2011 - %3, August

Rick Scott Takes the Piss Out of Florida Taxpayers

| Thu Aug. 25, 2011 1:40 PM EDT

Florida's neophyte Republican governor, tea-party-friendly Rick Scott, signed a bill back in June requiring the state's welfare recipients to undergo drug-testing urinalysis before collecting their monthly assistance check of around $241-to-$303. The measure, he said, would save taxpayer money by barring drug addicts from getting the dole. "Studies show that people that are on welfare are higher users of drugs than people not on welfare," he said.

Florida's welfare recipients are proving that Scott's assumption wasn't worth a warm bucket of pee. Now, the state is effectively being forced to pay for 11.5 gallons of welfare applicants' drug-free urine every month, to the tune of around $34,000.

Of the 1,000 or so recipients who have taken the required drug tests (at their own expense) since early July, only 2 percent have tested positive for drugs, according to the Tampa Tribune. That's well below the national population's average, and it's so low that the testing plan—which was expected to cost $187 million by some analysts' estimates—could end up costing taxpayers even more in the long run.

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The Economy and the Auto Industry

| Thu Aug. 25, 2011 1:09 PM EDT

In the LA Times today, Jerry Hirsch digs into the Commerce Department's report that orders for autos and auto parts rose 11.5% in July, the most in eight years:

After a massive restructuring and several high-profile bankruptcies, a leaner, more aggressive auto industry is making a comeback, hiring workers and ramping up manufacturing plants. From a trough two years ago, Ford Motor Co., General Motors Co., Chrysler Group and other auto companies have added almost 90,000 manufacturing jobs, a 14% increase, according to federal employment data.

....Dealers are having a banner year, making more money per sale than they have in years and hiring back some workers shed during the recession. "I have been adding dozens of employees for sales and sales support," said Mike Bowsher, who owns Chevrolet and Buick dealerships in Atlanta; Nashville, Tenn.; and Orlando, Fla. "The economy is crazy, but our retail business is still growing and getting better."

....Auto sales peaked at about 17 million in 2000 and held near that level until 2007 before crashing to just 10.4 million two years later. They were heading back into the 13-million range — helped by a wave of new models, low interest rates and improving consumer confidence — only to be upended by the Japanese earthquake in March...."If you see a 13-million-unit sales rate in the fourth quarter, that would help a lot," said Shulman, senior economist at the UCLA Anderson Forecast. "It would be very hard to see how the U.S. would go into recession with cars selling at that rate."

Some of the immediate rebound is due to pent-up demand following the Japanese tsunami, but in general it seems like a fairly durable response to an aging auto fleet. And it's benefiting American employment due in large part to the Obama administration's surprisingly agile rescue of GM and Chrysler. Taken as a whole, it probably saved upwards of a million jobs economy-wide. You can throw this into the mix with Medicare cost control and higher CAFE standards for cars and light trucks as things that Obama doesn't get enough credit for.

Peak Earnings

| Thu Aug. 25, 2011 11:54 AM EDT

Stuart Staniford directed me today to a report from the Georgetown University Center on Education and the Workforce about the distribution of earnings throughout the workforce (here). It's got lots of interesting stuff, including basic data about the value of education. On average, workers with a college degree earn 74% more over their lifetimes than workers with only a high school diploma. And workers with a high school diploma earn 34% more than high school dropouts.

But for some reason, the chart below drew my eye. It shows the trajectory of earnings from age 25 through 65, and most people hit their peak earning power around age 45. But there are two big outliers at the very top and very bottom. The earnings of those with professional degrees rise very steeply and max out at age 37, after which they go nowhere. Conversely, although high school dropouts don't make much, their earnings rise steadily for quite a long time, not peaking until about age 53. Also: people with Associate's degrees have an oddly delayed peak until about age 50.

This is, needless to say, one of the least important pieces of information in the report, but it seemed sort of interesting to me. Discussion?

Anti-Immigrant Activist Warns of Obama Plot to End "White America"

| Thu Aug. 25, 2011 10:27 AM EDT
President Barack Obama is secretly plotting to bring an end to "White America," according to one conservative activist.

