Monday, December 31, 2012

Guns As The Solution To Guns? A Meditation on Corporate Solutions In General

Brilliant!  In quintessential arms-industry fashion the gun lobby as embodied in the National Rifle Association (NRA) has offered to supply both sides in an escalating arms race: More guns is the industry’s proposed answer to too many guns!

American crazies can obtain and walk the streets toting arsenals unimpeded by any legal challenge or rules and the gun lobby’s proposed remedy is that our response should be to expend taxpayer money to publicly equip and position sentries with the industry’s newest designs and latest ideas in terms of achieving superior force so that both fabulously equipped sides can shoot it out Wild West style with rapid fire multiple bullet high capacity magazines spraying large caliber armor-piercing bullets through our schools, movie theaters, shopping malls and churches . . .

Who wins such a shooting match?  Let’s send an award out to the fastest to draw . . .  the obvious conclusion: The only sure winner of such a plan is the gun manufacturing industry.

We all know the debate can get rather silly when people struggle to assert that guns are not the problem when you don’t responsibly regulate guns. . .  Remember the discussion of assault gun violence during the last presidential debate?: Republican candidate Romney came up with the idea that the solution to gun violence was for government to get involved in ensuring that the nation is populated by two-parent households.  No kidding: He did!  That was his version of how to cling to the notion that “Guns don’t kill people, people kill people,” although the statistics make it perfectly clear that people kill people (with guns as it turns out) much more frequently when they have guns.

The gun industry’s plan for America comes across a little like the proverbial vacuum cleaner salesman who elbows his way through your front door to spread dirt on your carpet so the salesman can endeavor to show you how well the machine they want to sell you will clean it up; the only thing is that this isn’t like the real version of that rigged sales pitch where the fluffy mix spilled on the customer’s floor is especially easy to suck up with the machine. . .  The gun manufacturers gambit works out more like an spectacular unfunny version of those spoofing burlesque skits where the mud stains leave a very real and very uncleanable mess.

The absurdity of the NRA’s sell more guns to address the gun problem is understandable when you realize who the NRA represents when it is promoting gun policy.  The evidence is that it doesn’t represent its own membership: It instead represents the industry selling the guns.  A New York Times editorial on the subject makes the point:
 . .  surveys that show a majority of N.R.A. members and a majority of American gun owners often support restrictions on gun sales and ownership that the N.R.A. has bitterly fought.

For instance, a 2009 poll commissioned by Mayors Against Illegal Guns found that 69 percent of N.R.A. members would support requiring all sellers at gun shows to conduct background checks of prospective buyers, which they do not have to do now and which the N.R.A. has steadfastly argued against.
Whatever reputedly huge amount of spending the NRA puts into political campaigns its actual membership is relatively small.  In our country of 315 million people the NRA with its low dues rate claims membership of only 4.3 million.  According to YouGov survey statistics recently reported in the Washington Post about 35 percent of Americans had a gun in their household (either owning a gun or living with a gun owner).  NRA membership among gun owners (mostly men) was 24 percent.  Obviously, surveys depend on the questions you ask (i.e. The Times cited survey above about background checks for gun shows NRA members favoring stricter law) but of the very much more substantial majority of gun owners who are not NRA members 25 percent supported stricter laws and 45 percent want no change.  Of the smaller 24 percent group of gun owners who are NRA members 54 percent wanted to make gun laws less strict.   Interestingly, a plurality of those who did not own a gun but lived with a gun owner (40 percent) want to make gun laws “more strict.”

While it may come as a surprise that the NRA membership is more supportive of gun restrictions than the NRA itself (despite NRA supported policies almost everyone is in favor of keeping guns out of the hands of the mentally ill and half of the NRA members supported requiring a five-day waiting period for gun purchases), consider that particular surprise against the background of how much more conservative NRA membership is compared to the rest of the American public.  The New York Times recently published survey information that not only are Republicans more likely to own guns than Democrats, but:
Whether someone owns a gun is a more powerful predictor of a person’s political party than her gender, whether she identifies as gay or lesbian, whether she is Hispanic, whether she lives in the South or a number of other demographic characteristics.
The NRA membership as opposed to gun owners in general is likely not just to be Republican but conservative as well: According to the survey figures in the Washington Post story:
70 percent of [that small percent of] gun owners who were NRA members called themselves “conservative” or “very conservative.”  Only 44 percent of gun owners who weren’t NRA members said that. 
In other words, the NRA being more extreme than its relatively small membership does not just mean it is more extreme than typical gun-owning Republicans; it means that it is also more extreme than a much smaller segment of the population (actually outnumbered by the rest of the gun-owning population) that self-identifies as especially conservative.

Here are a couple of things I found surprising to learn: First, the NRA’s stance on gun control was originally diametrically different, until relatively recently (1920s and 30s) it pushed for gun control legislation and, secondly, those positions now advanced by the NRA when it says it represents its highly conservative membership are positions it derived from the country’s radical left.  We may tend to associate guns more with the South than the North but the NRA was started right after the Civil War by two former Union soldiers. The change to the current politics of the NRA came with a May 1997 coup that changed its leadership.  More on this background is available via a WNYC On The Media interview with UCLA law professor Adam Winkler, here: The Untold Story of Guns, Friday, December 21, 2012.

While we may strongly associate the NRA’s current views with right-wing  conservatives Winkler suggests that the heritage of the NRA’s current views, including demonization of the government as a threat (used as a justification to incapacitate government’s ability to regulate the industry), hearkens back to a precipitating NRA endorsement of and alliance in support of the radical left Black Panthers view that gun ownership is a critical protection against hostile government that can be  “tyrannical and disrespectful of people’s rights.”   Winkler has written a 2011 book on the subject (Gunfight: The Battle over the Right to Bear Arms in America) extracts of which became an article in the Atlantic: “The Secret History of Guns,” September 2011.   Another interesting tidbit therein: Ronald Reagan, who tenaciously continued to oppose gun control even after he himself was shot in an assassination attempt, started out on the other side of the fence as a governor who fought to curtail gun ownership.

When it comes to gun control I consider myself to be somewhere in the middle, recognizing that there is a very big middle to be in.  Living in New York City I see little reason to want to own a gun and plenty of reason I don’t want lots of them floating around the city, but having had family in Montana where they reported being stalked by cougars (who I was told are especially attracted to child-size human beings) I can see why one might want to take a gun for a walk in that area of the country.  Still, I can’t readily imagine how a concealed carry permit would assist in warding off the big cats. On the other side of the equation, my father’s cousin wound up owning his own World War II Howitzer for a while, you know those artillery field guns that are so big they travel on their own two wheels pulled around behind jeeps?  This gun was one of the smaller of such species.  If you have your own mountainside devoid of humans in the winter as my father’s cousin did you might actually be able discharge such a gun without too much mayhem but do we really want average citizens deciding where they want to point guns of such caliber and just when they want to set them off?

What do I think should be done in terms of gun control?  There is a lot that could be easily done that I would view as relatively middle of the road:
    •    I am hardly the first to wonder why guns whose primary purpose is to be deadly shouldn’t be at least as well regulated as automobiles which are only deadly if not used with the proper care.  The U.S. Constitution actually speaks in terms of regulating guns (the Second Amendment addressing guns speaks of a “well regulated Militia”) but the Constitution’s other direct mentions of possible government regulation (regulation of federal military forces, ports and commerce, currency, the federal courts, the manner of federal elections) doesn’t immediately bring to mind measures to ensure that other potentially deadly things like automobiles, chemicals or drugs be responsibly handled.

    •    Not only are car drivers required to have licenses but the cars they drive around also display license plates so that their improper use can be accountably traced back.  (The minimal cost to this system of licensing cars is far less than the alternative.)  I rather like the proposals that have been put forth to make bullets traceable in various ways so that law enforcement can identify where bullets were bought as well as the gun used to fire them.  A national registry to make the all of the tracking jobs a lot easier makes sense.  (See: Lawmakers Consider Stamps on Bullets, Published August 03, 2005,, The Year in Ideas; Traceable Bullets, By Margaret Talbot, December 15, 2002, US Needs Traceable Bullets - Not More Marketable Guns, By Josh Sugarmann. Josh Sugarmann is executive director of the Violence Policy Center. / December 13, 1993, Make Bullets Traceable To Affect Accountability, July 17, 1999, Mon Jul 12, 2010, How to track Gun Crimes, 'Tags' to Help Catch Bombers, May 30, 1995.)

