“A Pipeline And A Pie In The Sky”: The Challenge Is To Build For The Future, Not Steal From It
The Koch brothers Congress, purchased with the help of about $100 million from the political network of the billionaire energy producers, got down to its first order of business this week: trying to hold off the future.
Meanwhile, here on the other coast, one of the most popular politicians in America, Gov. Jerry Brown of California, bounced into his fourth and final term by trying to hasten that future. The contrasts — East and West, old and new, backward-looking and forward-marching, the beholden and behold! — could not have been more stark.
The 114th Congress is trying to rush through the Keystone XL pipeline to carry oil from the dirty tar sands of Canada to the Gulf Coast. The State Department has estimated that the total number of permanent new jobs created by the pipeline would be 35 — about the same as the handful of new taco trucks in my neighborhood in Seattle. This, at a time when the world is awash in cheap oil.
Governor Brown, having balanced a runaway California budget and delivered near-record job growth in a state Republicans had written off as ungovernable, laid out an agenda to free the world’s eighth-largest economy — his state — from being tied to old energy, old transportation and old infrastructure. He doubled down on plans to build a bullet-train network and replumb the state’s water system, while setting new goals to reduce dependence on energy that raises the global temperature.
“The challenge is to build for the future, not steal from it,” said Governor Brown, who is the embodiment of the line about how living well is the best revenge — political division. He is 76, but said he’s been pumping iron and eating his vegetables of late so he can live to see the completion of the high-speed rail system, about 2030, when Governor Brown would be a frisky 92.
Russia, which is ranked below California in overall economic output, is teetering as world commodity prices provide a cold lesson in what can happen to a country tied to the fate of oil’s wild swings. The Republicans should take note. The Keystone pipeline, though largely symbolic in the global scheme of things, does nothing for the American economy except set up the United States as a pass-through colony for foreign industrialists. Well, not all foreign: The Koch brothers are one of the largest outside leaseholders of acres in Canadian oil sands, according to a Washington Post report. I’m sure that has nothing to do with the fierce urgency of rushing Keystone XL through Congress now.
At the same time, the Republican hold-back-the-clock majority announced plans to roll back environmental regulations. Fighting hard for dirty air, dirty water and old-century energy producers, the new Senate leaders are trying to keep some of the nation’s oldest and most gasping coal plants in operation, and to ensure that unhealthy air can pass freely from one state to the other. One strategy is to block money to enforce new rules against the biggest polluters.
For intellectual guidance, Republicans can count on 80-year-old Senator James Inhofe of Oklahoma, the incoming chairman of the environment committee. Inhofe calls the consensus scientific view on human-caused warming “the greatest hoax.” He plans to use his gavel to hold back regulations aimed at reducing carbon emissions, fighting the obvious at every turn.
The headache, for the rest of us, will come when the nations of the world meet in Paris at year’s end to discuss how to address the problem that knows no nationality. We’ll talk about China and its climate-warming coal plants. Critics will point to the United States, its knuckle-dragging Congress and the industries it is shielding from responsibility.
The Republican agenda is frozen in time. It’s all frack-your-way-to-prosperity, and Sarah Palin shouting, “Drill, baby, drill.” The problem, of course, is that the world doesn’t need any more oil, not now; the price is down by 50 percent over the last year with no bottom in sight. Cheap petro is killing not just Russia but Iraq, Venezuela, Saudi monarchs and, soon, assorted other dependencies — like Alaska and Texas. At some point, the only way the Keystone XL can be profitably built and operated is with a huge subsidy from taxpayers.
Nature, also, is weighing in. Earthquakes in Texas and Oklahoma are raising alarms about the relationship between the hydraulic byproducts of fracking and the temblors rolling through a huge swatch of land that’s been perforated for oil and gas drillers.
Governor Brown and another West Coast governor, Jay Inslee of Washington, view the cheap oil era as a golden opportunity for an energy pivot. Inslee wants to tax the biggest carbon emitters to pay for new infrastructure. The motto is tax what you burn, not what you earn.
Governor Brown is quick to note the big forces at play between the West Coast and the pollution panderers along the Potomac. “California is basically presenting a challenge to Washington,” he told reporters earlier this week.
A big piece of that challenge is the $68 billion high-speed rail project, which would zip passengers between San Francisco and Los Angeles in just under three hours. It’s bogged down in legal and financial muck, and critics call it pie in the sky.
