Andy Kroll

Andy Kroll

Senior Reporter

Andy Kroll is Mother Jones' Dark Money reporter. He is based in the DC bureau. His work has also appeared at the Wall Street Journal, the Detroit News, the Guardian, the American Prospect, and TomDispatch.com, where he's an associate editor. Email him at akroll (at) motherjones (dot) com. He tweets at @AndrewKroll.

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Meteorologists Take Geoengineering Seriously

| Wed Jul. 22, 2009 6:02 PM EDT

Geoengineering received a big boost this week. The American Meteorological Society released a major statement Monday on the topic, making these recommendations:

1. Enhanced research on the scientific and technological potential for geoengineering the climate system, including research on intended and unintended environmental responses.
2. Coordinated study of historical, ethical, legal, and social implications of geoengineering that integrates international, interdisciplinary, and intergenerational issues and perspectives and includes lessons from past efforts to modify weather and climate.
3. Development and analysis of policy options to promote transparency and international cooperation in exploring geoengineering options along with restrictions on reckless efforts to manipulate the climate system.

The AMS is a respected scientific body here in the US, and a statement of this kind certainly gives credence to the possibility of a major, well-funded, possibly federal geoengineering research program. It also comes on the heels of a National Academy of Sciences workshop in which leading experts debated the merits of such a research program.

Some geoengineering critics (and there are plenty of them) say investment in this kind of research will only distract from mitigation efforts. I disagree, and now, so does AMS. And I think the Society responds well to that argument with this point:

Geoengineering will not substitute for either aggressive mitigation or proactive adaptation, but it could contribute to a comprehensive risk management strategy to slow climate change and alleviate some of its negative impacts. The potential to help society cope with climate change and the risks of adverse consequences imply a need for adequate research, appropriate regulation, and transparent deliberation.

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'Recovery' You Can't Believe In

| Thu Jul. 16, 2009 5:36 PM EDT

If there was any doubt before today who the federal government's $13 trillion bailout was truly meant to benefit—homeowners and small businesses or megabanks like Goldman Sachs  and JPMorgan Chase—a pair of telling, yet depressingly familiar, headlines should put that to rest.

Reuters reports:

Foreclosures at Record High in First Half 2009 Despite Aid

New York - U.S. home foreclosure activity galloped to a record in the first half of the year, overwhelming broad efforts to remedy failing loans while job losses escalated.

Foreclosure filings jumped to a record 1.9 million on more than 1.5 million properties in the first six months of the year, RealtyTrac said on Thursday.

The number of properties drawing filings, which include notices of default and auctions, jumped 9.0 percent from the second half of 2008 and almost 15 percent from the first half of last year.

"Despite everybody's best efforts to date we're not really making any headway against the problem," Rick Sharga, senior vice president at RealtyTrac in Irvine, California, said in an interview.

Meanwhile, The New York Times reported this today as well:

JPMorgan Earnings Soar as It Finds Profit in Slump

Even as it weathers the worst economic downturn in decades, JPMorgan Chase on Thursday announced a $2.7 billion second-quarter profit from stellar trading and investment banking results.

The strong showing may put to rest some worries that the bank was allowed to pay back its $25 billion taxpayer investment too early, after it passed the Treasury Department’s stress test in May. But its quick resurgence in earnings, along with Goldman Sachs’s announcement of a $3.4 billion quarterly profit on Tuesday, is bound to raise fresh concerns about soaring pay levels and growing influence in Washington.
 

Toss in Goldman Sachs' announcement on Tuesday that it had recorded its richest quarterly profit in the bank's 140-year-history and that it has so far earmarked $11.4 billion in compensation this year (NYT headline: "With Big Profit, Goldman Sees Big Payday Ahead"), and the writing is on the wall. Treasury Sec. Tim Geithner called these absurdly large profit announcements an "important sign of recovery." For the financial behemoths in whose pockets he so neatly fits, recovery it sure is. But for the 1.9 million homeowners who filed for foreclosure in the first half of this year and the small businesses teetering on the brink of bankruptcy, "recovery" couldn't be farther from the truth.

Congress: Hey Geithner, Show Us the Bailout Money!

| Tue Jul. 14, 2009 2:17 PM EDT

Congress is fed up with the Treasury Department's lack of bailout transparency and, more specifically, its refusal to account for how rescued financial institutions have used their billions in taxpayer funds. And rightly so. It's only fair that, in bailing out struggling financial institutions, Geithner and Co. track how those taxpayer dollars have actually been used. Specifically, whether they've been used for their intended purpose (boosting lending to small businesses and consumers), or simply to shore up their balance sheets—as appears to be closer to the truth. Since Geithner failed to respond to a May letter from 20 House and Senate Democrats on this subject, Congress is taking matters into its own hands. It has inserted into the FY 2010 Financial Services and Government Appropriations bill language to legally mandate that Geithner either increase oversight and transparency over the use of bailout funds, or show up before Congress and explain why not.

