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Stack's manifesto offers insight into his personal journey as a tax protester - and into the large and growing movement that attracted him. Passages of Stack's manifesto suggest that he was involved in a notorious home church scheme that was popular in the part of California where he lived before he moved to Texas, MacNab said. Stack wrote that he was part of a group who held tax code readings and "zeroed in on a section relating to the wonderful 'exemptions' that make institutions like the vulgar, corrupt Catholic Church so incredibly wealthy." He said they had "the best high-paid experienced tax lawyers in the business." MacNab said Stack likely was referring to a notorious scheme run by lawyers William Drexler and Jerome Daly. It was based on the idea that citizens could establish themselves as a church and gain the same tax exemptions afforded to religious institutions. The scheme didn't work, and Drexler and Daly were disbarred and imprisoned. If this was the operation Stack was referring to, it may have been a turning point in his life. He wrote: "That little lesson in patriotism cost me $40,000+, 10 years of my life, and set my retirement plans back to 0. It made me realize for the first time that I live in a country with an ideology that is based on a total and complete lie." This inspired him to take action, write to politicians and meet with likeminded anti-tax protesters. He wrote: "I spent countless hours on the L.A. freeways driving to meetings and any and all of the disorganized professional groups who were attempting to mount a campaign against this atrocity." His anti-tax and anti-government beliefs may also have been fueled by Section 1706, an obscure and relatively unknown change in the tax code that focused on his industry and went into effect in 1986. Section 1706 essentially removed technical workers like software engineers from a safe haven classification of "self-employed consultant," making it easier for the IRS to challenge how Information Technology companies classified their employers. An association of IT companies and industry professionals, now called TechServe Alliance, was created to protest the changes in tax law that it says singled out the industry. "It made the whole business riskier for people using independent contractors because it favored the so-called employment business model," Mark Roberts, TechServe CEO, told FoxNews.com. "It created havoc on a number of folks." Roberts was quick to condemned Stack's behavior as "an act of a very, very sick individual." "I don't see a long-term lasting effect, just a troubled wayward person acting in response to a legitimate issue. But I don't think that actually impacts the issue," Roberts said. Noting that Section 1706 was passed years ago, he added: "We still resent the fact that it singles out the industry, but folks have basically learned to adapt. It's kind of been awhile since this was a burning issue in the industry."

In spite of its new whizz-bang CEO, Prudential is a slow-moving but very reliable organization with a level of integrity that is trusted by policyholders. Frankly, that's what you want in an insurance company. I have had a modest U.K. pension with one of its competitors since 1980, and I am constantly worried that some leveraged buyout (LBO) artist will step in, take it over, change the computer system so that information gets lost, outsource customer service, and drive the company into bankruptcy. If you're buying life insurance or pension services, you want a company that's not going to disappear in the next 30 years, and doesn't change its address or computer system too often. Avoid a company like the plague if it is run by whiz kids. However, that's what AIG was like. We know how AIG operated; a guy who thought betting the ranch on the credit default swap market was a good idea ran it. Its Asian operation is no doubt full of similarly clever ideas. Even in the unlikely event that everything there is on the level, the cultural clash with an old-fashioned British insurance company is huge. And why would you pay a PREMIUM for an AIG operation? Like the Kraft/Cadbury deal, Prudential's takeover of AIA is value-destroying. Also like Kraft/Cadbury, it looks likely to destroy a valuable part of the British economy that millions of people have relied upon for generations - only this time the destruction will be caused by the buyer rather than the target. As shareholders we need a new form of corporate governance. Those in management are hired hands. In the old days, large shareholders used to treat management as they would have treated their butler - and management was equally deferential to the owners of substantial percentages of the company's capital. That's how capitalism is supposed to work - with resources deployed in the interests of the owners of capital. We know that system works; economics shows us why it works. The alternative, with resources deployed to satisfy the egos and fill the pockets of the hired hands, has no theoretical justification and little practicality - just as a big country house run in the interests of the butler would be a mess. As capitalists, we must work together to restore capitalism!

