2010 - %3, October

Visitors to California Prisons, Beware

| Thu Oct. 28, 2010 4:32 PM EDT

I just addressed my very first letter with the words "VISITING APPLICATION ENCLOSED" on the envelope; I'm trying to meet with a source currently residing in a California prison.

If you've never filled one of these applications out, the front is pretty much what you'd expect—name, Social Security number, do you have a criminal record? But I learned some interesting stuff on the back. Like, for example, that I lose the right to leave without being searched in the event that a "cause for a search arises while the visitor is one the institution grounds." Also, giving letters to or taking letters from inmates is a misdemeanor. Ditto for gifts. But my favorite clause is the last one. "Hostages will not be recognized for bargaining purposes during attempted escapes by inmates." First of all, I wonder if, when it comes down to it, that's really true. Second: Does this mean that by signing that I understand this condition, I can't sue the state of California for not trying to save me if I become a hostage in an attempted escape?

 

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Kill the Corporate Income Tax

| Thu Oct. 28, 2010 3:58 PM EDT

Megan McArdle thinks we should do away with the corporate income tax. I agree! Here is her most persuasive argument:

Without the corporate income tax, a lot of the incentive for lobbying would go away.  Not all of it, by any means — I am not trying to paint some halcyon future here. But an enormous amount of effort goes into lobbying for tax laws, and politicians often reward favored constituent businesses with little sweetheart fillips to the tax code. Conversely, apparently neutral changes to the tax code often turn out to be excellent ways to hamstring your competition, particularly small businesses who cannot afford a huge tax department.

And just think of all the corporate tax attorneys who'd be out of jobs.1 It's a win-win!

Seriously, though: I agree. The corporate tax code is by far the most popular way for politicians to reward favored interests without making those rewards too obvious. As long as it exists, even if the tax rate is low, it's a way to funnel money to one sector over another or one company over another. Just get rid of it.

The big question, though, is what to replace it with. Higher capital gains and dividend taxes are an obvious possibility. Higher top marginal income tax rates. A carbon tax. A financial transaction tax. There are lots of alternatives.

Of course, the business community would never support this. For starters, they like all the tax goodies they get, and they like the potential of getting more. And of course, businesses are run by rich people, and rich people would frankly prefer that taxes be high on their corporations than high on themselves. On a more substantive level, it would seriously raise the incentives for income shifting scams, so we'd have to amp up tax audits to catch that. So it'll never happen. But it's a nice idea.

1They wouldn't be entirely out of work, of course. There would still be state corporation taxes to worry about, and multinationals would have international tax issues. But it would sure cut down their ranks.

Halliburton Knew About Bad Cement Job Before the Spill

| Thu Oct. 28, 2010 2:53 PM EDT

Halliburton, the oil field services giant that provided the cement for BP's Macondo well, knew months before the explosion and spill that the cement mixture used on the well was not stable, according to new findings the National Oil Spill Commission released Thursday. Despite multiple failed tests on the mixture, Halliburton and BP used the cement on the well.

In the months since the spill, it's become clear that something went wrong with the cement job on the Macondo well, which should have prevented oil and gas from entering the well and causing the April 20 explosion. BP used a nitrogen foam cement that Halliburton recommended and supplied on the well. In a letter to the commission, the panel's lead investigator, Fred H. Bartlit Jr., cites documents obtained from Halliburton and tests conducted by cement experts at Chevron that suggest that there were plenty of warnings about this cement mixture before the explosion.

The documents from Halliburton show that the company conducted two tests on the cement mixture in February 2010, and both indicated that it was not stable. The company provided the results of one of those two tests to BP in March, but Bartlit states that "There is no indication that Halliburton highlighted to BP the significance of the foam stability data or that BP personnel raised any questions about it."

It appears that a third test conducted on April 13, seven days before the explosion, again demonstrated that the mix was unstable, but Halliburton did not provide that data to BP. Only a fourth test, performed after Halliburton's lab modified the testing procedure, produced results that found the mixture to be stable—but that data was not available until after the explosion, which indicates that the mixture was used with no lab results that suggested it would be stable.

Further, the letter includes data from testing that Chevron conducted on a indentical mixture for the spill commission, released on October 26, which also found that the slurry was not stable:

Chevron’s report states, among other things, that its lab personnel were unable to generate stable foam cement in the laboratory using the materials provided by Halliburton and available design information regarding the slurry used at the Macondo well. Although laboratory foam stability tests cannot replicate field conditions perfectly, these data strongly suggest that the foam cement used at Macondo was unstable. This may have contributed to the blowout.

The report concludes that while there are tests designed to ensure that a cement job is stable and methods to remedy it if they are found to be faulty, "BP and/or Transocean personnel misinterpreted or chose not to conduct such tests at the Macondo well."

Lying to Pollsters

| Thu Oct. 28, 2010 2:30 PM EDT

If you ever wanted evidence that Americans lie to pollsters with abandon, I'd say this is smoking gun proof:

That's from the latest Bloomberg poll. More here.

