Thursday, July 29, 2010

Here we go again.

My friend E who has his blog over at www.impossibletospell.com has an older post that I just now got around to reading that I think might be worth taking a look at. You can find it here. In it he posits essentially that there will be a "bubble" that is created around "green" jobs (specifically biofuel) much in the same way there was the .com bubble that was created and then wreaked havoc when it burst in the late 1990s. I think the theory is sound and want to play around with this idea a bit. Forgive me.

He starts by addressing the economics of the issue, talking about supply vs. demand and the Peak Oil phenomenon. All right on the mark.
I know environmentalists have been going on about peak oil since the 70′s, but it is bound to happen sooner or later. Note that doesn’t mean we’ll wake up one day to find the wells all dry. Just that we’ve drilled the most convenient wells first, and the price of oil will go up as the petroleum industry has to move on to lower grade wells, in less convenient places (ahem, Gulf of Mexico, ahem), at greater cost.
He wrote this fairly early into what is now the Deepwater Horizon Saga but you can see what he's getting at. In fact, I would argue that unless government regulations about where and how we drill for oil change, especially in very deep waters we're going to have more Deepwater Horizons in our future and it's because we've already hit peak oil and are beginning to feel it. The Deepwater Horizon well is in 5000 feet of water. That's a mile under the surface of the ocean essentially. Do you think it was cheap for BP to drill that well? And do you think if there were easier wells for them to drill they'd drill them? Yeah. We've already tapped the easy stuff. Now it's just a question of watching as quality goes down and price goes up. We've already had a little taste when gas was $4 a gallon in the summer of 2008 and a simple google search of the terms "$4 a gallon gas" produce a number of predictions that we'll see it again before the summer is gone. In milder terms, we've already mentally adjusted to a shift. I paid $3.13/gallon yesterday on the West Coast and I know that $2.50 is pretty normal in places where the prices trend lower than the national average. I can remember when gas was $0.99/gallon as a kid and how everyone started freaking out when it was suddenly $1.05. Welcome to the soft slide into the long fall that is peak oil.

Anyway, back to the biofuels. Simple high school economics explains why, as gas gets more expensive and it's quality goes down, alternatives that we now consider a tad too expensive will increase their market share. In fact, they already are in a tangential sort of way with the popularity of the Toyota Prius and new entries into America's fleet of vehicles coming soon like the Nissan Leaf and the Chevy Volt (just priced at $41,000!) A number of different competitors exist including biodiesel, wind, solar, hell even nuclear is on the table. Suddenly that giant pile of radioactive goo left over doesn't look so bad.
Moreover, many of those technologies are expensive for ‘fixable’ reasons–there’s room for more R&D to make them cheaper or more efficient, they haven’t had the chance to get good economies-of-scale going (look at the price on electric cars). Oil and coal companies have benefited disproportionately from having the living shit subsidized out of them, but that could change. Not that I expect the US will stop kissing oil company ass any time soon, but if Monsanto or the Iowa Corn Growers Association decide they want to be move into the energy market, they may get the way paved for them.
Yet another way to use the insane amount of corn grown in the midwest under federal subsidy. But farm subsidy reform and the food system are topics for another post.

He goes on to say, as I covered earlier up top, that the bust comes in if the economy does the same thing with new fuel sources that it did with the internet in the late 1990s. There IS an uncertainty about which of these new technologies will be what drives human power and innovation into the future. I'll grant that. I will however step aside for one moment and try and highlight one major difference between this and the .com bubble. While starting up an internet company requires capital it isn't physical in the way creating a company that builds thin-film solar cells or blades for an off-shore wind turbine are. I think that the physicality and the financial demands that are required to get in my be a hurdle that will help screen out all the "comp-sci dropouts with witty webaddresses", or at least a good number of them. Are their going to be businesses that fail as this industry emerges into its own, sure. But I'd like to think (and maybe I'm naive) that we'll figure this one out, if for no other reason than because we have to.

The real trick is that we an opportunity to set up a whole new industry here. Will we do it right, or will Bill Gates and Steve Jobs (metaphorically speaking) run the whole industry? We can just look at our government and see what happens when industry condenses to one or two major companies in an industry. You get crappy service and a high bill from AT&T and Verizon, it's all semantics which one you pick. You get screwed by the oil and gas industry no matter where the gas in your tank right now is BP or ExxonMobil. This is an opportunity we can't pass up. We MUST demand that this industry be built sustainably to create energy for us all instead of to create wealth for the very few.

And now we hit the crux of the matter.
...when I talk to non-scientists, including some really smart people about this issue, I hear a lot of variations on ‘Ok, so which one will it be? When the oil runs out, will we switch to ethanol? Will everything be solar powered? Who’s gonna win?’ The answer is, no one technology will replace the oil industry, ever. There’s no magic bullet. If oil and coal go way up in price, if consumers even ever start having to pay the full price of the mess they make, we’re not just going to swap one energy source for another and go on like nothing happened.

