....$11B a year in corn subsidies.
I wonder where the Libertarian, tea party, and GOP outrage over this government subsidy of private enterprise is? Perhaps they just don't have the strength and the energy to be simultaneously outraged over that and....oh....I don't know.....the social programs that benefit poor women like Planned Parenthood at the same time. Maybe they consider PP's $70million in annual funding and the $293 million they get through Medicare reimbursements (1), Senator Kyl's NITBAFS lies about abortions notwithstanding, to be a bigger budgetary problem than corn subsidies.
If so, perhaps some remedial math will help. PP's $363million is only 3.3% the size of the corn subsidies, and PP's funding is still only 0.0104% of the 3.5trillion fed budget.
..."Eating up just a tenth of the corn crop as recently as 2004, ethanol was turbocharged by legislation in 2005 and 2007 that set specific requirements for its use in gasoline, mandating steep rises from year to year. Yet another government bureaucracy was born to enforce the quotas."
Perhaps someone can remind me who controlled both houses of Congress and the White House in 2005?
I know. Dems are the ones always being accused by tea-baggers, Randians, and GOPpers of bloating government, but even they must admit in this case that when, "...another government bureaucracy was born to enforce the quotas" that that birth could reasonably be assumed to have happened in 2005 and not 2007, right? Maybe someone will be interested enough to look that one up.
I don't suppose there's much point in reminding anyone about the truth of the Reagan, HW and Wjr years and GOP Congresses when it comes to bloated bureaucracies and budget deficits, either, is there?
Besides all the downsides of treating foodstuffs as fuels that this article brings to light, here are a few final related food facts I also thought worth sharing....
....The average American family wastes $1,200 - or about 500 pounds - of food each year. Add in restaurants and farms, and the total comes to $155billion (with a 'b') worth of food going into landfills every year (2)
....925 million people are hungry. Every day, almost 16,000 children die from hunger-related causes. That's one child every five seconds(3).
In the time it took you to read this far, 30 kids died from hunger.
-----
Sources
(1): http://abcnews.go.com/Politics/planned-parenthood-center-budget-shutdown-threat/story?id=13328750
(2): http://www.cbsnews.com/stories/2008/07/23/earlyshow/contributors/susankoeppen/main4285083.shtml#ixzz1QPOW0xhL
(3): http://www.bread.org/hunger/global/
-----
FEELING the need for an example of government policy run amok? Look no further than the box of cornflakes on your kitchen shelf. In its myriad corn-related interventions, Washington has managed simultaneously to help drive up food prices and add tens of billions of dollars to the deficit, while arguably increasing energy use and harming the environment.
Related
· Times Topic: Corn
Even in a crowd of rising food and commodity costs, corn stands out, its price having doubled in less than a year to a record $7.87 per bushel in early June. Booming global demand has overtaken stagnant supply.
But rather than ameliorate the problem, the government has exacerbated it, reducing food supply to a hungry world. Thanks to Washington, 4 of every 10 ears of corn grown in America — the source of 40 percent of the world’s production — are shunted into ethanol, a gasoline substitute that imperceptibly nicks our energy problem. Larded onto that are $11 billion a year of government subsidies to the corn complex.
Corn is hardly some minor agricultural product for breakfast cereal. It’s America’s largest crop, dwarfing wheat and soybeans. A small portion of production goes for human consumption; about 40 percent feeds cows, pigs, turkeys and chickens. Diverting 40 percent to ethanol has disagreeable consequences for food. In just a year, the price of bacon has soared by 24 percent.
To some, the contours of the ethanol story may be familiar. Almost since Iowa — our biggest corn-producing state — grabbed the lead position in the presidential sweepstakes four decades ago, support for the biofuel has been nearly a prerequisite for politicians seeking the presidency.
Those hopefuls have seen no need for a foolish consistency. John McCain and John Kerry were against ethanol subsidies, then as candidates were for them. Having lost the presidency, Mr. McCain is now against them again. Al Gore was for ethanol before he was against it. This time, one hopeful is experimenting with counter-programming: as governor of corn-producing Minnesota, Tim Pawlenty pushed for subsidies before he embraced a “straight talk” strategy.
Eating up just a tenth of the corn crop as recently as 2004, ethanol was turbocharged by legislation in 2005 and 2007 that set specific requirements for its use in gasoline, mandating steep rises from year to year. Yet another government bureaucracy was born to enforce the quotas.
To ease the pain, Congress threw in a 45-cents-a-gallon subsidy ($6 billion a year); to add another layer of protection, it imposed a tariff on imported ethanol of 54 cents a gallon. That successfully shut off cheap imports, produced more efficiently from sugar cane, principally from Brazil.
Here is perhaps the most incredible part: Because of the subsidy, ethanol became cheaper than gasoline, and so we sent 397 million gallons of ethanol overseas last year. America is simultaneously importing costly foreign oil and subsidizing the export of its equivalent.
That’s not all. Ethanol packs less punch than gasoline and uses considerable energy in its production process. All told, each gallon of gasoline that is displaced costs the Treasury $1.78 in subsidies and lost tax revenue.
Nor does ethanol live up to its environmental promises. The Congressional Budget Office found that reducing carbon dioxide emissions by using ethanol costs at least $750 per ton of carbon dioxide, wildly more than other methods. What is more, making corn ethanol consumes vast quantities of water and increases smog.
Then there’s energy efficiency. Studies reach widely varying conclusions on that issue. While some show a small saving in fossil fuels, others calculate that ethanol consumes more energy than it produces.
Corn growers and other farmers have long exercised outsize influence, thanks in part to the Senate’s structural tilt toward rural states. The ethanol giveaway represents a 21st-century add-on to a dizzying patchwork of programs for farmers. Under one, corn growers receive “direct payments” — $1.75 billion in 2010 — whether they grow corn or not. Washington also subsidizes crop insurance, at a cost of another $1.75 billion last year. That may have made sense when low corn prices made farming a marginal business, but no longer.
