Housekeeping Note

Quick note.  Two or three times a week our resident MoJo editor and politics junkie Laura McClure drops by with a post called MoJo Mix.  The idea is to highlight a few good items on our other blogs — MoJo, Blue Marble, and The Riff — that the politics junkies here might be interested in reading too.  It's worth checking out.

Back in October, when we started bailing out banks with TARP funds, the Treasury received warrants from each bank in return for their investment.  Several of these banks have now paid back the TARP money, but what about the warrants?  While I was on vacation the Treasury announced its plan for selling the warrants back:

The Treasury Department said the banks will make the first offer for the warrants. Treasury will then decide to sell at that price or make a counteroffer. If the government and a bank cannot agree on a fair price for the warrants, the two sides will have the right to use private appraisers.

This is ridiculous.  This isn't like the toxic waste on bank balance sheets that can't be sold because it's impossible to value.  If you want to know how much the warrants are worth, just offer them to the highest bidder.  Simon Johnson has it right: "The only sensible way to dispose of these options is for Treasury to set a floor price, and then hold an auction that permits anyone to buy any part — e.g., people could submit sealed bids and the highest price wins."

If the Obama administration wants us to believe that it's not entirely in thrall to the banking industry, it needs to stop offering absurd sweetheart deals like this to banks that already received sweetheart deals in the original TARP bailout — and are continuing to benefit from trillions of dollars in various Fed support programs and liquidity guarantees.  Just auction the damn warrants.

A year and a half after inspecting their sexy downtown factory, U.S. Immigration and Customs Enforcement (ICE) finally nailed Los Angeles-based manufacturer American Apparel with the most unsurprising violation ever—according to the report, the company currently employees about 1800 workers (a third of the manufacturing staff) whose immigration status is (very) debatable. Cue Dov Charney yawning.

To many of us interested in immigration reform, the company's unprecedented engagement with the subject has been thrilling. By Charney's own estimate, he and his workers have been marching in the May Day immigration reform demonstrations in Los Angeles since 2001. Since then, the company's Legalize LA campaign has spawned a product line from tank tops to booty-shorts, a national print campaign, viral videos, and a timeline of American immigration policy on the shelves at every American Apparel retail store. On neon pink and sunshine yellow t-shirts, on the pages of the New York Times and Los Angeles Times, and in their coral pink downtown factory, American Apparel has made its (I think admirable) position on immigration central to its ethos as a corporation.

A report released this week by two public interest groups found that states are on average using nearly a third of their stimulus transportation funds to build new roads while often ignoring a huge backlog of necessary street repairs and public transportation investments.

Produced by a transportation consulting firm for CalPIRG and Smart Growth America, the report paints a particularly ugly picture in California, which has spent more than 80 percent of its $2.6 billion in transportation stimulus money. Forty three percent of that money went to build new road projects, even as about $310 million in ready-to-go road and bridge repairs went unfunded.

Of course, California looks downright sane compared to Kentucky, where more than 38 percent of lane miles are in "poor" condition, a whopping 573 bridges are structurally deficient, and yet 88 percent of the state's $421 million in stimulus transportation money will go to build new roads. "If the state can't afford to maintain what it has now," the report asks, "how does it plan to maintain the new roads?"

Similarly, it's anyone's guess how states will maintain their ailing public transportation systems. A recent Department of Transportation report found that the nation's seven largest rail transportation agencies have a combined investment backlog of $50 billion.  Yet the stimulus earmarks only $8.4 billion to public transportation, leaving other stimulus funds to fill the gap. Even then, few states with those rail systems are dedicating much of this money towards sustaining them. New Jersey, Pennnsylvania, California, New York, and Illinois each allocate less than 5 percent of their discretionary transportation stimulus funds to public transit.

Ironically, prioritizing new roads over public transit projects undermines the American Recovery and Reinvestment Act's goals to generate jobs, promote long-term economic growth, and create greener cities--all areas where transit is unbeatable.

It's not too late to change course. June 29th marked the deadline for states to commit at least 50 percent of the Act's $26.6 billion in transportation funds; here's hoping the next 50 percent will be spent more intelligently.

The debate over whether electromagnetic radiation from cell phones and other wireless technology causes cancer rages on. Yesterday, an advocacy group called the National Institute for Science, Law, and Public Policy sent a letter to journalists and lawmakers urging them to "learn about the health consequences of microwave radiation exposure from cell phones, neighborhood antennas, wireless networks, wireless routers, DECT portable phones, and the potential health consequences of further chronic exposures from wireless broadband and new wireless utility technologies."

