politics

Republican Financial Regulator Goes Crying To OMB

March 1, 2012

WASHINGTON — In a signal that partisan squabbling in the nation’s capital may be reaching new levels of rancor, a key Republican regulator is pursuing an unusual avenue to overturn a Wall Street reform rule issued by his own agency. Scott O’Malia, one of five commissioners who lead the Commodity Futures Trading Commission, is asking a powerful White House office that has no actual authority over the CFTC to assess his agency’s work. If the Office of Management and Budget were to take O’Malia up on his suggestion, it would radically change the way some federal regulations are written and severely hamper implementation of a host of rules mandated by the 2010 Dodd-Frank Act. It would also be illegal, according to Dennis Kelleher, president of Better Markets, a nonprofit financial reform advocacy group. Kelleher points out that the CFTC is an independent federal agency exempt from oversight by White House offices in order to avoid political interference in the technical regulatory process. The 2010 reform legislation tasked the CFTC with a host of new duties, from regulating the derivatives market that almost broke AIG, to cracking down on oil speculation that drives up gas prices, to preventing conflicts of interest that encourage banks to undercut their own clients. O’Malia has been a vocal opponent of these changes, even after helping to secure loopholes that water down the substance of the rules. Consider the CFTC’s proposal for the Volcker rule — a relatively simple concept banning banks from gambling in financial markets with their own money — which came in at nearly 300 pages, filled with exceptions and exemptions that O’Malia supported. He still opposed the proposal, voting against a measure to accept public comments on it. Last week, O’Malia wrote a little-noted letter to the OMB asking it to review the cost-benefit analysis that the CFTC had used in writing new rules against Wall Street conflicts of interest. O’Malia contended that his agency had violated OMB standards and two Obama-issued executive orders by failing to adequately consider certain regulatory costs highlighted by financial industry groups. O’Malia said in his Feb. 23 letter, “I am writing to request that the Office of Management and Budget (OMB) review the cost-benefit analysis” undertaken by the CFTC. “President Obama was very clear in his two Executive Orders that he expected the highest standards of analysis to validate the necessity of government rulemaking to ensure we don’t impose undue and unfounded economic burdens on market participants and the public as a whole,” he continued in his Feb. 23 letter. “I don’t believe the Commission’s rulemakings comply with this directive.” As an independent agency, however, the CFTC does not answer to OMB. The Obama administration does not have the authority to approve or reject the CFTC’s calculations. And while the president issued executive orders in 2011 urging regulators to avoid issuing or revise overly burdensome rules, neither order applies to O’Malia’s request. One executive order does not apply to independent agencies, while another does not apply to cost-benefit analysis. Moreover, cost-benefit analysis of regulations is a notoriously subjective enterprise. Some shareholder-friendly experts argue that its value lies only in assessing specific companies’ burdens, while others believe it should include effects on the broader economy and the environment. This lack of presidential authority has created tensions between Obama and the independent Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac. The administration has urged Fannie and Freddie to provide relief to struggling homeowners, arguing that modifying troubled mortgages would be less costly for taxpayers than foreclosing on homes. But FHFA Director Edward DeMarco has resisted, and Fannie and Freddie are not performing the mortgage modifications. While such independence at times frustrates presidents, it exists to prevent political pressure from distorting the regulatory process. Like the Securities and Exchange Commission and other independent agencies, the CFTC is run by five commissioners, including at least two Republicans and two Democrats — a division that ensures rules at least receive input from both parties. Traditionally, commissioners whose side loses a vote may speak their minds, but they do not publicly appeal to the White House for help. It is Congress that establishes rules for the operation of independent agencies, both in writing the charters for the agencies and in directing them how to write rules. (O’Malia has a great deal of experience on Capitol Hill, having served as an aide to Sen. Mitch McConnell (R-Ky.) and then-Sen. Pete Domenici (R-N.M.) prior to joining the CFTC.) When companies or individuals object to a rule issued by an independent agency, they are also free to challenge it in court. In a detailed letter of his own , Kelleher of Better Markets, argued that it would be not only illegal for OMB to comply with O’Malia’s request, but a procedural nightmare that would create a damaging new precedent for government functionality. “This attempt to attack the [CFTC] both from within and by enlisting an Executive Branch agency, initiated by a single Commissioner who was on the losing side of a vote, would open up a Pandora’s Box of foreseeable and unforeseeable consequences,” Kelleher wrote. “At minimum, it would incentivize every dissenting commissioner at any independent agency to seek OMB’s help in undermining an agency decision with which they disagreed.” OMB did not immediately return a request for comment. Many of the most important rules mandated by the 2010 Wall Street reform legislation have yet to be written or implemented.

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Life-Saving Regulation Languishes As Campaign Money Flows

March 1, 2012

WASHINGTON — A federal rule meant to protect the lungs of workers has been caught in bureaucratic purgatory for more than a year now, frustrating public health advocates who believe the rulemaking process has been overly influenced by industry lobbies. The so-called “silica” rule under consideration by the Labor Department would limit the amount of breathable silica dust to which workers in the construction and mining industries are exposed. Crystalline silica dust is found in sand and granite, and it has been known for decades to lead to the respiratory disease known as silicosis . Although the regulations would strengthen protections for workers, they’re expected to raise costs for businesses that mine or build with materials involving silica. The White House has had the rule under review since last February, even though the typical review period should be wrapped up in 90 days. As The Huffington Post previously reported , in the past year the White House’s Office of Management and Budget has held nine closed-door meetings on the subject with interested parties, including trade groups from the construction, homebuilding and chemistry industries, as well as labor groups. House Republicans, too, have weighed in on the discussion, sending the Labor Department a letter last summer noting that one estimate pegs the cost at “between $3-5 billion per year, if not higher” for businesses. The lawmakers, including House Education and Workforce Committee chairman Rep. John Kline (R-Minn.), argued that the agency had “[failed] to determine the full scope of the proposal” it was considering. According to campaign finance records, the seven Republicans who signed on to that letter have received roughly $70,000 in campaign donations this election cycle from trade groups who met with the White House over the silica rule. Kline and his leadership PAC alone have received more than $20,000 from some of those groups, including the Associated Builders and Contractors PAC, the National Roofing Contractors Association PAC, and the Associated General Contractors of America, according to data from the Center for Responsive Politics. House Education and Workforce Committee spokesman Brian Newell said in an email that small businesses are concerned with the costs of a new standard. Republicans would like to see the rule made public, he said, adding that the administration has “spent years working in secrecy on a new standard.” “The committee’s sole interest is to ensure a fair, transparent regulatory process that will develop responsible regulation, and nothing more,” Newell wrote. Thomas McGarity, an administrative law professor at the University of Texas Law School and a board member of the Center for Progressive Reform , said federal regulations such as the silica rule are increasingly getting bogged down in the rulemaking process as legislators and industry lobbies try to influence the final product. Safety rules often end up getting watered down in the process, he said. “There is a problem with over-political influencing in rulemaking,” McGarity aid. “This rule hasn’t even been proposed yet, and now it’s in a legal netherworld.” “And [silica] really is a rule that needs to be written,” McGarity continued. “The standard is obsolete. It’s an obvious problem, and it’s not something that anybody should have to tolerate and yet people do all the time.” The silica rule cannot be finalized until it undergoes a public-comment period, and that cannot happen until the White House completes its review, meaning that it is effectively stalled. The watchdog group Public Citizen estimates that the rule could have “prevented 60 worker deaths and 2,400 cases of silicosis” in the time it’s been under review. In January, more than 300 public health experts and labor officials sent a letter to the White House urging the rule’s release, citing their “serious concern” with the rule’s “extraordinary delay” and saying the closed-door meetings weren’t transparent. The letter suggested the rule might be held up due to political concerns. The White House has told HuffPost that as a matter of policy, it does not comment on rules under review. Brian Turmail, spokesman for the Associated General Contractors of America, which met with the White House last year on the issue, said the trade group doesn’t oppose the idea of stronger regulations on silica. It just wants to make sure the new standards are realistic. “We support the idea of putting a silica rule in place to support our member firms’ employees,” Turmail said. “Our concerns have been that the proposed rule would set a standard we thought couldn’t be met with existing technology.” Due to the concerns of several deep-pocketed industries, many experts believe the rule under consideration won’t be made public until after the presidential election, when the political blowback would be minimized. Says Public Citizen’s Justin Feldman, a worker safety advocate, “I wouldn’t expect anything to happen within the administration until Nov. 7.”

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Big Donors To Mitt Romney’s Super PAC Could Reap Many Dividends

March 1, 2012

WASHINGTON — One thing’s for certain about most of the biggest donors bankrolling the main pro-Mitt Romney super PAC: They are canny investors. Private equity or hedge fund moguls make up more than half of the top donors to Restore Our Future — the PAC created by former Romney aides to supplement his official campaign with unlimited contributions. Six of them have given $1 million or more each. The size of their checks, however, is dwarfed by what’s at stake for them in November. There may be no other group whose future earnings are more in play, especially should President Barack Obama and congressional Democrats pursue their tax agenda more aggressively and effectively in a second Obama term. If things don’t go their way, they could be hard hit by increased taxes on the rich, a higher tax rate on investment income, and regulations that could expose their secrets and limit their leverage. Most likely of all, however, they could see a sustained attack on one of the most blatant and exclusive loopholes in the tax code — something called “carried interest” — that happens to save them billions of dollars a year. The loophole allows certain kinds of financiers, including private equity investors and some hedge fund managers, to treat what would in ordinary circumstances be considered a performance bonus as long-term investment income — taxable at the maximum 15 percent capital gains rate instead of the 35 percent maximum for labor income. Per capita, it may be the biggest giveaway for the fewest people in the entire tax code. And Romney is a poster child for it. Carried interest is the main reason that he so famously was able to end up paying 13.9 percent in taxes on his $21.7 million income in 2010. Much of that income came from performance bonuses still trickling in from private-equity investments he managed during his career at Bain Capital. By contrast, each of Obama’s proposed budgets has called for eliminating the sweetheart deal for carried interest . “This tax loophole is inappropriate and allows these financial managers to pay a lower tax rate on their income than other workers,” said the White House’s most recent budget statement . “The President proposes to eliminate the loophole for managers in investment services partnerships and to tax carried interest at ordinary income rates. This would reduce the deficit by $13 billion over 10 years.” Other estimates have the proposal increasing tax revenues even more — perhaps by as much as $10 billion a year . There used to be rules, of course, barring people who have billions at stake from spending millions to influence elections. But the Supreme Court, and a subsequent lower court ruling, effectively struck them down two years ago, legalizing unlimited contributions — even on behalf of specific candidates — as long as the political operatives in charge promise not to coordinate their spending with the campaigns. And as a result, what has always been a disproportionate ability of the rich to buy influence has now gone into overdrive — even creating the possibility that a handful of super-investors could actually corner the market. Fred Wertheimer, president of Democracy 21, a group that supports strict campaign finance limits, says the preponderance of high-flying financiers funding the pro-Romney super PAC demonstrates how the Supreme Court’s 2010 Citizens United decision “created precisely the inherently corrupt system earlier Court decisions warned about with direct contributions.” “You have lots of donors seeing this as a huge opportunity to purchase influence with the candidate if the candidate wins,” Wertheimer said. “The super-rich have huge economic stakes in government decisions,” he continued. “There’s a very legitimate argument to be made that one of their principal economic interests is maintaining the unjustifiable tax advantage they get in hedge fund activities.” Brittany Gross, a spokeswoman for Restore Our Future, said the super PAC does not comment on its donors. There may also be more amorphous reasons why Wall Street titans would line up behind a pro-Romney super PAC: namely because he’s one of their own. “They have a friend in Romney,” said Victor Fleischer, a law professor at the University of Colorado. “I see it as about what you think normal is,” Fleischer added. For instance, “Romney thinks it’s perfectly normal to pay 15 percent on your labor income.” “It’s not that I fear these guys are going to pick up the phone and tell Romney what to do,” Fleischer said. That’s because “Romney’s going to do what they want him to do” without any prompting. And they may also be counting on the idea that Romney will treat them more respectfully. “They’re already rich,” said Leonard Steinhorn, a professor of political communication at American University. “I think their egos are hurting far more than anything else.” “This was a cohort that saw themselves as the whiz kids during the ’90s and aughts,” Steinhorn said. They were rewarded with huge bonuses, applauded for their creativity, credited for big deals and a booming economy. But then, when the economy crashed, the public recognized that their excesses were a major contributing factor — and Obama, even while treating them gently, sometimes had harsh words for them. “These people like to be flattered,” Steinhorn said. In Romney, “they’re making an investment in somebody who will be very sympathetic, who sees capital — and only capital — as the engine of growth in our country.” What they’re hoping to get for their trouble, Steinhorn said, is “a president who will praise them and laud them and put them on a pedestal and tell people that they’re the ones who are making America grow and making it rich.” Romney’s campaign did not respond to a request for comment. Fraser P. Seitel, a spokesman for the super PAC’s top donor, billionaire Julian Robertson, told The Huffington Post that Robertson’s motives have nothing to do with personal gain. Robertson, who founded one of the country’s earliest hedge funds, Tiger Management, maxed out on how much he could legally give Romney’s campaign directly — and then gave the super PAC $1.25 million more. “He happens to believe that Mitt Romney would make the best president at this moment, because of his experience in business and his experience as a manager, and his knowledge of the economy,” Seitel said. Robertson has been retired and focused on philanthropy and his own investments for more than 10 years, Seitel added. He is a major donor to environmental causes. “He really does believe sincerely that Romney would be the best president — for all the right reasons,” Seitel said. And the donation has nothing to do with buying access either, Seitel said. “People return his calls anyway.” ************************* Dan Froomkin is senior Washington correspondent for The Huffington Post. You can send him an email , bookmark his page ; subscribe to his RSS feed , follow him on Twitter or on Facebook , and/or become a fan and get email alerts when he writes.

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Gerard Papasimakopoulos: Fear-onomy 101

March 1, 2012

Another day, another social presence for someone living in Greece to fear. As if there wasn’t enough fear making the rounds already. To take a leaf out of the quote bible of the esteemed Hunter S. Thompson: “fear of poverty, fear of getting downsized or fired because of the plunging economy, fear of getting evicted for bad debts, fear of terrorism.” That last little gem, fear of terrorism, is the latest addition to the list. So far, the street riots, the lootings, the destruction of public property and the random acts of police brutality stayed ever so slightly away from a large part of the population. Sure, they were happening, but if you kept yourself at a safe distance, if you stayed behind a closed door and watched it all on television, then you were safe. And safety goes a long way in making sure you can sleep at night. Even if your pockets are increasingly empty. That all came crashing down around our ears this past weekend when police and the ever so professional-sounding Anti Terrorism Task Force recovered a bomb from a metro train on Saturday afternoon . According to reports, the bomb would have gone off at the Aigaleo metro station but thankfully did not, due to faulty wiring. What this effectively means is that its open season on all of us. You are no longer safe. Your life is in danger. At any moment, at any time, a bomb could go off while you are ordering a coffee, going to work, picking up your kids, meeting friends. At least that is what it’s being promoted as. And let’s face it, that is exactly what the message is. No two ways of looking at it, no alternate way of analysing it. A bomb on a public train, means that the internal strife in Greece, just moved up a notch on the brutality scale and is now out for the blood of the people. Frankly, it all fits into place perfectly. Too perfectly one might say. On Monday, a new entry on the terrorist roster, announced that it had in fact placed the bomb on the train. “Antartiko Poleon”, which roughly translates into “Urban Guerillas”, had never before made its presence felt in the Athenian landscape. The shock value of its inaugural hit was the fact that unlike other terrorist units in the past, these urban guerillas were striking blind, caring little if their attempts at an explosive anti-state protest ended in massive civilian casualties. If I was a conspiracy theorist, or a cynic, I would be smiling. I would also be thinking about the fact that a terrorist faction no one has ever heard of before, is jumping up and down and flailing its arms gingerly, hoping for attention, at a time when the internal political forces of Greece are striving to evade the blinding spotlight. At a time when the internal political forces of Greece were hoping that their hilariously feeble cuts on their own state funded expenditure – duly agreed by all, political friends and foes alike – would not be weighed against the cuts they are asking the public at large to make, forcing many into poverty and despair. At a time when the internal political forces of Greece are actively looking for something, anything, that would save their crumbling façade, as more and more Greeks (nearly half the electorate) are actively stating that they do not trust any of the existing parties in parliament. A new enemy, a new common foe could be a masterstroke, a perfect smokescreen to further disorient a panicking people as we head ever closer to the general elections. And it’s oh so much easier to handle someone in a slight fluster isn’t it? He’ll pretty much believe anything as long as it gets him back to calm waters. That is, I would think all of the above if was a conspiracy theorist. But I’m not. I’m just saying.

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Bill Clinton Welcomes Pipeline, But His Wife Will Make The Call

February 29, 2012

WASHINGTON – Former U.S. president Bill Clinton weighed in Wednesday in favour of TransCanada’s Keystone XL pipeline, the controversial project whose ultimate fate is in the hands of his wife. Clinton, the keynote speaker at the Department of Energy’s conference for clean-technology startup companies in Maryland, wondered aloud why TransCanada didn’t originally propose to build the pipeline around an environmentally fragile area of Nebraska. “One of the most amazing things to me about this Keystone pipeline deal is that they ever filed that route in the first place, since they could have gone around the Nebraska Sand Hills and avoided most of the dangers, no matter how imagined, to the Ogallala with a different route,” he said. “The extra cost of (rerouting the pipeline) is infinitesimal compared to the revenue that will be generated over a long period of time,” he added. “So, I think we should embrace it and develop a stakeholder-driven system of high standards for doing the work.” Secretary of State Hillary Clinton, testifying later in the day to the House of Representatives’ Foreign Affairs Committee hearings into energy security, was asked about her husband’s remarks. “He’s a very smart man,” she said to laughter. “But he, unfortunately, is not bound by the laws and regulations any longer of the United States to make decisions that follow a certain procedure. And that’s what we have to do.” Bill Clinton’s comments are certain to cause a stir given his wife has already been accused of a pro-pipeline bias. The State Department is deciding the fate of the $7.6 billion pipeline since it crosses an international border. In November, the Obama administration deferred making a decision on the pipeline until after this year’s presidential election, citing concerns about the risks Keystone XL’s proposed route could pose to the Ogallala aquifer. Pipeline proponents cried foul, saying it was a cynical political move aimed at pacifying the environmentalists among President Barack Obama’s base in advance of the election. In January, facing a mid-February deadline imposed by congressional Republicans, the Obama administration rejected TransCanada’s permit outright, saying it didn’t have enough time to thoroughly review a new route before giving it the green light. But Obama also assured Prime Minister Stephen Harper that the decision was not based on the pipeline’s merits, but was merely necessitated by the Republicans’ pressure tactics. Hillary Clinton said Wednesday that TransCanada has submitted a new application for a route that would carry Alberta oilsands bitumen from the Canadian border to Steel City, Nebraska. “At the same time,” she said, “they’re moving forward with parts of the pipeline like from Oklahoma to Texas, that don’t cross the border and don’t need State Department evaluation or decision.” The Calgary-based company has also said it is reapplying soon for a presidential permit that incorporates the alternate route around the Nebraska aquifer. Republicans have not eased up on their attempts to force approval of the pipeline. Earlier this month, the Republican-controlled House of Representatives passed legislation that would strong-arm the Obama administration into green-lighting Keystone XL as soon as possible. They believe the pipeline will create thousands of jobs and help end U.S. dependency on oil from often hostile OPEC regimes. At the White House daily media briefing on Wednesday, spokesman Jay Carney decried the tactics of congressional Republicans. “Calls to approve Keystone XL right away, again, are insulting to the American people because there is no permit to approve,” he said. The pipeline has become a rallying cry for Republican presidential candidates as well. After narrowly winning the Michigan primary on Tuesday, Mitt Romney vowed to keep fighting for Keystone XL. “I’ll get us that oil from Canada that we deserve,” he said to cheers in Columbus, OH. The Obama administration, meantime, signalled a shift in attitude toward Keystone XL earlier this week when the president praised TransCanada’s decision to carry on constructing the pipeline from Oklahoma to Port Arthur, Texas. Hillary Clinton denied the administration was shifting gears in her testimony on Wednesday. “So why the flip-flop on the Keystone XL pipeline?” Florida congressman Connie Mack asked Clinton. “I don’t think there was any flip-flop, Congressman,” she replied. “I think that this was always a matter that had to be evaluated in accordance with legal and regulatory standards. Certainly energy security considerations was a key factor, but not the only factor. There was a lot of concern on the part of one state through which the pipeline travelled.”

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Marvin Meadors: Should We Vote for Mitt Romney for His Business Acumen Alone?

