Friday, July 31, 2009

Another Reason To Ditch The Plastic Bottle

Even though the National Institute of Environmental Health Sciences has concluded that there is only "some concern" to "negligible concern" over the health impact of bisphenol A (BPA), new animal testing is arriving at a more drastic conclusion:
New animal studies link the chemical bisphenol A, which leaches from such polycarbonate plastics and food can linings, with heart arrhythmias in females and permanent damage to a gene important for reproduction.
Although the CDC already knows that BPA is in the urine of over 90% of the US population, the majority of studies on the substance have been limited to animals, leaving the long term impacts on our health unknown. Because of this lack of knowledge, the substance has already been banned in Canada; Chicago; Minnesota; Connecticut; Suffolk County, NY; and legislation is pending in California.

I say take a preemptive strike and start using glass bottles or plastics that don't contain BPA.

India Rejects ANY Emission Caps Until 2020

In an update to a story I posted last week, Jairam Ramesh, the India’s environment minister, went on record today that India would not even discuss signing up for any legally-binding limit on greenhouse gas emissions until at least 2020. This means that both India and China, home of 1.17 billion and 1.31 billion people respectively, have now refused to set any emission limits in the near- or mid-term because "their fast-growing economies should not be hampered when western countries were responsible for climate change."

Don't they see the difference between the United States, who only accounts for 4.5% of the global population, and themselves, home to 37% (almost 2 out of 5) of the global population? I realize that the current situation with our environment is due primarily to the industrialized world (with the US being the number one emitter of greenhouse gases) but what will happen once these massive nations repeat the same mistakes?

I'm anxious to see how this affects the upcoming international climate convention in Copenhagen later this year.

Rep. Anthony Weiner's (D-NY) Dare

In a bit of political showmanship, the democrat from New York's 9th district put forth an amendment for the pending health care legislation that would repeal Medicare, in effect forcing a vote on support for a "government-run health care system". He explains his reasons in the 5 minute video below. I love it.




And how did the Republicans vote? 57 against - 0 for. Way to trap the them in their own rhetoric!

"Undemocratic" Health Care Reform

David Sirota recently offered this brilliant perspective on how Congress is handling health care reform (emphasis added):

Here we have a major congressional push to fix a health care system that leaves one-sixth of the country without coverage. Here we have 535 House and Senate delegates elected to give all 300 million of us a voice in the solution. And here we have just 13 of those delegates holding the initiative hostage.

In the Senate, both parties have outsourced health care legislation to six Finance Committee lawmakers: Max Baucus, D-Mont.; Kent Conrad, D-N.D.; Jeff Bingaman, D-N.M.; Mike Enzi, R-Wyo.; Charles Grassley, R-Iowa, and Olympia Snowe, R-Maine. The group recently announced it is rejecting essential provisions like a public insurance option that surveys show the public supports. Meanwhile, seven mostly Southern House Democrats have been threatening to use their Commerce Committee votes to gut any health care bill, regardless of what the American majority wants.

This, however, isn't about the majority. These lawmakers, hailing mostly from small states and rural areas, together represent only 13 million people, meaning those speaking for just 4 percent of America are maneuvering to impose their health care will on the other 96 percent of us.

Census figures show that the poverty rates are far higher and per-capita incomes far lower in the 13 legislators' specific districts than in the nation as a whole. Put another way, these politicians represent exactly the kinds of districts whose constituents would most benefit from universal health care. So why are they leading the fight to stop - rather than pass - reform?

Because when tyranny mixes with legalized bribery, constituents' economic concerns stop mattering.

Thanks to our undemocratic system and our corrupt campaign finance laws, the health care industry doesn't have to fight a 50-state battle. It can simply buy a tiny group of congresspeople, which is what it's done. According to the Center for Responsive Politics, health interests have given these 13 members of Congress $12 million in campaign contributions - a huge sum further enhanced by geography.

I typically don't just copy and paste a story, but I felt that this one needed no editorializing.

Wednesday, July 29, 2009

Socialism?

I put together the table below during the election campaign to show the Republican's hypocrisy at calling now-President Obama a "socialist" and implying that his entire economic agenda was to "spread the wealth around," when they themselves were the beneficiaries of Bush's spreading the wealth around over the previous 8 years. What it shows is the ratio between federal spending and taxes paid per state for 2005, according to the census data and compiled by The Tax Foundation (I added the color coding of green being net beneficiaries of a progressive tax code and red being the net contributors), and how that state voted in the 2004 and 2008 elections.

As the debate over a strong public option rages in Congress and Republicans (or conservative Democrats) again use phrases like "government take-over" and "socialized medicine," check to see what state they are from. Odds are, if it's coming from a Republican, they couldn't be more hypocritical of what government can do.

The picture above comes from Nate Silver's blog, FiveThirtyEight, and shows the relationship between Support for the Public Option and Insurance PAC Fundraising, further broken down by party affiliation. His graph came from some comprehensive, proprietary number crunching but he isn't usually that far off.

It's a sad commentary on our political system and an should be seen as an urgent call for campaign finance reform.

This Isn't Capitalism

I posted a story a few days ago about the lack of enforcement of our nations antitrust laws, and something caught my eye today that I feel is relevant to add to the story.

