2010 - %3, May

Are BP's Dispersants Making People Sick?

| Wed May 26, 2010 2:13 PM EDT

Anecdotal reports are beginning to emerge that the chemical dispersants that BP is using to break up crude oil in the gulf are making clean-up workers sick. Pro Publica's Marian Wang (a former of Mojo intern) has been following the story, and points to reports in the LA Times and New Orleans TV station WDSU. Of course, drawing a direct link between the dispersants and the sicknesses will be tough.

It's worth noting that workers who cleaned up the Exxon Valdez spill also reported health problems, which scientists suspected were tied to exposure to the polyaromatic hydrocarbons and other substances found in crude oil. These same PAHs are also a suspected cause of health problems in communities around Canada's tar sands.

UPDATE: Due to concerns about the health of clean-up workers, the Coast Guard and BP have recalled all 125 private vessels that were helping to contain the spill around Louisiana's Breton Sound. Medical experts are being dispatched to evaluate them. While it's good to know that BP and the government are taking occupational hazards seriously, one has to wonder who, if anyone, is now cleaning up the oil.

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Steven Chu's Ties to BP

| Wed May 26, 2010 1:26 PM EDT

Is Steven Chu too cozy with BP? The oil spill is casting a spotlight on the Energy Secretary's close ties with the oil company, which funded the Energy Biosciences Institute at UC Berkeley that Chu founded a year before he joined the DOE. BP's decision to underwrite Chu's institute with a $500 million grant was made by its chief scientist, Steven Koonin, whom Chu last year named his DOE undersecretary for science.

"The fact that Steven Chu selected Steve Koonin, BP's chief scientist, to be his undersecretary would predispose them to think that they could maybe negotiate with BP, could be more like partners regarding the oil cleanup," Jennifer Washburn, the author of a forthcoming Center for American Progress report called, "Big Oil Goes to College," told the New York Times. While the DOE doesn't have jurisdiction over the spill, 150 people at its national laboratories have been working on it, and some consumer watchdogs have accused the department of reacting too slowly. Chu has also been an optimist regarding the clean-up and containment efforts, telling reporters two weeks ago that "things are looking up."

In late 2008, just after Obama appointed Chu to the Energy Secretary post, I explored his ties to BP and speculated on how they might influence him:

Chu's role in creating the Energy Biosciences Institute may inform his approach to governing the Department of Energy, a major governmental underwriter of research, and one that will face pressure to partner with corporations in pursuing technological solutions to climate change. As the incoming Obama administration prepares to spend liberally to develop cleaner sources of energy, the structure of corporate-government partnerships will determine how the profits of that research return to taxpayers, and how rigorously scientists evaluate the downsides of controversial technologies such as biofuels.

For now, at least, it remains unclear to what extent Chu has given BP favorable treatment, either in terms of crafting DOE's research agenda or its response to the oil spill. But what's clear is that the close ties are casting a shaddow over the agency, sowing doubt among the public that the government is truly an independent watchdog. The same concerns were raised by UC Berkeley professors regarding the Energy Biosciences Institute. At the time, biology professor Ignacio Chapela called the deal, "the coup de grace to the very idea of a university that can represent the best interest of the public."

 

 

Bronte Sisters Power Dolls!

| Wed May 26, 2010 1:19 PM EDT

This is pretty awesome:

GOP, Tea Party Part Ways Over Pork

| Wed May 26, 2010 1:16 PM EDT

On Wednesday, House Republicans launched America Speaking Out, a new attempt to create an agenda for congressional candidates running for reelection in the fall. Spearheaded by House Minority Leader John Boehner, the website was designed to solicit input from the public as to what the party's priorities ought to be.

The idea isn't exactly new. Months ago, Tea Party activists essentially did the same thing and came up with their own "Contract From America," modeled after the Contract With America that helped the GOP gain control of Congress in 1994. The Tea Partiers received feedback from nearly half a million people, who voted on the top ten ideas submitted by individuals to the site. The results were released to great fanfare on April 15 at a big Tax Day Tea Party at the Washington Monument.