    •    I was stunned when I learned in 1999 that it was possible to trace back half of all the crime guns to just 1 percent of federally licensed firearms dealers and that, with most crime guns being guns that were legally bought, all of the legally bought crime guns were sold by only 20 percent of the dealers.  From this you can infer that a lot of repetition of consciously intended bad acts.  We know that straw buyers make repeated purchases for organized rings of gun traffickers.  It hardly seems that, unfettered by the gun lobby, that this would be hard to stop.

    •    The list of possible sensible restrictions can easily be lengthened.  I don’t think that there is reason that most people should be permitted to own either a Howitzer or the assault weapons designed for mass mayhem even if I am not the sort to dismiss out of hand the notion endorsed by the Black Panthers that government can be tyrannically disrespectful of individual rights (Disquietingly, gun control advocate Michael Bloomberg, mayor of New York City, is one of the ones who must be watched in terms of the potentials for government abuse). 
But what is the logic of fighting the plethora of guns with an escalating investment in more guns to keep pace?

What is this predilection we seem to have developed in this new era now dubbed the Anthropocene* for attacking all our manmade problems (I should say masculinely manufactured problems) with an escalating piling on of the same?
(* the new epoch where human beings are changing the planet)
I find myself thinking of the disappearance of bees around the world due to colony collapse disorder.  One reason colony collapse disorder is likely occurring is because genetically modified crops are producing a new class of neonicotinoid pesticides (produced by companies like Monsanto). How are companies like Monsanto dealing with the fact that the world is dependent upon bees for fertilization of most of the world’s crops, about 40% of what we eat? Not by eliminating the genetically modified crops threatening the bees. Like Zeus when he decided he needed no female partner and could masculinely give birth to Athena without Hera, these companies are prepared to go it alone without any partnering or balance with nature: They are hard at work genetically reengineering almond and soy crops so they won’t require fertilization by bees.  How parthenogenetically pathological: To banish forever the utility of flowers!

Similarly, the same companies that sell powerful herbicides (like Monsanto’s Roundup) and pesticides are patenting new crops that they are genetically modifying to be resistant to increasingly high doses of such chemicals.  As weeds found in the fields naturally evolve to become herbicide tolerant and insect pests likewise evolve the companies escalate the strength of their poisons and the artificially created GMO crops that can co-exist with them.  It’s the rest of nature that can’t keep pace to stay in balance.  Those who think that the horror GMO “Frankenfoods”is their mere unfamiliarity probably have it wrong: What we really have to fear most is likely this kind out-of-balance arms race of man inventing alterations to the natural environment to stay ahead of man-made alterations to the natural environment.

We could be cutting back on the greenhouse gases we pour into the air that cause global warming and climate change but instead it is likely that we are going to be more content simply to take extraordinary measures to deal with its effects.  The center of the country (62 percent of the continental United States) is drying out.  The Colorado River, supplying seven states including Arizona and California and 25 million people with water, is drying up so the Federal Government is looking at a new pipeline to annually divert 600,000 acre-feet of water from the Missouri River.  But the Missouri River feeds the Mississippi River and right now because of the unprecedentedly severe drought the Mississippi is becoming increasingly less navigable.  If the river is shut down as a navigation waterway it will necessitate a huge reconfiguration of the nation’s existing infrastructure, including the relocation of towns and population or their reassignment to new industries and livelihoods.

Meanwhile, the Ogallala Aquifer, instrumental in keeping a return of 1930s Dust Bowl conditions in the region at bay, is is being drained at an unsustainable rate.  At the same time, the acquirer which supplies drinking water to 82% of the populace in the region is threatened by the proposed new Keystone pipeline which, probably more importantly, will lead to a significant increase in greenhouse gasses, global warming and thus, full circle, the aquifer’s replenishment problem.

Other things we are looking at doing to adapt to climate change: moving infrastructure, homes and industry away from the changing coastlines, rebuilding coastline structures to make them less vulnerable to storms, rebuilding subways and waste management systems, pumping sand to the beaches, building surge barriers in our harbors and paying for storm recovery.  As sea levels rise, substantial amounts of potable water sources near the coastlines need to be replaced.  We are even considering more extreme schemes to reverse the climate change like spewing iron into the oceans to spur algae production to recapture carbon and spewing reflective dusts into the sky to repel the heat.  With dust above our heads the skies might no longer be blue and solar power installations might be less effective but it would be consistent with piling on to take active measures to try to stay ahead of ourselves.

Why is the silliness of these compounding races to keep pace with our own unbalancing reinventions of the environment accepted by any of us as making sense when they get proposed?  Maybe they don’t actually make sense to us, at least not as we inhabit the world as human beings, citizens of the world or parents of future generations.  Maybe these ideas only make sense to the corporations that propose them in order to continue making profits.  Is acceptance of these ideas, such as that acceptance may be, only just the way that corporate thought pervades into the general culture at large?

My respect for former New York Governor Eliot Spitzer has been somewhat circumscribed at times, but maybe Mr. Spitzer has the right answer about how to address the problem with government’s spinelessness in taking on the proliferation of guns and their irresponsible use.  Spitzer found good answers in tackling Wall Street before.  Now he is suggesting that we need to take the profit out of the gun industry’s promotion of irresponsibility. 

He says it is time to bring pressure to bear on the owners of the gun companies, time to look at major union pension fund and university endowments investing in the industry because they sure don’t want to be;
tarred as a passive owner of the company that sells semi-automatic weapons with no background checks or concern for the use of the weapons. Those investors have enormous leverage over the [companies that own the gun manufacturers]
He suggests they “could wield vast power” if they spoke with one voice.  (See: It’s Time To Target Cerberus, the Private-Equity Firm That Dominates the Gun Industry, by Eliot Spitzer, Monday, Dec. 17, 2012 and December 22, 2012, Public pressure and guns, by Eliot Spitzer.)

It’s an idea worth expanding upon.  The world could be made better in a lot of ways if we took the profit out of a lot of things.  It would be a nice way to clean the slate for the New Year.

Happy New Year.

Thursday, November 8, 2012

Lesson Of Election: The Big Money Lost! . . . Or Maybe That's Pretty Far From Perfectly True

Which Times article to believe?  No effect from money or a shift to the right?
People still haven’t got it sorted out: One way you know . . . conflicting headlines in the same edition of the New York Times!  Everybody’s busy proclaiming victory or trying to deny actual defeat.  Fact is, they're both right.

One perfectly good take on this election is that the big money unleashed by the Supreme Court’s Citizens United decision lost.  Upper left hand of its front page the Times today chose to run a story making exactly this point: Little to Show for Cash Flood by Big Donors, by Nicholas Confessore and Jess Bidgood, November 7, 2012.

After what the Times notes was the “most expensive election in American history drew to a close this week with a price tag estimated at more than $6 billion” it comments that “the nation’s megadonors returned home with lighter wallets and few victories.”  Indeed, just as the Times observes, “President Obama will return to the White House in January, and the Democrats have strengthened their lock on the Senate.”

But contrast that with the message conveyed by other articles the Times featured in the same edition.  One picture is worth a thousand words and the message bolstered by Times data graphics proclaimed “most counties shifted toward the Republican side in Tuesdays’s vote, partly reversing large steps to the left in the 2008 election” and “Counties Blue and Red Move to the Right.”   See: Over the Decades, How States Have Shifted, How Obama Won Re-election, Obama Was Not as Strong as in 2008, but Strong Enough.

The Times supplies the above, illustrating a shift to the right, in the form of an animation at their site
And let’s not forget that the House of Representatives, seized by the Republicans in 2010, remained in Republican control.  So Karl Rove’s perspective reported in that first mentioned front page Times article is very important: Without the huge amount of spending by the megadonors, “the race would not have been as close as it was.” *  Among other things the Democrats might have taken back the House.  And this doesn’t even begin to consider what the effect of big money might have been in smaller, more easily bought local elections.
(* Notwithstanding, this philosophical point of view, Rove reportedly melted down on the Fox News set the night of the election unwilling to admit Obama had won Ohio.)
So if there is solace to be taken that the influence of big money can be fought and counteracted, that isn’t to say that its influence isn’t mightily felt.

