

Ah, at least token Alan Colmes will be there, the Stepin Fetchit of the liberal community. I feel so much better now.

{ 9:19 AM }

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