Greetings, MoJo Tumblr!

| Thu Oct. 28, 2010 2:21 PM EDT

Oh hey, guess what? Mother Jones now has a Tumblr alter ego. Check it out. If you like what you see, follow us on Tumblr and spread the word. And seriously? Don't be shy about suggesting links and pics from around the Interwebs that my co-conspirator Adam Weinstein and I should highlight. We aim to please.

Forthwith, a visual representation of MoJo's first few weeks on Tumblr (Click here to embiggen):

October looked like this.Yes, this is what we liked for Mother Jones' Tumblr in October.

The Missile (Disarmament) Crisis

| Thu Oct. 28, 2010 2:17 PM EDT

Last Saturday, an engineering malfunction at F. E. Warren Air Force base in Wyoming caused 50 US intercontinental ballistic missiles to go offline for 45 minutes. The ICBMs—one ninth of the US nuclear arsenal—were temporarily disconnected from the launch control centers at the base. Officials were quick to point out that it would still have been possible to launch the ICBMs from a command plane in a high alert scenario. But even if the reality of the failure wasn't that bad, it's implications for US nuclear policy might be.

Currently awaiting the Senate's consent is the new START treaty, which would reduce US and Russian nuclear arsenals by 30 percent. Signed by Obama and Russian president Dmitry Medvedev last April, the treaty has received widespread backing: "The support for new START by our entire military leadership, our intelligence community, six former secretaries of state, five former secretaries of defense, three former national security advisers, and seven former commanders of U.S. Strategic Command is an extraordinary endorsement of why this treaty needs to be passed," Secretary of State Hillary Clinton told reporters earlier this month. Ratifying the treaty would be a significant step toward nuclear disarmament. But a central argument for the new START treaty has been that because US nuclear stockpiles and launch systems are so well-maintained and reliable, the country could still pursue an effective deterrence strategy with fewer weapons. The mishap at Warren, along with several others in recent history, undermines this assumption.

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Quote of the Day: Rupert Murdoch

| Thu Oct. 28, 2010 1:59 PM EDT

From Conrad Black, once again a free man, writing about Rupert Murdoch:

I have long thought that his social philosophy was contained in his cartoon show, The Simpsons: all politicians and public officials are crooks, and the masses are a vast lumpen proletariat of deluded and exploitable blowhards.

Via E.D. Kain.

Interviewing the President

| Thu Oct. 28, 2010 1:44 PM EDT

Ryan Chittum takes a look at yesterday's sit-down between President Obama and five bloggers and concludes that the bloggers "didn’t exactly cover themselves with glory."

I guess that's true. But I wouldn't really blame the bloggers. Some of their questions were good, some were lame, and some were in between. But who's done better? Who can do better? Pretty much any big time politician — and Obama's as big time as they come — has heard every question before and knows exactly how to answer them. They filibuster, they distract, they offer up platitudes, and they move on. There's pretty much zero chance of anyone getting anything newsworthy out of a guy like Obama unless he feels like making news. This is just life in our modern media-saturated age.

The Governator: DC Politicians "Wimps" for Not Acting on Climate

| Thu Oct. 28, 2010 1:06 PM EDT

California Gov. Arnold Schwarzenegger appeared on World News with Diane Sawyer Wednesday night, talking about the ballot initiative that could thwart his state's landmark climate law. He also had some pointed words for the politicians in Washington who have shown "no guts" when it comes to cutting greenhouse gas emissions at the federal level. I wish he'd just come out and called them "girly men," but he was pretty direct:

We need to go to Washington and say, "Look what happened. You, because oil companies have spent money against you, they have threatened you, you backed off the energy policy and the environmental policy in Washington."
What wimps. No guts. I mean, here, you idolize and always celebrate the great warriors. Our soldiers, our men and women who go to Iraq and Afghanistan, and they’re risking their lives to defend this country and you’re not even willing to stand up against the oil companies. I said, that’s disgusting. You promised the people you’d represent them. You didn’t promise the people you’d represent the oil companies and the special interests.

Here's the video:

More Stimulus, Please

| Thu Oct. 28, 2010 12:49 PM EDT

Like Matt Yglesias, I don't quite get Peter Orszag's opposition to further quantitative easing from the Fed. He'd like to see Congress pass further stimulus, but thinks that's less likely if the Fed eases monetary policy. Why? Because a stimulus package should only be passed if it has an accompanying medium-term deficit reduction package, "and that medium-term deficit reduction package is less likely to be enacted when interest rates on long-term government bonds are so low."

I don't really understand this. But who cares? As Orszag says, the Fed's anticipated QE2 package will probably have, at best, a modest effect. What the economy really needs is "more fiscal expansion (read: more stimulus) now." I helpfully added italics to that quote since that seemed to be his intent. And remember: Orszag was widely considered the moderate deficit hawk in the Obama administration. If he thinks Job 1 is additional stimulus, people really ought to be listening to him.