At long last, the enormity of the nation’s budget deficit has added momentum to the forces of reason. While only a symbolic move, the Senate recently voted 73 to 27 to end ethanol subsidies. That alone helped push corn prices down to $7 per bushel. Incredibly, the White House criticized the action — could key farm states have been on the minds of the president’s advisers?
Even farm advocates like former Agriculture Secretary Dan Glickman agree that the situation must be fixed. Reports filtering out of the budget talks currently under way suggest that agriculture subsidies sit prominently on the chopping block. The time is ripe.
Steven Rattner was formerly counselor to the secretary of the Treasury and lead auto adviser. He has spent nearly 30 years on Wall Street as an investor and investment banker and is a contributing writer to Op-Ed.
Sunday, June 26, 2011
Saturday, June 18, 2011
Will We in the Middle Class Never Learn?
Joe Nocera's New York Times op-ed of June 17, 2011, "The Banking Miracle", makes me wonder why it's so hard for some people to accept what history has to tell us?
America's economic greatness is measured by its middle class, not the wealthy. We seem to be doomed without a vibrant, optimistic, and prospering middle class that has the money to spend on the goods and services that the economy produces. An irony in all of this is that we in the middle class are partly to blame. We are so caught up in striving to be wealthy - or at least occasionally feel like we can live a little of our lives as if we were - that we can be our own worst enemies when it comes to racking up personal debt. The difference between us and the bankers, however, is that our debts are our own and, as we should have learned from history and are so painfully learning again, so are Wall Street's.
We also become our own worst enemies when we start believing and supporting the fallacy of trickle down economics. History proves that model doesn't work. Correction. That model works perfectly well for the very wealthy. It's a superb model for widening the wealth gap and concentrating wealth in fewer and fewer hands.
So I continuously wonder how many more times will it take before intelligent individuals look at history, do the math, and accept that the rich consider the rest of us to be little more than economic chattel; property, as it were, to be bought and sold for the benefit of the uber-rich and powerful? By supporting failed economic models and legislative policies that benefit the wealthy over the middle class, we are doing little more than engaging in wishful thinking while clinging to a blind faith that by prostrating ourselves at the feet of the wealthy we might some day be invited to a seat at their table. Even without such an invitation, some of us cling to an even more dangerous and failed belief that what's needed now is to remove any last bit of regulation and to put our full faith and trust in the hands of wealthy capitalists and bankers. These are the very people who not only have caused the last two great economic collapses, they have mastered the art of duping an uninformed and blissfully ignorant portion of the population into believing that without them we will have even fewer opportunities to live a life that has any hope, dignity, or comfort at all.
IMHO, those of us in the middle class who believe these fairy tales do ourselves and our fellow citizens a grave injustice by thinking that the best a free market system has to offer is whatever scraps the richest among us care to share from their plates.
Economic collapses aren't and never have been caused by unions, the middle class, the poor, or illegal immigrants. Men from places like Goldman Sachs, JP Morgan, and other big houses on Wall Street have been at the root of our economic collapses. They've never really been the catalyst of economic growth and prosperity, either. They've never built a single car, computer, or line of software code. They don't build buildings and they don't grow food. They don't mine minerals and they don't teach our kids in schools or deliver health care. To be sure, they play a role as middle men in making the financing possible to do those things. They ostensibly provide the supposed financial expertise to evaluate the risk-reward equation. They have the contacts to be able to put monied interests together with those who need the investment capital. So at the end of the day, what are they? They are the hosts of a multi-trillion dollar Match Game for which they are paid astronomical sums and for which we are supposed to be grateful for their parts in the "jobs creation" equation.
Here's the rub. When their bets win, they reap the rewards in terms of massive personal wealth which never really trickles down very far, if at all. Good for them. Our system is supposed to reward intelligence and achievement, and I'm all for that. But what happens when there are no rules in place and their gambles go south? Who suffers? Who has to pay for those bad bets?
History cannot be denied. We know by looking back that when there are either too few or no borders, boundaries, or rules by which people - including capitalists - must play, bad things tend to happen. Call it a sad reality of human nature. Call it whatever you like. The reality cannot be denied. The concentration of wealth - and the unregulated power that goes with it - is what was at the root of the Great Depression and the Great Recession. And while the post-WWII prosperity this country enjoyed for the latter half of the 20th century is not completely the result of Glass-Steagall, the undeniable truths are that the bill existed until Reagan and Greenspan successfully vilified government and financial regulation, and Clinton signed a GOP piece of legislation into law that the Republicans had wanted since the 30s to reverse Glass-Steagall known as Gramm-Leach-Bliley.
And where do we find ourselves again and as a result? In an economy that widens the wealth gap, divides us on ideologies to the point where people stop talking to each other, and where, saddest of all, facts no longer matter.
Know what else cannot be denied? It's who pays for the *unregulated* bets that Wall Street makes and loses. Bets that we're now learning that Wall Street was making both ways by continuing to sell unregulated securities like mortgage backed securities and collateralized debt obligations even while they bet against them with credit default swaps? I can tell who didn't pay for those bad bets; the Wall Streeters who made them and who, despite the collapse, continue to make historic bonuses instead of being fired or going to jail. Whatever happened to accountability? Whatever happened to paying for one's mistakes? Whatever happened to business ethics?
So I have to ask, "Is the desire to regulate really socialism, and what is it called when an economic system privatizes all the gains and socializes all the losses?"
Are we witnessing a perversion of capitalism? Is the erosion of the middle class and vilification of the poor what happens when a wealthy and powerful oligarchy wields ever more unchecked and unregulated power, reaps all the rewards, and passes all of their losses onto us?