With big money in play this election was fought very strategically on both sides.  It’s already been mentioned that Republicans “have lost the popular vote in five of the last six presidential elections.”  That Republicans have won presidential elections while losing the vote is an indication that money was spent strategically with the most important goal being the winning of the election, not the winning of the hearts and minds of the populace.  But Obama was also willing to play strategically and for a while it was viewed as possible that Obama might have won the all-important electoral college without winning the popular vote.

Perhaps the biggest surprise is that with a little campaigning in North Carolina, a state the Obama campaign apparently wrote off due to importance of electoral collage math, Obama probably would have shifted a lot of voters in his favor, adding to his popular vote and electoral collage tallies.

Big money also probably forced the Democrats to play a strategic game concentrating on keeping a balance of power with majority in the Senate rather than devote resources to taking back the House.

How did big money assert itself in this election?  The best analysis will come in time.  Since much of the money invested in political candidates now stays secret, utilizing 501(c)(4) organizations, organizations that are ostensibly formed for charitable and public purposes but these days are abused for political purposes, it may take a long time to figure out whose money was going where, notwithstanding that there are some donors, like Sheldon Adelson, who actually seem to like to attract attention to the money they are giving as well as to whom it's going.

Before we discount the influence of big money too quickly let’s remember that Romney was the Republican candidate because he was the product of the big money.  In the Whac-a-Mole Republican primaries it was the powerful effect of Romney money that was whacking down that long string of anyone-but-Romney alternative candidates.  Speaking of "anybody but Romney," the phrase can be inverted and turned to say that analysts keeping their eye on the money never gave anybody but Romney a chance of being the Republican candidate, consistently and for more than a full year in advance.

The irony is that the other potential candidates taking on Romney were those favored by those in the populace stirred up by the Tea Party.  Consider that the Tea Party, while it masquerades as grass roots, is actually a top-down movement.  It is top-down and well-funded because it is largely the creation of big money.  It served to siphon off and engage a lot of the national anger coming to the surface about privileged elites that would have been channeled more rationally in a direction like the Occupy Wall Street movement.  While most of the establishment's big money wanted Romney, the big money funding the Tea Party couldn’t and didn’t tightly control the free-for-all preferences emerging for for candidates like Herman Cain, Michele Bachmann and Newt Gingrich.

What the donors behind the Tea Party have been buying with their focus on extremism and their picking off of moderates is an intransigent resistance to compromise, leftward movement, and any sort or rational debate and discussion about issues.  Gridlock is acceptable, likely desirable, to them.  Their strategies of creating new out-lying poles of "political" thought parallel the strategies of those spending heavily to create doubt about climate change and to remove from office politicians willing to take steps to deal with it.  This is not surprising because a lot of the money to fund the Tea Party and to fund creation of doubt concerning the scientific conclusions on climate change is actually coming from the same places.

I recently offered a teaser which I will offer here again: This may be the last presidential election where the fossil fuel industry will ever be able to spend this kind of money to buy politicians.  Why?  I’ll have to set that aside and deal with it in a future National Notice article.

Provided that big money is disabled in the future the shift to red that money bought in this election is likely to be counteracted by the changing demographic that favor Democrats in future years.  That's provided that the money, being done with this election, doesn't figure out how to buy new set of voters in the future.

Was big money also spent on the Democratic side of the election?  Of course.  There was some balancing out.  Big money on the Democratic side helped defeat big money of the Republican side, but there was much more of it on the Republican side.  Big money unleashed in politics was exactly what Republican strategists wanted when they pursued the Citizens United case.

There are those who will correctly point out that because there was big money spent on the Democratic side we should expect Obama will inevitably behave with a certain deference to the establishment entities where the money came from as a result.  True, but by virtue of that analysis we can also expect Obama to be less beholden to the Wall Streeters who abandoned him this time around and less beholden to fossil fuel industry that threw so much support to Romney.

Another set of data maps in today's Times showing a shift to red
Did the big money win?  Yes, in part: The House is still Republican.  The Republican’s are proclaiming that the results of the election mean that the people of the United State don’t want higher taxes on the rich.  If that is believed or treated as true that's a win for them.  Also, as mentioned in the last National Notice article, it’s the Republicans in the House of Representatives who won’t even talk about their positions about climate change.

Yes, big money is having a lot of influence.

Monday, November 5, 2012

Could The Environment Be The Main Issue In This Election, Not The Economy And Increasing Disparities In Wealth? It’s Really The same Thing

Mitt Romney during his Republican Convention acceptance speech, biting his lip in sarcastic mockery of the idea that the world should be concerned about climate change
I just put up a National Notice article that said that the central issue of this election and what everyone should absolutely understand is that the most important thing about the economy right now is that our economy bogs down when we focus the nation's policy on squeezing the majority of citizens so that a few at the top can do a lot better than everyone else. (See: Sunday, November 4, 2012, Central Issue In Election And Most Important Thing About The Economy: We Falter Economically When Everyone’s Squeezed To Benefit A Few At The Top.)

But what if that isn’t the most important issue?  Maybe, as superstorm Hurricane Sandy tends to demonstrate amply well, we should all be considering that the environment is really the most important issue in the election, trumping the economy.  If something isn’t done about weather weirding, global warming, climate change, whatever you want to call it, the earth’s demise as we know it may be irreversible before the next presidential election rolls around.

We all remember how in his acceptance speech at the Republican Convention Mitt Romney said “President Obama promised to slow the rise of the oceans. . . .” and then held back for an extended fourteen seconds bemusedly biting his lip while the entire convention hall laughed (see video above).  Romney then proceeded:
     . .  And to heal the planet. [more laughter]

    My promise is to help you and your family.
As if those suffering from disasters like superstorm Sandy or the drought that wiped out much of the corn belt this year would make any such distinction.  Maybe the distinction is that Romney has said that FEMA, the federal agency that comes in and cleans up after disasters precipitated or intensified by climate change, should be discontinued by the federal government so it can be cast down to the state level and privatized.  And Romney wants to totally unleash the fossil fuel industry.

The science on climate change is in.  There are no real scientists on any theoretical “other side” . . . . just a bunch of paid hacks.  Unless we as a country and a species quickly start changing how we do things we may soon be extinct or, at the very least, well on the way to a world that will have little resemblance to the world that has nurtured mankind since the beginning of human existence.

Is it fair for me at this late juncture to say that environmental destruction from climate change trumps the importance of the economy as an issue, along with the increasing disparities in the control of wealth now dragging it down?  No, because they are really the same thing.   

There is only one reason that we are not now addressing the issues of climate change: It's the vast amount of money that is being spent to cause the public to doubt incontrovertible science.   I suggest people take the time to watch Frontline’s recent hour-long documentary, “Climate of Doubt,” that shows exactly how the money is spent to create this doubt and you can meet, on screen, the people that do it.  While you are at it you may also want to watch Frontline’s “Big Sky, Big Money” which is about much the same thing, how money is secretly deployed to buy elections and politicians.  Even if money is paying for political advertisements that are, say for example about a social issue, those paying to finance those ads may be motivated by only an entirely different concern: Whether their corporations can continue to steal from the public.

Here is what I said in a Noticing New York article on the subject (which also said that New York should prepare for storm surges):
Continued burning of fossil fuels persists because it is attractive to the petroleum, gas and coal industry. It is attractive to them because these industries are highly subsidized. They are subsidized overtly with such things as steep tax breaks and, more important, they are subsidized by not having to pay for what they take from the public. The fossil fuel industry doesn’t have to pay for polluting the atmosphere with injected carbon, they don’t have to pay for the cost of higher sea levels, acidification of the oceans, or extreme weather events. They are also insulated, as in the case of the BP oil spill, from full legal liability for the damage done to the environment from spewing oil directly into the ocean.

In essence, the profit of the fossil fuels industry is predicated on what they are able to extract from the public and the public realm without paying for it.
(See: Wednesday, September 29, 2010, Brooklyn Tornadoes and a Cool-Headed Appraisal of Weather Weirding in New York.)

In other words, what’s behind all the money being spent to prevent the country from dealing with climate change is an intentional transfer of our natural environmental wealth from all the rest of us to those few who are wealthy enough to spend such huge amounts of money.  And maybe those big spenders are so wealthy they think they don’t need to care when the world becomes substantially less habitable.

So once again it's the same issue: The wealth that is increasingly aggregating in the hands of a few in this country is not only bad for the economy, it's also contributing to the jeopardy into which our environment has been put.  (This doesn't even get into the discussion about how good for the economy pursuit of alternative energy policy would be.)

