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Elizabeth Warren: The Feds Are Far Too "Cozy" With Wall Street

| Wed Oct. 1, 2014 5:04 PM EDT

Pointing to recently leaked audio recordings between officials at the Federal Reserve and Goldman Sachs bankers, Sen. Elizabeth Warren (D-Mass.) is slamming regulators for being far too timid and compliant when it comes to laying down the law with big banks.

"Well, ultimately this report tells us exactly what we already knew — that the relationship between regulators and the financial institutions they oversee is too cozy to provide the kind of tough oversight that's really needed," Warren said in an interview with NPR.

While the secret recordings, which were captured by former bank examiner for the Federal Reserve Carmen Segarra, do not expose any flagrant wrongdoing by either side, they do reveal an uncomfortable, wholly inappropriate eagerness to please Goldman Sachs. And let's keep in mind Segarra's secret tapes were recorded in 2012, at least four solid years after the financial crisis.

After This American Life and ProPublica jointly released the tapes last week, Warren and Sherrod Brown (D-Ohio) have also called for a federal investigation into the dealings of the New York Federal Reserve.

The New York Fed has since "categorically rejected" the accusations, but Warren tells NPR the public needs more individuals like Segerra who are willing to speak up against institutions deemed "too big to fail."

"We need to look at whether or not we've got the right tools to protect the kind of people who will speak up. But, but what we've got to start with is we've got to expose what happened here, we've got to look at what the available tools are, but we've got to give the message loud and clear to the Fed: Um, this isn't gonna work — you work for the American people, you don't work for the big banks."

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How Kansas Is Selling Sam Brownback's Failed Trickle-Down Tax Cuts

| Wed Oct. 1, 2014 4:38 PM EDT

Kansas Gov. Sam Brownback's reelection campaign is in serious trouble. The latest poll has the incumbent Republican losing to his Democratic opponent by 4 percentage points.

As I explained in our November/December issue, Brownback's woes can largely be traced back to the drastic tax cuts for the wealthy that he pushed through the state legislature. Kansas' tax rate for top earners dropped from 6.45 to 4.9 percent, with further future cuts baked in. The cuts were even more generous for business owners, entirely wiping away their tax burden for pass-through income.

Brownback sold his tax cuts on supply-side promises of unbounded future growth, but the results have been less than stellar: While the state's unemployment rate, like the national jobless rate, has dropped over the past few years, Kansas' economic growth has lagged behind its neighbors'.

Despite these disappointing results, the state has settled on enticing out-of-state businesses with its low tax rate. Check out this full-page ad from the Kansas Department of Commerce, scanned from an issue of the US Small Business Administration's magazine Small Business Resource by a reader:

That ad's pitch—"one of the most pro-growth tax policies in the country" leads to "a perfect state"—lines up with the theories of free-market economist Arthur Laffer, the grand poobah of Ronald Reagan's trickle-down economics. Brownback cited Laffer's work to justify his cuts. During the thick of the legislative debate, he flew Laffer in for a three-day sales pitch, costing the state $75,000.

When I called Laffer in August, he excitedly proclaimed that Brownback's cuts would prove a resounding success. "I'll make you a very large bet that Kansas will improve its relative position to the US over, let's say, eight years, hands down. I'll bet you with great odds," he told me. "I feel very confident that what Sam Brownback has done is and will be extraordinarily beneficial for the state of Kansas."

As Laffer saw it, low tax rates would entice out-of-state residents and businesses to relocate. Laffer himself had moved to Tennessee sight unseen nine years ago, fleeing from California because of the Volunteer State's lack of income tax. "In someplace like Kansas, I don't think the income tax makes any sense whatsoever," Laffer said. "That's what we're trying to move toward in Kansas. The income tax is a killer."

Except that magical migration hasn't developed yet. In August, the state added just 900 jobs, with a tepid growth rate of just half a percent for the full year. Maybe I should have made that bet with Laffer.

