Cash Grab
Afghanistan
The last time we talked about Afghanistan, it was to reminisce about all the money defense contractors siphoned from the war effort, and how little the country had to show for the billions the US poured into its military and economy.
Now that we’re fully withdrawn, and the Taliban has taken political control of Afghanistan, our government has engaged in foreign policy that more closely resembles a crypto rug pull than diplomacy.
I was listening to an excellent Odd Lots podcast with former head of Afghanistan’s Central Bank and I learned some sobering facts about the country. Despite US efforts to increase exports - aside from opium - the country has about a $1 billion dollar export GDP. Previously, the US had pumped another $5 billion or so into the economy to make up the deficit, with other countries and NGOs chipping in another billion or two.
When the Taliban took over the country, the US accused them of doing so militarily instead of negotiating a peaceful transition. It used this charade to keep in place pre-existing sanctions against the Taliban, designating the group a terrorist organization. Because we’re nothing if not a spiteful world power, the sanctions immediately threw Afghanistan’s other sources of humanitarian funding into disarray.
Despite the US media having largely forgotten about Afghanistan once the hawkish pundits stopped blaming Biden for surrendering or whatever, in December we started to see articles about how the country was facing a possible famine this winter.
The US “showed some flexibility” in attempts to quash the bad press and do the absolute bare minimum:
American officials showed some flexibility around loosening the economic chokehold on Afghanistan last week, when the World Bank’s board — which includes the United States — moved to free up $280 million in frozen donor funding for the World Food Program and UNICEF. Still, the sum is just a portion of the $1.5 billion frozen by the World Bank amid pressure from the United States Treasury after the Taliban took control.
So, the US allowed some funds to be released as a stopgap so almost 23 million people didn’t reach the brink of starvation. $280 million is a lot less than $1.5 billion, but it’s a lot lot less than the $9.4 billion dollars of Afghanistan’s currency reserves and the billions a year in UN aid the US is blocking from reaching the country.
As part of its rebuilding effort, the US “dollarized” the Afghan economy, helpfully holding on to its currency reserves at the Fed in New York. When the Tablian took power, the US said the country could no longer have access to those funds. There has been talk about allowing a private bank within Afghanistan to manage aid money meant to be spent on infrastructure and aid, but this solution is incredibly naïve - would the US allow another country to circumvent its government and dictate how its money can be spent? The Taliban are the government of Afghanistan, and these pathetic workarounds to attempt to save face in a war we resoundingly lost are taking an unacceptable human toll.
The whole thing is sad farce. This NYT editorial contains passages like this:
Even though U.S. Treasury Department officials say that the central bank of Afghanistan is not under sanctions, financial institutions around the world are treating it as if was. Foreign banks are refusing to wire money to Afghanistan, not only because they don’t want to deal with the reputational risk, but also because they fear that the long arm of the U.S. Treasury might one day punish them for it. Many banks say it is not worth the hassle.
Yeah, what a hassle to give a country lifesaving cash! I’m sure they have better things to do, like give loans to Middle Eastern princelings, or whatever. The Biden administration has, again, attempted bureaucratic half measures to pretend it’s helping:
The Biden administration was right to offer aid to stave off the immediate humanitarian crisis caused by hunger, drought and a harsh winter. The administration has also issued a flurry of licenses to allow personal remittances and humanitarian aid to pass through banks unmolested. But the very existence of those licenses implies that the rest of Afghanistan’s economy is off limits. That means shopkeepers can’t open lines of credit to import goods, and farmers can’t receive payment for their crops through international banks.
It is the fucking pinnacle of American hubris for our government to be issuing licenses to humanitarian organizations saying they can use their money to help starving citizens of a country we occupied for twenty years, and have now abandoned.
Then! There’s the lawsuit from the families of 9/11 victims, who obtained a default judgement for $7 billion dollars against the Taliban and Al Qaeda:
Among the specifics to be worked out is whether and how the United States can sidestep any legal requirement to recognize the Taliban as the legitimate Afghan government in order to use the money in the central bank account to help resolve the claim by the Sept. 11 families.
It’s worth noting that $7.3 billion was already distributed to the families by our government. Again, it is incredibly cynical to make the argument that because we invaded Afghanistan and held all their cash reserves in our banks, that this money should now be paid out to the families of 9/11 victims instead of used to run a country of 39 million people because there’s a default judgement in US court against the former government of the country we invaded, which is now back in power. Were the Taliban supposed to appear in court to defend themselves while we were bombing them in caves? Come on.
Watching economists and editorial writers debate things like this while tens of millions of people are without adequate food is maddening:
Given the Sept. 11 lawsuit, it may not be possible to free up the funds frozen in New York in time to stave off a crisis. It may be more realistic for funds to be released from the banks in Europe, which hold a smaller but still significant amount of the Afghanistan central bank’s money.
