04/20/2012 archive

Economist and former Clinton Labor Secretary Robert Reich was a guest on Jon Stewart’s The Daily Show to discuss the economy, taxes, and that state of our political system. In a three part extended interview , Sec. Reich discusses taking back of our democracy from the special interests and “the conditions that he believes will lead to the formation of a legitimate third party in the United States.”

One of the most pernicious falsehoods you’ll hear during the next seven months of political campaigning is there’s a necessary tradeoff between fairness and economic growth. By this view, if we raise taxes on the wealthy the economy can’t grow as fast.

Wrong. Taxes were far higher on top incomes in the three decades after World War II than they’ve been since. And the distribution of income was far more equal. Yet the American economy grew faster in those years than it’s grown since tax rates on the top were slashed in 1981. [..]

What we should have learned over the last half century is that growth doesn’t trickle down from the top. It percolates upward from working people who are adequately educated, healthy, sufficiently rewarded, and who feel they have a fair chance to make it in America.

Fairness isn’t incompatible with growth. It’s necessary for it.

President Obama’s electoral strategy can best be summed up as: “We’re on the right track, my economic policies are working, we still have a long way to go but stick with me and you’ll be fine.”

That’s not good enough. This recovery is too anemic, and the chance of an economic stall between now and Election Day far too high. [..]

The President has to offer the nation a clear, bold strategy for boosting the economy. It should be the economic mandate for his second term.

It should consist of four points:  

First, Obama should demand that the nation’s banks modify mortgages of homeowners still struggling in the wake of Wall Street’s housing bubble – threatening that if the banks fail to do so he’ll fight to resurrect the Glass-Steagall Act and break up Wall Street’s biggest banks (as the Dallas Fed recently recommended).

Second, he should condemn oil speculators for keeping gas prices high – demanding that the oil companies allow the Commodity Futures Trading Corporation to set limits on such speculation and instructing the Justice Department to investigate and prosecute oil price manipulation.

Third, he should stand ready to make further job-creating investments in the nation’s crumbling infrastructure, and renew his call for an infastructure bank. And while he understands the need to reduce the nation’s long-term budget deficit, he won’t allow austerity economics to take precedence over job creation. He’ll veto budget cuts until unemployment is down to 5 percent.

Finally, he should make clear the underlying problem is widening inequality. With so much of the nation’s disposable income and wealth going to the top, the vast middle class doesn’t have the purchasing power it needs to fire up the economy. That’s why the Buffett rule, setting a minimum tax rate for millionaires, is just a first step for ensuring that the gains from growth are widely shared.

But even before any of what Sec. Reich has put forth, President Obama needs to fire Treasury Secretary Timothy Geithner and appoint Sec. Reich, Prof. Bill Black and Paul Krugman to his Economic Advisory Council.

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

Abraham Lustgarten: A Stain That Won’t Wash Away

TWO years after a series of gambles and ill-advised decisions on a BP drilling project led to the largest accidental oil spill in United States history and the death of 11 workers on the Deepwater Horizon oil rig, no one has been held accountable.

Sure, there have been about $8 billion in payouts and, in early March, the outlines of a civil agreement that will cost BP, the company ultimately responsible, an additional $7.8 billion in restitution to businesses and residents along the Gulf of Mexico. It’s also true that the company has paid at least $14 billion more in cleanup and other costs since the accident began on April 20, 2010, bringing the expense of this fiasco to about $30 billion for BP. These are huge numbers. But this is a huge and profitable corporation.

Richard (RJ) Eskow: Should We “Means Test” Your Auto Insurance? Then Why Do It for Social Security?

Picture this: You’re driving down the road one rainy day as someone bearing an uncanny resemblance to Mitt Romney approaches you from the other direction in a Cadillac. One of you hydroplanes and there’s a collision.

After both of you have confirmed that nobody’s hurt — and that the dog and his carrier are still securely fastened to the roof — you call your insurance companies. Soon the claims adjusters show up in their little cars — you know, the ones with the insurance company logo on the door. (I know that doesn’t happen in real life. This is a story.)

Your claims adjuster punches some figures into an electronic device, then smiles and says “You’re all set! The check will be mailed out tomorrow.” So far, so good.

But then you overhear the other driver arguing with his adjuster: “What do you mean, my claim is rejected! The headlight is cracked. On a car like this that’s going to run me six grand, easy! Why won’t you guys honor my claim? I paid my premiums just like everybody else.”

“I’m sorry, sir,” the adjuster replies. “At your income level you’re not entitled to file a claim. But we sure do thank you for all those payments. Keep ’em coming — and have a good day!”

If that scenario doesn’t make sense to you, why do it for Social Security?

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

April 20 is the 110th day of the year (111th in leap years) in the Gregorian calendar. There are 255 days remaining until the end of the year.

