2010 - %3, October

Meet the New Boss, Same as the Old Boss

| Mon Oct. 25, 2010 3:15 PM EDT

In the months after the BP oil spill, the company announced that its gaffe-prone CEO, Tony Hayward, would be replaced by Bob Dudley, an American who served as the point person in the US on the spill. Since taking over on October 1, Dudley has been too busy to talk to members of Congress about the disaster the company unleashed on the Gulf. But he wasn't too busy today to accuse the media and other oil companies of making too much of a big deal about that 4.9 million barrels of oil they dumped.

In remarks today at the annual conference of a British business lobbying group, Dudley accused the media and the company's rivals for "creating a climate of fear" around the spill, and for making "a great rush to judgment before the full facts could possibly be known."

"I watched graphic projections of oil swirling around the Gulf, around Florida, across and around Bermuda to England—these appeared authoritative and inevitable," he said. "The public fear was everywhere."

The crux of his speech was that this was just an "accident," BP is doing its best to clean it up and reform their ways, and, gosh darn it, we should all be a little bit nicer to them about the whole thing. "We fully accept our share of responsibility but I hope for everyone's sake that over the next month and years we can reach a balanced and informed judgment about what happened and what we need to learn," he said. Dudley also praised the "huge progress in cleaning up the spill" that the company has made.

Dudley affirmed that the company plans to keep drilling here. "BP will not be quitting America," he said, arguing that companies should not let the risks outweigh the benefits:

We live in an atmosphere where many things are often exaggerated, opinion can quickly becomes polarized and it is tempting to react to events in extreme ways. The demand for information and instant conclusions is insatiable. But as business leaders we have to be wise, pragmatic and proportionate. There are difficult balances to strike, but we cannot afford to shy away from risk.

He also thanked the British government for its "stalwart support," as compared to the criticism and investigations the company faced from many US lawmakers. "At the height of the crisis it made a big difference knowing we had such good friends at home," he said. (His full remarks are here.)

Now, this is the same guy who, in the midst of the spill, stuck to claims that the well was only leaking at a rate of 5,000 barrels per day, and accused those who said the rate was higher of "scaremongering." We would later learn that up to 62,000 barrels of oil spilled from the well each day. And of course, the impact of the spill will remain for quite some time—it's far from over at this point.

It's safe to say that BP's new CEO is just engaging in some good old-fashioned, CYA PR. It's not that I expect anything less (or more, really). But that doesn't mean all of us have to buy in to his delusions.

But back in reality land, fishermen reported massive stretches of weathered oil washing up off the coast of Louisiana. The Coast Guard now says it's algae, not oil, but those who have seen it are skeptical. From the Times-Picayune:

"I've never seen algae that looked orange, that was sticky, smelled like oil and that stuck to the boat and had to be cleaned off with solvent," said one captain, who like the others wished to remain anonymous for fear of losing their BP contracts. "I'll wait for the lab reports. In fact, we're also sending some samples off."

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Keeping Tabs on Cholera in Haiti

| Mon Oct. 25, 2010 2:18 PM EDT

"It seems that a Haitian killed a Dominican, and now the Dominicans sent cholera here to kill the population," one of my Haitian friends just texted me. That hypothesis was advanced by one of his employees, and that's the kind of superstition and misunderstanding about sanitation that could quickly lead to a lot more deaths.

Latest reports of the recent cholera outbreak in Haiti are that 259 have died and about 3,000 have been hospitalized, with at least five confirmed cases in Port-au-Prince. The good news is that the cases didn't originate in the overpopulated capital, but traveled there from the central rural regions where the outbreak originated. The bad news is that with no restrictions on travel between those areas and no potable water in many of the devastatingly squalid displacement camps where more than a million people have been living post-quake, it's a short step to an epidemic. The Haitian health ministry reports that the infection rate is slowing but has likely not yet reached its peak.

You can keep tabs on the outbreak—and counter misinformation—on Twitter. @Haitifeed aggregates news about the country, much of it now cholera-related; the Miami Herald's Jacqueline Charles and freelancers Jacob Kushner and Ansel Herz are on the ground reporting about the situation. Partners in Health, an organization that's long been providing medical care in Haiti, is posting updates on its website, which is also a great place to donate if you want to help.

If You Can't Find a Tea Party Group, Does it Really Exist?

| Mon Oct. 25, 2010 2:00 PM EDT

If a tea party group won't talk to the press, does it even exist? Activists say yes, but it's a legitimate question, and one that came to mind this weekend while I was reading this interesting story in the Washington Post. In it, the Post published the results of its attempt to get an accurate census of the tea party movement and to gauge its impact on politics. The conclusions mirrored much of what I've noticed in the past year of reporting on the movement: While there may be a lot of conservatives out there sitting around their living rooms, holding hands and singing "God Bless America" and calling themselves a tea party, not all that many of them are well-poised to affect an election.

