Replace 'Tech' With 'Banks,' and We've Seen a Big Comeuppance Before (nytimes.com) 116
Nathaniel Popper, writing for The New York Times: When I moved to the Bay Area two years ago, it was with a sense of relief. Relief from New York winters and deteriorating subways, yes. But also relief after six years of covering Wall Street, an industry that had moved from one crisis to another after the financial crash of 2008, drawing the unending wrath of the public. In California I was joining a growing team of reporters covering Silicon Valley, which had quickly become the new engine of the economy. Just like Wall Street before it lost its luster, the tech industry had become the destination of choice for the top college graduates. I would be writing about a place where everyone was focused more on the future than on the past.
Now, just two years after getting here, and a decade after the start of the financial crisis, I have a creeping sense of deja vu as I go about my job. Admiration of the tech world has, in the wake of a growing list of scandals, quickly soured into an intense suspicion that manages to cross partisan lines, similar to what Wall Street faced after 2008 [Editor's note: the link may be paywalled]. As I have watched the recent parade of tech executives being grilled by Washington lawmakers from across the political spectrum, it has been eerily reminiscent of the combative hearings the big banks faced back in 2009 and 2010. As was true after the financial crisis, the backlash against tech rises out of a public awakening to the integral role that these huge companies occupy in our society -- with Facebook, Uber and Twitter playing the part that Goldman Sachs and JPMorgan Chase did a decade ago.
Now, just two years after getting here, and a decade after the start of the financial crisis, I have a creeping sense of deja vu as I go about my job. Admiration of the tech world has, in the wake of a growing list of scandals, quickly soured into an intense suspicion that manages to cross partisan lines, similar to what Wall Street faced after 2008 [Editor's note: the link may be paywalled]. As I have watched the recent parade of tech executives being grilled by Washington lawmakers from across the political spectrum, it has been eerily reminiscent of the combative hearings the big banks faced back in 2009 and 2010. As was true after the financial crisis, the backlash against tech rises out of a public awakening to the integral role that these huge companies occupy in our society -- with Facebook, Uber and Twitter playing the part that Goldman Sachs and JPMorgan Chase did a decade ago.
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Executives have learned not to put any risky decision on paper. They simply verbally tell their top few minions "go do X". If something goes wrong, the executive can deny giving the order, or say it was interpreted wrong. It becomes 1 word against 2 or 3, which is often not enough to convict. It's hard to ask the boss to "put it in writing" without risking your career.
I don't know a practical way around such. If we legislate that all "big" decisions must be handed down in written (documented) form, then we
Re:And no one went to jail then, either... (Score:5, Interesting)
Few went to jail, but a lot responsible (Score:2)
for small definitions of "largely". Parts of it were legal, just poorly thought out (and still in existence today). Likely being able to leverage something like 30$ for every 1$ you had on hand (or whatever it is now). It use to be less, but lobbied, and changed for the sake of market "liquidity".
What caused all the destruction was using the above, to knowingly buy derivatives of dirty mortgages, that everyone knew was bad, which were packaged by institutions that also knew they were bad, but everyone refus
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Actually... If Facebook or Twitter were to fail, apart from employees and shareholders, very little parts of the economy would suffer. Marketing would have to reinvent itself and find new ways of reaching people, end of. WhatsApp could be replaced by almost anything else (is Viber still running?)
Google, Apple and Microsoft would be a bit different. We'd all lose our emails, support for our phones / computers / wearables etc. But that can be restructured/sold under Chapter 11 proceedings.
Amazon is "just" a b
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Re:Stock Prices (Score:4, Insightful)
if we held back new hardware and software until all possible security holes have been fixed we'd still be waiting for the first CPU and an OS to run on it.
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There are companies shipping products with zero security, because they think it impacts time to market. There are products that NEED security that don't have it. There are also products that advertise having good security that actually have substandard security.
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That'd be Intel, AMD, Microsoft, and all the people/companies behind Linux. Android (Google)/iOS (Apple) don't run the world. Nor do Facebook or Twitter.
Well, the first list of companies I would call "tech" companies. The last group are not at all tech in anyw ay, they're social media. The middle group is half-and-half although they lean heavily towards merely being advertising companies.
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Then there are people who build reliable, secure, and rugged devices, but you refuse to buy they because they're "expensive." Instead you buy the cheapest garbage you can find, then blame everyone else for the problems you encounter. Yup, nothing new here either.
