Ross Hunter

Sustainability. Economics. Public Policy. Buddhism

Archive for December, 2008

what I’m reading 12/31/2008

Posted by rosshunter on December 31, 2008

  • Tags: economic

    • But, for all of Detroit’s mistakes, it is also a victim of something it did right: ensuring a middle-class lifestyle for bluecollar workers. When the carmakers, pushed by unions, agreed to provide workers with a steady level of purchasing power, comprehensive health benefits lasting into retirement, and various forms of workplace rights, they were promising something that all Americans covet. And, while the financial costs and managerial constraints associated with that effort have helped bring domestic carmakers to the edge of collapse, ultimate responsibility for this situation lies beyond Detroit.

      In a more enlightened society, after all, government would have made those promises and extended them to all workers, thereby spreading the burden of financing them to all taxpayers. That’s how it’s done in Europe and in Japan–which, not coincidentally, is the home of Detroit’s most successful competitors. But the U.S. government never took that step. So, instead of a public welfare state, we got a private one, administered for only some workers and paid for by their employers. Sooner or later, this arrangement was bound to fail.

    • Perhaps more famously still, the unions failed in their quest to win national health insurance. The UAW was an early and vocal advocate for universal coverage. But the best it could do was to help secure the passage of Medicare and Medicaid in the 1960s–a huge victory, but one that still left large chunks of the working-age population without health insurance and left even retirees needing supplemental coverage.

      The autoworkers, of course, had these things. Their collective bargaining agreements guaranteed them not just insurance but generous insurance–and not just for themselves but for their spouses, into retirement and even as widows (or widowers). They cherished these gains and, after careers spent doing tough physical labor, many needed the medical coverage. But the lavish insurance was creating precisely the sort of disparity that Reuther had feared. It was a sign of things to come.

    • Perhaps more famously still, the unions failed in their quest to win national health insurance. The UAW was an early and vocal advocate for universal coverage. But the best it could do was to help secure the passage of Medicare and Medicaid in the 1960s–a huge victory, but one that still left large chunks of the working-age population without health insurance and left even retirees needing supplemental coverage.
    • If the postwar boom had lasted beyond the 1960s, none of this really would have mattered that much, since, in the good times, management seemed content to pay a high premium for keeping peace with unions. But it was only a matter of time before the financial burden of running this private welfare state rendered U.S. manufacturers vulnerable to cut-rate competition–whether from across the ocean or below the Mason-Dixon line.
    • It’s a model for the welfare state that already exists in other parts of the world and that, as it happens, has been getting a lot of international attention in the last few years. It’s the Nordic or Scandinavian model, so named for the part of Europe where it’s practiced, and its philosophy is simple. In these countries, government guarantees everybody, even blue-collar workers, most of the things Detroit once guaranteed its workforce–like middle-class wages, full health benefits, and subsidized day care. The government also guarantees nearly full incomes for the unemployed. Organized labor is still a big part of the picture; Scandinavia is actually the most heavily unionized part of Europe. But unions there serve a somewhat different function. Instead of trying to restrict hiring and firing–or, for that matter, obstructing trade–they focus on improving labor conditions and training displaced workers to find new work. They have a less adversarial relationship with management, although that has a lot to do with the fact that Scandinavian employers don’t constantly attack unions the way American employers do.

      Even though it takes high taxes to support such generous government programs, the Scandinavian economies are strong. That’s led some center-left economists to suggest that this model for the welfare state represents the best hope for guaranteeing the kind of economic security companies once provided, but no longer can. As it happens, President-elect Obama’s agenda includes universal health insurance, more subsidized child care, and better worker retraining–not to mention labor-law reforms. And, while Obama hasn’t been talking up Sweden lately, his approach to policy suggests that he, too, believes government must assume the responsibility for providing benefits–and guaranteeing livelihoods–that once belonged to corporate America.

  • Tags: political

    • What should fall is another illusion, the idea that the United States is the world’s “sole remaining superpower.” This notion weakened us because it suggested an omnipotence that no nation can possess.

      By shedding this misapprehension, the United States could actually restore its influence. We could rediscover the imperative of acting in concert with others to build global institutions that strengthen our security and foster our values.

      Nowhere is the need for a new understanding more obvious than in economic matters. Capitalism will not disappear, but the current crash has destroyed a series of damaging myths.

      Those brilliant financiers were not so brilliant after all and certainly did not deserve the outsized rewards our system showered upon them for three decades. They did not understand that the financial instruments they created contained time bombs that would eventually rip apart the very system from which they so profited.

      The market cannot operate without significant regulation, and dreaded government turns out to be the only institution with the capacity to repair things when market actors are routed from the field and sit, petrified, at the sidelines.

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what I’m reading 12/30/2008

Posted by rosshunter on December 30, 2008

  • Tags: economic

    • Moreover, commercial real estate is a completely different animal than an auto company.

      Without a bailout, what happens to commercial real estate? Owners and developers leveraged themselves to the hilt to buy and own these things. Then they just rollover the financing. They never actually get themselves out of debt. That’s a business model that’s not going to work with a contraction of credit and with building values falling. Two years ago, owners could borrow 80 percent LTV on THEIR estimations of a building’s value. Today, you can get financing, but its 65 percent and it’s on the LENDER’S estimated value. So when you refinance, you’re taking a haircut and need to pony up some equity and find some bridge financing.

      What if you can’t do this? The property goes to the bank. If it’s an income-producing asset, the bank will just take the thing and keep operating it and probably get a third-party manager to run the property until the bank can sell it back on the market. In many cases, the properties themselves (while hurting) are still generating income. There’s an incentive for the banks to keep them going.

    • Without a bailout, what happens to commercial real estate? Owners and developers leveraged themselves to the hilt to buy and own these things. Then they just rollover the financing. They never actually get themselves out of debt. That’s a business model that’s not going to work with a contraction of credit and with building values falling. Two years ago, owners could borrow 80 percent LTV on THEIR estimations of a building’s value. Today, you can get financing, but its 65 percent and it’s on the LENDER’S estimated value. So when you refinance, you’re taking a haircut and need to pony up some equity and find some bridge financing.

      What if you can’t do this? The property goes to the bank. If it’s an income-producing asset, the bank will just take the thing and keep operating it and probably get a third-party manager to run the property until the bank can sell it back on the market. In many cases, the properties themselves (while hurting) are still generating income. There’s an incentive for the banks to keep them going.

      The ones that would get hurt in the process would be the owners/developers that over-levered and defaulted. Is that an industry that needs bailing out? Do we want to bail out developers and real estate investors? Really?

    • Nonetheless, even if the commercial real estate developer bailout is correctly turned down, it’s still coming to the wallet of a taxpayer near you. Much commercial property received the functional equivalent of 100% (or more) financing at the peak of the cycle through the truly deranged innovation of mezzanine loans. These are loans secured by the owner’s interest in the entity that actually owns the commercial real estate. Usually, that means shares in an LLC. This is less secure than a second mortgage, and if the first mortgage is underwater and foreclosed, it vaporizes.

      Huge numbers of mezzanine loans were popped into CDOs issued by the very financial services companies that we’re currently bailing out, no doubt with similar quality warranties that will turn into guarantees.

      It’s kind of Peter to consider commercial property to be income-producing. While this commercial property cycle did not feature the manic overbuilding of the 1980s cycle, there was a lot of “follow the rooftops” development of retail and suburban office in housing bubble areas. Landlords there are finding that the customers for their tenants just don’t exist. (This happened to a Morgan Stanley CMBS offering in the Southwest a few weeks ago and triggered the run on them.)

    • It is not the bankers who need money to buy a house but the workers.

      Instead of sending money to the banks so they can loan it to workers to able them to buy a house, why not send that money directly to the workers, at the condition that they buy a new house with it, which ones in turn will pass that money to the builders who will pass it to their suppliers and employees, using the banks to transfer that money from one to another, letting some of that money in the banks each time, with wich money the banks can create new money by lending it.

      In other words, put the banks at the end of the chain instead of the beginning.

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what I’m reading 12/29/2008

Posted by rosshunter on December 29, 2008

  • Tags: economic

    • To be fair, I think the “regulation by deal” label is actually misleading. The bailouts are examples of government response, not regulation. But they have identified a crucial area of regulatory uncertainty: The “too big to fail” problem. The government’s standards for responding to the collapse of a “too big to fail” institution are, as of now, nonexistent. They need to be clear. And they need to be harsh. Punitive, even. They should include the automatic elimination of the company’s top level executives and board of directors. You can argue that there should be personal liability for those executives if negligence can be proven. Why shouldn’t the risks taken by the richest involve the possibility of ruin — they certainly involve tat possibility for the rest of us. They should include takeover, and a repayment schedule that makes investors a profit before it makes shareholders whole. Sound unfair? Maybe. But the point of regulation — as opposed to response — is that it attempts to keep something from happening.