On this day in 1939, Billie Holiday records the first Civil Rights song “Strange Fruit”.

“Strange Fruit” was written by the teacher Abel Meeropol as a poem, it condemned American racism, particularly the lynching of African Americans. Such lynchings had occurred chiefly in the South but also in all other regions of the United States. He set it to music and with his wife and the singer Laura Duncan, performed it as a protest song in New York venues, including Madison Square Garden.

The song has been covered by numerous artists, as well as inspiring novels, other poems and other creative works. In 1978 Holiday’s version of the song was inducted into the Grammy Hall of Fame. It was also included in the list of Songs of the Century, by the Recording Industry of America and the National Endowment for the Arts.

In the poem, Meeropol expressed his horror at lynchings, possibly after having seen Lawrence Beitler‘s photograph of the 1930 lynching of Thomas Shipp and Abram Smith in Marion, Indiana. He published the poem in 1936 in The New York Teacher, a union magazine. Though Meeropol/Allan had often asked others (notably Earl Robinson) to set his poems to music, he set “Strange Fruit” to music himself. The piece gained a certain success as a protest song in and around New York. Meeropol, his wife, and black vocalist Laura Duncan performed it at Madison Square Garden. (Meeropol and his wife later adopted Robert and Michael, sons of Julius and Ethel Rosenberg, who were convicted of espionage and executed by the United States.)

Barney Josephson, the founder of Cafe Society in Greenwich Village, New York’s first integrated nightclub, heard the song and introduced it to Billie Holiday. Other reports say that Robert Gordon, who was directing Billie Holiday’s show at Cafe Society, heard the song at Madison Square Garden and introduced it to her. Holiday first performed the song at Cafe Society in 1939. She said that singing it made her fearful of retaliation, but because its imagery reminded her of her father, she continued to sing it. She made the piece a regular part of her live performances. Because of the poignancy of the song, Josephson drew up some rules: Holiday would close with it; second, the waiters would stop all service in advance; the room would be in darkness except for a spotlight on Holiday’s face; and there would be no encore.

Holiday approached her recording label, Columbia, about the song, but the company feared reaction by record retailers in the South, as well as negative reaction from affiliates of its co-owned radio network, CBS. Even John Hammond, Holiday’s producer, refused. She turned to friend Milt Gabler, whose Commodore label produced alternative jazz. Holiday sang “Strange Fruit” for him a cappella, and moved him to tears. Columbia allowed Holiday a one-session release from her contract in order to record it. Frankie Newton’s eight-piece Cafe Society Band was used for the session. Because he was worried that the song was too short, Gabler asked pianist Sonny White to improvise an introduction. Consequently Holiday doesn’t start singing until after 70 seconds. Gabler worked out a special arrangement with Vocalion Records to record and distribute the song.

She recorded two major sessions at Commodore, one in 1939 and one in 1944. “Strange Fruit” was highly regarded. In time, it became Holiday’s biggest-selling record. Though the song became a staple of her live performances, Holiday’s accompanist Bobby Tucker recalled that Holiday would break down every time after she sang it

   Strange Fruit

   Southern trees bear strange fruit,

   Blood on the leaves and blood at the root,

   Black body swinging in the Southern breeze,

   Strange fruit hanging from the poplar trees.

   Pastoral scene of the gallant South,

   The bulging eyes and the twisted mouth,

   Scent of magnolia sweet and fresh,

   Then the sudden smell of burning flesh!

   Here is fruit for the crows to pluck,

   For the rain to gather, for the wind to suck,

   For the sun to rot, for the tree to drop,

   Here is a strange and bitter crop.

When is a war not war? According to Fox News, it’s when it involves women. Comedy Central’s Jon Stewart did a pithy take down of the Fox Faux pout-rage that has attracted the ire of Catholic League president Bill Donohue, who has his rosary in a knot, declaring a war on Jon Stewart. If it’s as successful as The National Organization for Marriage’s boycott of Starbuck’s for its support of marriage equality, it will probably result in a ratings spike for The Daily Show.

Warning: Video contains Adult Material that some may fond offensive.  

Yum.

(Note: this is kind of a compliment to Magnifico’s Next Big Oil Spill Disaster Set for the Arctic.- ek)

This is kind of a tough story to assemble because the images are graphic and disturbing.  Just warning you before you click through on the links.

A lot of people are talking about Al-Jazzera’s story on the horrible consequences of the BP Oil Disaster on the Gulf of Mexico ecosystem-

Gulf seafood deformities alarm scientists

Dahr Jamail, Al-Jazzera

Last Modified: 18 Apr 2012 03:16

“The dispersants used in BP’s draconian experiment contain solvents, such as petroleum distillates and 2-butoxyethanol. Solvents dissolve oil, grease, and rubber,” Dr Riki Ott, a toxicologist, marine biologist and Exxon Valdez survivor told Al Jazeera. “It should be no surprise that solvents are also notoriously toxic to people, something the medical community has long known”.