Is President Obama allowing millions of Central Americans to live in the United States illegally as part of his secret plan to destroy "White America"? According to William Gheen of the group Americans For Legal Immigration, the answer is a resounding "yes." Gheen told a conservative talk radio show earlier this week that if things don't improve under "Dictator Obama," patriotic Americans may resort to possibly violent, "revolutionary means." (Gheen, as Media Matters pointed out, has been a frequent presence on Fox News and at tea party rallies). Here's what Gheen told talk show host Janet Mefferd:

What Janet Napolitano has spent most of her time doing in the last couple of months has been, one, preparing the new spy network that's available now, the new data-collecting, see everything you do online, beyond the normal terrorist list that they’re creating, they’re creating a much larger list now of people who might be troublesome here in the country. And putting out videos and propaganda telegraphing what I believe to be a conflict with White America they’re preparing for after they get another 10 or 15 million people in the country to back them up...

We're no longer referring to him as President Barack Obama, our national organization has made the decision and made the announcement we now refer to him as Dictator Barack Obama. That's what he is. And basically at this point, if you're looking for a peaceful, political recourse there really isn't one that we can think of, and I'm really not sure what to tell people out there than I guess they need to make decisions soon to just accept whatever comes next or some type of extra-political activities that I can't really talk about because they're all illegal and violent.

Gheen has since clarified (sort of) that he doesn't personally support violence as a political tool, but believes President Obama isn't leaving freedom-loving Americans with much a choice. (Gheen previously made news when he called Sen. Lindsay Graham (R-S.C.) gay at a tea party rally and alleged that Graham's supposedly closeted lifestyle was being used as blackmail to force him to adopt more moderate stances on immigration.)

It's worth noting that Gheen's conspiracy theory, while extreme, isn't so far removed from what actual elected officials are saying. Rep. Louie Gohmert (R-Texas), who famously suggested that terrorists were smuggling babies across the border as part of a stealth jihad, revealed on Tuesday that Democrats were secretly planning to register undocumented residents to vote in the November elections. Gohmert, citing no one in particular, alleged that it would be part of a "quid pro quo"—"we allow you to stay illegally and make sure you go down and vote." ACORN!

Public Debt and the Great Meltdown

| Thu Aug. 25, 2011 10:23 AM EDT

According to Paul Krugman, Germany's finance minister, Wolfgang Schäuble, gave a speech today in which he said:

It’s actually undisputed among economists worldwide that one of the main causes – if not the main cause – of the turbulence – not just now, but already in 2008 – was excessive public debt everywhere in the world.

Say what? Krugman points out that he and Brad DeLong and Christina Romer, among others, dispute this, but I'd go much, much further. Two years ago I jotted down a list of all the common explanations for the financial meltdown that were then making the rounds, and out of 18 items there wasn't a single one related to public debt. That doesn't mean that literally no one was talking about this, but it does mean that it was uncommon enough that I hadn't heard it. That makes it pretty uncommon.

Now, since then, there's no question that Ken Rogoff and Carmen Reinhart have popularized the notion that public debt is bad news for economic recovery. But as far as I know, even they don't suggest that it was the cause of the 2008 collapse. So what is Schäuble talking about? Well, Ambrose Evans-Pritchard reports on things that a few other Germans are saying today:

German President Christian Wulff has accused the European Central Bank of violating its treaty mandate with the mass purchase of southern European bonds. In a cannon shot across Europe’s bows, he warned that Germany is reaching bailout exhaustion and cannot allow its own democracy to be undermined by EU mayhem.

....The blistering attack follows equally harsh words by the Bundesbank in its monthly report. The bank slammed the ECB’s bond purchases and also warned that the EU’s broader bail-out machinery violates EU treaties and lacks “democratic legitimacy”.

....Chancellor Angela Merkel has struggled all this week to placate angry critics of her bailout policies within the Christian Democrat (CDU) party. Labour minister Ursula von der Leyen said countries that need rescues should be forced to put up their “gold reserves and industrial assets” as collateral, a sign that rising figures within the CDU are staking out eurosceptic positions as popular fury mounts.

....Mr Wulff said Germany’s public debt has reached 83pc of GDP and asked who will “rescue the rescuers?” as the dominoes keep falling. “We Germans mustn’t allow an inflated sense of the strength of the rescuers to take hold,” he said.

