Oil barons Charles and David Koch held their annual billionaires' summit in Palm Springs on Sunday, Nancy Goldstein reports in The Nation. Every year, the Kochs gather with fellow plutocrats, prominent pundits, and Republican legislators to plan their assault on government regulation and the welfare state. This is the first year that the low-profile gathering has attracted protesters.
by Catherine A. Traywick, Media Consortium blogger
Arizona lawmakers are expected to introduce an "anchor baby" bill today that would deny birthright citizenship to the U.S.-born children of undocumented immigrants. Modeled after birthright citizenship legislation unveiled by the nativist coalition State Legislators for Legal Immigration (SLLI) earlier this month, the measure is, unabashedly, part of a larger effort on the part of SLLI to challenge existing citizenship law in the United States.
Tonight, President Barack Obama will deliver his State of the Union address. A major theme of the speech will be jobs and the economy. Let's hope the president spares a few minutes for Wall Street reforms that might prevent a repeat of the economic collapse that we're slowly starting to recover from.
The National Oil Spill Commission released its report on last year's BP oil spill this week. The report laid out the blame for the spill, tagging each of the three companies working on the Deepwater Horizon at the time, Halliburton, Transocean and BP, and also offered prescriptions for avoiding similar disasters in the future.
"I think the recommendations are pretty tepid given the severity of the crisis," Jackie Savitz, director of pollution campaigns at the advocacy group Oceana, told Sheppard. "Even the small things they're suggesting, I think it's going to be hard to convince Congress to make those changes."
No transparency for you!
Last summer, after the spill, the Obama administration tried hard to look like it was pushing back against the oil industry, even though just weeks before the spill, the president had promised to open new areas of the East Coast to offshore drilling.
This week brought new evidence that, despite some posturing to the contrary, the administration is not exactly unfriendly to the energy industry. One of the key decisions the administration faces about the country's energy future is whether to support the Keystone XL, a pipeline that would pump oil from tar sands in Canada down to Texas refineries. And one of the key lobbyists for TransCanada, the company intending to build the pipeline, is a former staffer for Secretary of State Hillary Clinton.
Friends of the Earth, an environmental group, filed a Freedom of Information requesting correspondence between the lobbyist, Paul Elliott, and his former boss, but the State Department denied the request.
"We do not believe that the State Department has legitimate legal grounds to deny our FOIA request, and assert that the agency is ignoring its own written guidance regarding FOIA requests and the release of public information," said Marcie Keever, the group's legal director, The Michigan Messenger's Ed Brayton reports. "This is the type of delay tactic we would have expected from the Bush administration, not the Obama administration, which has touted its efforts to usher in a new era of transparency in government, including elevated standards in dealing with lobbyists."
Tar sands' black mark
What are the consequences if the government approves the pipeline? As Care2's Beth Buczynski writes, "Communities along the Keystone XL pipeline's proposed path would face increased risk of spills, and, at the pipeline's end, the health of those living near Texas refineries would suffer, as tar sands oil spews higher levels of dangerous pollutants into the air when processed."
What's more, the tar sands extraction process has already brought environmental devastation to the areas like Alberta, Canada, where tar sands mining occurs. Earth Island Journal's Jason Mark recently visited the Oil Sands Discovery Centre in Ft. McMurray, Alberta, which he calls "impressively forthright" in its discussion of the environmental issues brought on by oil sands. (The museum is run by Alberta's provincial government.) Mark reports:
The section on habitat fragmentation was especially good. As one panel put it, "Increasingly, Alberta's remaining forested areas resemble islands of trees in a larger network of cut lines, well sites, mine, pipeline corridors, plant sites, and human settlements. ... Forest disturbances can also encourage increased predation and put some plants and animals at risk."
