The bad news: 20 criminal investigations into people who have tried to rip off the TARP program have been initiated by federal prosecutors, with more investigations likely. The good news: at least we're going after these people in a timely fashion.

If you agree the bailout is necessary, you have to accept some amount of this -- any pile of money that big is going attract people seeking to filch some of it, and the best we can do is try to stop them before they are successful and catch them afterward if they are, which appears to be what the Obama administration is doing. I am officially not outraged.

The Center for Public Integrity analyzes the coal industry's strategy to keep coal-fired power plants burning long in to the future:

As Butch Cassidy might say, “Who are those guys?”

They’re the American Coalition for Clean Coal Electricity, a collection of 48 mining, rail, manufacturing, and power-generating companies with an annual budget of more than $45 million — almost three times larger than the coal industry’s old lobbying and public relations groups combined.

CPI reports ACCCE spent nearly a quarter of that budget last year lobbying the Senate. That's more than Citigroup spent lobbying altogether last year, and double what Bank of America spent. The rest went to advertising and political donations—all in the name of convincing the public clean coal exists.

The coal industry is actually lobbying to receive support for technology that captures carbon dioxide emissions from coal-burning power plants. That technology doesn't make coal any cleaner, and Energy Secretary Steven Chu says carbon-capturing technology will take ten years to prove itself. But the coal industry's lobbying and PR efforts have already reaped one huge benefit: The new draft (PDF) of Henry Waxman and Ed Markey's climate change legislation—about which the House energy committee is holding hearings all week—includes a provision what would allow new coal-burning power plants as long as they capture a large part of their carbon output. This is a major shift on Waxman and Markey's part: Only a year ago they backed a moratorium on all new coal-fired power plants.

 

Low Stakes Testing

Do you know as much about economics as a bright high school senior?  Find out here!  I missed question #11, so anyone who wants to show that they're smarter than me is welcome to explain the allegedly correct answer in comments.

Omar Samaha's sister Reema was among those gunned down at Virginia Tech in April 2007 when Seng-Hui Cho rampaged through classrooms with two semi-automatic pistols. In the shootings' aftermath, many were shocked to learn that Cho, with a long history of psychiatric problems, was able to obtain his weapons legally. Although Cho purchased his guns from licensed dealers, the Virginia Tech killings brought new scrutiny to Virginia's gun-show loophole: unlike larger, licensed dealers that sell in large quantities, small, unlicensed dealers are free to sell weapons at gun shows without completing background checks. And whereas many small dealers will do background checks anyway, many don't, creating an obvious opporunity for buyers who might not otherwise qualify to own weapons.

Omar Samaha recently drove this home when, accompanied by a film crew from ABC News, he purchased ten firearms at a Virginia gun show in under an hour without undergoing any background checks. Last year, in a similar exercise, I attempted to purchase an assault rifle at gun show in Fishersville, Virginia, but was unable to do so based on my DC residency. But had I lied about my residency or produced a fake license, I might just as easily have walked out with one.

With a new administration in Washington, some Senate Democrats are making a new push to close the gun show loophole. Joined by Omar Samaha, several others affected by the Virginia Tech shootings, and the Brady Campaign's Paul Helmke, New Jersey's Frank Lautenberg, Rhode Island's Jack Reed, and California's Diane Feinstein announced Tuesday that they plan to introduce legislation to make background checks mandatory for every gun purchase, whether from licensed dealers or not.

From a press release announcing the move:

The bill would help keep guns out of the hands of criminals, terrorists, the mentally ill and gun traffickers by requiring background checks on all sales at gun shows. In 1993, the Brady Law was passed requiring prospective purchasers of guns sold by federal firearms licensees, like gun shops and pawn shops, to go through a background check.  However, a loophole in current law allows people to purchase guns from unlicensed sellers at “gun shows” without going through any background check.

In 1999, Sen. Lautenberg introduced the first bill in Congress to close the gun show loophole.  Later that year, in the wake of the Columbine tragedy, the Senate passed Sen. Lautenberg’s legislation to close the gun show loophole as an amendment to a juvenile justice bill.  The legislation passed by one vote, with Vice Al President Gore casting the tiebreaking vote.  However, the gun lobby killed the legislation in House-Senate conference. 

 

Norm Coleman will rage, rage against the dying of the light. CQ Politics:

Republican Norm Coleman filed the promised notice of appeal Monday challenging a trial court’s ruling that Democrat Al Franken is the winner of Minnesota’s 2008 Senate race.

The appeal to the state Supreme Court will be based on the same arguments Coleman's legal team made unsuccessfully during the seven-week election trial, though with a focus on what his attorneys say are constitutional violations made during the initial count and six-week recount.

Huh. That doesn't sound like it will be very successful.

The Coleman campaign said it expected the state Supreme Court to take the case on an expedited basis, with attorney Jim Langdon estimating oral arguments could take place "anywhere from two weeks to two months from now."

Ahhh.

I don't want to bum everyone out on Earth Day, so I'm going to link to Joel Makower's article in our current edition today instead.  Two decades after writing The Green Consumer, he says he's about ready to throw in the towel.  The problem is that when it comes to waste and recycling, it hardly even matters what individuals do.  Consumers, he says, are mere pikers:

Consider what I call "A Tale of Two Circles." Perhaps you've seen the bottom circle, a pie chart containing nine slices, representing the composition of the stuff we throw out — a.k.a. municipal solid waste, or MSW. It shows that paper makes up about a third of our nation's trash, while yard waste, food scraps, and plastics each represent about 12 percent. They are followed by smaller amounts of metals, rubber, textiles, leather, glass, wood, and other materials.