We need to get ready. Our lives are going to change whether we like it or not. If we don't prepare for it it just means that when they do, it'll be that much uglier. It means changing where and how we live, what sort of density we think is appropriate (hint: think Europe or China, not rural Idaho or suburban California), what, how, and how often we use our vehicles, where and how we buy our food, and what we do to make a living. The era of cheap, easy energy is over. We've used up what's on our planet. Now we get to figure it out.

Friday, July 23, 2010

Who's on cleanup duty?

I was going to write an economic article tonight for you, but Mia Mingus, fabulous activist that she is, tweeted this story from AlterNet this afternoon and I have to write about it. There's a similar article up at thenation.com. The other post will be up soon.

In short, BP, who since capping the gushing well in the Gulf early this week has been a bit more off the radar than they should be, has been using local prison labor to clean up Gulf beaches. I'm a southerner born and raised. I don't know why I didn't think to write about this before. When I initially saw photos of the cleanup crews working on the beaches I noticed that they were pretty much all African-American men. That should have been all the tip off I needed to start digging and see where BP's labor force is coming from. I didn't. But thankfully several other people are on top of the issue. Although it's been WAY underreported in my opinion if it's only being mentioned now. This was also a topic for discussion for Mike Malloy on my way home from work tonight. It seems he was keyed in from The Nation article.

So, lets take a look at this situation critically. BP is a foreign corporation. The US has higher incarceration rates than most industrialized nations and the inmate population is heavily skewed toward men and racial minorities. Inmates have few recognized rights when it comes to work including little to no pay. BP gets a tax write-off for every inmate they employ in the clean up effort. And every employed inmate is one less Gulf Coast resident who isn't being hired in an economy where jobs are already scarce.

According to the Pew Center on the States 1 in 31 US adults are either in prison or on parole. Men are five times more likely to be imprisoned than women and African-Americans are four times more likely to be imprisoned than white Americans. Is it any wonder that BP is using our prison population to do this dirty and dangerous work? And then denying them the rights to talk to the public and the press as well as the right to wear protective gear and respirators? No one else in society seems to care about these people, their welfare, or their rights. So BP is just following our lead. They found a cheap, disposable work force to clean up their mess for them. They don't have to pay anyone to do the clean up and they get a tax break for doing it to boot! BP has been all about saving money here from the beginning. In fact, the drive to save/make as much money as possible is why we have this problem. Just days before the explosion on the Deepwater Horizon rig as they were finishing the drilling a BP employee made the decision to use six pins to keep the riser pipe in line rather than the recommended twenty-one. That's #2 on this list published on BP's own website for reasons the well failed.

This is about BP and their behavior, make no mistake. But it's about much more than that. We (that is Americans) have been using free or nearly free prison labor for years. Starting with the mental image of prisoners stamping license plates we now uses these people to clean up highways, mow public right-of-ways, make goods for government usage including basic protective gear for the military, and the list goes on. This is about race relations in America. When African-American men are over-represented in the prison population, and we willingly employ prisoners to do dirty, dangerous, and difficult labor for little or no pay, that's called slavery. We simply find different ways to justify it in our modern era. This Prison-Industrial Complex is the true reason for such harsh sentencing in non-violent drug offender cases that pass though the US Justice System. An excellent example is the 100 to 1 ratio for mandatory minimum sentencing for cocaine and crack as outlined below from www.drugwarfacts.org:

As a result of the 1986 Act, federal law10 requires a five-year mandatory minimum penalty for a first-time trafficking offense involving five grams or more of crack cocaine, or 500 grams or more of powder cocaine, and a ten-year mandatory minimum penalty for a first-time trafficking offense involving 50 grams or more of crack cocaine, or 5,000 grams or more of powder cocaine. Because it takes 100 times more powder cocaine than crack cocaine to trigger the same mandatory minimum penalty, this penalty structure is commonly referred to as the '100-to-1 drug quantity ratio.'"

What is not explained here is that many many times more African-Americans are arrested in possession of crack than white Americans. It's important that we keep feeding the system after all.

So, we feed the system and BP makes use of it. And the end result is that when BP makes an error and releases millions of gallons of crude oil into the Gulf of Mexico and then makes only a half-hearted attempt to keep it off the area's beaches, they call in the free labor to clean it all up later. Nobody will care.

Thursday, July 22, 2010

Debt Hawkishness

Lets take an overview for a moment. Republicans far and wide are making the argument that we need to pay attention to and take care of the debt and deficit and as such, many of the Obama spending programs are completely unaffordable. Leaving aside for a moment how this worry over the debt was nowhere to be seen during the duration of the most recent Bush Administration while the Medicare Prescription Drug Benefit Act and other laws like it as well as two off the record wars in Iraq and Afghanistan were put into effect, this is a very convenient argument.

Republicans say they are worried about the deficit to the point that any action on the part of the President to continue and expand the current, shaky recovery is unacceptable. They stop short however, at any action that affects Republican pet projects that might make an actual impact on America's debt.