The dispersants are known to be mutagenic, a disturbing fact that could be evidenced in the seafood deformities. Shrimp, for example, have a life-cycle short enough that two to three generations have existed since BP’s disaster began, giving the chemicals time to enter the genome.

Pathways of exposure to the dispersants are inhalation, ingestion, skin, and eye contact. Health impacts can include headaches, vomiting, diarrhea, abdominal pains, chest pains, respiratory system damage, skin sensitisation, hypertension, central nervous system depression, neurotoxic effects, cardiac arrhythmia and cardiovascular damage. They are also teratogenic – able to disturb the growth and development of an embryo or fetus – and carcinogenic.

Cowan believes chemicals named polycyclic aromatic hydrocarbons (PAHs), released from BP’s submerged oil, are likely to blame for what he is finding, due to the fact that the fish with lesions he is finding are from “a wide spatial distribution that is spatially coordinated with oil from the Deepwater Horizon, both surface oil and subsurface oil. A lot of the oil that impacted Louisiana was also in subsurface plumes, and we think there is a lot of it remaining on the seafloor”.

…

(Dr. Andrew) Whitehead’s (associate professor of biology at Louisiana State University) work is of critical importance, as it shows a direct link between BP’s oil and the negative impacts on the Gulf’s food web evidenced by studies on killifish before, during and after the oil disaster.

“What we found is a very clear, genome-wide signal, a very clear signal of exposure to the toxic components of oil that coincided with the timing and the locations of the oil,” Whitehead told Al Jazeera during an interview in his lab.

According to Whitehead, the killifish is an important indicator species because they are the most abundant fish in the marshes, and are known to be the most important forage animal in their communities.

“That means that most of the large fish that we like to eat and that these are important fisheries for, actually feed on the killifish,” he explained. “So if there were to be a big impact on those animals, then there would probably be a cascading effect throughout the food web. I can’t think of a worse animal to knock out of the food chain than the killifish.”

But we may well be witnessing the beginnings of this worst-case scenario.

Whitehead is predicting that there could be reproductive impacts on the fish, and since the killifish is a “keystone” species in the food web of the marsh, “Impacts on those species are more than likely going to propagate out and effect other species. What this shows is a very direct link from exposure to DWH oil and a clear biological effect. And a clear biological effect that could translate to population level long-term consequences.”

Back on shore, troubled by what he had been seeing, Keath Ladner met with officials from the US Food and Drug Administration and asked them to promise that the government would protect him from litigation if someone was made sick from eating his seafood.

“They wouldn’t do it,” he said.

What is Al-Jazeera’s special expertise in this story?  The Persian Gulf has been experiencing the toxic effects of oil spills for nearly a century.

ThinkProgress is covering it as is dday  who opinies-

There’s no way that every one of these mutated fish was caught before it ended up on a dinner plate. I don’t know what that means for humans who consume them; the process of cooking may have removed some of the toxics. But I am no longer hankering for Gulf sushi. And the Gulf of Mexico provides 40% of all seafood consumed in the US, so it’s not really “Gulf” sushi at all.

Scientists know enough about dispersants to say fairly confidently that they’re causing the mutations in the Gulf. I’m sure the American Petroleum Institute can find some who think otherwise. And the office of Louisiana Governor Bobby Jindal, contacted for the story, claimed that “Gulf seafood has consistently tested lower than the safety thresholds established by the FDA for the levels of oil and dispersant contamination that would pose a risk to human health.”

At Naked Capitalism George Washington has an excellent post with many, many links to the terrible damage that has already been documented-

George Washington: 2 Years After the BP Oil Spill, Is the Gulf Ecosystem Collapsing?

By Washington’s Blog, Naked Capitalism

Wednesday, April 18, 2012

Mother Jones points out that the White House pressured scientists to underestimate BP spill size. And see this Forbes write up, and our previous reporting on the topic.

This is exactly like Fukushima and the financial mess, because  government’s approach to crises is consistent, no matter what area we are talking about: let the giant companies which fund political campaigns do whatever they want … and then help them cover up the extent of the crisis once it inevitably hits.

And what is BP doing about it?  Extend and Pretend, because that’s working oh so well.

The Big Spill, Two Years Later

The New York Times

Published: April 17, 2012

BP has paid $14 billion in cleanup costs and $6.3 billion in damages to individuals and businesses, with another $7.8 billion pledged. The company is also likely to owe several billion dollars for damages to natural resources under the Oil Pollution Act, and somewhere between $5 billion and $20 billion in penalties under the Clean Water Act, depending on the level of negligence.