Yesterday, the Financial Times reported that Sprint-Nextel would be acquiring Virgin Mobile USA for $420 million. The deal would add Virgin's 5.3 million pre-paid subscribers to the 4.3 million Sprint-Nextel already had through their Boost Mobile brand. The reason I find this interesting is because in today's Financial Times, Sprint-Nextel announced that its net loss, year over year, had widened by 12% to $384m in the second quarter.

If the company is losing money, why are they buying up competitors? At what point does Sprint-Nextel attain the "too big to fail" moniker? Where is the competition in the telecommunications business? It's gotten to the point that there is no way to NOT support one of the telecom giants who assisted the NSA with Bush's illegal, domestic spying program. As a side note, Qwest was the only major company who refused to participate in the program because "it was uneasy about the legal implications of handing over customer information to the government without warrants." What a novel concept.

I can already hear the telecoms pitching their need for a bailout from congress because if they were to fail, the US economy would grind to a halt. When our economy is being run by monopolies (Banking, Insurance, Telecom, Agri-business, etc), unregulated capitalism has reached its final stage...

Health Insurance Consumer Protections

The White House just released its 8 requirements for the health care system overhaul. To quote the President, in his newsletter:
Over the next month there is going to be an avalanche of misinformation and scare tactics from those seeking to perpetuate the status quo. But we know the cost of doing nothing is too high. Health care costs will double over the next decade, millions more will become uninsured, and state and local governments will go bankrupt.
The principles are:

Tuesday, July 28, 2009

Health Care "Inflation"

When Clinton tried to overhaul the health care system back in 1993, 40 million Americans were uninsured and it cost $912 billion. Now, only 15 years later, the number of uninsured has increased to almost 50 million and Americans spend $2.5 trillion. That is a 25% increase in uninsured Americans and a 174%, or 11.5% annual, increase in cost. With inflation typically running around 3%, why is inflation in the health care industry almost 4 times higher?

Some other interesting facts to keep in mind as PhRMA, the drugmakers lobby, launches its $100 million ad campaign against health care reform:
  • Premium costs are projected to rise another 9% next year, an increase that 42% of employers plan to pass on to their workers, according to a report last month by PricewaterhouseCoopers
  • Earnings per hour climbed by a 0.7% pace on average over the last three months, the Labor Department said earlier this month, the smallest gain since the agency began keeping records in 1964
  • The share of insured workers with at least a $1,000 deductible has almost doubled since 2006 to 18%
  • Health-care spending will account for 20% of U.S. gross domestic product in 2018, or $1 in $5 spent, compared with 16% of GDP, $1 of $6 spent, in 2008 (As a point of reference, Canada's system costs 10% of their GDP and the average of all 30 members of the OECD is 8.9%. That means we currently spend twice what the world does for their health care)
Most experts who've analyzed President Obama's health care plan estimate it's cost between $1 and $1.5 trillion over 10 years. If we are already spending $2.5 trillion per year, why are people so shocked at the price tag of the Obama plan? If his plan works, it would be save massive amounts of money, which would then stimulate the economy. Sounds good to me.

Monday, July 27, 2009

Pay Czar's First Challenge

In what will probably be the first major clash between a bailed-out bank and President Obama's newly appointed "Pay Czar" Kenneth Feinberg, the head of Citi's Phibro energy trading business is pushing the struggling bank to honor his $100 million compensation package. I understand the need to honor existing contracts, but if the government hadn't stepped in with a $45 billion bailout, the bank would have gone bankrupt and the contract would be meaningless.

One thing to remember is that when Citigroup agreed to take money from the TARP, it also agreed to follow the stipulations of the contract. Section 5.3 of the TARP states that Congress has the ability to put new conditions or requirements
on any bank, even retroactively, who took money from the program. So, if Citigroup didn't want to be subject to an agreement that gave the government unilateral power to change the contract, they shouldn't have taken the money. I find it poetic justice that the banks are complaining because they didn't read the fine print of the loan. Now they know how their customers feel.

Citi is also unique out of the TARP recepients in that, while competitors are trying to get out of the TARP by repaying the money, they have started the process of converting the governments preferred shares into common equity. This means that We the People are about to have a 34% ownership stake in the bank. So why shouldn't we have a say over their executive compensation?

This story should be interesting to follow.

Declassified Satellite Images

Satellite images of polar ice (that had been classified by the Bush administration) that were declassified last week by President Obama show just how devastating and extreme the polar meltdown has been in recent years. You read that correctly: George W Bush classified pictures that gave dramatic evidence of global climate change. I guess it was just another aspect of his War on Science. One amazing image can be seen above.

The photos, and their 1-m
eter resolution, helped scientists estimate the amount of ice that melted in the summer of 2007, the largest melt on record, at more than a million square kilometers. The NOAA (National Oceanic and Atmospheric Administration) has warned that America's satellite fleet is aging and may no longer be effective at monitoring and predicting climate change. This sentiment has also been reflected by the National Academy of Sciences in their warning that the environmental satellite network was "at risk of collapse." NASA had planned to put a high-tech, carbon-monitoring satellite into orbit earlier this year, but it crashed shortly after lift-off.

The good news is that President Obama, in
his Recovery and Reinvestment Plan, has already allocated $170 million for climate modelling and the NOAA is looking for an additional $390 million to upgrade its environmental satellite fleet in 2010.

Here are two more of the freshly declassified pictures:


Nuclear Nonproliferation

The Obama diplomacy must be working. In the past few months, there have been great strives in nuclear nonproliferation as well as reduction of existing warheads, despite some very volatile regimes.