But Governor Brown is undaunted. What he has going for him is an old strain in the American character, dormant for much of the Great Recession — the tomorrow gene. There’s no legacy, no long-term payoff, in defending things that are well past their pull point. And, seriously, which would you rather have: a futuristic, clean-energy train, or a pipeline that carries a product produced in a way that makes the world a worse place to live?
By: Timothy Egan, Contributing Op-Ed Writer, The New York Times, January 8, 2014
“America, We’re In Big Trouble!”: A ‘Governing Majority’ That Doesn’t Know How To Govern
Incoming Senate Majority Leader Mitch McConnell (R-Ky.) said the other day that he hopes the Republican-led Congress can prove to the electorate that his party can be a responsible “governing majority.” And on the surface, that’s a perfectly worthwhile goal.
But it’s been quite a few years since GOP policymakers actually tried to govern effectively, and there’s reason to believe the party no longer remembers how. This week, for example, Republican lawmakers will get right to work, pushing the Keystone oil pipeline and a measure to redefine a full-time worker under the Affordable Care Act. Jonathan Weisman had a good piece on the latter.
The House will take up legislation on Wednesday, the first major bill of the 114th Congress, that would change the definition of a full-time worker under the health law from one who works 30 hours a week to one who works 40 hours. A vote is scheduled for Thursday.
Weisman’s report did a nice job noting that even conservatives seem to realize this is a bad idea, with National Review’s Yuval Levin arguing over the weekend that the legislation “seems likely to be worse than doing nothing.”
Republicans, at some level, must understand this. Indeed, they pushed this exact same idea 11 months ago – in a bill they called the “Save American Workers Act” – and it was deemed ridiculous at the time.
An analysis of the bill, released Tuesday by the nonpartisan Congressional Budget Office and Joint Committee on Taxation, found that it would cause 1 million people to lose their employer-based insurance coverage. The report projected that more than 500,000 of them would end up getting coverage through Medicaid, the Children’s Health Care Program or the Obamacare exchanges. The rest, CBO and JCT said, would become uninsured.
The legislation would also lower the amount the federal government collects in penalties from businesses who don’t abide by the employer mandate. As a result, the report found, the deficit would go up by $74 billion over 10 years.
Jonathan Cohn explained a while back, “The Congressional Budget Office just taught the Republican Party a lesson. Governing is hard…. [T]hat’s the reality Obamacare’s critics are never willing to confront. They’re great at attacking Obamacare. But they’re lousy at coming up with alternatives that look better by comparison. There’s a reason for that. The downsides of Obamacare are real, but, in many cases, they make possible the upsides. Take away the former and the latter go away, too.”
Faced with this knowledge, the new, massive House Republican majority has effectively declared, “Well, let’s just pass it anyway.”
And what about Keystone? I’ll dig into this in more detail when the vote draws closer, but for now, I’m reminded of President Obama’s comments at his year-end press conference a few weeks ago:
“At issue in Keystone is not American oil. It is Canadian oil that is drawn out of tar sands in Canada. That oil currently is being shipped out through rail or trucks, and it would save Canadian oil companies and the Canadian oil industry an enormous amount of money if they could simply pipe it all the way through the United States down to the Gulf. Once that oil gets to the Gulf, it is then entering into the world market, and it would be sold all around the world.
“So there’s no – I won’t say ‘no’ – there is very little impact, nominal impact, on U.S. gas prices – what the average American consumer cares about – by having this pipeline come through. And sometimes the way this gets sold is, ‘Let’s get this oil and it’s going to come here.’ And the implication is, is that’s going to lower gas prices here in the United States. It’s not. There’s a global oil market. It’s very good for Canadian oil companies and it’s good for the Canadian oil industry, but it’s not going to be a huge benefit to U.S. consumers. It’s not even going to be a nominal benefit to U.S. consumers.
“Now, the construction of the pipeline itself will create probably a couple thousand jobs. Those are temporary jobs until the construction actually happens. There’s probably some additional jobs that can be created in the refining process down in the Gulf. Those aren’t completely insignificant – it’s just like any other project. But when you consider what we could be doing if we were rebuilding our roads and bridges around the country – something that Congress could authorize – we could probably create hundreds of thousands of jobs, or a million jobs. So if that’s the argument, there are a lot more direct ways to create well-paying Americans construction jobs.”
