2010 - %3, January

Freedom Alliance's Charity Rating Falls After CREW Complaint

| Fri Apr. 2, 2010 2:57 PM EDT

In the days since Citizens for Responsibility and Ethics in Washington filed complaints regarding Sean Hannity's charity work, Charity Navigator downgraded its rating of Freedom Alliance from four stars to two stars.

CREW's complaint to the Federal Trade Commisssion alleges the Fox News star has falsely claimed that all proceeds from his Freedom Concerts go directly to a program run by Freedom Alliance—Oliver North's non-profit—that helps veterans' kids attend college. In reality, it's not clear exactly how much money finds its way to scholarships. CREW also challenged the Freedom Alliance's tax-exempt status with the Internal Revenue Service, arguing that the group is engaging in partisan political activities that should disqualify it from this status..

Charity Navigator provides independent analysis of a charity's financial health, looking at "how responsibly it functions day to day as well as how well positioned it is to sustain its programs over time." Here’s CREW’s latest post on their complaint against Hannity and the Freedom Alliance.

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Guardians of the Free Republics: An Astroturf Militia (VIDEO)

| Fri Apr. 2, 2010 2:36 PM EDT

Federal authorities are giving the hairy eyeball to a new "patriot" group, the Associated Press reports. The Guardians of the Free Republics—which has been praised by online supporters of Ron Paul—allegedly sent cryptic letters to most of the nation's governors with an ultimatum: Leave office now, or you'll be taken out of office. That, combined with the group's birther tendencies and other mad rhetoric—its website claims "immunity from public scrutiny, discretion, regulation or trespass. Trespassers beware," and its goals include "arrest and shackling of the District Court of the District of Columbia"- were enough to get the FBI involved.

Inspired by this news, fear and loathing run thick in the blogosphere today: Could this be the violent offshoot of angry white guyism, of Tea Parties and Oath Keepers, we always suspected lurking around the corner? With its amalgam of threats, Biblical hyperbole, and secretive initiations of Project Mayhem-like "posses" around the nation, could these be the slimy, ochre monsters that mobilize the country's patriot-subversives and drag us down the slippery slope to libertarian perdition?

Sorry to disappoint. What the AP didn't tell you is: The Guardians of the Free Republics appears to be little more than a website registered to a Silicon Valley conspiracy theorist. It's amazing what a simple "Whois" Internet domain search will turn up. A full report and video follow the jump.

Why is Smithsonian Taking Koch's Cash?

| Fri Apr. 2, 2010 2:32 PM EDT

Koch Industries and its billionaire leaders are among the biggest funders of the climate denial machine. And now Koch money is funding a new wing of one our nation's museums of record, the Smithsonian. In March, the National Museum of Natural History opened the David H. Koch Hall of Human Origins, after the billionaire polluter donated $15 million.

The museum has defended Koch, the ninth richest man in the United States, as a "philanthropist who is deeply interested in science." Moreover, Smithsonian Human Origins Program director Rick Potts said, "our donors have no control over the content of our science or scholarship of our exhibits." Climate Progress blogger Joe Romm, however, argues that the new exhibit "whitewashes the danger of human caused climate change." See his post for more on the subject.

Think Progress has also been doing a bang-up job of covering David Koch's anti-environmental work. Lee Fang today has a timeline of Koch's polluter front groups dating back to 1977.

Nuclear Exec Tops Corporate Pay Ranking

| Fri Apr. 2, 2010 1:46 PM EDT

Amy Harder at National Journal takes a look at executive salaries in the energy and environmental sector today, and finds that the nuclear industry’s chief officer is doing a lot better than his peers.

In 2008, the most recently available figures, the Nuclear Energy Institute paid president and CEO at that time Frank Bowman more than $3 million. Her post is part of the a larger survey of 514 executives from trade associations, professional societies, interest groups, think tanks, and unions that bring in more than $10 million in revenue each year. Bowman was the seventh-highest-paid executive out of the entire survey. That's no small change, especially for an industry whose existence is almost entirely reliant on the federal government.