Is what we are witnessing really the truest expression of capitalism? Is the ultimate manifestation of our system really the plutocracy we are seeing now; a system where the rich few tell all the rest of us what to think and what's good for us and, out of shear fear and panic, we believe them?
Are we really going to become a society in which social programs are seen as wasteful and frivolous; where the availability of medical science and technology that can improve and save lives is reduced to an economic ROI calculation; where average people who have played by the rules and worked hard all their lives become indigent in their old age; and where we gladly pursue and support economic and political policies that produce short term gains for a few with no regard for long term pains for the many?
Are we that blind? Are we that cold? Have we really lost our intelligence and our humanity at the same time?
What happens next? Do we continue to allow our system to devolve into a kleptocracy where government is replaced by capitalism, ruled completely by and for the exclusive and sole benefit of the richest among us, and where we finally and completely see them steal any lingering shreds of dignity and paltry wealth we have left?
It just seems to me that we are hurtling toward a doom that comes only from a completely unregulated capitalist system - at least as capitalism is being practiced today in America. IMHO, we have some people within the middle class who support the idea of less regulation, who refuse to learn from history, and who won't face reality to partially thank for it.
If we were united in the middle class and in our demands for fairness, equality, and sensible rules to protect the economy as a whole, I could see us creating the environment for real recovery and prosperity just as was the case during that period in the 20th century when the wealth gap wasn't so wide and legislation like Glass-Steagall kept people from making fortunes by knowingly making bets that only paid the dividends and never saddled them with the losses.
Related Sources
Rampell, Catherine. (June 17, 2011). For Want of a Word, Arizona’s Jobless Lose Checks. New York Times. Retrieved from http://www.nytimes.com/2011/06/18/business/18benefits.html
Howard, John. (June 2, 2011). Goldman Hit With Subpoena Over MBS Antics. Law360.com Retrieved from http://www.law360.com/topnews/articles/248863
The Daily Show: Exclusive - William Cohan Interview Parts 1 and 2 (April 28, 2011). Retrieved from
http://www.thedailyshow.com/watch/thu-april-28-2011/exclusive---william-cohan-extended-interview-pt--1
http://www.thedailyshow.com/watch/thu-april-28-2011/exclusive---william-cohan-extended-interview-pt--2
----- Original Message -----
Sent: Saturday, June 18, 2011 7:15:29 AM
Subject: The Banking Miracle
The president of the American Bankers Association was railing against excessive regulation in a speech at the Waldorf Astoria. The banking reform bill, he complained, “would destroy a substantial part of our bond-distributing machinery.” He added, “Can anyone expect that a step of this kind will improve the quality of our long-term investments?”
Modern echoes, for sure. But I read about the speech in a Jan. 27, 1933, article culled from the wonderful archives of The American Banker, the bankers’ bible now celebrating its 175th birthday. The speaker, one Francis H. Sisson, was complaining about an early version of the Glass-Steagall Act, the most famous of all Depression-era bank laws, and the one that, in retrospect, probably did the most good. Less than six months after Sisson’s speech, President Franklin Roosevelt signed it into law.
From my vantage point here in 2011, Glass-Steagall seems miraculous. It was amazingly radical, not just for its time, but for any time; it didn’t so much reform banking as upend it. Most notably, it ordered banks to get out of the securities business. As Sisson complained: “The effect of the proposed banking reform is to renounce investment banking rather than regulate it.” Because investment banking was then the chief activity of the big banks, this was a very big deal.
Glass-Steagall also created the Federal Deposit Insurance Corporation, which insured customer deposits for the first time, and outlawed branch banking by national banks, among other things. It is impossible to imagine anything like it passing today; although the modern reform bill, Dodd-Frank, surely does some good, it’s not even comparable.
I’d long wondered how Senator Carter Glass, the powerful Virginia Democrat, and his House counterpart, the Alabama congressman Henry Steagall, managed to get it passed. What were the politics like? What did they fight over? Why didn’t people like Sisson have better luck pushing back against it, the way bank lobbyists do today? So I asked the editors at American Banker if they would send me some articles from the era that would shed some light on the question. Happily, they obliged.
The first thing I realized is that all the horse-trading over the bill’s provision was done by Democrats. The Republicans, having been badly defeated in the 1932 election, had no ability to block it or even amend it. For instance, Republicans tended to view the creation of deposit insurance as “socialism.” (Sound familiar?) But it didn’t matter: Steagall cared deeply about deposit insurance. Many community bankers — as strong a force back then as today — also supported the idea because they believed it would renew customers’ faith in the banks, and bring back deposits. (This turned out to be true.) Glass, though skeptical, went along so he could get things he cared about, mainly a stronger Federal Reserve with more power over the banks.
The second thing I realized was that, the Sisson speech notwithstanding, there was surprisingly little controversy over what we now think of as the law’s primary achievement: splitting commercial and investment banking. The fights were all over issues that seem inconsequential by today’s lights. It’s as if the notion of breaking the banking business into two was always a foregone conclusion.
And, for the most part, it was. Partly, this was because, unlike today, bank failures in the 1930s were often ruinous to customers. So reform was more pressing. But it was also because, for the entire time the legislation was under consideration, the Pecora hearings were going on — in which Ferdinand Pecora, the flamboyant chief counsel of the Senate Banking Committee, dragged one well-known banker after another before the committee and grilled them mercilessly, exposing how they had abused their investment banking roles, sometimes to the point of criminality. The Pecora hearings serve as a steady drumbeat in the American Banker articles.