      It’s now clear that the incentives for caution were insufficient when set against the incentives for profit. The mechanism is clear: Shareholders have short memories, and they were looking for high returns, and firms that did not offer such returns would lose business. The market can stay irrational longer than you can stay solvent, or so goes the old line. It may be that there’s nothing regulation can do about that. In 40 years, this crisis will be forgotten, and the market will have convinced itself that exotic new instruments had eliminated the possibility of downside risk. Or it may be that a regulatory structure that is punitive in the face of collapse to both executives and shareholders will force different behavior, at least among cautious firms, at least during the late stages of a bubble. In either case, the government should be clear on what it will do. Response-by-deal is far worse than a response according to clear rules.

  • Tags: political

    • Poland, Hungary and the Czech Republic all settled down to become respectable citizens of Donald Rumsfeld’s “New Europe,” applied and were soon admitted to the European Union, and, not least, became a welcome market for US weapons manufacturers in that lean period for Death Inc.
    • Which may be why neocons and neoliberals alike (supported, as before, by the various Eastern European lobbies) saw no reason to stop the process. Romania, Bulgaria, Slovenia and Slovakia were quickly tapped as candidates for the next NATO expansion draft. So were the Baltic republics of Lithuania, Latvia and Estonia
    • In an rational world, in which leaders balance competing priorities against limited resources, the 9/11 attacks might have led to a rethink of NATO’s expansion plans. But amid the weird euphoria (or at least, delusions of omnipotence) that seems to have grabbed the Cheney Administration and the entire US foreign policy establishment by the brain stem after 9/11, the campaign to add a baker’s half dozen weak, ethnically divided states to the NATO club actually picked up steam.
    • And so, with an absolute minimum of democratic process, the United States of America committed its full prestige and power (if not, just yet, a legally binding guarantee) to the defense of the two former Soviet republics, even though the Russians have repeatedly stated that they regard NATO membership by either country as a direct threat to their own vital security interests.
    • Looking at this dreary legislative record (which reads like something out of the old Supreme Soviet) is it any surprise Georgia’s president felt he had a virtual carte blanche from America to challenge the Russians – up to and including the use of military force in a disastrous bid to reconquer South Ossetia? Why would he think otherwise – right up until the moment he discovered America had written him a check it had no real intention of honoring?

      There’s not much more to say – except that it’s a pretty strange world where the sworn goal of US diplomacy is to put the country in a situation where it may have to go to war with another nuclear power (or back down ignominiously) to defend the sanctity of borders drawn by Josef Stalin and Nikita Krushchev.

    • British analyst Anatol Levin (one of the more perceptive of the realists) describes it a case of “profound infantilism”:

      In the United States, the infantile illusion of omnipotence, whereby it doesn’t matter how many commitments the United States has made elsewhere—in the last resort, the United States can always do what it likes.

      Personally, I see it more as a case of the bureaucratic imperative run amok: The national security state is doing exactly what it was designed to do, but without any of the external checks and counterbalances that existed during the Cold War – the war it was originally created to fight. The domestic political system, meanwhile, has atrophied to the point where it’s simply an afterthought – a legislative rubber stamp needed to keep the dollars flowing. With no effective opposition, the machine can run on autopilot, until it finally topples off a cliff (as in Iraq) or slams into an object (like the Russian Army) that refuses to get out of the way.    

      And that, ultimately, is the most depressing thing about this story: Even after the fiasco in Iraq, the bloody failure in Lebanon, the downward spiral in Afghanistan and, now, the futile posturing in Georgia, there’s absolutely no evidence the US foreign policy elite is inclined to moderate its ambition to re-organize the world along American lines. Nor is there any sign the political class (including, unfortunately, Barack Obama) is rethinking its lockstep support for that agenda.

    • If you caught Andrew Bacevich on Bill Moyer’s show the other night, you may have noticed that his biggest complaint was not that US foreign policy is misguided and destructive (although he clearly thinks it’s both) but that it is being conducted in a democratic vacuum — despite all the florid rhetoric about promoting democracy. We may still go through the motions of a republican form of government, Bacevich says, but the fabric has gotten pretty thin: or, in the case of our national revival of the Great Game in the Caucasus, damned near invisible.

      How long before it tears completely?

  • Tags: political

    • Also embedded throughout this narrative — not just on Fox but in all of these reports — are the sneering references to “bloggers” and “blogs.”  Given that virtually every establishment media outlet now regularly writes in this format, I’m really not sure — nor is anyone else — what distinguishes a “journalist” from a “blogger” these days.
    • The number of visitors to Kos is roughly equal to the viewership of the prime-time CNN shows, greater than the MSNBC shows for this time period, and roughly half of the viewership for the Fox shows.
    • A story covered extensively on large blogs is going to reach (at least) hundreds of thousands of high-information, highly engaged political consumers, as well as most opinion-makers in politics and the media — still almost certainly a lesser quantitative reach than cable news shows currently have, but only by degree, not by level. 
    • Substantially bolstering the argument above, a new Pew poll, released today, finds that, among Americans, the Internet “has now surpassed all other media except television as a main source for national and international news.”  And, for young people, “the internet now rivals television as a main source of national and international news. Nearly six-in-ten Americans younger than 30 (59%) say they get most of their national and international news online; an identical percentage cites television.”

      And here is another Digby post, from today, on the media’s behavior in the Blagojevich scandal that is well worth reading.

    • Kurtz writes a column for the Post and hosts a weekly media show on CNN, yet wants to label himself a “blogger.”  It’s hard to imagine something that more compellingly illustrates how these terms have lost any real meaning.
  • Tags: economic

    • We need to give parameters to the ‘too big to fail’ concept. Whatever it is that leads to this category, must be outlawed. Bring on the trust busters! There is little or no evidence that Citicorp, JP Morgan, BOA, AIG, et.al. are significantly better economic actors than smaller banks.

      So, prevent combinations and buyouts that lead to TBTF institutions. Err on the side of caution and fiduciary responsibility.

      There’s been some blogworld discussion recently of an idea that makes lots of sense to me. View banks like we do utilities and reduce the impact of financial institutions on our overall economy. Back to finance as 5-10% of GDP instead of 30%. Banking should be a boring, relatively slow growth activity (reduced velocity and leverage).

      Salaries/compensation should reflect a reduced status in the economy, and the best and brightest new grads should be lead in the direction of actually productive enterprises and service.

      Too big to fail should mean too big to exist.

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what I’m reading 12/28/2008

Posted by rosshunter on December 28, 2008

  • Tags: planetary

  • Tags: economic

  • Tags: economic

  • Greenspan’s most disturbing legacy sprang from a different source. As a young man he found in Ayn Rand the moral guidance he felt he needed for the rest of his life. Rand, founder of a libertarian philosophy she later termed “objectivism”, had made virtues out of individualism and enlightened self-interest, and was deeply suspicious of all collective effort. Greenspan grew to share Rand’s views. In particular, he was sceptical about efforts to help the less fortunate. “What attracted me to Reagan”, he explains, “was the clarity of his conservatism which was to say that tough love is good for the individual and good for society.” This “implies much less government support for the downtrodden”.\n\nBill Clinton was elected in 1992, in part to reverse what Reagan had wrought. Clinton promised to provide all Americans with the health care, education, job training and other supports they needed in order to adapt to a fast-changing economy, as well as repair the nation’s roads, bridges and ports, which had been neglected for many years. Yet by the time Clinton came to office, the federal budget deficit had grown so large he had to trim his ambitions. Ironically, that deficit had ballooned largely because Ronald Reagan had cut taxes and increased spending, mostly on the military. Although he was chairman of the Federal Reserve Board during Reagan’s final years in the White House, Greenspan’s memoirs don’t suggest he warned Reagan against the widening deficit. It seems more likely that Greenspan agreed with Reagan and others in his administration that deficit spending as Reagan undertook it would serve to “starve the beast”, forcing any subsequent Democratic President – such as Bill Clinton – to offer less support to the downtrodden.\n\nThe question we faced at the start of the Clinton administration (I was a member of Bill Clinton’s Cabinet) was how much deficit reduction was necessary, and how much of Bill Clinton’s original agenda would have to be jettisoned as a result. Greenspan urged Clinton in no uncertain terms to

    Tags: economic

  • Tags: economic

  • Tags: economic

  • Tags: planetary

  • Tags: political

    • The story of why an ambitious Republican president working with a Republican Congress failed to achieve most of what he set out to do finds Rove at center stage. A big paradox of Bush’s presidency is that Rove, who had maybe the best purely political mind in a generation and almost limitless opportunities to apply it from the very outset, managed to steer the administration toward disaster.