This Is the GOP Campaign Ad Everyone Is Laughing About

| Wed Oct. 1, 2014 3:05 PM EDT

On Wednesday, the College Republican National Committee released a slew of nominally "culturally relevant" campaign ads. Unsurprisingly, they are bad and the internet is having a lot of fun mocking them.

Here is the one they made for the gubernatorial race in Florida:

(They also released versions for races in Colorado, Illinois, Michigan, Arkansas, and Pennsylvania.)

The ads—parodies of "Say Yes To The Dress"—are being roundly mocked on social media. Deservedly so! They are objectively awful. To be honest though, if they were produced by Democrats a lot of liberals would be laughing with them instead of at them. And, look, on the one hand, c'est la vie. That's the way it goes with campaign ads. But on the other hand, it's probably worth keeping in mind because being aware of your own hypocrisy helps build character.

 

Why Is There No Code Name for the ISIS Bombing Campaign?

| Wed Oct. 1, 2014 2:25 PM EDT

I learned something new today: code names for military operations only became a public thing after World War II, and it was only around 1980 that the names of major operations got turned into serious PR exercises. Paul Waldman runs down all the recent hits:

  • Operation Urgent Fury (invasion of Grenada, 1983)
  • Operation Just Cause (invasion of Panama, 1989)
  • Operation Desert Shield/Desert Storm (Kuwait/Iraq, 1989)
  • Operation Restore Hope (Somalia, 1993)
  • Operation Uphold Democracy (Haiti, 1994)
  • Operation Deliberate Force (NATO bombing of Bosnia, 1995)
  • Operation Desert Fox (bombing of Iraq, 1998)
  • Operation Noble Anvil (the American component of NATO bombing in Kosovo, which was itself called Operation Allied Force, 1999)
  • Operation Infinite Justice (first name for Afghanistan war, 2001)
  • Operation Enduring Freedom (second name for Afghanistan war, 2001)
  • Operation Iraqi Freedom (Iraq, 2003)
  • Operation Odyssey Dawn (bombing of Libya, 2011)

Aside from the fact that we have twelve of these things in just the past 30 years, Waldman points out that Republican names (in bold) are considerably more martial than Democratic names:

Even though it's the military that chooses these names, you might notice that the ones during Republican administrations have a particularly testosterone-fueled feel to them, while most of the Democratic ones are a little more tentative. Something like Operation Uphold Democracy just doesn't have the same oomph as, say, Operation Urgent Fury. If the Obama administration had really wanted to get people excited about fighting ISIS, they should have called it Operation Turgid Thrusting or Operation Boundless Glory.

Oddly, though, it turns out that the ISIS campaign doesn't even have any name at all. I guess that's a good sign.

Take Two: Are Americans Really in Love With War?

| Wed Oct. 1, 2014 11:55 AM EDT

Yesterday I wrote that the American public is "in love with war." This was obviously a bit of a rant, born of frustration with our seemingly bottomless tolerance for addressing foreign policy problems in suitably small countries with military force. Greg Sargent pushed back with some polling evidence, and Daniel Larison takes things a step further:

Far from being "in love" with war, a better way to think of the public's reaction is that they have been whipped into a panic about a vastly exaggerated threat by irresponsible fear-mongers. Most Americans support the current intervention because they wrongly think it is necessary for U.S. security, and they have been encouraged in that wrong view by their sorry excuse for political leaders.

I got this same kind of pushback from several people, but I really think this is a distinction without a difference. As it happens, my primary point was actually the same as Larison's: that the American public is very easily whipped into a war frenzy. In the case of ISIS, all it took was a couple of atrocities on YouTube; a bit of foaming at the mouth from the usual TV permahawks; and a presidential decision to take action. Obama didn't even need to wave the bloody shirt. In fact, he's been relatively restrained about the whole thing. Still, he did commit us to military action, and that was enough. Public support for bombing ISIS went from 39 percent to 60 percent in a mere twelve weeks.

Does this mean the American public is in love with war? Or merely that when a war is proposed, they can be persuaded to support it pretty easily? I submit that there's not really a very big difference between the two.