So: Germany is (understandably) unhappy about having to bail out the PIIGS and equally unhappy that this rescue will probably require them to substantially increase their own public debt. Politically, this means they need to badmouth public debt, so that's what they're doing. Schäuble is just taking a bit more dramatic license about it than the others. That will probably earn him points both at home and with the GOP's deficit hawks here in America, but it doesn't make him right. Debt was indeed a major cause of the 2008 financial collapse, but not the public variety. The private financial sector managed it all on its own.

CEOs, Hollywood, and Corporations, Oh My! Meet the Super PAC Bankrollers

| Thu Aug. 25, 2011 9:56 AM EDT
GOP presidential candidate Rick Perry has six super PACs raising and spending cash on his behalf.

Super PACs, the relatively new breed of political action committee that can raise and spend unlimited amounts of money, are shaping up to be the hottest political money story of the 2012 elections. Offspring of the Supreme Court's 2010 Citizens United decision, super PACs can't donate to or coordinate with political candidates. But anybody who's anybody in American politics, it seems, has an affiliated super PAC fighting on his or her behalf—Barack Obama, Mitt Romney, Michele Bachmann (two), Ron Paul, Rick Perry (six!), Ron Paul, Stephen Colbert, and more. There are also super PACs fighting for Democratic and Republicans in the House and Senate, and still others run by tea partiers and labor unions. All told, there are more than 100 super PACs in existence today.

Election Day 2012 may be 15 months away, but the number-crunchers at the Center for Responsive Politics have helpfully laid out everything you need to know about an already a cash-flush, crowded super PAC field. Conservative super PACs are so far leading the charge, having raised $17.6 million in the first half of this year; the bulk of that money—$12.2 million—went to Restore Our Future PAC, a pro-Romney outfit. Liberal super PACs raked in $7.6 million, with Priorities USA Action, a pro-Obama group started by two former Obama White House aides, raising $3.2 million.

Other super PAC heavyweights include American Crossroads, the Karl Rove-inspired group that spent $21.5 million in the 2010 midterm elections, according to CRP. American Bridge 21st Century, a cutting-edge hub of opposition research conceived by Media Matters for America founder David Brock, ranked fourth in fundraising among all super PACs. The super PAC affiliated with the Communications Workers of America ranked ninth.

But there's one big takeaway from from the Center's analysis: the vast majority of the cash flowing into super PACs' coffers comes from a elite group donors including CEOs, Hollywood big wigs, corporations, and unions. The fears that the Citizens United decision would allow wealthy individuals and companies to exert more influence in American elections are quickly coming to fruition:

Liberal Super PACs

* Of the $7.6 million raised, more than eight of every ten dollars—or $6.24 million of it—came from just 23 donors.

* Of those 23 blue-chip donors, 45 percent came from the entertainment industry, including DreamWorks CEO Jeffrey Katzenberg, CEO of DreamWorks

* Twenty-six percent of blue-chip donors were CEOs not in the entertainment industry

* Twenty-five percent of blue-chip donors were labor unions

Conservative Super PACs

* Of the $17.6 million pocketed, more than eight of every ten dollars came from just 35 donors

* Sixty-six percent of those blue-chip donors are CEOs

* Eighteen percent came from corporate treasuries, a company's main money pot

* Sixteen percent came from people who work at Bain Capital, which Romney founded three decades ago

Here are the fundraising totals for top 18 super PACs in the first half of 2011:

PAC Cash Raised Slant
Restore Our Future PAC $12,231,700 C
American Crossroads $3,929,381 C
Priorities USA Action $3,161,535 L
American Bridge 21st Century $1,562,775 L
Cooperative of American Physicians $1,235,447 N/A
Majority PAC $1,082,407 L
House Majority PAC $985,000 L
Club for Growth Action $440,693 C
Communication Workers of America $295,000 L
Raising Red $200,000 C
Americans for Rick Perry $193,000 C
Women Vote! $165,833 C
America's Families First Action Fund $160,374 L
Faith Family Freedom Fund $124,870 C
America's President Committee $124,343 C
Christine PAC $119,914 C
America Votes Action Fund $73,061 L
Texas Tea Party Patriots PAC $56,755 C
     
