Thursday, March 26, 2009

great day

Yesterday brought great news from Congress – the best in a long time when it comes to the environment. The “Omnibus Public Land Management Act of 2009,” passed with strong bipartisan support, designates 86 new Wild and Scenic Rivers and protects over two million acres of public land with new Wilderness designations.

I’m on the national board of both
American Rivers and Earthjustice, and both organizations played critical roles in the protection of the wild places covered by this legislation and in its ultimate passage.

From yesterday’s American Rivers
press release:
Washington, DC -- The second largest Wild and Scenic Rivers package in history now heads to President Obama’s desk, after passing the House of Representatives today by a vote of 285-140. The bipartisan H.R. 146, the legislative vehicle for the Omnibus Public Land Management Act of 2009, will safeguard over 1,100 miles of rivers in Oregon, Idaho, Arizona, Wyoming, Utah, California, and Massachusetts. The legislation includes important protections for 350,000 acres of land along 86 new Wild and Scenic Rivers and it also contains new Wilderness designations for over two million acres of public land. Last week the bill passed the Senate by a vote of 77-20.

“Passage of this bill is an expression of the home grown support for one of the largest environmental protection measures in decades,” said Rebecca Wodder, President of American Rivers. “Today congressional leaders established a legacy of clean water, outdoor recreation and the economic benefits of healthy rivers and wild places for our grandchildren.”

American Rivers is extremely grateful to Senate Majority Leader Harry Reid, House Speaker Nancy Pelosi, House Majority Leader Steny Hoyer, Chairman Jeff Bingaman, Chairman Nick Rahall, and all the sponsors of the Wild and Scenic Rivers provisions. Without their determination to see this legislation through we could not have protected these national treasures for future generations of Americans.

A Wild and Scenic River designation protects riverside land along both sides of a river corridor, blocks dams and other harmful water projects, and preserves a river's free-flowing nature. It helps protect and improve clean water, as well as the river's unique historic, cultural, scenic, ecological, and recreational values.

The law was enacted in 1968 and three years ago American Rivers set the goal of designating 40 new Wild and Scenic Rivers by the 40th anniversary of the law. With passage of this package we more than double our goal by designating 86 new Wild and Scenic Rivers.

“From the Snake River headwaters in Wyoming to the desert Southwest’s Fossil Creek, to the trout streams of the Rockies, and the popular fishing and paddling streams of the Pacific Northwest, local people—hikers, boaters, hunters and anglers—pushed for these historic protections,” said Wodder. “These rivers are the lifeblood of the land and our communities and the Wild and Scenic River designations are a tremendous gift to future generations.”
Read the press release for a full listing of the protected areas.

American Rivers was founded in 1973 with the specific mission of increasing the number of rivers protected by the National Wild and Scenic Rivers System. (Over the years our mission has broadened substantially to address a wide variety of issues affecting people and rivers.) As noted in the press release, last year marked the 40th anniversary of passage of the Wild and Scenic Rivers Act and to commemorate that anniversary, we undertook a “40x40” campaign to secure 40 new Wild and Scenic Rivers designations. We missed our self-imposed 2008 deadline by three months, but we more than doubled the number of designations. It was worth the extra time.

To give you an idea of some of what is being protected, check out the Snake River headwaters:

My personal favorite among the new designations is the Owyhee River – spectacular canyon lands along the Idaho/Oregon border.

Earthjustice (which started out as the Sierra Club Legal Defense Fund) is the premier non-profit environmental law firm in the country. Among the newly designated Wilderness areas is Mineral King, which has particular historical significance to Earthjustice.

From yesterday’s press release:

Mineral King -- the Sierra "birthplace" of Earthjustice and of environmental law -- is one of many wild places across the nation that were granted wilderness status on March 25 by Congress, freeing them from the threat of degradation by development.

After years of work and a recent false start, the Omnibus Public Lands Act of 2009 passed through the House of Representatives. It already passed the Senate, and is expected to be signed into law by President Obama.

The new designation will permanently protect more than 2 million acres of America's wilderness in California, Colorado, Idaho, Michigan, New Mexico, Oregon, Utah, Virginia, and West Virginia.

