2010 - %3, January

Saudis to Behead TV "Sorcerer"

| Thu Apr. 1, 2010 1:28 PM EDT

In a spectacular display of theocratic zeal that makes The Crucible look like The Sound of Music, the government of Saudi Arabia—America's petro-partner in the war on terror—is preparing to get medieval on a Lebanese TV personality: The popular host is to be beheaded Friday for practicing "sorcery" on his Arabic-language TV show. And according to Amnesty International and Human Rights Watch, the man's ordeal is but one strange front in a renewed Saudi offensive to root out un-Islamic thoughtcrimes. As one Amnesty worker puts it, "If JK Rowling lived in Saudi Arabia, she could be arrested for practising 'sorcery' with her Harry Potter books."

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Obama Starting to Sound Like Bush

| Thu Apr. 1, 2010 12:39 PM EDT

He donned a leather bomber's jacket with an Air Force One logo on it, got up in front of a boisterous crowd of about 2,000 military personnel in a hangar at Bagram Air Base, and gave a tub-thumping, "support the troops" campaign speech. I'm talking about Barack Obama on his six-hour visit to "Afghanistan." Of course, any presidential trip to "the front" is always essentially a domestic political phenomenon destined to trump all other news and be covered uncritically. In this case, it was undoubtedly part of the post-health-care run-up to election 2010, emphasizing an area—the Afghan War—in which Americans are, at the moment, remarkably supportive of the president's policies.

Starting with that bomber's jacket, the event had a certain eerie similarity to George W. Bush's visits to Iraq. As Bush once swore that we would never step down until the Iraqis had stepped up, so Obama declared his war to be "absolutely essential." General Mohammad Zahir Azimi, a spokesman for the Afghan Defense Ministry, even claimed that the president had used the long-absent (but patented) Bush word "victory" in his meeting with Hamid Karzai. Above all, whatever the talk about beginning to draw down his surge troops in mid-2011—and he has so far committed more than 50,000 American troops to that country—when it comes to the Afghan War, the president seemed to signal that we are still on Pentagon time.

Don't Mess With Texas (Mortgages, That Is)

| Thu Apr. 1, 2010 12:37 PM EDT

I think I've blogged about this before, but Alyssa Katz has a good piece today about how Texas generally avoided the housing bubble that afflicted the rest of the country and nearly destroyed Wall Street. The key, she says, is that Texas had uniquely stringent regulation of home equity loans:

As home prices skyrocketed in many markets, cash-out refinancings became standard, even in the relatively sober world of Fannie Mae and Freddie Mac. By 2006, Freddie Mac reported that 88 percent of refinance mortgages that it purchased were for amounts at least 5 percent higher than borrowers’ previous loan balances. Subprime, in insane pursuit of risk, piled on with cash-out refinances for high-risk borrowers, often approaching the entire appraised value of the home.

But not in Texas. A borrower there can secure a home-equity line of credit from a bank. And she can refinance her mortgage or take out a home-equity loan. But the total amount of debt on a home cannot exceed 80 percent of its appraised value, and any proceeds cannot be used to pay off other debts.

This is, you'll note, essentially a limit on leverage. In this case, though, it's not a limit on bank leverage, but on individual homeowner leverage. It's a good example of how leverage is shot through our entire financial system, and how reining it in at one level can have a big impact on every other level as well.

But there's more to Texas than just their regulation of HELOCs. State law also prohibits mortgage loans with prepayment penalties. And it prohibits negative amortization loans, where the principal you owe goes up over time because you're not required to make full interest payments. There are also limits on balloon payments and requirements that mortgage lenders take into account the borrower's ability to repay a loan. (Shocking, I know.)

My guess is that these latter restrictions, especially the ban on prepayment penalties and negative amortization loans, were actually more important than the HELOC restrictions. Prepayment penalties were a key part of the mortgage madness of the past decade, since the most egregious subprime and Alt-A loans only worked if you were penalized for paying off your loan early. You can hardly afford to offer loss-leader teaser rates, after all, if the borrower can just enjoy the low payments for a couple of years and then refinance into a standard mortgage with no penalty, leaving the lender with the losses on the first two years of the loan.

Bottom line: there are several common-sense changes to home mortgage regulations that would go a long way toward stabilizing the housing market in the future. The 80% HELOC rule is a good one. Banning prepayment penalties is another. Requiring a minimum 10% down payment for all home loans would be useful too — as well as making sure that brokers don't use "silent seconds" to get around this rule. All of these regs would not only be good for consumers, they'd help keep a lid on housing prices as well. And remember: it was skyrocketing housing prices that underlay everything else that happened during the past decade. It's too bad that no one at the federal level seems much interested in doing any of this stuff, isn't it?