Those hearings infuriated the country, and made it unthinkable that banks would continue to be allowed to sell securities. In fact, some banks, seeing which way the wind was blowing, applauded: “The spirit of speculation should be eradicated from the management of commercial banks,” declared Winthrop Aldrich, the chairman of Chase National Bank, according to Michael Perino, Pecora’s biographer. Ironically, Glass loathed the Pecora hearings, deriding them as “a circus, and the only thing lacking now are peanuts and colored lemonade.” But the hearings made his bill — which had been filibustered by Huey Long just 18 months earlier — not just possible but inevitable.
How inevitable? Charles Geisst, a finance professor at Manhattan College and an expert on the law, says that the House and Senate didn’t even bother with a roll-call vote for final passage. This seminal piece of legislation, which helped keep the banks out of trouble for the next 70-plus years, flew through on a voice vote. On Friday, June 16, 1933, when Roosevelt signed it into law, The American Banker gave the news all of three paragraphs. There was nothing left to say.
Joe Nocera
America's economic greatness is measured by its middle class, not the wealthy. We seem to be doomed without a vibrant, optimistic, and prospering middle class that has the money to spend on the goods and services that the economy produces. An irony in all of this is that we in the middle class are partly to blame. We are so caught up in striving to be wealthy - or at least occasionally feel like we can live a little of our lives as if we were - that we can be our own worst enemies when it comes to racking up personal debt. The difference between us and the bankers, however, is that our debts are our own and, as we should have learned from history and are so painfully learning again, so are Wall Street's.
We also become our own worst enemies when we start believing and supporting the fallacy of trickle down economics. History proves that model doesn't work. Correction. That model works perfectly well for the very wealthy. It's a superb model for widening the wealth gap and concentrating wealth in fewer and fewer hands.
So I continuously wonder how many more times will it take before intelligent individuals look at history, do the math, and accept that the rich consider the rest of us to be little more than economic chattel; property, as it were, to be bought and sold for the benefit of the uber-rich and powerful? By supporting failed economic models and legislative policies that benefit the wealthy over the middle class, we are doing little more than engaging in wishful thinking while clinging to a blind faith that by prostrating ourselves at the feet of the wealthy we might some day be invited to a seat at their table. Even without such an invitation, some of us cling to an even more dangerous and failed belief that what's needed now is to remove any last bit of regulation and to put our full faith and trust in the hands of wealthy capitalists and bankers. These are the very people who not only have caused the last two great economic collapses, they have mastered the art of duping an uninformed and blissfully ignorant portion of the population into believing that without them we will have even fewer opportunities to live a life that has any hope, dignity, or comfort at all.
IMHO, those of us in the middle class who believe these fairy tales do ourselves and our fellow citizens a grave injustice by thinking that the best a free market system has to offer is whatever scraps the richest among us care to share from their plates.
Economic collapses aren't and never have been caused by unions, the middle class, the poor, or illegal immigrants. Men from places like Goldman Sachs, JP Morgan, and other big houses on Wall Street have been at the root of our economic collapses. They've never really been the catalyst of economic growth and prosperity, either. They've never built a single car, computer, or line of software code. They don't build buildings and they don't grow food. They don't mine minerals and they don't teach our kids in schools or deliver health care. To be sure, they play a role as middle men in making the financing possible to do those things. They ostensibly provide the supposed financial expertise to evaluate the risk-reward equation. They have the contacts to be able to put monied interests together with those who need the investment capital. So at the end of the day, what are they? They are the hosts of a multi-trillion dollar Match Game for which they are paid astronomical sums and for which we are supposed to be grateful for their parts in the "jobs creation" equation.
Here's the rub. When their bets win, they reap the rewards in terms of massive personal wealth which never really trickles down very far, if at all. Good for them. Our system is supposed to reward intelligence and achievement, and I'm all for that. But what happens when there are no rules in place and their gambles go south? Who suffers? Who has to pay for those bad bets?
History cannot be denied. We know by looking back that when there are either too few or no borders, boundaries, or rules by which people - including capitalists - must play, bad things tend to happen. Call it a sad reality of human nature. Call it whatever you like. The reality cannot be denied. The concentration of wealth - and the unregulated power that goes with it - is what was at the root of the Great Depression and the Great Recession. And while the post-WWII prosperity this country enjoyed for the latter half of the 20th century is not completely the result of Glass-Steagall, the undeniable truths are that the bill existed until Reagan and Greenspan successfully vilified government and financial regulation, and Clinton signed a GOP piece of legislation into law that the Republicans had wanted since the 30s to reverse Glass-Steagall known as Gramm-Leach-Bliley.
And where do we find ourselves again and as a result? In an economy that widens the wealth gap, divides us on ideologies to the point where people stop talking to each other, and where, saddest of all, facts no longer matter.
Know what else cannot be denied? It's who pays for the *unregulated* bets that Wall Street makes and loses. Bets that we're now learning that Wall Street was making both ways by continuing to sell unregulated securities like mortgage backed securities and collateralized debt obligations even while they bet against them with credit default swaps? I can tell who didn't pay for those bad bets; the Wall Streeters who made them and who, despite the collapse, continue to make historic bonuses instead of being fired or going to jail. Whatever happened to accountability? Whatever happened to paying for one's mistakes? Whatever happened to business ethics?
So I have to ask, "Is the desire to regulate really socialism, and what is it called when an economic system privatizes all the gains and socializes all the losses?"
Are we witnessing a perversion of capitalism? Is the erosion of the middle class and vilification of the poor what happens when a wealthy and powerful oligarchy wields ever more unchecked and unregulated power, reaps all the rewards, and passes all of their losses onto us?
Is what we are witnessing really the truest expression of capitalism? Is the ultimate manifestation of our system really the plutocracy we are seeing now; a system where the rich few tell all the rest of us what to think and what's good for us and, out of shear fear and panic, we believe them?
Are we really going to become a society in which social programs are seen as wasteful and frivolous; where the availability of medical science and technology that can improve and save lives is reduced to an economic ROI calculation; where average people who have played by the rules and worked hard all their lives become indigent in their old age; and where we gladly pursue and support economic and political policies that produce short term gains for a few with no regard for long term pains for the many?