February 29, 2012

Mitt Romney’s business acumen is fabled. With an estimated net worth of $250 million, that is, give or take a few stock options, he will not be clipping coupons anytime soon. In the GOP primaries, his main selling point as a presidential aspirant is his business success at Bain Capital. Hardly mentioned is his single term as a Republican governor in the very blue state of Massachusetts, pejoratively called Tax-a-chusetts by the Republican faithful. He single-handedly rescued the financially troubled 2002 Salt Lake City Olympics with the help of a government bailout . Given this emphasis on his private sector experience, should we vote for Mitt for his storied business acumen hoping it will translate into concrete policies that strengthen the economy? In terms of his previous statements on the housing crisis and the automobile manufacturer’s bailout, it seems the answer is an emphatic “no!” Romney’s business success is as storied as is his political tone deafness. He chose the City of North Las Vegas, where home prices have plunged by two-thirds and vacant homes litter the landscape, to state the housing market should be allowed to bottom out. He continued: “As to what to do about the housing industry specifically and are there things you can do to encourage housing: One is, don’t try to stop the foreclosure process. Let it run its course and hit bottom. Allow investors to buy homes, put renters in them, fix the homes up and let it turn around and come back. The Obama administration has slow-walked the foreclosure process… that has long existed and as a result we still have the foreclosure overhang .” In Florida, Romney doubled down saying that banks are feeling the same things as homeowners on the verge of losing their homes. However, with the banks frequent utilization of robo-signed, mass mailings of foreclosure documents, one wonders where Romney encountered this sensitive banker? Local North Las Vegas economist John Restrepo said he believes: “Philosophically, Mitt Romney’s laissez-faire approach is wrong. ” Romney’s abject faith in free market mechanisms does not allow for a governmental role even in crisis situations. A wait-and-see, let-the-free-market-take-its-course attitude is his only response. One wonders what would have become of an executive at Bain with such a passive approach. Likewise, Romney thinks it was wrong-headed of the Bush administration and, in turn, the Obama administration to bail out General Motors and Chrysler. He suggested a “managed bankruptcy” was the correct course to follow. He penned a now infamous op-ed article in the New York Times in November of 2008 saying: “If General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed… Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course, the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check .” Bush officials scoffed at Romney’s judgement. A point man for the Bush administration firmly stated that auto manufacturers would have been liquidated if allowed to declare bankruptcy in December of 2008 without the infusion of government funds because private capital markets were completely dried up at that time. “In the last week of December, GM and Chrysler told us they would file under Chapter 11 in early January if they did not get loans from the Troubled Asset Relief Program. They also told us, as did countless outside experts that they were not ready for such a filing, and that Chapter 11 would lead to near-immediate liquidation. We estimated that 1.1 million jobs would be lost if this happened,” wrote Keith Hennessey, the former director of the National Economic Council in the Bush White House on June 7th, 2009. True to his Wall Street roots, Romney was strangely sanguine about TARP. “TARP got paid back and it kept the financial system from collapsing!” Romney concluded: “Well, it was the right thing to do!” So Romney is entirely at ease with bailing out his pals on Wall Street and the bailout he engineered of the winter Olympics, but does not see a governmental role in housing markets or to keep auto manufacturers from perishing. His views are characteristically inconsistent. A vote for Mitt is a vote to let the free market take its slow, painful course. He is too wedded to this ideology to be effective at leveraging his prior business experience into effective economic policies. I mean, Herbert Hoover supported letting the economy take its course during the Great Depression and the result was 25% unemployment. The record profits earned at GM this quarter are testament to the success of the auto bailout, while Romney’s admonition to former homeowners to “let them rent” sounds vaguely like the utterance of Marie Antoinette when saying “let them eat cake.” Finally, if we want to worship at the altar of free market determinism, we may as well elect its high priestess Ayn Rand to the Oval Office, that is, of course, if she were still alive and a natural born U.S. citizen.

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Sen. Ron Wyden: Trade Rules Matter

February 28, 2012

Right now, the Obama administration and the International Trade Commission (ITC) are in the process of investigating complaints alleging that China is violating global trading rules to give their domestic solar-and wind-energy industries an advantage on the world market. The contention is that the Chinese government — recognizing the growing global demand for renewable energy products — has been giving its solar and wind energy producers enough money to price Chinese solar panels and wind turbines less than the rest of the world’s solar panels and wind turbines. Their goal is to get the world’s customers to stop buying the rest of the world’s products and start buying from the Chinese. The Chinese Government has made no secret of its desire to become the world’s leading producer of environmental goods and has even issued a series of economic plans laying out its strategy to “speed up the development and deployment of hydropower, wind power, solar energy and biomass energy,” directing local authorities to “allocate the necessary funds to support renewable energy development.” By all accounts, the Chinese Government’s strategy is working. Today, my office is issuing a report showing that in just the last five years, China rose from playing a minor role in the global market for environmental goods to become the dominant actor in the world’s biggest and fastest growing markets. Among other things, the report lays to rest arguments that the U.S. solar industry isn’t losing out to China, showing that in just 2011, the U.S. went from a $2 billion trade surplus in solar energy products to a $1.5 billion deficit. Of course, some will undoubtedly say: “So what?” They’ll argue that the Chinese Government can do what it wants, that we shouldn’t start a trade war with China and that cheap solar panels are a good thing. And others will say this is just another example of why free trade isn’t good for Americans. Let me respond: 1. So what if China is helping its domestic industries charge less for solar panels and other environmental goods? Can’t the U.S. do the same? If China is helping its domestic industries charge an artificially low price for solar panels and other environmental goods, then China is violating international trade rules that it agreed to when it became a member of the World Trade Organization. The global rules based trading system — established after World War II and the Great Depression — was designed to prevent trade wars by creating clear, enforceable standards for all of the world’s participants. Its rules ensure that competition is based, not on the amount of assistance a government provides its industries, but on each industry’s ability to innovate quality products and produce them efficiently. If China — the world’s second largest economy — is violating trade rules to help its industries undercut the price of solar panels and other environmental goods, it changes the competition from a race to produce better products more efficiently to a competition to cheat better. Meanwhile, the global trading system breaks down and countries that play by the rules — like the U.S — suffer. 2. But wouldn’t enforcing trade laws with China start a trade war? Trade wars aren’t started by countries appealing to respected, independent trade authorities. Rather, trade wars begin when one country decides to violate international trade rules to undercut another country’s industries. In trade — as in football or any other rules-based competition — we hold the rule breaker accountable, not the coach who asks the referee for a review. If the U.S. Department of Commerce finds that China isn’t breaking the rules, then no action will be taken. But if China is breaking trade rules to give its industries an unfair advantage, it’s important that trade rules be enforced and tariffs be applied to negate that unfair advantage. Again, doing otherwise would undermine the integrity of the rules-based trading system. 3. But won’t fewer people install solar panels if we raise the cost of Chinese solar panels? This is a short-sighted argument. Yes, while U.S. manufacturers of solar panels are closing plants and laying off workers, U.S. solar panel installers are doing well by using the low-cost Chinese solar panels. However, if China successfully puts the rest of the world’s solar manufacturers out of business, the Chinese government will stop subsidizing the price of solar panels and prices will go up. Moreover, if China successfully puts the rest of the world’s solar industries out of business, the race to innovate better, more efficient and more affordable renewable energy technologies comes to a halt. 4. Isn’t this just another example of why trade is bad for Americans? No. This is an example of why unfair trade is bad for Americans. President Obama said it best during his state of the Union Address this year when he declared: “I will go anywhere in the world to open new markets for American products. And I will not stand by when our competitors don’t play by the rules.” More than 90 percent of the world’s customers live outside the United States. Ensuring that U.S. companies have a level playing field to compete for those customers is probably the single best way to grow U.S. businesses and create more good-paying U.S. jobs. But free trade does not mean trade free from rules, and failing to enforce trade rules not only fails to ensure that level playing field, it leaves U.S. industries at the mercy of countries that break the rules. President Obama was right to make enforcement of those trade rules a priority and his creation, today, of a Trade Enforcement Unit is a massive step in the right direction. But as my office’s report shows, we need to act quickly because it doesn’t take long to lose to China. Wyden Staff Report: Losing the Environmental Goods Economy to China

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Corporate Personhood Case Forces Justices To Hack New Path

February 28, 2012

WASHINGTON — On Tuesday morning, the Supreme Court will hear oral argument on whether corporations, like real people, can be held liable in American courts for international human rights violations. The issue has divided four appeals courts over the past year and a half, as Democrat-appointed judges have uniformly voted for corporate liability while all but one Republican-appointed judge has come down for corporate immunity. If that pattern holds in the Supreme Court, then the five justices appointed by Republican presidents will surely be hit with more accusations of pro-business bias: Having all voted in Citizens United v. Federal Election Commission to extend to corporations the First Amendment right of actual people to independently spend unlimited sums in this country’s elections, they will in the current case have refused to hold corporations responsible, as real people are, for their roles in atrocities abroad. That kind of application of corporate personhood would be enough to make a casual observer’s head explode. Legally, however, Tuesday’s case, Kiobel v. Royal Dutch Petroleum , is totally unrelated to the Citizens United decision. What the Court decides, at least in theory, should have everything to do with how the justices approach international law. In Kiobel, about a dozen Nigerians contend that Shell Oil’s parent company aided and abetted their government in its torture and extrajudicial killing of environmental and human rights protesters resisting Shell’s operations in Nigeria in the 1990s. The plaintiffs brought their suit under a law, commonly called the Alien Tort Statute , passed by the first Congress in 1789 to allow foreign nationals to bring civil suits in federal courts “for a tort only, committed in violation of the law of nations or a treaty of the United States.” The Alien Tort Statute lay virtually dormant from its founding-era passage until the 1970s, when human rights groups representing victims of oppressive regimes began taking advantage of the law’s broad language to haul the alleged foreign tormentors before U.S. judges. The Supreme Court has weighed in only once on the meaning of the law, stepping into the fray in 2004 to declare that only international law offenses that are as “specific, universal and obligatory” as those that existed when the statute was written could give rise to a lawsuit under the statute. Torture and genocide triggered the Alien Tort Statute, the Court suggested; arbitrary arrest and detention did not. The justices left unsettled what types of defendants — individual, corporate, state — can be sued. The text of the law is silent on that issue. In deciding Kiobel in 2010, the majority in the U.S. Court of Appeals for the 2nd Circuit divined its answer by asking whether any international courts have held corporations liable for human rights violations. Finding no such examples, the majority threw out the case. Three other appeals courts have since disagreed with the 2nd Circuit in methodology and result when hearing cases under the Alien Tort Statute against Firestone , Exxon and Rio Tinto . These courts found that the question of corporate liability is up to individual countries to determine and that the U.S. domestic law has long held corporations to account for the wrongs they commit. The United States, for its part, submitted a brief to the Supreme Court supporting the Nigerian plaintiffs. “The text and history of the ATS provide no basis for distinguishing between natural and juridical persons,” the brief says, referring to the distinction between human beings and “persons” created under law. “Corporations have been subject to suit for centuries, and the concept of corporate liability is a well-settled part of our ‘legal culture.’” The real trouble for the justices hearing Kiobel is that nothing is “well-settled” under the Alien Tort Statute. The methods used by the lower courts to come to their opposite conclusions were not much more than newly created paths custom-beaten to lead to their preferred result. Now there is a veritable parade of ideologically driven parties , from multinational corporations and human rights organizations to conservative and liberal legal academics, who have submitted friend-of-the-court briefs hoping to lure the justices toward their favored destinations. In an ironic twist, the conservative justices, who loudly resist being influenced by foreign legal trends, can look to European interpretations of U.S. law as the best cover for now discovering corporate immunity from international human rights allegations. In briefs filed in support of Royal Dutch Petroleum, the United Kingdom and Netherlands governments wrote that they have long opposed “overly broad assertions of extraterritorial civil jurisdiction” based on foreigners’ claims against foreign defendants for alleged activities in foreign countries. The German government took a similar stance. These positions arose out of all three nations’ express preference for multilateral agreements to resolve such problems, rather than unilateral action by any one country’s courts. Bluntly relying on these kinds of policy preferences may be a better path for the Supreme Court than pretending to fashion a decision out of nonexistent precedents and ideologically rigged legal arguments. Doing so will not eliminate the accusations of pro-business bias, but it will deter the accusations of disingenuousness that still plague the Citizens United decision. Tuesday’s oral argument should offer some hints at which path the justices will likely choose.

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Deborah Howlett: A Closer Look at Gov. Christie’s Unrealistic Budget Plan for New Jersey

February 27, 2012

About that 10 percent income tax cut that Gov. Christie promised us last week … don’t start planning that dream vacation quite yet. Despite polls that show New Jersey voters expecting a median savings of nearly $750 from the cut, the true savings are much, much less. For someone earning $60,000 a year, which is pretty close to half of all workers, the cut will amount to income tax savings of less than $35 in 2013. It would double to $70 in 2014, before finally hitting the full $105 — or about $2 a week — in 2015. What’s more, there will actually be no income tax cut this year. Instead, taxpayers will have to wait until they file their 2015 taxes in 2016 to get all of what the governor is promising – and even that won’t amount to much for most of us. The income tax proposal put forth by the governor doesn’t become “operational” until January 1, 2013, according to a footnote in the Department of Treasury’s Budget in Brief , a 150-page document that adds detail to the budget proposal outlined in Tuesday’s speech. So while the governor unabashedly refers to his plan as a “10-percent income tax cut,” it’s really more like a “3.3 percent, and you-gotta-wait-til-next-year-to-get-it tax cut.” And here’s the kicker: over three years, this cumulative pittance in individual tax savings will end up costing the state $1.7 billion in revenues. Quite simply, in this economy and given the devastation caused to services in the past two budgets, the state can’t afford to give up those revenues. The governor’s solution to that issue is to create the illusion of more money. His economic advisers are forecasting 7.3 percent growth in the state’s tax collections next year — a $2.2 billion windfall that the state hasn’t seen since pre-recession days, when the economic bubble was being stretched to bursting. “Revenue growth will primarily result from the continued improvement in the state’s economy,” according to the Budget in Brief. The governor’s budget numbers are incredibly optimistic, even though New Jersey lags the rest of the nation in economic recovery with a 9 percent unemployment rate, and even though the state is expecting revenues for this year to fall short of projections by 3.2 percent, or $325 million. In the end, this budget is a dog. The revenue numbers are suspect. The promise of a 10 percent tax cut is false. And the political narrative of a “New Jersey comeback” is just so much fiction. It is now incumbent on the legislature to draft a budget that includes realistic revenue numbers that will adequately fund some of the good priorities the governor did lay out in his speech – increased school aid, restoration of the state Earned Income Tax Credit and expansion of drug courts. That budget must include increasing the top tax rate and demanding that the wealthiest one percent share in the burden that the other 99 percent have endured the past two budgets.

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Lucy Lawless Arrested In Oil-Drilling Ship Protest

February 27, 2012

WELLINGTON, New Zealand — Police on Monday arrested actress Lucy Lawless and five Greenpeace environmental activists after the group spent four days protesting aboard an oil-drilling ship docked in New Zealand. Police removed the group from their perch atop a 174-foot (53-meter) drilling tower on the Noble Discoverer in Port Taranaki. Lawless and six activists climbed the tower early Friday in an attempt to raise awareness about oil drilling in the Arctic and prevent the ship from leaving. One of the activists left the tower Saturday and was initially charged with unlawfully boarding a ship. All seven activists, including Lawless, have now been charged with burglary, a more serious charge. All have been released and are due to appear in a New Zealand court Thursday. Chartered by oil company Shell, the ship had been due to leave over the weekend for the Arctic to drill five exploratory wells. Lawless, 43, a native New Zealander, is best known for her title role in the TV series “Xena: Warrior Princess,” and more recently for starring in the Starz cable television series “Spartacus.” Lawless spoke to The Associated Press from atop the tower Friday, where she said wind gusts were making it difficult for the group to stay put. She said she felt compelled to take a stand against oil-drilling in the Arctic and against global warming. “I’ve got three kids. My sole biological reason for being on this planet is to ensure that they can flourish, and they can’t do that in a filthy, degraded environment,” she said. “We need to stand up while we still can.” In a series of tweets over the weekend, Lawless described some of the challenges of staying on the tower. “I found last night pretty darn scary,” she wrote. “Not for sissies.” In a release, Rob Jager, Chairman of Shell New Zealand, said the protest had put people in danger and he was pleased it was over. He said he remained disappointed that Greenpeace hadn’t taken up the company’s offer to engage in a “productive conversation.” Shell spokeswoman Shona Geary said she thought the ship would leave port within the next few days. Bunny McDiarmid, the chief executive of Greenpeace New Zealand, said she thought the protest had gone “brilliantly” and that more than 100,000 people had sent messages to Shell to oppose the company’s Arctic plans.

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Romney: Controversial Plan Is An ‘Excellent Idea’

February 25, 2012

CHEYENNE, Wyo. — Conservatives who say welfare recipients should have to pass a drug test to receive government assistance have momentum on their side. The issue has come up in the Republican presidential campaign, with front-runner Mitt Romney saying it’s an “excellent idea.” Nearly two dozen states are considering plans this session that would make drug testing mandatory for welfare recipients, according to the National Conference of State Legislatures. And Wyoming lawmakers advanced such a proposal this week. Driving the measures is a perception that people on public assistance are misusing the funds and that cutting off their benefits would save money for tight state budgets – even as statistics have largely proved both notions untrue. “The idea, from Joe Taxpayer is, `I don’t mind helping you out, but you need to show that you’re looking for work, or better yet that you’re employed, and that you’re drug and alcohol free,’” said Wyoming Republican House Speaker Ed Buchanan on Friday. Supporters are pushing the measures despite warnings from opponents that courts have struck down similar programs, ruling that the plans amount to an unconstitutional search of people who have done nothing more than seek help. “This legislation assumes suspicion on this group of people. It assumes that they’re drug abusers,” said Wyoming Democratic Rep. Patrick Goggles during a heated debate on the measure late Thursday. The proposals aren’t new, according to the NCSL. About three dozen states have taken up such measures over the years. But as lawmakers seek new ways to fight off the effect of the recession on state budgets and Republican politics dominate the national discussion as the party seeks a presidential nominee, the idea has sparked political debates across the nation. This year conservative lawmakers in 23 states from Wyoming to Mississippi – where lawmakers want random screening to include nicotine tests – are moving forward with proposals of their own. Romney, in an interview this month in Georgia, supported the idea. “People who are receiving welfare benefits, government benefits, we should make sure they’re not using those benefits to pay for drugs,” Romney said to WXIA-TV in Atlanta. Newt Gingrich addressed the topic with Yahoo News in November, saying he considered testing as a way to curb drug use and lower related costs to public programs. “It could be through testing before you get any kind of federal aid – unemployment compensation, food stamps, you name it,” he said. In Idaho, budget analysts last year concluded that such a program would cost more money than it would save, prompting lawmakers to ditch the idea. Also, recent federal statistics indicate that welfare recipients are no more likely to abuse drugs than the general population. Data show that about 8 percent of the population uses drugs. And before a random drug testing program in Michigan was put on hold by a court challenge, about 8 percent of its public assistance applicants tested positive. In years past such legal challenges had a chilling effect on state legislatures, but that seems to have thawed. Michigan’s program was halted after five weeks in 1999, eventually ending with an appeals court ruling that it was unconstitutional. For more than a decade, no other state moved to implement such a law. “The biggest piece that has held up action now and in the past are the constitutional questions,” said Rochelle Finzel, the Children and Families Program manager at the NCSL. But Florida last year passed legislation that was eventually halted by a federal court ruling that cited constitutional concerns. Finzel said some states are trying to avoid court challenges by requiring drug tests only in cases where there’s reasonable cause to believe there’s substance abuse, instead of requiring everyone to take a test. Missouri took that approach in passing a law last year that hasn’t gotten tied up in court, but which has touched off an attempt at political one-upsmanship from a House Republican who introduced a bill this month that would require his colleagues at the state Capitol to take and pass the same test. In Wyoming, the Republican-controlled state House handily approved a welfare drug testing bill after a fiery debate Thursday. The plan sailed through a second vote Friday and needs only one more reading before heading to the solidly-conservative state Senate, where a key leader supports the concept. In Colorado, a testing plan is expected to fail because Democrats who oppose it control the state Senate – but Republicans have succeeded in starting a conversation on the issue. “If you can afford to buy drugs, and use drugs, you don’t need” welfare, said Republican Rep. Jerry Sonnenberg, who is sponsoring a bill this session. Sonnenberg said his bill also seeks to help drug users get clean because applicants must complete rehab to qualify for government aid again. Sonnenberg’s critics said the idea feeds off the negative – and unsubstantiated – stereotype that low-income communities are more likely to use drugs. Sonnenberg said he’s not picking on any group, and pointed out that the legislation would likely have a narrow effect. “The five percent, or the four percent, or whatever that percentage is that is on drugs, will have a choice to make. They will either do what they can to get clean, or not have their (Temporary Assistance for Needy Families) funds,” he said. In Wyoming, Republican Rep. Frank Peasley, a co-sponsor of the testing bill, said the measure is an effort to rein in a welfare system run amok. “We are going broke,” he said, But Linda Burt, director of the ACLU in Wyoming, said this week it’s possible her group would challenge the testing program if it’s adopted in Wyoming. “We challenged it in Michigan. We challenged it in Florida. Both of those cases found that singling out this particular group of people for drug testing was unconstitutional with absolutely no cause.” ___ Associated Press writer Ivan Moreno contributed reporting from Denver.