      Years from now, when the major figures in the Bush administration publish their memoirs, historians may have a clearer idea of what went wrong than we do today. As an exercise in not waiting that long, I spent several months reading the early memoirs and talking to people inside and outside the administration (granting anonymity as necessary), in Congress, and in lobbying and political- consulting firms that dealt directly with Rove in the White House. (Rove declined requests for an interview.) The idea was to look at the Bush years and make a first pass at explaining the consequential figure in the vortex—to answer the question, How should history understand Karl Rove, and with him, this administration?

    • Fifty years ago, political scientists developed what is known as realignment theory—the idea that a handful of elections in the nation’s history mattered more than the others because they created “sharp and durable” changes in the polity that lasted for decades. Roosevelt’s election in 1932, which brought on the New Deal and three decades of Democratic dominance in Washington, is often held up as the classic example. Modern American historians generally see five elections as realigning: 1800, when Thomas Jefferson’s victory all but finished off the Federalist Party and reoriented power from the North to the agrarian South; 1828, when Andrew Jackson’s victory gave rise to the modern two-party system and two decades of Jacksonian influence; 1860, when Abraham Lincoln’s election marked the ascendance of the Republican Party and of the secessionist impulse that led to the Civil War; 1896, when the effects of industrialization affirmed an increasingly urban political order that brought William McKinley to power; and Roosevelt’s election in 1932, during the Great Depression.
    • From the outset, Rove’s style of pursuing realignment—through division—was in stark contrast to the way it had happened the last time. In Franklin D. Roosevelt and the New Deal, the historian William E. Leuchtenburg notes that Roosevelt mentioned the Democratic Party by name only three times in his entire 1936 reelection campaign. Throughout his presidency, Roosevelt had large Democratic majorities in Congress but operated in a nonpartisan fashion, as though he didn’t. Bush, with razor-thin majorities—and for a time, a divided Congress—operated as though his margins were insurmountable, and sowed interparty divisions as an electoral strategy.
    • Instead, Rove’s idea was to use the levers of government to create an effect that ordinarily occurs only in the most tumultuous periods in American history. He believed he could force a realignment himself through a series of far-reaching policies. Rove’s plan had five major components: establish education standards, pass a “faith-based initiative” directing government funds to religious organizations, partially privatize Social Security, offer private health-savings accounts as an alternative to Medicare, and reform immigration laws to appeal to the growing Hispanic population. Each of these, if enacted, would weaken the Democratic Party by drawing some of its core supporters into the Republican column. His plan would lead, he believed, to a period of Republican dominance like the one that followed McKinley’s election.
    • Rove’s greatest shortcoming was not in conceptualizing policies but in failing to understand the process of getting them implemented, a weakness he never seems to have recognized in himself. It’s startling that someone who gave so much thought to redirecting the powers of government evinced so little interest in understanding how it operates. Perhaps because he had never worked in government—or maybe because his standing rested upon his relationship with a single superior—he was often ineffective at bringing into being anything that required more than a presidential signature.
    • Rove has no antecedent in modern American politics, because no president before Bush thought it wise to give a political adviser so much influence. Rove wouldn’t be Rove, in other words, were Bush not Bush. That Vice President Cheney also hit a historic high-water mark for influence says a lot about how the actual president sees fit to govern. All rhetoric about “leadership” aside, Bush will be viewed as a weak executive who ceded far too much authority. Rove’s failures are ultimately his.
  • Tags: political

    • Doug Wead, presidential historian and philanthropist, gives very interesting insight about the Bush family while being interviewed by Terry Moran on ABC Nightline
  • Tags: political

    • But, according to Suskind, the president was perhaps having second thoughts about cutting taxes again, and was uncharacteristically engaged.

      “He asks, ‘Haven’t we already given money to rich people? This second tax cut’s gonna do it again,’” says Suskind.

      “He says, ‘Didn’t we already, why are we doing it again?’ Now, his advisers, they say, ‘Well Mr. President, the upper class, they’re the entrepreneurs. That’s the standard response.’ And the president kind of goes, ‘OK.’ That’s their response. And then, he comes back to it again. ‘Well, shouldn’t we be giving money to the middle, won’t people be able to say, ‘You did it once, and then you did it twice, and what was it good for?’”

      But according to the transcript, White House political advisor Karl Rove jumped in.

      “Karl Rove is saying to the president, a kind of mantra. ‘Stick to principle. Stick to principle.’ He says it over and over again,” says Suskind. “Don’t waver.”

      In the end, the president didn’t. And nine days after that meeting in which O’Neill made it clear he could not publicly support another tax cut, the vice president called and asked him to resign.

  • Tags: economic

    • John Kenneth Galbraith fifty-one years ago in The Affluent Society pointed out that our ages-long struggle to produce and distribute sufficient goods and services to take care of everyone in civil society had now succeeded.

      We could change our consumerist habituation, said Galbraith, into a new one of simply enjoying being alive in the midst of abundance. We could spend our energy contributng to social betterment, becoming healthier, helping others, creating art, science – the possibilities were as manifold as those of every arriviste, and for everyone.

      Instead of this, as JKH noted, our producers continued with their production frenzy, except that now they needed an entire marketing effort to persuade people to buy things. We retained our poverty mentality, force-fed by Madison Avenue. And we binged.

      In half a century, the speed with which we’ve diminished the resources of the planet is akin to the pace of a mad party that refuses to turn down the music, stop the dancing, or pay any heed to the aggrieved neighbors.

      Actually paying the band for this dance was always going to be a rueful experience.

      But imagine the lessons we stand on the brink of learning if we’re lucky.

  • Tags: economic

    • Review
      “A must-read on the origins of the crisis.”
      The Economist

      “A must read. . . . The problem, says Mr. Cooper, is that central banks have subscribed to one economic philosophy in an expanding economy and quite another when the economy is contracting. . . . Cooper’s book is by far the most cogent and reasoned of the modern-day ‘credit excess’ school.”
      The Economist

      “A well written book. . . . Cooper’s most novel doctrine is that investors do not have to be irrational to generate bubbles. . . . Mr. Cooper traces present difficulties to the rapid growth of credit encouraged by the Fed’s ultra-cheap money policy of a few years ago.”
      Financial Times

      Product Description
      In a series of disarmingly simple arguments financial market analyst George Cooper challenges the core principles of today’s economic orthodoxy and explains how we have created an economy that is inherently unstable and crisis prone. With great skill, he examines the very foundations of today’s economic philosophy and adds a compelling analysis of the forces behind economic crisis. His goal is nothing less than preventing the seemingly endless procession of damaging boom-bust cycles, unsustainable economic bubbles, crippling credit crunches, and debilitating inflation. His direct, conscientious, and honest approach will captivate any reader and is an invaluable aid in understanding today’s economy.

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reading 03

Posted by rosshunter on December 27, 2008

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what I’m reading 12/27/2008

Posted by rosshunter on December 27, 2008

  • Tags: no_tag

    • The current World-wide economic down-turn is nothing but the result of years amassing wealth in the upper-echelons of society. Trickle-down, like most governmental oxymorons, really mean “push upward”. Eternal economic growth is IMPOSSIBLE.

      The rich knew this and have been doing everything in their power to accumulate as much wealth as possible at any expense (downsizing, out-sourcing, golden parachutes, etc.)

  • Tags: no_tag

    • The future of global warming — a world of extreme storms, floods, droughts, rising seas, catastrophic change, species loss — is upon us today. The Wonk Room looks at the startling new scientific evidence that has come out this week, as well as how top environmental organizations — the Environmental Defense Fund and the National Wildlife Federation — have responded.

  • Tags: no_tag

    • Richard Moss, who worked for the Climate Change Science Program from 2000 to 2006 and now serves as vice president and managing director for climate change at the World Wildlife Fund-U.S., welcomed the report but called it “way overdue.”

      “There is finally a greater flow of climate science from the administration,” Moss said, noting that the report was originally scheduled to come out in 2007. “It really is showing the potential for abrupt climate change is real.”

  • Tags: no_tag

    • Not to elevate the tone or anything.