Here's How Fact Checking Exits the Real World and Enters Wonderland

| Wed Oct. 1, 2014 10:36 AM EDT

So here's the big controversy of the day out in our nation's heartland. Joni Ernst, running for a Senate seat in Iowa, is one of 21 Republicans who voted in favor of a "personhood" amendment to the state constitution. It says that "the inalienable right to life of every person at any stage of development shall be recognized and protected."

That seems clear enough. It means life begins at conception, and that embryos will have the same legal protections as you and me. Ernst's opponent, Bruce Braley, concludes, logically enough, that this would ban certain forms of contraception, prevent people from getting in vitro fertilization, and lead to the prosecution of doctors who perform those procedures.

Ernst says this is nonsense. "That amendment is simply a statement that I support life," she says. Why, it's just a nothingburger! Sort of like a resolution endorsing apple pie or Mother's Day.

Today, Glenn Kessler wades into this dispute. He dings Ernst for "straining credulity" about the intent of the amendment, but he also has harsh words for Braley:

Braley goes too far with his scary scenarios, especially because he repeatedly said the amendment “would” have the impact he described. Ernst is on record of not opposing contraception—though she also favors punishing doctors who perform abortions. We concede that the legal terrain in murky, and the impact uncertain. But that’s all the more reason not to speak with such certainty. Braley thus earns Two Pinocchios.

Ed Kilgore is dumbfounded by this kind of treatment, and so am I. I just don't get it. Kessler is not some babe in the woulds. He knows perfectly well exactly what the goal of this amendment is. It's possible, of course, that Democrats in Iowa will prevent Republicans from enacting enabling legislation. Or that the US Supreme Court will stand in the way. But why does that matter when the intent is so clear? Likewise, Ernst may say that "I will always stand with our women on affordable access to contraception," but that's plain and simple weaseling. And it doesn't even matter. Republicans in the legislature can keep their hands completely clean and simply let activists take things to court. With an amendment like that in place, no judge could turn away a suit that asked for a ban on abortions or in-vitro fertilization or certain forms of contraception.

As Kilgore says, "Encouraging this lack of accountability, and engaging in the worst form of false equivalency, is just a sin." All Braley is doing is calling out Ernst for the obvious implications of an amendment she supports. It's not merely a "statement" and she knows it. But in our topsy-turvy world of fact checking, Braley's plain description of the obvious real-world impact of Ernst's amendment is somehow deemed more of a lie than Ernst's slippery prevarications in the first place.

I don't understand this. This isn't a debating society. It's not la-la land. It's the real world, and it's not partisan sniping to say that we all know what this stuff means in the real world. Shouldn't that be the domain of a fact checker?

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Budget Cuts "Eroded Our Ability to Respond" to Ebola, Says Top Health Official

| Wed Oct. 1, 2014 6:00 AM EDT
The CDC's Dr. Jordan Tappero, about to don his goggles just prior to entering the Ebola treatment unit

On Tuesday, the US Centers for Disease Control and Prevention (CDC) confirmed the first case of Ebola diagnosed in the United States; the infected patient was a man who traveled from Liberia to visit family in Texas. It's the latest development in the ever-worsening outbreak of the virus, which so far has sickened more than 6,500 people and killed more than 3,000. The United States government has pledged to send help to West Africa to help stop Ebola from spreading—but the main agencies tasked with this aid work say they're hamstrung by budget cuts from the 2013 sequester.

On September 16, the Senate Committees on Appropriations and Health, Education, Labor, and Pensions held a hearing to discuss the resources needed to address the outbreak. Sen. Patty Murray (D-Wash.) asked NIH representative Anthony Fauci about sequestration's effect on the efforts.

"If even modest investments had been made…the current Ebola epidemic could have been detected earlier, and it could have been identified and contained."

"I have to tell you honestly it's been a significant impact on us," said Fauci. "It has both in an acute and a chronic, insidious way eroded our ability to respond in the way that I and my colleagues would like to see us be able to respond to these emerging threats. And in my institute particularly, that's responsible for responding on the dime to an emerging infectious disease threat, this is particularly damaging." Sequestration required the NIH to cut its budget by 5 percent, a total of $1.55 billion in 2013. Cuts were applied across all of its programs, affecting every area of medical research.