Fiore Cartoon: Narco Trafficking

Thu Apr. 1, 2010 12:34 PM EDT

With California one step closer to legalizing marijuana, the weed debate has reached a fevered pitch.

In the cartoon below, satirist Mark Fiore offers his perspective: Why make pot legal when traffickers are all too happy to smuggle it at the expense of human lives?

Hamid Karzai: Practical Joker?

| Thu Apr. 1, 2010 11:44 AM EDT

Is Afghan President Hamid Karzai pulling a prank? He says that his re-election was indeed tainted by epic fraud. But here's the twist: He says the UN, and in particular its former No. 2 official in Afghanistan, Peter Galbraith, were behind it:

"There was fraud in the presidential and provincial election, with no doubt there was massive fraud," he said.

"This wasn't fraud by Afghans but the fraud of foreigners, the fraud of Galbraith, or (head of the EU's observers Philippe) Morillon, and the votes of the Afghan nation were in the control of an embassy."

Accusing Galbraith of taking part in the fraud is particularly strange. The diplomat was reportedly removed from his post last fall because he was too outspoken about the tainted election, clashing with his boss, Kai Eide (who was later dismissed himself), over whether to aggressively pursue allegations of vote-rigging and ghost polling sites. In October, Galbraith wrote:

For weeks, Eide had been denying or playing down the fraud in Afghanistan's recent presidential election, telling me he was concerned that even discussing the fraud might inflame tensions in the country. But in my view, the fraud was a fact that the United Nations had to acknowledge or risk losing its credibility with the many Afghans who did not support President Hamid Karzai.

I keep waiting for Karzai's office to issue a release—"April Fool's!"—informing the international media that we've been punk'd. Apparently Galbraith, who called Karzai's remarks "absurd," thought the Afghan president was pulling his leg, too. He told the BBC: "At first I thought it was an April Fool's joke but I realised I don't have that kind of warm, personal relationship with President Karzai that he would do that."

Speaking of tense relationships, Karzai is on mighty thin ice with the Obama administration, particularly after his recent move to wrest control of his country's Electoral Complaints Commission by claiming the authority to appoint all five members of the panel, three of whom had previously been chosen by the UN. (The Afghan parliament voted overwhelmingly against Karzai's decree on Wednesday.) Karzai's maneuver so enraged US officials that the Obama administration abruptly cancelled a planned visit by the Afghan president to the White House. Karzai responded to this slight by inviting Mahmoud Ahmadinejad to Kabul, where the Iranian firebrand delivered an anti-American speech. After President Obama's surprise visit to Kabul on Sunday, the White House put the Karzai visit back on its calender—a move that it might be rethinking right about now.
 

New CAFE Standards Finally Signed

| Thu Apr. 1, 2010 11:28 AM EDT

This has been in the works for a long time, but it's still nice to see it finally made official:

The Obama administration finalized the first national rules curbing greenhouse gas emissions Thursday, mandating that the U.S. car and light-truck fleet reach an average fuel efficiency of 35.5 miles per gallon by 2016.

The new fuel efficiency standards, issued by the Transportation Department and the Environmental Protection Agency as the result of a May 2009 deal with the auto industry, represent a peaceful end to a contentious legal battle over how to regulate tailpipe emissions....As a result of the new rules, the U.S. vehicle fleet is projected to cut its greenhouse gas emissions 21 percent by 2030.

For all the crap CAFE gets from conservatives and car buffs, it's been an astonishingly successful program. It probably cut oil use following the embargoes of the 70s more effectively than any program before or since — and unlike gas prices, which fell precipitously in the early 80s, it had a permanent effect. What's more, for most of us it did it with virtually no noticeable impact on the cars we drive.

Technology has advanced a lot since the original CAFE standards were adopted, and I expect the new ones to have approximately the same invisible effect on the kinds of cars we drive. At the margins, it will make the most egregious gas guzzlers a little more expensive. It might even spell the end of a few of them. And on average, your next new car might accelerate from zero to sixty half a second slower. But that's about it. And in return we'll extend our oil supplies, import a bit less from Saudi Arabia, and cut down on greenhouse gas emissions. It's no panacea, but it sure is a cheap way to make a difference.

 

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Inside Koch's Climate Denial Machine

| Thu Apr. 1, 2010 11:28 AM EDT

Who’s behind a multi-million dollar campaign to seed doubt about climate change? It’s not just Exxon and Chevron—it’s also Koch Industries, an oil and gas giant that most people have never heard of, according to a new report from Greenpeace. Koch's extensive funding of anti-climate work makes it the "financial kingpin of climate science denial and clean energy opposition," says Greenpeace.