The folks behind this latest media blitz are some of the same ones who authored the controversial BioInitiative Report in 2007, which linked wireless radiation to cancer and a host of other health problems.* When I investigated the issue of whether cell phones cause brain cancer last spring, I was told by some BioInitiative authors that we'd finally have the answer in a few months, when the conclusive results from the multinational Interphone Study, the holy grail of cell phone health research, would finally be released.

But a year later, the results still haven't been released. Why not?

 

ExxonMobil isn't just in denial about climage change, it's in denial about its own denial. Despite a pledge in 2008 to discontinue contributions to groups "whose position on climate change could divert attention" from the need for clean energy, the company went right on funding them, the Guardian reports.

Recently released company records reveal that ExxonMobil handed over $75,000 that year to the National Center for Policy Analysis in Dallas, Texas and $50,000 to the Heritage Foundation in Washington, DC. Both NPCA and Heritage oppose siginficant action on climate change and question whether global warming is a threat.

Given ExxonMobil's past behavior, it's easy to see how the company might have a tough time going cold turkey. In 2005, Mother Jones broke the story that ExxonMobil gives millions of dollars to think tanks, researchers, and media figures to produce and promote phony science purporting to debunk global warming (check out the handy charticle). A few months later, ExxonMobil vowed to "soften" its public image, earning headlines such as "Exxon cuts ties to global warming skeptics" and "ExxonMobil Softens its Climate Change Stance."

That was all just wishful thinking. (For a taste of the propaganda Exxon has wrought, see the first comment in this recent post). Maybe the company needs to enroll in some sort of 12-step program. Perhaps Carbonoholics Annonymous, or better yet, Cap and Trade.

 

 

Square Wheel=Not So Smart

When it comes to the economy, America favors the square-wheel approach.

According to satirist Mark Fiore, this usually doesn't work out so well.

 

On Wednesday, Mir Hossein Mousavi released a statement in which he declared the government of Mahmoud Ahmadinejad was "illegitimate," called for continuing protests, and demanded the release of opposition supporters detained by the security forces.

One of those detainees appears to be Hossein Zaman, an Iranian pop singer. He appears on one list of detained Iranians. Various Twitter users have cited him as one of the many reformists detained. And a Tehran filmmaker tells me that he is still in prison. There's little publicly available information—especially in English—about his arrest or current whereabouts.

Zaman, who once served in the Revolutionary Guard, has long identified with the forces for reform in Iran. An article that appeared in the Iranian Times in 2000 noted that Zaman had performed at "political events" for the reformists. In 2002, according to Agence France Presse, he blasted the country's culture minister for not defending the rights of artists after he was blocked from performing near a shrine of a descendant of Mohammad. "It seems that certain people signed a petition during Friday prayers seeking to stop the concert,'" he told an Iranian newspaper, "and the judiciary thought it best to stop it." The next year, according to AFP, Zaman ran for a city council position in Tehran. And his music has been banned from state-controlled radio and television.

Throughout his musical career, Zaman has received little, if any, attention outside Iran. But a YouTube search turns up a video posted in 2007 for a Zaman song called "Parandeh."



At the White House press briefing on Wednesday, I asked press secretary Robert Gibbs if President Barack Obama would join Mousavi in urging the Iranian government to release its political prisoners. Gibbs said that "the President strongly believes in the right for people to gather in protest without fear of harm or violence." He added,   "I think I'll leave it at that."

And "parendeh" is farsi for "bird."

You can follow David Corn's postings and media appearances via Twitter.

The taboo of writing about the environmental impacts of poop is officially on the wane. None other than Dwell, the glossy architecture and design magazine, has posted a snazzy video on the subject--an ode to the LooWatt, a slick-looking toilet constructed from dried poop that collects your #2 and turns it into cooking fuel. Here at the Blue Marble, we've been fascinated by all the new ways to convert poop into power instead of sewage sludge. With the LooWatt, you can do it yourself:

  

 H/T Grist

I've got a bit of a ramble teed up on climate change and the Waxman-Markey bill, which unfortunately means that my conclusion is going to be buried at the end of a long post.  So if that's all you want to read, feel free to skip down to the last two paragraphs.  The rest is just throat clearing.

Still here?  Then here's the ramble.  Over the past couple of weeks there's been a lot of blogospheric chatter surrounding a cost-benefit analysis of Waxman-Markey done by Jim Manzi.  I'm not going to link to the dozens of posts going back and forth about it, but suffice it to say that Manzi concludes that W-M isn't a good deal.  Over the next century, it's going to cost us more in lost economic growth than it will benefit us in reduced global warming.