Two expanses of wild lands protected by the legislation, including Mineral King and
the Wyoming Range, are still in their natural state because of vigorous past efforts by Earthjustice attorneys. Of those, Mineral King has special significance for Earthjustice.

Tucked away in the Southern Sierra, Mineral King Valley is a subalpine jewel that attracted the attention of Walt Disney Corporation in the 1960's. Disney had visions of building a world-class ski resort in Mineral King to rival Sun Valley in size and provide recreational opportunities to people living in Southern California.

The Sierra Club was less than enthusiastic. Mineral King was surrounded on three sides by Sequoia National Park, and would have been included in the park save for some abandoned mine shafts left by miners when the ore played out two decades before the park was created. …

The club appealed to the Forest Service and the Park Service to deny the resort its permits, to no avail. The only recourse left was federal court.

This was a near novelty -- most courts required potential plaintiffs to demonstrate a financial interest in a matter they wished to ask the court to rule on. But the club insisted that the interest of its members in the recreational possibilities offered by Mineral King, plus its general mission of protecting places like Mineral King, should allow it to bring a lawsuit and ask for relief.

Judge William Sweigert, of the district court in San Francisco, agreed and blocked the project. The government appealed to the Ninth Circuit Court of Appeals, and that court ruled that the Sierra Club had no right to bring the case -- it lacked "standing to sue." The club then appealed to the Supreme Court.

The high court ruled against the club but, in a famous footnote, said the club was free to return to the district court and refile the case with an extensive explanation of how the interests of itself and its members would be harmed by the resort.

The club did so, and Judge Sweigert reimposed the injunction. Disney, tiring of the bad publicity the case had generated, walked away. A few years later Mineral King was added to Sequoia National Park. Now, with its addition to the National Wilderness Protection System, Mineral King will be protected in perpetuity.

The bill also protects 1.2 million acres in the Wyoming Range, the largest tract of roadless land in the Bridger-Teton National Forest. The Bush-Cheney administration wanted to open it up to massive oil and gas development, which Earthjustice helped to stop. (Hunting, fishing, recreation, and associated travel – sustainable use of the land – will bring in more money to the state than the oil and gas development.) Earthjustice also helped the legislation over the final humps in the face of much last minute maneuvering by opponents.

Yesterday was a great day for future generations of Americans (and other species). If that makes you happy, maybe give some props to
American Rivers and Earthjustice (these are tough times for non-profits – which I guess would include just about all of us these days).

[For those of you in Seattle, American Rivers is having its annual Northwest dinner and auction on April 23rd at a very cool venue,
Herban Feast at Sodo Park. It’s $125/head. It is always a fun event. This year it will feature climate expert Dr. Lara Hansen. American Rivers president Rebecca Wodder will also be joining us. If you are interested, contact me for more details.]

Sunday, March 22, 2009

fox news destroys world economy

Sixty days into the Obama presidency, Republicans are pronouncing Obama responsible for the worst economic crisis since the Great Depression based on the fact that stock prices have declined since he took office. In fact, the S&P 500 has declined 8.6% since Obama’s inauguration. As you would expect, FOX News has been leading the charge (“Study: Dow's Decline Is Fastest for a New President in Nearly a Century”)

But, wait. The stock market didn’t peak on January 20, 2009. It peaked on October 9, 2007 – more than seventeen months ago – and has declined by over 50% since then. So, what happened in October 2007?

On October 14, 2007, FOX Financial News went on the air. The previous close on the S&P 500 was 1561 – only four points below its record high. As you can see, 99.5% of the decline in the stock market can be attributed to FOX Financial News.

We report, you decide.

Friday, March 20, 2009

obama on leno

If you missed it, watch it.

I’m sure glad this guy is president.

Tuesday, March 10, 2009

who is john galtsson?

Michael Lewis is probably the most entertaining financial writer in this country. He writes about other stuff, too. But he made his name with "Liars Poker" and he still has a way of capturing the culture of the financial world better than almost anyone. He appears to be writing a book about the current financial crisis, giving us the periodic pleasure of it as a work-in-progress in various publications. His latest is in Vanity Fair ("Wall Street on the Tundra"), about the Icelandic Meltdown. Just the bit where he describes how the 1100-year-old Icelandic fishing culture naturally lent itself to investment banking is a classic. Read it now.