Dr. Beth Bell, director of the CDC's National Center for Emerging and Zoonotic Infectious Diseases, testified before the committee, making a case for increased funding. Her department, which has led the US intervention in West Africa, was hit with a $13 million budget cut as a result of the cuts in 2013. Though appropriations increased in 2014 and are projected to rise further in 2015, the agency hasn't yet made up for the deficit—according to Bell, $100 million has already gone toward stopping the Ebola epidemic, and much more is needed. The United Nations estimates it will take over $600 million just to get the crisis under control.

Bell also argued that the epidemic could have been stopped if more had been done sooner to build global health security. International aid budgets were hit hard by the sequester, reducing global health programs by $411 million and USAID by $289 million. "If even modest investments had been made to build a public health infrastructure in West Africa previously, the current Ebola epidemic could have been detected earlier, and it could have been identified and contained," she said during her testimony. "This Ebola epidemic shows that any vulnerability could have widespread impact if not stopped at the source."

Still, CDC officials have pledged to do everything in their power to stop Ebola in its tracks. "The sooner the world comes together to help West Africa, the safer we all will be," Director Tom Frieden says in a statement released in early September. "We know how to stop this outbreak. There is a window of opportunity to tamp this down—the challenge is to scale up the massive response needed."

It Takes HOW Much Water to Grow an Avocado?!

| Wed Oct. 1, 2014 6:00 AM EDT

We've heard a lot about how the boom in almond and other nut production is straining California's dwindling water supplies amid the state's worst-ever drought. But what about the avocado, another trendy commodity that grows on trees and delivers all-the-rage healthy fats?

US consumers certainly love this unctuous tropical fruit. According to the US Department of Agriculture, avocado production per capita jumped from 1.1 pounds annually in 1999 to 4.5 pounds in 2011.

Avocados don't require nearly as much water per pound as almonds. But they do require significantly more than other kinds of produce, as my colleague Julia Lurie shows in this chart:

(Note that the figures in this chart, and the one later in this post, include only blue water—which comes from rivers, lakes, streams, and aquifers—and not rainfall or recycled water.)

And as in the case of almonds and so many other crops, California dominates US production, accounting for about 90 percent of the US avocado harvest. Nearly all of it takes place in Southern California, in a five-county region that straddles the coast from San Luis Obispo to San Diego.

Like the rest of the state, the southern coastal region is locked in a drought, and largely cut off from the flow of surface water from the state's big irrigation projects. The result has been strife in the avocado groves—sky-high water costs and a reliance on water pumped from underground aquifers.

But overall, California's avocado farms have a relatively light water impact. Unlike almonds and pistachios, whose acreage has expanded dramatically in recent years, land devoted to avocados has actually shrunk, from a high of 76,000 acres in 1987 to fewer than 60,000 acres in 2012 (although production has held steady, because yield increases have offset the loss of acres). Also unlike the state's nut growers, California's avocado farmers aren't taking advantage of a boom in demand from Asia. According to the USDA, US avocado exports are so small they're "negligible."

Also, avocados are a perishable, seasonal product, and the California season peaks from May through August—meaning that for the rest of the year, we rely on Mexico, Chile, and Peru to satisfy our guacamole habit. All told, the USDA reports, about 70 percent of the avocados we consume are imported.

And so most of the water impact from our growing appetite for avocados lands on other places. And as Eilis O'Neill recently reported in Civil Eats, satisfying our demand for off-season avocados is causing trouble in another drought-stricken region, Chile's Central Valley—which, like California's, lies between a snowcapped interior mountain range and a coastal mountain range.

In part because of demand from the United States, avocado farmers in Chile have used so much water that some towns' wells have run dry.