      But Coulter has a point. When you back up and look at Western history over the last four hundred years or so it becomes pretty clear that the fundamental struggle has been between Enlightenment and Reaction. Which isn’t a struggle between Light and Dark or Good and Evil (though us Enlightenment types tend to believe we are on the side of light and good), instead it is a struggle between Future and Past. If you examine the world view of Europeans in pre-modern times (i.e. pre-1492) it is clear that history is conceived as a process of decay, the Golden Age of the Greeks was in the past, the real Heros and Founders were almost always traced back to Troy, that is at a time mostly before History. This is encapsulated in the saying “They were giants in those days”

      Well by at latest the 18th century much of that had changed, the Golden Age had a new contender whose name was Progress. Which could be encapsulated in the saying “The best days are yet to come”.

    • And the fight was on. Now not all Progressives were nice people, while both the French and Chinese Revolutionaries were undoubtedly focused on the future they let the ends justify every and all means. And not all Reactionaries are evil, just because you want to retreat to traditional values doesn’t make you Hitler. None of this reduces neatly to moral superiority.

      BUT. Conservatives, the modern day inheritor of the 19th century Reactionaries, as both names imply, want at least to stop the clock of Progress and hope to actually turn it back. Given that Coulter makes sense. At a time when Conservatism is reeling you want someone in the lead who can throw sand in the gears of Progress and do so in a way that makes Liberals/Enlightenment Folk crazy.

      And if you can wrap that leader in a pretty, folksy, caribou slaughering package its all the better. Sarah Palin is a walking talking advertisement for returning to the past. That the Golden Age never actually existed is kind of immaterial, for Conservative/Reactionaries it is always something to return to if possible or at least prevent further movement away.

      Coulter is not being irrational here. For people like her ‘Change’ is a dirty word and who better to obstruct it than Sarah ‘you betcha’ Palin? Because driving Liberals crazy is not just mischief for the sake of it, it is a calculated attempt to block movement away from the past. For these people ‘Obstructionist’ is a badge of honor. That a President Palin would not actually get anything done is a feature and not a bug of Conservatism.

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what I’m reading 12/26/2008

Posted by rosshunter on December 26, 2008

  • Tags: no_tag

    • Dec 24th, 2008
    • Yesterday, a water main break in Maryland trapped a dozen commuters in their cars and sent rescuers scrambling to pull motorists from frigid floodwaters. Despite the fact that officials had been warning for years of the dangers of the crumbling pipe system, Maryland did not have the money to make the necessary repairs.
    • Just hours after the water main break, however, Karl Rove belittled the idea of infrastructure spending on Fox News, calling it “goofy, pie-in-the-sky spending ideas,” and agreed with host Rich Lowry that infrastructure spending doesn’t “make[] any economic sense”:

      ROVE: What we’ve got to worry about some of these sort of goofy, pie-in-the-sky spending ideas in which this wisdom of the government is substituted for the wisdom of private individuals in the market, and there we have every right to question. For example, look, I’m in favor of infrastructure spending, but let’s be honest about it. It’s not stimulative. […]

      LOWRY: It also depends on — just because it’s an infrastructure project doesn’t mean it makes any economic sense.

      ROVE: Exactly.

    • In fact, prominent economists agree that infrastructure spending will help boost the economy. As NPR reported, “Every $1 billion the federal government commits to roads, bridges and other infrastructure helps to support some 35,000 jobs.” A Center for American Progress report found that a $100 billion in a green infrastructure spending would create two million jobs in two years.

      Rove echoed the conservative trope that cutting the corporate tax rate is the best way to stimulate the economy. In fact, the Bush administration has been “unusually aggressive” in forcing through corporate tax cuts this year. As the record of 2008 conclusively proves, cutting corporate taxes does nothing to stimulate the economy.

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    • Business Alliance for Local Living Economies:
      15,000 entrepreneurs building the new economy

      “How can my business use less energy and produce less waste? How can I help my customers understand that locally owned businesses are important to the strength of our community? What new business opportunities exist for our region in the emerging green economy?”

      The Business Alliance for Local Living Economies, also known as BALLE, brings small business leaders together to answer these questions (and many more!). We provide tools and resources.
      Above all, we´re showing that community-based businesses can go beyond traditional measures of success

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    • ExxonSecrets is a Greenpeace research project highlighting the more than
      a decade-long campaign by Exxon-funded front groups – and the scientists
      they work with – to deny the urgency of the scientific consensus on
      global warming and delay action to fix the problem.  For more
      information see our FAQ.
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    • Overall, House and Senate members who voted for Big Oil took almost four times more oil money (2, 3) than those who voted in favor of the public interest. In the House, members who voted for Big Oil accepted almost four times more oil money (4) than those who voted in the public interest. In the Senate, they received 2.6 times more oil money.
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      • And what does this 350 number even mean?350 is the number leading scientists say is the safe upper limit for carbon dioxide–measured in “Parts Per Million” in our atmosphere. 350 PPM–it’s the number humanity needs to get back to as soon as possible to avoid runaway climate change.
      • If we’re already past 350, are we all doomed?No. We’re like the patient that goes to the doctor and learns he’s overweight, or his cholesterol is too high. He doesn’t die immediately—but until he changes his lifestyle and gets back down to the safe zone, he’s at more risk for heart attack or stroke. The planet is in its danger zone because we’ve poured too much carbon into the atmosphere, and we’re starting to see signs of real trouble: melting ice caps, rapidly spreading drought. We need to scramble back as quickly as we can to safety.
      • How do we get the world on track to get to 350?We need an international agreement to reduce carbon emissions fast. The United Nations is working on a treaty, which is supposed to be completed in December of 2009 at a conference in Copenhagen, Denmark. But the current plans for the treaty are much too weak to get us back to safety. This treaty needs to put a high enough price on carbon that we stop using so much. It also needs to make sure that poor countries are ensured a fair chance to develop.
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    • hat most distinguishes the candidates, however, is character—and here, contrary to conventional wisdom, Obama is clearly the stronger of the two. Not long ago, Rick Davis, McCain’s campaign manager, said, “This election is not about issues. This election is about a composite view of what people take away from these candidates.” The view that this election is about personalities leaves out policy, complexity, and accountability. Even so, there’s some truth in what Davis said––but it hardly points to the conclusion that he intended.

      Echoing Obama, McCain has made “change” one of his campaign ma

    • hat most distinguishes the candidates, however, is character—and here, contrary to conventional wisdom, Obama is clearly the stronger of the two. Not long ago, Rick Davis, McCain’s campaign manager, said, “This election is not about issues. This election is about a composite view of what people take away from these candidates.” The view that this election is about personalities leaves out policy, complexity, and accountability. Even so, there’s some truth in what Davis said––but it hardly points to the conclusion that he intended.

      Echoing Obama, McCain has made “change” one of his campaign mantras. But the change he has actually provided has been in himself, and it is not just a matter of altering his positions. A willingness to pander and even lie has come to define his Presidential campaign and its televised advertisements. A contemptuous duplicity, a meanness, has entered his talk on the stump—so much so that it seems obvious that, in the drive for victory, he is willing to replicate some of the same underhanded methods that defeated him eight years ago in South Carolina.

    • Perhaps nothing revealed McCain’s cynicism more than his choice of Sarah Palin, the former mayor of Wasilla, Alaska, who had been governor of that state for twenty-one months, as the Republican nominee for Vice-President. In the interviews she has given since her nomination, she has had difficulty uttering coherent unscripted responses about the most basic issues of the day. We are watching a candidate for Vice-President cram for her ongoing exam in elementary domestic and foreign policy. This is funny as a Tina Fey routine on “Saturday Night Live,” but as a vision of the political future it’s deeply unsettling. Palin has no business being the backup to a President of any age, much less to one who is seventy-two and in imperfect health. In choosing her, McCain committed an act of breathtaking heedlessness and irresponsibility. Obama’s choice, Joe Biden, is not without imperfections. His tongue sometimes runs in advance of his mind, providing his own fodder for late-night comedians, but there is no comparison with Palin. His deep experience in foreign affairs, the judiciary, and social policy makes him an assuring and complementary partner for Obama.
    • The longer the campaign goes on, the more the issues of personality and character have reflected badly on McCain. Unless appearances are very deceiving, he is impulsive, impatient, self-dramatizing, erratic, and a compulsive risk-taker. These qualities may have contributed to his usefulness as a “maverick” senator. But in a President they would be a menace.