One of the biggest announcements thus far has been the agreement between President Obama and Russian President Medvedev with the stated goal of reducing the world's two largest nuclear stockpiles by as much as 33%, which would be the the lowest levels of any U.S.-Russia accord. Because the US and Russia account for almost 90% of the worlds nuclear weapons, this is a great first step. Russia, however, is not the biggest obstacle at the moment, that title is shared by Iran and North Korea.

President Obama made clear during his campaign that he would persue a new strategy of mutual respect and diplomacy, which is appears to be upholding. He has already extended a hand to the Iranian regime, it's up to them to reach back. For those who missed it, Obama set forth his plan for Iran in his speech in Cairo:

This issue has been a source of tension between the United States and the Islamic Republic of Iran. For many years, Iran has defined itself in part by its opposition to my country, and there is in fact a tumultuous history between us. In the middle of the Cold War, the United States played a role in the overthrow of a democratically elected Iranian government. Since the Islamic Revolution, Iran has played a role in acts of hostage-taking and violence against U.S. troops and civilians. This history is well known. Rather than remain trapped in the past, I've made it clear to Iran's leaders and people that my country is prepared to move forward. The question now is not what Iran is against, but rather what future it wants to build.

I recognize it will be hard to overcome decades of mistrust, but we will proceed with courage, rectitude and resolve. There will be many issues to discuss between our two countries, and we are willing to move forward without preconditions on the basis of mutual respect. But it is clear to all concerned that when it comes to nuclear weapons, we have reached a decisive point. This is not simply about America's interests. It's about preventing a nuclear arms race in the Middle East that could lead this region and the world down a hugely dangerous path.

I understand those who protest that some countries have weapons that others do not. No single nation should pick and choose which nation holds nuclear weapons. And that's why I strongly reaffirmed America's commitment to seek a world in which no nations hold nuclear weapons. (Applause.) And any nation — including Iran — should have the right to access peaceful nuclear power if it complies with its responsibilities under the Nuclear Non-Proliferation Treaty. That commitment is at the core of the treaty, and it must be kept for all who fully abide by it. And I'm hopeful that all countries in the region can share in this goal.

That is the talk I like to see out of my president. Hilary Clinton, however, was a bit less eloquent in her appearance on Meet the Press this weekend when she said that Iran does “not have the right to obtain a nuclear weapon” and continued to say, with a total lack of irony:
“What we want to do is to send a message to whoever is making these decisions, that if you’re pursuing nuclear weapons for the purpose of intimidating, of projecting your power, we’re not going to let that happen,” Clinton said. “Your pursuit is futile.”
Though Iran's nuclear ambitions are a major focus, North Korea successfully tested a nuclear device earlier this year and has been claiming that any attempt to enforce the new UN sanctions, such as boarding/inspecting any North Korean ship, would be considered an act of war. , even going as far as saying that it would "wipe the United States off the map." The good news, however, is that North Korea's Foreign Minister said over the weekend that it may be open to new negotiations on its nuclear program as long as they are held outside of the upcoming six-party talks, including the U.S., China, Russia, South Korea and Japan.

Now, we just have to wait and see if the talk translates into action.

Sunday, July 26, 2009

Democratic In-Fighting: Executive Branch

The media has done a good job showing the battles within the Democratic party vis-a-vis Congress, but they also exist within the Executive branch of government. Two examples that haven't gotten the attention they deserve involve torture prosecution and, in a story that is just breaking, antitrust enforcement.

President Obama has repeatedly stated that he wishes to look forward and not open prosecutions of any Bush administration policy, but a few weeks ago Attorney General Holder announced that he is "considering having a prosecutor investigate allegations of CIA torture of suspected terrorists, The Washington Post said." He has, however, also announced that the prosecutions would be limited to those who committed acts that went above and beyond the ones outlined in the famous torture memos and NOT to the architects of the program. This viewpoint has been eloquently challenged by the progressive Democrats in a letter to the AG by Senator Russ Feingold. I hope Holder listens...

Back in May, President Obama's antitrust chief, Christine Varney, announced that the Justice Department “will be aggressively pursuing cases where monopolists try to use their dominance in the marketplace to stifle competition and harm consumers." Apparently, the Bush Administration didn't just stop enforcing the antitrust laws already on the books, but enacted a legal policy that impeded the government’s ability to fight anticompetitive conduct by monopolistic companies in court. Despite the announcement and Mrs Varney making it clear that courts should no longer refer to the Bush administration policy, other departments within the Executive Branch are refusing to go along.

Why can't Democrats get their house in order and govern as one? It's the one aspect of politics that the Dems need to learn from the Republicans. For good or for bad, the Republican party is great at unifying their message and getting their legislative agenda passed.
Personally, I suspect lobbying contributions have something to do with it.

Senator Dick Durbin: "[The Banks] Own the Place"

This audio clip from Dick Durbin is a few months old, but as Congress breaks for the summer recess, with the Senate failing to bring new health care legislation to a vote, I feel it's more relevant than ever. Why is it that any meaningful, progressive legislation get's either filabustered into obscurity or watered-down by the Republicans or Blue Dog Democrats until it's impotent? Personally, as Sen. Durbin agrees, I blame corporate lobbyists. In the clip, Mr Durbin articulates why passing any banking legislation is doomed to failure. This time the poor quality is not my fault:



For those not familiar with Dick Durbin, he is the current senator from Illinois and Senate Majority Whip, the second highest position for the Democratics in the Senate. He was also voted one of "America's 10 Best Senators" by Time Magazine back in 2006.