This is the gist:

Iceland was ... a nation of extremely well-to-do (No. 1 in the United Nations’ 2008 Human Development Index), well-educated, historically rational human beings who had organized themselves to commit one of the single greatest acts of madness in financial history. “You have to understand,” he told me, “Iceland is no longer a country. It is a hedge fund.”

An entire nation without immediate experience or even distant memory of high finance had gazed upon the example of Wall Street and said, “We can do that.” For a brief moment it appeared that they could. In 2003, Iceland’s three biggest banks had assets of only a few billion dollars, about 100 percent of its gross domestic product. Over the next three and a half years they grew to over $140 billion and were so much greater than Iceland’s G.D.P. that it made no sense to calculate the percentage of it they accounted for. It was, as one economist put it to me, “the most rapid expansion of a banking system in the history of mankind.”

He comes up with passages like this:

Back in the 1980s, Oddsson had fallen under the spell of Milton Friedman, the brilliant economist who was able to persuade even those who spent their lives working for the government that government was a waste of life. So Oddsson went on a quest to give Icelandic people their freedom—by which he meant freedom from government controls of any sort. As prime minister he lowered taxes, privatized industry, freed up trade, and, finally, in 2002, privatized the banks. At length, weary of prime-ministering, he got himself appointed governor of the Central Bank—even though he was a poet without banking
And this:
Fishermen, in other words, are a lot like American investment bankers. Their overconfidence leads them to impoverish not just themselves but also their fishing grounds.

And in part of the final passage of the article:
When you borrow a lot of money to create a false prosperity, you import the future into the present. It isn’t the actual future so much as some grotesque silicon version of it. Leverage buys you a glimpse of a prosperity you haven’t really earned.

There are passages that made me think of Ayn Rand's Atlas Shrugged. It's as if that island nation of 300,000 inhabitants had awkwardly morphed into John Galt's exclusive commune -- where everyone is a hedge-fund manager.

Along the lines of this recent updated version of Atlas Shrugged. A sample of the faux Ms. Rand's timeless prose:

"I heard the thugs in Washington were trying to take your Rearden metal at the point of a gun," she said. "Don't let them, Hank. With your advanced alloy and my high-tech railroad, we'll revitalize our country's failing infrastructure and make big, virtuous profits."

"Oh, no, I got out of that suckers' game. I now run my own hedge-fund firm, Rearden Capital Management."


He stood and adjusted his suit jacket so that his body didn't betray his shameful weakness. He walked toward her and sat informally on the edge of her desk. "Why make a product when you can make dollars? Right this second, I'm earning millions in interest off money I don't even have."

He gestured to his floor-to-ceiling windows, a symbol of his productive ability and

"There's a whole world out there of byzantine financial products just waiting to be invented, Dagny. Let the leeches run my factories into the ground! I hope they do! I've taken out more insurance on a single Rearden Steel bond than the entire company is even worth! When my old company finally tanks, I'll make a cool $877 million."

Saturday, March 7, 2009

just making stuff up

With the announcement yesterday that the US economy lost another 651,000 jobs in February, and an upward revision in the job loss estimates for recent months, the current economic downturn is unquestionably the worst since the Great Depression. The economy has lost 4.4 million jobs since December 2007, but more alarming is that 2.6 million jobs have been lost in just the past four months. Unemployment tends to be a lagging indicator, so clearly there is worse to come. Look at the chart below – there is no indication that we are anywhere near bottoming out. We’re still in free-fall.

(During the recession of the early ‘80’s unemployment peaked at a higher rate than the current rate. But it started from a higher base, so the job loss was less. And since then revisions to the way unemployment is measured have the effect of understating unemployment. The broadest measure of unemployment, including those who have given up looking for work or who are involuntarily working part time, is now
almost 15%.)

[click to enlarge]

So what is the Republican response to this worst global economic crisis in our lifetime?

“House Minority Leader John Boehner, R-Ohio, reacted to the rise in unemployment today by calling for a federal government spending freeze.”
You can’t make this stuff up.