Here is a teaser: This may be the last presidential election where the fossil fuel industry will ever be able to spend this kind of money to buy politicians.  Why?  I’ll have to set that aside and deal with it in a future National Notice article.  But it also could just be too late for the planet if the election is decided the wrong way.

Frontline’s “Climate of Doubt” documentary made one thing clear.  While nobody in Congress is willing to act on climate change anymore, there is an important difference between Republicans and Democrats right now when it comes to climate change: Zero Republicans even answer questions about climate change anymore, while Democrats acknowledge the science.  If we can get a few more Democrats in office acknowledging the science is start.

It matters up and down the ticket how people vote tomorrow.

Sunday, November 4, 2012

Central Issue In Election And Most Important Thing About The Economy: We Falter Economically When Everyone’s Squeezed To Benefit A Few At The Top

Obama on Jon Stewart 10/18/2012 with a pinch representing the few at the top benefitting from a skewing of wealth that slows the economy
The central issue of this election and what everyone should absolutely understand is the most important thing about the economy right now is that our economy bogs down when we focus the nation's policy on squeezing the majority of citizens so that a few at the top can do a lot better than everyone else.  That may seem like a self-evident proposition to most National Notice readers and there have certainly been more than a few National Notice articles related to the premise in one way or another.  It does not seem to be a self-evident proposition to either Mitt Romney or his running mate Paul Ryan.

Why restate this right now?  Because the election is upon us and because, picking up on words of the president previously noted in Noticing New York, President Obama made essentially this point when he appeared on Jon Stewart’s Daily Show not long ago.  His words that deserve being quoted and passed around were as follows:
The most important thing is when you think about the economy, I am absolutely convinced that, when you look at the historical record, that when middle class families do well, when there are ladders of opportunity for poor families to get into the middle class, the entire economy does well, and when a few folks are doing very well at the top and everybody else is getting squeezed the economy grows slower.  And that is the central issue in this election that we've got to make sure we address.
(See: Wednesday, October 24, 2012, Most Important Thing About Economy + Central Issue In Election: Obama On Jon Stewart’s Daily Show Rejects Ratner/Prokhorov “Barclays” Paradigm.  That Noticing New York article makes the point that these national issues also play out on the local level in insidious ways.)

However self-evident this point about wealth inequality is, it can’t be repeated too often right now in light of its importance to the coming election.

If you want documentation, the International Monetary Fund has issued a report saying that this “widening disparity” in wealth is gumming up and slowing down the U.S. economy.  I liken the situation to the way that things grind to a halt at the end of a Monopoly game, when further moves cease to be possible because all the money is piled up in one place.  We used to have a disparaging view of economies in South American countries where it seemed so obvious that things could never work because of concentrations of wealth in the midst of unnecessary deprivation, but more and more we are becoming the thing we once disparaged. is sharing a bit of campaigning on this subject by punctuating with animation (by a 'Simpsons' Animator) an Obama speech about what does and doesn’t work when it comes to the economy: BRILLIANT: A 'Simpsons' Animator Works His Magic On A Rousing Obama Speech.  View the video below (or go to the website above to share it more broadly).

Whatever good things can be said about private equity firms, the principal motivating focus of a firm like Bain Capital, where Romney spent most of his career is to figure out how to direct more squeezed-out wealth to a narrow segment of the population owning stocks that pay them income being taxed at a much lower rate than on regular income.  Romney’s tax liability for 2011 was 10% (despite the fact that he told the public it was never less than 13%).

Those at the top do well but other Americans are seeing longer work weeks, lower pay and some are seeing shorter life spans while the wealthy are living longer.

Romney champions programs, tax structures and alterations to Medicare and Social Security that will further skew the allocation of income and wealth in this country to those who are already far wealthier than others.

Meanwhile we are not supposed to know, talk about or understand the wealth practices and equations that pertain to the wealth of those, like Romney, who are seeking to govern the rest of us.   In the United States we have more freedoms and a better system than in China in this respect, but how much so?: In the United States Romney (though not yet elected) doesn’t want to release his tax returns even when we find that he misrepresented them. . . In China when the NY Times reports that the family of prime minister Wen Jiabao and his family, once poor, have acquired wealth in the billions (real money in China), China shuts down parts of the internet not wanting the populace to find out anything about it.

It’s not a good thing not to know what’s going on when a country's leaders consolidate all the nation's money and all the power.  For years Silvio Berlusconi, the vastly wealthy former Italian prime minister, simultaneously controlled most of the media in that country.  Once viewed as untouchably powerful, he has now been convicted and sentenced to 4 years in prison for tax fraud, with more charges pending.

Columbia University professer Joseph E. Stiglitz , a winner of the Nobel Prize in Economics and a former chief economist of the World Bank, has two similar articles about the meaning of this election as it relates to the issue of wealth inequality.  Strangely, one appeared only in the Sunday Review section of the New York Times print edition (available elsewhere though) and the other appeared only in the paper's web edition.  (See: Print edition version, What’s at stake in this US election, October 30, 2012 and the web edition, Some Are More Unequal Than Others, October 26, 2012.)

Says Mr. Stiglitz in the web version of this article:
Mitt Romney has been explicit: inequality should be talked about only in quiet voices behind closed doors.

    * * * *

 . . .  inequality and poverty [have suddenly appeared] as part of the Romney-Ryan makeover, as they attempt to portray themselves (to use a phrase of some 12 years ago) as compassionate conservatives. In Cleveland on Wednesday, Paul Ryan gave a speech that might lead one to conclude that the two Republican candidates were really concerned about poverty. But more revealing than oratory are budget numbers — like those actually contained in the Ryan budget. His budget proposal guts programs that serve those at the bottom, and little could have done more to enrich those at the top than his original tax proposals (like the elimination of capital gains taxes, a position from which he understandably has tried to distance himself).

    * * * * 

. . .Tax havens discourage investment in the United States. Taxing speculators at a lower rate encourages speculation and instability — and draws our most talented young people out of more productive endeavors. The result is a distorted, inefficient economy that grows more slowly than it should.

The Romney campaign, however, has defended inequality or brushed it aside. To do so, it has employed a handful of economic myths.
Mr. Stiglitz then goes on to examine those myths.  One of them is the “trickle-down economics” theory used to justify shifting more wealth to the already wealthy. (Watch the video to see it called something else.)

One example Mr. Stiglitz could have provided of just how impossible it is to make  “trickle-down economics” work is the how the bailout of Wall Street after the financial crisis did not readily benefit Main Street. The banks sat with the money, not passing it along to Main Street, even as their profits were restored and they resumed paying extraordinary bonuses.  The structure of that approach (initiated under the Bush administration) is something for which President Obama is only partially responsible.  Under Romney and Ryan we’d see implemented many more examples of what was misguided with respect to this approach: The priority it placed in helping the wealthy few first.
Chart showing boost to personal income when stimulus was enacted after Obama took office- Click to enlarge
The stimulus was also spent elsewhere, like on American infrastructure.  That worked.  (See the chart above being used in the filming of a commercial for Obama in New York’s Prospect Park.)  Republicans claim the stimulus didn’t work and say they would have spent less.  They probably would have.  Support for the banking community aside, the new breed of Republicans find themselves hostile to almost any form of government spending, be it FEMA, healthcare of Social Security, because government spending, even on things like infrastructure, often levels the playing field, tending to interfere with their goal of redistributing more wealth to the wealthy.  And Republicans, not at all interested in seeing an effective recovery anyway, prevented the level of spending that would have led to an even stronger recovery.

But the top issue of the campaign, more important than any other, is whether Romney and Ryan will, if elected, be put in a position to make a further redistribution of wealth to the wealthy the nation’s misbegotten priority.

The New York Times today has a scary story today about how Paul Ryan, the most ideologically extreme and starkly consistent of the Romney/Ryan pair, with “no record of compromise” in his past, expects to put in charge of cutting back and overhauling government programs like Medicare (presumably Social Security would be among the other top programs to be targeted as well): Ryan, Quiet for Now, Is Said to Be Planning for an Active Role, by Trip Gabriel, November 3, 2012.

Are you ready for these Romney/Ryan plans to tilt things even more to the wealthy?  And are we all ready for the economy to slow way down as a result?