BP may well prefer a negotiated settlement of these damages to a long and potentially damaging trial. If so, the Justice Department should press for the best possible deal from what is still a deep-pocketed company. Congress must make sure that the bulk of this money is used not only to address particular damage from the spill but to carry out a broad program of ecosystem restoration – the wetlands and barrier islands that had been weakened well before the spill by industrialization and mismanagement of the Mississippi River and by Hurricane Katrina.

Duh.

BP proposes Gulf spill accord terms, trial delay

By Jonathan Stempel, Reuters

Wed Apr 18, 2012 4:16pm EDT

If BP wins a trial delay, the schedule suggests that any trial on federal and state government pollution claims, claims against BP’s drilling partners, and claims among BP and those partners would not start until well into 2013, if not later.

“States represent millions of citizens, and they deserve their day in court,” Alabama Attorney General Luther Strange, who coordinates state interests with his Louisiana colleague James “Buddy” Caldwell, said in a telephone interview.

“I think quite frankly that BP is not going to focus on a comprehensive settlement until it is up against a trial deadline,” Strange added.

…

The medical settlement addresses claims by people made ill from exposure to oil or chemical dispersants. It covers clean-up workers and residents of beachfront or wetland areas, and allows people who develop symptoms later to sue BP at that time. About 16,000 plaintiffs have submitted claims, court papers show.

Victims who are unhappy with the settlements may opt out and pursue their claims separately.

Those ineligible to recover include financial institutions, casinos, people claiming hardship from an Obama administration moratorium on deepwater drilling, and some private plaintiffs in Florida and Texas.

…

“Neither side will receive everything it wants,” but the settlements are “more than fair, reasonable and adequate” and could avert a decade of litigation, BP and plaintiffs’ lawyers said in papers filed in New Orleans federal court.

…

“BP made a commitment to help economic and environmental restoration efforts in the Gulf Coast,” Chief Executive Bob Dudley said in a statement. “This settlement provides the framework for us to continue delivering on that promise, offering those affected full and fair compensation, without waiting for the outcome of a lengthy trial process.”

…

Prior to the settlement, the lawyer Kenneth Feinberg had paid out $6.1 billion to spill victims who submitted claims under BP’s $20 billion Gulf Coast Claims Facility.

BP expects the $7.8 billion payment to come from that trust. Claimants with final offers from Feinberg can receive 60 percent of their money now, and if eligible under the new program may receive the remaining 40 percent or seek higher awards.

…

BP still faces tens of billions of dollars of potential claims from the U.S. government; Gulf states; and drilling partners Transocean Ltd, which owned the rig, and Halliburton Co, which provided cementing services.

The oil company’s potential liability for violating the federal Clean Water Act alone could reach as high as $17.6 billion upon a finding of gross negligence. BP has already taken a $37.2 billion charge for the spill.

Your tax dollars at work-

Congress falls short on oil spill safety, panel says

By Neela Banerjee, Washington Bureau, L.A. Times

April 17, 2012, 6:24 p.m.

The report by members of the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling complained that Congress had failed to pass legislation requiring the offshore oil and gas industry to bear the costs of federal oversight through fees on leasing and permitting reviews. The presidential panel had also recommended that the $75-million liability cap for offshore oil spills be increased substantially.

The Democratic-controlled Senate has passed a bill to funnel penalties from the spill to restoring the Gulf of Mexico’s ecosystem, but House Republicans have yet to approve it.

Several recent developments signal the need for more serious steps to bolster offshore drilling safeguards, the report said. In the last 10 months, “at least three offshore oil and gas rigs around the world have experienced significant leaks, demonstrating again and again how risky this activity is,” the report said. “Risks will only increase as drilling moves into deeper waters with harsher, less familiar environmental conditions.”

Some senior administration and congressional staffers complained that the report used simple letter grades to sum up complicated efforts.

And as usual, Magnifico scooped me on that story too-

U.S. oil production is increasing and offshore drilling is expanding, but yet the problems that contributed to the BP Gulf oil disaster remain. “It is unfortunate that two years after the worst oil spill in U.S. history, Congress has yet to take action to bolster the government’s program for managing offshore activities,” the commission wrote in their report card.

…

With increased drilling and intentionally negligent oversight, it isn’t a matter of if there will be another oil drilling disaster off the American waters, but when it will happen. The environment and people who depend on it for their existence, which is everyone, will be negatively impacted.  With the inevitable oil spills, the commission reports that “Congress has provided little support” for spill response and containment too. So, the country remains unready to respond to the next disaster.

…

So, while the Obama administration has been opening up more areas for drilling, the Republican-controlled House and the ineffective Senate have been at best doing nothing to responsibly oversee offshore oil drilling and at worst been proactively trying block oversight.

The commission is being generous when it gave Congress a “D” grade. “Congress has provided neither leadership nor support for these efforts,” the commission wrote summarizing nearly two years of inaction.

We need to do better electing people to represent us and our nation’s interests. More oil at the expense of our country’s environment is not the solution.