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You are assuming, or it seems as if you are assuming, that the backdoors aren't mandated by the governments that allow the companies to operate. I find that quite a questionable assumption. In certain cases we definitely know that this or that government demanded that this or that backdoor be present, and in some other cases there is reasonable circumstantial evidence. True, in most cases there is no evidence, but there's no evidence either way, so my default assumption is that it is similar to the cases
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It's just the next ponzi scheme. Whether you are an investor or not, you HAVE to put the made up money that the government prints into these tech companies because there is no other retirement or savings scheme.
No matter what industry you are in, if you plan to save, it will lose value in a savings account so you are by default investing in the most-hyped thing from these huxsters.
The VC world subsidizes these schemes until they become so entrenched that the government can't allow them to fall - apple, FB,
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Don't be so sure -- the rich NEED the markets to tank every decade or so to make more money.
Also, what's wrong with buying rental property in down times and renting to the tech workers? Services to tech workers are better investments than the tech firms themselves.
Just like many more people got rich selling shovels and food to gold miners than mining gold themselves.
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No here is how it is the same...
1) Car kills people, "oh fuck it the driver is at fault" -> Tesla. If this were say Toyota where people were pushing the wrong pedal combined with a glitch, then well you would be taken to court and slammed. But because of the EULA there is a get out of jail card because you fucken signed up yourself.
2) I use social media and how my data is used and owned is not your business, it is their business. They can sell it and do whatever they please. Google fought for the longes
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1) Car kills people, "oh fuck it the driver is at fault" -> Tesla. If this were say Toyota where people were pushing the wrong pedal combined with a glitch, then well you would be taken to court and slammed.
An independent investigation into Toyota's PCM code revealed that it was hot garbage— really, it was just gift-wrapped unintended behavior. Numerous execution paths were identified which could lead to unintended acceleration; and furthermore, Toyota's engineers were not only ignoring their own internal practices, but those practices were substantially and provably inferior to industry-standard practices.
I use social media and how my data is used and owned is not your business, it is their business. They can sell it and do whatever they please. Google fought for the longest time the right to be forgotten and then it is only in Europe this law.
That law is also garbage. Its entire purpose is to try to make people forget about bad things that
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Yeah, instead the tech companies screw with our elections and let other people screw with our elections. Things are SOOO much better under our new leader, right? Just waiting for November. Republicans better get their shit together and help rid us of Trump otherwise there very well may be a blue wave, and it will be a whole lot worse then the Obama years.
If you thought those years were expensive, just wait until the "progressives" get behind the wheel. Those years will really get expensive. If you've done a
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vs Democrats that increase my taxes and I see nothing for it because I work full time therefore get nothing in the way of services.
Democrats reduce crime [quora.com], Republicans increase the national deficit [forbes.com]. What you see for it is that you get to keep what you make because it's not being stolen from you.
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Proost: I young wanker wastes a lot of time thinking about questions with no answers, then realizes life is for living and sets out to get drunk and laid.
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The summary utterly failed to get to the point.
It was written by a professional journalist, so what did you expect?
So, I didn't read it. Would anyone care to summarize properly?
Summary: Journalist thinks journalism matters.
Zuck going before congress makes the front page of the NYTimes, but that has very little to do with what is going on in the tech world. Just because a herd of journalists are all chasing the same story, that doesn't mean the story is important.
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Don't condemn journalism by the actions of just one twit. This article draws vastly incorrect parallels between the financial crisis and the tech industry. YES, the tech industry has its own huge and costly problems. But there aren't the same parallels, or even congruencies between the financial meltdown and tech.
This said, tech security is its worst problem. That the spooks in gov have manipulated it into Spy vs Spy is even more onerous. Add in lack of controls on data sets, and indeed something will explo
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Maybe. But I won't do on-line banking, and I'm looking into getting a refillable credit card to use for online purchases instead of just avoiding them. So far they've all wanted to charge too much, so I just avoid online purchases, but as local stores go out of business that's becoming less practical.
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So, the real problem here is some liberal arts major who was covering Wall Street, without understanding what was going on there is now covering Silicone Valley without really understanding what is going on there.
Isn't the the major problem with journalism in the U.S.? A bunch of people who don't have any real knowledge of what they are reporting on spouting nonsense? The reason the parallels are so bad is the writer doesn't know the difference between a tech company which supports vital technology infrastr
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No.