Friday, October 26, 2012

Chilling Reality: Why Those Voting Early Get Greater Proportional Representation Than Those Who Don’t

It’s a chilling reality but do you know why, when the votes are finally counted, those who vote early will wind up being proportionately better represented with a greater number of their votes counted than those who wait for Election Day? . . . 

. . . . Because, if you wait till Election Day to vote you might die first.  Or you might just get sick, enter into a coma, or otherwise somehow lose competence to make it to the polls to cast your vote.  Or you could be kidnapped!  Meanwhile, although a certain percentage of those who vote early will likewise die before Election Day their votes are still going to count.

Now, technically, (here’s a quibble) if you vote early and then die before Election Day your vote isn’t supposed to count.  In theory it should be traced and extracted from the amassed vote totals of which it will have by then become a part, but, as a practical matter, that isn’t going to happen.  That’s what this article says and I’ll concur in its conclusion without researching it further: Don't Worry, This World War II Veteran's Vote Will Be Counted, Alexander Abad-Santos, Oct 22, 2012.                

What about your vote if you lose mental competence or are in a coma?  Do those votes wind up being votes that, as a practical matter, will still count even if they perhaps aren't supposed to?

Oh, they’ll probably be counted too but whether people think they should count under applicable voting rules is complicated: You probably don’t want to get into trying to sort out the answer. . .

. . . It’ll depend, partly, on what are the laws of whatever one of the fifty states in the union you are in.  You get sent to an insane asylum after voting early?  A court orders that a guardian must take charge of you?  It might be that your vote is still supposed to count, at least unless further steps have been taken to classify your vote as an incompetent one.

Here’s a peculiar sort of topsy-turvy, turnaround state of affairs when it comes to voting.  Normally, if you become incompetent, your ability to do anything legally disappears unless you have executed and are acting through a document (everybody ought to know about and consider using) called a durable power of attorney- It’s something you sign so that someone can still effectuate your legal wishes after you’ve become non compos mentis (not sound of mind).  Voting?  Voting in a public election is practically the only legal act that kind of power of attorney can’t be used to accomplish if you’ve gone, proverbially, out to lunch.    Conversely, though, that early vote of yours?: It stands, perhaps singularly, as maybe the only future legal act that is still supposed to be recognized as having legal validity even though you’ve lost your mental faculties!

You go into a coma?  Well, whether your vote ought to count might depend on whether you come out of that coma later.  If you come out of the coma then your vote is probably supposed to be counted no matter what.  Going into a coma and not coming out might be something different.  That's technically speaking, although as a practical matter, your vote is probably still going to stay amongst the counted anyway.

As for being kidnapped?: Your early vote should count no matter what.  And remember, kidnapping might include that kind of metaphorical kidnapping that occurs when, on the day of the election, your boss tells you that you have to work extra shifts, right through all the scheduled voting hours.

Does all the nitpicking associated with all this meticulous legal parsing seem just a tad ridiculous?   Yes, perhaps it does.  After all, even if there are some votes that, if you scrutinize them, are perhaps not supposed to count for reasons that may apply and vary from state to state, are there really that many people total who are going to die, get declared incompetent or go into a coma between the particular day they vote early and that national election day now looming before us?*  As an honestly credible concern would the small number of such individuals be likely to have any truly significant effect on the outcome of an election?  Even if it were the case, how unfair is it that these dedicated early voters are able to surmount the vagaries of fate to cross the quadrennial finish line to have their vote count one last time?
(* For the die hards of death tracking who want to do some rough calculations: Say that 2,420,000 Americans die every year.  Say that, of this number, maybe some 93,000 die during the average period between the casting of an early vote and Election Day.  Not all of them are eligible voters or vote to begin with.  The current U.S. population is 311,800,000. Last presidential election, with a record turnout, 131 million people voted.  Only about 60% of eligible voters vote.  This year it is estimated that 40% of those voting will vote early.  So maybe 15,500 or so voters might die before the election after casting an early ballot.)
Think the above is ridiculous?

The horror of having the votes of dead voters improperly count just discussed is nothing compared to the ridiculousness of what has been going on in Texas this election in the name of of not letting dead voters improperly vote. . .

Mid-September, National Public Radio ran a superb story on the political shenanigans going on in Texas that commenced by making brilliant use of an audio clip from the film, “The Sixth Sense” (It is pretty much the same audio used as audio for the film’s trailer): Many Texans Bereaved Over 'Dead' Voter Purge, by Wade Goodwyn September 16, 2012.

I include the movie’s trailer here in this post so you can click on it just in case you don’t find this post spooky enough all on its very own.

The NPR story (click here to listen) begins with the young actor from the 1999 film, Haley Joel Osment saying:
I see dead people. Walking around like regular people. They don't know they're dead.    
In the film trailer Osment also says:
They’re everywhere.
The NPR story is basically about how, for political reasons, Republican Texas Secretary of State Esperanza "Hope" Andrade decided she could, with a similar paranormal paranoia, see dead people everywhere, walking around like regular people who didn’t know they were dead.  That enabled her to purge the Texas voting rolls of likely Democratic voters.

Hope Andrede notified 80,000 individuals* that they were deceased and were therefore being removed from the voting rolls.  To do so she used information that the Social Security administration warned the state of Texas it shouldn't rely on.  According to the NPR story a quick check by one of the local tax assessor-collectors led him to conclude “that there was a big probability that even a majority of the names on the list were people that were still alive.”
(*  Note for the die-hard death trackers: This huge 80,000 number is for just one state, not a nationwide figure.)
The NPR story then chronicles how these “dead people” (in one case a 52-year-old African-American woman and her 80-year-old father both got letters from Hope saying they were dead) have to spend hours on the phone, to no avail, trying to reach the government to say they are not dead.

You may want to tuck this article away and pull it out to give a livening-up “Boo” to a few a friends at Halloween which, like the election, is coming in just a few days.

The point to be most conscious of here is that the vast amount of voter suppression going on this year is not about getting things technically right and preventing from being counted the almost nonexistent number of votes that are cast improperly.  We are at risk for virtually no documented instances of voter fraud.  The onslaught against voting rights has not been about striking a balance in terms of what makes sense to ensure that the electorate is properly and accurately represented : Voter suppression is being pursued for the insidious purpose of intimidating and preventing those who are entitled to vote from doing so, and as many of them as possible.   The scary thing is that these baleful intentions could wind up steering the results of the election.

One last thing: If you do go and vote early it will give you the chance to find out if someone has been intentionally exaggerating reports your death.  That way can get started complaining early too.  (And just so you know, if you find yourself facing that plight you can still exercise your right to vote, so insist on it!)

Tuesday, October 23, 2012

Did Romney Access His Credentials As Mormon Bishop To Answer Gun Control Question In Second Presidential Debate?

Romney answering question about controlling AK-47 assault weapons during second presidential debate- Was his answer "heaven-sent"?
There was a moment in the second presidential debate that struck me as most odd.  I think I have finally managed to explain it by referring back to the time that Romney served as a Mormon Bishop. . .

. . .  How do we get from here to there?

Well that was more or less my question when I was listening to the debate: What kind of leap was Romney making when he answered an audience member’s question about gun control?

The Gun Control Question

Nina Gonzales asked the gun control question first of President Obama, whose turn it was to take the next question.  When Obama finished answering moderator Candy Crowley restated it to put it before Mr. Romney.

Ms. Gonzales’ question and Ms. Crowley restatement were as follows:
Ms. Gonzales: President Obama, during the Democratic National Convention in 2008, you stated you wanted to keep AK-47s out of the hands of criminals. What has your administration done or plan to do to limit the availability of assault weapons?

Ms. Crowley: Governor Romney, the question is about assault weapons, AK-47s.
The Answer?

Now admittedly we’ve had a number of issues that people would just as soon dance around or avoid entirely in this election if they can: Global weather change, Guantanamo detentions, drug legalization (See Brian McFadden’s October 21, 2012 “The Strip”).  Given the strength and inflexibility of the gun lobby, gun control is no doubt another of these.

But where did Romney go in his dance?  He went to the importance of two-parent households and not having babies before getting married!  (Presumably that translates into not having sex or only having very careful sex before getting married given Romney’s stance against a woman's free choice when it comes to abortion rights.  Presumably it also means government encouragement of the forgoing, given that Romney was answering the gun control question in the context of explaining why he should be president.)

Government encouragement of two-parent households to limit the availability of AK-47 assault weapons?