The Real Tea Party

| Mon Oct. 25, 2010 1:52 PM EDT

The Washington Post, after a massive effort to contact every tea party group in the nation, says their activism has probably been overrated:

Seventy percent of the grass-roots groups said they have not participated in any political campaigning this year. As a whole, they have no official candidate slates, have not rallied behind any particular national leader, have little money on hand, and remain ambivalent about their goals and the political process in general.

....The findings suggest that the breadth of the tea party may be inflated. The Atlanta-based Tea Party Patriots, for example, says it has a listing of more than 2,300 local groups, but The Post was unable to identify anywhere near that many, despite help from the organization and independent research.

....In all, The Post identified more than 1,400 possible groups and was able to verify and reach 647 of them. Each answered a lengthy questionnaire about their beliefs, members and goals. The Post tried calling the others as many as six times. It is unclear whether they are just hard to reach or don't exist.

In other words, the grassroots tea party movement (lower case) is a lot less important than most people think. Conversely, Tea Party Inc. (upper case) is considerably more important than it's usually given credit for. Adele Stan has more on that.

But there's another disturbing finding from the Post's survey:

Eleven percent said that Obama's race, religion or ethnic background was either a "very important" or "somewhat important" factor in the support their group has received.

In the past I've argued that although racial tensions were obviously a motivating factor in the tea party movement, conspicuous racism itself wasn't a big part. But this makes me wonder. The taboos against admitting that race makes a difference are pretty strong, and if 11% of the tea party groups were willing to admit this in writing, it suggests that probably at least a quarter of them have similarly overt views. Maybe more. That's a helluva lot.

Growth and Stagnation

| Mon Oct. 25, 2010 1:12 PM EDT

After a review of Amar Bhidé’s A Call for Judgment: Sensible Finance for a Dynamic Economy that frankly makes it sound pretty much like a hundred other recent books and magazine articles, Matt Yglesias says we should all read it anyway:

For one thing, though Bhidé doesn't seem super-interested in pursuing this line of inquiry, I think that if it's correct it fills in the microfoundations missing from the argument of Hacker and Pierson’s Winner-Take-All Politics by producing a plausible account of how developments in the financial sector could produce both super-inequality and middle class stagnation through the misallocation of resources away from real economy innovators.

I'm confused. Hacker and Pierson were mostly concerned with the political foundations of income inequality, not the economic foundations. And in any case, isn't this pretty easy? If bankers — and rich people in general — hoover up a larger and larger share of national income, then there's less left over for the middle class.1 Economically, that's pretty much all the foundation you need. The only way you wouldn't get a combination of massive inequality growth and middle class stagnation is if the innovations of the financial sector supercharged the economy so powerfully that the overall pie was bigger for everyone. That's always the prospective argument while this stuff is happening, of course, but in retrospect it hasn't recently turned out to be true. Basically, the rich have spent the past couple of decades recklessly running the economy for their own benefit, and now that they've driven it into a ditch they're spending enormous2 amounts of their wealth to make sure they aren't expected to contribute so much as a penny to help rebuild it. That's really pretty much it. I'm not sure there's any need to overthink this.

1Or vice versa. If you keep middle class wages flat, then there's a bigger pool of money for the rich. I actually prefer this mechanism for a variety of reasons, but the actual inequality numbers work out the same either way.

2Enormous to you and me, anyway. Peanuts to them, of course.

The Chamber's Foreign Oil Money

| Mon Oct. 25, 2010 12:52 PM EDT

As we reported earlier, European companies are using political action committees to spend quite a bit on lawmakers who have blocked climate legislation in the Senate. But as Wonk Room reported over the weekend, foreign oil and gas interests have also directed quite a bit of cash to the US Chamber of Commerce, which is running a $75 million campaign focused on ousting congressional Democrats.

