2010 - %3, March

Republicans Hate Obama's Offshore Plan Too

| Wed Mar. 31, 2010 3:23 PM EDT

Environmental groups and some coastal state senators are ticked off by today’s announcement on offshore drilling. But so, predictably, are Republicans, who maintain that the Obama administration’s massive expansion of oil and gas drilling doesn’t go far enough.

House Minority Leader John Boehner (R-Ohio) fired off a statement declaring that the Obama administration "continues to defy the will of the American people" by not letting oil companies drill everywhere immediately.

"It's long past time for this Administration to stop delaying American energy production off all our shores and start listening to the American people who want an ‘all of the above’ strategy to produce more American energy and create more jobs ... Republicans are listening to the American people and have proposed a better solution--the American Energy Act--which will lower gas prices, increase American energy production, promote new clean and renewable sources of energy, and encourage greater efficiency and conservation.

He also made sure to get in a pot-shot at the Obama administration's plans to regulate greenhouse gas emissions, just for good measure:

At the same time the White House makes today's announcement, the Environmental Protection Agency (EPA) is plotting a new massive job-killer that the American people can’t afford: a cascade of new EPA regulations that will punish every American who dares to flip on a light switch, drive a car, or buy an American product. Americans simply don’t want this backdoor national energy tax that will drive up energy and manufacturing costs and destroy jobs in our states and local communities.

Clearly, these overtures to Republicans on energy are finding resounding success.

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Insider Trading

| Wed Mar. 31, 2010 2:56 PM EDT

Some facts for your consideration:

Fact 1: If you trade stocks based on insider knowledge (for example, maybe you know that next week's earnings announcement will be disappointing), that's illegal.

Fact 2: Ditto for bonds.

Fact 3: Credit default swaps are basically insurance on bonds. So buying or selling CDS coverage based on insider knowledge is illegal too. Right?

Well hold on there pardner! You're assuming that credit default swaps are securities. Because insider trading laws only apply to securities. But swaps are — well, they're just private contracts between two consenting adults. Nothing security-ish about them. Capiche? So forget this whole insider trading thing.

Felix Salmon explains further here and then says maybe we ought to do something about this:

The first obvious thing that needs to be done here is to give the SEC formal jurisdiction over single-name CDS....The second thing which ought to be considered is moving CDS trading onto an exchange, where it can be regulated. And it's almost certain, at this point, that that's not going to happen. In fact, I asked Craig Donohue, the CEO of CME Group, about this at yesterday's Reuters Global Exchanges and Trading Summit. He's very keen on clearing over-the-counter CDS trades, but he said that he's come to the decision over the past couple of years that he's not interested in listing CDS on any of his exchanges directly. The big CDS players are his clients, they make lots of money from their OTC trading, and he seems to have no appetite to start competing with them on that front, rather than simply facilitating the clearing of their trades.

Financial regulatory reform is looking better all the time, isn't it? No serious capital or leverage requirements. A consumer protection agency housed at the Fed and barely worth the paper it's implemented on. And no exchange trading of CDS because the exchanges don't want to do it and Congress probably won't force them to. I don't know about you, but I'm about ready to say we should just scrap the whole thing and admit that we're OK with Wall Street plutocrats continuing to run the country for their own benefit until they destroy the country properly. At least that would have the virtue of honesty.

And by the way: Felix will shoot me for saying this, but I've pretty much come to the conclusion that credit default swaps should simply be banned. Their benefits are actually pretty minimal, while their vulnerability to abuse seems almost unlimited. I'm having a harder and harder time these days buying the case that we can regulate them into submission.

Lautenberg: Obama Plan is "Kill, Baby, Kill"

| Wed Mar. 31, 2010 2:11 PM EDT

Frank Lautenberg (D-NJ) really doesn’t like today's offshore drilling announcement from the Obama administration:

"Drilling off the Virginia coast would endanger many of New Jersey’s beaches and vibrant coastal economies,” stated Lautenberg. “Giving Big Oil more access to our nation’s waters is really a 'Kill, baby, kill' policy: It threatens to kill jobs, kill marine life and kill coastal economies that generate billions of dollars. Offshore drilling isn’t the solution to our energy problems, and I will fight this policy and continue to push for 21st-century clean energy solutions."

The senator is one of 10 who said last week that including more oil and gas drilling in an energy and climate plan would be a deal-breaker for them.