Here are the top-paid executives in the sector:

  1. Nuclear Energy Institute, $3.0 million
  2. American Petroleum Institute, $2.7 million
  3. Edison Electric Institute, $2.5 million
  4. National Rural Electric Cooperative Association, $2.0 million
  5. American Coalition for Clean Coal Electricity, $1.7 million
  6. American Iron and Steel Institute, $1.6 million
  7. American Gas Association, $1.4 million
  8. American Chemistry Council, $1.3 million
  9. Association of American Railroads, $1.1 million
  10. American Forest and Paper Association, $896,168

At the other end of the spectrum are the chiefs of the biggest environmental groups:

The Union of Concerned Scientists, Greenpeace, the National Wildlife Federation and the American Wind Energy Association were among seven groups paying their chiefs between $400,000 and $100,000. Greenpeace's former executive director, John Passacantando, was the fifth-lowest-paid executive in the survey overall, making a (comparatively) paltry $103,624. The Environmental Defense Fund and World Wildlife Fund paid their executives the most of the green groups, at roughly $496,000 and $486,000, respectively.

It ain’t easy, or particularly well-paying, being green.

China and Us

| Fri Apr. 2, 2010 1:32 PM EDT

So then, what's going on with China? Things have been testy for a while, but now suddenly we're hearing reports that U.S.-China relations may be on the mend. No currency war, a bit of agreement on Iran sanctions, and sort of a mini-detente over Taiwan and Tibet. Hooray! But Dan Drezner points us to the FT's Gideon Rachman, who says the long picture isn't quite so hunky dory, especially this:

The mega-trend in the background is the rise of China and the relative decline of the US — and the expression of this will be the gradual challenge to American military hegemony in the Pacific. This will not be a comfortable process.

Maybe not. But it presupposes that China is going to keep growing at the blistering rate we've seen for the past couple of decades — a pace they have to keep up just to keep from falling behind. Gordon Chang, writing in World Affairs, thinks they've already missed their chance to do that:

The analysts and the conventional wisdom they peddle are wrong. China’s economic model, which allowed the Chinese to take maximum advantage of boom times, is particularly ill suited to current global conditions. About 38 percent of the country’s economy is attributable to exports — some say the figure is higher — but global demand at this moment is slumping.

....Chinese technocrats, goaded by a multitude of analysts and foreign leaders, have known for years that they would have to diversify the economy — steer it away from investment and exports and toward consumption. Yet [Prime Minister Wen Jiabao], in office since 2003, has not made much of an effort to do so....So the Chinese economy, once in an upward super-cycle, is now headed on a downward trajectory. Beijing’s leaders had the opportunity to fix these problems in a benign period of growth, but they did not because they were unable or unwilling to challenge a rigid political system that inhibits adaptation to changing circumstances. Their failure to implement sensible policies highlights an inherent weakness in the system of Chinese governance, not just a single economic misstep at a particular moment in history.

Now, Chang is a longtime doomsayer about the Chinese economy. His book, The Coming Collapse of China, predicted that China would collapse in 2006. So like any good doomsayer proven wrong, he's just pushed out his prediction a bit.

In other words, take him with a big shaker of salt. Still, I think there's a germ of truth here that gets missed too often: Chang is right that China's economy is probably shakier than we usually give it credit for. Not only is it built on a foundation of booming exports, but its political system requires fantastic growth rates just to remain stable. As China's economy grows, however, its wage base will grow too and this will hurt their ability to keep up the flood of exports. Without internal demand to make up for it, growth rates will fall below the magic number of 8% per year. For them, that would be about as painful as a sluggish growth rate of 1-2% would be for us.

Now, maybe China will make the transition better than Chang thinks. And in any case, they'll certainly continue to grow both their economy and their influence even if they don't do it quite as manically as they have since the 80s. In other words, I'll leave the doomsaying to Chang. Still, I suspect that China is going to run into a few more hiccups on the way to domination of the Pacific than the alarmists think. Their brand of autocratic government is going to have a very hard time coping with a restive middle class once per capita income starts to bump up against $10,000 or so. That's still a ways off, but it's not that far off.