And don’t forget the “bold” GOP plan for turning around the economy:
elimination of the capital gains tax. (Actually, there is nothing new about this proposal. Newt Gringrich was pushing it as far back as 1997 – when the economy was booming. Boom or bust, deficits or surpluses, war or peace, inflation or deflation, the Republicans have a one-size-fits-all solution: Tax cuts for the rich and reduce the social safety net.)

I don’t know about you, but the capital gains tax is pretty much the least of my worries these days.

Josh Marshall’s
summarizes the point:
Let's just stipulate DC Republicans are simply not part of the discussion when it comes to repairing the US economy or arresting our slide into deep economic misery. And any reporters who aren't clear about this are just lying to their readers or viewers. The latest Republican plan, in the face of today's new spike in unemployment, is a freeze on federal spending. I'm not even sure it's fair to say that this is a replay of the disastrous decisions the magnified the Great Depression between 1929 and 1933. It's more a parody of it. When the crisis is a rapid and catastrophic drop off in demand, you handcuff the one force that can create demand (i.e., the federal government) in the throes of the contraction. That's insane. Levels of stimulus are a decent question. Intensifying the contraction is just insane and frankly a joke. It's time to recognize that the only debate here is happening among Democrats and sundry non-affiliated sane people. The leaders of the GOP are simply not part of the conversation.

Republicans seem to be occupying some kind of alternative reality. The main Republican tactic these days is to mock every form of government spending to undermine confidence in President Obama’s economic recovery plans and foment opposition to them. It shouldn’t be too hard to find instances of wasteful spending – that’s the oldest populist trick in the book. But increasingly, they are just making stuff up.

Take Bobby Jindal’s Republican response to President Obama’s address to a joint session of Congress last week. His
big example of wasteful spending in the president’s stimulus bill was, “$8 billion for high-speed rail projects, such as a 'magnetic levitation' line from Las Vegas to Disneyland.” The whole right-wing noise machine has been shouting out this mythical Las Vegas-to-Disneyland train in recent days – originally as part of the stimulus bill but lately it has morphed into an element of the fiscal 2008 omnibus spending bill. As “reported” by FOX News’s Megyn Kelly (in the latter context):

It's a super railroad, of sorts -- a line that will deliver customers straight from Disney, we kid you not, to the doorstep of the moonlight Bunny Ranch brothel in Nevada. I say, to the moonlight Bunny Ranch brothel in Nevada. So should your tax dollars be paying for these kinds of projects?

“We kid you not,” says FOX News. (Is it worth pointing out that the
Bunny Ranch is outside Carson City, 400 miles north of Las Vegas? Not that I know these kinds of things.)

Pure fiction. Yes, the stimulus bill included $8 billion for high-speed rail lines. But that allocation of funds does not include any “earmarks” and it doesn’t specify any such Las Vegas-to-Disneyland rail line. The funds are to be allocated by Transportation Secretary Ray LaHood, a Republican it is worth noting. While no specific projects have been designated, the Department of Transportation does have a
map of proposed high-speed rail corridors:

[click to enlarge]

Notice there is no line to Las Vegas (let alone the Bunny Ranch).

And what’s wrong with high-speed rail lines? This is exactly the kind of infrastructure project that has propelled economic growth throughout American history. Canals. The transcontinental railroad. Rural electrification. Western water projects. The interstate highway system. The Internet. To name a few. This is exactly the kind of thing the government should be doing, especially at a time when aggregate demand has collapsed and unemployment is skyrocketing (and we want to break our addiction to fossil fuels). And this is hardly cutting-edge technology. Japan built the world’s first “bullet trains” that could go 130 mph in the early ‘60’s. (I lived in Japan in the early/mid ‘80’s and loved traveling the country on the “
Shinkansen” – much better than air travel.) Heck, even Spain now has a train that goes over 200 mph – and they are planning over 6000 miles of high-speed track (video). But to Republicans this is a subject of mockery and derision. (A funny story here.)