For a great overview on corporate lobbying totals for just the first quarter of 2009, check out this link or, for a more comprehensive look at the influence of ALL money in politics, check out Open Secrets. Once you learn how much money the wealthy and corporations spend to influence our elected representatives, you'll understand why campaign finance reform should be priority number one.

Global Worker Unrest

A story in the Financial Times today caught my eye and I thought I'd make a quick inter-country comparison of how each countries workers handle their disagreements with management. I'll start with the extreme example.

In China:
Tonghua Iron & Steel, a state-run enterprise with about 50,000 workers, had been in privatization talks with Jianlong Group, one of China’s largest privately-held steel companies, when the workers rebelled. After the manager, Chen Guojun, stated that he was going to lay-off all of the workers, they beat him unconscious then stopped an ambulance and police from entering. The manager died because of the attack.

In France:
France has several interesting examples. Two weeks ago, workers facing lay-offs at a Nortel Networks research center that is being closed in ChĆ¢teaufort, near Paris, threatened to blow up their factories unless they receive more severance pay. They later admitted the bomb threats were a hoax. Back in April, workers at two Caterpillar plants in Grenoble, France, kidnapped five of their management team in their offices after the company announced it would be laying off 733 employees. More examples of the French workers "kidnapping strategy" can be found in this comprehensive article from the Washington Times. Though this strategy sounds extreme, the workers typically treat their "hostages" very well and mainly used the tactic to bring media attention and awareness of the issue to the rest of the country.

In the United States:
The only example of a successful worker rebellion (other than a strike) that I can remember in the past few years was the sit-in last year at the Republic Windows and Doors factory in Chicago that ended with the company getting an emergency loan that kept the factory open.

Why is it that extreme examples of worker protests don't happen in America any more? Where are all of the protests, like the ones in the '60s and '70s that made America famous? I ask because, according to the Organisation for Economic Cooperation and Development, the United States has the highest rates of poverty and inequality of it's member countries, with the exception of Mexico and Turkey. The OECD was formed in 1960 and currently has 30 members, that you can see here. The first link in this paragraph takes you to the OECD individual report on the US also has some other very interesting statistics, so I highly suggest clicking it.


Could America's worker's response to management be so docile because of the fact that their economic well-being is so fragile? I'm not advocating violence or bloodshed, but where are the domestic protests?

Saturday, July 25, 2009

How The Disaster Happened

I recorded the following audio clip from the Thom Hartmann show last year. In it Bill Seedman, the former head of the Resolution Trust Corporation and inventor of tranched, mortgage-backed securities (more commonly known as CDO's), discusses how his team went to the Federal Reserve to ask how their new financial instruments should be regulated, to which Alan Greenspan responded that they wouldn't be regulating them at all. He considered it to be a test of his free-market ideology. Now that the results are in, can we get rid of that debunked economic theory?

The clip is practically unbelievable.


Friday, July 24, 2009

A Potentially Big Step in Carbon Sequestration

It looks like another potentially huge scientific discovery is the result of pure luck, or in this case by leaving stuff sitting out on a lab bench:
[Scientists] were trying to design and create molecules that could capture negatively charged ions, such as chlorides and phosphates, on the surfaces of bioengineered cells. In one experiment, the researchers set aside an alkaline solution of various organic substances to evaporate, says geochemist John A. Tossell, author of the new study. When analyzing the crystals that formed, the team found that the organic macromolecule that made up the crystal unexpectedly contained carbonates, which form in solutions containing carbon dioxide.
This means that the macromolecule they were using has the ability to directly absorb atmospheric carbon dioxide:
Though the carbonate isn’t chemically bonded to the macromolecule, spontaneous absorption of carbon dioxide from the air suggests that the combination is very stable, Tossell says. Theoretical analyses show the macromolecule is a giant ring composed mostly of ring-shaped subcomponents and that the negatively-charged carbonate ion nestles within the positively-charged center of that macromolecule, he notes.
Although the use of this process is most likely too expensive to be used on a wide-scale basis, studying the macromolecule and how it’s made may help future fuel future breakthroughs.

Obama Birth Certificate Conspiracy

Much to my amazement, the conspiracy theory that President Barack Obama is not a US citizen is still hanging around. Even though the Supreme Court refused to hear the case due to lack of evidence, many in the mainstream media (especially at CNN and Fox News) continue to fan the fires. Here is a great clip of Jon Stewart, who was just voted the most trusted newscaster in America in a Time.com poll, debunking the "mystery" on his show from July 22, 2009.


The Daily Show With Jon StewartMon - Thurs 11p / 10c
The Born Identity
www.thedailyshow.com
Daily Show
Full Episodes
Political HumorJoke of the Day

Starbucks Redux

Starbucks, which announced it was closing 600 stores last year because of the harsh economic times, has decided to try a new idea: rebranding individual stores with Eco-friendly, local-neighborhood-inspired motifs. The first store of its kind will be opening in Capitol Hill this Friday at 6am. What makes this Starbucks different, other than the conspicuously absent Starbucks name and logo?
  • No more mass-brewed coffee. Instead it will be replaced by French presses, pour-over racks and the small-batch brewing Clover machine
  • Exclusive varieties of coffee and tea and no frappucinos
  • Free wi-fi without having to buy a Starbucks gift card.
  • Costs that are 5-10 cents more expensive
  • Local art and entertainment
  • Expanded food selections from local businesses, e.g. Fremont-based Essential Baking and Pike's-Market-staple Beechers cheese (with the leftovers donated to St. Mary's Food Bank)
  • Beer and wine in the afternoon and evening
I've been a Starbucks junkie ever since working there through college, so I may be a bit biased, but I think this is a great idea. I know many will complain that this is another case of the big corporate giant "stealing" ideas from small, locally-owned businesses, but for me as Washingtonian, Starbucks is a local business.