      By contrast, Obama’s transformative message is accompanied by a sense of pragmatic calm. A tropism for unity is an essential part of his character and of his campaign. It is part of what allowed him to overcome a Democratic opponent who entered the race with tremendous advantages. It is what helped him forge a political career relying both on the liberals of Hyde Park and on the political regulars of downtown Chicago. His policy preferences are distinctly liberal, but he is determined to speak to a broad range of Americans who do not necessarily share his every value or opinion. For some who oppose him, his equanimity even under the ugliest attack seems like hauteur; for some who support him, his reluctance to counterattack in the same vein seems like self-defeating detachment. Yet it is Obama’s temperament—and not McCain’s—that seems appropriate for the office both men seek and for the volatile and dangerous era in which we live. Those who dismiss his centeredness as self-centeredness or his composure as indifference are as wrong as those who mistook Eisenhower’s stolidity for denseness or Lincoln’s humor for lack of seriousness

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    • Sometimes, when a political campaign has run out of ideas and senses that the prize is slipping through its fingers, it rolls up a sleeve and plunges an arm, shoulder deep, right down to the bottom of the barrel. The problem for John McCain, Sarah Palin, and the Republican Party is that the bottom was scraped clean long before it dropped out. Back when the polls were nip and tuck and the leaves had not yet begun to turn, Barack Obama had already been accused of betraying the troops, wanting to teach kindergartners all about sex, favoring infanticide, and being a friend of terrorists and terrorism. What was left? The anticlimactic answer came as the long Presidential march of 2008 staggered toward its final week: Senator Obama is a socialist.
    • The Republican argument of the moment seems to be that the difference between capitalism and socialism corresponds to the difference between a top marginal income-tax rate of 35 per cent and a top marginal income-tax rate of 39.6 per cent. The latter is what it would be under Obama’s proposal, what it was under President Clinton, and, for that matter, what it will be after 2010 if President Bush’s tax cuts expire on schedule. Obama would use some of the added revenue to give a break to pretty much everybody who nets less than a quarter of a million dollars a year. The total tax burden on the private economy would be somewhat lighter than it is now—a bit of elementary Keynesianism that renders doubly untrue the Republican claim that Obama “will raise your taxes.”
    • YOUNG WOMAN: Are we getting closer and closer to, like, socialism and stuff?. . .
      MCCAIN: Here’s what I really believe: That when you reach a certain level of comfort, there’s nothing wrong with paying somewhat more.
    • On October 12th, in conversation with a voter forever to be known as Joe the Plumber, Obama gave one of his fullest summaries of his tax plan. After explaining how Joe could benefit from it, whether or not he achieves his dream of owning his own plumbing business, Obama added casually, “I think that when you spread the wealth around, it’s good for everybody.” McCain and Palin have been quoting this remark ever since, offering it as prima-facie evidence of Obama’s unsuitability for office. Of course, all taxes are redistributive, in that they redistribute private resources for public purposes. But the federal income tax is (downwardly) redistributive as a matter of principle: however slightly, it softens the inequalities that are inevitable in a market economy, and it reflects the belief that the wealthy have a proportionately greater stake in the material aspects of the social order and, therefore, should give that order proportionately more material support. McCain himself probably shares this belief, and there was a time when he was willing to say so.
    • Perhaps there is some meaningful distinction between spreading the wealth and sharing it (“collectively,” no less), but finding it would require the analytic skills of Karl the Marxist.
  • Posted by Wayne 10/22/2008 03:44 PM\nIf economic recessions are caused by (or at least associated with) high oil prices, as implied by the chart, a case can be made that recovery from those recessions and a return to prosperity is caused by (or associated with) the oil price receding back to low levels. This certainly seems to be the case in the price spikes in the 1970’s, which eased in the 80’s and collapsed in 1986 leading to a revival of the world’s industrial engines (and unfortunately also back to wasteful ways) and a return to economic growth through the 90’s.\n\nThe question now is: will this happen again? The price 1970’s spikes were caused by planned cutbacks by OPEC, primarily Saudi Arabia, of their immense production capacity. OPEC was basically flexing their newly attained muscle as the world’s swing producer, which was handed to them by the USA as we reached our peak of oil production in the early 1970’s. Prices retreated in the 1980’s as OPEC learned some lessons but also because supply from newly found and developed North Sea, Prudhoe Bay, Mexican and other non-OPEC fields came on line. The trend of global oil production peaked at about 65 million barrels per day (MBOPD) in 1979, then actually decreased for a few years, and resumed its upward climb to about 85 MBOPD today.\n\nI think the oil price rise over the past few years is fundamentally different than that of the 1970’s in ways which do not bode well for a long-term retreat to lower price levels. One difference is that the price rise since 2002 was not caused by the planned shutting-in of existing production. World -wide production has been essentially full blast with only the Saudi’s claiming any excess capacity and that only a relatively small amount. Another difference, and more important, is that the large new fields that came on-line in the 1980’s are all producing their last oil in much smaller volumes than at their peak, and there are not enough new large fields to replace them. It is unlikely that global oil production will ever grea

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    • Without question, energy supply shocks are disruptive, but they need not create recessions. Indeed, there is a more general lesson from experience with oil price shocks. Monetary policy should not allow an economy to operate at the edge of a cliff. When balanced precariously at the edge of a cliff, even a minor disturbance, oil or otherwise, may be sufficient to push the economy over the edge. Although an outside shock may be the catalyst, or trigger, that creates undue inflation pressures, the fundamental problem is not the catalyst but the powerful and risky brew of an overheated economy. To use another analogy, if someone opens gas jets and fills a house with gas, do we blame the explosion on the person who lights the match or the person who opened the jets? I know where I want to place the blame.
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    • The banks are the conduit between central-bank policy and the wider economy. The trouble is, the conduit is blocked. Despite deep cuts in interest rates by the Federal Reserve, including one this week (see article), the cost of bank credit for American firms and households has not dropped by much. Investors are wary of lending to banks for even a few months, because of the risk that they may go bust or run out of cash. Banks are loth to lend to each other for the same reason (and fear of their own demise is leading them to hoard cash). The spread between what banks pay for overnight central-bank cash and what they pay to borrow for three months is therefore far above pre-crisis levels. The latter rate is the reference point for loans to customers.
    • Indeed, if scared banks, firms and households cling more tightly to cash rather than lend it or spend it, the downturn will deepen. The more confidence weakens and asset prices fall, the more eager is the rush into cash. At the extreme, the demand for cash is so strong than not even interest rates at zero can get the economy moving. When standard monetary-policy responses reach their limit, fiscal options, such as cutting taxes and increasing public spending, come into play.
    • However, fiscal policy has its limits. A run of big budget deficits increases the risk that a government will default or repay its debts only by forcing its central banks to print money, creating inflation. If public debt spirals upwards as the economy stagnates, investors will worry that future taxpayers will be unable to shoulder the burden. Looser fiscal policy will stretch the public finances of countries that went into the downturn with big debts and budget deficits and have since had to fund bank bail-outs. Markets could choke on the extra bond sales required to finance huge deficits, driving interest rates up and worsening the downturn.

      They are not choking yet. Financing government deficits is hard when investors are keen on rival uses for their money—such as companies’ shares and bonds. In fact, investors are shying away from such assets. The omens for business investment from recent company reports and confidence surveys are poor. Job cuts, slumping asset prices and a worsening credit drought augur ill for consumer spending too. If firms fear that others will cut back their spending, it will make them still more cautious. The rot could easily feed on itself, leaving equipment and workers idle, and depressing tax revenues. A pre-emptive fiscal stimulus may help prevent that—and shore up the government’s tax base.

    • The nuclear option, conceived in America but untried in Japan, is to finance public spending or tax cuts by printing money. This requires the central bank to go along with the fiscal authorities (which may prove easier in America than in Europe). It could work like this: the government announces a tax rebate and issues bonds to finance it. But instead of selling them to private investors, it lodges them with the central bank in exchange for a deposit. It draws on this account to clear the cheques mailed to taxpayers. This scheme is essentially the same as the proverbial “helicopter drop” of money, but with neater accounting and a less erratic distribution of cash. It bypasses banks and money markets, and puts money directly into people’s pockets.
    • Ben Bernanke, now the Fed chairman, recommended this course of action to Japan’s policymakers in 2003 (when he was a Fed governor). Indeed, he went further. One way out of a slump, he argued, is for policymakers to commit themselves to a period of catch-up inflation, to break deflationary expectations and heal the wounds from past price falls.

      If all else fails, it seems, the one sure way to secure solvency in the private and public sectors is to inflate away debts and buoy up asset prices. That nuclear option is the ultimate bail-out: rescuing the indebted by hurting those with savings. In essence, if not degree, it is not so different from conventional policy. Interest-rate cuts are a salve for debtors and a penalty on savers. Fiscal-stimulus schemes impose a cost on all taxpayers, even those well placed to endure a downturn. But the cost of a prolonged slump, in terms of idle resources, lost income, decaying skills and an erosion in the trust that keeps civil society going, would be far higher.

