2010 - %3, April

Why Didn't BP Have a Plan in the Event of a Massive Spill?

Fri Apr. 30, 2010 5:02 PM PDT

Kate Sheppard appeared on Hardball With Chris Matthews to discuss the Gulf of Mexico oil spill and how a lack of regulations for BP and the rest of the oil industry has rendered the cleanup process ineffective.

Kate Sheppard covers energy and environmental politics in Mother Jones' Washington bureau. For more of her stories, click here. She Tweets here.

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Arizona: It Just Got a Lot Worse

—By

| Fri Apr. 30, 2010 4:53 PM PDT

When Arizona Gov. Jan Brewer signed the nation's most draconian immigration law last week, criminalizing illegal immigration (and, many critics say, being a minority), she had a good political reason for doing so: Joe Arpaio.

Joe's the aging sheriff of Maricopa County, Arizona (which includes Phoenix), and his disdain for brown people, civil liberties, federal authority, and Constitutional law are pretty well documented at Mother Jones and elsewhere. A man with a Pravda-esque communications machine that would be the envy of any politician on any level, he lords over Maricopa's swelling prison population with the swagger of an antebellum South Carolina planter driving his slaves. He's made prisoners wear pink panties, stuck them in sweltering tents in the desert, screwed with their food rations, cited fake laws, gone after news reporters, and generally made nativism the reason for his existence on this heavenly sphere.

He made arresting Latinos fashionable and, after many run-ins with the feds over such practices, was likely the main inspiration behind Arizona's new immigration code. In short, Brewer felt she had to sign last week's immigration bill, because she felt Arpaio's breath on her neck. She had to appear as tough on brown people as Arpaio does, lest he decide to challenge her in the GOP primary.

So she signed it. And guess what? Arpaio's still going to run against her. Sources in the sheriff's department, which will likely double as his campaign staff (no new thing there), say his paperwork's filed. And on his Twitter account - where you can read about his Washington Post interview today, or his "crime suppression/illegal immigration" operations briefings, or his anger about "out of town critics" - he recently tweeted that his wife wants him to run. And he's already the frontrunner in Arizona Republicans' minds.

So why not run? What does he have to fear? Latino turnout in the Phoenix metro area? Problem solved!

Here, then, is to Arizona: one of the prettiest states in the union, soon to be the first breakaway republic in the new confederacy of Inner America.

Rights Stuff to Read

—By

| Fri Apr. 30, 2010 1:50 PM PDT

It's not all bad news. Some of it even comes with a choreographed dance number:

The Philippines is going to allow a gay political party to participate in elections. Huzzah!

A shocking number of kids are being paddled in American schools, and an equally surprising proportion of them are disabled.

Oklahoma takes away the rights of women, including rape and incest victims, to get an abortion without watching an ultrasound, as well as their rights to information about birth defects from their doctors.

Nearly a year later, the three American hikers arrested in Iran—one of whom is a MoJo contributor who wrote a piece in one of our National Magazine Award-winning issues—are still in jail.

Insurgents are attacking Afghan girls' schools; the Taliban is gunning women down.

Some US troops made what might end up being the greatest thing to come out of the war in Afghanistan. The video is a close contender to the University of Oregon's a capella number in the beefy-dudes-do-Lady-Gaga contest. If I said I didn't start getting goosebumps 1:27 into that latter one, I'd be lying.

The Great Crist eBay Selloff!

—By

| Fri Apr. 30, 2010 1:08 PM PDT

Two things you can always count on Republicans to do with astounding alacrity: Burn bridges and turn a quick buck. And thanks to the party defection of moderate Florida Gov. Charlie Crist, GOPers plan on doing both in one swift move!

Crist, of course, announced yesterday he'd run for senator as an independent, sidestepping what by all accounts would have been a GOP primary face-smashing at the hands of babyfaced archconservative and Tea Party darling Marco Rubio. The state Republican apparatus, which had recently been purged of its Crist-friendly chairman, wasted no time in implementing its omerta code against the sitting governor, announcing that they'd take down an oil painting of Crist at the party headquarters and dump it for a quick sale on eBay. "He's been gone a long while," state party commissar chairman John Thrasher complained of Crist, after saying he'd sell the painting. [Full video is below.]

This is no small stunt, mind you. That portrait—a $7,500 rendering of the governor who was once called "Chain Gang Charlie"—is actually the focus of a possible probe into financial misappropriations by the state party. And it's tough to tell whether state GOPers were being sincere, or if they were just trying to fit their size 10s into their mouths as usual—like RNC Chairman Michael Steele did yesterday when he blustered: "There will be no senator Crist." Which, of course, could look really bad if Crist wins...and the GOP seeks his vote in their caucus.