Are we that blind? Are we that cold? Have we really lost our intelligence and our humanity at the same time?
What happens next? Do we continue to allow our system to devolve into a kleptocracy where government is replaced by capitalism, ruled completely by and for the exclusive and sole benefit of the richest among us, and where we finally and completely see them steal any lingering shreds of dignity and paltry wealth we have left?
It just seems to me that we are hurtling toward a doom that comes only from a completely unregulated capitalist system - at least as capitalism is being practiced today in America. IMHO, we have some people within the middle class who support the idea of less regulation, who refuse to learn from history, and who won't face reality to partially thank for it.
If we were united in the middle class and in our demands for fairness, equality, and sensible rules to protect the economy as a whole, I could see us creating the environment for real recovery and prosperity just as was the case during that period in the 20th century when the wealth gap wasn't so wide and legislation like Glass-Steagall kept people from making fortunes by knowingly making bets that only paid the dividends and never saddled them with the losses.
Related Sources
Rampell, Catherine. (June 17, 2011). For Want of a Word, Arizona’s Jobless Lose Checks. New York Times. Retrieved from http://www.nytimes.com/2011/06/18/business/18benefits.html
Howard, John. (June 2, 2011). Goldman Hit With Subpoena Over MBS Antics. Law360.com Retrieved from http://www.law360.com/topnews/articles/248863
The Daily Show: Exclusive - William Cohan Interview Parts 1 and 2 (April 28, 2011). Retrieved from
http://www.thedailyshow.com/watch/thu-april-28-2011/exclusive---william-cohan-extended-interview-pt--1
http://www.thedailyshow.com/watch/thu-april-28-2011/exclusive---william-cohan-extended-interview-pt--2
----- Original Message -----
Sent: Saturday, June 18, 2011 7:15:29 AM
Subject: The Banking Miracle
The president of the American Bankers Association was railing against excessive regulation in a speech at the Waldorf Astoria. The banking reform bill, he complained, “would destroy a substantial part of our bond-distributing machinery.” He added, “Can anyone expect that a step of this kind will improve the quality of our long-term investments?”
Modern echoes, for sure. But I read about the speech in a Jan. 27, 1933, article culled from the wonderful archives of The American Banker, the bankers’ bible now celebrating its 175th birthday. The speaker, one Francis H. Sisson, was complaining about an early version of the Glass-Steagall Act, the most famous of all Depression-era bank laws, and the one that, in retrospect, probably did the most good. Less than six months after Sisson’s speech, President Franklin Roosevelt signed it into law.
From my vantage point here in 2011, Glass-Steagall seems miraculous. It was amazingly radical, not just for its time, but for any time; it didn’t so much reform banking as upend it. Most notably, it ordered banks to get out of the securities business. As Sisson complained: “The effect of the proposed banking reform is to renounce investment banking rather than regulate it.” Because investment banking was then the chief activity of the big banks, this was a very big deal.
Glass-Steagall also created the Federal Deposit Insurance Corporation, which insured customer deposits for the first time, and outlawed branch banking by national banks, among other things. It is impossible to imagine anything like it passing today; although the modern reform bill, Dodd-Frank, surely does some good, it’s not even comparable.
I’d long wondered how Senator Carter Glass, the powerful Virginia Democrat, and his House counterpart, the Alabama congressman Henry Steagall, managed to get it passed. What were the politics like? What did they fight over? Why didn’t people like Sisson have better luck pushing back against it, the way bank lobbyists do today? So I asked the editors at American Banker if they would send me some articles from the era that would shed some light on the question. Happily, they obliged.
The first thing I realized is that all the horse-trading over the bill’s provision was done by Democrats. The Republicans, having been badly defeated in the 1932 election, had no ability to block it or even amend it. For instance, Republicans tended to view the creation of deposit insurance as “socialism.” (Sound familiar?) But it didn’t matter: Steagall cared deeply about deposit insurance. Many community bankers — as strong a force back then as today — also supported the idea because they believed it would renew customers’ faith in the banks, and bring back deposits. (This turned out to be true.) Glass, though skeptical, went along so he could get things he cared about, mainly a stronger Federal Reserve with more power over the banks.
The second thing I realized was that, the Sisson speech notwithstanding, there was surprisingly little controversy over what we now think of as the law’s primary achievement: splitting commercial and investment banking. The fights were all over issues that seem inconsequential by today’s lights. It’s as if the notion of breaking the banking business into two was always a foregone conclusion.
And, for the most part, it was. Partly, this was because, unlike today, bank failures in the 1930s were often ruinous to customers. So reform was more pressing. But it was also because, for the entire time the legislation was under consideration, the Pecora hearings were going on — in which Ferdinand Pecora, the flamboyant chief counsel of the Senate Banking Committee, dragged one well-known banker after another before the committee and grilled them mercilessly, exposing how they had abused their investment banking roles, sometimes to the point of criminality. The Pecora hearings serve as a steady drumbeat in the American Banker articles.
Those hearings infuriated the country, and made it unthinkable that banks would continue to be allowed to sell securities. In fact, some banks, seeing which way the wind was blowing, applauded: “The spirit of speculation should be eradicated from the management of commercial banks,” declared Winthrop Aldrich, the chairman of Chase National Bank, according to Michael Perino, Pecora’s biographer. Ironically, Glass loathed the Pecora hearings, deriding them as “a circus, and the only thing lacking now are peanuts and colored lemonade.” But the hearings made his bill — which had been filibustered by Huey Long just 18 months earlier — not just possible but inevitable.