The other big target of Republican anti-spending wrath has been $30 million for “Nancy Pelosi’s marsh mouse.” You must have heard about the little rodents by now. They were the primary Republican objection to Obama’s economic recovery plan before the mythical Bunny Ranch train. Supposedly there is some outrageous amount (it varies in the telling – usually $30 million, but sometimes more) in the Obama plan for the protection of marsh mice in Nancy Pelosi’s district. (As I was drafting this post I began to include some of these expressions of Republican rodent rage. But when I got up to over 20 such quotes I decided to cut them all out. But you can read some of them
here and here.)

Again, pure fiction. Turns out, the stimulus bill has some funds for wetlands restoration. (I’m on the national board of
American Rivers and wetlands restoration is a priority of ours. It is a good use of stimulus money. Labor intensive with all kinds of long-term benefits. A GOOD thing.) Among the “shovel-ready projects” submitted to the U.S. Army Corps of Engineers and the National Oceanic and Atmospheric Administration are marshland restoration projects proposed by the California State Coastal Conservancy, a state agency charged with preserving and restoring the coastline. These projects have all sorts of benefits like flood and storm water runoff control, habitat restoration, and clean water improvements. But Nancy Pelosi lives in California and the salt marsh harvest mouse is one of many species that live in the kinds of wetlands that might benefit from restoration, so in the Republican alternative reality this became spending for Nancy Pelosi’s mouse. Never mind that these projects have nothing to do with the marsh mouse per se. And that the Army Corps and NOAA have not even indicated that they would fund any of the projects that the California State Coastal Conservancy has proposed. And that there aren’t even any proposed wetland restoration projects in Nancy Pelosi’s district and she had nothing to do with this wetlands restoration provision. Not only is the story false, it’s stupid. Do Republicans really think this kind of thing is what the American people care about during a global economic crisis when millions of people are losing their jobs?

Earlier, Republicans were claiming that the stimulus bill provided $5 billion as a “political payoff” for ACORN (a group whose voter-registration work has resulted in it being demonized by the right). Republican critics included House minority leader Boehner and Sen. “Diaper Dave” Vitter (R-La.) (perhaps best know as a client of the DC madam with a diaper fetish). Turns out, the funding is for housing and community development programs signed into law by Gerald Ford for which ACORN (along with just about anyone else in America) theoretically could apply – but ACORN hasn’t and has said it has no intention of doing so. As

Boehner and Vitter commit two logical fallacies. Their argument has the form:

1. The stimulus bill provides funding for redeveloping neighborhoods.
2. ACORN does work in redeveloping neighborhoods.
3. Therefore the stimulus bill provides funding for ACORN.

That's an example of what philosophers call the undistributed middle fallacy. It's a common mistake … [b]ut Boehner and Vitter compound their error by treating different terms as if they had the same meaning. ACORN does indeed work in redeveloping neighborhoods, but the work that it does is not the same sort of work for which NSP provides funding. By pretending as if the two are the same, Boehner and Vitter commit the fallacy of equivocation.

We're accustomed to seeing logical fallacies in political arguments. But working two of them into a single argument is unusually bad logic.

Another attack line is the billions of dollars for “remodeled federal offices”. New drapes and designer wastepaper baskets, presumably. From Newsweek:

According to GSA's acting administrator, Paul F. Prouty, this will allow the agency to comply with laws requiring it to reduce energy and fossil fuel consumption. Plans for making the buildings more environmentally friendly include thicker insulation, more efficient windows, dual flush toilets and LED lighting in parking garages – small changes, but GSA owns about 1,500 properties that would need to be updated. They also have bigger plans, such as installing energy-producing roofs and intelligent lighting systems.

Increasing the energy-efficiency of federal buildings sounds like a pretty good idea to me.

Then there is the infamous $300 million for “
golf carts.” Turns out, the funding is for government purchases of (in the language of the stimulus bill), “motor vehicles with higher fuel economy, including: hybrid vehicles; neighborhood electric vehicles; electric vehicles; and commercially-available, plug-in hybrid vehicles.” High-fuel-economy cars = golf carts. The horror!

And who could forget $200,000 for “
tattoo removal” (actually part of an effective anti-crime effort that helps get youth out of gangs).

Don’t even get me started on the $1.7 million for "swine odor and manure management research" (turns out people subjected to a lot of pig emissions come down with a
pretty nasty set of symptoms – the kind of thing that you might want to look into a bit – maybe to the tune of $1.7 million).