Again, the Republican Congress knows all of this. They know gas prices have already plummeted and that Keystone won’t push them any lower. They know that the project would create a few dozen permanent U.S. jobs. They know this is all about Canadian oil.
But this new “governing majority,” eager to prove how capable they are, have once again effectively declared, “Let’s pass it anyway” – whether it actually makes sense or not.
Republican lawmakers have had months – and by some measures, years – to come up with a policy agenda they’d implement once they controlled all of Congress. This, alas, is what they’ve come up with.
By: Steve Benen, The Maddow Blog, January 6, 2014
“Presidents And The Economy”: Serious Analyses Of The Reagan-Era Business Cycle Place Very Little Weight On Reagan
Suddenly, or so it seems, the U.S. economy is looking better. Things have been looking up for a while, but at this point the signs of improvement — job gains, rapidly growing G.D.P., rising public confidence — are unmistakable.
The improving economy is surely one factor in President Obama’s rising approval rating. And there’s a palpable sense of panic among Republicans, despite their victory in the midterms. They expected to run in 2016 against a record of failure; what do they do if the economy is looking pretty good?
Well, that’s their problem. What I want to ask instead is whether any of this makes sense. How much influence does the occupant of the White House have on the economy, anyway? The standard answer among economists, at least when they aren’t being political hacks, is: not much. But is this time different?
To understand why economists usually downplay the economic role of presidents, let’s revisit a much-mythologized episode in U.S. economic history: the recession and recovery of the 1980s.
On the right, of course, the 1980s are remembered as an age of miracles wrought by the blessed Reagan, who cut taxes, conjured up the magic of the marketplace and led the nation to job gains never matched before or since. In reality, the 16 million jobs America added during the Reagan years were only slightly more than the 14 million added over the previous eight years. And a later president — Bill something-or-other — presided over the creation of 22 million jobs. But who’s counting?
In any case, however, serious analyses of the Reagan-era business cycle place very little weight on Reagan, and emphasize instead the role of the Federal Reserve, which sets monetary policy and is largely independent of the political process. At the beginning of the 1980s, the Fed, under the leadership of Paul Volcker, was determined to bring inflation down, even at a heavy price; it tightened policy, sending interest rates sky high, with mortgage rates going above 18 percent. What followed was a severe recession that drove unemployment to double digits but also broke the wage-price spiral.
Then the Fed decided that America had suffered enough. It loosened the reins, sending interest rates plummeting and housing starts soaring. And the economy bounced back. Reagan got the political credit for “morning in America,” but Mr. Volcker was actually responsible for both the slump and the boom.
The point is that normally the Fed, not the White House, rules the economy. Should we apply the same rule to the Obama years?
Not quite.
For one thing, the Fed has had a hard time gaining traction in the wake of the 2008 financial crisis, because the aftermath of a huge housing and mortgage bubble has left private spending relatively unresponsive to interest rates. This time around, monetary policy really needed help from a temporary increase in government spending, which meant that the president could have made a big difference. And he did, for a while; politically, the Obama stimulus may have been a failure, but an overwhelming majority of economists believe that it helped mitigate the slump.
Since then, however, scorched-earth Republican opposition has more than reversed that initial effort. In fact, federal spending adjusted for inflation and population growth is lower now than it was when Mr. Obama took office; at the same point in the Reagan years, it was up more than 20 percent. So much, then, for fiscal policy.
There is, however, another sense in which Mr. Obama has arguably made a big difference. The Fed has had a hard time getting traction, but it has at least made an effort to boost the economy — and it has done so despite ferocious attacks from conservatives, who have accused it again and again of “debasing the dollar” and setting the stage for runaway inflation. Without Mr. Obama to shield its independence, the Fed might well have been bullied into raising interest rates, which would have been disastrous. So the president has indirectly aided the economy by helping to fend off the hard-money mob.
Last but not least, even if you think Mr. Obama deserves little or no credit for good economic news, the fact is his opponents have spent years claiming that his bad attitude — he has been known to suggest, now and then, that some bankers have behaved badly — is somehow responsible for the economy’s weakness. Now that he’s presiding over unexpected economic strength, they can’t just turn around and assert his irrelevance.
So is the president responsible for the accelerating recovery? No. Can we nonetheless say that we’re doing better than we would be if the other party held the White House? Yes. Do those who were blaming Mr. Obama for all our economic ills now look like knaves and fools? Yes, they do. And that’s because they are.