Not renewable, just new
The museum that Mark visited also made clear that extracting and refining oil from tar sands is a labor-intensive practice. He writes:
Mining, we learn, is just the start. Then the tar has to be "upgraded" into synthetic petroleum via a process that involves "conditioning," "separation" into a bitumen froth, then "deaeration" to take out gases, and finally injection into a dual-system centrifuge that removes the last of the solids. Next comes distillation, thermal conversion, catalytic conversion, and hydrotreating. At that point the recombined petroleum is ready to be refined into gasoline, diesel, and jet fuel. It all felt like a flashback to high school chemistry.
Why bother with this at all? In short, because with easily accessible sources of oil largely tapped out, techniques like tar sands mining and deepwater drilling are the only fonts of oil available. This problem is going to get worse, as The Nation is explaining over the next few weeks in its video series on peak oil.
Energy and the economy
Traditional ideas about energy dictate that even as the world uses up limited resources like oil, technology will create access to new sources, find ways to use limited resources more efficiently, or find ways to consume new sources of energy. These advances will head off any problems with consumption rates. The peak oil theory, on the contrary, argues that it is possible to use up a resource like oil, that there's a peak in supply.
Once the peak has been passed, the consequences, particularly the economic consequences, become dire, as Richard Heinberg, senior fellow with the Post Carbon Institute explains. "If the amount of energy we can use is declining, we may be seeing the end of economic growth as we define it right now," he told The Nation. Watch more below:
Light green
Part of the problem is that the energy resources that could replace fossil fuels like oil-wind and solar energy, for instance-likely won't be in place before the oil wells run dry. And as Monica Potts reports at The American Prospect, our new green economy is getting off to a slow start.
Although the administration has talked incessantly about supporting green jobs, Potts writes that the federal government hasn't even finalized what count as a "green job" yet. The working definition, which is currently under review, asserts that green jobs are in industries that "benefit the environment or conserve national resources" or entails work to green a company's "production process." But what does that actually mean?
"That definition was rightly criticized as overly broad," Potts writes. She continues:
While nearly everyone would include installing solar panels as a green job, what about an architect who designs a green house? (Under the proposed definition, both would count.) ... Another problem comes in weighing green purposes against green execution: We could count, for example, public-transit train operators as green workers. But how do we break down transportation as an industry more broadly? Most would probably agree that truckers who drive tractor-trailers running on diesel fuel wouldn't count as green workers even if they're transporting wind-turbine parts. And many of the jobs we would count as green already exist.
It doesn't exactly inspire confidence that the country is moving swiftly toward a bright green future.
This post features links to the best independent, progressive reporting about the environment by members of The Media Consortium. It is free to reprint. Visit the Mulch for a complete list of articles on environmental issues, or follow us on Twitter. And for the best progressive reporting on critical economy, health care and immigration issues, check out The Audit, The Pulse, and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.
Everything I am reading these days on financial issues points to some serious reckoning soon to come, especially because of - as the folks at Third Way are calling it - foreclosure-gate. The Massachusetts Supreme Court ruling in the Ibanez case, along with a growing body of cases where the banks and/or their servicers have been ruled against in foreclosure cases, and even the banks' lawyers are being castigated in court by judges for bringing in made-up paperwork, is causing a growing sense of panic among the biggest banks that hold the most mortgages. Spokespeople for the banks are talking bravely, trying to dismiss the situation as some minor paperwork errors, but everyone who has been paying attention to the situation fears that there are really big consequences afoot. The plain fact is that over the last decade, in their overwhelming rush to make bigger and bigger profits from trading in the bubble-driven real estate securities market, the banks ran roughshod over the home mortgage and title system that had served this country (and England and many others) quite well for hundreds of years - and they made a serious mess of it. Because of the way these mortgages have been sliced and diced and sold into complicated securities, homeowners, judges, and the banks themselves are having quite a bit of trouble figuring out who actually owns the note in more cases than is easy to believe. The "paperwork" - figuring out who owns the note - is not just a little messed up, it is a disaster area.