It is possible! We gave over $167 billion away to American businesses during the pandemic with no strings attached. Or the US could allow the UN to raise funds, lift threats of sanctions, or do any of a dozen other things that would help offset the devastation and death we inflicted on the country for 20 years. Sometimes, foreign policy and aid funding are complex issues, with many geopolitical factors to consider, etc. In this case, we invaded a country, failed to build a stable government, and when we left and that government immediately collapsed, we decided to strangle the country economically because we don’t like the people who took power. We send money to many other countries run by brutal regimes, but this one hurt our feelings, so fuck it, 20 million people can starve.
The UN has received commitments for around $4 billion a year in aid to Afghanistan, if the US would get out of its way. An unrelated fact is that Elon Musk will owe around $11 billion in taxes for Tesla stock sales last year.
For better analysis written by an actual foreign policy person here is Spencer Ackerman on the topic.
JP Morgan Chase
There is an argument that when a bank gets to a certain size, the people who run it don’t really know what’s going on in all of its hundreds of different departments. This is an argument Wells Fargo CEO John Stumpf tried to make, but it didn’t work, and he got in trouble.
So when I an article titled “JPMorgan Chase Has Unleashed a Lawsuit Blitz on Credit Card Customers” I wonder what Jamie Dimon has been saying lately:
Chase’s CEO, Jamie Dimon, sounded sympathetic about a year later as he offered broader reflections on what was ailing the country. “Americans know that something has gone terribly wrong,” he wrote in a letter to shareholders. “Many of our citizens are unsettled, and the fault line for all this discord is a fraying American dream — the enormous wealth of our country is accruing to the very few. In other words, the fault line is inequality.”
But even as those words were published, the bank had quietly begun to unleash a lawsuit blitz against many of its struggling customers. Starting in early 2020 and continuing to today, Chase has filed thousands of lawsuits against credit card customers who have fallen behind on their payments.
The depressing part is, this is nothing new, in fact Chase got caught doing the same thing back in 2011:
Chase “filed lawsuits and obtained judgments against consumers using deceptive affidavits and other documents that were prepared without following required procedures,” the Consumer Financial Protection Bureau concluded in 2015. At times, Chase employees signed affidavits “without personal knowledge of the signer, a practice commonly referred to as ‘robo-signing.’” According to the CFPB’s findings, there were mistakes in about 10% of cases Chase won and the judgments “contained erroneous amounts that were greater than what the consumers legally owed.”
Chase, of course, neither admitted nor denied this, but it did sign a consent order saying it would “provide significant evidence” for its lawsuits in the future which seems like something that should be required to file a lawsuit in the first place? Maybe?
You’ll never guess what happened in 2020 that coincided with the sudden “blitz” of lawsuits:
But that provision expired on New Year’s Day 2020. And since then the bank has gone back to bringing lawsuits much as it did before 2011, according to lawyers who have defended Chase customers.
Hell yeah! Chase was making around a billion dollars a year doing credit card collections before it got hit with the CFPB action. So, they had eleven years and essentially unlimited assets to fix their processes, maybe get some non-robos to sign affidavits, or improve their technology so they weren’t going after people for debts they didn’t owe. Did they?
Before the settlement, Chase had about a half-dozen employees churning through affidavits stacked a foot high or taller
[…]
The current operation involves roughly a dozen “signing officers” working from the same San Antonio offices as before and performing many of the same tasks, according to Chase employees and outside lawyers who have represented the company.
Okay, so they hired six more signing officers. Progress!
Chase used to prepare affidavits “in bulk using stock templates,” according to the 2015 CFPB findings. That is again happening today, according to two of Chase’s outside lawyers who requested anonymity because they were not authorized to discuss the process.
Maybe they…improved the template?
Chase affidavits contain stock language that the “signing officer” has “personal knowledge of and access to [Chase’s] books and records.” That “personal knowledge” is limited, said one signing officer who declined to be named. Chase does not expect signing officers to perform a forensic review of an account but rather to follow computer prompts to complete the affidavit, said the employee. “We just work with what’s on the screen.”
Nope! I am glad that in more than a decade since it got dinged for robo-signing, Chase has hired a few people and done apparently nothing else to fix the situation. Plus, they’ve been suing tens of thousands of people for credit card debt for the entirety of a global pandemic while their CEO sounds sad about inequality. The bank made $10.4 billion dollars in net income in the fourth quarter of 2021 and Jamie Dimon made $34.5 million in salary for a “record breaking” 2021, a 10% raise over the year prior.
EVs
There is compelling evidence that electric vehicles are better for the environment. They are growing in popularity, and as large carmakers produce new models, it seems only a matter of time before they have significant market penetration.
Typically when we are talking about EV companies it is because they’ve done something bad, like push a truck down a hill or overstate vehicle orders or be worth eighty billion dollars without selling any cars - which is maybe only bad if you bought Rivian stock at the peak, but whatever.
However! Today I am going to do something I never thought I would do, and stick up for companies like Tesla and Rivian. That is because a major impediment to nationwide EV adoption is an even worse group of business ghouls. That’s right, I’m talking about local car dealers:
[Car] dealerships are protected to varying degrees in most states by laws that were passed decades ago to address predatory behavior by the big three automakers. These laws effectively force vehicle sales and servicing to go through independent franchises.