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    • So does the relative decline of America as a technology powerhouse really amount to a threat to its prosperity? Nonsense, insists Amar Bhidé of Columbia Business School. In “The Venturesome Economy”, a provocative new book, he explains why he thinks this gloomy thesis misunderstands innovation in several fundamental ways.

      First, he argues that the obsession with the number of doctorates and technical graduates is misplaced because the “high-level” inventions and ideas such boffins come up with travel easily across national borders. Even if China spends a fortune to train more scientists, it cannot prevent America from capitalising on their inventions with better business models.

      That points to his next insight, that the commercialisation, diffusion and use of inventions is of more value to companies and societies than the initial bright spark. America’s sophisticated marketing, distribution, sales and customer-service systems have long given it a decisive advantage over rivals, such as Japan in the 1980s, that began to catch up with its technological prowess. For America to retain this sort of edge, then, what the country needs is better MBAs, not more PhDs.

      America also has another advantage: the extraordinary willingness of its consumers to try new things. Mr Bhidé insists that such “venturesome consumption” is a vital counterpart to the country’s entrepreneurial business culture.

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    • Our goal is to inspire a generation by creating a clean automobile propulsion technology that serves the needs of the 21st Century and delivers performance that is a reflection of the driver’s spirit. By creating this new power technology we hope to reduce the demand for petro-fuels enough to eliminate the need for war over energy supplies, thereby enhancing the security of the USA and other nations throughout the world.
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    • The rules themselves will need changing, too. All investment managers, not just mutual funds, could now be forced to use external clearing agents to ensure third-party scrutiny, says Larry Harris of the University of Southern California’s Marshall School of Business. Regulation of financial firms’ accountants may also need tightening. And more could be done to encourage whistle-blowing. Mr Madoff claims to have acted alone. But given the huge amount of paperwork required to keep his scam going, it seems unlikely that no one else knew about it.

      Above all, however, investors need to help themselves. This pyramid scheme may have been unprecedented, but the lessons are old ones: spread your eggs around and, as Mr Harris puts it, “investigate your good stories as well as your bad ones.” This is particularly true of money managers who work deep in the shadows or seem beyond reproach—even more so during booms, when the temptation to swindle grows along with the propensity to speculate. There will always be “sheep to be shorn”, as Charles Kindleberger memorably wrote in “Manias, Panics and Crashes”. Let us hope they never again line up in such numbers.

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    • The United States government has done almost nothing in the realm of energy policy for 30 years – if the free market has been stepping into that breach, I haven’t seen it. We are this this situation specifically because of government inaction (or in the case of ethanol, bad action.) No higher fuel standards for car, no stringent efficiency standards for buildings, no encourage of such practices as co-generation.Yes, there is a danger in subsidies done wrong, but I think there’s a far greater danger in leaving it all to the free market and keeping our fingers crossed that they’ll make choices that look further than the next quarterly report.
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    • Subsidies are more popular but both theory and practice argue against them. Subsidising clean energy requires politicians to decide on the best way of delivering it, and their judgment is likely to be worse than the market’s.
  • As other reviewers have noted, this is NOT by Michael Lewis. Rather, the same guy who gave us Liar’s Poker: Rising Through the Wreckage on Wall Street and The New New Thing: A Silicon Valley Story has worked through a variety of sources in search of the best reportage on past financial market panics. At the time Lewis was toiling on assembling this (the last story in the anthology is dated in January 2008), it must have been hard to imagine how topical this would become. Certainly, the readings offer clear insight, from many different points of view, on how financial manias emerge, grow, build and then burst, triggering, yes, panic. In light of the events of the last six months or so, this book arrives right in time to give us a framework within which to ponder our current plight. And in some ways, I’d rather have this anthology than a book by Lewis himself — no single viewpoint is going to give any reader a firm handle on this complex topic.

    I particularly appreciate Lewis’s eclectic sourcing. He goes to humorists like Dave Barry as well as outstanding business reporters like Roger Lowenstein and Greg Zuckerman to obtain insight into the phenomena that we are all seeing played out before our eyes today. Joseph Stiglitz opines on the aftermath of the Asian Crisis in a piece pulled from “Project Syndicate”; he includes blog entries and statements by politicians. He has reproduced Jack Willoughby’s classic financial reporting effort on the rate at which dot.com companies were burning through cash, published by Barron’s in March 2000 — just as that market was about to turn very sour indeed.

    This is a very valuable contribution to the relatively scanty ranks of accessible business/financial reporting. For those who don’t scour the busienss press daily, it will provide them with insight into the way financial markets normally work and what kinds of factors can lead to them becoming distorted. Even those familiar with the way Wall Street works should find this both intriguing and useful, reminding us that there really is no such phenomenon as “it’s different this time.”

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    • Michael Lewis, who previously wrote the popular book “Liar’s Poker,” takes his own spin on our country’s most notable financial catastrophes of the last twenty years. These include:1. The 1987 stock market crash

      2. Russian default and eventual failure of Long-Term Capital Management (hedge fund)

      3. The Asian currency crisis

      4. The bursting of the Internet stock bubble

      5. And, of course, the recent subprime debacle

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    • WASHINGTON – Barack Obama isn’t the only one hoping to make a huge leap in importance and influence on Election Day. A Washington think tank with close ties to Obama and former president Clinton is about to publish a 50-chapter book on how to run a new Democratic administration.
    • The Center for American Progress already has produced a 26-page document, widely distributed among Obama aides, describing what the last five presidents did on each day of his transition. And if Obama wins the presidency Tuesday, the group stands ready to fill top federal positions with some of its staffers, many of whom worked for Clinton.

      The Center for American Progress, formed five years ago to counteract conservative think tanks, could become one of Washington’s most influential policy advocacy groups. And it could give Obama a valuable head start in staffing agencies and drafting priorities for his administration, a daunting task for any president-elect with 11 weeks between the election and inauguration.

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    • But what’s happening to the Republican party today runs much deeper than this election. The current crisis has been brewing for 44 years. When President Lyndon Johnson signed the Civil Right Act in 1964 he said that he believed he had just delivered the South to the Republicans for a generation. Johnson knew that the vestiges of the Jim Crow system were so entrenched that white voters in the South would change their party affiliations once it became clear the Democratic party favored black civil rights. The 1968 presidential campaign offered the GOP the first opportunity to run the “Southern Strategy.” Subsequent elections proved Johnson right: the South turned Republican.
    • By the end of two miserable terms of George W. Bush the Republican moderates (sometimes called RINOS, for “Republicans in Name Only”) were driven out of the party (just ask Lincoln Chafee). Today, the sorry spectacle of the McCain campaign has driven out many of the shining-light intellectuals — people like Andrew Sullivan, George Will, David Brooks and Christopher Buckley. But the coup de grace was the total collapse of the tenets of market fundamentalism that are at the core of conservative ideology. What do conservatives have left of their ideology if their economic prognostications have been proven to be fallacies? The answer is: Sarah Palin. Without a coherent economic narrative all the Republicans have left is the culture war. The Republican party has exploited race and hot-button social issues for so long that it has whittled away its numbers down to becoming a regional party. If the Obama campaign can turn Virginia, North Carolina, Colorado, New Mexico, and Nevada to the Democratic column it might be able to lock in the Republican party into being a permanent backwater and Electoral College minority. Once a state turns “blue” it will be very difficult to flip it back to “red” again.
    • The Southern Strategy has born its bitter fruit: the Republican party will become so heavily identified with retrograde social and cultural stands — and so thoroughly right-wing evangelical — that it will be on the losing side of the demographic changes that are the country’s destiny. The nation is not becoming more Protestant, more white, and more racist. It’s becoming more diverse, more tolerant, and more reflective of 21st Century multicultural society. Young people who the Obama campaign has energized and brought into the political process represent the future, and they are the least likely to hate minorities, gays and lesbians, and they have the greatest stake in protecting the global environment. The “values” wing of the Republican party will continue to dominate the primaries so any future GOP presidential candidate will have to pass the Southern evangelical litmus test. It’s a recipe for the party to nominate one Sarah Palin after another.
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    • Gellman offers ample evidence for the charges he levels; likely owing the near end of the Bush reign, more than a few sources went on the record. Some have appeared elsewhere, such as Jack Goldsmith who worked in the Justice Department, while others are new, such as Former Majority Leader Dick Armey describing a meeting in the House in the run-up to the war where Cheney claimed that not only did they have unreleased proof that Saddam and his family had “close” relations with Al Qaeda, but that Iraq was getting close to creating miniaturized nuclear weapons. While in retrospect Cheney’s claims more than strain credulity, one can imagine why Armey could not imagine the VP lying about such grave matters and, connecting the dots, switched his position to support the invasion.
    • Bottom Line: “Angler” shows V.P. Cheney did not acquire his power and influence by accident – it was built through his experience and learning in prior decades at the top levels of government. Clearly he has transformed the nature of the office, and was aided in doing so by an uninvolved, incurious president who was also a poor manager (eg. failure to follow-up directive to Rumsfeld to begin Guantanamo trials, to back up Rice vs. Rumsfeld; to quickly realize “Brownie” was incompetent – Cheney did).On the other hand, Cheney’s ignoring warnings pre-9/11 (along with Bush), sometimes duplicity, and lack of pragmatism in favor of erroneous policies (eg. resisting information requests, even from the 9/11 Commission; almost marching the administration over the cliff regarding reauthorization for internal eavesdropping; lack of sensitivity to growing opposition to the Iraq War) are serious, irredeemable flaws.