The Kansas-based company and its affiliates and foundations spent almost $25 million on "organizations of the 'climate denial machine'" between 2005 and 2008, according to the report. Koch Industries and the Koch family also spent $37.9 million between 2006 and 2009. "Although Koch intentionally stays out of the public eye, it is now playing a quiet but dominant role in a high-profile national policy debate on global warming," the report concludes.

The company is led by brothers Charles G. Koch and David H. Koch, and is the second largest privately-held company in America. As I've reported previously, their estranged brother, William, is behind the efforts to block the Cape Wind offshore wind project in Massachusetts. Koch money comes through a lot of business interests – ranching, mining, oil refining, and producing paper products, fertilizer, and chemicals.

The report lists 35 organizations who have directly or indirectly received money from Koch Industries, affiliates, or Koch family foundations. They include the libertarian think-tank Cato Institute, which received a $1 million grant from the Kochs. Cato runs the climate-change-denial site GlobalWarming.org, and is suing the Environmental Protection Agency to block its finding that climate change threatens human health. The Koch family has also directed more than $5 million to Americans for Prosperity, which has campaigned against efforts to cut greenhouse gas emissions. They have also supported Citizens for a Sound Economy (which later merged with another group to form FreedomWorks).

The Koch PAC has given more than $10,000 to 21 lawmakers since 2004—four Democrats and 17 Republicans—which is more than any other oil-and-gas sector PAC, the report states. Topping the House recipients: Henry Cuellar (D-Texas) at $30,500, Eric Cantor (R-Va.) at $28,000, and Joe Barton (R-Texas) at $26,500. On the Senate side, Jim DeMint (R-SC) and Lisa Murkowsi (R-Alaska) both received $20,000 in Koch Funds, and Blanche Lincoln (D-Ark.) received $18,000.

Between the foundation-funded groups, lobbying, political action contributions, Koch Industries and the Koch brothers are "among the most formidable obstacles to advancing clean energy and climate policy in the U.S.," Greenpeace states.

The report also looks at Koch's role in the so-called "ClimateGate" scandal, in which emails between scientists were hacked and made public. There’s been little doubt that this and other recent attacks on climate science were a coordinated attack by well-organized and well-funded groups hoping to sow doubt about the validity of climate change. Greenpeace notes that "Twenty organizations, roughly half of the Koch-funded groups profiled in this report, have contributed to the "ClimateGate" echo chamber." The groups have posted articles, hosted events, and landed their in-house skeptics on cable news. Cato, for example, recently boasted that its senior fellow, Pat Michaels, was "at the center of the 'ClimateGate' controversy" in their newsletter.

The Kochs have also supported efforts to undermine scientific findings that polar bears are threatened by climate change by funding a study by prominent climate deniers. One of the authors, Dr. Willie Soon, disclosed in the acknowledgments that his work "was partially supported by grants from the Charles G. Koch Charitable Foundation, American Petroleum Institute, and Exxon-Mobil Corporation."

Koch downplayed its role in the climate denial industry, issuing a statement to Agence France-Presse claiming that the company works to "support open, science-based dialogue about climate change and the likely effects of proposed energy policies on the global economy." A later statement claimed that Greenpeace "mischaracterizes" its efforts, which are meant to "advance economic freedom and market-based policy solutions to challenges faced by society" and create "more opportunity and prosperity for all."

Check out the whole report, an excellent case study of the climate denial machine. (Also, I should note, you may see ads for the report on our website this week).

British PM Gordon Brown to Go "Dirty Harry"?

| Thu Apr. 1, 2010 11:15 AM EDT

In an unbelievable political development in England, the Labour Party, which faces losing power in the next election, has decided to try to turn Prime Minister Gordon Brown's well-known volatility into an asset. The Guardian reports: 

In an audacious new election strategy, Labour is set to embrace Gordon Brown's reputation for anger and physical aggression, presenting the prime minister as a hard man, unafraid of confrontation, who is willing to take on David Cameron in "a bare-knuckle fistfight for the future of Britain", the Guardian has learned.

Following months of allegations about Brown's explosive outbursts and bullying, Downing Street will seize the initiative this week with a national billboard campaign portraying him as "a sort of Dirty Harry figure", in the words of a senior aide. One poster shows a glowering Brown alongside the caption "Step outside, posh boy," while another asks "Do you want some of this?"