By: Paul Krugman, Op-Ed Columnist, The New York Times, January 4, 2015
“The Lion Of Liberalism”: Remembering Mario Cuomo, 1932-2015
When I met Mario Cuomo in the summer of 1978, he was already a celebrated public figure, if not yet a political powerhouse. We were at the Democratic state convention in Albany, where I was reporting for the Village Voice, and he was pondering an offer from New York governor Hugh Carey, then seeking re-election, to join the ticket as lieutenant governor. Mario frankly didn’t much trust Carey, who needed him more than he needed a largely ceremonial promotion from his then-position as secretary of state.
But in the end he accepted the deal, both because he believed that New York needed a Democratic administration, regardless of his personal feelings toward the governor — and because he knew that this step would advance his own political career.
That was my introduction to the Cuomo style of “progressive pragmatism” – and to a charming, thoughtful, highly literate, and occasionally volatile figure who became one of the most compelling orators of the late 20th century.
His speech at the 1984 Democratic convention, delivered at the zenith of Ronald Reagan’s reign, remains a remarkably inspirational assertion of progressive values against conservative complacency and cruelty. His address at Notre Dame on religious belief and public morality that same year courageously defended the independence of Catholic elected officials from subservience to church doctrine on reproductive rights.
In recent years, it has been fashionable to draw contrasts between Mario, who passed away yesterday at the age of 82, and his older son Andrew, who was sworn in for a second term as governor of New York only hours earlier. According to the conventional wisdom, Mario was liberal while Andrew is conservative; Mario was too self-doubting to run for president, while Andrew is too self-confident not to run, someday.
Whatever the differences in personality between father and son, however, Mario’s reputation as the conscience of the Democrats grew more from what he said than what he did. “We campaign in poetry but we govern in prose,” he famously remarked – and much of his governance was prosaic indeed.
He spoke out bravely against capital punishment, for instance, yet built more prison cells than any governor in state history. He approved tax cuts, held down spending, and was proud of his balanced budgets – even while the number of homeless on New York’s streets swelled during his administrations. But he borrowed billions to stimulate spending and create jobs with major public works in environmental protection, education, roads, bridges, and mass transit.
As a columnist for the Voice, I didn’t always agree with his priorities, to put it mildly, and wrote many columns criticizing his policies. More than once I picked up a jangling telephone to hear an angry, argumentative Governor Cuomo railing on the line, without the pleasantry of a “hello.” It was an experience that other reporters shared from time to time. But I have met very few elected officials who were as kind or as genuine.
And I’ve known few politicians as engaging in conversation, or as erudite without pretension. He wrote wonderful diaries of his first campaign for governor, published by Random House in 1984, and could speak as cogently about the history of Lincoln’s presidency as the philosophy of the Jesuit visionary Teilhard de Chardin. But he was still a tough lawyer who went to public schools and grew up on the streets of Queens.
Among the most amusing Cuomo anecdotes is one from the 1977 New York City mayoral campaign, when he is supposed to have confronted Michael Long, the unsavory chairman of the state’s Conservative Party, on a street corner – and knocked him out with a single punch. (Long later claimed this report was an “embellishment,” but I heard it straight from an impeccable source.)
Exaggerated or not, that little legend captures the feisty essence of Mario Cuomo – a man of passionate intellect and spirit, who sought to make his values real in this world. He worked diligently and spoke powerfully, reminding millions of Americans about values we ought to cherish. I have no doubt he will rest in peace.
By: Joe Conason, Editor in Chief, The National Memo, January 2, 2015
“American Society’s Real Moochers; CEOs”: It’s Not The Working Poor Who Deserve Public Scorn For Dependence On Government Handouts
Holiday bells are silent in the homes of America’s struggling working poor, even with gasoline prices at their lowest levels in years. These are people derided as moochers because their starvation wages force them to accept food stamps to feed their children.
On the other side of town, inside gated communities where guards demand photo ID even from Santa, CEOs’ Christmas plums are super-sugared with record-breaking corporate profits.
These are people somehow not derided as moochers, even though their million-dollar pay packages are propped up by tax breaks.