      Finally, to be fair, it should also be pointed out that Cheney was scrupulous in avoiding possible personal gain from his actions (eg. the Energy Task Force).

    • This book contains some truly stunning accusations. It suggests that Cheney’s role in picking himself as Bush’s running mate when he was in charge of finding a running mate for Bush in 2000 had serious ethical breaches. There is a suggestion that Cheney was less than candid about his health problems.The author suggests that Cheney knowingly lied to Dick Armey (House Majority Leader) about intelligence concerning the (nonexistent) relationship between 9/11 terrorists and Saddam Hussein.

      There is more disturbing material concerning Cheney’s alleged role in encouraging the use of torture against terrorism suspects and the use of domestic wiretapping.

      It is interesting that Gelman knocks down one of the most popular accusations against Cheney, the notion that he wanted to use his office for private financial gain or the benefit of the oil industry or his previous employer, Halliburton. In a recent interview with Harper’s magazine, Gellman states, “There’s no venality here. Cheney was not trying to aggrandize himself, to steer money to friends, or to set himself up for higher office. He simply believed that the stakes were high and he was more capable than others. He saw the world, he believed, as it truly is and was prepared to do the “unpleasant” things that had to be done to safeguard us. Cheney is a rare combination: a zealot in principle and a subtle, skillful tactician in practice.”

    • This whole situation is very depressing story about a talented man who did a lot of good in the past but went in a truly disastrous direction since 9/11/2001.
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    • Dec 24thMonday, more than 500 million gallons of toxic coal sludge burst through a retention wall in eastern Tennessee, causing massive property and environmental damage and leaving residents holding their breath over possible long-term consequences. Environmentalists said the spill was more than 30 times larger than the Exxon Valdez oil spill. The incident underscored the false nature of the “clean coal” propaganda. In an interview with NBC Nightly News, Elliott Negin of the Union of Concerned Scientists explained:

      This disaster shows that the term ‘clean coal’ is an oxymoron. It’s akin to saying ‘safe cigarette.’ Clean coal doesn’t exist.

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    • Dec 24thLast week, EPA Administrator Stephen Johnson — citing “sound policy considerations — wrote a memo declaring “that carbon dioxide is not a pollutant to be regulated when approving power plants.” On Monday, Sen. Barbara Boxer (D-CA), chair of the Senate Environment and Public Works Committee, wrote Attorney General Mike Mukasey a letter demanding that he ensure that Johnson withdraw “his blatantly illegal memo“:

      I am writing to request that as the nation’s chief law enforcement officer, you intervene immediately with Environmental Protection Agency Administrator Stephen Johnson to ensure that he withdraws his blatantly illegal memo. […]

      The Johnson document presents as arguments against including carbon dioxide emissions in a Clean Air Act permit the same kind of transparent excuses for inaction on global warming pollution that both the Supreme Court and the Environmental Appeals Board flatly rejected in their respective opinions.

      Boxer points out that the memo “flies in the face” of the Supreme Court’s 2007 decision. As conservative legal scholar Jonathan Adler acknowledged, “Under that decision, the EPA is effectively obligated to begin the regulation of greenhouse gas emissions under the Clean Air Act.”

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    • In a new interview with the Washington Post, embattled Securities and Exchange Commission Chairman Christopher Cox stridently “defend[ed] his restrained approach to the financial crisis.” He refused to accept any blame for the Wall Street crisis or the Madoff Ponzi scheme, saying that regulating Wall Street and protecting investors “wasn’t the SEC’s job“:

      Cox argued that the agency has carefully defined responsibilities and that it was unfair to blame it for every problem on Wall Street.

      The public might not understand that that wasn’t the SEC’s job,” he said, adding that the agency was not responsible for preventing investment banks from collapsing but rather for sheltering their securities trading units from problems in the broader corporation. “The SEC is not a safety and soundness regulator,” he said. [..]

      In fact, the SEC’s mission statement clearly suggests that “safety” is — or should be — a primary concern of the commission:

      The mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.

    • Cox also denied any culpability in the Madoff scandal: “When Cox was asked whether he should be blamed for a culture of lax enforcement that allowed multiple warnings about the fraud to go undetected, he said: ‘Absolutely not.’” However, a former SEC official slammed Cox for failing to prevent the Ponzi scheme: “I can’t comprehend how a well-run investigation would have missed a fraud of this magnitude,” said Lynn Turner, a former SEC chief accountant.
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    • Ed Gillespie’s RealClearPolitics article on “Myths and Facts About the Real Bush Record” is about as stupid and dishonest as you’d expect. But after “debunking” five perfectly accurate alleged myths, Gillespie gets into the whopper that really gets my goat:

      And one last fact: Our homeland has not suffered another terrorist attack since September 11, 2001. That, too, is part of the real Bush record.

      This is like saying that except for the Great Depression, Herbert Hoover had a good economic record. The vast majority of Americans to have ever been killed by foreign terrorists were killed under George W. Bush’s watch. As Gillespie says, whether or not a president succeeds in preventing foreign terrorists from murdering thousands of American citizens is an important part of that president’s record. And Bush took office on January 20, 2001. Nine or so months later by far the largest terrorist attack on American soil was perpetrated. That’s a fantastically enormous failing. If you only look at Bush’s final seven years, you’ll see that he was as good as every other president at preventing terrorist attacks. And if you include his entire presidency, you’ll see that he was by far the worst.

    • The fight about the Bush years is not over. It is also mportant who wins the historical narrative in the years ahead.
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    • A new NBC News/Wall Street Journal poll shows that only 33 percent of respondents admitted to having voted for Bush twice.  52 percent of those polled said that they never voted for the twice-elected President in the first place. In 2004, President George W. Bush became the first president to win an absolute majority of the popular vote since his father, George H.W., in 1988.

      The poll also showed more bad news for Bush: Only 18 percent of people surveyed said they were going to miss Bush, while 79 percent said they would not. Compare that to December of 2000, when the same poll showed that 40 percent of respondents said that they’d miss Bill Clinton, and 55 percent saying they would not.

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    • STEPHANOPOULOS: You mentioned earlier you want to restore balance in the job of vice president. And during the campaign, you called your predecessor, Vice President Cheney, probably the most dangerous vice president ever.

      He was pretty defiant, though, this week in interviews with ABC, with
      Jonathan Karl. And he said, “Those who have accused the administration
      of condoning torture or violating the Constitution with the terrorist
      surveillance program don’t know what they’re talking about.”

      BIDEN: Well, I still — I don’t agree with the vice president.

    • I think the recommendations, the advice that he has given to President Bush — and maybe advice the president already had decided on before he got it — I’m not making that judgment — has been not healthy for our foreign policy, not healthy for our national security, and it has not been consistent with our Constitution, in my view.

      His notion of a unitary executive, meaning that, in time of war,
      essentially all power, you know, goes to the executive, I think is dead
      wrong. I think it was mistaken. I think that it caused this
      administration in adopting that notion to overstep its constitutional
      bounds, but at a minimum to weaken our standing the world and weaken our security. I stand by that, that judgment.

      And he also went on to say that he still thinks we should have gone into Iraq, knowing exactly what we knew and the way we did, as I — I heard the interview. He also stands by the fact that we still should keep Guantanamo Bay open and so on. So — so we have fundamentally different view.

      STEPHANOPOULOS: He says, the more you learn about threats, as you — as you see the intelligence, the more you’re going to come around to the Bush administration’s point of view on their counterterrorist policies.

    • BIDEN: I’ll make two responses to that. One, as chairman of the Foreign Relations Committee, unless they were lying to me all along, I knew the details of the threat. I was one of those four people that had access to all that information, excuse me, one of those eight people the — that had access to that information.

      Secondly, I have been getting what they call that presidential briefing you get every morning from the intelligence community since the day we have been — since the day we were elected, not sworn in.