I could go on all day refuting Republican lines of attack – but it’s a Sisyphean task. They just make this stuff up, so there is literally an infinite supply of fiscal outrages.

This whole thing about “earmarks” has become ridiculous. First, to be clear, the Obama economic recovery program had NO earmarks. Then there is the $410 billion omnibus spending bill for the remaining six and a half months of fiscal 2009 that has spent eight months working its way through Congress. According to Taxpayers for Common Sense, it has in it $7.7 billion in “earmarks.” That is in addition to a slightly lower amount for fiscal 2009 spending to date.

Personally, I see nothing wrong with “earmarks” per se. An “earmark” just consists of Congress directing spending toward a specific program or project. The Constitution vests in Congress the power of the purse. If Congress didn’t direct the spending, some executive-branch agency would. Even if, as a general matter, the executive branch might do a better job of it, that isn’t inherently so. Congress not only has every right to direct spending, but it is actually the branch of government with the explicit Constitutional control over spending (and more direct accountability to votes – which, of course, is the problem). Sure, it is a power subject to abuse (as the Jack Abramoff scandal demonstrated). And unquestionably many “earmarks” are dumb and wasteful. Earmarks increased four-fold under Republican control of Congress. But now (thanks to Democrats, since they took control of Congress) earmarks are transparent – each one has to be specifically identified to the particular member of Congress who proposed it (in many cases more a matter of pride than shame). According to
Taxpayers for Common Sense there were $14 billion in “earmarks” (including the current omnibus bill) in the 2009 budget – down from 2008. So that is less than ½ of one percent of the $3.1 trillion budget. Even if that spending is 100% wasteful – and there is no reason to believe it is – that is a pretty trivial amount of “waste.”

Speaking of
Taxpayers for Common Sense, they have compiled a database of earmarks in the current budget. The top “porkmeisters”? Six out of the top ten are Republicans:

Earmarks (number/$ in millions)

1. Cochran (R-MS): 204 $471m
2. Wicker (R-MS): 143 $390m
3. Landrieu (D-LA): 177 $332m
4. Harkin (D-IA): 177 $292m
5. Vitter (R-LA): 142 $249m
6. Bond (R-MO): 86 $248m
7. Feinstein (D-CA): 153 $235m
8. Inouye (D-HI): 106 $225m
9. Shelby (R-AL): 125 $219m
10. Grassley (R-IA): 125 $219m

But this is really a silly political distraction. We’re talking about ½ of one percent of the federal budget at a time of global economic crisis. What about, you know, ECONOMIC POLICY? And there we have a Republican “plan” consisting of a federal spending freeze and the elimination of the capital gains tax.

Gail Collins had a
great piece in the New York Times after Bobby Jindal’s infamous Republican response that touches on this subject:

Absent any deep thoughts, the Republicans are going to complain about waste. The high point of Jindal’s address came when he laced into “wasteful spending” in the stimulus bill, and used as an example a $140 million appropriation for keeping an eye on the volcanoes in places like Alaska, where one is currently rumbling.

“Instead of monitoring volcanoes, what Congress should be monitoring is the eruption of spending in Washington, D.C.,” Jindal claimed.

I don’t know about you, but my reaction was: Wow, what a great stimulus plan. The most wasteful thing in it is volcano monitoring.

Louisiana has gotten $130 billion in post-Katrina aid. How is it that the stars of the Republican austerity movement come from the states that suck up the most federal money? Taxpayers in New York send way more to Washington than they get back so more can go to places like Alaska and Louisiana. Which is fine, as long as we don’t have to hear their governors bragging about how the folks who elected them want to keep their tax money to themselves. Of course they do! That’s because they’re living off ours.

O.K., I’m done.

The Republicans can’t try to convince the country their ideas are better because of that intellectual bankruptcy problem. All they can do is make Barack Obama’s programs look feckless, plunging everyone into so much despair that by next summer the public will be ready to go live in caves and eat squirrel stew.

Oh, by the way, volcano monitoring is a pretty good thing. You’d think the governor of Louisiana would appreciate the idea of anticipating natural disasters. But, alas, he is a Republican.