The problem is with this journalist, not all of them. There are quite a number of cogent tech journalists. Simply speaking, this fellow isn't really qualified in either tech, or finance, IMHO.
Journalists have outed the bad business practices of many tech companies, but as most corporations are highly focused on returns to their stockholders, they're only vaguely concerned with ethical methodologies and concerns that they believe aren't theirs: security, privacy, ethical management of data, and more.
Becau
What comeuppance? (Score:3, Insightful)
The banks appear to have continued fucking everyone, so whatever their comeuppance was, it was not enough. Surely the response towards tech will be even weaker.
Big Backlash? (Score:5, Insightful)
The banks are still running everything. They got a bailout and they got to keep the properties on which they knowingly sold bad mortgages for which they got bailed out. We paid for those homes and didn't even get them. Tell me again about this "big backlash".
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Who sets mortgage underwriting standards?
Who runs the secondary mortgage market?
Both questions have the same answer...Freddy and Fanny. They own a big share of that mess. Banks are going to 'bank'. Freddy and fanny were supposed to regulate bank behavior, but were used for social engineering, with disastrous outcome.
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Do large tech companies present system risk in the same way banks do? If they deal with communication or power infrastructure, for example, probably.
Re:Big Backlash? (Score:4, Insightful)
Wake me up when US tech companies' activities cause a meltdown of the US economy;
It already happened once, in 1999. The dot-com crash rippled through the economy, and the sector is much larger now, and just as prone to bubbles.
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Wake me up when US tech companies' activities cause a meltdown of the US economy;
It already happened once, in 1999. The dot-com crash rippled through the economy, and the sector is much larger now, and just as prone to bubbles.
And it's getting ready to happen again. There is simply too much money flying about and not much to show for it.
The big boys like Google, Microsoft, Amazon, et al. I suspect will come though completely unscathed. Its the companies with no plans for profitability, in fact no business plan beyond "be disruptive and be noticed" like Uber, Tesla, et al, who'll go bust. The good news is it'll only hurt those invested heavily in these businesses, either financially or emotionally.
The biggest issue we'll hav
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Well, the Experian security hole, that doesn't seem to have been fixed, could cause this to happen. I suspect that there are others that just haven't seen as much public notice. But even Experian didn't see any reason to change their practices.
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I think he mean the S&L scandal where all those bankers went to jail for trillions of .. oh, wait... sorry, one of the instrumental players in that fiasco became president. my bad.
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Under a free market, any bank or lender who made too many bad loans would have gone out of business and lost all their money, thereby preventing them from repeating these mistakes. That's the way free markets police themselves. It is government that keeps bailing out these people.
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The problem isn't these policies, the problem with government is that it keeps rewarding bad decisions and bad risk taking by market participants through bailouts. That is, government socializes the risk but privatizes benefits. That is not a free market problem, it is a problem with government.
The two are the same thing, since you can't have a free market without fair governance. Absent government, whoever gains the upper hand winds up dominating the market and exerting unfair influence over the other players. They in effect become the government. They grow until they have more than everyone else and become a more inviting target, then they amass force to themselves to protect against those attacks, then they wind up using their force to influence the market.
The right thing to do under a capitali
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Yeah, anti-capitalist, fascist fairy tales since 1920.
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Yeah, anti-capitalist, fascist fairy tales since 1920.
If reality frightens you, perhaps you should run away.
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Oh, believe me, I have seen enough political unrest that I don't take liberal democracy for granted: it is always under threat from people like you.
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Oh, believe me, I have seen enough political unrest that I don't take liberal democracy for granted: it is always under threat from people like you.
Riiiiight, liberal democracy is under threat from liberals like me who are agitating for more democracy, e.g. the abolishment of the electoral college. Now pull the other one.
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You're not a liberal, you're a progressive. And you don't want more liberal democracy, you want majoritarianism, a deeply illiberal form of democracy.
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You're not a liberal, you're a progressive.
I'm both.
And you don't want more liberal democracy, you want majoritarianism, a deeply illiberal form of democracy.
No, no I do not. I constantly take up the causes of minorities. You have no idea what you are on about.
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You can't be both, at least in the classical and European sense of liberalism. Progressivism is the use of government powers to impose progress on the population; liberalism means individual choice, free markets, and personal responsibility.