Not to mention, Starbucks is one of the few large corporation who takes care of their employees by paying them well over minimum wage and offering health care benefits and paid time off to even part-time workers to name a few. It was one of the core beliefs of Howard Schultz, the founder of modern-day Starbucks.

If this is successful, keep an eye out for the Starbucks-in-disguise in a neighborhood near you.

Thursday, July 23, 2009

UnitedHealth Group Profits in 2Q

As Congress debates groundbreaking health care legislation, the insurance industry continues to reap ridiculous profits. One corporation, in particular, caught my eye: UnitedHealth Group, the largest commercial health insurer based on revenue.

A few days ago, UnitedHealth Group posted a second-quarter profit that more than doubled last years, earning $859 million (73 cents/share) as compared to $337 million (27 cents/share), respectively. What makes this news even more shocking is that they made this profit with 6% drop in enrollment! They are making more money off of fewer insured customers. How is that possible without cherry-picking, overcharging, or denying legitimate claims?


As a reminder, this is the same company that paid their CEO, Bill McGuire, a total compensation package of $1.7 billion over his 10 year reign at the company. That works out to roughly $46,500 per hour (assuming he worked 10 hour days). That means this man "earned" the median household income in this country every single hour. Granted, he had to pay back almost $500 million in fines to the SEC for backdating options, but every dollar he made was a dollar that could have gone to providing health care.

Who would you rather have between you and your doctor? A government bureaucrat, answerable to We the People, or a UnitedHealth Group bureaucrat who has financial incentives to deny claims so they can pay their CEO literally billions of dollars?

Bush 3.0?

Obama, what are you thinking:
"The Obama administration has declined requests from U.N. human rights investigators for information on secret prisons and for private interviews with inmates at the U.S. military detention center at Guantanamo Bay, Cuba, U.N. officials said, dampening their hopes of greater U.S. cooperation on human rights issues."
Where is the transparency and accountability you ran on? Doesn't the president realize that by refusing access, the US is admitting wrongdoing? Why hide the transgressions of the previous administration?

The progressive wing of the Democratic party is going to have a field day with this. I just hope the Right understands that the frustration is because President Obama isn't being liberal/progressive ENOUGH, and not because we believe he is a lying, unamerican, secret muslim...

More Economic Updates

With the Dow crossing the 9000 point mark for the first time since January and the S&P hitting its highest level since November today, I thought I'd share a snapshot (good and bad) of our economy:

Housing Market -
  • Home resales increased 3.6% in June after climbing by 1.3% in May, a monthly rise more than double what economists were expecting (in all, sales are down by 0.2% compared with a year ago).
  • The number of potential buyers looking at homes is 12% higher compared to a year ago.
  • The median price of a home rose for the second straight month in June, climbing by 4.06% to $181,800 from May (compared with a year ago, home prices are off by 15.8%).
  • Inventory fell by 0.7% in June with 3.82m homes for sale, representing a 9.4-months supply, down from a revised 9.8 in May.
Job Market -
  • new jobless claims climbed by 30,000 to 554,000 during the week ending July 18 (in line with economists’ expectations).
  • The four-week average of new claims declined last week, falling by 19,000 to 566,000. Earlier this month, benefits claims had dropped to their lowest level since January.
  • The four-week average of continuing claims is down by 132,500 to 6.54m, which is 106% higher (or roughtly double) than a year ago.
  • The unemployment rate is at a 26-year high of 9.5%
State Governments -

While California has been making most of the headlines with it's budget crisis, many other states have quietly been battling theirs. The financial times put together this great visual to illustrate the problem:


According to data released on Monday by the National Conference of State Legislatures, the total deficit of all 50 states totaled $143bn for fiscal year 2010.

Our economy has come along way in the last 18 months, but we're not out of the woods yet.

Wednesday, July 22, 2009

EconomyInCrisis.Org

I just came across the site EconomyInCrisis.org and thought it had a unique perspective on what's happened to the US Economy over the last few decades, focusing on the foreign acquisition of US based and owned businesses. Using the average amount of money spent per second on acquisitions in 2007, which was $4087.85/second, they built a "Great American Sell Off" ticker that gives a real time estimate of how much of Americas industry has been sold off. Currently, the total is:

$2,171,985,500,000.

Insane...

Obama Economics: Domestic vs Abroad

In an interesting poll courtesy of Bloomberg, it appears that President Obama's economic leadership is much more popular abroad than here in the U.S:
"In Europe and Asia, 87% of respondents say they view Obama positively, compared with just 49% in the U.S. His standing among American investors is even lower on economic matters: only a quarter of U.S. poll respondents rate his economic policies as “good” or “excellent,” compared with more than half in Europe and Asia."
Why don't Americans have the same optimism as the rest of the world? I knew that Bush was unpopular, but I never would have guessed that the world would have been so happy to be rid of him.