Brown aides had worried that his reputation for volatility might torpedo Labour's hopes of re-election, but recent internal polls suggest that, on the contrary, stories of Brown's testosterone-fuelled eruptions have been almost entirely responsible for a recent recovery in the party's popularity. As a result, the aide said, Labour was "going all in", staking the election on the hope that voters will be drawn to an alpha-male personality who "is prepared to pummel, punch or even headbutt the British economy into a new era of jobs and prosperity".

Strategists are even understood to be considering engineering a high-profile incident of violence on the campaign trail....

It's quite amazing what some political strategists will do. Read the rest of the Guardian's incredible report here.

The USS Nicholas and Somali Pirates

| Thu Apr. 1, 2010 11:12 AM EDT

On Thursday morning, some "suspected" Somali pirates made a very big mistake. They fired on a large-ish ship they hoped to hijack. Unfortunately for the would-be ransom collectors, the ship was the USS Nicholas (no relation), a very well-armed American guided missile frigate. Oops! More:

The USS Nicholas returned fire on the pirate skiff, sinking it and confiscating a nearby mothership. The Navy took five pirates into custody, said Navy Lt. Patrick Foughty, a spokesman....

"If you think of the kind of young men who are doing this, they go out into the middle of the ocean in a tiny boat. They might not always make rational decisions, and they often attack things that are bigger than they should (attack)," said [Roger Middleton, a piracy expert at the British think tank Chatham House.]

I get the point Middleton was trying to make, but have you seen a photo of the USS Nicholas? (You have! It's to the left.) That just doesn't look like the kind of ship you want to mess with.

Anyway, if you're interested in Somali pirate-related content, you've come to the right place. We've written about the pirates as environmental avengers, told you what Somali rapper K'naan thinks about them, explained why you can blame George Bush for them, and told you how they could help Barack Obama. We've also reviewed a book on pirate finance, explained what really motivates the Somali pirates, reported on the Somali pirates' PR people, told you about pirate "consultants", introduced you to America's piracy point man, and much more.

News From TreeHugger: DC Bag Tax Shows Impressive Results

| Thu Apr. 1, 2010 11:10 AM EDT

Editor's Note: A weekly roundup from our friends over at TreeHugger. Enjoy!

Wisconsin Bans Phosphorus in Lawn Fertilizer to Protect Drinking Water and Tourism Industry

Recognizing the need to protect Wisconsin's lakes and rivers, which support a large and economically important tourism industry, and which provide drinking water for a large portion of Wisconsin's residents, the State no longer allows sale of phosphorus-containing lawn products intended for maintenance (recurring) application. There are exemptions for starting up a new lawn, gardening, and so on, but the bottom line is that retailers and producers are going need to stock no-phosphorus lawn care products.

Plastic Bag Use in DC Drops From 22 Million to 3 Million a Month

Washington DC's 5 cent tax on plastic bags, instated just this past January, has already proven to have a phenomenal impact: the number of plastic bags handed out by supermarkets and other establishments dropped from the 2009 monthly average of 22.5 million to just 3 million in January. While significantly reducing plastic waste, the tax simultaneously generated $150,000 in revenue, which will be used to clean up the Anacostia River.

San Francisco is the First City in the US to Count Its Parking Spaces

t might come as a surprise to some, but pretty much all cities in the U.S. (and the world) have only a vaguest idea of how much parking spaces (public and private) they have. Almost all of them, but now there's a sizeable exception: San Francisco spent the past 18 months counting parking spaces. Total: 441,541 spaces. Over 280,000 on streets, 25,000 of which are metered. Now that this is know, decisions about removing or adding parkings can be informed, and be part of a bigger-picture plan.

Peruvian Farmers Happy to Offset West's Carbon

Peruvian farmers are about to get a windfall--and it's all thanks to the burgeoning carbon offsetting market. Recently, one particular section of Peru was selected to be the site of a massive reforesting operation to offset CO2 emissions of Nestle Waters France over 6 thousand miles away. But, in age where the appearance of environmental responsibility often supersedes actual responsibility, the bottled water company has enlisted the help of France's most well-known environmentalist to head the tree planting project to show that all is on the level--and he insists that Peruvians won't be the only ones to benefit from it.

The US May Finally Get a Bigger Gas Tax, But Would It Work?

The US has long had among the most minuscule taxes of transportation fuels in the developed world--blame it on our deeply ingrained car culture or the plethora of wide open spaces that make transit via automobile seem more like a need than a privilege. Either way, we may finally see a significant bump in the amount consumers pay at the pump—one of the anticipated provisions in the soon-to-be-released Kerry-Graham-Lieberman energy reform bill is a proposed spike in the national gas tax. But would such a tax accomplish its intended goal of curbing carbon emissions and deterring Americans from relying so heavily on automobiles?