You're right: you really do not "want" majoritarianism, you simply put it out as a convenient political tools: you favor eliminating the electoral college because it helps progressives and Democrats. Once in power, you dispense with democracy alt
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Yeah, and who was responsible for that? Well, Bush signed it into law, but Obama and McCain both supported it. And Obama doubled down on those bailouts during his presidency.
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Yeah, and who was responsible for that? Well, Bush signed it into law, but Obama and McCain both supported it. And Obama doubled down on those bailouts during his presidency.
What a coincidence, Bush, Obama, and McCain are/were all war criminals.
If you think I'm a fan of any of those guys, you've got another think coming. The best thing I have to say about Obama is that I far preferred him to Trump, but you know what they say about faint praise.
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True enough. You are a fan of are even more corrupt politicians and even worse war criminals.
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True enough. You are a fan of are even more corrupt politicians and even worse war criminals.
Name one.
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It's really Simple (Score:5, Insightful)
Once a corporation gets big enough, it looses any soul it may have had. It's structural and systemic.
Tech is really boring these days. Back in the 90's when the net was taking off and interesting things were happening with computers (and a lot of tech companies still had some soul), one could at least naively believe in it. I did -- naively. I ran an Internet company -- I was "democratizing information" -- and thought I was doing social good.
It's all so about the money now even the naive can't believe it all.
Re: It's really Simple (Score:2)
Instead of focusing on what the company strives for, more effort is spent appeasing stock holders. They could care less what the company does as long as it makes money. If you told some of those blue bloods that their share value would double if the company burned kittens in the street, those assholes would bring them in by the sack load.
Meanwhile,
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I was "democratizing information" -- and thought I was doing social good.
"Many forms of Government have been tried, and will be tried in this world of sin and woe. No one pretends that democracy is perfect or all-wise. Indeed, it has been said that democracy is the worst form of Government except all those others that have been tried from time to time." -- Winston Churchill
Democratizing information has exactly the same problem, give them the whole Internet to choose from and some will pick Alex Jones as their source of news. Compared to the old days when I could only access the
false equivalence (Score:2, Troll)
This is an example of a false equivalence. The reason is that banking doesn't actually produce anything. Seriously, it doesn't make money, it just transfers money away from other people. Technology firms actually produce something, be it software or hardware, it's still something. Whatever that something is, it's going to keep being new as long as people have needs or desires. Sure, no one city lasts forever but it's a given.
Except one difference... (Score:2)
The solution to the banking crisis was regulation and control, which in today's age likely drives technical solutions (need an data archiving solution that can pull records in X amount of time? IT solution....). Breaking up big banks? Great, more entities that need new datacenters, more bandwidth, new IT staff, etc...
In the tech industry, regulation and control begets more technology and will drive demand and innovation for smarter, more integrated solutions. Facebook will look at "regulation" as a coding p
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Why would that necessarily be the case? If you split an org into 2, typically each will need about half the IT resources it did before. If many banks need similar software, then dedicated application companies can fill the void by selling common software to avoid reinventing the wheel. I've worked for many companies who used off-the-shelf industry-specific software, or at least partially customized v
News at 11 (Score:1)
I feel both of these apply:
Investigative reporters find bad things when they actually start investigating something...
News Reporters trying to make a name for themselves only report the bad things when they investigate something...
So in other words... (Score:3)
So in other words, we can expect a few years of increased scrutiny, and then everything will be back to business as usual for the tech companies.
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Not tech (Score:5, Insightful)
Facebook is an advertising company.
Uber is a taxi service.
Twitter is an internet message board (ok, that's sort-of tech).
Google is an advertising company.
Actual tech companies aren't having the same troubles.
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HP? Sun?
Apple seems to be running into problems, too. Just yesterday I read about a different prominent system vendor with financial problems.
Saying they aren't having the same problems is probably accurate, depending on how you describe the problems, but they sure are having problems.
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So Starbucks and Dominos Pizza are tech companies?
ha - your first tech bubble there, cherry boy? (Score:3)
this stuff goes in cycles in many industries
get used to it, bail and get a job in different area on the downward side
These guys are fucking crazy (Score:1)
The press is having an insane moral panic. Literally, someone writing for the Times just compared Facebook -- whose big crime is that if you were clicking on links to Farmville quizzes back in 2010, then advertisers got a copy of your friends list -- to bankers who intentionally acted in a way the led to thousands of job losses and foreclosures. These aren't even in the same UNIVERSE of wrongs.