Conservative Super PACs $17,612,012  
Liberal Super PACs $7,612,459  

Source: Center for Responsive Politics

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Shooting Yourself in the Foot as Political Strategy

| Thu Aug. 25, 2011 9:23 AM EDT

Starbucks CEO Howard Schultz has gotten a lot of press for his campaign to get CEOs to halt all political contributions until politicians in Washington, DC, stop their insane bickering. Except it's not really bickering that he and his fellow corporate titans are upset about:

More than 100 business leaders have signed onto Starbucks CEO Howard Schultz’s pledge to stop making donations to incumbents until Washington gridlock eases, sending a message to lawmakers that they must make real progress in reining in deficit spending.

…In all, more than 100 business leaders have agreed to the pledge, which not only has leaders agreeing to stop campaign contributions until lawmakers “strike a bipartisan, balanced long-term debt deal that addresses both entitlements and revenues,” but also has the leaders agree to find ways to accelerate job growth in their companies and the economy as a whole.

I'm not sure that spending their personal fortunes on mansion upgrades instead of political contributions is quite the cri de coeur these guys seem to think it is, but whatever. As a PR device—and what is politics besides PR?—it seems to be getting some attention. So more power to them.

As usual, though, I'm sort of flummoxed by the substantive thinking on display here. I mean, I assume these guys are all bright and politically aware. Which means they must know perfectly well that one party in Washington is already willing, however grudgingly, to cut a debt deal that addresses both entitlements and revenues. In fact, the leader of this party has spent the last several months leading his own PR campaign to sell precisely this "balanced approach."

And then there's the other political party in Washington. This one relentlessly mocks the "balanced approach" as yet another big government giveaway. Its presidential candidates unanimously agree that they'd oppose a deal that includes $10 in real spending cuts for every $1 in increased revenue. Its leader in the House walked away from several opportunities to strike an ambitious deal based on an 85-15 split of cuts vs. revenue increases. Its leader in the Senate declared himself delighted with the debt ceiling debacle, saying his party learned it's "a hostage that's worth ransoming." And the rest of its congressional leaders have all sworn blood oaths not to compromise on their pledge to never ever raise taxes under any circumstances.

This description of recent events isn't really controversial or especially inflected by partisan hackery on my part. Everyone knows this is how the deal went down earlier this month. Republicans are pretty proud of it, in fact. So in exactly what way are Schultz and his fellow boycotters seeking a "bipartisan" agreement? They aren't. What they really want, if their own words are to be taken seriously, is for the Republican Party to agree to tax hikes as part of any future debt deal.

And for some reason they've decided that Republicans will cave in on this if they announce their intention to withhold all political contributions to both parties this year. Seriously? My guess is that the GOP leadership is laughing its ass off over this. If this kind of strategic thinking is typical of these rock-jawed titans of American industry, it's no wonder our country is in such trouble.

NYPD: The Domestic CIA?

| Thu Aug. 25, 2011 6:40 AM EDT

Just days after the release of our investigation of the FBI's use of informants in Muslim communities around the US comes a probe by the AP into the NYPD's collaboration with the CIA to spy on Muslims in the greater New York area. The AP's Adam Goldman and Matt Apuzzo reveal that the "NYPD operates far outside its borders and targets ethnic communities in ways that would run afoul of civil liberties rules if practiced by the federal government."

Some background: In 2002, the NYPD hired former CIA official David Cohen to run their civilian intelligence program. Cohen got help from a CIA official to train and run a surveillance program in Muslim-American communities in the New York City area. Under Cohen, the NYPD utilized the diversity of its force to dispatch undercover officers in ethnic neighborhoods where they could "blend in." Officers were looking for "hot spots," areas needing further investigation, like a bookstore selling "radical" literature. They still call this investigative team the "Demographic Unit."

The Demographic Unit, according to the AP investigation, monitors "daily life in bookstores, bars, cafes and nightclubs. Police have also used informants, known as 'mosque crawlers,' to monitor sermons, even when there's no evidence of wrongdoing. NYPD officials have scrutinized imams and gathered intelligence on cab drivers and food cart vendors, jobs often done by Muslims." 