This wouldn't be as big a deal except that the combination of the housing bubble itself plus the worst recession since the Great Depression (caused in great part by that bubble) has created a foreclosure crisis of gargantuan proportions. Millions of homeowners are in foreclosure proceedings, millions more underwater because of the collapse of housing prices. And because the banks have cooked their books, not wanting all these toxic assets to wreak havoc with their official valuation and their stock prices, they have no interest in helping homeowners stay in their homes by writing down these mortgages to current market levels. So banks are moving to foreclose these millions of homes, but they can't prove to judges that they even own the notes that would allow them to foreclose. Thus you have robo-signers, falsified affidavits, and all kinds of strange things being presented to judges in courts. The judges who are not bought and paid for by the banks are raising big red flags about all this, and thus you have cases like Ibanez going against the banks.
One of the most discouraging things about the last two years was seeing swing voters in focus groups, when asked what President Obama's economic strategy was, repeat different versions of "Well, I know he said we needed to save the banks. Beyond that, I'm not sure." When Obama in his first State of the Union gave a vigorous defense of bailing out the banks, saying he knew it about as popular as a root canal, and saying "I get it", it was very memorable to voters. But when his predictions about what would happen when the banks were stabilized- they would start making loans to businesses, and businesses would start hiring- didn't happen, and instead the banks gave themselves record breaking bonuses, voters turned on Obama fast. In exit polls on Nov. 2nd, when asked who was most to blame for the bad economy, voters by a wide margin said Wall St was most to blame, and the voters who said that went Republican by a 14 point margin.
Obviously, saving the banks hasn't been the President's only economic strategy. The stimulus bill, while too small, was an important job creator/saver. Saving the American auto industry was an incredibly important thing to do. Health care reform was in part a long term economic strategy. The infrastructure bank idea is a great potential job creator. Extending unemployment insurance helps keep money in the economy. And all the tax cutting going on is clearly meant to have some stimulative effect, although how much is highly debatable.
However, there have certainly been times where Secretary Geithner, who has been the main driver of the economic strategy, seems to think and act as if helping the big banks and helping the economy amount to the same thing. The tepid reaction to the foreclosure crisis has sure felt that way- apparently we can't freeze foreclosures or do much to help homeowners because it might "endanger" the banks. In fact, I would argue the exact opposite: that our number one economic strategy right now should be to shift money from the big banks to the real economy, to Main Street businesses and workers and consumers. The big banks are hoarding extraordinary amounts of money, and they are clearly not investing it in job creating businesses. They are speculating with it, they are trading with it, they are investing in complicated financial instruments that do nothing to create jobs- in fact, they are sucking capital out of the real economy that might actually create jobs. These massive financial conglomerates have way too much concentrated wealth and market power, and that is weakening the rest of the economy.
This is one reason why, as I wrote a couple of times last week, it is so important to write down the mortgages of homeowners who are underwater. Taking that money out of the bankers' hands and putting it in the hands of the hard pressed middle class would do more to stimulate the economy than any other thing the President could do right now. This is also why the Federal Reserve's new proposed rule, out last week, on swipe fees is so good. It would generally limit swipe fees to 12 cents per transaction. Right now the average is 44 cents, and with most small businesses it's quite a bit higher. If this rule is upheld, this is money that will go straight from the big banks' profit margins into the main street economy- all told probably a $15 billion boost going back to retailers, restaurant owners, taxi cab drivers, and hopefully consumers. $15 billion going from Wall Street, speculative economy into the real economy is a nice lift right now. This is why I have been working with retail business leaders and consumer groups to support this new regulation.
Unfortunately, not all Democrats see it this way. Tom Carper and Mark Warner tried to head off the amendment that made this regulation happen in the Senate, and have been lobbying the Federal Reserve against a strong regulation on the subject ever since they lost the legislative fight. And Barney Frank, who is a great liberal on social issues but spends way too much time with bank lobbyists, was whining on Friday how unfair the proposed rule was to the poor bankers.