I didn't get involved in this conversation for a simple reason: I've been on both the producing and receiving end of too many cost benefit analyses to trust them.  If you're being relatively honest and if you're dealing with fairly concrete, short-term issues, they're useful tools, but even then it's still the case that you can manufacture strikingly divergent conclusions by manipulating your assumptions and inputs by surprisingly small amounts.  Cost-benefits usually look like they're grounded in hardheaded thinking simply because they're numerically based, but quite often they're nothing of the kind.

And that's in the best case.  Climate change is far worse.  Not only are we decidedly not talking about concrete, short-term issues, but there's a huge asymmetry in what we can say about the cost side and the benefit side of fighting global warming.

On the one hand, you have the actual science of climate change.  And although climate models are enormously complex and subject to considerable uncertainty, they're fundamentally based on physics, chemistry, and thermodynamics.  We know how much CO2 we're pumping into the atmosphere and we can project with pretty good confidence how much that's going to increase over the next century if we do nothing to stop it.  We know how the greenhouse effect works, we have pretty good historical records of how CO2 concentration correlates with global temperatures, and we have a pretty good sense of the feedback loops involved in things like melting icecaps and saturation of the ocean sinks.  Basically, our level of uncertainty is within tolerable bounds here.  And what we know is that if we do nothing, global temps are absolutely certain to rise 2°C over the next century, fairly likely to rise by 4-5°C, and at least somewhat likely to rise by 6-7°C.  The lower number would be bad but, just possibly, manageable.  You could at least make an arguable case, as Manzi does, that the cost of preventing an additional 2°C is higher than it's worth.  The two bigger numbers, however, would be catastrophic.  Unfortunately, the science increasingly suggests that these higher numbers are considerably more likely than we thought even a few years ago, and any serious cost-benefit analysis needs to address that.  Using only the lower number avoids tackling the real problem we're up against.

So that's the climate analysis in a nutshell.  On the opposite hand you have the economic analysis.  And that's simply hopeless.  An economic analysis that goes even ten or twenty years into the future is as much guesswork as anything else.  One that goes a hundred years into the future is just voodoo.  It looks like economics, but you might as well be throwing darts.  Compounded over a century, even minuscule changes in assumptions and operating parameters produce enormous changes in your conclusions, and the result is that you end up deep in the weeds arguing over tiny differences in those assumptions instead of simply admitting that they're flatly impossible to forecast.  That's good for slowing down the debate, but not much else.

(For a couple of more detailed versions of this argument, see Dave Roberts here and Patrick Appel here.)

So where we stand is fairly simple: we have a pretty good idea of what climate change is going to do to the planet, and we have a pretty good idea that there's at least a reasonable chance that the results are going to be catastrophic (and much more catastrophic for some than for others).  However, we don't have a good idea of the economic impacts of addressing climate change, and we never will.  The problem is simply too nonlinear and too long-term to be analyzable, especially when the differences between high-end and low-end projections are on the order of two or three percent.  When it comes to climate change, cost-benefit on anything other than a very broad scale is a mug's game.

Still, let's grant several things.  First, Waxman-Markey is a kludge of a bill.  It's possible that its cost-benefit is negative, and it's almost certain that, by itself, its cost benefit is quite small even if it is positive.  Second, W-M's carbon caps by themselves will probably have only a tiny effect on rising temperatures.  Third, global warming is a hopeless problem if we don't get the rest of the world to address it too.  If China and India and the rest of the developing world don't play along, nothing the U.S. and Europe do by themselves will be enough to halt it.

That's all true.  So why support Waxman-Markey?  There are all sorts of reasons.  For one thing, it's a good start.  Also: it may be hard to persuade other countries to join us, but it will be impossible if we aren't willing to do something ourselves.  And although the cap-and-trade piece of the bill starts out weak, at least it puts in place the administrative framework we'll need down the road if and when we work up the will to address climate change more seriously.

But here's what I think is the overriding reason to support W-M despite its flaws: even if it's weak, and even if the rest of the world doesn't join in immediately, it starts to align incentives in the United States in favor of inventing and deploying green technologies.  (Ditto for the ETS cap-and-trade system in Europe.)  And that's critically important: it's in the advanced economies of the world that new green technologies will be invented.  And it's in the advanced economies of the world that existing green technologies will be proven to work on a wide scale.  Once that happens — once the technologies are proven and economies of scale start to bring down their costs — the rest of the world will start to adopt them too.  W-M, in its final form, may not be a strong bill, but by raising the price of carbon even a little bit, it makes the development and deployment of green tech far more likely in the United States, and therefore, far more likely on a global basis too.

And that's critically important.  Conservation and efficiency and cutting back are all necessary parts of addressing climate change, but human nature being what it is, that's never going to be enough.  We're going to have to invent entire new technologies as well.  W-M makes that more likely, and that's why it needs to be passed.  Warts and all.