Why is the optimism warranted?
Equity investors around the world have done well since Obama’s Jan. 20 inauguration. The gains were most pronounced in Asia, where the MSCI Asia Pacific Index has risen 28%. In the U.S., the S&P 500 Index has risen 19%. The benchmark index for U.S. equities has rallied 41% over the past four months, led by a 95% rise in financial firms. European investors...have fared less well: The Eurostoxx 50 Index has risen 14%.
That sounds like cause for optimism to me.

Alan Greenspan Admits Failure to Congress


To all the fans of Alan Greenspan and Free Market Ideology (libertarians and objectivists alike), you may have missed this testimony of Mr Greenspan to Congress last year where he admits his economic theory was WRONG. The audio is from an episode of The Thom Hartmann show last year that I recorded with my iPhone, sorry about the quality.

Tuesday, July 21, 2009

Health Care Surtax On The Wealthy

Many in the press have been talking about the "health care surtax on the wealthy" included in the Health Care legislation in the House, so I thought I'd throw in my two cents. Here is how the tax breaks down (even though, most are only quoting the top rate of 5.4% on millionaires): Paying for Health Care Overhaul
The reason why I don't think that it's an unreasonable question to ask the top earners in the country to foot the bill for the rest of us is simple. The very same group of people were the direct recipients of the majority of the Bush tax cuts, which were never funded. Because of these tax cuts, the Citizens for Tax Justice estimates that this group of tax payers will have received around $700 billion by 2010. Compare that to the estimated $544 billion that these newly proposed taxes would raise over the next 10 years and the idea seems fair to me.

The California "Solution" Has Come To Seattle


Much like California did to close their budget shortfall, King County has decided to cut services that impact primarily the poorest among us to solve their own budget crisis.

Because a plan to give voters the option to raise the property tax in November was rejected 4 to 2 by the county Budget and Finance Committee, all King County general fund payments to things like homeless shelters, public health clinics and other programs for the needy will almost certainly be eliminated next year.
"Those services are going to go away," County Councilwoman Julia Patterson said. "That means people will go to the emergency room after they've waited until their situation is chronic and crucial. It means the health care costs will increase for all of us. It means people, children, seniors, people living in poverty in King County are going to get sick, and some people might die. So let's just be very honest about this. These decisions we're making impact peoples lives."
Another one of the tax increases that the Committee won't let us vote on? A sales tax increase of one-tenth of one cent to eventually raise $50 million annually. If it would save the county parks, shelters and health clinics, I'd vote yes on it.

Environmental Problem = Energy Solution


What do we do with the 2.7 billion kgs of chicken feathers generated each year by the commercial poultry industry? One possible answer may solve a big problem for hydrogen-fueled cars. Researchers have discovered a cheap, environmentally-friendly way to store hydrogen fuel: carbonized chicken feathers.

One of the major obstacles in shifting to a hydrogen-based automobile infrastructure is that hydrogen is difficult to store and transport, as it requires massive pressures in order to carry a quantity large enough to have a range comparable to gas-powered cars, which in turn can massively increase the weight of the car. Previously, carbon nanotubes had been used to solve the problem. Carbonized chicken feathers, however, have a similiar strength as and can store as much hydrogen as the nanotubes (up to 1.7% of their weight) but at a fraction of the cost. A storage tank of nanotubes can cost millions of dollars, whereas a mass produced chicken-feather-tank would only cost around $200.

The U.S. Department of Energy currently has a target capacity for hydrogen-storage techniques of 6% of weight though, so a marketable prototype is still a ways off. But this is the type of creativity that will make the US energy independent.

California's "Solution"


It looks like the Governator has finally struck an agreement with the state government over California's $26 billion deficit. The deal reduced the deficit by $15 billion through decreased spending and increased borrowing, but would impose no new tax increases. Here's how they cut the spending:
  • Cut nearly $6bn from schools and community colleges and close to $3bn from the state’s university system
  • $1.3bn will be cut from Medi-Cal, the health program for low earners and the poor
  • CalWorks, the state’s welfare-to-work program will have its funding cut by $528m, while Healthy Families, a program that provides health insurance for 930,000 low-income children, will be cut by $124m
  • In-home support services program for the frail and disabled will have its funding slashed
And the most annoying of all the provisions:
  • The agreement will clear the way for oil drilling to resume off the coast of Santa Barbara
According to the article this will "most likely intensify the social impact of the economic slump that is ravaging the state."

So not only will this specifically punish the most vulnerable in California, but also clears the way to resume oil drilling off of the coast? I feel horrible for Californians...

Monday, July 20, 2009

India Rebuffs Hillary


As a follow up to my story on global emissions and their effect on the Amazon, it seems India will not be part of the solution.

Hillary Clinton, US secretary of state, is on a 5-day trip to India to convince it's leadership to embrace a low-carbon future. The US did not, however, get the response it was looking for:
“There is simply no case for the pressure that we, who have been among the lowest emissions per capita, face to actually reduce emissions,” Jairam Ramesh, India’s environment minister told Mrs Clinton. “And as if this pressure was not enough, we also face the threat of carbon tariffs on our exports to countries such as yours.”
Even though it looks like India will continue to set their own targets, Hillary reassured them that the United States will not stand in the way of the world’s largest democracy’s economic progress.