This valley is the epicenter of Chile's fruit-and-veg export behemoth that began in the 1980s. As this US Department of Agriculture report states, Chile's Southern Hemisphere location gives it a "counter-seasonal production schedule with the United States"—that is, Chile's summer starts around the time that ours ends. The rapid rise of Chilean produce into the US market is a big reason US consumers can expect bountiful produce aisles year-round—it "extended the availability of certain fruits in the market without direct competition with domestic production, and gave US consumers fruit choices beyond the traditional domestic winter fruits of citrus, apples, and pears," the USDA notes. Chile now supplies a fifth of US fruit, the USDA adds.

Avocados were part of that boom. As O'Neill notes, land devoted to avocados has expanded rapidly—from about 6,180 hectares (15,270 acres) in 1980 to 27,000 hectares (66,700 acres) in 2006, all the way to 36,000 hectares (88,960 acres) in 2014, according to the USDA.

And just as in California, climate change and drought have meant less surface water flowing from mountain ranges to irrigate crops—and a shift to pumping water from underground aquifers. As a result, producers have "used so much of the region's waters that small farmers with shallow wells—and some nearby towns—are left with no water," O'Neill writes, echoing reports of waterless towns in California's Central Valley.

Like our Golden State, Chile takes a laissez-faire approach to groundwater regulation, O’Neill reports—a legacy of the reign of General Augusto Pinochet, a free-market zealot who came to power in a US-backed coup in 1973 and remained dictator until 1990.

And large, export-minded farm operations have the wherewithal to drill larger and deeper wells, squeezing out small farms and nearby communities, O'Neill reports. Meanwhile, the profits from Chile's farm export boom remains pretty concentrated in the hands of large landowners.

Chile's avocado harvest starts in runs from August to March—making it a prime supplier during the football season guacamole blitz.

O'Neill's piece gives us something to think about as we plunge chips into that delicious dip. "When you eat an avocado that comes from [a large producer in] Chile, think about the fact that the water used to produce it is water that homes in the country's most humble communities now lack," water activist Rodrigo Mundaca tells her.

Chart: As Top Tax Rates Dropped, Top Incomes Soared

| Wed Oct. 1, 2014 6:00 AM EDT

We're still posting a new chart on the current state of income inequality every day over the next week. Yesterday's looked at how the top 1 percent of Americans have captured half of all income.

Today, let's talk taxes. In the past few years, we've heard a lot about overtaxed "job creators" and freeloading "takers." But consider this: As the income rates for the wealthiest have plunged, their incomes have shot up.

Source: Tax rates: The Tax Foundation; top incomes: Emmanuel Saez and Thomas Piketty (Excel

Illustrations and infographic design by Mattias Mackler​

You Insult Henry Kissinger At Your Peril

| Wed Oct. 1, 2014 12:41 AM EDT

Newly declassified documents show that Fidel Castro pissed off Henry Kissinger so badly that he drew up plans to "clobber the pipsqueak":

Mr. Kissinger, who was secretary of state from 1973 to 1977, had previously planned an underground effort to improve relations with Havana. But in late 1975, Mr. Castro sent troops to Angola to help the newly independent nation fend off attacks from South Africa and right-wing guerrillas.

That move infuriated Mr. Kissinger, who was incensed that Mr. Castro had passed up a chance to normalize relations with the United States in favor of pursuing his own foreign policy agenda, Mr. Kornbluh said.

“Nobody has known that at the very end of a really remarkable effort to normalize relations, Kissinger, the global chessboard player, was insulted that a small country would ruin his plans for Africa and was essentially prepared to bring the imperial force of the United States on Fidel Castro’s head,” Mr. Kornbluh said.

“You can see in the conversation with Gerald Ford that he is extremely apoplectic,” Mr. Kornbluh said, adding that Mr. Kissinger used “language about doing harm to Cuba that is pretty quintessentially aggressive.”

Yep, that's everyone's favorite geopolitical strategic master at work. Kissinger considered Castro's actions to be a personal insult, so he began drawing up plans for the US military to blockade Cuba, mine its harbors, and potentially touch off a war with the Soviet Union. Because that's what you do when a small country irritates Henry Kissinger. Amirite?