How inevitable? Charles Geisst, a finance professor at Manhattan College and an expert on the law, says that the House and Senate didn’t even bother with a roll-call vote for final passage. This seminal piece of legislation, which helped keep the banks out of trouble for the next 70-plus years, flew through on a voice vote. On Friday, June 16, 1933, when Roosevelt signed it into law, The American Banker gave the news all of three paragraphs. There was nothing left to say.
Joe Nocera
Monday, May 2, 2011
Dear Sen. Toomey (and GOP), We can't drill our way to so-called energy independence.
Dear Senator Toomey,
Let me say as respectfully, directly, and candidly as possible that I could not disagree with you more on your strategy as outlined in the following statement from your email below.
"It is for this reason that I have been disappointed by the President's reluctance to a significant expansion of oil exploration and energy production within our own borders, including in the north Alaska coast. More oil production in the United States - both offshore and on land - will create jobs and bring new supplies to market, making us less dependent on the Middle East for our energy security. I will continue working with my Senate colleagues on policies that will bolster domestic oil production."
This is, with all due respect, an idea that has no merit and makes absolutely no sense in the 21st century.
First of all, fossil fuels are fungible resources. There simply are insufficient resources within our borders and offshore in our waters to have any meaningful impact on prices globally(1).
Second and perhaps even more importantly, the risks to our environment as demonstrated most recently by the BP Deepwater Horizon disaster last year proves that this is an industry that cannot be trusted to put safety for its workers and the environment above profit. It is time for us to stop subsidizing this wildly profitable industry and to start helping companies who want to provide us with energy solutions that do not put workers' lives at risk and which do not permanently and irrevocably harm our planet.
Therefore and in closing, unless and until you publicly reverse your position and instead advocate to the president and your colleagues for greater and more meaningful commitments to cleaner and greener energy technologies such as solar, wind, and geothermal, please know that I will advocate against you and your reelection. I will tell all of my family, friends and neighbors that yours is a short-sighted and doomed idea to "drill, baby, drill", and I will use precisely that kind of language to attach you to less serious political figures who share what I consider to be ridiculous and dangerous ideas about energy and our future.
Sincerely,
Greg *********
(1) http://www.eia.doe.gov/pub/oil_gas/petroleum/analysis_publications/arctic_national_wildlife_refuge/html/preface.html and http://www.eia.doe.gov/oiaf/aeo/otheranalysis/ongr.html
----- Forwarded Message -----
From: "Senator Pat Toomey"
To: "greg
Sent: Monday, May 2, 2011 11:24:14 AM
Subject: Reply from U.S. Senator Pat Toomey
May 2, 2011
Dear Mr. **********,
Thank you for contacting me about energy prices. I appreciate hearing from you as I begin my service on behalf of Pennsylvania.
Like you, I am very concerned about the increased cost of gasoline and other fuels. High energy prices hurt the wallets of households across the country and pose a serious threat to our economy. It also is troubling that we continue to import billions of barrels of oil every year from unfriendly and unstable parts of the world. As Administrator Lisa Jackson, the head of the U.S. Environmental Protection Agency, recently noted, our dependence on foreign oil is the "most important factor" for the increase in gasoline prices. Clearly, we need to advance policies that tackle this problem and help Americans who are concerned about how much they are paying at the pump.
First and foremost, we need to produce significantly more energy here at home and put our country on the right track towards energy independence and affordable fuels. It is for this reason that I have been disappointed by the President's reluctance to a significant expansion of oil exploration and energy production within our own borders, including in the north Alaska coast. More oil production in the United States - both offshore and on land - will create jobs and bring new supplies to market, making us less dependent on the Middle East for our energy security. I will continue working with my Senate colleagues on policies that will bolster domestic oil production.
In addition, you may be interested to know that I have cosponsored an energy bill to protect Pennsylvania jobs and help lower energy prices. The Boutique Fuel Reduction Act of 2011 (S. 511) would reduce the probability of gas price spikes by simplifying our complex gasoline system and curbing "boutique fuel" regulations that can drive up prices at the pump. This bill is currently pending before the Senate Environment and Public Works Committee.
Lastly, some have argued that speculation in the oil markets is driving the increase in gasoline prices. In response to such concerns, my office has contacted the U.S. Commodity Futures Trading Commission to learn more about the possible impact of energy speculation and about federal efforts to regulate the trade of energy futures. I look forward to working with my Senate colleagues on this issue, as well as on other possible factors that could be driving gasoline prices such as the Federal Reserve's recent efforts to pump an unprecedented amount of money into the economy.
Thank you again for your correspondence. Please do not hesitate to contact me in the future if I can be of assistance.
Sincerely,
Signature
Pat Toomey
U.S. Senator, Pennsylvania
Let me say as respectfully, directly, and candidly as possible that I could not disagree with you more on your strategy as outlined in the following statement from your email below.
"It is for this reason that I have been disappointed by the President's reluctance to a significant expansion of oil exploration and energy production within our own borders, including in the north Alaska coast. More oil production in the United States - both offshore and on land - will create jobs and bring new supplies to market, making us less dependent on the Middle East for our energy security. I will continue working with my Senate colleagues on policies that will bolster domestic oil production."
This is, with all due respect, an idea that has no merit and makes absolutely no sense in the 21st century.
First of all, fossil fuels are fungible resources. There simply are insufficient resources within our borders and offshore in our waters to have any meaningful impact on prices globally(1).
Second and perhaps even more importantly, the risks to our environment as demonstrated most recently by the BP Deepwater Horizon disaster last year proves that this is an industry that cannot be trusted to put safety for its workers and the environment above profit. It is time for us to stop subsidizing this wildly profitable industry and to start helping companies who want to provide us with energy solutions that do not put workers' lives at risk and which do not permanently and irrevocably harm our planet.