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Wisconsin GOP Rolls Back Equal Pay Law

February 24, 2012

WASHINGTON — In 2009, the Wisconsin legislature made it easier for victims of wage discrimination to have their day in court. That law is now on the verge of repeal. The Equal Pay Enforcement Act was meant to deter employers from discriminating by giving workers more avenues to press charges. Among other provisions, it allows individuals to plead their cases in the less costly, more accessible state circuit court system, rather than just in federal court. In November, the state Senate approved ( SB 202 ) rolling back this provision. On Wednesday, the Assembly did the same. Both were party-line votes. The legislation is now in the hands of Gov. Scott Walker (R). His office did not return a request for comment on whether the governor would sign it. “It really takes away the teeth and the enforcement aspect of equal pay in Wisconsin,” said Sara Finger, director of the Wisconsin Alliance for Women’s Health (WAWH). Women earn 77 cents for every dollar that men make. In Wisconsin, it’s 75 cents , according to WAWH, which also estimates that families in the state “lose more than $4,000 per year due to unequal pay.” State Sen. Dave Hansen (D) was one of the authors of the 2009 law, and said he had no doubt that Walker would sign the repeal of his legislation. “The whole [Republican] agenda in this state is about attacks on workers,” he said. “It’s an ongoing assault on workers’ rights. But now it’s also taking the assault to workers in the private sector. It’s not just an assault on women. Older workers can be taken advantage of, and they’re hurting in this bad economy. It didn’t hurt business at all.” State Sen. Glenn Grothman (R), who sponsored SB 202, also did not return a request for an interview. Business associations lobbied in support of SB 202 , according to the state’s Government Accountability Board. Groups like Wisconsin Manufacturers and Commerce, and the Wisconsin Restaurant Association all backed a repeal. Rep. Tammy Baldwin (D-Wis.), who is now running for the state’s open U.S. Senate seat, supported the federal Lilly Ledbetter Fair Pay Act and has worked on equal pay issues since graduating from college, including in the administration of former Wisconsin Gov. Anthony Earl. “He made fighting our pay inequities based on gender a priority issue,” she said. “I was working on that agenda. I can tell you, even back then, I was being fiercely opposed by the Wisconsin Manufacturers and Commerce association, which didn’t want us advocating for fair wages.” “It is much easier for somebody who’s been unfairly compensated to gain access to a state court than a federal court,” she said of the Wisconsin law. “It is something that if you want these laws to have meaning, they have to be enforceable. So I’m very disappointed with the Wisconsin state legislature. Yet another big step back for women. This is becoming a real pattern.” Assembly Speaker Jeff Fitzgerald, former Gov. Tommy Thompson and former Rep. Mark Neumann are competing for the Republican nomination to challenge Baldwin in the general election for the U.S. Senate seat. Fitzgerald supported SB 202 and, as speaker, brought it to the Assembly floor for a vote. His campaign declined to further comment on the issue. Neither Thompson nor Neumann returned a request for comment. “A lot of people weren’t even aware this was up for a debate,” said Finger. “Here we have this issue that’s going to the governor’s desk with very little time or understanding for the public to weigh in and express their disappointment. We’re now one step away from having equal pay enforcement repealed in the state of Wisconsin.”

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Are Officials Ignoring Tainted PA Water?

February 24, 2012

EVANS CITY, Pa. (AP) — A western Pennsylvania woman says state environmental officials refused to do follow-up tests after their lab reported her drinking water contained chemicals that could be from nearby gas drilling. At least 10 households in the rural Woodlands community, about 30 miles north of Pittsburgh, have complained that recent drilling impacted their water in different ways. The Department of Environmental Protection first suggested that Janet McIntyre’s well water contained low levels of only one chemical, toluene. But a review of the DEP tests by The Associated Press found four other volatile organic compounds in her water that can be associated with gas drilling. DEP spokesman Kevin Sunday said on Friday that the low chemical concentrations were not a health risk, and suggested that the contamination may have come from the agency’s laboratory itself or from abandoned vehicles on or near the property. But Sunday didn’t answer why DEP failed to do follow-up tests if the DEP suspected that its own lab was contaminated. One public health expert said the lack of follow-up tests by DEP doesn’t make sense. “DEP cannot just simply walk away,” said Dr. Bernard Goldstein, professor emeritus at the University of Pittsburgh School of Public Health. McIntyre and other residents say the water problems started about a year ago, after Rex Energy Corp. of State College, Pa., drilled two wells. But a map Rex provided also shows gas wells from other companies in the area. Residents in the community have been complaining for nearly a year, but DEP never revealed the possible presence of chemicals to the general public. Rex has been supplying drinking water to many households, but has sent letters notifying them it will no longer deliver drinking water after Feb. 29. In a statement, Rex said that the wells of residents who have complained are from 2,100 to 4,600 feet from its drilling locations. The company noted that many other homeowners in the area haven’t raised complaints or concerns. Rex also said there are old oil wells in the region that could impact some ground water, and that there were “no notable differences in water chemistry between pre- and post-drill water quality tests of the water wells in question.” McIntyre’s water showed detectable levels of t-Butyl alcohol, acetone, chloromethane, toluene and 1, 3, 5-trimethylbenzene. The chemicals can be used in the high-pressure hydraulic fracturing process that has led to a production boom of deep shale gas in Pennsylvania. But some are also commonly used in households and other industry, such as toluene, a paint thinner. Goldstein said the multi-chemical mix is what is so unusual, since it suggests either multiple sources of contamination, or an industry that uses many different chemicals. “Where would you get such a strange mixture?” Goldstein asked. “Is this coming from drilling?” He added that the low concentrations shown in the test may not be a health threat, and may not be connected to gas drilling. But if DEP’s own laboratory was even a potential source of the chemicals, the agency had the obligation to follow up. “You’ve got to pursue the finding,” Goldstein said, since if the lab was at fault the variety of chemicals that showed up “makes no sense at all, except a really sloppy lab.” Sunday said an independent peer review of the DEP laboratory found it to be “a well-managed, efficient and highly functional laboratory” that is “driven by a culture of customer service.” McIntyre told the AP that she repeatedly asked a DEP field worker for follow-ups after two separate tests last summer showed the chemicals, as well as elevated levels of some natural underground compounds such as barium. “He said no,” she said, leaving her feeling that she had no one to turn to for an objective public health opinion. She also said the chemicals didn’t show up on pre-drill water tests. As drillers have poured into Pennsylvania to tap its vast Marcellus Shale gas reserves, residents and environmentalists have raised concerns over the impact or potential impact to water supplies. Water contamination in Dimock, in northeast Pennsylvania, has riled some homeowners for months. State regulators determined that Houston, Texas-based Cabot Oil & Gas Co. drilled faulty gas wells that allowed methane to escape into Dimock’s aquifer. The company paid heavy fines but denied responsibility; it has been banned from drilling in a 9-square-mile area of Dimock since April 2010. Another Woodlands resident who complained about dramatic changes in her water over the last year said DEP staff suggested the bad smell was simply from garden slugs in her well, which is 300 feet deep. “They just insult your intelligence. I don’t trust the DEP,” said Kim McEvoy, who lives about a mile from McIntyre. McEvoy said she wants the U.S. Environmental Protection Agency to investigate the community, and that she’s come to that point because state environmental officials haven’t answered her questions. “Something has happened here,” McEvoy said.

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CFPB Crowdsources Nominations For Key Advisory Posts

February 23, 2012

WASHINGTON — In a significant break with traditional federal policy, the new Consumer Financial Protection Bureau is appealing directly to the public for nominees for key advisory positions — crowdsourcing the appointment process to help ensure that the agency is attuned to consumer abuses and committed to curbing them. The CFPB is reaching out for nominees to its Consumer Advisory Board, a group of experts who guide the agency’s attention toward problems in consumer finance as the issues develop in communities. The crowdsourcing move is required by the Dodd-Frank Act, the Wall Street reform legislation that President Barack Obama signed into law in 2010. The strategy accompanies a broader push from CFPB founder Elizabeth Warren to utilize both the public and new technology to ensure that the new agency remains accountable to citizens. Warren is now a Democratic candidate for Senate in Massachusetts, with former Ohio Attorney General Richard Cordray serving as CFPB Director. At other federal bank regulators, such boards have long been limited by bureaucratic, political and industry pressures. The Federal Reserve’s consumer board has frequently been stacked with corporate executives ideologically opposed to the very idea of consumer protection regulation, and even bankers — the result of a nomination process that is largely a game for industry insiders, though community activists and academics have also been nominated. In 2006, the Fed’s consumer advisory council included officials from JPMorgan Chase, Wachovia, Countrywide, and Option One — companies that were all heavily involved in the sale of subprime mortgages. Seven other banking executives, a MasterCard lawyer, a Wal-Mart vice president and the marketing chief for consumer credit score company Equifax were also on the board, alongside community development advocates and consumer attorneys. When members of the board did in fact suggest during the heyday of subprime mortgages that the central bank take action against abuses, the Fed simply ignored the advice . But the Fed and other regulators had dueling responsibilities. They were tasked both with maintaining banks “safety and soundness” and with protecting consumers from fraud and deception. Safety and soundness regulation focused on preventing banks from failing, and in practice, regulators typically signed off on just about any practice that resulted in short-term profits for banks, under the hypothesis that more money today meant a lower likelihood of failure tomorrow. That hypothesis was proven wrong when scores of banks either failed or sought major bailouts as a result of their subprime excesses. In the process, hordes of American homeowners were ripped off. But the CFPB doesn’t face that dual mandate — its only responsibility is protecting consumers from bank malfeasance. “The Consumer Advisory Board will be a key resource in our mission to protect the American consumer,” CFPB Director Richard Cordray said in a written statement Thursday. “This Board will provide valuable input from a group of true experts with diverse backgrounds but a shared goal. I am eager to see it established.” The actual members of the Consumer Advisory Board will ultimately be chosen from among the nominees by the CFPB. The CFPB has made a habit of appealing to the public for information on consumer finance trends. It has a user-friendly consumer complaint service, and a “Tell Your Story” section where wronged consumers can warn each other about misleading banking practices. WATCH CFPB Director Richard Cordray ask for nominations in the video above.

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Sen. Chuck Schumer Invites Arizona Gov. Jan Brewer To Testify

February 23, 2012

WASHINGTON — The day before the Supreme Court hears arguments on Arizona’s harsh immigration law this spring, Sen. Chuck Schumer (D-N.Y.) wants Arizona Gov. Jan Brewer to come to Washington to explain why the law is necessary and constitutional. The state law, SB 1070 , has been at least partially blocked by lower federal courts, which found it trespasses on the authority of the federal government. Brewer (R) and her allies have been highly critical of President Barack Obama for even challenging Arizona’s efforts. The high court is set to hear arguments in Arizona v. United States on April 25. If the law survives, it would require immigrants in Arizona to present their papers to law enforcement officers who stop them for any reason — which critics slam as thinly disguised racial profiling. Writing to Brewer on Thursday , Schumer, who sponsored a law in 2010 to dramatically strengthen border patrols, said she should come to Washington a day early to enlighten federal lawmakers on her concerns. “As you frequently ask the President to visit the southern border to discuss border security, we expect that you will be eager to engage in a productive dialogue with the Congressional Committee responsible for acting upon any border security recommendations you provide,” wrote Schumer , who is calling the hearing as chairman of the Senate Judiciary Committee’s immigration subcommittee. In his message to the governor, the New Yorker argued that federal efforts are already having a powerful effect, noting that the Emergency Border Security Supplemental Appropriations Act directed $600 million to boost electronic surveillance and other law enforcement all along the Southwestern border. Schumer wrote that more than 1,000 new agents have been added, boosting the border force to 21,300, up from 10,000 in 2004, while the flow of undocumented immigrants has slowed dramatically, with nationwide apprehensions down from nearly 724,000 in 2008 to about 340,000 last year. At the same time, seizures of cash, drugs and guns along the Southwestern border have skyrocketed, with 74 percent more cash, 41 percent more drugs and 159 percent more weapons grabbed by law enforcers since the border law was passed, “Given the new level of security at our Southern Border as result of the August 2010 law, it would be extremely beneficial for the Committee to hear from you with regard to: 1) why you signed SB 1070 in 2010; 2) whether you still believe SB 1070 is necessary in light of the substantially increased security situation along our southern border; and 3) whether you favor SB 1070 being made a permanent law irrespective of whether conditions further improve along the southern border,” Schumer wrote. “We would also appreciate any other insight you can provide regarding the legality and prudence of enacting state immigration laws,” he wrote. A spokesman for Brewer did not immediately respond to a request for comment.

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Ken Blackwell: Auto Industry Turn-Around Is a Two-Party Success

February 23, 2012

As the 2012 election season turns full throttle, the president and members of his administration are pointing to their only economic success story — the government’s investment in an ailing, failing auto industry and the subsequent revival of the nation’s manufacturing base. Vice President Biden recently stated on a campaign stop that “Osama bin Laden is dead and GM is alive.” But let’s put this presidential campaign victory tour into perspective. The president and even the media fail to acknowledge a critical fact, that the initial decision to help the automobile industry began with the Bush administration. This recovery plan was set in motion under a Republican administration, approved with votes in Congress from both parties, and was then continued by President Obama. It’s odd how this president and the press are so anxious and willing to blame former President George W. Bush for a failing economy and soaring national debt, yet the president’s primary example of a GM turnaround began under the Bush watch. Apparently the president wants it both ways. In reality, this auto industry recovery is an example of both parties working together to help save a national treasure in our auto industry and preserve jobs in industries that depend on auto manufacturing. I wrote some time ago that conservatives, myself among them, were certainly justified in opposing government involvement and partial ownership of a private company such as General Motors. Generally, when the government gets its fingers into private industry, problems only get worse. But since the decision was made to invest tax dollars in GM and Chrysler, let’s look under the hood of GM to examine how and why this company is making a comeback. When you check the facts, you quickly understand how GM’s accomplishments have nothing to do with this president and everything to do with restoring sound business practices that are rooted in conservative free-market principles — something you’ll never hear Obama, Biden or the media talk about. The old days of GM building poor-quality vehicles that no one wanted to buy are over. The company finished 2011 by increasing U.S. sales by 14 percent versus 11 percent for the entire auto industry. GM’s market share increased to 19 percent, the first share increase for the company since 2002. All four GM brands increased their total sales and posted double-digit gains in retail sales. Since the bailout, GM has racked up a remarkable seven consecutive quarters of profitability. How? Not due to any help from the Obama administration. New management at GM has made it clear that politicians will stay out of the car business. GM renegotiated its deal with labor to bring employee salaries in line with its competitors. This new labor agreement with the United Auto Workers union maintains a low, break-even level and gives employees a direct stake in company’s performance. If the company doesn’t do well, people don’t make as much! Gone are automatic, built-in incentives for employees or overly generous retirement packages. The company has been restructured to carry less debt on its balance sheet — $4.2 billion in automotive debt at close of Q3 2011, versus $45.8 billion for the old GM. There are many new managers in top positions and a new board of directors is in place. Seven of eleven board members are new to GM. But at the end of the day, GM’s resurgence is based on a fundamental decision to get back to work. The company is simply building better cars, trucks and SUVs, and no amount of bailout money would have helped if the people at GM, from the CEO to the line worker, weren’t working harder to help return this company to profitability. Before Election Day, I am sure we will have to endure seeing more photos and video of the president sitting in GM and Chrysler vehicles and listen to him tell us how he is the savior of the auto industry. Truth be told, it’s the American worker that is the real hero in this story, along with a company that is rededicating itself to a free-market system. # # # Blackwell formerly served as mayor of Cincinnati, Secretary of State of Ohio, as an ambassador to the U.N. Human Rights Commission and is presently a senior fellow for family empowerment at the Family Research Council.

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WATCH: Oil Man’s Son Fights Pipeline And ‘Decline Of A Civilization’

February 23, 2012

Lee Brain may claim to be “no one in particular,” but after a speech delivered last weekend to a pipeline review panel, many identify him as the oil man’s son who “does not see eye to eye” with his father. Brain delivered his stirring speech in Prince Rupert on February 18 to Canada’s Northern Gateway Pipeline Joint Review Panel. As the Vancouver Observer highlighted , it was “the most moving moment” of the hearings. The proposal to run a pipeline from Bruderheim, Alberta to Kitimat, British Columbia has been fought by many environmental and aboriginal groups. According to their website , the government-mandated Joint Review Panel is working to “assess the environmental effects of the proposed project and review the application under both the Canadian Environmental Assessment Act and the National Energy Board Act.” Growing up in Prince Rupert as the son of an EPCM contractor, 26-year-old Brain is an unlikely pipeline opponent. A few years ago, his father sent him off to experience the oil industry first-hand. His month-long experience on one of the world’s largest oil refineries in rural India gave him serious doubts about the future of the oil industry. “It’s time for us to dismantle the institutions that are beginning to imprison us,” he said. Brain told the panel he witnessed villages that had slowly become impoverished — he believes this occurred after a refinery project arrived carrying a slew of troubles, from a pipeline break to cheap labor issues. Brain said that his experiences left him believing that “those who work in industry can get excited about growth and yet subsequently, can turn their eyes off towards any adverse impacts they are creating as a result.” Looking to the future, he suggested moving away from fossil fuels, and focusing on a new energy economy. Although Brain was interrupted for presenting an argument over oral evidence of his personal experience, his speech was met with loud applause and a standing ovation, according to the YouTube description . Brain concluded his speech by asking whether people will choose to embrace a new way of life or “a predictable path that leads to the slow, inevitable decline of a civilization.” The Enbridge Northern Gateway Project Joint Review Panel describes the panel’s mission on its website, stating they are “an independent body, mandated by the Minister of the Environment and the National Energy Board. The Panel will assess the environmental effects of the proposed project and review the application under both the Canadian Environmental Assessment Act and the National Energy Board Act.” According to Reuters, many groups that oppose Keystone XL are also against Northern Gateway : They say the route of the pipeline is too dangerous, owing to seismic activity, frequent landslides and other natural hazards that could lead to oil spills. They also say the chemical makeup of the diluted bitumen that would flow through the pipeline is more corrosive than conventional oil, a contention that has not been proven by independent study. Enbridge claims their pipeline follows a safe route and uses new technologies which will cut down on rupture risks.

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West Virginia Mine Boss Gary May Charged in Fatal Explosion

February 23, 2012

Federal prosecutors in West Virginia filed criminal charges on Wednesday against a former senior supervisor of the Upper Big Branch coal mine, where an explosion killed 29 miners in April 2010. Gary May, 43, was charged with felony conspiracy for what prosecutors said was his role in thwarting federal inspectors in their efforts to enforce safety regulations at Upper Big Branch. The mine was owned by Massey Energy at the time of the explosion and purchased in June 2011 by Alpha Natural Resources. The charges were filed directly with the court, rather than with a grand jury, suggesting that May is cooperating with authorities. May, the highest-ranking mine official charged so far, faces up to five years in prison if found guilty. Prosecutors said the investigation is “absolutely” not over. May’s testimony could implicate high-ranking corporate executives at Massey Energy in safety violations and fraud, including Don. L. Blankenship, the company’s former CEO, said Mark D. Moreland, a West Virginia attorney who represents several families of miners who died at Upper Big Branch. “The way that Massey Energy managed its mines was very hands-on by corporate people,” said Moreland, who also served as a miners’ representative during the federal investigation into the explosion. “From that, you can extrapolate that corporate people knew what was going on and directed what was going on.” Three investigations reports into the Upper Big Branch disaster concluded that inadequate ventilation allowed highly explosive dust to build up in the mine, causing the explosion. A 972-page report by the Labor Department in December 2011 found more than 300 violations of federal mine safety law and concluded that “unlawful policies and practices” by Massey were the “root cause of the tragedy.” The charges against May are part of an increasingly aggressive push for accountability by federal prosecutors in the Upper Big Branch case. On Feb. 14, U.S. attorney Booth Goodwin urged a federal judge in Charleston to give Hughie Elbert Stover , the former mine security chief at Upper Big Branch, a 25-year maximum sentence for lying to investigators and attempting to destroy evidence in the federal investigation of the disaster. “A sentence consistent with the magnitude of the defendant’s conduct and its consequences will send a resounding message: Gambling with coal miners’ lives risks the most severe punishment available under the law,” Goodwin wrote in a motion filed with the court. “Tens of thousands of similar federal sentences are handed down every year,” he wrote. Federal sentencing guidelines recommend a sentence between 33 and 41 months, but a judge is not bound to follow those guidelines. The push for a heavy sentence for Stover is yet another signal of a far less tolerant attitude by federal officials toward mine safety violations, Moreland said. “I think it’s another indication that there’s a new sheriff in town,” he said. “I think Goodwin is trying to make it clear to the industry that he’s going to take these things very seriously.” Alpha Natural Resources released a statement on Wednesday noting that Gary May became an employee of a company subsidiary after its acquisition of Massey Energy in 2011, but had since been placed on administrative leave. “Although Alpha was not operator of the mine at the time of the accident, the company supports efforts that will lead to a full understanding of the circumstances that precipitated this tragic event,” the company said.

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Romney Saw Marriott Use Tax Shelters As Auditing Chairman

February 22, 2012

Mitt Romney has long had close ties to hotel operator Marriott International Inc. (MAR) The candidate for the Republican presidential nomination, whose full name is Willard Mitt Romney, was named after the chain’s founder, J. Willard Marriott, a friend of his father. He joined the company’s board in 1993, and has served on it for 11 of the past 19 years, including six as chairman of the audit committee.

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Richard (RJ) Eskow: Oil Slicks: Who Benefits From Gambling on Gas Prices?