Barney, you got this one wrong. Democrats should not be looking out for the bankers, we should be looking for every single opportunity we can to drain the Wall St swamp. The big banks are hoarding money. They have way too much market power, and when their profits expand, they put that money into the speculative economy rather than the real economy that manufactures goods, sells products and services, and creates jobs. When we take a dollar away from them, and put it into the real economy, there is actually a multiplier effect as people on Main Street spend or invest the money in real products. When mortgages get written down, it helps the real economy. When swipe fees on credit or debit card transactions get lessened, it helps the real economy. If we instituted a transactions tax on every trade made on Wall St, and put that money into a jobs program, that would help the real economy.
The big banks are hoarding our money. Our best economic program right now is to shift money from the banks, and put it into the hands of consumers who might actually buy products and businesses who might actually hire more workers.
America's economy is in a bad way. The economic recovery has turned out to be disturbingly weak, and joblessness rates are still actually rising. Investment is down, Americans are depressed and angry, and there are even worries about a double-dip recession.
There has not been much analysis of the causes behind today's economic stagnation. Most experts talk about how weak recoveries generally follow financial crises. Politically, Republicans blame Democrats, and Democrats are generally too busy trying to fix the problem than to think about what caused it.
Yet there is indeed something that did badly damage the recovery - an event very few nowadays link to America's economic woes.
Congressional Republicans and the White House struck an agreement in principle on Monday night to extend all the Bush tax cuts for 2 more years in exchange for extending unemployment benefits. The GOP agreed to the so-called "Lincoln-Kyl compromise" a partial 2-year extension of the Bush estate tax cuts on estates worth over $5 million. If the deal had not been struck, estate taxes on estates over $5 million would have gone back up from 0% to the pre-cut rate of 55%. Instead, the rate will be 35% for the next 2 years.
by Catherine A. Traywick, Media Consortium blogger
It's a now-or-never moment for the DREAM Act, a bill that would provide a conditional path to citizenship for certain immigrant youth. The bill's prospects won't improve with next Congress' influx of Republican legislators, and thousands of undocumented students and their bipartisan supporters are urging the Senate to pass the DREAM Act. But as the Senate appears ready to finally vote on the landmark bill, state lawmakers are moving in the exact opposite direction.
I came across these stunning statistics in a Matt Taibbi piece the other day: the top 1% in our country has had its percentage of the nation's wealth leap from 34.6% in 2007 to 37.1% in 2009, while the median net worth for an American household has gone from $102,500 in 2007 to $65,400 in 2009. Changes in numbers that dramatic in a two year period are astonishing, almost unfathomable. In the massive economic crisis we have just experienced, the home prices, savings, pensions/401(k) funds for the middle class took a beating like nothing most of us have seen in our lifetimes, while the top 1% have actually done okay after the initial hit on stock prices: corporate profits and stock prices are back up, corporate bonuses and dividends and executive compensation is in good shape, and the top 1% has more of the country's wealth in its back pocket than it did before. We still have high unemployment and stagnant wages and a terrible housing market, but the guys at the top are floating along pretty well right now.
As I was writing that last paragraph, my eye was caught by this headline and story from today's NYTimes:
Corporate Profits Were the Highest on Record Last Quarter
The nation's workers may be struggling, but American companies just had their best quarter ever.
American businesses earned profits at an annual rate of $1.66 trillion in the third quarter, according to a Commerce Department report released Tuesday. That is the highest figure recorded since the government began keeping track over 60 years ago, at least in nominal or non-inflation-adjusted terms.
Corporate profits have been going gangbusters for a while. Since their cyclical low in the fourth quarter of 2008, profits have grown for seven consecutive quarters, at some of the fastest rates in history.
This story, those statistics from my opening paragraph, paint an incredible picture of an economy and country in bizarre juxtaposition: corporate profits at record levels, big banks quarterly bonuses and profits at record levels over the least couple of years, while the rest of the country in economic meltdown.