It seems that both India and China are using the same argument that it isn't fair that the U.S. rose to economic power through buring carbon-based fuels but they cannot. They both argue that it is up to the already-developed nations to clean up the mess they've already made.

Total Cost of the Bailout?

I'll just copy and paste this story from Bloomberg, it's short and sweet:

July 20 (Bloomberg) -- U.S. taxpayers may be on the hook for as much as $23.7 trillion to bail out financial companies, according to Neil Barofsky, special inspector general for the Treasury’s Troubled Asset Relief Program.

Barofsky made the estimate in testimony prepared for a congressional hearing tomorrow.

(emphasis added)

RIP: Ulysses Spacecraft


After almost 17 years in orbit, the Ulysses spacecraft (launched from the space shuttle Discovery on October 6, 1990) suffered a fatal altitude-control system defect and was forced to end its mission on June 30th. The satellite was originally designed to study the solar wind and interstellar dust from an orthogonal orbit around the sun's poles over a 5-year period. It has been called "one of the most productive science missions ever flown."

Here are a few of the scientific gems we got from Ulysses:

  • Extended knowledge of the sun's influence on its surroundings through its outflowing solar wind from two dimensions into three
  • The sun's magnetic field can capture charged particles ejected from the sun's poles and redirect them toward Earth and the other planets
  • Created a massive change in the way we think about the global structure of the solar wind and the sun's magnetic field
  • Found a surprising amount of neutral helium atoms arriving from deep space in interstellar dust--a find from which scientists have deduced that the universe contains too little matter to halt its expansion. And the spacecraft found that the dust itself was 30 times more abundant than expected.

Sunday, July 19, 2009

China vs America



According to Bloomberg.com, China's stock market (currently valued at $3.2 trillion) may become the worlds largest in just 3 years, driven by it's nations 1.4 billion people putting more of their money in equities. Right now, the US market is the worlds largest, valued at $11.2 trillion. The two market, however, are headed in complete opposite directions.

The US market's value peaked in July 2007 at a value of almost $20 trillion, but has declined 41% during the financial crisis. Even with the massive stimulus efforts, the S&P 500 has only managed to gain 4.1% this year and GDP has contracted by 5.5% in the first quarter and an estimated 1.8% in the second quarter. Could this sluggish growth be because the Reinvestment and Recovery act had too many tax cuts and was too small overall, as Paul Krugman predicted
and tried to warn us about? Or could it be because we diluted the "Buy American" provision so we ended up stimulating China's economy instead of ours?

Contrast that with how China's market is reacting to it's countries own 4 trillion-yuan ($586 billion) stimulus package, which included a "Buy China" provision that required all stimulus spending to go to only Chinese-owned and operated businesses, and you'll see whose approach is more successful: the Shanghai Composite Index is up 75% this year and their economy grew by 7.9% in the second quarter.

The most interesting question, in my opinion, is what will happen to the US-China relationship once their economy eclipses ours AND they are the majority owner of our national debt.






Exxon Mobile Sabotage


Exxon Mobile may be fined more than $1 billion for sabotaging oil wells of fields it no longer wanted in order to prevent other oil companies from reusing them. Jerry Patterson, the commissioner of the land office that oversees oil leases that help fund Texas schools, alleges that, in the 1990s, Exxon Mobil plugged abandoned wells with trash, sludge, explosives and cement plugs. The Railroad Commission stipulates that Exxon Mobil face fines of $10,000/day for each well.

How will this monetarily affect Exxon?
"Exxon Mobil had $25 billion in cash and cash equivalents at the end of the first quarter, more than The Hague-based Royal Dutch Shell Plc and BP Plc of London combined, according to data compiled by Bloomberg. For Exxon Mobil, $1 billion is equivalent to 2.2 percent of last year’s net income."
What lessons are we hoping they learn when the fine assessed is equivalent to only 2.2% of a single year's income? Even though Exxons' 2008 profits were the most for any corporation in the history of the world, the fine should still be much higher.

One thing to remember about Exxon and all of their recent profits: they still owe about $450 million in accrued interest to plaintiffs in the Exxon Valdez oil spill case.

Their greed knows no bounds.

Friday, July 17, 2009

Kucinich Saves the Single Payer Option


I just got this email from the office of Dennis Kucinich D-OH, one of the true progressive democrats in the House. For supporters of single-payer health care, this is great news:

"With your support, your phone calls, your emails, we won a major legislative victory today for a state single payer health care option in the House of Representatives in Washington, DC. The House Education and Labor Committee approved the Kucinich Amendment by a vote of 27-19, with 14 Democrats and 13 Republicans voting yes.

The amendment propels the growing single payer health care movement at the state level. There are at least ten states which have active single payer efforts in their legislatures. They are California, Colorado, Illinois, Minnesota, Montana, New Mexico, New York, Ohio, Pennsylvania and Washington. The amendment mandates a single payer state will receive the right to waive the application of the Employee Retirement Income Security Act (ERISA), which has in the past been used to nullify efforts to expand state or local government health care."

Some claim that this amendment may very well save health reform.

Spying for China


A former Boeing engineer was just convicted of handing over secrets on the space shuttle and Delta IV rocket to China. I can only imagine what this news would mean if there was a Cold-War-style relationship between us and China. I guess that is one positive side effect of them owning a healthy portion of our national debt...

How has this story not made bigger headlines?

Thursday, July 16, 2009

40th Anniversary of the Moon Landing

To commemorate the 40th anniversary of the moon landing, NASA has released newly restored footage of the iconic event.