Obama danced a little in his response but not that much.  He referred implicitly to being governed by the Supreme Court’s recent rulings by saying that: “we're a nation that believes in the Second Amendment.”   That’s pretty direct.

Romney actually cited back to part of Obama’s response when he went off on his tangent about having babies when you are not married.  Indeed, Obama had spoken of having “a broader conversation” about reducing impulses to violence in the culture (and he even mentioned “faith groups” in this regard) even as he spoke about taking guns out of the hands of criminals and the mentally ill:
And so what I'm trying to do is to get a broader conversation about how do we reduce the violence generally. Part of it is seeing if we can get an assault weapons ban reintroduced, but part of it is also looking at other sources of the violence, because frankly, in my hometown of Chicago, there's an awful lot of violence, and they're not using AK-47s, they're using cheap handguns.

And so what can we do to intervene to make sure that young people have opportunity, that our schools are working, that if there's violence on the streets, that working with faith groups and law enforcement, we can catch it before it gets out of control?

And so what I want is a — is a comprehensive strategy. Part of it is seeing if we can get automatic weapons that kill folks in amazing numbers out of the hands of criminals and the mentally ill. But part of it is also going deeper and seeing if we can get into these communities and making sure we catch violent impulses before they occur.
But consider where Romney went with it when invited to participate in that broader question.

First he referred back to President Obama’s concept of being attuned to the culture of communities to catch violent impulses before they manifest:
What I believe is we have to do as the president mentioned towards the end of his remarks there, which is to make enormous efforts to enforce the gun laws that we have and to change the culture of violence we have. And you ask, how are we going to do that? And there are a number of things.
The “number of things”?

Obama had mentioned (in conjunction with the need for opportunity) the nation's schools should be working and Romney quickly endorsed having good schools (We were able to drive our schools to be number one in the nation in my state” - Fact checking: Romney didn't do that `driving') saying:
    . .  we'll give people the — the hope and opportunity they deserve, and perhaps less violence from that. 
But it was where Romney went quickly after that and the depth and amount of time he spent with the idea indicated it might all have been heartfelt even as he tried to cover multiple bases (two-parent households are “not always possible):
But let me mention another thing, and that is parents. We need moms and dads helping raise kids. Wherever possible, the — the benefit of having two parents in the home — and that's not always possible. A lot of great single moms, single dads. But gosh, to tell our kids that before they have babies, they ought to think about getting married to someone — that's a great idea because if there's a two-parent family, the prospect of living in poverty goes down dramatically. The opportunities that the child will — will be able to achieve increase dramatically.

So we can make changes in the way our culture works to help bring people away from violence and give them opportunity and bring them in the American system.
Where did this come from?  Obama wants to pay attention to how people are behaving in their “communities” but Romney wants to have a conversation with us all about having babies and what kind of families we are forming that . .  (is he really saying this?). .  may or may not (depending on the number of parents?) be part of the “American system”?

A Heaven-Sent Answer?

I believe I found my answer the other day.  I was about halfway through watching PBS Frontline’s “The Choice 2012,” a two hour documentary (Frontline does one every four years) interweaving the biographies of the two presidential candidates.

What I believe is my answer came when the documentary covered Romeny’s being ordained as a Mormon bishop.  (He served four years.) Here is what I heard:
NARRATOR: He would spend 20 to 30 hours each week helping other Mormons handle their most personal problems;— debt, sickness, unwanted pregnancies, and failing marriages.

CLAYTON CHRISTENSEN, [Romney's] Friend: The responsibility to helping them resolve their difficulties and recommit to each other falls on the shoulders of the bishop.

NARRATOR: At first, Bishop Romney was viewed by some as inflexible, what Mormons call an “iron rodder.”

SCOTT HELMAN [The Boston Globe- Co-Author, The Real Romney]: Some people describe him as being very much out of that hidebound tradition, where you know, he’s telling women that they cannot have an abortion. He’s telling single women to give up their children for adoption because the Mormon church does not encourage single parenthood, that he’s resistant to calls for changes within the church for more liberal policies, especially towards women.
The documentary suggested that Romney, confronted with real world family problems ultimately “thawed a bit” but that idea that “single women” should “give up their children for adoption because the Mormon church does not encourage single parenthood” sounds an awful like the idea Romney accessed on the stage of the second presidential debate when he told the nation how we should address the availability of AK-47 assault weapons on the streets.  I am not comfortable with the “broader conversations” Romney seems a little too eager to have.

Investors Discover That Fracking Costs Exceed (In The Not-So-Obvious Way) Expected Financial Benefits: What The New York Times Fails To Say

The New York Times Sunday Business section this week ran an article about the trouncing that investors in hydraulic fracturing companies are suffering.  A subhead to the print version of the article calls it a “gut punch to investors.”  It’s happening because the cost of fracking is exceeding the value of what’s being produced.

Fracking Cost Exceeds Benefit

Economists and environmentalists might say: That’s news? . .   We always knew that fracking was so destructive to the public's assets and environment that it wasn’t worth the cost.  But the news the Times story is delivering is different: Fracking investors are losing their shirt because the fracking boom is so much of a boom that it's going bust.  As the Times puts it the gas rush has:
    . . .been a money loser so far for many of the gas exploration companies and their tens of thousands of investors.
    The drillers punched so many holes and extracted so much gas through hydraulic fracturing that they have driven the price of natural gas to near-record lows. And because of the intricate financial deals and leasing arrangements that many of them struck during the boom, they were unable to pull their foot off the accelerator fast enough to avoid a crash in the price of natural gas, which is down more than 60 percent since the summer of 2008.
(See: After the Boom in Natural Gas, by Clifford Krauss and Eric Lipton, October 20, 2012.)

The most interesting thing about the Times article is likely what was left out, the multiple implications it didn’t address.  We’ll get to all that in moment.  First, what the Times did cover.

Fracking Companies Headed Toward Bankruptcies

Although the Times doesn’t use the term it looks like “bankruptcies” are, no doubt, in the future for some of the companies.  That, at least, is what I would glean from information supplied like the following:
    •    Rex W. Tillerson, the chief executive of Exxon Mobil, is quoted in the article saying:  “We are all losing our shirts today,” Mr. Tillerson said. “We’re making no money. It’s all in the red.”

    •    Now the gas companies are committed to spending far more to produce gas than they can earn selling it.

    •    We learn of situations where an  “agreement, negotiated by Goldman Sachs, came with some important strings attached: Exco [Resources] had to keep all 22 rigs drilling for gas, even as the price was dropping.” so that drilling wells continues “even if [Exco] now insisted that it made no economic sense.”

    •    Aubrey K. McClendon, a chief executive of Chesapeake Energy, one of the industry's really big companies is quoted as saying, “At least half and probably two-thirds or three-quarters of our gas drilling is what I would call involuntary.”

Picking on T. Boone Pickens

In this vein, the Times story tells a supporting anecdote about that Exco Resources contract that features Texas oilman, T. Boone Pickens.  I’ve previously quarreled with Mr. Pickens for misrepresenting that lots of fracking has been done before and that what is suddenly massively underway in this country isn’t a brand new technology, the likes of which we haven’t seen before.  In the Times anecdote Mr. Pickens learns that things are shaping up different enough so that he is encountering surprises himself:
    “Quit drilling,” T. Boone Pickens, the Texas oilman, barked to his fellow board members at Exco Resources, . . . .  “Shut her down.”

    * * * *

    There was only one problem: under the contracts that Exco signed, it couldn’t stop drilling.

    * * * *

    Mr. Pickens was furious. “We are stupid to drill these wells,” he said in a recent interview.
In unfolding the anecdote the Times works in that in the late 1980s Mr. Pickens lost his company, Mesa Inc., “when drooping gas prices hurt its ability to repay debts and pay dividends.”

Wall Street Bankers Behaving Badly Again

The article portrays the hammered investors as being the victims of perhaps unscrupulous investment bankers likening the investors’ situation with the “recent credit bubble,” saying:
the boom and bust in gas were driven in large part by tens of billions of dollars in creative financing engineered by investment banks like Goldman Sachs, Barclays* and Jefferies & Company.
(* Barclays is the British bank for which two Brooklyn subway hubs were recently renamed by the city MTA, together with a sports arena that was deeply subsidized by New Yorkers with some help from federal taxpayers as well.)