February 22, 2012

Anybody who doesn’t believe that energy speculators can change election results might want to ask Gray Davis, the former Governor of California who was removed in a recall drive partly prompted by voter frustration over California’s ongoing energy crisis. Only afterwards did we learn that the crisis was caused by speculators who backed his opponents’ deregulatory agenda — and benefited from it. Coincidence? We report, you decide. And anyone who doesn’t believe that gas prices affect election results might want to ask former President Jimmy Carter. If the 1980 election hadn’t turned out the way it did we might be living in a very different world. Today gas prices continue to rise, despite the fact that demand for oil is lower than it’s been in the last fifteen years. Are speculators affecting our fate again? That’s the subject of heated technical debate, although I find the evidence very compelling. But here’s something to consider: The prime suspects for oil speculation — Goldman Sachs, the Koch Brothers, etc. — are the people who are fighting tooth and nail to make sure government never has the power to investigate their actions. Here’s the California scenario in a nutshell: Deregulation unleashes the dogs of speculation on energy markets, driving up prices and creating scarcity. A moderate Democrat loses office as a result, turning the reins of power over to a Republican who calls for … more deregulation. Could it happen again? Speculation Speculation People keep debating the question, just as they did in 2008: Are speculators affecting oil prices? Skeptics point to the crisis in Iran and recent signs of increased demand as real-world factors that could affect prices. But end-user demand remains low. I find the pro-speculation arguments compelling. But the professional approach to any financial question requires us to “put the ‘anal’ in ‘analyst,’” so the most professional thing to say is: We don’t know for sure. And we can’t know for sure until the government gets the authority and the resources to investigate fully. (More about that in a minute.) Here’s what we do know: Oil prices rose while demand fell. Futures and other financial instruments have allowed all sorts of people to bet on the oil market, along with other commodities markets, for more than twenty years. And whenever demand and prices don’t track together, something is happening that we can’t see. If prices are rising based on expectation that things will get better in the future, that suggests speculators are at work. And if they fall whenever there’s a sign of an upcoming economic storm, that also suggests that prices are being driven by intermediaries who are gambling on the future rather than suppliers responding to demand. Those intermediaries happen to be the same people who keep lobbying to make sure we don’t have the ability to find out what’s happening or the authority to stop it. The Skeptics Some of the people who reject the idea that speculators are at work are also defending a separate but related idea: That oil is a limited commodity and we’re overly dependent on it. That’s true, and some people are afraid that the “speculator” argument will be seen as a blank check to continue our over-reliance on oil. But two things can be true at the same time: Speculation may be affecting the price of a commodity that will nevertheless continue to grow in direct and indirect cost, meaning that we should therefore begin reducing our dependence on it. The Case Why is the case for oil speculation prices so compelling? Not only is there that mysterious divergence between demand and price, but there are also convincing analyses like the one Michael Masters did which linked the last price surge to $60 billion in speculator purchases. Twenty years ago, speculators purchased roughly 30 percent of the world’s future oil deliveries. As of 2011 that number has risen to 70 percent. They wouldn’t be doing it if there weren’t money to be made. It’s hard to believe that they would stake trillions of dollars merely on the wisdom of their educated guesses — especially if they had the opportunity to manipulate the results instead. You can count Goldman Sachs among the believers. Last year it issued a warning that speculation was getting out of hand and driving prices too high. Since Goldman was present at the creation of the speculation market, it has a lot of credibility on the topic. Nobody knows more about Frankenstein’s monster than Dr. Frankenstein himself. Speculation/Manipulation Speculation is one possible cause of rising prices. Another is outright price manipulation, as took place in California. If we have no clear proof that speculators are driving prices, that means we also lack proof of outright manipulation. How do we get proof? There are three possible scenarios: One is that speculators are innocent of any wrongdoing, and aren’t even hurting the economy. Another is that they’re acting legally, but destructively, which may spur calls for new legislation. And the third is that some of them are engaged in criminal behavior. The way to find out is through government investigation, and by strengthening the regulatory power of the appropriate agencies. But look who’s blocking those actions. Cui Bono? As the old prosecutors used to say, Cui Bono? Who benefits? The people who would have both the motive and the opportunity to manipulate markets are the same people who are blocking real investigations. Wall Street firms have been at the forefront of blocking even the mild financial reforms of Dodd/Frank — reforms which include increased limits on their ability to gamble in the commodities market. Energy distributors like the infamous Koch Brothers also have both motive and opportunity. The Koch Brothers own oil suppliers and distributors, and introduced the first oil-indexed Wall Street swap way back in 1986. As suppliers, they can influence price. As speculators, they can make a fortune. Wall Street firms and energy distributors also happen to be pouring enormous sums of money into Washington to make sure they’re never subjected to meaningful regulatory oversight. They’re in bed with a number of prominent politicians, especially in the GOP. (Ten years ago they were literally “in bed” with one another, since Sen. Phil Gramm’s wife was on Enron’s board even as Gramm pushed the deregulation of oil speculation.) Who else benefits from rising oil prices? Republican politicians, who have been using them all week to attack the President and Democrats in general. Coincidence? We report, you decide. To be clear, we’re not suggesting that anybody’s sinking tens of billions of dollars into oil purchases just to decide this year’s election. There are probably cheaper ways to purchase democracy. But if it is all coincidence, it’s all working out pretty nicely for somebody. A Populist Issue As we said in the beginning, we can’t know for sure what’s behind these oil prices. But what we can know is that we don’t know — and that our government should have the resources to track these markets and intervene when they’re being misused. Some people believe the oil price boom may be ending, and that’s possible. But with so much that’s hidden from view, we can’t know. If they continue to rise that could change the course of the upcoming election and lead the President to defeat. Fortunately there are things he can be doing now that would greatly benefit the country, and parenthetically would also help his reelection efforts. Last year he announced an investigation into possible oil speculation, but it was underfunded and seems to have gone nowhere. The President should immediately ramp up that effort and give it real resources. Secondly, the President should mount a strong defense for financial regulation and make the case for strong oversight of commodities trading. He can point to rising oil prices, should they occur, and tell the public that his opponents won’t give him the resources he needs to handle the problem. Third, he can point to GOP-backed moves like the amendment passed in Congress last week which would force U.S. taxpayers to keep guaranteeing big banks’ speculation in oil and other markets as a sign of what this battle is really about: economic security for the many vs. government-guaranteed greed and speculation for the few. To be sure, this latest move had “bipartisan” support, as so much dangerous deregulation has in the past. ( This picture serves as a harsh reminder of Clinton-era coziness with Wall Street.) But that’s exactly the kind of bipartisanship the President should reject: the bipartisanship of corporate politics. That’s a route the President would be well-advised to take. Should he? Yes. Will he? We don’t know — and we’re not in the business of speculating. We discussed oil prices last week with Thom Hartmann in his television show, The Big Picture :

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Robert Reich: Corporations Don’t Need a Tax Cut, So Why Is Obama Proposing One?

February 22, 2012

The Obama administration is proposing to lower corporate taxes from the current 35 percent to 28 percent for most companies and to 25 percent for manufacturers. The move is supposed to be “revenue neutral” — meaning the administration is also proposing to close assorted corporate tax loopholes to offset the lost revenues. One such loophole allows corporations to park their earnings overseas where taxes are lower. Why isn’t the White House just proposing to close the loopholes without reducing overall corporate tax rates? That would generate more tax revenue that could be used for, say, public schools. It’s not as if corporations are hurting. Quite the contrary. American companies are booking higher profits than ever. They’re sitting on $2 trillion of cash they don’t know what to do with. And it’s not as if corporate taxes are high. In fact, corporate tax receipts as a share of profits is now at its lowest level in at least 40 years. According to the Congressional Budget Office, corporate federal taxes paid last year dropped to 12.1 percent of profits earned from activities within the United States. That’s a gigantic drop from the 25.6 percent, on average, that corporations paid from 1987 to 2008. And it’s not that corporations are paying an inordinate share of federal tax revenues. Here again, the reality is just the opposite. Corporate taxes have plummeted as a share of total federal revenues. In 1953, under President Dwight Eisenhower, a Republican, corporate taxes accounted for 32 percent of total federal tax revenues. Now they’re only 10 percent. But now the federal budget deficit is ballooning, and in less than a year major cuts are scheduled to slice everything from prenatal care to Medicare. So this would seem to be the ideal time to raise corporate taxes — or at the very least close corporate tax loopholes without lowering corporate rates. The average American is not exactly enamored with American corporations. Polls show most of the public doesn’t trust them. (A recent national poll by the University of Massachusetts at Lowell found 71 percent with an unfavorable impression of big business — about the same as those expressing an unfavorable view of Washington.) The administration’s initiative doesn’t even make sense as a bargaining maneuver. Republicans will just accept the administration’s lower corporate tax rate without closing any tax loopholes. House Republicans have already made it clear that, to them, closing a tax loophole is tantamount to raising taxes. And corporate lobbyists in Washington know better than anyone how to hold tight to loopholes they’ve already got. Big business will fight to keep their foreign tax shelters. After all, it’s almost impossible to distinguish between their foreign and domestic earnings, which is why the U.S. Chamber of Commerce and other business lobbies have spent the past three years trying to make it even easier for companies to defer U.S. taxes on income they supposedly earn outside the country. Representative David Camp, a Michigan Republican who heads the House Ways and Means Committee, has already proposed a 25 percent corporate top rate and changes that would let companies avoid paying U.S. taxes on even more of the income they say they earn outside America. Nothing is going to be enacted this year, anyway, so it would have made more sense for the administration to support a hike in corporate taxes — and use it to highlight the difference between the president and his likely Republican challenger. Mitt Romney wants to reduce the corporate tax rate to 25 percent before eliminating any tax loopholes. Rick Santorum wants to cut the rate to 17.5 percent and eliminate corporate taxes for manufacturers. Newt Gingrich wants to cut the rate to 12.5 percent and let companies write off all capital investments immediately. It’s discouraging. The President gives a rousing speech, as he did on December 6 in Kansas. Then he misses an opportunity to put his campaign where his mouth is. Robert Reich is the author of Aftershock: The Next Economy and America’s Future , now in bookstores. This post originally appeared at RobertReich.org .

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Can Vermont Meet Its Ambitious Renewable Energy Goals?

February 22, 2012

MONTPELIER, Vt. (AP) — Two key state lawmakers said Tuesday that Vermont won’t meet its goal of getting 20 percent of its electricity from renewable sources by 2017, and they’re withdrawing their support for setting a new goal of 30 percent renewable power by 2025. Reps. Tony Klein and Margaret Cheney, the chairman and vice chairwoman of the House Natural Resources and Energy Committee, also said legislation passed three years ago to offer premium prices to renewable energy project developers had fallen far short of its goal of bringing 50 megawatts of new renewable power onto the Vermont electric grid. Cheney said just 7.1 megawatts worth of such projects had been built. The two Democrats said they were surprised to learn recently from the state Department of Public Service, which regulates utilities, that the state likely would fall short of its 2017 goal. Of backing away from the more ambitious 2025 goal, Cheney said, “We don’t want to put out a percentage because it sounds good and not be able to meet it.” “You have to balance ambition and what’s doable,” Klein said. Citing a DPS report, the lawmakers said renewable energy projects already operating and in the pipeline currently add up to 16.5 percent of Vermont’s retail electric sales. Five years is not long enough to plan and build enough new projects to reach the 20 percent goal, they said. And development is expected to slow in part because two key federal incentives for renewable power development are expiring. The energy committee has been working since early January on legislation that had set the new 2025 goal. Klein said he was putting that bill aside to work on legislation to move the state toward mandatory recycling of solid waste. He said he had asked DPS officials to appear before the committee next week to make a new proposal regarding renewable energy. Klein and Cheney said they had been hearing a groundswell of concern voiced by business lobbyists that getting more power from renewable sources, which are usually more expensive than electricity generated with nuclear or fossil-fuel-fired power, would drive up electric rates and make Vermont less competitive economically. Scaling back the drive for renewable power is a big change for a Legislature and administration that have been pushing to close the Vermont Yankee nuclear plant and had touted wind, solar, biomass and other renewable energy sources as keys to fighting climate change tied to burning fossil fuels. A long-term energy plan issued by Gov. Peter Shumlin’s administration in the fall calls for Vermont to get 90 percent of its energy — for electricity, transportation and space heating — from renewable sources by 2050. Elizabeth Miller, commissioner of the Department of Public Service and Shumlin’s point person on energy issues, agreed there is doubt about the state meeting its 2017 renewable power goal. If all projects now in the planning stages are built — and that’s uncertain — Vermont would be getting about 18 percent of its power from renewable sources by 2017, she said. Renewable energy advocates said they would continue to push for a more ambitious agenda. Gabrielle Stebbins, executive director of the industry group Renewable Energy Vermont, rebutted business concerns about harm to Vermont’s economy by saying her industry had the potential to add many jobs in the state. Ben Walsh, energy advocate with the Vermont Public Interest Research Group, said his group would push Shumlin and lawmakers to keep campaign promises about supporting renewable energy. “We live in a state where people elected an administration and legislature that … said they were going to build a future of clean energy for Vermonters,” Walsh said. “We’re still very hopeful that’s what will happen in the end.”

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Obama Touts Big Win

February 21, 2012

WASHINGTON — President Barack Obama will be joined at the White House on Tuesday by taxpayers who stand to benefit from a payroll tax cut extension. Obama will discuss the importance of Congress’ agreement to extend the Social Security payroll tax cut and unemployment insurance. He will also urge Congress to take additional steps to create jobs, grow the economy and help the middle class. Joining Obama will be Americans who have shared their stories on WhiteHouse.gov and Twitter about what an extra $40 in their paycheck means to them. In the evening, the president and first lady will welcome well-known musicians, including B.B. King, Mick Jagger and Buddy Guy, to the White House for a celebration of blues music in recognition of Black History Month.

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Big Losers In Contentious Debate Cry Foul

February 21, 2012

WASHINGTON — Federal workers were $15 billion losers as Congress looked for ways to pay for parts of the just-passed legislation to extend the payroll tax cut and federal unemployment benefits through the end of the year. Their advocates are crying foul, saying two consecutive years of seeing their pay frozen means the nation’s 2 million civil servants already have contributed more than $60 billion to reducing government costs. Republicans, led by their aggressive freshman class, say federal employees, with their generally secure jobs and benefits, can do more. They have proposed several bills to make that happen. The White House also is asking federal employees to pitch in more for their retirement plans. Under the bill passed Friday, about half of the $30 billion cost of extending unemployment benefits will be made up by requiring newly hired federal workers to pay an additional 2.3 percent of their salaries for their pensions. Currently they pay 0.8 percent. Combined with other bills House Republicans have proposed to further limit federal wages and benefits, the total cost to civil servants could be $134 billion over the next decade, said House Democratic Whip Steny Hoyer of Maryland. “The ongoing efforts to target federal workers will substantially undermine our ability to recruit and retain the quality of people we need,” said Hoyer, whose district encompassing some of the Washington suburbs is home to thousands of government employees. Unions representing federal workers were equally upset. “It is unreasonable to turn to this dedicated workforce yet again while shielding those who are not paying their share,” said Colleen M. Kelley, president of the National Treasury Employees Union. “I don’t know how cutting our retirement puts anybody back to work,” said John Gage, president of the American Federation of Government Employees. “What are we, an ATM machine?” Republicans in December proposed an even more ambitious plan to pay for part of the payroll tax and jobless benefit bill by freezing government workers’ pay a third consecutive year and reducing pension benefits in addition to raising their retirement plan contributions. The Senate wouldn’t go along, but in the more recent round of negotiations the House GOP again asked for all federal workers to pay more for their retirements. Democrats objected, and in the end they settled for higher contributions only from newly hired employees. But that’s not the end of it. Earlier this month, the House passed separate legislation, offered by freshman GOP Rep. Sean Duffy of Wisconsin, to keep the pay freeze in effect for a third year in 2013 and also deny members of Congress a salary hike. Democrats complained but, not wanting to be seen as supporting a pay raise for themselves, 72 voted for the bill and it passed 309-117. The House is also considering a bill that would require federal workers and members of Congress to contribute a total of 1.5 percent more to their pensions over three years and readjust how annuities are calculated for new hires. That bill, estimated to save more than $40 billion, also eliminates a Social Security supplemental income program for those eligible to retire before age 62. The NTEU, the largest independent union of federal workers, says the increased pension contribution would boost the annual payment for a worker earning $50,000 a year from $400 to $1,150. In introducing the bill, freshman Rep. Dennis Ross, R-Fla., said people are “rightfully outraged by the pension benefits guaranteed to a bloated federal workforce.” Ross wants to see savings from his bill go to deficit reduction, but the current plan is to use it to help pay for a $260 billion bill to finance highway construction and transit programs over the next five years. Freshman Rep. Martha Roby, R-Ala., has also introduced a bill to stop what she called a gimmick to dodge the pay freeze. Her bill would suspend through the end of this year within-grade step increases, wherein many employees can get raises of 2 percent or 3 percent every one to three years upon the recommendation of their bosses. These increases, not covered in the pay freeze, cost about $1 billion a year, Roby said. While most of the action has been in the House, a group of Senate Republicans has proposed extending the federal tax freeze for two more years and reducing the size of the government workforce by 5 percent as one way to help avoid automatic Defense Department budget cuts passed by Congress last summer and due to take effect in 2013. All these proposals will face resistance in the Democratic-controlled Senate. Republicans are not alone in trying to tap the federal workforce for savings. The White House, in its budget proposal for 2013, is calling for a 1.2 percent increase in federal employee contributions to their pension plans. That would reduce the government’s share by $27 billion over the next decade. But the White House also favors giving federal workers a 0.5 percent pay raise in 2013. “A permanent pay freeze is neither sustainable nor desirable,” it said. An AP-CNBC poll taken in November 2010 found that many agree that the federal workforce is too big and can be a source of savings. Some 62 percent said they favored reducing the number of federal workers as a means of shrinking the federal deficit, and 59 percent supported a federal wage freeze. Republicans base many of their arguments on a recently published report by the Congressional Budget Office that found that the average federal worker earns about 2 percent more than a comparable private sector worker, and that, when pension and health benefits are factored in, federal compensation is 16 percent greater. Federal unions say the report overstates the advantages of federal workers. The CBO reported wide variances depending on worker education levels. Federal civilian workers with no more than a high school education earned about 21 percent more, and their benefits were 72 percent higher, than their private-sector counterparts. But federal workers with a professional degree or doctorate earned about 23 percent less. The government spends about $200 billion a year to compensate the 2.3 million federal civilian employees, including about $80 billion for civilian personnel working in the Defense Department. The CBO noted that the size of the federal workforce has remained at about 2 million over the past 30 years, and that its share of the total U.S. workforce has declined, from 2.3 percent in 1980 to 1.7 percent in 2010.

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Leo W. Gerard: Republicans: Against It Before They Were for It

February 20, 2012

First, Republicans opposed extending the payroll tax cut that put an extra $20 a week in the pockets of 160 million working Americans. Next , they supported it. If the cost were offset the way they wanted. Even though Republicans previously had said that tax cuts never need be offset. After that, they opposed a stopgap measure extending the break by two months. Even though the cost was offset. Ultimately, they approved the 60-day extension. Then, they opposed extending the tax cut another 10 months. Unless the cost were offset. Finally, however, they supported that . Even though the cost was not, in fact, offset. What’s that sound? It’s the frantic flailing of a grounded GOP fish: flip flop, flip flop, flip flop. Republicans revel in casting themselves as the principled party. They claim they’re the moral majority. Their values, they contend, are unshakable. So their serial waffling on this issue is confusing. Against it; for it; against it; for it. Isn’t that what they ridiculed a Democratic Presidential candidate for? There’s a simple explanation, however. Throughout this entire episode, Republicans never wavered or vacillated or faltered in any way in performing their most vital, their most basic function as a political party: pandering to the rich. The thread running through this drama, from beginning to end, is Republican opposition to equitably taxing the rich. The GOP did whatever it took to prevent the nation’s millionaires and billionaires from parting with another cent. In the end, the party’s public image took a beating. But Congressional Republicans triumphed in shielding the nation’s richest from paying their fair share. So focused are Republicans on providing welfare for the rich in the form of special tax breaks and perks that initially the party didn’t support extending the payroll tax cut for the middle class at all. Late last November, party leaders, including U.S. Sen. Jon Kyl of Arizona , announced they opposed a one-year expansion. Republicans said they’d allow a temporary tax cut for the middle class to expire, no problem, even though they’d previously contended they couldn’t end the supposedly temporary income tax cut Bush gave the rich because that would be a “tax increase,” and they could never support a tax increase. Not ever. For Republicans, who are so true-blue to blue bloods, the real problem with extending the payroll tax cut for the middle class was that Democrats proposed paying for it with a small surtax on the nation’s wealthiest. That confronted the GOP with a choice: side with the rich or go with the middle class. This was hardly a Sophie’s Choice , however. It was no difficult decision for the average American, say one of the 160 million for whom the extra $1,000 a year from the payroll tax break is meaningful. Despite that, the GOP sided with 350,000 millionaires and billionaires . Republicans worked to ensure those millionaires and billionaires would not have to pay an additional amount insignificant to the 1 percent individually, but collectively substantial to the federal budget. Within days of Kyl’s assertion that the GOP opposed adding a year to the payroll tax cut, Republicans changed their minds. They would go for the extension, they said, if the cost were offset not by taxing the rich but instead by freezing the wages of federal workers for a third year in a row and eliminating the jobs of 210,000 of them . Their logic was straightforward — if the middle class were to get a break, then the middle class would pay for it. Democrats, and the vast majority of Americans, disagreed. Stymied on a year-long deal, the two parties arranged a two-month reduction, the cost of which was offset. Even so, House Republicans rejected it . Before they accepted it. At the time, Republican U.S. House Speaker John Boehner said Americans could “take to the bank the fact that” a payroll tax cut extension for 10 additional months “will be paid for.” Seventy-eight days later, Boehner and his Republican crew agreed to extend the tax break without an offset. Never mind, then. In a presidential election year, Boehner & Co. surrendered to a simple calculus: the 99 percent has something that the 1 percent doesn’t — more votes. Way more. And polls show American opinion is just the opposite of Republican position on these issues. Americans strongly support raising taxes on the rich , while they strongly oppose ending the payroll tax cut for the 99 percent . The GOP was cornered. If it wanted to win elections, it must appease the 99 percent. If it wanted to remain true to its core values — pandering to the rich — it must refuse a surtax on the 1 percent. So Republicans flip flopped on the easier issue — appeasing the unwashed masses. Have your payroll tax break extension, damn it. Unfortunately for the GOP, the masses may be unwashed, but they’re not unwise. This time last year, 63 percent disapproved of Congressional Republicans; by January, 75 percent disapproved of the GOP. There’s just something so unappealing about a flip flopper. But as U.S. Sen. John Kerry can tell you, Republicans know that.