The Treasury's rationale for not tracking these funds, an excuse they've been peddling for months now, is that it's essentially impossible to track the flow of bailout funds once they're in the banks' coffers. But that's BS. The Special Inspector General for TARP, or SIGTARP, said in its April quarterly report to Congress (PDF) that it had gathered this very information by surveying 364 banks that had received funds before January 31. All SIGTARP did was send letters to the banks and ask nicely. As the 20 lawmakers wrote in May:

Although the results of the [SIGTARP] survey still need to be analyzed, one thing is clear: Treasury's arguments that such an accounting was impractical, impossible, or a waste of time because of the inherent fungibility of money were unfounded. Banks generally provided a reasonable level of detail regarding their use of TARP funds, and, while the response quality was not uniform, some banks were able to provide detailed, at times even granular, descriptions of how they used taxpayer money.

The Financial Services and Government Appropriations bill mandating that Geithner explain himself should come up for a vote before the full House later this week. After countless reports and statements from individuals like SIGTARP point man Neil Barofsky, Congressional Oversight Panel chairwoman Elizabeth Warren, lawmakers, and others calling for far greater transparency over the bailout, perhaps Congress' latest effort will shine a light on how taxpayers’ billions have actually been used—hardly an unreasonable proposition.

The Next Big Bailout Bamboozle

| Fri Jul. 10, 2009 7:15 PM EDT

One of the main watchdogs over the government's $13 billion financial bailout, the Congressional Oversight Panel, released its monthly report for July today, bringing some much needed scrutiny to the repayment of TARP funds and the Treasury Department's questionable oversight of that process. The COP highlighted the sale of government-held warrants (options to buy stock for a set price over a predetermined time period) back to bailout recipients exiting TARP, who, according to Treasury's guidelines, get the first crack at repurchasing their own warrants. This repurchasing process began earlier this spring, when the first bailed-out banks bought their stocks and warrants to extricate themselves from the taxpayer-funded TARP; since then, the process has been dogged by numerous reports showing that the Treasury sold warrants for much less than they could have. By one estimate, taxpayers were shortchanged in those early transactions by millions of dollars.

The COP's latest report puts a number to what many suspected: The Treasury, the panel estimates, sold warrants back to the 11 small banks who've so far completely exited the bailout for only 66 percent of their value. If the Treasury had sold them for closer to market value, taxpayers could’ve recouped $10 million more—a small sum compared to the entire bailout, but nothing to scoff at. And though the warrant-repurchasing process will differ for megabanks like JPMorgan Chase, Wells Fargo, and several others currently trying to buy back their warrants, applying that 66-percent rate to all government-held warrants could result in a loss of $2.7 billion.

If you've closely followed the COP's reports, you'll notice a troubling similarity to previous reports in this latest finding. The panel's widely cited February report (PDF), which analyzed the Treasury's 10 largest TARP investments in 2008, found that the Treasury had received, on average, only $66 for every $100 spent, resulting in a $78 billion shortfall. (This while Berkshire Hathaway received $110 assets for every $100 when it invested in Goldman Sachs, and Mitsubishi received $91 in assets for every $100 invested in Morgan Stanley.) Which means that the Treasury received a 34-percent markdown on assets it bought (with taxpayer money) last year with its early TARP investments, and received only a 34-percent markdown for its early warrant sales back to banks.

Coincidence? Hardly.

Geoengineering Won't Save Our Oceans

| Thu Jul. 9, 2009 6:13 PM EDT

Last month I wrote about geoengineering, controversial schemes to deliberately manipulate the Earth’s climate to slow the planet’s warming. I focused mostly on a proposal often called “solar radiation management” (PDF), in which sunlight is blocked in the upper atmosphere in order to reduce warming at the planet’s surface. A new study, cowritten by one of the main sources in my piece, Stanford’s Ken Caldeira, makes a major conclusion about this type of geoengineering: It may cool the planet, but it won’t prevent dangerously high levels of carbon dioxide from wreaking havoc on our oceans.

As MoJo’s environmental correspondent Julia Whitty has written, our oceans are already at their breaking point: Man-made emissions have negatively impacted the ocean's chemistry, and toxic waste is being dumped into our oceans without regard for its harmful impact on fragile marine ecosystems. To make matters worse, scientists fear that large-scale geoengineering proposals could cause further acidification of our oceans (for instance, the sulfur injected into the atmosphere in a solar radiation management scheme would fall back to the Earth's surface through precipitation), damaging the lifeforms that live there. More recent geoengineering studies (PDF), however, allayed those fears, finding that solar radiation management wouldn’t acidify the oceans as much as first anticipated.

Nonetheless, the Caldeira report finds that our oceans and coral life are in grave danger—and even the best-case-scenario geoengineering scheme to block out the sun’s rays won’t help the oceans much. Paired with a report from earlier this year stating that global warming is essentially irreversible, that CO2 will hang around in the atmosphere for around a thousand years or so, the Caldeira paper suggests that solar radiation-related geoengineering efforts aren't worth pursuing.

Perhaps geoengineering researchers would be better off focusing on ways to remove CO2 from the atmosphere, like synthetic trees that “scrub” the CO2 out of the air. After all, why waste time, money, and manpower on a geoengineering scheme like solar radiation management if, as this latest research suggests, it won’t do much to save our planet?

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