As of this writing, there's no oil painting of Charlie on eBay. But there's lots of great other stuff, forming a fungible, melodramatic narrative of the governor's political life to date: the many faces of Crist! Here's a brief selection:

  • An autographed "Charlie Crist: GOVERNOR" business card, along with some cards signed by some other shlubs who run some other states, but who cares about them? The top bid thus far is $9.39, which is slightly more than a buck per governor!
  • A campaign button from Charlie Crist's gubernatorial campaign, reminding conservatives that he hates crime. "You just can't chain a good man down," it reads, along with a shot of the guv, a set of shackles, and a quote from Crist himself: "Let's bring hard labor back to the penal system." [UPDATE: Sold for $11.61!!]
  • A "John McCain/Charlie Crist" button from the 2008 presidential campaign. Has a reserve price of $1.99. No bids yet.
  • A button calling Crist "The Right Choice" for president in 2012. Available for instant purchase in bulk quantities!
  • Then there's the seller who claims to possess "PICS of FL GOV CHARLIE CRIST snorting lines of COCAINE!" (Why not? After all, he is a graduate of that esteemed party school, Florida State.) They can be yours for a starting bid of $600,000. Hey, the seller's got a 100 percent positive rating. So buy with confidence!

Fiore Cartoon: Arizona's Police State

Fri Apr. 30, 2010 12:39 PM PDT

Arizona's new draconian immigration bill has been in the news recently. President Obama called it "misguided" and our own Adam Weinstein described it thusly: "Arizona has opened US culture to two words that previously were the exclusive province of Nazi Germany and the communist bloc: 'Papers, please.'" As basic notions of fairness crumble in Arizona, Mark Fiore imagines a future in which even Governor Jan Brewer herself is arrested under suspicion of foreign citizenship.

This cartoon requires Macromedia's Flash Player. If you don't see the cartoon above, download the player here.

Mark Fiore is an editorial cartoonist and animator whose work has appeared in the Washington Post, the Los Angeles Times, the San Francisco Examiner, and dozens of other publications. He is an active member of the American Association of Editorial Cartoonists, and has a web site featuring his work.

Obama's Offshore Nightmare

—By

| Fri Apr. 30, 2010 12:25 PM PDT

The giant patch of oil seeping onto Louisiana coast today is sure to have dire environmental consequences. But the explosion and subsequent spill are also spurring political pushback against the Obama administration's plans to vastly expand drilling off the shores of the United States, a scheme unveiled just one month ago.

The White House called together a press conference yesterday afternoon, lining up heads of the Coast Guard, the Department of Homeland Security, the Interior, and the Environmental Protection Agency to discuss the state of the spill. The administration pledged an "all hands on deck" approach to the spill, but maintained its support of offshore expansion. "We need the increased production," said White House press secretary Robert Gibbs. "The president still continues to believe the great majority of that can be done safely, securely, and without any harm to the environment."

But by Friday morning, the White House had shifted its stance a bit, with adviser David Axelrod announcing plans to pause drilling expansion in an appearance on Good Morning America. But Axelrod was clear that this isn't a permanent move. "All he has said is that he is not going to continue the moratorium on drilling but ... no additional drilling has been authorized and none will until we find out what happened here and whether there was something unique and preventable here."

Obama tried to strike a balance in a statement Friday between condemning the incident and holding the line on expansion. "I continue to believe that domestic oil production is an important part of our overall strategy for energy security, but I've always said it must be done responsibly, for the safety of our workers and our environment," said Obama.

But the White House is under increasing pressure to permanently forestall its offshore plans. What was extended as an olive branch to moderate Democrats and Republicans in hopes of getting a comprehensive energy plan in place has quite literally blown up in Obama's face. Obama had opposed offshore drilling in the early days of his candidacy, before switching to support it amid the "drill, baby, drill" calls of the summer of 2008. It was at that time Congress also allowed the long-standing moratorium on drilling in the outer continental shelf to expire, paving the way for the administration's announcement of plans to open new areas to drilling last month.

Obama has been getting plenty of heat for the concession from coastal state Democrats. New Jersey Democratic Sen. Frank Lautenburg condemned Obama's expansion plan as "Kill, baby, kill," before the rig explosion claimed 11 human lives and imperiled sensitive Gulf Coast ecosystems. Yesterday, Florida Democrat Bill Nelson fired off a missive to Obama, calling for an "immediate halt" to new drilling and warning that he would introduce legislation that would prohibit the Interior Department from enacting its new lease plans. A group of New Jersey Democrats, led by Sen. Robert Menendez, also called on the White House to stand down on offshore drilling Friday, asking the administration to "suspend all action on expanding such exploration on the Outer Continental Shelf immediately and reverse any plans to drill off the Atlantic coast."

[Read more]

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Nagaland for Dummies

—By

| Fri Apr. 30, 2010 12:00 PM PDT

A Mother Jones human rights reporter, a Berkeley Journalism School Rotary World Peace Fellow, and an NPR employee walk into a Bay Area coffee shop that offers vegan doughnuts and garnishes the baked goods with sea salt. I'm pretty sure the punch line has something to do with us lamenting American indigenous oppression and widespread South Asian insurgency.

Which, yeah, is exactly what happened. To the former discussion: It turns out Oklahoma is even more messed up than I'd thought—and I'm a person who was just scathingly tweeting about it the other day. The NPR gal, who used to call Oklahoma home, explained the festivities of Land Run Day: In commemoration of the 1889 afternoon that settlers ran around claiming (formerly Indian) property, kids in elementary schools statewide claim plots of a playground, set up cardboard general stores, and pretend to barter for cigarettes with student descendants of the Indians the original holiday displaced.