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Marian Wright Edelman: Desperately Working to Stay Afloat

February 17, 2012

Levi Nation, age 12, and his sister Katherine, eight, eat Sunday dinners at their grandparents’ house in rural Kalkaska County, Michigan. They live with their parents, James and Lois, in an old trailer next door. Though both parents work, they can’t afford a better place—or health insurance or outings with the children. “Sometimes I wish we could go someplace like down to a water park or, like, the zoo,” Levi said. At one time, the Nations owned a home. But like so many other American families, their standard of living has declined over the past decade even though they are a two-parent working family. James’s family employment story echoes the Michigan story, as Pulitzer Prize-winning journalist Julia Cass learned when she met the family while on assignment for the Children’s Defense Fund. His father worked for General Motors in Flint until it offered him “a golden handshake and he took the check.” James said. James considers himself a member of “probably the last generation to be able to walk out of high school and get a decent job,” though he and his brother came too late to find well-paying work at GM and move up into the middle class. During the earlier years of their marriage, when they were able to afford to buy a home, James and Lois lived in Durand, near Flint. He worked for 14 years in a family-owned machine shop that made tools for the aluminum wheel industry. Lois, who’d taken some junior college classes, worked as a bank teller. When Levi was born, she wanted a career she could base around a child’s schedule and went to a school for massage therapy. In 2004, they sold their house and moved to Kalkaska County, where Lois grew up. They wanted to raise their children in a safer place, and planned to live in a trailer on property Lois’s parents owned and build a home there later. Levi Nation, age 12, and his sister Katherine, eight, live with their parents, James and Lois, in an old trailer in rural Kalkaska County, Michigan. Though both parents work, they can’t afford a better place—or health insurance or outings with the children. James says, “You can work your butt off and still not get ahead.” Kalkaska and neighboring Grand Traverse County on Lake Michigan are, in part, resort areas with second homes and luxury condos. James started a handyman service and Lois had massage clients. “Then the economy kind of fell apart and I had to get a job to be sure the bills were paid,” James said. He worked as a mechanic at a farm equipment store for a few years and recently moved to a part-time job with the Village of Kalkaska as a wastewater operator. “It’s a little less money, but the commute is shorter, so it evens out,” James said. “Also, I’m hoping it will turn into a full-time job with benefits.” James earns $13 an hour and works 30 hours a week. He earns a little more than $19,000 a year. Lois didn’t have enough clients in her massage business so she took a job at McDonald’s. “I’ve worked there four years and am just now breaking over the $8 an hour mark,” she said. That job, too, is part-time. She says the company keeps hiring new people and spreading out the hours so that if someone leaves or doesn’t show up, they have other employees who can fill the shifts. “They think you can just come in whenever they need you, but a lot of people can’t do this because they have family,” she said. “My kids are too young to leave by themselves.” She works 15 to 25 hours a week and earns between $10,000 and $15,000, depending on how many hours she gets. The family is working so desperately to stay afloat, Lois recently began training for a second part-time job at a credit union. She will be a fill-in person working from 20 to 30 hours a week and earning $8.50 an hour. The number of hours will vary from week to week at both jobs, but she expects to wake up at 3:30 a.m. to work at McDonald’s from 4:15 till 8 a.m. and to work at the credit union from late morning until 5 or 6 p.m. on Mondays and Fridays and half-days on Saturdays, the credit union’s three busiest days. “I’ll miss the kids’ soccer games,” she said, “but we need the money.” Because both jobs are part-time, she will receive no benefits. Their children Levi and Katherine are covered by Medicaid, a critical safety net support for their family. But James and Lois make too much to be eligible for Medicaid themselves, but not enough to buy health insurance. James recently needed $2500 in dental work and Lois had $1200 in medical tests, for which they reluctantly used CareCredit cards; with this method, if they pay off the doctor and dental bills within 18 months, they pay no interest, but if they don’t, James said they will be charged 24 to 36 percent interest retroactive to date of service, adding, “We will pay them off somehow because we’ve worked hard to keep good credit”—to be able, someday, to get another home for themselves and their children. The Nations receive about $80 a month in food stamps. When their children were younger they were eligible to attend Head Start. It helped a lot with the children’s development. “We couldn’t afford to pay for preschool, and if it hadn’t been for Head Start, we wouldn’t have gotten Levi diagnosed [with mild attention deficit hyperactivity disorder]. And the teacher taught me ways to work with him.” Katherine, she said, is going into third grade and already reads on the fifth grade level, “and they have to challenge her in math too because of Head Start. Every week they were sending something home on how to challenge your child’s brain and make it fun.” Lois said they applied to Habitat for Humanity for a house but “they turned us down. They said we had more opportunities than other people because we have land and good credit.” James commented, “We’re kind of between a rock and a hard place” of being somewhat poor but not poor enough. “The way grocery and gas prices keep going up, I don’t see where we’re making that much money that we should be in between. You can work your butt off and still not get ahead.” For now, they keep going—not yet getting ahead, but working as hard as they can, and never giving up.

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John Boehner Is Upset That The Payroll Tax Cut Extension Means That Mere Ordinary Americans Will Have More Money

February 17, 2012

As you know, the White House’s pursuit of a payroll tax cut extension, which many believed (based on their observation of how Washington has been working lately) would be met with a full round of obstruction and wrangling, was actually settled, quite unexpectedly, in a rather quick and orderly compromise. But that doesn’t mean that all parties to the compromise are happy about it. Far from it! Speaker of the House John Boehner (R-Ohio), of course, has continually suggested that the only reason anyone is having a discussion about cutting payroll taxes is because President Barack Obama’s economic policies have failed. This Boehner does according to his wont, and I can’t imagine that anyone expects him to make any other case. But yesterday, as the House prepared to pass the conference agreement that would pass the extension and send it to the president’s desk for signature, he said something revealing : Last fall, I said that the only reason we’re even talking about a payroll tax break or an extension of unemployment benefits is because the president’s economic policies have failed. I still believe that to be the case today. The agreement that’s been reached to stop a tax hike on middle class Americans is a fair agreement and one that I support. I want to thank Chairman Camp and all of our conferees for all the work and effort they’ve put into this bill. But let’s be honest, this is an economic relief package, not a bill that’s going to grow the economy and create jobs. Tomorrow’s the third anniversary of the president’s ‘stimulus’ bill and yet another reminder that we need to change course and focus on pro-growth economic policies and the types of bills that for months Republicans have been passing over to the United States Senate. So let’s get this straight: Boehner “supports” the “agreement” that will “stop a tax hike on middle class Americans.” But! He says, “let’s be honest, this is an economic relief package, not a bill that’s going to grow the economy and create jobs.” Everyone should note the separation here. Per Boehner, providing tax relief to the middle class — while it may be swell for them, and even “fair” — is something that has no beneficial impact on the economy or employment . The implication here is that you’re never helping the economy by giving the middle class an advantage of any kind. To Boehner’s mind, it’s not a good thing to put more money in the pockets of ordinary Americans, with which they could … I’m just spitballing here … buy stuff , increase demand and spur additional hiring. And yet, when I cast my mind back to the job creators we’ve talked to, they’ve made it pretty clear that they hire when they are profitable, and that in order to be profitable, people have to actually buy stuff . To Boehner’s mind, the only thing that can or should be done to aid the economy is funnel more taxpayer money to the wealthy “job creators,” who somehow keep failing to get their s#!t together and make with the job creating, despite the fact that — per Bruce Bartlett — “by the broadest measure of the tax rate, the current level is unusually low and has been for some time.” These job creators seem to be eternally in need of just a few hundred thousand dollars more, and then, the economy will really start to take off! There will certainly be policy fights over matters that could end up adding to the tax burden of the sorts of people that Boehner considers to be job creators — such as when the next fight over the Bush-era tax cuts are engaged. At that time, there will be ample opportunity for everyone to have a thoroughly jaundiced argument over that. But what’s striking about the payroll tax cut is that it doesn’t burden the wealthy at all! It’s just a measure of relief to middle class Americans. Which means that Boehner is deeply aggrieved at the opportunity cost here. He is literally upset that the government, in this instance, is giving back to ordinary Americans billions of dollars it could instead being giving to rich people. The indignity! It’s pure, mountain-grown petulance, and it should be a crystallizing moment for everyone. [Would you like to follow me on Twitter ? Because why not?]

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Obama Unveils New Proposal

February 17, 2012

SAN FRANCISCO — President Barack Obama is outlining new steps to boost U.S. exports during a visit to a Boeing assembly plant in Washington state, calling on Congress to continue financing a national export credit agency crucial to a goal of doubling exports by 2014. Obama was to tour the Boeing facility in Everett on Friday, promoting foreign trade and manufacturing at the end of a three-day trip that included a stop at a Milwaukee padlock manufacturer. Congress extended the Export-Import Bank’s authorization through May of this year, but White House officials said the bank will reach its lending limit at the end of March. Obama has pointed to the bank as a key player in helping promote U.S. exports. At the same time, Obama was to announce that Boeing will participate in an Export-Import Bank program that helps companies advance money to suppliers on export-related contracts. Administration officials said Boeing would be committing to more than $700 million in short-term credit this year. Officials said the arrangement would help Boeing compete for foreign clients against European jet maker Airbus. Officials said the administration intends to use the Export-Import Bank to help U.S. companies counter foreign companies that are getting unfair assistance from their governments. Facing re-election, Obama has pointed to a decline in unemployment and touted a recent boost in manufacturing jobs as an indicator of an economy on the mend. Republicans seeking the White House have accused Obama of failing to steer the economy out of a deep recession, setting up the health of the nation’s economy as a pivotal issue in the 2012 election. In remarks prepared for delivery Friday, Obama said the country was on track to meet a goal of doubling exports over a five-year period “ahead of schedule.” But he said the U.S. needed to take more steps that will “help more American businesses sell their products around the world, create jobs right here at home and help us build an economy that lasts.” Obama was unveiling a number of steps aimed at boosting foreign trade, including: _ A pilot program called Global Credit Express to help small business exporters apply for up to a 1-year loan of up to $500,000. _ A simplified process for foreign trade zones, which allow companies to use special procedures to delay or reduce duty payments on foreign merchandise. _ A website called BusinessUSA making it easier for companies to access information to help their businesses grow. In addition to the trade announcement, Obama was holding two fundraisers in the Seattle area Friday, including a fundraising luncheon with 65 people at the Medina home of Jeff Brotman, the co-founder of retailer Costco. Tickets for the event cost $17,900. Obama also was appearing at a reception with 450 supporters in Bellevue, with a musical performance by the band The Head and the Heart. Tickets started at $1,000. Both events were supporting the Obama Victory Fund, a joint fundraising committee of Obama’s campaign and the Democratic National Committee. Obama reported Friday that it had raised $29.1 million for his campaign and the Democratic Party in January, putting him ahead of the pace he set in the last quarter of 2011. Obama has raised about $250 million through the end of January. In October, the president signed off on free-trade agreements with South Korea, Colombia and Panama, a move that could be worth billions of dollars to American exporters and generate tens of thousands of jobs. In November, Obama presided over a deal that will send Boeing planes to Lion Air, a private air carrier in Indonesia, the largest commercial plane order in Boeing’s history. Lion Air ordered 230 airplanes and the White House said the transaction would support tens of thousands of jobs in the United States. Republicans have said the Obama administration has moved too cautiously in finding new trade partners, putting U.S. exporters at a disadvantage with foreign competitors. The administration has sought to pursue free trade while ensuring that basic worker and environmental rights are preserved and U.S. job growth promoted. Obama’s visit to the Boeing plant comes a few months after the National Labor Relations Board dropped a high-profile lawsuit against the company over allegations it built a nonunion plant in South Carolina to retaliate against past union strikes in Washington state. The board halted the case after the Machinists union approved a four-year contract extension with Boeing, which plans to build the new version of its 737 airplane in Washington state. Republican presidential candidates seized upon the case, accusing the NLRB of threatening a new Boeing factory in South Carolina. White House spokesman Jay Carney told reporters that Obama’s visit would be focused on manufacturing and trade promotion and had “nothing to do with” the NLRB case. ___ Associated Press writer Jim Kuhnhenn in Washington contributed to this report.

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Presidents’ Day: A Look Back At How Much They Earned

February 17, 2012

The Republican presidential candidates — particularly Mitt Romney — have been under pressure to release their tax returns . The topic has gotten plenty of play in the GOP debates this year. It’s not the first time the issue has come up in a presidential campaign, however. Although tax returns are private, most presidents since the 1970s have chosen to release them. In honor of Presidents Day, here’s a look back at how much some past presidents made, and how they earned it. All numbers come from tax returns courtesy of the Tax History Project .

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Hawaii Plastic Bag Fee Could Be First Of Its Kind

February 17, 2012

HONOLULU (AP) — A proposal to collect fees from customers who choose disposable paper and plastic shopping bags is gaining support as it works its way through Hawaii’s Legislature. If lawmakers pass the House Bill 2260 this session, Hawaii would become the first state to enact this kind of pro-environment legislation. The measure has been touted as a way to discourage shoppers from using single-use shopping bags by charging an extra 5 cents per bag. The average person uses 400 plastic bags each year, advocates say. Mark Fox, Director of External Affairs for the Nature Conservancy, told a House committee Thursday that the legislation has two benefits: “It works on changing people’s behavior and encourages them to bring reusable bags. And if you’re unable to change your behavior, you can contribute to helping our watersheds.” Maui, Kauai and Hawaii Island counties have all enacted measures to limit use of plastic bags. Melissa Pavlicek, testifying on behalf of Safeway and Times Supermarket, said plastic bag bans on Maui and Kauai have led more shoppers to ask for costly paper bags instead of bringing their own reusable totes. The grocery chains support the bill, however, but requested the state use some of the fee to help them cover the cost of administering the program. Supporters note the bags require fossil fuel for manufacture, harm marine life when they end up in the ocean, burden overcrowded landfills and wind up as unsightly litter. Sixty to 70 percent of the collected fees would go into the natural area reserve fund for watershed protection, restoration and reacquisition. “Only 10 percent of the watersheds are currently protected, and that’s taken 40 years to do,” said Guy Kaulukukui, deputy director of the state Department of Land and Natural Resources. The disposable bag fee could help protect Hawaii’s mauka forests and all priority watersheds within the decade, he told lawmakers. Carol Pregill, president of the Retail Merchants of Hawaii, noted the proposal puts the burden on consumers, rather than businesses. The retailers Pregill represents support the bill, but want to ensure future changes would not result in additional costs to merchants, she remarked. Stuart Coleman, of the Surfrider Foundation, told committee members he was excited to see the bill moving after four years of urging the state to take action. “We feel like we’re going to be turning a problem into a solution,” he said. Coleman pointed out that it was unusual to see so many diverse groups united in support. “This is kind of win-win for everybody,” he said. “We’ve got businesses behind us. We’ve got government agencies. We’ve got environmental groups and just a whole wide array of school groups and citizens groups and such. It’s very inspiring to see everything coming together.”

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Michael Linden: Did the Stimulus Work?

February 17, 2012

Three years ago today, President Obama signed the American Recovery and Reinvestment Act. Though, at the time, everyone agreed that the economy was in serious trouble, three years on, the law — better known as the stimulus — has become incredibly controversial. President Obama’s political opponents insist that the stimulus did nothing to help the economy and some even claim that it made things worse. The numbers, and a newly released video, tell a very different story. In the years before the start of the Great Recession, the US economy was growing, albeit at a much slower pace than it had during the 1990s, and the country was adding jobs at a respectable clip. But that growth was built on a housing bubble and dependent on a deeply rotten financial system. When the bubble popped, and the financial system almost collapsed, the economy took a nosedive. Take overall gross domestic product, for example. That’s the total measure of all economic activity in the country. In the first half of 2008, GDP stagnated, and then in the second half, it began to contract at an alarming rate. In the 4th quarter of 2008, GDP declined by an astounding 9 percent. As the economy shrank, companies began laying off more and more people, and we began losing jobs left and right. By the time President Obama took office, the economy was in a free-fall. In January 2009, the country lost more jobs in a single month than it had in any month in the previous 60 years. Then, in February, we enacted the stimulus bill. It was designed to stop the bleeding and turn the economy around by pumping billions of dollars into the economy through things like infrastructure investments, aid to the states, and tax breaks. So what happened after the stimulus started? Did the economy continue its disastrous tumble? In the second quarter of 2009, the first full quarter after the stimulus passed, the economy did still contract, but at only a 0.7 percent rate, and then began to grow again in the third quarter. Job losses also began to slow down immediately. Before the stimulus, we were losing more and more jobs each month. After the stimulus: fewer and fewer, until eventually we started adding jobs again. Private-sector layoffs actually peaked in the month the stimulus started, and then declined dramatically. In early 2009, every indication was that the economy was headed over the edge of a cliff. But at the last second, the country swerved away from the edge and started heading back in the right direction. Now maybe it was just pure coincidence that the turnaround began at almost the exact same moment that the stimulus started. It could be possible that that the economy began to grow again, job losses began to slow and layoffs started coming back down to earth all at nearly the same time — right after the president signed the Recovery Act — and it had nothing at all to do with the stimulus. More likely, of course, is that the myriad independent economists — from the Congressional Budget Office to Moody’s.com to Macro Economic Advisors — are right. The stimulus worked.

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2 New England Utilities Agree To Buy Offshore Wind Power

February 16, 2012

BOSTON (AP) — Energy companies Northeast Utilities and NStar have agreed to buy more than a quarter of the power produced by the long-planned Cape Wind offshore wind farm as a condition of a proposed merger, state officials announced Wednesday. The announcement is a huge boost for the 130-turbine Cape Wind project, which would be located about 5 miles off Cape Cod in Nantucket Sound and aims to be the nation’s first offshore wind farm. The Cape Wind project has sold half its power to the Massachusetts utility National Grid but has struggled to find buyers for the rest of the power, posing a major obstacle to its efforts to secure financing. As part of the deal announced Wednesday, the combined Northeast Utilities-NStar company would buy 27.5 percent of the electricity Cape Wind produces under a 15-year contract. State Energy and Environmental Affairs Secretary Richard Sullivan said the agreement shows the administration’s commitment to clean energy. The agreement between the state and the utilities also calls for a four-year freeze on base energy distribution rates and a one-time $21 million credit for ratepayers. Attorney General Martha Coakley said the deal would save Massachusetts consumers an estimated $217 million. Even with the agreement, Hartford, Conn.-based Northeast Utilities’ $4.7 billion purchase of Boston-based NStar still needs final green lights from utility regulators and other officials in both states. Cape Wind spokesman Mark Rodgers said the company was waiting to land another customer before pursuing project financing, and now it can, once the deal is final. “The more power that is secured in a long-term power purchase agreement, the better,” he said. “It helps attract the private capital that’s needed, both in the form of debt and equity to build the project.” The price NStar and Northeast Utilities will pay for Cape Wind’s power is still subject to negotiation, NStar spokeswoman Caroline Allen said. Cape Wind was proposed in 2001 but has met tough resistance. Opponents say the power is overpriced: For instance, the starting price in the National Grid deal is 18.7 cents per kilowatts hour and increases annually, while land wind can be had for about 10 cents an hour. They also complain the project will mar a pristine area. Various lawsuits are pending against the project. NStar initially seemed cool to Cape Wind, with chief executive Tom May saying he was “agnostic” about the project. The utility also passed on buying from Cape Wind when it first had the chance, choosing cheaper land wind instead. Cape Wind opponents have accused the state with using the merger approval to force NStar to buy power from a favored project, but NStar’s Allen said the deal announced Wednesday wasn’t a result of pressure from Massachusetts officials. Democratic Gov. Deval Patrick, during a Statehouse news conference, downplayed the relative importance of the Cape Wind portion of the overall agreement and said it was not a “sticking point” in negotiations. “The value of the rate freeze and the potential to have rates go down is considerably more important and larger in scale than the Cape Wind component of this,” he said. Cape Wind opponent Audra Parker, of the Alliance to Protect Nantucket Sound, didn’t believe it, saying state energy customers will pay more because of the state’s “arm twisting” of NStar. But she said that after a decade of trying, and despite the deal with NStar, she’s convinced Cape Wind won’t be built and the NStar deal won’t matter. “Twenty seven percent of nothing is still nothing,” she said. ___ Associated Press writer Stephen Singer in Hartford, Conn., contributed to this report.

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42,000 Gallons Of Drilling Mud Spill On Alaska’s Tundra After Apparent Blow-Out

February 16, 2012

ANCHORAGE, Alaska (AP) — No workers were injured or oil spilled when an exploratory well being drilled by a new company to Alaska’s North Slope had an apparent blow-out Wednesday. An exploratory well near the mouth of the Colville River hit a natural gas patch about 2,600 feet deep, forcing drilling mud back up the rig, Alaska Department of Environmental Conservation spokesman Ty Keltner said in a release. About 42,000 gallons of drilling mud were released on the gravel pad and snow-covered tundra, Keltner said. Drilling mud and methane gas shot from the well through a diverter pipe, the Anchorage Daily News reported. Additional mud was pumped into the borehole in an effort to “kill” the well, but that mud was also blown out, Keltner said. Spanish oil company Repsol evacuated workers from the site over concerns about the methane gas. By Wednesday evening, Keltner said Repsol reported that the flow of gas appeared to have nearly stopped and drilling mud was no longer flowing from the well. However, he said the well was not under control. Repsol has hired Wild Well Control Inc. of Houston, Texas, to assist with controlling the well. That crew is expected to arrive Thursday. Once the well is controlled, the North Slope company Alaska Clean Seas will begin to clean up the mud. A state and a North Slope Borough official were also expected to be onsite Thursday. A command incident team was being arranged. The spill was at the Qugruk 2 drill site near Nuiqsut, about 625 miles north of Anchorage. Drilling mud, or drilling fluid, is a term for liquids used in drilling that lubricate the drill shaft and cool the hole. Repsol E&P USA Inc., a subsidiary of Spain energy company Repsol-YPF, announced in March that it would invest at least $768 million in North Slope oil exploration and development. At the time, Repsol said it was working with 70 & 148 LLC and GMT Exploration LLC to develop leases over a 772-square mile area. It began exploratory work this winter.