Yup! In many states, laws force car manufacturers to sell through dealerships, blocking the direct sales model companies like Tesla and Lucid and Rivian want to use to bring EVs to the (mostly rich) people. Lest you feel bad for the local mom-and-pop car dealers, they’ve gotten very rich off this rigged system:
And dealerships, though still fragmented, have moved far from the mom-and-pop model of yesteryear. The top 10 companies together generate more than $100 billion in annual revenue.
This isn’t a isolated to a few states that are beholden to the auto industry, either:
As first Tesla and now other EV makers have sought to sell directly, the incumbents have dug in for a legal ground war. As of today, about two-thirds of the states cap or prohibit direct sales by auto manufacturers.
The car dealer lobby argues that protecting dealerships also protects consumers by keeping prices low, an laughable argument given how dealers are now openly gouging their customers due to inventory shortages. EVs are not immune - Ford had to send a memo to its dealerships telling them to stop inflating prices on EV truck preorders.
Here is a NY Daily News story detailing what these laws mean for consumers who are trying to simply sit in an EV to decide if they want to go green:
A 2021 survey of New York dealerships revealed only 16% had an EV available for test drives and only 30% had an EV available for sale. If you do find a franchised dealership with EVs available, beware of price gouging. Car dealers nationwide are exploiting demand by adding up to $30,000 to the price of some popular EVs.
The power of the car dealer lobby at the state level is on full display:
When Tesla first established a retail location in Manhattan in 2009, direct-to-consumer sales was legal. In 2012, the Greater New York Auto Dealers Association sued the DMV for granting a dealer license to a manufacturer. New York courts ruled in 2013 that Tesla was within its rights. The dealers turned to the legislators, and in 2014 the state and Tesla struck an agreement that capped Tesla at five locations and blocked any other manufacturers from opening any store.
Whatever you may think about companies like Tesla, they should have a right to sell cars to consumers who want them. Car dealers using the courts and state legislatures to block EV adoption is sleazy, even for them.
Jedi Blue
We talked awhile ago about a lawsuit filed by Indicted Attorney General Ken Paxton against Google back in 2020. At the time I wrote:
Well, roughly speaking, Google set up a special arrangement with Facebook, giving it the opportunity to bid on ads it could match to its existing users, and gave Facebook favorable terms on the deal. In exchange, Facebook backed off endorsing “header bidding” which would allow website operators to offer their ad inventory to multiple exchanges - which Google was worried would jeopardize its monopoly.
Both Google and Facebook denied involvement at the time, but new documents in the case allege that’s not only not true, but that the deal was approved at the highest levels:
While their names are redacted in the documents, the suit claims that Facebook (now Meta) CEO and COO—Mark Zuckerberg and Sheryl Sandberg, respectively—signed off on the deal in 2018, as did Google CEO Sundar Pichai. Today, both of their companies control more than half of the roughly $491 billion dollar digital ad market.
Not only do tech giants have iron-fisted monopolies on the ad and search business, they also pay each other astonishing amounts of money to keep it that way. Deals like Jedi Blue put these monopolistic practices on paper, and the fact Zuckerberg and Pichai are willing to put their names on it indicates how sure they are the government won’t do anything about it.
SawStop
Here is an interview with the creator of SawStop, an invention that slams a brake on a table saw when it detects a finger - or a hot dog - is perilously close to the blade. It’s a great invention, and I am happy the company has been successful. But why isn’t SawStop on every table saw? It seems like a no-brainer, installing a safety device on a dangerous power tool. Well:
The fundamental question came down to economics. Almost a societal economic structure question. The CPSC says table saws result in about $4B in damage annually. The market for table saws is about $200-400M. This is a product that does almost 10x in damage as the market size. There's a disconnect—these costs are borne by individuals, the medical system, workers comp—and not paid by the power tools company. Because of that, there’s not that much incentive to improve the safety of these tools
Ahhhh yes, of course. The manufacturers, makers of products that cause a staggering four billion dollars’ worth of damage a year - some of it to human bodies! - couldn’t make the math work, so they didn’t license the SawStop technology. Plus, they aren’t liable anyhow, so it’s the operator’s problem when they lose a finger or a hand. We sure do live in a society.
Short Cons
The Hustle - “Strangely, the new arrivals didn’t see any dwellings or buildings. The only signs of life were the remaining passengers from the Honduras Packet, holed up in bamboo huts, and 2 eccentric Americans who had been living off the land for years.”
AP - “The National Insurance Crime Bureau said the number of catalytic converter thefts reported in claims to insurance companies jumped from 3,389 in 2019 to 14,433 in 2020.”
SPLC - “White supremacists embraced cryptocurrency early in its development, and in some cases produced million-dollar profits through the technology, reshaping the racist right in radical ways…”
Bloomberg - “China Fortune Land Development Co. said it has been unable to get hold of a money manager that it gave $313 million for investment, the latest blow for the debt-laden developer.”
Bloomberg - “Large bankruptcies—those involving companies with at least $50 million in liabilities—dipped to 121 last year from 245 in 2020, according to data compiled by Bloomberg.”
Tips, thoughts, or $4 billion dollar UN donations in my name to scammerdarkly@gmail.com