In a direct challenge to Democratic leadership, Sen. John McCain (R-Ariz.) introduced an amendment on Thursday night that would prohibit Congress from using reconciliation to make changes to Medicare. Framed as an effort to protect the sanctity of entitlement programs, McCain's measure would deprive Democrats of a stream of revenue for their health care bill. The party has targeted hundreds of billions of dollars in cuts and savings to the Medicare program that it would turn around and use to pay for other reforms. But for McCain to be the Republican face behind this effort is to distract, a bit, from its seriousness. The Senator has a fairly lengthy history of voting for reconciliation bills that do exactly what his current amendment prohibits: change Medicare. As pointed out by a Democratic source on the Hill, the Arizona Republican has voted for nine out of 13 reconciliation bills that have been offered during his time in the Senate. Of those nine, four included cuts to Medicare.

So in coming to this meeting of some of the very best in the field -- from Elizabeth Warren to George Soros -- I was keen to hear just what the strategy was to restore us to some sort of financial sanity. How could we avoid it again? Yet through the course of the morning, I was struck by two very different and very depressing points. The first is that things are actually much worse than anyone ever talks about. The pivot points of our financial system -- the infrastructure that lets free markets produce real wealth -- have become profoundly corrupted. Balance sheets are "fictions," as Professor Frank Partnoy put it. Trillions of dollars in liability hide behind these fictions. And as expert after expert demonstrated, practically every one of the design flaws that led to the collapse of the past few years remains essentially unchanged within our financial system still. That bubble burst, but we can already see the soaring profits of the same firms that sucked billions in taxpayer funds. The cycle has started again. But the second point was even worse. Expert after expert spoke as if the problems we faced were simple math errors. As if regulators had just miscalculated, like a pilot who accidentally overshoots the run way, or an engineer who mis-estimates the weight of cargo on a plane. And so, because these were mere errors, people spoke as if these errors could be corrected by a bunch of good ideas. The morning was filled with good ideas. An angry earnestness was the tone of the day.

There were exceptions. The increasingly prominent folk-hero for the middle class, Elizabeth Warren, tied the endless list of problems to the endless power of "the banking lobby." But that framing was rare. Again and again, we were led back to a frame of bad policies that smart souls could correct. At least if "the people" could be educated enough to demand that politicians do something sensible. This is a profound denial. The gambling on Wall Street was not caused by the equivalent of errors in arithmetic. It was caused by a corruption of the system by which we regulate those markets. No true theorist of free markets -- and certainly none of the heroes of even the libertarian right -- believe that infrastructure markets like financial systems can be left free of any regulation, including the regulation of rules against fraud. Yet that ignorant anarchy was the precise rule that governed a large part of our financial system. And not by accident: An enormous amount of political influence was brought to bear on the regulators of these core institutions of a free market to get them to turn a blind eye to Wall Street's "innovations." People who should have known better yielded to this political pressure. Smart people did stupid things because "the politics" of doing right was impossible. Why? Why was their no political return from sensible policy? The answer is so obvious that one feels stupid to even remark it. Politicians are addicts. Their dependency is campaign cash. And in their obsessive search for campaign funds, they let these funders convince them that for the first time in capitalism's history, markets didn't need the basic array of trust-producing regulation. They believed this insanity because it made it easier for them -- in good faith -- to accept the money and steer financial policy over the cliff. Not a single presentation the whole morning focused this part of the problem. There wasn't even speculation about how we could build an alternative to this campaign funding system of pathological dependency, so that policy makers could afford to hear sense rather than obsessively seek campaign dollars. The assembled experts were even willing to brainstorm about how to educate ordinary Americans about the intricacies of financial regulation. But the idea of changing the pathological economy of influence that governs how Washington governs wasn't even a hint. We need to admit our (democracy's) problem. We need to get beyond this stage of denial. We need to recognize that until we release our leaders from a system that forces them to ignore good sense when there is an opportunity for large campaign cash, we won't have policy that makes sense. Wall Street continues unchanged because the Congress that would change it is already shuttling to Wall Street fundraisers. Both parties are already pandering to this power, so they can find the fix to fund the next cycle of campaigns. Throughout the morning, expert after expert celebrated the brilliance in Franklin Roosevelt's response to the Nation's last truly great financial collapse. They yearned for a modern version of his system of regulation. But we won't get to Franklin Roosevelt's brilliance till we accept Teddy Roosevelt's insight -- that privately funded public elections tend inevitably towards this kind of corruption. And until we solve that (eminently solvable) problem, we won't make any progress in making America's finances safe again.