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With Gas Tax Money Vanishing, Transportation Bills Mum On What Comes Next

February 15, 2012

WASHINGTON — As both chambers of Congress continued to debate dueling surface transportation bills on Wednesday, Speaker John Boehner (R-Ohio) announced that a vote on the House’s transportation bill would be postponed until late February. The Republican leader’s hesitation underscores the deep difficulties lawmakers in both parties have had in facing up to an uncomfortable fact: gas tax revenues are running dry, and nobody wants to find a new source of cash to make up for them — least of all as the economy still struggles and an election nears. By 2013, the Congressional Budget Office predicts bankruptcy for the Highway Trust Fund, which collects gas tax revenues to be spent on interstates and other roads. A host of panels and pressure groups from the Simpson-Bowles Fiscal Commission to the U.S. Chamber of Commerce to the CEO of Ford Motors have all recommended raising the gas tax to fill the gap. Last week, Sen. Mike Enzi (R-Wyo.), supported by Sen. Tom Coburn (R-Oka.), introduced a surprise amendment to the Senate Finance Committee’s part of the transportation bill that would have taken the small step of pegging the gas tax to inflation. That would have somewhat replenished the Highway Trust Fund over the long term, but committee chairman Max Baucus (R-Mont.) quickly shot them down , saying that it wasn’t the time. Enzi and Coburn, Transportation Secretary Ray LaHood said Thursday, were “two very brave souls” for even bringing the subject up. But neither the Obama administration nor either chamber will include gas tax bumps in their transportation plans. The reason is simple, LaHood said: “People don’t want to raise taxes in an election year.” Although some states faced with transportation deficits are beginning to consider raising their own gas taxes, almost nobody at the federal level seems willing to seriously contemplate raising the politically charged gas tax. Especially with the average gallon in the United States ringing in at $3.52, up 38 cents from a year ago . Instead, the administration’s budget pays for $476 billion in transportation spending over the next six years by relying roughly half on dwindling gas tax revenues and half from money that will no longer be spent in Afghanistan and Iraq as military operations draw down. But the president’s proposal to “do some nation-building right here at home,” as he put it in his State of the Union, hasn’t impressed Republicans, who say the plan really just relies on slippery accounting. The supposed war savings are “imaginary money,” Sen. Jeff Sessions said in a Budget Committee meeting on Wednesday that LaHood attended. “We need the road program on a sound financial basis, not on borrowed money,” he said. Over in the House, meanwhile, Republicans proposed to fill the gap on their own $260 billion, five-year transportation bill with a variety of controversial provisions that create their own form of “imaginary” money, Democrats charged. The House GOP’s ideas included loosening restrictions on offshore oil drilling and oil leases in the the Arctic National Wildlife Refuge. Over the life of the bill, however, those hotly debated items would only raise about $5 billion — far less than what’s needed to fill the funding gap. “We just shouldn’t be engaging in trying to find fictional revenues from fictional drilling that’s never going to happen,” Rep. Ed Markey (D-Mass.) told Republicans on the House Rules Committee on Tuesday. To find more money, Republicans would also force federal workers to contribute more to their pensions. Rep. Virginia Foxx (R-N.C.) spoke favorably of the move by citing an apocryphal saying from bandit Willie Sutton as to why he robbed banks: “because that’s where the money is.” The alternative to the House’s drastic measures, Chairman John Mica (R-Fla.) told the Rules Committee, would be raising the gas tax by 20 cents a gallon. Even with all that, the CBO estimates that the House bill would empty out the Highway Trust Fund by the end of 2016. The bipartisan Senate version of the transportation bill would keep funding for transportation at its current levels, spending $109 billion over two years. It has less of those “imaginary” or “fictional” revenue sources than either the administration or House bills, but its version comes with one major caveat: it would spend the rest of the Highway Trust Fund even earlier, over just two years, according to Mica . The Senate bill, which has the support of the president and Republicans in its chamber, may never come into law. If it does, however, Congress will likely be faced with the very same dilemma again in just a couple years: what to do about that tricky gas tax.

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Mike Lux: A New Strategy for Wall Street Accountability

February 15, 2012

One of the things progressive activists always need to be careful of is letting down after a big fight comes to a conclusion. With the banking settlement finished, one phase of the fight for Wall Street accountability is over, but now we enter an even more important next phase. And whether you viewed the settlement as a win, a defeat, or (like me) , some of both, progressives who want big bank accountability and a better financial system in this country need to unite as we move into this new phase. There are four major things our side needs to simultaneously develop long term strategies around: 1. Holding the settlement accountable. This settlement, like many before it, relies in part on promises by the big banks to stop breaking the law in the future. In many past settlements with the SEC and Attorneys general, banks have made those promises only to quickly start breaking the promises- and the law- all over again. Enforcement of these banker promises is critical. In addition, these banks have promised to write down mortgages over the next 3 years, but we have also seen big banks ignore these kinds of promises before. Those of us who care about holding Wall Street accountable need to make sure the banks aren’t ignoring the promises they made, and we need to make sure our government is enforcing this agreement. 2. Getting Fannie and Freddie involved in mortgage write-down. Even if all of our other political, grassroots organizing, and legal strategies work in terms of getting the big banks to write down mortgages, we still won’t solve the housing crisis in this country without forcing Fannie Mae and Freddie Mac to the mortgage write-down table. They are acting completely irresponsibly in this area and are totally putting the screws to homeowners. Remember, Fannie and Freddie are controlled by our government. Acting administrator Edward DeMarco, appointed by Obama, has become the single biggest barrier to improving the nation’s housing market because of his bull-headed and stunningly narrow minded approach to mortgage write-downs. President Obama needs to use a recess appointment to appoint a new administrator, and if he doesn’t, progressive Attorneys general like Schneiderman shouldn’t hesitate to sue Fannie and Freddie to force change in their behavior. This is a very big deal, and activists need to be very focused on going after DeMarco, and going after Obama to use a recess appointment. 3. Pushing hard for more staff resources for the new financial fraud task force. The fact that the President appointed this new task force, and made Schneiderman a co-chair (and from what I have heard from the White House, he is clearly designated as first among equals on driving the task force forward) is a wonderful thing. But as many people have pointed out, the resources allocated do not measure up to what they need to: big banks have legal teams in the thousands to fend off their pursuers. The good news is that many different agencies (including the IRS, whose agents don’t mess around), and a number of different state Attorneys general, are contributing staff to this operation. I am also very confident that Schneiderman will walk away if he is not getting the help he needs from the Feds, and am heartened by the new Justice Department budget which shows them shifting more resources the task force’ way. But there is no doubt it will be better all the way around if the task force is given every last staffer the Department of Justice can spare. We need to keep pushing for more. 4. No roadblocks for the task force. The biggest thing that could hold up the financial fraud task force is bureaucratic roadblocks placed in front of Schneiderman and others who want to push the investigation forward. Some of these roadblocks might be the typical governmental/jurisdictional issues that sometimes crop up. Some of them might be intentionally placed in the way by people who want to help the banks. Progressives have to watch this like hawks, and fight back against it whenever it crops up, and for whatever reason it crops up. Every delay on this task force is a defeat for us, because every bit of forward movement puts more pressure on the big banks. This is a lot of work, and will take a sustained and dedicated effort, but it is worth doing it because the stakes are very high. If the task force doesn’t produce, if the settlement isn’t enforced, if Fannie and Freddie keep screwing homeowners mercilessly, it is terrible news. It is terrible for our economy, because the centrally important housing market will be stuck in a black hole without progress on all these things. And it is terrible for justice and our democracy, because it will show that once again the biggest banks do not have to live by the rule of law. Coalitions like the Campaign for a Fair Settlement and the New Bottom Line campaign have done a great job in driving these banking and housing issues forward. Working together, we all need to figure out how to sustain the pressure in these four crucial areas, and to keep the media spotlight firmly affixed to the fundamental notion of accountability for Wall Street.

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Santorum Searches For Support In Oil Country

February 15, 2012

TIOGA, N.D. — Presidential hopeful Rick Santorum has been spending a lot of time in oil country lately, prospecting for GOP votes – and money. He tromped through an oil field in the frigid northwest corner of booming North Dakota on Wednesday to assure industry officials he had their backs. In the past week, Santorum also spoke of peeling back regulations in Oklahoma and Texas. In all three fuel-rich states, he spoke industry language meant to forge common bond with his hosts. He goes after the Obama administration for slowing consideration of a Canada-to-Texas oil pipeline and not embracing hydraulic fracturing. The message resonates with local Republican audiences as well as industry executives capable of writing big campaign checks. And if there’s one thing Santorum’s campaign sorely needs these days, it’s money.

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Mindy S. Lubber: Hour of Power

February 15, 2012

At any moment Congress will decide whether to extend the production tax credit , which gives wind power producers a 2.2 cent tax credit for every kilowatt hour of power they produce. Among those urging extension are some of America’s biggest brands and largest purchasers of wind and other renewably sourced energy. This week, 15 of them, including Starbucks, Staples, Nike, Levi Strauss & Co., Campbell Soup Co. and Yahoo!, wrote to Congressional leaders urging extension of the PTC. Some of these companies already get more than half their energy from renewables; Starbucks’ goal is to source 100 percent of its energy from renewables in two years. “The PTC has enabled the wind industry to slash wind energy costs — 90 percent since 1980 — a big reason why companies like ours are buying increasing amounts of wind energy,” the letter states. Made in America renewable energy, such as wind, is highly attractive to U.S. companies for whom managing energy costs is a high priority. Sources of foreign oil are unreliable, as is the price: With every international crisis, especially in the volatile Middle East, the cost of a barrel of oil soars. By making domestic renewables part of their energy portfolio, American companies help stabilize their marginal costs of energy which is good for their bottom line, for the economy, and for American jobs. Unless Congress acts the PTC will expire at the end of the year and many wind turbines will stop spinning and many more will never be built. Development of this clean, renewable, domestic energy source has accelerated since the PTC was last put in place in 2005, adding 47,000 megawatts of new capacity and accounting for $60 billion in private investment and 35 percent of the new electrical generation capacity developed in the U.S. over the past four years. With the country in desperate need of domestically produced affordable clean energy to reduce emissions that are causing climate change, wean us from our dependence on foreign oil and fuel our economy, you’d think renewing the PTC would be a no-brainer. But Washington being Washington, think again. The PTC has strong support, even from many staunch Republicans such as Governors Terry Branstad of Iowa and Sam Brownback of Kansas, whose states are leaders in wind energy production and development. Even the U.S. Chamber of Commerce , which has fought fiercely against any efforts to reduce greenhouse gas emissions, backs the PTC. Yet, there is opposition, particularly from Tea Party-affiliated members of Congress, who oppose all federal investments in energy production. Passage of the PTC extension is not assured. The economic fallout from failure to extend the PTC would be substantial. The wind power industry would lose an estimated 40,000 jobs and be stopped in its tracks, signaling U.S. readiness to cede the $6 trillion clean energy business opportunity to China and Europe. The United States heavily subsidizes oil, gas and coal production to the tune of tens of billions of dollars, even as oil companies rake in record profits. So, while others are investing heavily to build the 21st-century clean energy economy, the U.S. is still busy trying to sustain the 19th- and 20th-century fossil fuel economy. Guess how that will turn out. To compete with the fossil fuel giants, wind producers need a more level playing field, and that’s what the PTC does. It’s time to keep the wind at our back by passing the extension of the PTC.

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Del Phillips: Take a Chance on the Unemployed

February 15, 2012

The results of a United Technologies/National Journal Congressional Connection poll were just released and they are surprising to read. Americans appear to have mixed thoughts about helping their fellow Americans. For a country that prides itself on its generosity, this survey may indicate how secretly selfish we may be. If a discussion is to continue about the future of a social safety net, there must also be a discussion about what to do with those utilizing that safety net. It’s time to talk about hiring the unemployed. Let’s face it: hiring any new employee is always risky. A candidate can tell you anything she wants as to why she is leaving her current organization (no room for growth, seeking more challenging work, etc.) in an effort to shed the best light on herself. That’s obvious. Yet, for all you know, her boss was on the verge of firing her for a consistent lack of productivity. Although your organization tries to establish a process to mitigate hiring risks, it’s never a perfect formula and your process may likely never uncover that she was a poor performer, but you’ll hire her anyway because of her eager attitude and impressive titles. If the circular file is not an official part of the selection process for unemployed resumes, being unemployed surely holds a negative bias in our collective brains. It is often equated to being lazy, lacking drive or having a preference to ‘mooch’ off the system. These are just a few characterizations and judging by the reaction of the audience at Republican debates in response to jabs by the candidates at the unemployed, many Americans agree with them. It’s time to throw out the stereotypes! Today’s “unemployed generation” is NOT lazy. It’s frustrating to hear those who talk about a friend of a friend who once “loved being unemployed for 8 months.” I don’t love it and reading stories like these leads me to believe there are millions of others who don’t either. I, like the millions of others, have gone from a credit score in the 800s to complete ruin through bankruptcy and foreclosure. We have applied to the online ads, attended the networking events, used social media and crafted multiple iterations of our resume based on each new blogger’s opinion. There are even those of us attempting to gain additional skills. We’re eager and ready to get back to work. I can attest first-hand to the determination of the unemployed as a participant in the Chicago Career Tech program — a retraining program that includes both classroom training and hands-on learning experience, initiated by former Mayor Richard M. Daley and supported by the business and non-profit communities of Chicago. My colleagues in this program are just like me and we all hang our hopes to this program to give us the valuable skills needed to meet the demand of today’s workforce. At first we were encouraged by the words of Shelley Stern, Citizenship Director for the Microsoft Corporation and Chair of the CCT Board of Directors, who recounted how CCT was born out of a realization by the business community that many jobs, including at Microsoft, were going unfilled over the past few years, despite high unemployment. This was not due to a lack of labor, clearly, but rather a lack of necessary skills on the part of that unemployed labor. This program seeks to supplement the already valuable skills possessed by the unemployed for high-demand industries. Despite the efforts of CCT and our new skills obtained, we continue to find it difficult to land a position. The rejection continues for a lot of previous participants and despair is setting in. We ARE trying and we ARE being interviewed, but we continue to be told that we do not have enough or the “right” experience. Instead of a discussion about removing or reducing the social safety net, thereby creating a deeper problem, let’s talk about how we all can help Americans get back to work. Here are my challenges: First, I challenge the president and Congress to re-enact the tax cuts to businesses for hiring the unemployed. Although we are no longer in an official recession, there are millions of Americans who have been unemployed longer than 8 months. That’s an awfully long time to go without work when there are bills to pay and mouths to feed. This may help alleviate long-term joblessness. If it doesn’t, businesses can no longer complain that they pay too much in taxes, if they pay them at all. Next, I challenge the Republican nominees to do more than talk. They are out there each day shaking hands with the unemployed. Has one of them offered to put them in contact with their influential friends who are likely to be hiring managers with open positions? If they want us to vote for them and believe they are the one to get the country back to work, start showing us you have experience doing it. Third, I challenge business owners, HR managers, hiring managers and decision-makers to re-think the old notion that someone who has been unemployed is lazy or unproductive. Take the risk; you may be pleasantly surprised with the results! Finally, I challenge all Americans to help their fellow unemployed American. Patriotism isn’t just putting up a flag on holidays and singing the National Anthem at sporting events. Patriotism is also supporting your fellow citizen. FDR wrote: “In our personal ambitions we are individualists. But in our seeking for economic and political progress as a nation, we all go up or else all go down as one people. ” President George W. Bush was criticized for not asking Americans to participate in the “war effort.” So here’s how you can participate in the “unemployment effort”: Check your company’s website to find out what positions are available. Post them to Facebook or Twitter (use #jobs, for example). Forward replies to your HR department. This is just one of many examples easily implemented and that helps move us all forward together. Help a person, help a family, help the country, gamble on the unemployed! Cross-posted from Reframe Shame .

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Noam Chomsky: The Imperial Way