The parable of Charles Dickens’ A Christmas Carol springs to mind as Wall Street banks and law firms hand out six- and seven-figure year-end bonuses while Wal-Mart and fast food workers protest wages so low that their holiday meals are food pantry dregs. It is CEOs, not the working poor, who deserve public scorn for their dependence on government handouts.
The Institute for Policy Studies issued a report last month that details the mooching of the nation’s top corporations and CEOs. It’s called “Fleecing Uncle Sam.” The findings are pretty galling.
Of America’s 100 top-paid CEOs, 29 worked schemes that enabled them to collect more in compensation than their corporations paid in income taxes. The average pay for these 29: $32 million. For one year. And corporations mangle tax the code to deduct that too.
Though their corporations reported combined pre-tax profits of $24 billion, they wrangled $238 million in tax refunds out of the federal government. That’s refunds — the government gave money to highly profitable corporations.
That’s an effective tax rate of negative 1 percent.
That means middle class taxpayers helped cover the cost of million-dollar pay packages for CEOs. Middle class taxpayers, whose median family income is $51,324 and whose federal income taxes are withdrawn directly from their checks before they see a cent of pay, support CEOs who pull down $32 million a year.
That qualifies CEOs as first-class fleecers!
Their corporations pay nothing for essential government services that middle class taxpayers provide. That includes patent protection, the Commerce Department’s sanctions against foreign trade rule violations and federal court dispute resolution.
Some corporations haven’t developed schemes enabling them to tax the federal government. Instead, they pay, but not at that 35 percent rate they’re always whining about. Between 2008 and 2012, the average large corporation, according to Fleecing Uncle Sam, paid just 19.4 percent. Individuals earning $50,000 a year pay 25 percent. Clearly, corporations are not paying a fair share at 19 percent.
There’s this wacky theory that if governments excuse corporations from paying their share, then they’ll expand and create jobs. It’s wacky because it’s fiction. Highly profitable corporations aren’t expanding and creating jobs; they’re buying back their own stock.
A study by University of Massachusetts professor William Lazonick, president of the Academic-Industry Research Network, showed that between 2003 and 2012, S&P 500 corporations used 54 percent of their earnings – $2.4 trillion – to buy their own stock.
This isn’t creating jobs. This isn’t investing in a corporation’s future. This is adding to CEO wealth. It works like this: Stock buybacks push up stock prices. Forty-two percent of compensation for S&P 500 CEOs comes from stock options. Thus, as Lazonick points out, stock increases equal CEO pay raises.
Corporations don’t expand just because untaxed profits are sitting around anyway. They expand to meet demand. And corporate practices have deflated demand.
Part of the problem is that CEOs and top executives are taking an increasing portion while doling out less to workers. As the New York Times reported in January, wages have fallen to a record low as a share of gross domestic product, dropping to 43.5 percent last year. It was 50 percent in 1975. The decline means less demand.
But there’s more. Just last week, The New York Times noted two other trends that contribute to weak demand. One is wage theft. The U.S. Department of Labor found that more than 300,000 workers in New York and California are victims of minimum wage violations each month, costing them between $20 million and $29 million each week. If corporations didn’t cheat them out of those earnings, their spending would generate greater demand.
The other trend is insecure income. Millions of Americans are unsure week to week how much money will be coming into their households. This occurs for many reasons, but among the most prominent is the refusal of employers to provide workers with steady weekly hours and practices like sending workers home when retail or restaurant traffic is light. A survey by the Federal Reserve suggests the problem of unreliable income may have worsened as Wall Street has strengthened. Families that can’t pay their bills reduce demand.
Instead of giving workers raises and steady hours, corporations have rewarded only those at the top. The Fleecing Uncle Sam study found that companies that paid their CEOs more than they paid in federal income taxes gave those CEOs fat raises. The average pay of these CEOs rose from $16.7 million in 2010 to $32 million in 2013.
They’ve got trillions for CEOs and stock buy-backs, but nothing for workers or the federal government. This isn’t an accident. It’s not some invisible hand of the market. It’s CEOs freeloading.
No ghosts are going to show up to convert these Scrooges into humans. Instead, the first step in that process is recognizing that the moochers are the CEOs, not the hapless food stamp recipients who desperately want steady, full-time, decently-paid work. The second step is to demand that corporations pay their fair share of taxes and provide steady, full-time, decently-paid work.
By: Leo Gerard, President of the United Steelworkers International Union; In These Times, January 1, 2015
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