Doctor: Obama Voters Piss Off

| Fri Apr. 2, 2010 12:29 PM EDT

A Florida doctor has fired the latest shot across the bow in the battle over implementing President Obama's health care bill. The Orlando Sentinel reports that Dr. Jack Cassell, a urologist with an office near Orlando, made his disgust perfectly clear over "Obamacare," as its opponents deride it, by taping a sign to his front door that read:

"If you voted for Obama...seek urologic care elsewhere. Changes to your health care begin right now."

Cassell said that he wasn't necessarily rejecting care for patients, but merely voicing his opinion on Obama's health care overhaul. "I'm not turning anybody away—that would be unethical," Cassell, a Republican, told the Sentinel. "But if they read the sign and turn the other way, so be it."

Medical ethics experts interviewed by the Sentinel said that while Cassell wasn't blatantly discriminating against patients—political leanings aren't legally protected when it comes to discrimination law—the doctor was "trying to hold onto the nub of his ethical obligation," said the expert, William Allen, a University of Florida professor of bioethics. Cassell also papered his waiting room with GOP-produced fliers on the health care bill, the Sentinel reported, and featured a sign near those documents that said, "This is what the morons in Washington have done to your health care. Take one, read it, and vote out anyone who voted for it."

Cassell's office, it turns out, is located in the district of Rep. Alan Grayson (D-FL), the tenacious, outspoken lawmaker who once said the GOP's health care mantra was "If you get sick, America...die quickly." An outspoken urologist with a grudge against Democrats and Obamacare should give Grayson, known for his office's entertaining mailers and occasionally outrageous remarks, plenty of material to work with.

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Healthcare and Hillary

| Fri Apr. 2, 2010 12:21 PM EDT

Bruce Bartlett makes a long argument today that conservatives should have (quietly, one presumes) supported Hillary Clinton during the Democratic primary because she would have governed more agreeably than Obama has. I'm not sure about that, but I'm especially not sure about this specific prediction:

I think the evidence suggests that Hillary Clinton could have won the Democratic nomination with just a little bit more support, and probably would be governing significantly more conservatively than Obama. For one thing, given her disastrous experience with health care reform in 1993-1994, it's reasonable to assume that she would have stayed away from that issue at all costs.

Well, we'll never know, will we? But my guess is just the opposite. I think Hillary was, if anything, more dedicated to healthcare reform than Obama, and I think she would have taken it on more vigorously than he did. What's more, my guess is that her better feel for the Senate and past failure with healthcare reform would have made her more effective at getting a package passed. It probably would have looked about the same as what we got (her position during the campaign was similar to Obama's and most of the work was done by Congress anyway), but I suspect that she would have been a little more aggressive about pushing it through more quickly. Contra Bruce, we might have gotten healthcare reform last fall instead of last month.

But! Who knows? Maybe the economy would have spooked her. Maybe Bill would have convinced her to wait until 2011. Maybe the townhall madness of summer would have stopped her short. But I think the conservative myth of the allegedly principle-less, endlessly calculating Hillary has led Bruce astray here.

Lambasting the Banks

| Fri Apr. 2, 2010 11:45 AM EDT

The first thing I do when I come down to the computer each morning is read the email that's piled up overnight. More precisely, I sort of mindlessly click through and delete the 90% of it that's either spam, PR drops, announcements from politicians, or other related dreck. I was doing that this morning when my eyes lit on the phrase "lambasted the tilted playing field that benefits Wall Street banks over Main Street banks." My fingers stopped. Tell me more, internet!

In a 45-minute interview this week, Federal Reserve Bank of Kansas City President Thomas M. Hoenig, who's emerged as one of the few influential voices calling for a fundamental redesign of a broken U.S. financial system:

  • Lambasted the tilted playing field that benefits Wall Street banks over Main Street banks;
  • Called the idea that the U.S. needs megabanks to compete globally a "fantasy";
  • Said Congress should mandate simple, easily understood and enforceable rules — rather than guidelines — so regulators can restrain financial firms and rein in the financial system;
  • Prodded the Senate to get tougher on permanently ending Too Big To Fail by enacting laws that would take away much of the discretion currently held by policymakers (who bailed out financial firms when confronted with these decisions in late 2008);
  • And criticized the Federal Reserve's ongoing policy to keep the main interest rate near zero because it "guarantee[s] a spread to Wall Street", enabling unearned profits and "encourag[ing] speculation."