February 15, 2012

American Decline in Perspective, Part 2 Cross-posted with TomDispatch.com In the years of conscious, self-inflicted decline at home, “losses” continued to mount elsewhere.  In the past decade, for the first time in 500 years, South America has taken successful steps to free itself from western domination, another serious loss. The region has moved towards integration, and has begun to address some of the terrible internal problems of societies ruled by mostly Europeanized elites, tiny islands of extreme wealth in a sea of misery.  They have also rid themselves of all U.S. military bases and of IMF controls.  A newly formed organization, CELAC, includes all countries of the hemisphere apart from the U.S. and Canada.  If it actually functions, that would be another step in American decline, in this case in what has always been regarded as “the backyard.” Even more serious would be the loss of the MENA countries — Middle East/North Africa — which have been regarded by planners since the 1940s as “a stupendous source of strategic power, and one of the greatest material prizes in world history.” Control of MENA energy reserves would yield “substantial control of the world,” in the words of the influential Roosevelt advisor A.A. Berle. To be sure, if the projections of a century of U.S. energy independence based on North American energy resources turn out to be realistic, the significance of controlling MENA would decline somewhat, though probably not by much: the main concern has always been control more than access.  However, the likely consequences to the planet’s equilibrium are so ominous that discussion may be largely an academic exercise. The Arab Spring, another development of historic importance, might portend at least a partial “loss” of MENA.  The US and its allies have tried hard to prevent that outcome — so far, with considerable success.  Their policy towards the popular uprisings has kept closely to the standard guidelines: support the forces most amenable to U.S. influence and control.  Favored dictators are supported as long as they can maintain control (as in the major oil states).  When that is no longer possible, then discard them and try to restore the old regime as fully as possible (as in Tunisia and Egypt).  The general pattern is familiar: Somoza, Marcos, Duvalier, Mobutu, Suharto, and many others.  In one case, Libya, the three traditional imperial powers intervened by force to participate in a rebellion to overthrow a mercurial and unreliable dictator, opening the way, it is expected, to more efficient control over Libya’s rich resources (oil primarily, but also water, of particular interest to French corporations), to a possible base for the U.S. Africa Command (so far restricted to Germany ), and to the reversal of growing Chinese penetration.  As far as policy goes, there have been few surprises. Crucially, it is important to reduce the threat of functioning democracy, in which popular opinion will significantly influence policy.  That again is routine, and quite understandable.  A look at the studies of public opinion undertaken by U.S. polling agencies in the MENA countries easily explains the western fear of authentic democracy, in which public opinion will significantly influence policy. Israel and the Republican Party Similar considerations carry over directly to the second major concern addressed in the issue of Foreign Affairs cited in part one of this piece: the Israel-Palestine conflict.   Fear of democracy could hardly be more clearly exhibited than in this case.  In January 2006, an election took place in Palestine, pronounced free and fair by international monitors.  The instant reaction of the U.S. (and of course Israel), with Europe following along politely, was to impose harsh penalties on Palestinians for voting the wrong way. That is no innovation.  It is quite in accord with the general and unsurprising principle recognized by mainstream scholarship: the U.S. supports democracy if, and only if, the outcomes accord with its strategic and economic objectives, the rueful conclusion of neo-Reaganite Thomas Carothers, the most careful and respected scholarly analyst of “democracy promotion” initiatives . More broadly, for 35 years the U.S. has led the rejectionist camp on Israel-Palestine, blocking an international consensus calling for a political settlement in terms too well-known to require repetition.  The western mantra is that Israel seeks negotiations without preconditions, while the Palestinians refuse.  The opposite is more accurate.  The U.S. and Israel demand strict preconditions, which are, furthermore, designed to ensure that negotiations will lead either to Palestinian capitulation on crucial issues, or nowhere. The first precondition is that the negotiations must be supervised by Washington, which makes about as much sense as demanding that Iran supervise the negotiation of Sunni-Shia conflicts in Iraq.  Serious negotiations would have to be under the auspices of some neutral party, preferably one that commands some international respect, perhaps Brazil.  The negotiations would seek to resolve the conflicts between the two antagonists: the U.S.-Israel on one side, most of the world on the other. The second precondition is that Israel must be free to expand its illegal settlements in the West Bank.  Theoretically, the U.S. opposes these actions, but with a very light tap on the wrist, while continuing to provide economic, diplomatic, and military support.  When the U.S. does have some limited objections, it very easily bars the actions, as in the case of the E-1 project linking Greater Jerusalem to the town of Ma’aleh Adumim, virtually bisecting the West Bank, a very high priority for Israeli planners (across the spectrum), but raising some objections in Washington, so that Israel has had to resort to devious measures to chip away at the project. The pretense of opposition reached the level of farce last February when Obama vetoed a Security Council resolution calling for implementation of official U.S. policy (also adding the uncontroversial observation that the settlements themselves are illegal, quite apart from expansion).  Since that time there has been little talk about ending settlement expansion, which continues, with studied provocation. Thus, as Israeli and Palestinian representatives prepared to meet in Jordan in January 2011, Israel announced new construction in Pisgat Ze’ev and Har Homa, West Bank areas that it has declared to be within the greatly expanded area of Jerusalem, annexed, settled, and constructed as Israel’s capital, all in violation of direct Security Council orders.  Other moves carry forward the grander design of separating whatever West Bank enclaves will be left to Palestinian administration from the cultural, commercial, political center of Palestinian life in the former Jerusalem. It is understandable that Palestinian rights should be marginalized in U.S. policy and discourse.  Palestinians have no wealth or power.  They offer virtually nothing to U.S. policy concerns; in fact, they have negative value, as a nuisance that stirs up “the Arab street.” Israel, in contrast, is a valuable ally.  It is a rich society with a sophisticated, largely militarized high-tech industry.  For decades, it has been a highly valued military and strategic ally, particularly since 1967, when it performed a great service to the U.S. and its Saudi ally by destroying the Nasserite “virus,” establishing the “special relationship” with Washington in the form that has persisted since.  It is also a growing center for U.S. high-tech investment.  In fact, high-tech and particularly military industries in the two countries are closely linked. Apart from such elementary considerations of great power politics as these, there are cultural factors that should not be ignored.  Christian Zionism in Britain and the U.S. long preceded Jewish Zionism, and has been a significant elite phenomenon with clear policy implications (including the Balfour Declaration, which drew from it).  When General Allenby conquered Jerusalem during World War I, he was hailed in the American press as Richard the Lion-Hearted, who had at last won the Crusades and driven the pagans out of the Holy Land. The next step was for the Chosen People to return to the land promised to them by the Lord.  Articulating a common elite view, President Franklin Roosevelt’s Secretary of the Interior Harold Ickes described Jewish colonization of Palestine as an achievement “without comparison in the history of the human race.” Such attitudes find their place easily within the Providentialist doctrines that have been a strong element in popular and elite culture since the country’s origins: the belief that God has a plan for the world and the U.S. is carrying it forward under divine guidance, as articulated by a long list of leading figures. Moreover, evangelical Christianity is a major popular force in the U.S.  Further toward the extremes, End Times evangelical Christianity also has enormous popular outreach, invigorated by the establishment of Israel in 1948, revitalized even more by the conquest of the rest of Palestine in 1967 — all signs that End Times and the Second Coming are approaching. These forces have become particularly significant since the Reagan years, as the Republicans have abandoned the pretense of being a political party in the traditional sense, while devoting themselves in virtual lockstep uniformity to servicing a tiny percentage of the super-rich and the corporate sector.  However, the small constituency that is primarily served by the reconstructed party cannot provide votes, so they have to turn elsewhere.  The only choice is to mobilize tendencies that have always been present, though rarely as an organized political force: primarily nativists trembling in fear and hatred, and religious elements that are extremists by international standards but not in the U.S.  One outcome is reverence for alleged Biblical prophecies, hence not only support for Israel and its conquests and expansion, but passionate love for Israel, another core part of the catechism that must be intoned by Republican candidates — with Democrats, again, not too far behind. These factors aside, it should not be forgotten that the “Anglosphere” — Britain and its offshoots — consists of settler-colonial societies, which rose on the ashes of indigenous populations, suppressed or virtually exterminated.  Past practices must have been basically correct, in the U.S. case even ordained by Divine Providence.  Accordingly there is often an intuitive sympathy for the children of Israel when they follow a similar course.  But primarily, geostrategic and economic interests prevail, and policy is not graven in stone. The Iranian “Threat” and the Nuclear Issue Let us turn finally to the third of the leading issues addressed in the establishment journals cited earlier, the “threat of Iran.” Among elites and the political class this is generally taken to be the primary threat to world order — though not among populations.  In Europe, polls show that Israel is regarded as the leading threat to peace.  In the MENA countries, that status is shared with the U.S., to the extent that in Egypt, on the eve of the Tahrir Square uprising, 80% felt that the region would be more secure if Iran had nuclear weapons.  The same polls found that only 10% regard Iran as a threat — unlike the ruling dictators, who have their own concerns. In the United States, before the massive propaganda campaigns of the past few years, a majority of the population agreed with most of the world that, as a signatory of the Non-Proliferation Treaty, Iran has a right to carry out uranium enrichment.  And even today, a large majority favors peaceful means for dealing with Iran.  There is even strong opposition to military engagement if Iran and Israel are at war.  Only a quarter regard Iran as an important concern for the U.S. altogether.  But it is not unusual for there to be a gap, often a chasm, dividing public opinion and policy. Why exactly is Iran regarded as such a colossal threat? The question is rarely discussed, but it is not hard to find a serious answer — though not, as usual, in the fevered pronouncements.  The most authoritative answer is provided by the Pentagon and the intelligence services in their regular reports to Congress on global security.  They report that Iran does not pose a military threat.  Its military spending is very low even by the standards of the region, minuscule of course in comparison with the U.S. Iran has little capacity to deploy force.  Its strategic doctrines are defensive, designed to deter invasion long enough for diplomacy to set it.  If Iran is developing nuclear weapons capability, they report, that would be part of its deterrence strategy.  No serious analyst believes that the ruling clerics are eager to see their country and possessions vaporized, the immediate consequence of their coming even close to initiating a nuclear war.  And it is hardly necessary to spell out the reasons why any Iranian leadership would be concerned with deterrence, under existing circumstances. The regime is doubtless a serious threat to much of its own population — and regrettably, is hardly unique on that score.  But the primary threat to the U.S. and Israel is that Iran might deter their free exercise of violence.  A further threat is that the Iranians clearly seek to extend their influence to neighboring Iraq and Afghanistan, and beyond as well.  Those “illegitimate” acts are called “destabilizing” (or worse).  In contrast, forceful imposition of U.S. influence halfway around the world contributes to “stability” and order, in accord with traditional doctrine about who owns the world . It makes very good sense to try to prevent Iran from joining the nuclear weapons states, including the three that have refused to sign the Non-Proliferation Treaty — Israel, India, and Pakistan , all of which have been assisted in developing nuclear weapons by the U.S., and are still being assisted by them.  It is not impossible to approach that goal by peaceful diplomatic means.  One approach, which enjoys overwhelming international support, is to undertake meaningful steps towards establishing a nuclear weapons-free zone in the Middle East, including Iran and Israel (and applying as well to U.S. forces deployed there), better still extending to South Asia.  Support for such efforts is so strong that the Obama administration has been compelled to formally agree, but with reservations: crucially, that Israel’s nuclear program must not be placed under the auspices of the International Atomic Energy Association, and that no state (meaning the U.S.) should be required to release information about “Israeli nuclear facilities and activities, including information pertaining to previous nuclear transfers to Israel.” Obama also accepts Israel’s position that any such proposal must be conditional on a comprehensive peace settlement, which the U.S. and Israel can continue to delay indefinitely. This survey comes nowhere near being exhaustive, needless to say. Among major topics not addressed is the shift of U.S. military policy towards the Asia-Pacific region, with new additions to the huge military base system underway right now, in Jeju Island off South Korea and Northwest Australia , all elements of the policy of “containment of China.” Closely related is the issue of U.S. bases in Okinawa , bitterly opposed by the population for many years, and a continual crisis in U.S.-Tokyo-Okinawa relations. Revealing how little fundamental assumptions have changed, U.S. strategic analysts describe the result of China’s military programs as a “classic ‘security dilemma,’ whereby military programs and national strategies deemed defensive by their planners are viewed as threatening by the other side,” writes Paul Godwin of the Foreign Policy Research Institute.  The security dilemma arises over control of the seas off China’s coasts.  The U.S. regards its policies of controlling these waters as “defensive,” while China regards them as threatening; correspondingly, China regards its actions in nearby areas as “defensive” while the U.S. regards them as threatening.   No such debate is even imaginable concerning U.S. coastal waters.  This “classic security dilemma” makes sense, again, on the assumption that the U.S. has a right to control most of the world, and that U.S. security requires something approaching absolute global control. While the principles of imperial domination have undergone little change, the capacity to implement them has markedly declined as power has become more broadly distributed in a diversifying world.  Consequences are many.  It is, however, very important to bear in mind that — unfortunately — none lifts the two dark clouds that hover over all consideration of global order: nuclear war and environmental catastrophe, both literally threatening the decent survival of the species. Quite the contrary. Both threats are ominous, and increasing. Noam Chomsky is Institute Professor emeritus in the MIT Department of Linguistics and Philosophy. He is the author of numerous best-selling political works. His latest books are Making the Future: Occupations, Intervention, Empire, and Resistance , The Essential Chomsky (edited by Anthony Arnove), a collection of his writings on politics and on language from the 1950s to the present, Gaza in Crisis , with Ilan Pappé, and Hopes and Prospects , also available as an audiobook . To listen to Timothy MacBain’s latest Tomcast audio interview in which Chomsky offers an anatomy of American defeats in the Greater Middle East, click  here , or download it to your iPod  here . Follow TomDispatch on Twitter @TomDispatch and join us on Facebook. To stay on top of important articles like these, sign up to receive the latest updates from TomDispatch.com here . Part 1, “Losing the World,” can be found here .

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Despite Panel Report, Mass. Residents Claim Wind Turbines Make Some Sick

February 15, 2012

BOSTON (AP) — Neil Anderson says the headaches, dizziness and palpitations began shortly after Wind One, a 400-foot high wind turbine, began operating about a quarter mile from his Falmouth home. So did sleep disruptions, ringing in his ears and elevated blood pressure. Anderson was among a number of Massachusetts residents who on Tuesday disputed a recent report from a state-appointed panel of experts that reviewed existing scientific evidence and found no serious health risks associated with living near wind turbines. “Despite the conclusions of this expert health panel, wind turbines that are close to residences make people sick,” Anderson told the Statehouse hearing, adding that nearly all of his symptoms disappeared when the town-owned, 1.6 megawatt turbine was temporarily shut down in November amid complaints. Environmentalists, industry officials and other wind energy advocates were equally strong in their praise of the panel’s report, telling state officials who called the meeting that the findings were a resounding endorsement of wind as a safe and clean alternative to other types of energy. “When we say no to wind in Massachusetts we are saying yes to a bunch of dirty energy sources like coal, like gas, like nuclear power” that bring health risks far greater those posed by wind power, said Emily Rochon, a Northeastern University law student who attended the meeting with other members of the group Wind Action Committee. The report, commissioned by state environmental and public health officials and released in January, said there was no evidence noise or low-frequency vibrations from turbines trigger health problems like those described by Anderson and other neighbors, effects sometimes collectively referred to as “wind turbine syndrome.” The report did raise the possibility that sound generated by turbines could be annoying to nearby residents or cause sleep disruptions, and recommended that Massachusetts adopt noise limit guidelines similar to those in some European countries. State officials stressed Tuesday that they had not yet formally accepted the panel’s findings nor reached any conclusions about where new wind turbines should be constructed in Massachusetts. Gov. Deval Patrick has made wind energy a key tenet of his strategy to move the state away from carbon-emitting power plants. Critics have questioned both the methods and motivations of the panel, chastising it for relying on a review of data from previous studies done around the world rather than visiting the sites and conducting interviews with state residents who have complained of wind turbine syndrome. Eleanor Tillinghast, a Mount Washington resident and member of the statewide coalition Windwise Massachusetts, accused the panel of “passing off junk science as real science.” The group has called for a moratorium on the construction of new land-based wind turbines until all potential health risks are addressed. Projects have been proposed for several other communities in the state, including Fairhaven, Lenox and Plymouth. Critics have also suggested that at least two members of the state-appointed panel had previous ties to the wind energy industry, a claim strongly denied by the panelists and the state officials who appointed them. Some wind energy advocates, while acknowledging that they did not live in the shadow of a turbine, said the whooshing sound of turbine blades was not annoying but actually soothing — akin to ocean waves or a babbling brook. But Falmouth resident Kathryn Elder dismissed any notion that health concerns were more perception rather than reality. “It’s not my perception, it’s not my opinion, and it certainly isn’t annoyance that wakes me up repeatedly at night, or has caused myself and members of my family to have extreme anxiety and other physical issues in response to living close to the turbine,” said Elder, who urged the state to adopt “hard and fast regulations” that would require turbines to be kept a safe distance from residential areas and set strict noise limits.

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Texas Farmer Wins Temporary Restraining Order Against TransCanada

February 15, 2012

A coalition of environmentalists, conservative property rights activists and landowners are mounting a full court press against TransCanada in an attempt to derail the oil company’s attempts to build the controversial Keystone XL pipeline in Texas. On Monday, they won a small victory when a Lamar County judge issued a temporary restraining order against the company’s plans to do construction work on a farm near Paris, Texas. The coalition’s efforts are reminiscent of another battle during the last decade over eminent domain in Texas, concerning a massive “superhighway,” known as the Trans-Texas Corridor, that Republican Gov. Rick Perry had sought to build with the help of a Spanish company. Perry lost that fight to a coalition of conservative ranchers and environmentalists, dealing him a serious political blow. “We are involved because it’s starting to look a whole lot like the Trans-Texas Corridor battle,” said Terri Hall, founder of Texans Uniting for Reform and Freedom. “When push comes to shove, it’s clear to me that my party is more interested in oil and gas interests than property rights,” added Hall, a Republican. Debra Medina, a property rights activist and Republican, has counted 89 cases so far in Texas where TransCanada had exercised eminent domain, she said. The company cites the pipeline’s status as a “common carrier” under Texas law as the reason for its ability to use governmental power to take land. Eminent domain battles have periodically erupted as TransCanada has bought easements on property for the pipeline that would cross six U.S. states if built. The company has generally tried to settle with landowners, or route the pipeline around those who refuse compensation terms . But in Lamar County, the pipeline company took Julia Trigg Crawford’s farm by eminent domain. Crawford’s lawyer asked for a temporary restraining order, disputing the notion that the pipeline is a “common carrier” as Texas law requires for eminent domain and questioning whether the company adequately considered the Caddo tribe artifacts on Crawford’s land. On Monday, County Court at Law Judge Bill Harris said the company couldn’t go forward with construction on the land at least until a Feb. 24 court hearing. TransCanada had refused to consent to a “standstill” agreement that would have prevented work on the pipeline until March 1. “I would never categorize myself as an environmentalist,” Crawford told HuffPost. “I’m just a steward of my family’s land.” She lives with her 78-year-old father on a 600-acre farm near Paris boughther grandfather bought in 1948. “I have no political affiliation,” she said. “I’m just a girl that wants to protect a thing my grandfather bought.” The farm owner also alleges that TransCanada behaved in a “duplicitous” manner when it claimed it had already secured all the necessary permits for the pipeline. “The eminent domain process is well established, and we follow the process that is set out by law in each state,” TransCanada spokesman Terry Cunha said in a statement. “In Texas, we already have easement agreements in place with over 99 per cent of the landowners along the in-state portion of Keystone XL.” Despite the Obama administration’s recent decision denying an environmental permit for the pipeline, which would carry oil from the Alberta tar sands to Texas refineries, TransCanada is pressing forward with its plans to apply for another permit. The company announced in an earnings report on Tuesday that it expected the pipeline to start operating in 2015.

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Will U.S. Carbon Rules ‘Send The Message That Coal Is Dead’?

February 13, 2012

* Proposed rules on new plants expected this month * Could push carbon capture, other ways to cut emissions By Timothy Gardner and Valerie Volcovici WASHINGTON, Feb 13 (Reuters) – The Obama administration is expected soon to unveil long-delayed rules limiting carbon emissions from new coal-fired power stations, possibly helping to slam the door shut well into the future on building plants that run on the fuel. The Environmental Protection Agency has dragged its feet on proposing the new standards on carbon emissions that would hit new coal plants or facilities undergoing expansion. The short-term impact of the rules, the first to limit U.S. carbon emissions from new power stations, is expected to be symbolic — the rules will not tackle existing plants, which would have been far more disruptive to the industry. But in the long run it could set the stage for rules that take on such cuts. “The proposed rule is certainly expected to send the message that coal is dead,” said Christine Tezak, an energy policy analyst at wealth management company Robert W. Baird & Co. Republicans sharply oppose a raft of clean-air initiatives from the EPA and are keen to take the argument on the campaign trail for this year’s presidential election that the initiatives kill jobs and saddle businesses with onerous costs. The longer the administration delays, the less likely the rules will be finalized before November’s vote and the greater the chances they could be overturned if President Barack Obama loses. But EPA chief Lisa Jackson, whose mantra is smart rules can protect the environment, human health and the economy, says the carbon plan will be out early this year. The delay on the carbon rules is simply to work out the kinks so they are not too costly on power companies, said administration sources, who asked not to be identified. U.S. states and environmentalists who have sued the EPA in the past to speed up the carbon rules also expect to see the proposal soon. “It’s our expectation that the rules for greenhouse gas emissions from new power plants will be issued this month,” said Mike Myers, a New York state government lawyer involved in talks with the EPA. BETTER SAFE THAN SORRY After delaying the carbon rules in June and again in September last year, the EPA finally submitted them in November to the White House’s Office of Management and Budget, where they were being reviewed before going back to the agency. The OMB has already held the rules for 90 days, which is normally the length of time the White House would review proposals such as these. The environmental groups that sued the EPA on the carbon plan would consider going back to court if the White House continued to delay the rules, according to sources in the organizations. A ruling favorable to the environmental groups could result in the courts laying down a hard date for the release of the rules. Obama delayed a major smog rule last fall, leading some environmental groups outside the talks on the carbon regulations to worry a precedent had been set for axing clean-air initiatives. Still, officials from states and environmental groups in the talks said the administration would move forward. The agency has created a public database of the country’s top emitters and is requiring the biggest emitters to hold permits for releasing greenhouse gases. “The administration is working on getting it right,” said Jeff Tittel, head of the New Jersey chapter of the Sierra Club, one of the groups that have sued the EPA over carbon. “It’s better to be safe than sorry, because they don’t want to rush a rule that can’t be implemented.” WHAT IF GAS RUSH SLOWS? The outlook for new coal plants has been darkened by the EPA’s host of clean-air rules and as electricity companies dash to build plants to burn much cheaper natural gas. The EPA rules have pushed utilities to close more than 30 coal-fired plants, and companies have announced plans to shut at least 130 more through 2020. No new coal-fired plants were started in 2011, but more may be needed in the future if the economy recovers and natural gas prices rebound. The carbon rules could require new coal-fired power plants to capture a portion, up to 60 percent, of their carbon emissions and bury them permanently underground, or take other measures to reduce emissions. The EPA’s overall clean-air efforts have divided the power industry between companies that have moved toward cleaner energy, including Exelon and NextEra, and those that generate most of the power from coal, including Southern Co and American Electric Power. Southern, which owns the three largest carbon-polluting power plants in the country, would not comment on the carbon rules, but has said EPA air rules taken together will force it to shut 40 percent of its coal-fired generation. Melissa McHenry, a spokeswoman for American Electric Power, said the United States needed to worry about the long-term implications of the carbon rules. “Near-term it’s not an issue, but what are the implications of the rules longer-term if the shale gas business doesn’t pan out the way people expect it to?,” she said. “It’s a concern for long-term reliability” of the electric grid.

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Ian Fletcher: The Disappointing Economics of Rick Santorum

February 12, 2012

Rick Santorum seems to be (if the bloom isn’t off by the time this article comes out) the latest anybody-but-Romney Flavor of the Week, so it’s work taking a look at his economic ideas. I know, I know: he’s got some interesting, er, cultural baggage . But I’ll leave that to the culture warriors. The first thing that strikes me about Santorum’s economics is that, of all the Republican candidates save the admitted long-shot Buddy Roemer (whom I interviewed here ), he is the one verbally farthest from the piggy-piggy give-me-more hyper-capitalist mentality and the libertopian fantasy that the Fwee Mocket will solve all our problems if we just give it a chance. Anyone who knows their history will know that neither of these attitudes are actually required to be a conservative in good standing, or even a good Republican. There’s not room here for a dissertation on American history, but neither Abraham Lincoln nor Teddy Roosevelt worked this way. So perhaps what we have here is a rational Republican response to our present economic situation. Everyone who’s not a hopeless ideologue knows that American capitalism has gone off course in recent years, and somebody is going to have to reform it. It can potentially be done from the left or the right, but done it must be if we are to avoid national decline. It’s no secret where Santorum is getting this stuff. Its lineage in Catholic social teaching is obvious. Broadly speaking, it’s distributist economics. Google “distributism” and you’ll see what I mean. It’s the capitalism of Main Street, not Wall Street. It has a long intellectual history, and in many ways it’s actually more conservative, with small “c,” than what the current Republican establishment believes in. Those dollar-sign patriots have been busy selling off the country piece-by-piece for personal profit. There’s a glimmer of hope out there that Mitt Romney represents their quiet repentance, and coming turn towards economic nationalism, but I’m very unsure on this. So I’m fairly sympathetic with Santorum’s overall mentality on economics. It’s when I look at his detailed proposals that I start to get worried. The substance behind his populist pitch isn’t that solid, and a lot of it is clueless. Let’s take as the baseline of what he thinks this page on his campaign website. He says, to pick the interesting items out of a sea of Republican boilerplate, 10. Eliminate the corporate income tax for manufacturers – from 35% to 0% – which will spur middle income job creation in the United States and will create a job multiplier effect for workers Now this is a classic case of doing someone a favor that they never asked for . I work for one of America’s leading organizations devoted to fixing the decline of American manufacturing, so I have some idea of both what would help this sector, and manufacturers want. And I have never, in the five years I’ve been working this issue, heard any manufacturer say they thought they should be exempt from taxes. So this is, frankly, bizarre. What do American manufacturers want? They want our government to stop the foreign-currency manipulation that puts them at a horrendous (and contrary to treaties) disadvantage relative to their competitors in China and elsewhere. They want an end to foreign trade barriers that open our markets to the world without getting the same treatment in return. They want an end to the theft of their intellectual property and proprietary technology. They want an end to the disadvantage of having to compete with nations that don’t impose the cost of serious pollution controls. They want a reasonable balance of regulations here at home. They want government programs that serve their sector–like the Manufacturing Extension Partnership –to get at least some token fraction of the largesse that Uncle Sam lavishes on sectors like finance and agriculture. And they want a public education system that trains the skilled employees they need. But a free ride on taxes? No, I never heard that one. This makes me wonder if Santorum even asked any actual manufacturers what would help them. 14. Spur innovation in America by increasing the Research & Development Tax Credit from 14% to 20% and make it permanent. OK, this is good. It’s a well-established fact (first noted by Alexander Hamilton in 1791) that society should subsidize innovators because they can’t capture the entire value of their innovations, which spill over to benefit the rest of us without our paying. 15. Eliminate all energy and most agriculture subsidies within four years, letting the markets work. Now I’m actually (depending, of course, on that weasel-word “most”) impressed. Telling people the truth about agricultural subsidies–that they’re a racket–takes a fair amount of bravery, as most people still suffer the delusion that they’re a kind-hearted attempt to rescue family farms from the Dust Bowl. The reality is that corporate agribusiness pockets most of the cash, and any subsidy that does trickle down to genuine family farms just enables them to stay alive to get squeezed harder by the agribusiness oligopolies that overprice their inputs and underprice their outputs. 18. Pass a Balanced Budget Amendment to the Constitution capping government spending at 18% of GDP. This, I am afraid, can only be described as disingenuous and stupid. For one thing, you can’t even have a true balanced-budget amendment unless you are literally willing to put the federal budget under the control of the judiciary–which, after all, would enforce anything set up as a matter of black-letter law. And I flatly don’t believe any Congress would really allow this. For another, whatever one may feel about limited government or the desirability of a small public sector, the reality is that if you don’t run deficits during recessions, recessions will be much worse. John Maynard Keynes doesn’t get much respect from conservatives (except Richard Nixon), but he was right, as shown by the fact that all Republican administrations use his playbook when actually in office. FDR slammed on the deficit brakes in 1937 and got the Recession of 1937-8. I wish I could dismiss this proposal as mere posturing, but Santorum seems to be going deep with it, as shown by “31. Audit the Federal Reserve and return it to its original purpose – a single charter to only manage inflation.” This indicates a disturbing seriousness of intent. Unfortunately, I don’t know of any document establishing that the sole original purpose of the Fed was to control inflation. It’s not the European Central Bank or its predecessor the Bundesbank–which really does and did have such a mandate. When the Fed was founded in 1913, the U.S. was on the gold standard, so controlling the value of money wasn’t within its brief; arguments over inflation vs. deflation focused on so-called bimetallism, or the dilution of the gold standard with silver, which Congress determined. Anyhow… the main purpose of proposing a balanced-budget amendment is to win the hearts of fiscal conservatives without actually having to name real budget cuts. Everyone’s in favor of small government; no-one’s in favor of actually throwing their own mother off Medicare. Proposing such an amendment enables one to keep one’s ideological purity while postponing the cost until some distant future day when it is (supposedly) going to be passed. Disingenuous . 19. Negotiate 5 Free Trade Agreements and submit to Congress in first year of Presidency This is really witless. If Santorum truly got the nature of America’s current economic mess, he’d know that the expansion of “free” (free for them, not for us) trade over the last 15 years has been one of our big economic mistakes. We need to be dialing back, renegotiating, and withdrawing from trade agreements, not signing more. (Buddy Roemer understands this.) And this is despite the fact that Santorum has voted against some free-trade agreements in the past. And as for that “5″ ? Why does the number of trade agreements mean anything? It’s the dollar amount of the trade that counts, not racking up treaties with a large number of small economies. This minor detail gives me the feeling Santorum doesn’t have advisors who know their stuff on the most basic level. It reads like something strung together by a bunch of bright but inexperienced volunteers. Santorum’s last item is something I actually agree with: 32. Strengthen our national security and national defense so that we are not dependent upon our foes or competitors for critical manufacturing, technology, energy and other security needs Forgiving, for a moment, the fact that this quote has the direction of causality between the industrial base and national security backwards, it is correct. So I’m glad to see Santorum’s heart is in the right place here. But I’m still not glad that he hasn’t proposed the key measures that would actually make this happen. To wit: • He’s actually come out against doing something about Chinese currency manipulation, invoking that old bogey-man trade war. • He’s against domestic-content laws –which aren’t perfect, but would still be a step in the right direction if rationally implemented. • He’s denounced the auto bailout–which, again, wasn’t perfect, but the U.S. simply can’t be a serious industrial power without an auto industry. All told, my take on Santorum on economics is that he’s partly well-intentioned on some level, but has little grip on the really key policy questions, is susceptible to dangerous Republican clichés pushed by various obsession groups, and is given to posturing. Better than some of the other candidates, but still no great shakes.