The MSW pie chart is well known in environmental circles and is the grist for a range of claims and disputes. The plastics industry, for example, uses it to "prove" that plastic bags are less of an environmental problem, at least a solid waste problem, than their paper counterparts. Aluminum, wood, and glass industries use it to make their own cases. Everyone, it seems, finds some solace in the numbers.

But there's another circle — a much, much bigger one, totaling about 10 billion tons of waste a year, or roughly 40 times the MSW pie. This circle doesn't have an official name — indeed, it's virtually unknown in environmental circles, and the EPA doesn't publish it. I've dubbed it gross national trash, or GNT....The thinnest slice of the pie — a minuscule 2.5 percent sliver of the whole — is municipal solid waste.

Read the rest here.

Robert Farley passes along the news that a Dutch naval vessel raided a pirate ship this weekend but then released all seven captured pirates because NATO has no authority to arrest pirates:

This, my friends, is not change we can believe in. Especially since the same thing happened again yesterday; a Canadian frigate operating under NATO authority chased down a group of pirates over the course of seven hours, forced them to surrender at gunpoint, and then released them....I'm reluctant to join in the right-wing chorus of denunciation against bureaucrats and lawyers, but someone somewhere in NATO has screwed up badly. There isn't the faintest question that Canada and the Netherlands have the authority to arrest and collect evidence against pirates, and the idea that the aegis of NATO would make that impossible is infuriating.

Anybody feel like defending the bureaucrats and lawyers here?  Anybody?

On the Color of Swans

Rotwang sez:

I'm tired of Nassim Nicholas Taleb. He isn't as brilliant as he thinks he is. He may be a quant jock, but he talks about an idealized laissez-faire capitalism as if he's never read a history book. Dude, this is the way the system works. This IS the system. The bubble bursting was not some unforeseeable event. It's happened many times. Lots of people foresee it. They just don't foresee the timing.

That's kind of my untutored feeling too.  If an asset bubble followed by a banking crisis is a black swan, then black swans must be about as rare as black point guards.  Our current crisis is bigger than most, but it's hardly unprecedented.

UPDATE: In comments, ack says:

This is completely and utterly wrong! Nassim Taleb has two independent arguments:

1) Due to a cognitive limitation, people tend to underestimate the likelihood of improbable bad events ('black swans'). Therefore, you can out-bet the market by continually betting that bad events will happen....Taleb has even described the current crisis as a 'white swan,' and argued that it was totally forseeable.

James Joyner makes the same point at greater length here. Consider me corrected.

Want some Earth Day inspiration that has nothing to do with Susan Boyle? Check out the seven Goldman Environmental Prize winners this year. From Indonesia to Appalachia, shipping to logging, these "Green Nobel" winners all have great heart. The one I spoke with, Hugo Jabine, comes from the forests of Suriname, where the Maroon community founded by freed African slaves has lived for 300 years. Goldman award materials say Jabine and his co-recipient Wanze Eduards "successfully organized their communities against logging on their traditional lands, ultimately leading to a landmark ruling for indigenous and tribal peoples throughout the Americas to control resource exploitation in their territories."

Here's how he tells it:

Gabe Sherman has a piece today in New York magazine about how gobsmacked the Wall Street crowd is that people are pissed off at them these days.  There are a million things you could say about it — and since I'm coming late to this, a million things probably have been said about it — but I just want to excerpt this one piece:

Wall Street people are not moral idiots (most of them, anyway) — it’s not as if they’ve never pondered the fairness of their enormous salaries. “One of my relatives is a doctor, we’re both well-educated, hardworking people. And he certainly didn’t make the amount of money I made,” a former Bear Stearns senior managing director tells me. “I would be the first person to tell you his value to society, to humanity, is far greater than anything that went on in the Bear Stearns building.”

That said, he continues, “We’re in a hypercapitalistic society. No one complains when Julia Roberts pulls down $25 million per movie or A-Rod has a $300 million guarantee. We have ex-presidents who cash in on their presidencies. Our whole moral compass has shifted about what’s acceptable or not acceptable. Honestly, you can pick on Wall Street all you want, I don’t think it’s fair. It’s fair to say you ran your companies into the ground, your risk management is flawed — that is perfectly legitimate. You can lay criticism on GM or others. But I don’t think it’s fair to say Wall Street is paid too much.”

It's hard to know what to say about this.  It just leaves you speechless.  And this guy is one of the more self-aware ones.

Later on Sherman quotes another Wall Streeter who's livid over Obama's plan to raise tax rates slightly on the rich.  "He doesn’t want to have any wealth creation," the guy wails, and that really seems to get to the heart of all this.  Financial industry players sincerely seem to view all "wealth" as equal.  If the market pays you a lot, it's because you're responsible for creating a lot of wealth, and that's that.  The fact that the wealth you created was largely divorced from even a notional real-world benefit to the larger economy doesn't matter.  Money is money.

Still, both these guys are right: the big players in the financial industry get paid a lot because they're responsible for creating gigantic streams of money for their firms.  As long as that stays the case, they're going to continue making truckloads of money no matter what we do.  But if we reduce that stream of financial rents to levels more related to the actual value it creates in the real world, pay levels will become more reasonable too.  That's what we should focus on.