Given that credit default swaps caused the largest financial crisis since the Great Depression, you'd think that the folks responsible for them, people who are now surviving on the taxpayer dime, might be laughed out of Washington if they were to suggest that they be the ones to decide how to regulate them. Sadly, it's the opposite.
On Monday, the Times' Gretchen Morgenson published a little-noticed but excellent piece about the CDS Dealers Consortium, a group created in November by the nine biggest participants in the derivatives market to lobby against stricter regulation of derivatives. The move came a month after five of them had received bailout money. The group's head lobbyist, Edward J. Rosen, who was paid $450,000 by the banks for four months, wrote a secret policy memo that he shared with the Treasury Department and leaders on Capitol Hill. A few months later Tim Geithner released a suspiciously similar regulatory plan.
It gets much worse: in February Rosen testified before Congress on derivaratives without disclosing his ties to the CDS Dealers Consortium. From 2007 to 2008, five banks in the consortium spent a combined $47.7 million on campaign donatations and lobbying.
Geithner's bank-friendly plan to regulate derivatives would force them to be traded on a privately-managed clearinghouse, rather than on an open exchange, similar to the stock market, where many experts believe that they'd be less subject to manipulation. Morgenson reports:
Critics in both the financial world and Congress say relying on clearinghouses would be problematic. They also say Mr. Geithner's plan contains a major loophole, because little disclosure would be required for more complicated derivatives, like the type of customized, credit-default swaps that helped bring down A.I.G. A.I.G. sold insurance related to mortgage securities, essentially making a big bet that those mortgages would not default. . .
But increased transparency of derivatives trades would cut into banks' profits — hence the banks' opposition. Customers who trade derivatives would pay less if they knew what the prevailing market prices were.
The Times piece is long, but reading it goes a long way towards understanding what is often a huge gulf between the Obama Administration's rhetoric and its tepid approach to bank regulation.
In January, 2007, I visited the Wichita, Kansas, abortion clinic operated by Dr. George Tiller, who was shot to death in church yesterday by an anti-abortion crusader. Tiller's clinic had just become the last one in town. A shuttered clinic nearby had been purchased by an anti-abortion group, Operation Rescue, which was in the process of converting it into its headquarters, complete with a prayer garden and a memorial to the 50,000 unborn children that the group claims were murdered there. Over the next two days, I learned a lot about Wichita's radical hothouse of abortion foes.
Troy Newman, Operation Rescue's charismatic leader, who some have suspected is partly to blame for Tiller's murder, drove around town with me and vented his rage that nobody had yet shut down Tiller, who he called "the abortionist to abortionists." A few days earlier, Wichita's district attorney, Nola Foulston, had moved to dismiss indictments against Tiller that had been filed by the state's outgoing attorney general. She later conducted her own investigation of Tiller and found he'd complied with the law, but Newman believed Tiller's clinic had killed a woman. "Our field plan is to expose the lies and misdeeds that they do," he said. "It's pretty simple: They're scum of the earth, they're dirtbags."
It struck me that Newman was deeply disillusioned with the legal system. "All laws are thrown out the window once you talk about abortion," he complained. "In the movement, we call it 'abortion distortion.'"
The next morning, at a bright cafe in the heart of town, Newman and two women discussed how to turn up the pressure on Foulston. Operation Rescue is famous for a strategy of harassing its foes outside their homes. "People have a public identity that they like to keep seperate from their private identity," Newman explained, "but we believe you can't separate the two when you are talking about killing babies. And people are more likely to listen to what you say and be influenced when you bring the issue home to where they work and live." It was a full-court press of constant annoyance: "You poke, poke, poke until they scream," he added, "and then you just keep poking some more."
Despite Newman's tough tactics, he was civil and professed to have friends who disagreed with him on abortion. After spending two days with him, I'm willing to take him on his word that his pro-life views extend to grown humans, even abortion doctors. But it was easy to see the militaristic rhetoric of Newman, who is the son of an army recruiter, was goading people on towards something more extreme. "A lot of what we do is demoralize the enemy," he said. "This is a battle, and that's the strategy."