Simply by allowing the 2001 and 2003 Bush Tax Cuts to expire along with his hold on the Estate Tax and allowing the Capital Gains and Dividends taxes to revert to the levels they were during President Clinton's administration as proposed in S. 722 in the 111th Congress  as well as H.R. 470 and other similar bills we could save $3.5 Trillion through fiscal year  2017. That's simply by letting all of these tax advantage for the rich put in place by the Bush Administration to lapse. For those of you who are unaware, $3.5 Trillion is actually a dent in the federal debt of about $13.5 Trillion currently. Allowing any of these provision to be extended, as Republicans at large are running on, ADDS $3.5 Trillion to the federal debt over the next 7 years. Check out Florida Senate Candidate Marco Rubio's own website. He details his 12 ideas for helping the economy. Extending the Bush Tax Cuts permanently is his first plank! Remember that's $3.5 Trillion dollars through 2017. But the deficit and debt are just too much! Or watch this clip from Rachel Maddow. She covers all the salient facts. Carly Fiorina's discussion about how the tax cuts "pay for themselves" as well as each president's total debt increase running back to the Carter Administration. Spoiler, every Republican runs up the debt more than any Democrat.

Now that I've beaten that dead horse for a while, lets take a look at actual changes to the budget. I've written before about American defense spending and its relationship to our budget as a whole. But let me go over it again. We spend roughly $600 billion annually through the Department of Defense. That's more than the rest of the world combined. I'll advocate cutting the defense budget by half to $300 billion. If we get out of Iraq and Afghanistan that should be doable. All of this is with the understanding that such a cut would be implemented after going over the defense budget line by line with people who understand it better than I do, that is any such cuts would need military input.

The Federal Highway Administration got a budget of $40.1 billion in FY 2009. I understand that much of this goes to maintain existing roadways and that is a good thing. But we are still building new highways. The era of the car is over. Gas prices will only continue to climb as we move past peak oil. We need to look at ways to save in the FHWA and if not save, at least to redirect much of the funds dedicated to new road construction to other projects including intra-city light rail and HSR lines between cities. The administration has started doing this with the bailout funds but the percentages were far from adequate.

This post could go on and on. But it's intended to point out the pure hypocrisy of the GOP talking points as of late. If you are going to harp on the debt and deficit you can't keep advocating tax cuts for the rich and a 100% opposition to raising rates ever. The simple fact is that if the American people desire the continuation of services they have come to expect from their government including Social Security, Medicare, Medicaid, Welfare programs, and federal funding of Schools and Transportation along with a capable military and a growing middle class, the cash will have to come from somewhere. Because it sure isn't coming from anywhere now.

Thursday, July 8, 2010

This just in!

This just in! Some level of federal court has ruled the Defense of Marriage Act (DOMA) unconstitutional. I don't have more details right now though I will soon and most certainly will do a post. The Rachel Maddow Show has some coverage that I'm off to watch hosted by Chris Hayes of The Nation while Rachel is doing her planned reporting from Afghanistan.

I'll have more, I promise.

Thursday, July 1, 2010

Thurgood Marshall Take 2

Let's take a look at this Thurgood Marshall as judicial activist meme that's coming out of the Kagan nomination a little closer. As has been noted, Marshall was a Supreme Court Justice for twenty-four years so he has no dearth of opinions to be looked at. First, a little Marshall history.

Marshall began arguing before the Supreme Court in 1940, the same year he became the Chief Council of the NAACP. During this part of Marshall's life he argued numerous cases including Chambers v. Florida that upheld confessions obtained under torture violate the 14th Amendment in an 8-0 decision, Smith v. Allwright that ruled that segregated political primaries were illegal in an 8-1 decision, and of course Brown v. Board of Education that struck down separate but equal as established by Plessy v. Ferguson (1896). That was a 7-1 decision. These are all race based cases and all of them are nowhere near split courts.

After Justice Marshall's appointment to the Supreme Court in 1967 he sat for many other important cases and expanded his reach outside of the race based cases he mainly worked with while with the NAACP. In Furman v. Georgia, a 5-4 decision, Justice Marshall sided with the court that the death penalty was cruel and unusual and when, four years later, the court reversed itself in Gregg v. Georgia that the death penalty was acceptable under the constitution he dissented in every other death penalty case he heard. In Teamsters v. Terry he held union members seeking backpay have a right to a jury trial.

If this case history describes an "activist judge" so be it. But if that's the case then Justices Brown, Fuller, Field, Gray, Shiras, White, Peckham, Brennan, Douglas, Stewart, Blackmun, O'Connor, Scalia, Kennedy, etc. are all activist judges too. Clearly, Justice Marshall has a liberal judicial record. That isn't under dispute. He's viewed by pretty much everyone in that context. But I think this simple  overview shows that there was nothing activisty about Justice Marshall