Climate Hacking 101

| Wed Mar. 31, 2010 2:05 PM EDT

Can the climate be hacked to keep the Earth's surface temperatures manageable? Can we get away with hijacking natural cycles (emulating volcanoes, pumping nutrients into the oceans, tinkering with the solar reflectivity of clouds) without radically screwing up weather patterns—or starting a war? Or is it a cop-out even to talk about this, rather than focus on kicking ass and taking names on the carbon emissions front?

Huh? Did he say "war"? Well, since climate heeds no human boundaries, any serious intervention by scientists could require a level of global cooperation that makes Copenhagen look like a cakewalk—and we all know how that turned out. If any country were to start testing this stuff unilaterally on a big scale, let's just say it would not be terribly popular.

But all the technical, cultural, and political roadblocks didn't dissuade leading geoengineering researchers from attending last week's big powwow at the Asilomar Conference Center—a longtime science haven and site of a similar meeting on genetic engineering back in 1975. Like that historic meeting, this one's ostensible purpose (activists envision something more nefarious) was for the scientists to discuss possible ground rules for future experimentation and for navigating, well, the technical, cultural, and political roadblocks. And like that meeting, this one has been criticized as an attempt to legitimize a potentially dangerous area of science.

Not to say the attendees were all gung-ho to put their ideas into practice. As climate scientists deeply concerned about human contributions to global warming, most were somewhat wary about the implications of climate hacking. That's one thing reporter Jim Rendon learned when we sent him to Asilomar to check out the scene. His dispatches below, and their links to our past geoengineering coverage, will give you a sort of Climate Hacking 101. Considering the world's inaction on addressing the most pressing problem of our time, you'll need it. We're all going to be hearing a lot more about human volcanoes and so on in the not too distant future.

Dispatch 1: Geoengineering Bad Fixes for Worse Problems
As climate-intervention scientists meet, fans see a Plan B where critics see a delay tactic.
Dispatch 2: Who Eats Geoengineering Risk?
Any large-scale test would require true international cooperation.
Dispatch 3: Do We Test Geoengineering?
Any meaningful field run would be a contentious, high-risk venture.
Dispatch 4: Geoengineering for Fun and Profit
Should scientists—or anyone—be allowed to cash in on high-risk climate fixes?

The New Tower of London

| Wed Mar. 31, 2010 1:49 PM EDT

Below I commend to your attention "London's answer to the Eiffel tower," scheduled for completion prior to the 2012 Olympic Games. "The structure will officially be called the ArcelorMittal Orbit, after steel magnate Lakshmi Mittal, the richest man in Europe, who is funding it." Naturally, Boris Johnson is deeply involved too. Its designer says: "There is a kind of medieval sense to it of reaching up to the sky, building the impossible. A procession, if you like. It's a long winding spiral: a folly that aspires to go even above the clouds and has something mythic about it." Though at only 400 feet, it's not clear which clouds it will go above.

Your opinion is naturally solicited.

Obama: The "First Gay President"?

| Wed Mar. 31, 2010 1:47 PM EDT

Judging from the Family Research Council's official bio of its vice president Tom McClusky, you'd think the guy was a pretty mild-mannered, if conservative, politico. He's worked for Bush the Elder, Jack Kemp, and George Allen, among others—not your typical Tea Party rabble—and he's written lots of anti-tax policy papers. He appears like the sort of staid, quiet guy who'd say something like this to Fox News: "It seems like for only six months, every two years—right around election time—that we're even noticed."

Fortunately for the good-humored progressive, McClusky fills that down time with highly entertaining ramble on a blog for the right-wing, "family values"-oriented FRC. It's called the Cloakroom—not to be confused with a closet, for it is here that McClusky details the evils of homosexuality...as well as women's rights, homeland security (when it's Democratic-run), and the like. And few of his Cloakroom rambles are as fun as the one he posted yesterday calling Barack Obama gay. The First Gay, in fact. Wrote McClusky:

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Shill, Baby, Shill

| Wed Mar. 31, 2010 1:24 PM EDT

Over at The Corner, Ilya Shapiro explains Barack Obama's U-turn on offshore drilling in terms that the conservative faithful can understand:

Recall that on the campaign trail in June 2008, candidate Obama declared that, “when I’m president, I intend to keep in place the moratorium here in Florida and around the country that prevents oil companies from drilling off Florida’s coasts.” (See video of that speech here.)