Wonk Room notes that a number of foreign oil and gas companies pay their member dues to the Chamber of Commerce’s 501c(6) account, which is the same account that funds its political ads. Those ads have included attacks on Democratic incumbents for supporting the House cap-and-trade bill (a.k.a. the "job-killing energy tax")—folks like Joe Sestak (D-Penn.), a House member currently running for Senate, and Reps. Alan Grayson (D-Fla.) and Betsy Markey (D-Colo.). Among the groups paying into this electoral war chest, and the interests they represent:

– Avantha Group, India (at least $7,500 in annual member dues): power plants
– The Bahrain Petroleum Company, Kingdom of Bahrain ($5,000): state-owned oil campany
– Gulf Petrochemical Industries Company, Kingdom of Bahrain ($5,000): state-owned oil company
– Essar Group, Mumbai, India ($7,500): oil & gas, coal power
– GMR, Bangalore, India ($15,000): coal power, mining
– Hinduja Group, London, UK ($15,000): the Gulf Oil group
– Jindal Power, New Delhi, India ($15,000): coal power
– Lahmeyer International, Frankfurt, Germany ($7,500): power plant engineering
– Punj Lloyd, Gurgaon, India ($15,000): offshore pipelines
– Reliance Industries, Mumbai, India ($15,000): oil and gas, petrochemicals
– SNC Lavalin, Montreal, Canada ($7,500): mining, power plant, and oil & gas engineering
– Tata Group, Mumbai, India ($15,000): power plants, oil & gas
– Walchandnagar Industries, Mumbai, India ($7,500): power plant, oil & gas engineering
– Welspun, Mumbai, India ($7,500): oil & gas exploration

The Supreme Court's decision earlier this year in Citizens United has allowed the Chamber and other interest groups to spend unlimited amounts of money on elections without disclosing their donors. Democrats have latched onto the idea that the decision has also allowed groups like the Chamber to funnel foreign money into our elections, unbeknowst to the average citizen. The Chamber says it has accounting methods in place to separate the money and ensure that these funds from other countries aren't being spent on US elections, and as my colleague Nick Baumann pointed out earlier this month, the amount of domestic money pouring through the Chamber is probably a bigger concern anyway than the relatively small total from foreign corporations. But the money flowing into the Chamber's coffers from overseas is worth pointing out, as these oil and gas interests clearly have good reason to want to sway debate over climate and energy in the US.

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Political Rage

| Mon Oct. 25, 2010 12:49 PM EDT

Megan McArdle reads an article about — well, it doesn't really matter what it's about. Here's what she says in response:

This resonates with my growing disgust at the level of anger in the blogosphere. I don't mean irritation, pointed jibes, or even spirited discussion; I mean an aggressive revelling in rage. I notice it much more on left wing sites, but that's because I basically refuse to read angry right-wing sites, so I don't know what's going on there.

Two things here. First, I'm pretty sure that right-wing rage continues to outpace left-wing rage fairly substantially — though, like Megan, I don't really spend too much time reading rage-filled sites on either side of the aisle. But the conventional wisdom is that righties are all fired up this election season over Barack Obama's attempts to destroy the America we love, while we lefties are dispirited and depressed. You can probably guess which emotion produces more rage.

Second, I think the blogosphere fools us about this stuff. In the past, I imagine there's been every bit as much rage as there is today. It's just that the mainstream media was all dressed up in suits and ties and most of us ordinary citizens didn't really have a way to channel our rage. But it was still there. The big difference isn't that we're any more filled with rage than we've ever been, it's just that it's all so public now. This might very well be a bad thing on its own (or not — who knows, really?), but it's not because tea partiers are any angrier at Obama than they were at FDR or Bill Clinton. We just have a better view of it these days.

That said, though, I too was pretty disgusted by the blogospheric treatment of Todd Henderson a few weeks ago, which was so wildly blown out of proportion that it reminded me more of a rabid mob than anything else. That kind of freeding frenzy has become all too common. On the other hand, "curb stomping" is just routine trash talk. I wouldn't read too much into it.

Are the Young Disillusioned?

| Mon Oct. 25, 2010 12:22 PM EDT

Bloomberg's Catherine Dodge writes today that "the thrill is gone" for young voters who supported Barack Obama in 2008:

Indiana University professor Gerald Wright opened his class on congressional elections by asking students if they saw the previous night’s school-sponsored U.S. House candidate debate a few blocks from campus.

Among almost 60 students, three hands went up.

“Most students don’t care about elections in general,” 20-year-old sophomore Melody Mostow said after the class last week. “In most midterm elections, there’s not that central person for us to rally around.”

Yeah, maybe. But you know what? I wouldn't have watched either. The U.S. Congress is effectively a parliamentary body these days, and it matters only slightly who its actual individual members are. A few extreme cases aside, all that matters is what party the candidates belong to. No one needs to listen to a debate to figure that out.

In any case, I'm willing to bet a million dollars — no, make it a billion — that young voters will turn out this year in roughly the same numbers that they always turn out for midterm elections. The chart on the right from the good folks at CIRCLE shows that youth turnout was up a bit from historical lows in 2006, but the broader trend is that turnout in general has gone steadily down, and a youth turnout rate of 20-22% this year would be entirely average. And that's pretty much what I expect it to be. No thrill needs to be gone to explain this.