....Hoenig isn't just any reformer — he's the longest-serving Fed policy maker; a voting member of the Fed's main policy-making body, the Federal Open Market Committee; and his credentials as a deficit- and inflation hawk are unparalleled.

I'm not so sure Hoenig is right about raising the interest rate — his inflation hawkery is too strong for my taste — but I definitely like his attitude toward leverage and how to rein it in:

"The simplest is: What is your total assets and what is your equity capital, and what's that ratio, and what's the maximum we should allow it to be? Should it be 12 or 14 or in some instances 15? We can have that debate either through the legislative process or though the regulatory process with comments and then come to a rule that is binding and cannot be exempted under any circumstance.

...."The max should be — and this is based on my experience, I haven't done the studies, so I have to put that caveat in there — if a bank has a 12-to-1 leverage ratio, total assets to equity, that's a fairly good operating level if you look across the country. So I would be inclined to put 15-to-1 as the max, so that in a growth environment you could get to 15, but not beyond that. That becomes a constraint, and I think it would work over time. You would get some blame during the boom that you're inhibiting growth, but that means you'd have to bring capital to the table and that would be strong.

"So I would start with 15. Let the debate go on — if that's not the right number — but that's where I would start."

Obviously Hoenig isn't exactly bowling over the world with his views yet, but it's nice to see that there are at least a few people in real policymaking positions who seem to get this stuff. Hoenig's approach to leverage, I think, is exactly right: keep it simple and keep it blunt. The only thing he doesn't mention here is the need to apply these kinds of blunt limits to the shadow banking system as well as the conventional banking system, but I'd be surprised if he doesn't believe that too. Is there any way we can appoint him dictator for a day?

Mark Penn's Realism on 2010 and Jobs

| Fri Apr. 2, 2010 11:26 AM EDT

I ran into Mark Penn, the Democratic pollster and consultant (best known perhaps for not doing a swell job on Hillary Clinton's presidential campaign), this brilliant spring morning in downtown DC. He's mainly handling corporate clients these days, not politicians. I had just posted yet another column noting that the Republicans appear to have a tremendous advantage in the coming congressional elections. So I asked if he is "pessimistic" about the Dems' prospects. "Realistic," he shot back, adding that the recent polls (see here and here) show the Democrats are facing a mess of trouble. The polls suggest that Americans, at this moment, have more confidence in how GOPers will deal with the economy. The elections "will be all about jobs," Penn said, echoing what just about every other member of the politerati says. (Sometimes conventional wisdom is correct.) And Penn noted that the jobs report released this morning—showing that 162,000 jobs were created last month—could help the Democrats. But that report also said that unemployment remained at the very high level of 9.7 percent. Doesn't that muddy the picture? I asked. After all, Republicans immediately released press releases claiming that the Democrats haven't done anything to lower unemployment. Any good news at all will bolster the Democrats, Penn replied, especially given how "the press covers this guy." He nodded in the direction of the White House. In politics, old resentments die hard.

Why Did Obama Decide to Drill, Baby?

| Fri Apr. 2, 2010 11:02 AM EDT

I should have posted this yesterday, but I forgot. On Tuesday night, responding to President Obama's decision to unilaterally open up new offshore drilling tracts, I asked, "Wouldn't he be better off holding this stuff in reserve and negotiating it away in return for actual support, not just hoped-for support?" Well, it turns out that something of a consensus answer has formed about this.

Basically, it goes like this. Sure, Obama could have held out on offshore drilling and used it as a bargaining chip to get some Republican support for an overall climate plan. But no Republican would have made the deal anyway, so it wouldn't have done any good. However, by doing it preemptively, Obama has (a) deprived them of an issue to sputter about this summer, (b) split their ranks, and (c) made himself look like a pretty reasonable guy to the general public. Long story short, this is mostly a long-term play for public opinion, not part of a short-term partisan negotiation.

I'm not sure if I buy this or not. But I just thought I should mention it since I asked the question in the first place.