Democrats are still reeling from our political losses, and the DC political class is still obsessed with the re-positioning dance, but at the heart of everything else, at the center of everything that matters, are these bleak economic facts driving our politics. The sooner Democrats stop worrying about being center or left, and start focusing on how to get the middle class out of its economic black hole, the sooner our politics start getting fixed. Period. End of story. The heart of our political darkness is the heart of the middle class' economic darkness.
Weekly Audit: Millions of Americans Could Lose Unemployment Benefits
Editor's Note: Happy Thanksgiving from the Media Consortium! This week, we aren't stopping The Audit, The Pulse, The Diaspora, or The Mulch, but we are taking a bit of a break. Expect shorter blog posts, and The Diaspora and The Mulch will be posted on Wednesday afternoon, instead of their usual Thursday and Friday postings. We'll return to our normal schedule next week.
The 2010 elections can be described in many ways, but one way to view them is as a repudiation of the congressional factions with which the Obama Administration has negotiated with (and/or capitulated to) over the last two years.
Blue Dogs and "moderate/centrist" GOPpers were overwhelmingly defeated in primaries and in the general election.
The progressive wing of the Democratic party did not suffer such defeat. It is time that the President join the winning wing of his chosen political party.
At a minimum President Obama owes the progressives a nod of thanks and respect for their demonstrated ability to stave off the recent Republican Wave.
The Democratic Party internal debate about what to do in order to come back in 2012 rages on and will for a while. The issues and strategic implications are complicated. There are a lot of big and small tactical considerations. The potential paths that could be followed go a lot of different directions. But here's one thing I feel extremely confident in saying: the path for Obama's political comeback does not lie in walking over the backs of senior citizens and the working class.
Voters over 65 years old were the one age group that went clearly against Obama in the 2008 victory, but it got a lot worse in 2010: the margin against Democrats ballooned to 22 points in this election, after being -8 in 2008. And working class voters in their 40s, 50s, and 60s- the folks getting ready to go on Social Security and Medicare- turned strongly against the Democrats as well. The economy was a big part of that, of course, but so was a few hundred million dollars worth of false ads about Democrats cutting Medicare.
It’s only been a week, and I am already sickened unto death of the re-positioning tango over how to re-position ourselves to win the next election. Of course, maybe one of the reasons I am sick of it is that it happens after every losing election. The biggest reason I am sick of it, though, is that none of it really matters at all to the voters Democrats lost in this election and need to win back. The swing voters we lost in this election, as I wrote about here, are the economically stressed working and middle class- the ones whose mortgages are underwater or in danger of getting there, the ones whose family members are losing jobs or having hours being cut back, the ones who haven’t gotten a raise in 2 or 3 years, the ones whose pensions and savings are worth a lot less than they were 3 years ago. And you know what: they couldn’t care less how Obama or other Democrats are positioned. What they do care about are having good jobs come back to their communities, and having their homes’ value start to edge up again.
That’s why the new memo from Third Way doesn’t do much for me. It doesn’t make me angry, either, although I know it is supposed to: you know, get the debate between liberals and moderates engaged and all that. What it does do is go to my friends at Third way’s favorite stalking horse, the fact that self-identified liberals only make up 20% of the electorate. You know what? Just so Third Way folks don’t feel like they have to keep beating this dead horse, I will be glad to stipulate that point in this and all future arguments: self-described liberals are a small minority of the electorate, and you can’t win elections with only their votes. See, we agree. And who ever said progressives couldn’t get along with moderates?
Inequality constitutes a rising problem in United States. Ever since the 1970s, it has been steadily increasing; today, income inequality is at its highest since the Great Depression. The fact that America is currently mired in the worst economic crisis since that period may not be a coincidence.
This site has found fifteen striking charts of inequality. Some are better at conveying the problem than others. Nevertheless, overall it does a decent job at presenting the magnitude of American inequality. Pictures like the one below are especially effective:
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