At a time when we are facing so many crises, this is a great reminder of what we can accomplish as a nation if we dedicate enough time and money.

The Health Care Debate


There was a great interview with Kathleen Sebelius last night on The Daily Show and it inspired me to dig up some facts on the US health care system:
  • According to the CDC, the United States ranked 29th in the world in infant mortality in 2004, compared to 27th in 2000, 23rd in 1990 and 12th in 1960.
  • According to the CIA World Factbook, the United States has a life expectancy of 78.1 years, which ranks 50th in the world. That puts us between Wallis and Futuna at #49 and Albania at #51. Other notable entries: Canada - #8, France - #9, UK - #36, South Korea - #40, and Mexico - #71.
  • National health expenditures in 2008 were expected to rise 6.9%, or double the rate of inflation. In 2007, total spending was $2.4 trillion, representing 17 % of GDP. If trends continue for the next decade, total expenditures will reach $4.3 trillion in 2017, or 20% of GDP. Health care spending accounted for 10.9% of GDP in Switzerland, 10.7% in Germany, 9.7% in Canada and 9.5% in France, according to the Organization for Economic Cooperation and Development.(source)
  • "Although nearly 46 million Americans are uninsured, the United States spends more on health care than other industrialized nations, and those countries provide health insurance to all their citizens." (source).
  • "A recent study by Harvard University researchers found that the average out-of-pocket medical debt for those who filed for bankruptcy was $12,000. The study noted that 68 percent of those who filed for bankruptcy had health insurance. In addition, the study found that 50 percent of all bankruptcy filings were partly the result of medical expenses. Every 30 seconds in the United States someone files for bankruptcy in the aftermath of a serious health problem."(source)
With the discussion on health care reform in Congress heating up, call your Senators and Representative and tell them what you think.

Wednesday, July 15, 2009

The Lesson of the 2005 Amazonian Drought


This could be the most startling story I've read in awhile. The above picture shows one of the tributaries of the Amazon River that completely dried up during the 2005 drought, leaving a ferry boat beached on the riverbed. I had no idea the drought even happened...

By studying the effects of the drought, the Amazons' worst in a century, scientists have released some very sobering news:

"The world’s forests are an enormous carbon sink, meaning they absorb massive quantities of carbon dioxide, through the processes of photosynthesis and respiration. In normal years the Amazon alone absorbs three billion tons of carbon, more than twice the quantity human beings produce by burning fossil fuels. But during the 2005 drought, this process was reversed, and the Amazon gave off two billion tons of carbon instead, creating an additional five billion tons of heat-trapping gases in the atmosphere. That’s more than the total annual emissions of Europe and Japan combined."

"Significantly, Phillips also found that the 2005 drought was not the result of El NiƱo, the cause of previous smaller episodes, but of a regional rise in sea temperatures—one of the expected early signs of global warming. Taken together, these findings suggest that climate change could trigger the worst kind of vicious cycle, with climbing temperatures causing the rainforests to dry out and give off massive quantities of greenhouse gases, which in turn causes the planet to warm more rapidly—a dynamic with harrowing implications. An article last year in Proceedings of the National Academy of Science identified rainforest-wide dieback in the Amazon, along with the melting of the Arctic sea ice, as among the nine most crucial "tipping points" that must be staved off to prevent catastrophic climate change.

As if that’s not enough bad news, new research presented in March at a conference organized by the University of Copenhagen, with the support of the Intergovernmental Panel on Climate Change, says that as much as 85 percent of the Amazon forests will be lost if the temperature in the region increases by just 7.2 degrees Fahrenheit. To keep from hitting that mark, we will have to curb global carbon emissions by at least 80 percent. At the same meeting, Vicky Pope, a researcher from Britain’s Met Office (a government agency that tracks climate and weather data) showed that a temperature increase of 2.2 degrees above current levels would trigger a 20 to 40 percent Amazon die-off within 100 years. A rise of 5.4 degrees would kill 75 percent of the trees. "The forest as we know it would effectively be gone," she says. Other Met researchers have found that the loss of the forest would be irreversible. "

The good news is that at the most recent G-8 meeting in Italy last week, each of the 8 nations agreed to cut their greenhouse gas emissions 80% by 2050. However, none of them could agree on any short-term goals. It'll be interesting to see how this all plays out at the major meeting on climate change in Copenhagen later this year.

Tuesday, July 14, 2009

Department of Justice Launches Probe into Credit Derivatives


The anti-trust division of the Department of Justice has opened an investigation into the Markit Group over their role in the Credit Default Swap market.

Who exactly is Markit Group? They provide pricing data on the CDS market and has developed many of the most closely-watched derivatives pricing benchmarks in it. And who are the shareholders in this group, which was set up in 2001? You guessed it: JPMorgan Chase, Goldman Sachs, Deutsche Bank, Bank of America and Morgan Stanley to name a few. That list may look familiar, it is almost identical to the list of major counterparties who benefitted from the bailout of AIG.

Why is the DOJ investigating the Credit Default Swap market? As the above graph shows, the CDS market grew from literally nothing in 2001 to over a $60 trillion market in only 6 years. Keep in mind, according to the World Bank, the GDP of the US in 2008 was $14 trillion and the GDP of the entire globe was only around $60 trillion. Looking at those stats, how was the size of the CDS market even possible?

Why do I have a feeling these banks were doing something wrong?