Today, however, President Obama announced plans to lift a 20-year moratorium on oil exploration and development in Atlantic coastal waters running from Virginia to Florida, as well as further activity off Florida’s Gulf Coast.

....To paraphrase John Maynard Keynes [...] the facts have been rammed down Obama’s throat and so he had the good sense to change his mind. Well done, Mr. President.

Jeez, are conservatives really this gullible? Yes, Obama opposed offshore drilling in the summer of 2008, but he then famously changed his tune just a few weeks later. I was there! I remember him doing it! I was even sort of annoyed at the time. In August he hinted at compromise and then, talking about energy strategy in September, he said, "And that means, yes, increasing domestic production and off-shore drilling." This comes via NBC's First Read, which also had to refresh its institutional memory on this subject.

Hey, we all cherry pick. I get it. But you can't claim that the Montgomery bus boycott was caused by the Civil Rights Act without getting laughed at, and you can't claim that "the facts have been rammed down Obama's throat" when his position was set 18 months ago and his interior secretary has been busily working on regs for the past year. Better spin, please.

Preying on the Weak

| Wed Mar. 31, 2010 12:32 PM EDT

Over at the Washington Independent, Martha White has a good piece about tax preparers who prey on low-income filers by hard selling refund anticipation loans, which typically boast effective interest rates of anywhere from 50% to 1000%. The whole thing is worth reading, but here's an interesting tidbit:

The big appeal of these loans, the Woodstock Institute’s Rand points out, is the prospect of instant money. Already, taxpayers who e-file and elect to receive their refund via direct deposit generally get their returns within two weeks. If the IRS sped up its payments to taxpayers outside the mainstream banking system and allowed them to receive that money on a debit card similar to those used for other benefits, the appeal of RALs would be diminished. “These improvements the IRS could make would eliminate a need for refund anticipation loans,” Rand said.

Here's a guess: an awful lot of low-income taxpayer have simple returns that could be pre-filled out by the IRS. This isn't done today largely because of opposition from tax preparers, who don't want to lose any business. But guess what else they might lose: their RAL business. If you received a pre-prepared statement in the mail and could accept it with a simple phone call or e-filing, there's no reason the feds couldn't get refunds out within days. With no tax preparer pushing the loans, and refunds available quickly in any case, the entire shifty industry would be wiped out. And it would be wiped out by making government more efficient. Who could object to that?

A Long War: Did Bush Mislead US into Iraq?

| Wed Mar. 31, 2010 12:28 PM EDT

Last week I noted that Karl Rove, Ross Douthat, and Peter Wehner had so far declined my challenge to a duel—that is, to respond to an article I had written (in response to their claims that George W. Bush had not misled the American public into the Iraq war) that listed a sampling of false Bush administration statements that went far beyond good-faith reliance on faulty intelligence. But a day later, Wehner, a PoliticsDaily.com columnist who worked in the W. White House, took a stab at it in an article addressing the false assertions I had highlighted. One problem: Wehner ignored several of the extreme and significant Bush misrepresentations I had listed. Thus, regrettably, I had to reply to his reply:

Let me remind readers -- those who are not weary of all this -- about the statements Wehner declines to confront. In August 2002, as the Bush White House was ramping up its sales campaign for war in Iraq, Cheney delivered a high-profile speech in which he declared that there was "no doubt" that Saddam Hussein was "amassing" WMDs "to use against our friends, against our allies, and against us." Yet a few months earlier, the head of the Defense Intelligence Agency had testified to Congress that Saddam was only maintaining "residual" amounts of WMDs (which, as it turned out, was itself an overstatement). Perhaps more important, at the time of Cheney's speech, there was no intelligence indicating that Hussein intended to use WMDs against the United States, which would have been suicidal. In fact, intelligence reports suggested he was not interested in a WMD showdown with Washington. That is, there was no factual basis for Cheney's dramatic statement. No wonder Wehner avoids dealing with it.