No silver bullets. This is the simple premise of Diane Ravitch’s new book, “The Death and Life of the Great American School System,” which is being brought out this week by Basic Books. Written by one of our nation’s most respected scholars, it has been eagerly awaited. But it has also been, at least in some quarters, anticipated with a certain foreboding, because it was likely to debunk much of the conventional — and some not so conventional — wisdom surrounding education reform. Click Image to Enlarge

What of the once-great comprehensive high schools, institutions with history and in some cases a track record of success going back generations? As time moves on, it is fast becoming clear that the new small schools, many with inane themes (how about the School of Peace and Diversity?), can never substitute for a good neighborhood high school, which can become a center of communal life and pride. Ms. Ravitch’s report underscores the fact that the trick is to fix the neighborhood schools beset with problems, not destroy them.

It is not only the foundations that Ms. Ravitch blames for the current crisis: government has also failed in the attempt to reform the schools from above, lacking a clear perspective of how schools work on a day-to-day basis. Thus, the major federal initiative, No Child Left Behind, well intentioned as it may have been, ended up damaging the quality of education, not improving it. While the federal government declares schools as “failing” and prescribes sanctions for schools not meeting its goal of “annual yearly progress,” it is the states that are allowed to write and administer the tests. This has led to a culture of ever easier tests and more test preparation rather than real instruction. More ominously, it led to such scandals as the New York State Education Department lowering the “cut scores” that define the line between passing and failing. Ms. Ravitch suggests that the proper roles of the states and federal government have been reversed under NCLB. Maybe the standards for achievement should be set in Washington, which, after all, administers the National Assessment of Educational Progress , and the solutions found at the local level, using the accurate data provided by Washington. Instead of moving in a different direction from the failed NCLB model of the Bush Administration, the Obama administration has adopted and expanded on them.

Reconciliation was created through the Budget Reform Act of 1974 in an effort to streamline the budget process, strengthen the ability of Congress to make tough decisions regarding deficits, and to make legislative decision-making more efficient. Congress quickly expanded on the types of measures that could be considered under reconciliation until 1985 and 1986, when the Senate passed rules proposed by Sen. Robert Byrd that limited what could or could not be included when using this process. Before moving forward, Democrats must consider two questions. The first is whether using reconciliation to pass health care is legitimate or an abuse of the process. Republicans have charged that this would be akin to forcing the program through the chamber rather than passing the bill through negotiation and compromise. On this question, the answer is easy. Reconciliation has been as much a part of the Senate in the past three decades as the filibuster. According to an article that was published in The New Republic, Congress passed 22 reconciliation bills between 1980 and 2008. Many important policy changes were enacted through this process, including the Children's Health Insurance Program, COBRA (which allows people who switch jobs to keep their health care), student aid reform, expansions in Medicaid and several major tax cuts. NPR's Julie Rovner reported that most of the health care reforms enacted in the past two decades have gone through reconciliation. President Ronald Reagan was one of the first presidents to make aggressive use of reconciliation when he pushed through his economic program in 1981. Senate Majority Leader Howard Baker said then that speed had been essential because "Every day that this is delayed makes it more difficult to pass. This is an extraordinary proposal, and these are extraordinary times." Presidents Jimmy Carter, George H.W. Bush, Bill Clinton and George W. Bush all used reconciliation as well. It is worth noting that these presidents, particularly George W. Bush, also made use of sweeping executive power to circumvent Congress altogether. The second question is more difficult and it involves perceptions. If the Democratic leadership wants to use this tactic, they have to convince enough members of their own party that this won't scare off independent voters. This argument was harder to make in 2009 than in 2010. But after a year of dealing with paralysis in the Senate and highly effective Republican obstruction, more Democrats are coming on board. The leadership must be proactive in responding to the criticism about reconciliation. They will have to explain that reconciliation is a legitimate process by pointing to the history. They will also have to connect the dots for voters frustrated with the ineffective government by explaining that the constant use of the filibuster has turned the Senate into a supermajority institution where both parties have found it extraordinarily difficult -- virtually impossible -- to pass major legislation.On this point, Republicans and Democrats actually agree. Indeed, as Democrats make this decision, Kentucky Republican Senator Jim Bunning is objecting to a unanimous consent order and single-handedly preventing the Senate from passing an important bill to assist unemployed workers.