Later that afternoon I drove to Tiller's clinic and was promptly booted from the parking lot by a security guard. It was too dangerous to allow lone men inside, I was told when I called the clinic on my cell phone. So I parked on the curb, next to a "truth truck" that displayed a giant billboard of an aborted fetus.
Arrayed on the grassy median in front of Tiller's walled building were rows of white crosses and the plastic figurines of a nativity scene. Writen on chalk near the building's drivway was Psalm 94:20: "Can unjust judges be allied with you God? No!" Anti-abortion activists sat alongside the driveway in lawn chairs and pounced at any cars that tried to enter. As a frightened young woman was driven inside, one of them commented, "Another parent bringing in their daughter to have their grandchild killed."
An abortion protester who would only give his name as Brian spoke favorably of an array of local anti-abortion groups in town. He declined to give his affiliation, but pointed out that a group called Operation Save America had bought a house just across the street from Tiller's office. "Everybody has got a different approach," he said, "a different style."
Those words seem much more chilling when you consider the multiple attempts on Tiller's life. Newman's world is also one in which David Leach, publisher of the Prayer and Action News, which printed essays by Tiller's alleged murderer, can tell the New York Times that "To call this a crime is too simplistic. . .There is Christian scripture that would support this." Religious fundamentalism is still alive and well in the heartland, and isolation and defeat is likely to make some of its radicals even more desperate.
In the week after 9/11, unleashed deep within a Yemeni prison was what might have been the most effective interrogation tool ever devised by the U.S. Government. It could be more powerful than waterboarding, sleep deprivation, naked photos, or barking dogs. It is a monster that resides within almost all of us, a shaggy, blue-haired beast with an uncontrollable urge to devour oven-baked sweets while growling, "Coooookie!"
From Time comes this account of FBI interrogator Ali Soufan's successful attempt to win over Al-Qaeda operative Abu Jandal, who had been closer to Osama bin Laden than any other terrorist ever captured:
He had no intention of cooperating with the Americans; at their first meetings, he refused even to look at them and ranted about the evils of the West. Far from confirming al-Qaeda's involvement in 9/11, he insisted the attacks had been orchestrated by Israel's Mossad. While Abu Jandal was venting his spleen, Soufan noticed that he didn't touch any of the cookies that had been served with tea: "He was a diabetic and couldn't eat anything with sugar in it." At their next meeting, the Americans brought him some sugar-free cookies, a gesture that took the edge off Abu Jandal's angry demeanor. "We had showed him respect, and we had done this nice thing for him," Soufan recalls. "So he started talking to us instead of giving us lectures."
All hail the Cookie Monster! Seriously, his brand of monstrousness might be the the only kind we need:
Soufan, now an international-security consultant, has emerged as a powerful critic of the George W. Bush — era interrogation techniques; he has testified against them in congressional hearings and is an expert witness in cases against detainees. He has described the techniques as "borderline torture" and "un-American." His larger argument is that methods like waterboarding are wholly unnecessary — traditional interrogation methods, a combination of guile and graft, are the best way to break down even the most stubborn subjects.
More than half of the 15 trillion gallons of sewage Americans flush annually is processed into sludge that gets spread on farmland, lawns, and home vegetable gardens. In theory, recycling poop is the perfect solution to the one truly unavoidable byproduct of human civilization. But sludge-based as fertilizer can contain anything that goes down the drain—from Prozac flushed down toilets to motor oil hosed from factory floors. That's why an increasing number of cities have begun to explore an alternative way to dispose of sludge: advanced poop-to-power plants. By one estimate, a single American's daily sludge output can generate enough electricity to light a 60-watt bulb for more than nine hours. Here are the six most innovative ways that human waste is being converted to watts:
Digesters similar to brewery casks house anaerobic bacteria that eat sludge and belch out methane. This technology is the oldest, cheapest, and most proven poop-to-power method. Even so, fewer than 10 percent of the nation's 6,000 public wastewater plants have the digesters; of those, just 20 percent burn the methane gas for energy (the rest simply flare it off). Flint, Michigan, and several other cities use the methane gas to fuel fleets of city buses. The problem with anaerobic digesters is that they only reduce sludge's volume by half and capture a portion of its embedded energy.