To the latter discussion: I now know that I need to buy a good book about Nagaland. Or write one. Or make an incredibly violent soap opera about it. This northeastern Indian state is apparently home to 130 armed groups, 2 of which are made up of former headhunters pretty recently reformed by the Baptists, one of which wants autonomy, one of which wants secession, neither of which is going to happen. Culturally distinct from many other parts of India—in Nagaland, they sacrifice and eat cows—Nagaland has long felt isolated and neglected. Some of the militias that formed for political reasons devolved into petty but bloody extortionist groups; the Indian army has reenacted an old British Empire law that allows soldiers to shoot any suspected law-breaker; one protester has been in jail for 10 years, since she saw Indian armed forces gun down 10 people who were waiting for a bus and was arrested for going on hunger strike.

See, you can learn a lot from well-traveled career-driven hippies. Also, sea salt is actually pretty good on chocolate chip cookies. If I get invited to a community-supported-agriculture dinner party anytime soon, I might impress my hosts by arriving with dark-chocolate-chunk cookies with a little salt on top. Pink Himalayan salt, obviously.

Friday Cat Blogging - 30 April 2010

—By

| Fri Apr. 30, 2010 11:53 AM PDT

Today is "favorite things" day. (Actually, that's most days around here.) On the left, Domino is stretched out in the 10 am sunny patch and looking at me suspiciously because she wants to get on with her nap. On the right, Inkblot is eating breakfast. This is, I admit, not the most flattering picture I've ever taken of him, but I thought everyone would enjoy the hint of tongue action. Happy weekend, humans!

Quote of the Day: Laura Bush

—By

| Fri Apr. 30, 2010 11:29 AM PDT

From Laura Bush, in an interview with Ladies Home Journal:

George loves to tell the story of how all his Midland friends would come to the Oval Office and say, "I can't believe I'm here." And then they looked at him. Couldn't believe he was there either.

I think I understand how they felt.

Prop Trading and the Volcker Rule

—By

| Fri Apr. 30, 2010 11:11 AM PDT

Mike Konczal interviews Jane D’Arista, a research associate at PERI, about the Volcker Rule and its proposed ban on proprietary trading by banks, the part of their business in which they borrow money to trade on their own accounts:

Prop trading only works if [banks] can borrow enough to substantially leverage their own capital. They have to set up a situation in which the cost of borrowing is lower than the return on the assets or derivatives in which they are investing. One example is what they are doing right now — borrowing very cheaply from the Federal Reserve and earning 200 basis points, let’s say, on buying Treasury securities.

....The only way prop trading is profitable is if the scale is enormous, especially in periods of low interest rates when margins are thin. Also because there is — has to be — a maturity mismatch to generate that margin. Except in rare periods when yield curves are inverted, low interest rates are available if borrowing is short-term lending and the desired higher rates on investment are available on longer-term assets. There is a liquidity risk if something happens in the market and the cost of rolling over the short-term borrowing rises....Every time there’s been a shock — Franklin National in 1975, Continental Illinois in 1984, Long Term Capital Management in 1998 — one or more big institution was not able to cover its position because its short-term funding disappeared and central bank liquidity had to be rushed to the rescue.

....Now people might say if we remove the prop trading desk from the firm its no less risky because it will be outside the firm, its like were not going to make it less risky, it will just move it around. What should people think in terms of taking the prop desk out of firms that have access to the fed window?

....What’s important about the ban on banks is that you end the channel through which the backup to the Fed creates the moral hazard that supports excessive risk. If the amount of funding banks can supply to one another and to other financial institutions is curtailed, prop trading will have to shrink because the repo market will shrink.

That’s what section 610 of the Dodd bill would do, shrink the repo market. It would restrict loans by banks to other financial institutions, requiring that the same limit on loans to a non-financial borrower in relation to capital that has been in effect for over a hundred years also apply to financial borrowers. In the case of financial institutions, the limit would apply to credit exposures involving repos, securities purchases and sales and a very broad list of derivatives.

....The growth of the offshore banking market and the invention of the domestic repo market [in the 90s] dramatically raised the amount of intra-sectoral borrowing and brought the issue into focus....About the same time, the Gramm-Leach-Bliley act gave permission to banks to borrow more for both necessary and other reasons — that is, to increase the share of non-deposit liabilities on their balance sheets. So they set up this whole interconnection game in which they borrow from one another and, in the process, are creating liquidity by monetizing debt. Of course, its all on paper — its all a pyramid — and in the end it can collapse and did.

The solution is to limit the funding that goes into prop trading as well as banning the trading itself for those institutions that have access to the Fed. And if that were done — if section 610 became law — even the investment banks wouldn’t be able to engage in excessive proprietary trading because they couldn’t get the funding to do so.

The whole thing is a little long and wonky, but worth a read. And while you're at it, if "off balance sheet" is a mystery to you, you might want to check out Mike's interview with UMass lecturer Jennifer Taub as well. It's good tutorial stuff.