Since then, the Tea Partiers have been trying to get members of Congress to sign the thing, which includes standard-fare GOP material, such as calls for a balanced budget, lower taxes, and rejecting cap and trade climate legislation. Republican officials have been openly supportive of the contract, lavishing praise on the Tea Partiers for drafting it. Boehner himself even called it "required reading" for conservative politicians. But then he refused to sign.

Why Did North Korea Do It?

| Wed May 26, 2010 1:09 PM EDT

I haven't been posting about the North Korean situation, but I've been following it with considerable interest ever since the start. And the biggest question all along has been: Why? Even by North Korean standards, torpedoing a South Korean ship is nuts. What on earth were they thinking? In the Financial Times today, Christian Oliver runs down the theories:

  1. Revenge
  2. To smooth the succession
  3. An internal power struggle
  4. A reversion to hardline ideology
  5. Breakdown of command in North Korea
  6. To distract from economic woes at home
  7. Bitterness about G20 meeting in Seoul

I have to say that I find all of these unsatisfactory, and I haven't read anything better anywhere else. It's just weird as hell. Even granted that North Korea acts like a mental case much of the time, this doesn't make sense. There's simply nothing good that can conceivably come out of this incident from their point of view.

So: my guess is that it was an accident. Or perhaps some combination of #3 and #5, a rogue commander who fired the shot because of some kind of chaos in the chain of command. Then, once the deed was done, we got all the usual North Korean bluster and delusion that we've come to know and loathe over the past few decades.

And then there's another obvious question: just how long is China willing to put up with all this? Sharon LaFraniere had a pretty good rundown of the Chinese dilemma a few days ago in the New York Times, and their unwillingness to put serious pressure on North Korea mostly seems to come down to a combination of inertia and a fear of massive refugee flows across the border if North Korea collapses. This, again, is something I've never quite bought: refugee flows can be managed with international help, and in any case they wouldn't be any kind of existential threat to China. Propping up North Korea hardly seems to be in China's self-interest any longer, and if that's the case I'll bet they eventually overcome their inertia and decide that the refugee problem can be managed after all. The only question is just how long "eventually" is.

Red Cross: We Help the Taliban

| Wed May 26, 2010 1:09 PM EDT

Doctors can operate without borders, but can they work without regard for strategic consequences? The International Committee of the Red Cross says "Yes." The ICRC is defending itself this morning after the Telegraph of London reported that the group trains Taliban guerrillas in first aid and provides them with basic medical equipment. The Red Cross is claiming it's neutral, saying its highest value is the prevention of unnecessary death on all sides of a conflict. But is it ethical to put US, UK, and Afghan troops on a par with the Taliban? And even if so, is the Red Cross' "neutrality" simply enabling future violence?

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Predators vs. Aliens: Arizona Wants More Drones

| Wed May 26, 2010 12:56 PM EDT

As TPM reports, Arizona governor Jan Brewer has asked President Obama to help step up border security by dispatching unmanned aerial vehicles to her state. "I would also ask you," she writes, "as overseas operations in Iraq and Afghanistan permit, to consider wider deployment of UAVs along our nation's southern border. I am aware of how effective these assets have become in Operations Iraqi and Enduring Freedom, and it seems UAVs operations would be ideal for border security and counter-drug missions." For those who support Arizona's new anti-immgrant law and want to seal the border, her request may make it sound like the feds have been saving their best surveillance toys for the battlefield. And for opponents of beefing up the border, it may sound like Brewer has a creepy vision of turning the US-Mexico border into something like the Afghanistan-Pakistan border, with death-dealing drones circling overhead.  

Yet the reality is that the drones are already there. Customs and Border Protection has a small but growing fleet of UAVs that it's been flying along the borders since the mid-2000s. It currently has six Predators (unarmed)—five of which operate from Arizona. One even crashed there in 2006. CBP credits its drones with helping bust 15,000 lbs of pot and 4,000 illegal immigrants. (And the agency hasn't been the only one watching the line from above—in 2003, the American Border Patrol, an Arizona Minutemen-type group, tested its own small surveillance UAV, the Border Hawk.)

Whether the federal UAVs are doing a good job or whether more are needed is subject to debate. But if you want to get on the government's case for not flying Predators in domestic airspace or for considering the idea in the first place, too late—that drone has flown.