Power corrupts (Score:1)
It's simple: power corrupts. It's not just about which sector or organization type (gov't, non-profit, conglomerates, etc.) It's Human Nature 101. Checks and balances are needed on everything. It's a rare accident that an entity with power stays nice, and may not continue*. Any org who claims they can self regulate should be whipped with a wet noodle.
It's also the case that the Internet has a bigger influence on our lives. Start-up antics hurt only a handful, but missteps with widely used services can have
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Power doesn't always corrupt, but that's the safe way to bet. And I agree that checks and balances are needed on everything. But there's a problem there:
Who ensures that the folks at the top of the power chain properly adhere to the checks and balances? Who defines the proper balance?
To put it classically:
Qui custodiet ipsos custodes?
Who will watch those selfsame watchmen?
In a way, this is the kind of problem that blockchains were designed to address. It's just not clear either that they successfully do
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I had agreed there were rare exceptions.
Hopefully voters. Democracies can crash on themselves when one large party or group is okay with destroying checks-and-balances in order to get more power NOW, downplaying the future side-effects. It's sort of collective anarchy.
China did away with their limited C&B by making Xi the supreme ruler. I'll bet
Not at all comparably "integral" (Score:2)
I've managed to go my entire life without ever once finding any need for Facebook, Twitter, or even Uber which at least provides an actually practical service unlike the first two.
Good fucking luck going through life without ever needing a mortgage though.
Banks control all of the actual productive capital of the world. So-called "tech companies" like those listed aren't even actually tech companies, they just make products that use technology. The first two are comparable to makers of fucking video games. T
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Actual tech companies are the people who build the computers and, even more importantly, the people who operate the networks between them.
While they do other things, google [for example] is actively funding the development of new algorithms. How is that not a tech company? Those other examples are the same, of course, google is just most obvious.
Futurism, Science Fiction, and Lethargy (Score:2)
"Admiration of the tech world has, in the wake of a growing list of scandals."
That's because people are desperate to be saved by non-humans. They want an app to change their world, not a person. They want a smartphone, not a philosophy. They would rather some form of modern technology revolutionize the simplification and security of their lives and possessions than accept that a comfortable life requires a lot of work. And they'll accept/believe a whole lot of BS just to ease their minds into believing that
Bad news (Score:2)
Aw, shucks. (Score:2)
" quickly soured into an intense suspicion" (Score:2)
Good. People should be suspicious. They'll still be mostly ignorant of what they're suspicious of, but it's an improvement.
typical NYT (Score:1)
Covering Wall St., covering High Tech, it's all the same to a NYT reporter: it's not like their work requires any competence or insight into what they are reporting about, and it shows in their writing. I'm glad I stopped reading that rag a decade ago.
Oh joy (Score:2)
A NYT's article? So, the ramblings of a 20 year old that doesn't know shit, basically. I doubt he even knows how to pronounce "San Tomas Expressway" correctly.
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You mean like Gnome3 instead of Gnome2?
Re: How to know if your article is anti-semitic (Score:1)
Thanks, the Republican Party appreciates your support.
Just send a check to V. Putin, Kremlin, Mother Russia.
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We don't hang people anymore. And doing your absolute best for the country regardless of competency is the furthest thing from treason. You have to prove intent to try someone for treason. The FBI proved that when they dismissed Hillary from wrong doing.
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We don't hang people anymore. And doing your absolute best for the country regardless of competency is the furthest thing from treason. You have to prove intent to try someone for treason. The FBI proved that when they dismissed Hillary from wrong doing.
Hillary was never accused of treason. She was investigated for criminal behavior and exonerated by a corrupt administration. Comey deciding that a crime hadn't been committed and therefore avoiding the grand jury was criminal in itself.
Grand juries determine whether a crime was committed based on an investigation and either refer it for prosecution or not. It wasn't Comey's job to subvert the standard process. And he did it twice. Clumsily.
Re: Replace Priests With Paedophiles (Score:1)
Treason in your mind being what: not being Hillary? Not being the person you voted for? Not being a whiny participation trophy baby who can't wrap a tiny brain around the notion that a whole lot of people have different ideas about how things ought to work than you do?
You lost. You're going to keep on losing until you figure out why you lost. Your ideas don't work, trying to force people to think your way doesn't work, none of it works, so quit your tantrums and grow up.