Therefore and in closing, unless and until you publicly reverse your position and instead advocate to the president and your colleagues for greater and more meaningful commitments to cleaner and greener energy technologies such as solar, wind, and geothermal, please know that I will advocate against you and your reelection. I will tell all of my family, friends and neighbors that yours is a short-sighted and doomed idea to "drill, baby, drill", and I will use precisely that kind of language to attach you to less serious political figures who share what I consider to be ridiculous and dangerous ideas about energy and our future.
Sincerely,
Greg *********
(1) http://www.eia.doe.gov/pub/oil_gas/petroleum/analysis_publications/arctic_national_wildlife_refuge/html/preface.html and http://www.eia.doe.gov/oiaf/aeo/otheranalysis/ongr.html
----- Forwarded Message -----
From: "Senator Pat Toomey"
To: "greg
Sent: Monday, May 2, 2011 11:24:14 AM
Subject: Reply from U.S. Senator Pat Toomey
May 2, 2011
Dear Mr. **********,
Thank you for contacting me about energy prices. I appreciate hearing from you as I begin my service on behalf of Pennsylvania.
Like you, I am very concerned about the increased cost of gasoline and other fuels. High energy prices hurt the wallets of households across the country and pose a serious threat to our economy. It also is troubling that we continue to import billions of barrels of oil every year from unfriendly and unstable parts of the world. As Administrator Lisa Jackson, the head of the U.S. Environmental Protection Agency, recently noted, our dependence on foreign oil is the "most important factor" for the increase in gasoline prices. Clearly, we need to advance policies that tackle this problem and help Americans who are concerned about how much they are paying at the pump.
First and foremost, we need to produce significantly more energy here at home and put our country on the right track towards energy independence and affordable fuels. It is for this reason that I have been disappointed by the President's reluctance to a significant expansion of oil exploration and energy production within our own borders, including in the north Alaska coast. More oil production in the United States - both offshore and on land - will create jobs and bring new supplies to market, making us less dependent on the Middle East for our energy security. I will continue working with my Senate colleagues on policies that will bolster domestic oil production.
In addition, you may be interested to know that I have cosponsored an energy bill to protect Pennsylvania jobs and help lower energy prices. The Boutique Fuel Reduction Act of 2011 (S. 511) would reduce the probability of gas price spikes by simplifying our complex gasoline system and curbing "boutique fuel" regulations that can drive up prices at the pump. This bill is currently pending before the Senate Environment and Public Works Committee.
Lastly, some have argued that speculation in the oil markets is driving the increase in gasoline prices. In response to such concerns, my office has contacted the U.S. Commodity Futures Trading Commission to learn more about the possible impact of energy speculation and about federal efforts to regulate the trade of energy futures. I look forward to working with my Senate colleagues on this issue, as well as on other possible factors that could be driving gasoline prices such as the Federal Reserve's recent efforts to pump an unprecedented amount of money into the economy.
Thank you again for your correspondence. Please do not hesitate to contact me in the future if I can be of assistance.
Sincerely,
Signature
Pat Toomey
U.S. Senator, Pennsylvania
Monday, April 18, 2011
Senator Sanders asks, "Tax Time? Not for Giant Corporations"
From Senator Bernie Sanders
Release: Tax Time? Not for Giant Corporations
March 27, 2011
Sanders Calls for Shared Sacrifice
BURLINGTON, Vt., March 27 - While hard working Americans fill out their income tax returns this tax season, General Electric and other giant profitable corporations are avoiding U.S. taxes altogether.
With Congress returning to Capitol Hill on Monday to debate steep spending cuts, Sen. Bernie Sanders (I-Vt.) said the wealthiest Americans and most profitable corporations must do their share to help bring down our record-breaking deficit.
Sanders renewed his call for shared sacrifice after it was reported that General Electric and other major corporations paid no U.S. taxes after posting huge profits. Sanders said it is grossly unfair for congressional Republicans to propose major cuts to Head Start, Pell Grants, the Social Security Administration, nutrition grants for pregnant low-income women and the Environmental Protection Agency while ignoring the reality that some of the most profitable corporations pay nothing or almost nothing in federal income taxes.
Sanders compiled a list of some of some of the 10 worst corporate income tax avoiders.
1) Exxon Mobil made $19 billion in profits in 2009. Exxon not only paid no federal income taxes, it actually received a $156 million rebate from the IRS, according to its SEC filings. (Source: Exxon Mobil's 2009 shareholder report filed with the SEC here.)
2) Bank of America received a $1.9 billion tax refund from the IRS last year, although it made $4.4 billion in profits and received a bailout from the Federal Reserve and the Treasury Department of nearly $1 trillion. (Source: Forbes.com here, ProPublica here and Treasury here.)
3) Over the past five years, while General Electric made $26 billion in profits in the United States, it received a $4.1 billion refund from the IRS. (Source: Citizens for Tax Justice here and The New York Times here. Note: despite rumors to the contrary, the Times has stood by its story.)
4) Chevron received a $19 million refund from the IRS last year after it made $10 billion in profits in 2009. (Source: See 2009 Chevron annual report here. Note 15 on page FS-46 of this report shows a U.S. federal income tax liability of $128 million, but that it was able to defer $147 million for a U.S. federal income tax liability of $-19 million)
5) Boeing, which received a $30 billion contract from the Pentagon to build 179 airborne tankers, got a $124 million refund from the IRS last year. . (Source: Paul Buchheit, professor, DePaul University, here and Citizens for Tax Justice here.)
6) Valero Energy, the 25th largest company in America with $68 billion in sales last year received a $157 million tax refund check from the IRS and, over the past three years, it received a $134 million tax break from the oil and gas manufacturing tax deduction. (Source: the company's 2009 annual report, pg. 112, here.)