According to the Times:
After the financial crisis, the natural gas rush was one of the few major profit centers for Wall Street deal makers, who found willing takers among energy companies and foreign financial investors.
Remember how in the aftermath of the financial crisis Goldman Sachs was excoriated for and then avoided prosecution by paying a record $550 million fine to the SEC (many argued it was too low) for playing both sides of the housing mortgage market, promoting housing bonds while at the same time betting that money could be better made from the coming downturn in that market?  The Times has a gas drilling industry-based version of this investment banker story, once again involving Goldman Sachs selling, in conjunction with Jefferies & Company, a debt position in one of these fracking companies while the bankers are at the same time betting on a market decline.

Goldman gets passing mention while the Times focuses in on a Jefferies & Company banker, Ralph Eads III, whom it describes as “a pitch artist” of “unrestrained enthusiasm” and probably a bit of a manipulator as well.  (The Times recounts that Eads was involved with what regulators charged was the creation of “an artificial gas shortage in California” in 2000; Eads’ counter-characterization was that the company he worked for had just come up with “creative financial transactions.”)

Selling a Toxic Product In Which You Don’t Believe

Focusing in on Eads to build its story to a very big extent the Times says that Eads participated in structuring a deal that personally benefitted Eads and his colleagues “far more than the people writing the big checks.”  Giving examples of Eads' hard sell to investors the Times reports he acknowledges their “bluster” but invokes “caveat emptor” (buyer beware) in saying that his investors should be exercising good judgment in deciding whether to invest notwithstanding that a managing director at Oppenheimer & Company describes Mr. Eads as being like a “bartender serving drinks for people who can’t handle it.”

More important, Eads was simultaneously playing the other side:
    Just as in the earlier real estate bubble, the main players publicly predicted success even as, privately, their doubts were growing, court documents show.

    * * * *

    Mr. Eads appears to have fared better. He had seen the coming crash, and, as any master salesman would, found a way to play both sides. He continued to persuade new investors of the great potential in shale while telling his longtime clients to cash out.

    * * * *

    Mr. Eads then helped arrange what will go down as one of the great early paydays of the shale revolution: the 2010 sale of East Resources, which Mr. Pegula had started with $7,500 borrowed from family and friends, to Royal Dutch Shell for $4.7 billion.

But Eads and Jefferies & Company, together with Goldman, were directing investor debt into the troubled Chesapeake Energy.

Bad News Implications Entirely Sidestepped By The Times

The Times article has a lot more information about the apparent targeted swindling of gas industry investors and it is all worth a careful read.  Here are pertinent observations missing from the Times article, not even hinted at in its content:
    1.)  While things are now this bad in terms of the cost equation for the investors, the fracking investment these investors made (and the industry as a whole) were never initially required to internalize all the negative costs to society of hydraulic fracturing.

    2.)  Bankruptcies of these companies are going to make it a problem when society then looks to defunct companies to:
        a.) clean up after themselves,
        b.) maintain wells and equipment in ways that prevents worse damage, and
        c.) pay damages to compensate those suffering from injury (that includes those companies who have been paying to truck in fresh water for people who can no longer drink from their wells.)
    3.)  The companies may still in the future be required to internalize some societal costs they haven't yet been required to internalize.  That would make their situation for investors far worse.

    4.)  Companies that have leveraged themselves by borrowing against assets they theoretically have in the ground will be vulnerable to a bursting bubble on this basis.  (A bigger bust is coming when the industry realizes that eventually it will be barred from extracting most of what the industry currently counts as in-the-ground fossil fuel assets.  The Times article ends with Mr. Eads making statements exactly contrary to this reality: “These shale assets are forever . . .They are going to produce for a hundred years.”)

    5.)  Meanwhile the costs of competing technologies are dropping although the gas glut has interfered with their development to an extent.
Collateral Damage In Other Industries?

If companies in competing industries, for example the solar power industry, were facing that same kind of shakeout while facing an unexpected glut of product, some solar companies going bankrupt and the more efficient ones rising to the top, there wouldn't be so much collateral damage accompanying that shakeout.. .

 . . . Hey, wait a minute: The solar industry is experiencing these kinds of problems at the moment!  My wife has a cousin who works with an electrical company that has been developing solar technology.  Right now they have shelved those research and development efforts.  The reason: The tremendous drop in cost of gas.  Similarly the coal industry, not an industry of the future since it is also fossil fuel, is going through shut-downs.

Those working hard to get out information about the hazards and destruction that fracking entails are, no doubt, going to consider, with some eagerness, promulgating the New York Times Business section story for its cautionary value in discouraging potential investment in fracking.  A reason they might have some reluctance to do that is because the story commences with a long industry-friendly reiteration of the industry narrative that the “gas rush has benefited most Americans.”  That is not true: You can’t claim benefit from fracking when you consider its long-term costs and detriment.  (The last National Notice article summarizing the detriments to take into account was:  Monday, October 15, 2012, Do They Really Think People Just Don’t Know What `Fungibility’ Is?: A Good Question To Ask As The Fracking Industry Tries To Pull Another Fast One.)

Accelerating Crash-Destined Vehicles: A Repeating Story

The Times metaphor about the industry being “unable to pull their foot off the accelerator” to avoid “a crash” (it also alternatively refers to “a train without brakes”) happens to dovetail with what I have said of the industry, that it is engaged in:
a premeditated “hit and run” strategy, looking to do as much as they quickly can while knowing the damage it will inflict, trying to do it before people realize how dangerous and destructive the new technology is, how devastating to the environment and before the lower and lowering cost of alternatives like solar are recognized to have overtaken and relegated the fracking industry to a curious antiquity.
The Times story is evidence that, maybe not so surprisingly, the industry’s bankers enriched themselves with this same quick hit strategy to take advantage of investors.

A Feint and Faint Find of Collateral Damage

Aside from the damage suffered by the investors as a result of such unethical treatment, does the Times acknowledge collateral damage anywhere else?  There are only these two paragraphs at the end of the article and they are insufficient:
    The bust has certainly hit the Haynesville (sic) [A town in Louisiana where Chesapeake Energy was drilling] hard. Some local landowners, having spent their initial lease bonuses, are now deeply in debt. Local restaurants and other businesses are suffering steep losses now that so many drillers have left town.

    “At this point we’re struggling,” said Shelby Spurlock, co-owner of Cafe 171 in the town of Mansfield. The restaurant is decorated with wall collages of drill worker uniforms from companies that are leaving the area. Once open from 4 a.m. to 10 p.m. and employing four servers, the restaurant has cut its hours and is down to two servers. “Our very existence is in danger,” she sighed.
Actually, with fracking and global weather change from irresponsible fossil fuel exploitation it's the entire country and the entire world whose very existence is threatened.

Thursday, October 18, 2012

How Big A Lie Did Mitt Romney Tell When He Said His Federal Taxes Were Never Less Than Thirteen Percent Of His Income? (And Why It Affects The Economy)

Romney during second Presidential debate this week where he said he talked about eliminating capital gains taxes
Mitt Romney misled us when he told us that federal taxes on his very substantial income were always at least thirteen percent.   Knowing how very little Romney is really required to pay in taxes matters a lot.  It matters a lot because it is creating a drag on the economy.

As of now, Mitt Romney has still released only two of his tax returns.  For the longest time he had released only one tax return.  That was back when he was assuring us that, not to worry, in the absence of releasing more information he could assure us that his tax liability was always at least thirteen percent.  (See: Romney Says He Paid at Least 13% in Income Taxes, by Michael D. Shear, August 16, 2012.)

In September, Romney finally released his 2011 tax returns.  It turned out that the federal taxes he owed for his adjusted gross income of about $13.7 million was actually about only ten percent. That’s far less than that thirteen percent figure he’s been pushing out to the public with assurances back in August.

So that it didn’t appear that Romney had been too outrageously inaccurate or misleading Romney had a fix-it when he finally released this tax return: He consciously elected to pay more taxes than he had to:
Mr. Romney has said that he has paid at least 13 percent in federal income taxes in each of the last 10 years.

In order for that claim to be true in 2011, Mr. Romney had to voluntarily take a smaller deduction than he was entitled to for his charitable deductions, his advisers said Friday.
(See: September 21, 2012, Romney Releases 2011 Tax Returns, By Michael D. Shear.)

Romney overpaid his taxes by enough that he actually paid about fourteen percent in taxes.

The fix-it, as after-the-fact fix-its go, is pretty inadequate in a couple of ways. 