Sound familiar? The FBI has engaged in similar activities with the help of a former CIA official, Phil Mudd. Mudd helped create a program called "Domain Management" to strategically focus the FBI's resources on particular communities. A New York Times reporter once described how Mudd "displayed a map of the San Francisco area, pocked with data showing where Iranian immigrants were clustered—and where, he said, an F.B.I. squad was 'hunting.'" When asked to comment, an FBI spokesperson told the AP: "If you're sending an informant into a mosque when there is no evidence of wrongdoing, that's a very high-risk thing to do...You're running right up against core constitutional rights. You're talking about freedom of religion."

In our own year-long investigation into the FBI's activities with informants in Muslim communities, reporter Trevor Aaronson notes: "Informants have said in court testimony that FBI handlers have tasked them with infiltrating mosques without a specific target or 'predicate'—the term of art for the reason why someone is investigated. They were, they say, directed to surveil law-abiding Americans with no indication of criminal intent."

Study: Climate Shifts Cause War

| Thu Aug. 25, 2011 6:00 AM EDT

Top military brass, the Central Intelligence Agency, and the UN Secretary General have all warned that climate change will create conflicts in the future. But environmental shifts are already causing wars, argues a team of experts in a new paper in Nature (PDF) published this month.

El Niño, the oscillating period of warmer temperatures in the Pacific Ocean, brings with it higher temperatures on land and lower rainfall every three to seven years. According to the researchers, the weather phenomenon doubles the risk of civil conflicts in 90 tropical countries. They also believe it has been a potential factor in 21 percent of the world's conflicts over a 54-year span.

As the authors explain, events like droughts put strain on food and water resources, which can cause conflict. Natural disasters can also cause disease, famine, and economic distress, which may create tensions between factions.

The three authors, whose research backgrounds include sustainability, climate science, and international affairs, looked at conflicts that involved more than 25 deaths between 1950 and 2004. They looked at the annual conflict risk in each country, and determined that there was a 3 percent chance of conflict during cooler periods and a 6 percent risk during the periods of El Niño. There the likelihood of conflict in countries that weren't affected by El Niño stayed the same.

Certainly, many have already speculated about historical conflicts and climatic shifts, but this is (as far as I can tell) the first systematic attempt to understand how the conflicts of recent history fit in with climatic changes. While the authors aren't saying that El Niño was at fault for any particular incident of violence, they do make the connection between climate shifts and modern conflicts and raise questions about the implications for a future as the climate changes. Global warming, they argue, will exacerbate the normal weather cycles and make the typical fluctuations more extreme. Basically, it will take a trend that already exists and make it worse.

The press release from the Earth Institute at Columbia University highlights some specific conflicts that coincided with warmer weather, which wasn't included in the Nature paper:

In 1982, a powerful El Niño struck impoverished highland Peru, destroying crops; that year, simmering guerrilla attacks by the revolutionary Shining Path movement turned into a full-scale 20-year civil war that still sputters today. Separately, forces in southern Sudan were already facing off with the domineering north, when intense warfare broke out in the El Niño year of 1963. The insurrection abated, but flared again in 1976, another El Niño year. Then, 1983 saw a major El Niño—and the cataclysmic outbreak of more than 20 years of fighting that killed 2 million people, arguably the world’s bloodiest conflict since World War II. It culminated only this summer, when South Sudan became a separate nation; fighting continues in border areas. [Lead author Solomon] Hsiang said some other countries where festering conflicts have tended to blow up during El Niños include El Salvador, the Philippines and Uganda (1972); Angola, Haiti and Myanmar (1991); and Congo, Eritrea, Indonesia and Rwanda (1997).

Of course, the weather shifts weren't the only reason for the conflict. "But," as Hsiang said in a statement, "if you have social inequality, people are poor, and there are underlying tensions, it seems possible that climate can deliver the knockout punch."

We're Still at War: Photo of the Day for August 25, 2011

Thu Aug. 25, 2011 5:57 AM EDT

It's Raining Flares
A C-130 Hercules from the Niagara Falls Air Reserve Station launches flares over Lake Ontario during a training exercise Aug. 10, 2011, in Niagara Falls, N.Y. Flares can be launched from an aircraft as a defensive measure against hostile forces. US Air Force photo by Staff Sgt. Joseph McKee.