Quote of the Day: Please Fool Me

| Mon Oct. 25, 2010 11:43 AM EDT

From Adam Ozimek:

Our desire to have costs hidden from us is a very expensive preference.

He is reacting to a study showing that CAFE mileage standards are a less efficient way of reducing gasoline use than simply raising gasoline taxes. In the end, we all pay more for CAFE increases than we would if we just accepted the need for higher taxes.

I'll confess that I'm not sure I'm convinced about this specific argument, though it's pretty conventional economics. Largely this is because CAFE standards are more permanent than taxes and don't suffer from the problem that people just get used to them and revert to their old behavior. If CAFE standards are higher, then they're higher forever and gasoline use is reduced forever. Conversely, people react pretty weakly to higher gasoline prices in the short term, and we don't really know all that much about how they react in the long term. So I'd be careful here. Ditching CAFE for higher gasoline taxes may be orthodox economics, but it might have social and political shortcomings even aside from our unwillingness to consider it in the first place.

Still, there's a pretty good chance the study is right, and certainly this argument is right in general. We do an awful lot of inefficient revenue raising in this country because we're not willing to simply raise taxes in a transparent way. Republicans don't seem to have figured this out yet.

European Companies Spend Big to Block Climate Action in US

| Mon Oct. 25, 2010 11:12 AM EDT

Some of Europe's biggest polluters are dumping money into US politics, in an effort to undermine progress on climate and energy. The oil giant BP, the chemical company BASF, the cement and concrete manufacturer Lafarge, and pharmaceutical company Bayer were among the biggest donors. Combined, European companies gave $240,200 to senators who blocked climate action, which accounted for 78 percent of their total campaign donations this year.

The figures were released in a new report from the Climate Action Network Europe on Monday, using data compiled by the Center for Responsive Politics. The information, said CAN Europe, shows what "appears to be a coordinated effort by European polluters to influence United States climate and energy policies through targeted donations to candidates who oppose action on climate change." (Foreign companies, through their US-based subsidiaries, are able to give to candidates via political action committees—and this year their spending has soared.)

A large chunk of that money—$107,200–went to candidates who deny that climate change is a problem, like Senators James Inhofe (R-Okla.). But Democrats who acknowledge the problem yet still block action also made out well—with Blanche Lincoln (D-Ark.) leading the pack at $47,500. Lisa Murkowski (R-Alaska), architect of several legislative attempts to block the Environmental Protection Agency from regulating greenhouse gas emissions under the Clean Air Act, also received $16,000 from the companies surveyed by CAN Europe.

Other big recipients of the EU largesse: Jim DeMint (R-SC) at $13,000, John Cornyn (R-Texas) at $11, 000, John Barrasso (R-Wy.) at $10,000, Mike Crapo (R-Idaho) at $10,000, Mike Enzi (R-Wy.) at $10,000, Roy Blunt (R-Mo.) at $9,500, Orrin Hatch (R-Idaho) at $8,000, David Vitter (R-La.) at $7,500, Richard Burr (R-NC) at $7,000, James Inhofe (R-Okla.) at $6,000, Chuck Grassley (R-Iowa) at $5,500, and Mary Landrieu (D-La.) at $4,500.

Bayer, the German pharmaceutical giant, gave $108,100. The UK-based oil titan BP made $25,000 in campaign donations, with $18,000 of that going to senators who blocked action on climate change. This is particularly notable, as prior to the oil spill, BP was one of the companies that the bill's authors were touting as supporting climate legislation. A number of these companies have said publicly that they support action on climate, but their campaign spending actively undermines action.

As CAN Europe points out, this funding serves their purposes on multiple levels. The EU has been out ahead of the rest of the world in acting on climate change, aiming to cut emissions 20 percent by 2020. Countries have proposed increasing that target to 30 percent, but many of these companies, through groups like Business Europe and the Alliance for a Competitive European Industry have pushed back. Their big argument? The EU should wait until laggard countries like the US pass climate laws before they take more aggressive action. The failure to act in the US also handcuffed global action in Copenhagen last year. Thus, subverting US climate action serves their greater purpose of stopping tougher action in Europe, too.

“It’s appallingly hypocritical for these European polluters that are supporting anti-climate crusaders in the US to simultaneously fight against strong climate legislation in Europe, based on the false premise that the EU can’t make meaningful emissions cuts without the US on board," said Tomas Wyns, CAN Europe senior policy officer.