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Airlines Urge Global Emissions Deal To Avert Carbon Trade War

February 12, 2012

* Airlines body says impasse over EU scheme intolerable * Urges global emissions deal at UN’s aviation agency * EU official says open to multilateral ICAO discussion * Emissions row overshadows key China-EU summit By Tim Hepher and Harry Suhartono SINGAPORE, Feb 12 (Reuters) – Global airlines called on Sunday for a U.N.-brokered deal to prevent a row over aviation emissions between China and the European Union spilling into a damaging trade war. The call by the head of the International Air Transport Association (IATA) comes amid signs that the EU may be willing to soften a unilateral stance that also risks souring efforts to resolve Europe’s sovereign debt crisis with Chinese support. In an interview, IATA Director General Tony Tyler said airlines had become wedged between conflicting domestic laws after China ordered its airlines not to join the EU’s compulsory market-based system for regulating airline emissions. “The Chinese move to prevent its airlines from taking part in the Emissions Trading Scheme is a very bold move and it pushes the Chinese carriers very much into the front line of this particular dispute,” Tyler told Reuters. “This is an intolerable situation which clearly has to be resolved; it cannot go on like this. I very much hope of course that we are not seeing the beginning of a trade war on this issue and eventually wiser counsels will prevail,” he said. China was an early opponent of the EU’s cap-and-trade scheme, which has also drawn protests from the United States and India, and the escalating row threatens to hamper efforts to work out an international solution to Europe’s sovereign debt crisis. By banning its airlines last week from co-operating, China hardened its stance just ahead of a Feb. 14 Beijing summit at which the EU will seek Chinese help to ease its debt crisis. The EU says its scheme to charge airlines for emissions on flights into or out of Europe, which took effect on Jan. 1, is needed as part of the fight against global climate change. It maintains it was driven to act after more than a decade of inaction at the United Nations’ aviation standards agency, the International Civil Aviation Organization (ICAO), which has yet to find a global solution to tackling airline emissions. Tyler said ICAO’s chambers were the only forum for resolving the row and he and other airline industry officials noted that the EU had indicated willingness to avoid further isolation. “The European Commission is now much more open to an ICAO solution,” he said. “I very much hope that the EU and all its member states will work hard with ICAO to come up with a global solution. It is not going to be easy.” Tyler was speaking on the eve of the Singapore Airshow. MORE AIRLINE BANKRUPTCIES POSSIBLE Last week the senior EU civil servant responsible for climate action said Brussels preferred multilateral discussion. “We have been clear that we are willing to review our legislation in the light of agreement on market-based measures being agreed in ICAO,” Jos Delbeke told a conference. A relative backwater of the United Nations responsible for industry standards, the Montreal-based ICAO has emerged as the potential bulwark against the first serious carbon trade war. It is widely seen as a challenging task for an agency created to oversee neatly bordered airspace, but which must now try to find an urgently needed formula for tackling aircraft fumes that criss-cross international frontiers. ICAO has already served as a back-channel for issues deemed too difficult to handle elsewhere, for example providing opportunities for contacts between Washington and Cuba, but has rarely found itself in the diplomatic foreground. The row comes at a difficult time for airlines as the industry struggles to escape the fallout from high oil prices and the economic uncertainty surrounding Europe’s debt crisis. Tyler said airlines faced a tough year in 2012 and warned of further bankruptcies in Europe or elsewhere if the region failed to resolve its credit problems. The current quarter is traditionally the leanest time for aircraft revenues. IATA has predicted the global airline industry will make a profit of $3.5 billion in 2012, but says this could flip to a loss of $8.3 billion in the event of deep recession in Europe. Cargo traffic which acts as a barometer for global trade ticked 0.2 percent higher in December, but Tyler said it was too early to tell whether this signalled a turnaround. The head of a sister organization responsible for Asian carriers said airlines risked being hurt by any trade conflict. “The risk for airlines is that if this does degenerate into tit-for-tat trade war, then airlines will be caught in the crossfire from both sides,” Andrew Herdman, director general of the Association of Asia-Pacific Airlines, told Reuters.

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US Faces Tough Fight In Cash Smuggling Crackdown

February 12, 2012

WASHINGTON — Jeanette Barraza-Galindo conspicuously left her bags of teddy bears and throw pillows on a bus during an inspection at the Texas-Mexico border – and professed ignorance about the $277,556 officers found hidden inside. The bags were handed to her at a bus station, gifts to be given to a child upon her return to Mexico, she told investigators. The crime she pleaded guilty to – bulk cash smuggling – is increasingly drawing the attention and resources of federal authorities responsible for fighting drug trafficking across the border. Federal immigration authorities say their investigations have yielded more cash seizures and arrests in the past half-dozen years as criminals, sidestepping scrutiny from banks over electronic transfers, resort to using cash to conceal drug trafficking and move money to crime rings in Mexico and elsewhere. It’s similar to the tactic taken in fighting terrorism: crippling financing networks before the money ends up with leaders of drug cartels and trafficking rings. But the flow is hard to stop. Officials in both the U.S. and Mexico are realizing that criminal enterprises, just like other businesses, can’t operate without a steady cash stream, said David Shirk, director of the Trans-Border Institute at the University of San Diego, which promotes scholarship of border issues. “We’re shifting our strategy to a more diverse strategy of not just going after bad guys and arresting them, but also going after their guns, going after their money,” he said. It’s illegal to try to smuggle more than $10,000 in undeclared cash across the border. Officials say the crime is often connected to other illegal activities including drug trafficking, gambling and credit card fraud. Money that’s seized is deposited into government forfeiture funds. The problem is not new, but there are signs of heightened emphasis. The Obama administration says targeting bulk cash smuggling is a prong of its strategy against transnational crime. Congressional panels held hearings on the issue last year. U.S. Immigration and Customs Enforcement reported more than $150 million in seized cash and 428 arrests in bulk cash smuggling investigations in fiscal year 2011, up from $7.3 million and 48 in fiscal year 2005, according to agency statistics. And a cash smuggling center in Vermont that opened in 2009 and is run by ICE’s homeland security investigations has expanded operations, officials announced in December. But experts say measuring the impact of the beefed-up focus is tricky. It’s hard to track cash’s origin and destination – and investigators can’t always count on help from couriers, who may be more afraid cooperating than of spending a few years in prison. Plus, the amount seized represents a fraction of the total money at stake. Estimates cited by federal authorities suggest at least $18 billion in illicit proceeds is laundered across the southwestern border each year. A 2010 report by the Government Accountability Office said staffing and infrastructure at the border were limiting success in detecting large quantities of cash, and also highlighted another, continuing problem: the use of prepaid, stored value cards to move money. “I call this winning the battle, losing the war. Sure, $90 million sounds like a lot,” said Bruce Bagley, a University of Miami international studies professor who researches drug trafficking. “That’s nothing in comparison to the $19 to $39 billion that’s being returned” across the border. Cash smuggling, though a seemingly elementary form of money laundering, has emerged as a seductive medium for criminals as banks have become more sophisticated in spotting suspicious transactions. Cash has built-in advantages, too: It can be transferred without a trace and is instantly available. “The financial industry has done a much better job in terms of trying to keep out illicit money, and as a result the organizations adapt and then they go to some tried-and-true methods – and, that is, they’re bulking it up and sending it where it needs to go,” said Joseph Burke, chief of ICE’s National Bulk Cash Smuggling Center in Vermont. Criminal organizations generally move contraband north across the border. The money they make, in turn, flows south. Burke said the money is often collected at consolidation hubs – perhaps a home in a residential neighborhood or a warehouse – and distributed among several couriers. Dividing the cash into smaller chunks means less money will be lost if one courier is arrested. Drug trafficking groups recruit relatives, associates and those lower in the organization – like those who might need to pay off debt to the cartel – sometimes dangling as incentive a percentage of the amount of money being transported. Couriers have assorted methods for moving the money, including strapping it to their body, hiding it in car compartments, stacking it on pallets and concealing it in vacuum-packed bags. U.S. Customs and Border Protection has increased the size of the border patrol and begun screening more vehicle traffic and southbound rail traffic for weapons and cash since the Obama administration announced a new southwestern border initiative in March 2009, agency officials said at congressional hearings last year. But the accountability office report said CBP needs better data on how successful its efforts have been and more consistent, full-time enforcement. The office said its investigators tested three border ports of entry, with shredded cash hidden in the car. At two sites, the report said, the cars were allowed to turn around without being searched or the driver questioned. The vehicle wasn’t physically inspected at the third, though officers did use an X-Ray detector. Efrain Perez, a program manager with CBP, said patrol officers are vigilant about looking for suspicious behavior, but it’s impossible to catch every single person. “We know we’re can’t talk to 100 percent” (of drivers). It’s like looking for a needle in a haystack, but we put a lot of resources out there,” he said. Authorities can point to some successful, large-scale investigations, including one – Operation Pacific Rim – that ICE credits with disrupting a powerful cocaine smuggling organization. In that investigation, authorities intercepted at seaports in Colombia and Mexico $41 million in shrink-wrapped cash hidden within shipments of fertilizer, and broadened it out to score arrests by locating the cartel’s smuggling routes. Meanwhile, activity continues steadily – mostly, but not always, along the southwestern border. The cases this month include a U.S. citizen from Mexico who was caught in California with $277,770 in cash, wrapped in bundles and concealed in the rear panels of the car, and the discovery in Illinois of $572,045 in a rental van driven by a man authorities said had a history of marijuana trafficking, according to a law enforcement bulletin obtained by The Associated Press. Barraza, the woman stopped with the stuffed animals and throw pillows last March, caught the attention of border patrol officers after she ignored instructions for passengers to remove belongings from the bus. She later pleaded guilty to illegally concealing the money, though charging documents don’t explicitly state the motive. She was sentenced in September to two years in prison. Her lawyer didn’t return messages. Perez said the evolving methods of some couriers indicate progress in the fight. “The smugglers, the drug traffickers, know we’re out there, and they adapt. And so do we.” ____

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WATCH: Breitbart Explodes At Occupy Activists, Calls Them ‘Filthy Freaks’

February 11, 2012

Andrew Breitbart is angry. On Friday night, the conservative muckraker accosted activists who were protesting the 2012 Conservative Political Action Conference. Emily Crockett of Camp Progress was on hand to capture the remarkable tirade on video. Breitbart screamed at the protesters to ‘behave yourself’ repeatedly. He also called the protesters freaks and animals and told them to ‘stop raping people.’ It’s pretty entertaining. Watch the full video below:

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‘Joe The Plumber’: ‘I Don’t Have To Try’ To Stand Out At CPAC (VIDEO)

February 11, 2012

WASHINGTON — HuffPost’s Zach Carter and Howard Fineman on Friday spoke with Joseph Wurzelbacher at the 2012 Conservative Political Action Conference. Wurzelbacher is also known as ” Joe the Plumber ,” a name he was dubbed during the 2008 presidential campaign when he was portrayed as a symbol of middle-class America. CPAC is a major annual event for the conservative movement, and on Friday GOP presidential candidates Rick Santorum, Mitt Romney and Newt Gingrich all addressed large crowds. Yet Wurzelbacher told HuffPost he has no problem distinguishing himself. “I don’t have to try,” he said. “My name is Joe Wurzelbacher. I’m going to speak the truth. And I don’t have to remember what I said five years ago or three years from now because it’ll always be the same thing — because it’s the truth.” Wurzelbacher is now running as a Republican candidate for Congress in the 9th District of Ohio.

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Bill Gunderson: Can a Businessman Run a Country?

February 10, 2012

President Obama sure likes to hold Warren Buffett up as an example these days. After all, it is Warren Buffett that is dying to pay a higher tax rate. Never mind that he is currently fighting the IRS over a paltry billion dollars or so in unpaid taxes. Warren is also hot and bothered about his secretary paying a higher effective tax rate than most millionaires and billionaires. Of course, we still have not seen her tax return, so we really don’t know what rate she does pay. I guess it does not matter however, that Mitt Romney paid several million in taxes while Buffet’s secretary may have paid a few thousand. Who’s counting anyway? My question to you the reader is this: If God forbid, something should happen to Mr. Buffett, would he feel more comfortable hiring Barack Obama or Mitt Romney to take over the management of Berkshire Hathaway? Oh, I know what you are thinking, government cannot be run like a business; it takes politicians to get things done. It is thinking like this that has helped create a current debt load of $15 trillion dollars! Do you think that Mr. Buffett would have gotten us into the mess that we are currently in had he been running the country over the last 10 years? I highly doubt it. Warren still lives in the same humble abode that he has lived in for years. He is known for being pretty frugal. Oh, I forgot however that Mr. Buffett is a businessman though. We can’t have a businessman running our country. Actually, it would be real interesting to know where we would be today had Warren Buffett been running the country for the last 10 years. Maybe he would have consulted with other businessmen like Steve Jobs of Apple Computer or Jim Skinner of McDonald’s about the economy and job creation. Instead our president goes to CEOs like Jeffrey Immelt of General Electric and Antonio Perez of Eastman Kodak to get his advice about job creation. Is that the same Jeffrey Immelt who has had the stock of GE going backwards by an average of 3.3 percent per year over the last 10 years? Is that the same Antonio Perez who just had his company file for bankruptcy ? Eastman Kodak was once a member of the Dow Jones Industrial Average, it is now a penny stock! I don’t know about you, but when I want to lose weight, I seek out a skinny diet counselor. Now back to Berkshire Hathaway. What does President Obama’s resume look like when it comes to investing in companies? Let’s see, there was some $520 million that went into Solyndra. How did that one turn out? Did the investment go there on merit or favoritism? What would Buffet’s shareholders say if Warren made an investment that went from $520 million to zero in the span of 18 months? How did the Obama administration’s investment in Beacon Power go? Oh well, it is just taxpayer money that we don’t have. How about the billions that went into the so-called stimulus program? What kind of return are we getting on that one? While it is intriguing to think where our country might be today had a crackerjack businessman like Warren Buffett been running the show, it is an absolutely frightful thought to think where Berkshire Hathaway might be today, had Mr. Obama been at the helm for the last 10 years. This may sound like a harsh observation, but close your own eyes and ponder these questions for a minute. The bottom line is this: What we have been doing has not been working. The hole that we have to climb out of here in America is getting deeper and deeper and deeper. In fact, it is getting so deep, I think I can see Greece-austerity, strikes, riots, and bailouts anyone? We need a different skill set in the White House right now. We need a turnaround expert in the worst way. Oh, I forgot that a businessman cannot run a country. If a bunch of politicians can run the country into the ground, I feel pretty confident that it will take some businessmen to turn it around.

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White House: Energy Department Loan Oversight Needs Overhaul

February 10, 2012

* Struggling to fill key positions to manage loans * Did not evaluate failed loan to Solyndra * Chu: will review ideas, but program is working By Roberta Rampton WASHINGTON, Feb 10 (Reuters) – The U.S. Energy Department relies on too many consultants and committees for managing its loans and needs to beef up its management, concluded a review commissioned by the White House in the wake of publicity over failed solar panel maker Solyndra. Herb Allison, a former investment banker known for his work helping government agencies manage large, complex financing programs, reviewed the energy loan program, and recommended an overhaul in oversight of the $23.769 billion portfolio. He said the Energy Department has struggled to fill vacancies in key positions without success. “At least one manager is acting head of several departments,” he said in a 75-page report. Decisions should be made by individual managers with expertise, Allison said, instead of using a committee process “where collective responsibility can obscure individual accountability.” Allison did not review a $535 million loan guarantee to Solyndra, which filed for bankruptcy last year and has become a political sore spot leading into the 2012 election season. The loan was once held up by President Barack Obama as an example of how his administration was creating new jobs with “stimulus” funding while promoting renewable energy. It now is featured in at least two attack ads on television, and candidates for the Republican presidential nomination regularly invoke Solyndra as a symbol of what they say is government waste and misguided energy policy. Energy Secretary Steven Chu said he would review the recommendations to find ways to strengthen the program. But he said the program is working as it is intended, and noted that the review rated the overall risk of the loan portfolio as “slightly lower” than the department’s projections. “We have always known that there were inherent risks in backing innovative technologies at full commercial scale, and it is very likely that there will be other companies in the portfolio that won’t succeed, but the vast majority of companies are expected to pay the loans back in full, on time, and with about $8 billion in interest,” Chu said in a statement.

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BP Wins Ruling To Keep Old Accidents Out Of Gulf Spill Trial

February 10, 2012

* Evidence of Texas, Alaska incidents excluded * Judge: Older cases too dissimilar from Gulf spill * Feb. 27 trial expected By Jonathan Stempel Feb 9 (Reuters) – BP Plc won a court order to keep references to some previous accidents out of this month’s trial to assess blame for the 2010 Gulf of Mexico oil spill, the oil company’s second victory in as many days to bar potentially damaging evidence. Thursday’s ruling by U.S. District Judge Carl Barbier in New Orleans followed a ruling Wednesday by U.S. Magistrate Judge Sally Shushan to keep out some emails questioning some of BP’s activities before and after the spill. Barbier blocked the introduction of evidence related to two accidents involving BP facilities: a 2005 explosion at a Texas City, Texas refinery that killed 15 people, and a 2006 rupture of a corroded pipeline at Prudhoe Bay, Alaska. In the Texas case, BP pleaded guilty to violating the Clean Water Act and accepted a $50 million fine. BP pleaded guilty to a criminal Clean Water Act violation and was fined $20 million in the Alaska case. Barbier, however, ruled that the prior incidents were “not sufficiently similar” to the April 20, 2010 explosion of the Deepwater Horizon drilling rig and blowout of the Macondo oil well, which BP mainly owned. “The prior incidents were all land-based, while the Macondo incident occurred in the Gulf of Mexico,” Barbier wrote. “Additionally, the circumstances of oil refinery disasters and (an) exploratory drilling disaster are vastly different.” James Roy, a lawyer for some of the plaintiffs, who include people and businesses harmed by the accident, did not immediately respond to a request for comment. BP was also fined a record $87 million by the federal Occupational Safety and Health Administration for safety problems at the Texas refinery. Barbier is scheduled on Feb. 27 to preside over a non-jury trial to assign blame for the Deepwater Horizon accident, which killed 11 people and caused the largest offshore oil spill in U.S. history. Other corporate defendants include rig owner Transocean Ltd and Halliburton Co, which provided cementing services for the well. Plaintiffs also include the U.S. government, Alabama, Louisiana and Mississippi. BP has set aside roughly $42 billion for spill costs. Chief Executive Bob Dudley this week said the London-based company is preparing for trial, but willing to settle on reasonable terms. The case is In re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010, U.S. District Court, Eastern District of Louisiana, No. 10-md-02179.

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