      I have learned nothing thus far that would change my view…

      STEPHANOPOULOS: Nothing?

    • BIDEN: Nothing thus far that would change my fundamental view that Guantanamo should close, number one, that, number two, the way in which we have conducted our policy, in terms of both surveillance as well as the detainees, has hurt our reputation around the world.

      And to quote from a previous national security report put out by the –
      the intelligence community, we have — we have created, not dissuaded,
      more terrorists as a consequence of this policy.

      Nothing I’ve learned thus far has changed my fundamental view on the
      constitutional as well as the practical positions we should take
      relative to the issues of torture and others.

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    • WE CAN be forgiven for feeling utterly bewildered in the current climate of financial uncertainty that has swept the globe over recent months. The figures involved are so monumental that we have lost all sense of measure. For ordinary people struggling to pay the bills at the end of the month, the dizzying talk of billions, even trillions wiped off global markets is simply too overwhelming to comprehend.And if it was hard enough to grasp the billions lost to economies across the world, how are we to get our heads around the $50 billion allegedly defrauded from investors in a simple pyramid scheme by a single man, Bernard Madoff, one of the most respected figures of the American financial scene – dwarfing the misdemeanours of trader Jérôme Kerviel, who lost his employers at Société Générale the trifling sum of €4.9 billion?

      Back in 1989, many were happy to believe the words of American philosopher Francis Fukuyama, who proclaimed “the end of history” in the wake of the collapse of Communism, marking the triumph of secular, free-market democracy across the world. Together with liberal democracy, few were those willing to cast doubt on the virtue of ultra liberal free market capitalism. Market rules were a win-win for everyone, delivering what people wanted through the golden rule of supply and demand, with free competition improving services, bringing prices down, and driving profits. The interests of shareholders and those of consumers therefore always coincided, and the system was seeing as so successful that its influence reached into public policy and even areas like the provision of education and healthcare.

    • The theory is so simple that in many ways it seemed flawless. What it failed to take account of was basic human greed. From the Cyprus Stock Exchange, to sub-primes, to Iceland, to Bernard Madoff’s investment funds, everyone ignored  the most basic rule that if something seems to good to be true, it probably is. Amateur Cypriot investors can be forgiven for their gullibility, but what are we to say of the major banks, bristling with financial expertise, accountants and regulators? That they too were greedy. Just like the rest of us, they believed what they wanted to believe and turned away from anything that might distract them from the profits they saw accumulating.So what now? Governments across the world are waking up to the need for greater regulation and state intervention. In an ideal world, we could perhaps trust the markets to regulate themselves, but in reality they are driven by the same human frailties that are rooted in society. And just as we need government, police and prisons to stem a descent into social anarchy, so too we need stringent regulation to bring financial markets back from the chaos into which they have descended.
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    • This is no longer the America of 40 years ago, nor of 25 or even as few as 10 years ago. Things do change and, sometimes, for the better. Racism, ignorance, bias and prejudice have neither evaporated nor been abolished. But anyone who believes that our boilerplate political discourse emerges intact from this stunning moment needs to be dispatched to the same pasture where John McCain will listlessly spend the rest of political eternity. No longer can it be said that a black child cannot dream of becoming president. No longer can it be said that Americans are TV-doped sheep, easily managed and manipulated by some sort of right-wing media conspiracy. You thought that nothing would ever be the same after 9/11? Well, how about after a black man, his black wife and two black children move into the White House?
    • Perhaps history itself demanded that we pass through the pain and humiliation of the Bush era in order to merit the relief granted by this election. We have been forced to suffer through the most vile of administrations, one that has shown total disdain for the Constitution, for the rule of law, for basic humanity. And this is the second most important takeaway from the election. After nearly three decades in which the power structure pandered to, exploited, refined and capitalized on all the worst of our collective base instincts, along comes a candidate who speaks only to our most humane and compassionate side. That says something striking about Barack Obama. And it says even more about the American people. It’s one more victory we shouldn’t hesitate to claim.
    • We know that we have witnessed the collapse of an entire political era based on the narrowest and greediest principles of social Darwinism.
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    • A report published today finds that investors are demanding greater clarity from companies on the ‘public affairs’ activities (defined as corporate activities or decisions intended to influence public policy) they are engaged in. 83% of investors surveyed claim their information needs in this regard are not currently being met.
    • Alignment between public affairs and corporate responsibility activities seen as an indicator of the quality of management: The investors questioned saw the integration of environmental, social and governance issues into public affairs activity as a strong indicator of good management, illustrative of the connection between what companies say about issues and their actions. “It is an input for how we assess the quality of a management team”, said one investor.
    • A significant volume of assets considers public affairs activity: 65% of investors surveyed, representing over $320 billion of assets, actively consider public affairs activities in company assessments.
    • Seb Beloe, lead author or the report and Vice President of Research and Advocacy at SustainAbility, the 20-year old think tank and consultancy, comments: “How companies participate in the public policy making process often hasn’t been clear in the past. Up until now, discussion of this activity has been driven in the main by NGOs and academics. Our report suggests this is changing: in the future, investors will demand more information on a company’s public affairs activity, encouraging companies to be more open, mirroring interest in environmental, social and governance activity in general.”
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    • What’s amazing is the extent to which the [environmental] campaign has been successful … they have accelerated the rate at which they talk about the changes that they’re making, and they have allowed major NGOs like Conservation International, Environmental Defense, and Green Seal to come in and help them create pioneering ways of changing some of their practices …. We can praise them for those changes without giving up analysis which says this is a company that’s dangerously large and capable of doing real damage to all of its competitors as well as to people throughout its supply chain … it doesn’t mean I agree with the way it pays its workers or agree with the damage it does to neighborhoods, but those battles continue to be fought on a different plane.
  • (Reuters) – The Office of Thrift Supervision (OTS), a federal banking regulator, on Thursday completed new rules to rein in fees and billing practices by credit card issuers.

    The rules are expected to be approved later on Thursday by the Federal Reserve Board and the National Credit Union Administration for their respective institutions.

    Following are key provisions of the rules, which were proposed in May:

    * Reasonable time to make payments

    Institutions cannot consider a payment late unless consumers were given a reasonable amount of time to pay. Banks, thrifts and credit unions must ensure that credit card statements are mailed or delivered at least 21 days before the payment due date.

    * Double cycle billing

    Banks cannot use the practice known as double-cycle billing, in which they reach back into prior billing cycles to compute finance charges. For example, under double-cycle billing, a cardholder who begins a billing cycle with a $500 balance and makes a one-time payment of $450 during the cycle would be charged interest on the full $500. Under the new rules, the cardholder would be charged interest on the remaining balance of $50, in this example.

    * Interest rate increases on outstanding balances

    Banks cannot raise the annual percentage rate on an outstanding balance, except in certain conditions. For example, an institution could raise the variable rate if a promotional rate has expired or if the cardholder’s payment is delinquent.

    * Payment allocation

    When different annual percentage rates apply to different balances, banks cannot allocate amounts paid above the minimum payment in a way that hurts consumers. Instead, they must apply the consumer’s payment over the required minimum first to the balance with the highest annual percentage rate, or split the amount equally among the balances.

    * Fees/Deposits for credit issuance

    Banks cannot charge account-opening fees or membership fees to a credit card if they would use up most of the available credit on the account during the first year after account opening.

    * Universal default

    Banks cannot increase the interest rate on outstanding balances if the consumer defaults on other debt obligations such as a gym membership. The practice is sometimes referred to as universal default.

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    • WASHINGTON — A report released Thursday by leaders of the Senate Armed Services Committee said top Bush administration officials, including Donald H. Rumsfeld, the former defense secretary, bore major responsibility for the abuses committed by American troops in interrogations at Abu Ghraib in Iraq; Guantánamo Bay, Cuba; and other military detention centers.
    • The report was issued jointly by Senator Carl Levin of Michigan, the Democratic chairman of the panel, and Senator John McCain of Arizona, the top Republican. It represents the most thorough review by Congress to date of the origins of the abuse of prisoners in American military custody, and it explicitly rejects the Bush administration’s contention that tough interrogation methods have helped keep the country and its troops safe.
    • The report also rejected previous claims by Mr. Rumsfeld and others that Defense Department policies played no role in the harsh treatment of prisoners at Abu Ghraib in late 2003 and in other episodes of abuse.

      The abuse of prisoners at Abu Ghraib, the report says, “was not simply the result of a few soldiers acting on their own” but grew out of interrogation policies approved by Mr. Rumsfeld and other top officials, who “conveyed the message that physical pressures and degradation were appropriate treatment for detainees.”

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