The first thing that makes this fix-it inadequate is that Romney was on record saying he wouldn’t be qualified to be president if he paid more taxes than he actually had to.  He said that just last July when ABC’s David Muir asked him it in an interview whether he had ever paid taxes lower than 13.9%.  (If you are wondering why Romney paid fourteen percent when he overpaid his taxes, rather than just enough to get thirteen percent, the reason may be that Muir asked him about this 13.9% figure.)

Romney responded to Muir as follows:
My view is that I have paid all the taxes required by law [. . . . .]  I don’t pay more than are legally due. And frankly if I had paid more than are legally due I don’t think I’d be qualified to become president.  I think people would want me to follow the law and pay only what . .  Ah. . the tax code requires.
You can hear an audio clip* of him saying exactly this in a Brian Lehrer show segment the following Monday. .  Romney released his tax returns just before the weekend on a Friday. . (starting at 3:52).  You can click to hear it below in the embedded audio.

You can also watch the ABC Muir interview itself or read the transcript.*
(* Here is an issue of exactitude that will be of geeky interest to those who wonkily track how the media presents stories: If you look at the transcript of the interview you can see that the audio of the Brian Lehrer show clip, a direct lift from the ABC video, and the ABC video itself are undetectably edited- ABC slid in a cut to a photo to hide the cut, but the edited deletion from what Romney said is nothing that will help or especially hurt him.  It goes in where I inserted the bracketed ellipses in the quote above: “From time to time I've been audited as happens I think to other citizens as well and the accounting firm which prepares my taxes has done a very thorough and complete job paying taxes as legally due.”)
The second thing that makes Romney’s coy ploy of this after-the-fact fix-it inadequate is that overpaying one’s federal taxes does nothing in terms of locking in his tax liability at that higher rate.  In its first New York Times report (not the second) about Romney finally releasing his 2011 tax return the paper hinted at this when it suggested that it was possible Romney “could still deduct the unclaimed amount of his charitable donations in future tax years.”

This deserves to be truly nailed down!: Overpaying taxes doesn’t establish (or `fix') tax liability.  It’s instead like socking your money away for future withdrawal from the bank.  Yep!

To confirm this I called the firm of Reiner and Reiner, Wall Street lawyers I like to consult for tax advice who also prepare tax returns.  I was assured that anytime Mr. Romney wants, after the election or otherwise, all he has to do is file an amended tax return and he can then claim the charitable deductions he didn’t recently claim. VoilĂ !  Mr. Romney will then have paid only the minimum ten percent in income taxes he is legally obligated to pay.  He can do this for up to three years after filing and thereby no longer be unqualified (by his own standards) to be president by paying more taxes than are legally due.

Do people, politicians and others often go around amending their income tax returns, even doing so when getting what they have filed correct is important for political purposes?  You bet they do!  In one of the same articles reporting on Romney’s final release of his tax returns we learned that his vice-presidential running mate Paul Ryan filed an amended return to deal with the fact that he and his wife failed/forgot to report $61,122 of their income for 2011:
In an amended return also released Friday, Representative Paul D. Ryan, Mr. Romney's running mate, disclosed that he and his wife had initially failed to report $61,122 in income from 2011. He said the failure was inadvertent. The change raised their total income to $323,416 and increased their taxes by $19,917 to $64,674, or 20 percent of adjusted gross income.
(See: Romney Reveals He Paid 14% Rate in 2011 Tax Return, by Nicholas Confessore and David Kocieniewski, September 21, 2012.)

It’s been suggested that the Democrats haven’t wanted to drill down on the fact that Romney’s tax liability was actually only ten percent in 2011 because it involves the difficult issue of Mr. Romney’s making what qualifies as “charitable” deductions.  That gets into a whole other kettle of fish when it comes to the vast wealth that only a few people control in this nation.  There are those like New York Mayor Michael Bloomberg or real estate developer/public subsidy collector Bruce Ratner who direct huge amounts of their “charitable” and deductible "giving," wielding it for political and personal gain.

When it comes to having to pay so very little income tax, the fascinating thing is that payment of taxes is an element of the disdain that Romeny expressed in his infamous 47% percent remark about all those Americans Romeny says “believe that they are victims” and don’t “take personal responsibility and care for their lives,” is that, in Romeny’s words:
These are people who pay no income tax. Forty-seven percent of Americans pay no income tax.
A lot has been written after Romney’s remarks about the 47% of Americans who don’t pay taxes (actually 46.4%), about how that includes young people and students, elderly collecting on the Social Security benefits they paid for, active service men and women, Americans paying payroll and Social Security taxes at a higher rate than those with higher incomes, and as Jon Stewart made fun of on the Daily Show would have included Romney's own parents when they needed to take advantage of public assistance.  (See: The 47 Percent, In One Graphic, by Jacob Goldstein, September 18, 2012, Who Are the 47 Percent? 7 Facts about the Americans Mitt Romney Attacked, by Kevin Fallon, Sep 18, 2012 and Fact-checking Romney's "47 percent" comment, by Lucy Madison, CBS News/ September 18, 2012.)

Romney’s ten percent tax liability isn’t quite down to the level of having to pay no federal taxes at all but there are those among the wealthy, those Romney might himself have been addressing at the political fund raiser where he made his 47% remark, who actually are among the 47% who don’t pay taxes.  Back when Romney hadn't yet released his 2011 tax returns the New York Times filled the void with a story about the sort of things that tax returns of the rich can reveal.  It contained the following information “never before disclosed” by the IRS (emphasis supplied):
It so happens that this summer the Internal Revenue Service released data from the 400 individual income tax returns reporting the highest adjusted gross income. This elite ultrarich group earned on average $202 million in 2009, the latest year available. And buried in the data is the startling disclosure that six of the 400 paid no federal income tax.
(See: Common Sense, In Superrich, Clues to What Might Be in Romney’s Returns, by James B. Stewart, August 10, 2012.)

Six of those with highest adjusted gross income in the nation paid no federal income tax?   And where between no federal income tax and Romney’s ten percent tax liability do the rest of those with highest incomes in the nation stand in terms of the taxes they are required to pay?

During this week’s presidential debate Romney offered what was, no doubt, intended to be an obfuscating figure in his regard, that:
The top 5 percent of taxpayers . . . pay 60 percent of the income tax the nation collects.
The more correct figure is actually apparently 57 percent (not 60 percent), but to the extent that the figure is true it says more about the way that income in this country has been increasingly skewed to go more to the already wealthy and more advantaged, those who even paying such lower such rates, still wind up picking up that much of the nation’s taxes.  It also shows why, as incomes increasing skew to go to a small minority of the population, it is so important that that population pay their fair share, rather than the lower preferential rates Romney champions.

One reason Romney pays lower taxes than everyone else is because so much of Romney’s income is in investments and capital gains being taxed at a preferential lower rate than what other Americans must pay on their earned income.  During the debate Romney tried to pull another fast one: That because he wanted “middle-income taxpayers to have lower taxes” he had a plan where they “no longer will pay any tax on interest, dividends or capital gains.”  (One wonders: When Romney says he wants to benefit a“crushed” “middle class of America,” what percent of that group does he consider to be included in the 47% he disdains?)

When implemented Romney’s capital gains tax elimination plan will probably involve further tax cuts for himself and the similarly wealthy but CBS notes (providing a chart): That “most middle class taxpayers are not currently paying a ton of tax in these [capital gains, etc.] areas.”

Why are all the preferential tax treatments that skew more wealth to the wealthy and have them shoulder less than their fair share a very important concern?  It not only makes the rest of us poorer; it is also bad for the economy.  Here is caution about the United States from the International Monetary Fund which normally might be concerning itself instead with travesties of third world economies in the countries of continents like South America:
“Growth becomes more fragile” in countries with high levels of inequality like the United States, said Jonathan D. Ostry of the International Monetary Fund, whose research suggests that the widening disparity since the 1980s might shorten the nation’s economic expansions by as much as a third.

Reducing inequality and bolstering growth, in the long run, might be “two sides of the same coin,” research published last year by the I.M.F. concluded.

    * * * *

The I.M.F. has cautioned the United States, too. “Some dismiss inequality and focus instead on overall growth — arguing, in effect, that a rising tide lifts all boats,” a commentary by fund economists said. “When a handful of yachts become ocean liners while the rest remain lowly canoes, something is seriously amiss.”
(See: Income Inequality May Take Toll on Growth, by Annie Lowrey, October 16, 2012.)