Wall Street's Temper Tantrum

| Wed May 26, 2010 12:29 PM EDT

John Heileman’s recent New York piece on financial reform tells us, among other things, that "it’s hard to find anyone on Wall Street who doesn’t speak of Obama as if he were an unholy hybrid of Bernie Sanders and Eldridge Cleaver." It's always fun to link to someone else's rant, so here's James Kwak's response:

Wall Street CEOs like to think they are the adults, the big men in the room, the ones who know how the world works. Well, you know what? They screwed up their own banks, the financial system, and the economy like a bunch of two-year-olds. Every single major bank would have failed in late 2008 without massive government intervention — because of wounds that were entirely self-inflicted. (Citigroup: holding onto hundreds of billions of dollars of its own toxic waste. Bank of America: paying $50 billion for an investment bank that would have failed within three days. Morgan Stanley and Goldman Sachs: levering up without a stable source of funding. Etc.) The financial crisis should have put to rest for a generation the idea that the big boys on Wall Street know what they’re doing and the politicians in Washington are a bunch of amateurs. Yet somehow the bankers came out of it with the same unshakable belief in their own perfection that they had in 2005. The only plausible explanation is some kind of powerful personality disorder.

It really is pretty mind boggling. I mean, obviously I get the fact that no one likes government interference in their business, no one likes being regulated, no one likes to make less money, and everybody has a million excuses for their own mistakes. But considering the epic FUBAR the bankers laid at our feet and the Obama administration's obvious efforts to protect them from the worst of the populist backlash by keeping the financial reform bill toned down — well considering that, and considering the fact that even bankers ought to occasionally take the long view and understand that better rules might be in their enlightened self interest, you'd think they could restrain themselves a bit. But no. I guess there's a reason that their nickname is Big Swinging Dicks.

Quote of the Day: Bipartisanship

| Wed May 26, 2010 12:09 PM EDT

From Sen. Lamar Alexander, commenting on the fact that no progress was made during a "good and frank" meeting yesterday between President Obama and congressional Republicans:

We simply have a large difference of opinion, which [will] not likely ... be settled until November.

Well, I'd say he's half right.

Federal Spending and Private Investment

| Wed May 26, 2010 11:35 AM EDT

Tyler Cowen points today to some interesting new research on government spending. Three researchers at Harvard took a look at what happened to federal earmarks when a state's senator or congressman took over chairmanship of a key appropriations committee. Answer: the state's earmarks went up a bunch (by 50% for senators and 20% for House members). No surprise there. So what happens to economic activity after this bounty starts pouring in? From the paper:

Seniority shocks result in economically and statistically significant declines in firm capital expenditures. Across all measures of seniority, the declines are large and highly significant....The coefficient implies a 1.2% drop in scaled capital expenditures []. Since firms have average capital expenditures of 8 percent of assets, Senate chairmanship causes a roughly 15 percent reduction in the representative firm’s capex.

Italics mine. So when federal spending goes up in a random way (committee chairmanships are generally unrelated to broader economic activity), capital expenditures by private industry goes down. A lot. Researcher Joshua Coval takes a crack at explaining why:

Some of the dollars directly supplant private-sector activity — they literally undertake projects the private sector was planning to do on its own. The Tennessee Valley Authority of 1933 is perhaps the most famous example of this. Other dollars appear to indirectly crowd out private firms by hiring away employees and the like. For instance, our effects are strongest when unemployment is low and capacity utilization is high. But we suspect that a third and potentially quite strong effect is the uncertainty that is created by government involvement.

Italics mine again. These are interesting results. But they need some followup. Even if you believe that government spending crowds out private spending in a serious way, the effect here is enormous. How can you possibly get an 8% drop in private sector capital expenditures from the relatively trivial increase in federal spending that comes from earmarks? There has to be something more to this story.

On the other hand, it makes perfect sense that whatever effect there is, is more pronounced when unemployment is low. That's exactly when you'd expect government spending to crowd out private sector spending. However, it probably doesn't tell us much about current stimulus spending, which is taking place in an environment of zero-bound monetary policy and extremely high unemployment. We haven't had an environment like that since the Great Depression, which means that empirical evidence one way or the other on this kind of federal spending is just very hard to come by. I'd certainly be surprised if the 2009 stimulus bill provoked any significant private sector crowding out.