Turd Cell Smashers
Destroying the cell walls in sludge—by heating it under pressure, zapping it with ultrasonic waves, or pulsing it with electric fields—boosts its methane production by 50 percent or more in anaerobic digesters. On the downside, researchers have found that some of these processes can unleash nasty odors and even a "chemical attack" on sewage machinery.
Last summer, Los Angeles began injecting sludge into a mile-deep well, where pressure and heat are expected to release enough methane to power 1,000 homes. The well also dissolves and sequesters carbon dioxide that the sludge would normally release, removing the equivalent exhaust of about 1,000 cars per year. "This renewable energy project is absolutely electrifying," Los Angeles mayor Antonio Villaraigosa told the LA Times. "It will save money and make money."
As a cheaper green option, some 50 waste plants in 20 countries have installed versions of UC Berkeley professor William J. Oswald's Advanced Integrated Wastewater Pond Systems Technology--large open-air ponds that primarily rely on anaerobic digestion and photosynthesis to break down sludge and convert it into a fertilizer or animal feed of nitrogen-rich algae. The algae in turn can be used as a feedstock for biofuels. Rich Brown, an environmental scientist at the Lawrence Berkeley National Laboratory, sees an obstacle in the ponds' huge footprint: "For rural areas it’s great," he says. "For San Francisco it wouldn’t work so well."
Sludge gasification plants are popular in Europe and especially Germany. A low-oxygen reaction transforms the solids in sludge into a carbon-rich "char" similar to BBQ briquettes. Next, the char is gasified in the presence of air to produce a syngas that can be burned for energy.
Last year, Atlanta-based EnerTech built the world's first commercial sludge "pyrolysis" plant in Southern California. Its patented SlurryCarb process converts sludge from a third of Los Angeles and Orange Counties into char pellets that replace coal at a nearby cement kiln; its ash is mixed into the cement.
One Small Poop for Man. . .
With billions in stimulus funds slated for wastewater improvements, is the time right for poop power? Such efforts, which reduce landfilling and emissions, have earned praise from some anti-sludge groups. Caroline Snyder, the founder of Citizens for Sludge-Free Land, calls it a "win-win situation."
The EPA says sludge power holds promise, but it's not ready to quit pushing sludge as a wonder fertilizer. This hasn’t deterred the sewage industry, which sees a chance to get into the renewable energy business and put a stop to the stream of health complaints and costly lawsuits. "After almost 40 years of working in biosolids," a sewage industry official wrote in a recent newsletter. "I never thought I’d say this: it is an exciting time for sludge!"
H/T to the State of Science Report: Energy and Resource Recovery from Sludge, published by the Global Water Research Coalition. Photo from Flickr user gtmcknight used under creative commons license.
With the price of oil in the bucket, environentalists have been acting as if Canada's speculative tar sands boom is all but dead. They shouldn't. A report released today by the energy consultancy IHS CERA predicts a nearly 80 percent increase in tar sands production by 2035, and that's assuming strong environmental regulation, weak growth, and low oil prices. Should things work out better for Big Oil, the tar sands will pump out five times the crude they do now and account for a staggering 37 percent of U.S. oil imports.
CERA suggests that this might not be such a bad thing. In an analysis of 11 previous studies, it found that "well-to-wheels" greenhouse gas production from the tar sands is only 5 to 15 percent higher than the average crude oil processed in the United States. Last year, I reported that a team of UC Berkeley researchers had calculated a 30 percent well-to-wheels difference. Either figure is significant when multiplied a potential tar sands output of 6.3 million barrels per day.
Factor in devastation to Canada's boreal forests, streams, and native communities, and the swap of climate security for energy security seems even more faustian. Once we exhaust the tar sands, we'll move on to liquefied coal, which emits 80 percent more greenhouse gasses than regular oil, and then oil shale, which spews twice as much. When will it all end? And more important, what will the weather look like?