Wehner also ducks addressing Bush's pre-war attempt to link Hussein to al-Qaeda. That was a key part of the administration's pitch for war. On Nov. 7, 2002, Bush proclaimed that Hussein "is a threat because he's dealing with al-Qaeda." Yet as the 9/11 Commission later noted, there was no intelligence confirming an operational relationship between Iraq and al-Qaeda. Nevertheless, in March 2003, Cheney insisted that Hussein had a "long-standing relationship" with al-Qaeda. Moreover, Cheney again and again tried to tie Hussein to al-Qaeda by referring to an unconfirmed intelligence report indicating that 9/11 ringleader Mohamed Atta had met with an Iraqi intelligence officer in Prague. The CIA and FBI, though, had discounted this report, and the 9/11 Commission later said that it was indeed bogus. So here was the vice president of the United States pushing phony information, after his government's own intelligence experts had said there was no confirmation for it. How reckless was that? It's not surprising that Wehner ignored this part of the challenge.

And Wehner overlooks one of Bush's biggest whoppers. At a Dec. 31, 2002, press conference, Bush maintained, "We don't know whether or not [Hussein] has a nuclear weapon." This comment suggested that Hussein -- oh my God! -- might already possess these dangerous weapons. The faulty intelligence available at the time had errantly declared that Iraq was "reconstituting" its nuclear weapons program, but it had also concluded Iraq would not be able to produce a nuclear weapon for years. There was no basis for Bush to say that Hussein already could be nuclear-armed. Clearly, Bush was doing so to rile up the public. Wehner is silent on this point.

So Wehner has nothing to say about (1) Cheney hurling an intelligence-free claim that Saddam was developing WMDs so he could attack the United States; (2) Bush and Cheney hyping the connection between Saddam and the mass murderers of 9/11; or (3) Bush resorting to scare-'em rhetoric about a nuclear Iraq that had no foundation in the available intelligence. On these fronts, Bush, Cheney, and their aides exhibited a reckless disregard of the facts as they tried to whip up public support for their war. But none of that is on Wehner's radar screen. Which calls into question his entire attempt to beat back the proposition that Bush bamboozled the public.

As for those statements Wehner does attempt to address, he mostly ends up defending Bush-Cheney spin. That's not surprising. If you care about the back and forth, I unwind all this spin here. And I note that Wehner side-steps a fundamental point:

I closed my [original] column with a question:

Can Wehner, Rove and Douthat state that Bush carefully reviewed the intelligence in order to present to the public an accurate depiction of what was known and not known about the WMD threat possibly posed by Saddam?

It's telling that Wehner does not attempt to concoct a response to that query.

...The bottom line is undeniable: Bush and Cheney repeatedly issued false statements to guide the nation to war, and they made no concerted efforts to guarantee that they were providing the public with the most realistic depiction of the threat. They were not interested in an honest debate; they wanted war.

The Bush gang will wage this battle for years to come—until their dying days, I presume. But no matter how hard they try to explain away all of the false assertions Bush made to sell this war, they simply cannot argue that he met his first obligation as commander in chief: to take great care in assessing a potential threat to the United States before sending Americans overseas to kill and die for their country.

Running to the Right

| Wed Mar. 31, 2010 11:51 AM EDT

As you may know, eBay zillionaire Meg Whitman is running for governor in California. She's been pretty assiduously avoiding reporters who might ask real questions, but she is running ads and giving speeches:

Whitman was asked by an attendee at a Redondo Beach campaign event whether as governor she would "force your attorney general to file suit" against the [healthcare] reforms, as more than a dozen attorneys general in other states have said they would.

"The answer to that is yes," said Whitman, drawing the most sustained, and loudest, applause of the hourlong event.

This is quite a campaign we're having. In a nutshell, nobody on the Democratic side really wants to run, so Jerry Brown is getting a free ride to an encore nomination. (Jerry Brown!) On the Republican side, we have two mega-rich candidates, Whitman and Steve Poizner, who, as near as I can tell, are basically fairly moderate conservatives. This, however, is completely unacceptable to California's GOP, so they've been spending tens of millions of dollars running ads with one purpose: to position themselves as heirs to Barry Goldwater and their opponent as more liberal than Nancy Pelosi. It's a pretty unedifying spectacle. And what makes it even worse is that despite the fact that they both have enormous trainloads of money to spend, they keep running the same damn ads over and over and over again. It's really boring.

But that's what it takes to win the admiration of California Republicans these days: faux pandering on idiotic questions like repealing healthcare reform, which Whitman knows perfectly well she can't do and wouldn't work even if she did. I can't wait for Poizner's response, which will probably try to paint her as a sellout for not demanding that California secede from the union if healthcare reform isn't repealed. It's only March, but the silly season is already well underway here.