7) Goldman Sachs in 2008 only paid 1.1 percent of its income in taxes even though it earned a profit of $2.3 billion and received an almost $800 billion from the Federal Reserve and U.S. Treasury Department. (Source: Bloomberg News here, ProPublica here, Treasury Department here.)
8) Citigroup last year made more than $4 billion in profits but paid no federal income taxes. It received a $2.5 trillion bailout from the Federal Reserve and U.S. Treasury. (Source: Paul Buchheit, professor, DePaul University, here, ProPublica here, Treasury Department here.)
9) ConocoPhillips, the fifth largest oil company in the United States, made $16 billion in profits from 2006 through 2009, but received $451 million in tax breaks through the oil and gas manufacturing deduction. (Sources: Profits can be found here. The deduction can be found on the company's 2010 SEC 10-K report to shareholders on 2009 finances, pg. 127, here)
10) Over the past five years, Carnival Cruise Lines made more than $11 billion in profits, but its federal income tax rate during those years was just 1.1 percent. (Source: The New York Times here)
Sanders has called for closing corporate tax loopholes and eliminating tax breaks for oil and gas companies. He also introduced legislation to impose a 5.4 percent surtax on millionaires that would yield up to $50 billion a year. The senator has said that spending cuts must be paired with new revenue so the federal budget is not balanced solely on the backs of working families.
"We have a deficit problem. It has to be addressed," Sanders said, "but it cannot be addressed on the backs of the sick, the elderly, the poor, young people, the most vulnerable in this country. The wealthiest people and the largest corporations in this country have got to contribute. We've got to talk about shared sacrifice."
Release: Tax Time? Not for Giant Corporations
March 27, 2011
Sanders Calls for Shared Sacrifice
BURLINGTON, Vt., March 27 - While hard working Americans fill out their income tax returns this tax season, General Electric and other giant profitable corporations are avoiding U.S. taxes altogether.
With Congress returning to Capitol Hill on Monday to debate steep spending cuts, Sen. Bernie Sanders (I-Vt.) said the wealthiest Americans and most profitable corporations must do their share to help bring down our record-breaking deficit.
Sanders renewed his call for shared sacrifice after it was reported that General Electric and other major corporations paid no U.S. taxes after posting huge profits. Sanders said it is grossly unfair for congressional Republicans to propose major cuts to Head Start, Pell Grants, the Social Security Administration, nutrition grants for pregnant low-income women and the Environmental Protection Agency while ignoring the reality that some of the most profitable corporations pay nothing or almost nothing in federal income taxes.
Sanders compiled a list of some of some of the 10 worst corporate income tax avoiders.
1) Exxon Mobil made $19 billion in profits in 2009. Exxon not only paid no federal income taxes, it actually received a $156 million rebate from the IRS, according to its SEC filings. (Source: Exxon Mobil's 2009 shareholder report filed with the SEC here.)
2) Bank of America received a $1.9 billion tax refund from the IRS last year, although it made $4.4 billion in profits and received a bailout from the Federal Reserve and the Treasury Department of nearly $1 trillion. (Source: Forbes.com here, ProPublica here and Treasury here.)
3) Over the past five years, while General Electric made $26 billion in profits in the United States, it received a $4.1 billion refund from the IRS. (Source: Citizens for Tax Justice here and The New York Times here. Note: despite rumors to the contrary, the Times has stood by its story.)
4) Chevron received a $19 million refund from the IRS last year after it made $10 billion in profits in 2009. (Source: See 2009 Chevron annual report here. Note 15 on page FS-46 of this report shows a U.S. federal income tax liability of $128 million, but that it was able to defer $147 million for a U.S. federal income tax liability of $-19 million)
5) Boeing, which received a $30 billion contract from the Pentagon to build 179 airborne tankers, got a $124 million refund from the IRS last year. . (Source: Paul Buchheit, professor, DePaul University, here and Citizens for Tax Justice here.)
6) Valero Energy, the 25th largest company in America with $68 billion in sales last year received a $157 million tax refund check from the IRS and, over the past three years, it received a $134 million tax break from the oil and gas manufacturing tax deduction. (Source: the company's 2009 annual report, pg. 112, here.)
7) Goldman Sachs in 2008 only paid 1.1 percent of its income in taxes even though it earned a profit of $2.3 billion and received an almost $800 billion from the Federal Reserve and U.S. Treasury Department. (Source: Bloomberg News here, ProPublica here, Treasury Department here.)
8) Citigroup last year made more than $4 billion in profits but paid no federal income taxes. It received a $2.5 trillion bailout from the Federal Reserve and U.S. Treasury. (Source: Paul Buchheit, professor, DePaul University, here, ProPublica here, Treasury Department here.)
9) ConocoPhillips, the fifth largest oil company in the United States, made $16 billion in profits from 2006 through 2009, but received $451 million in tax breaks through the oil and gas manufacturing deduction. (Sources: Profits can be found here. The deduction can be found on the company's 2010 SEC 10-K report to shareholders on 2009 finances, pg. 127, here)
10) Over the past five years, Carnival Cruise Lines made more than $11 billion in profits, but its federal income tax rate during those years was just 1.1 percent. (Source: The New York Times here)
Sanders has called for closing corporate tax loopholes and eliminating tax breaks for oil and gas companies. He also introduced legislation to impose a 5.4 percent surtax on millionaires that would yield up to $50 billion a year. The senator has said that spending cuts must be paired with new revenue so the federal budget is not balanced solely on the backs of working families.
"We have a deficit problem. It has to be addressed," Sanders said, "but it cannot be addressed on the backs of the sick, the elderly, the poor, young people, the most vulnerable in this country. The wealthiest people and the largest corporations in this country have got to contribute. We've got to talk about shared sacrifice."
Saturday, April 9, 2011
GOP and Tea Party Budget Cuts Make No Sense Mathematically or Logically
To any and all self-proclaimed supporters of Ryan or the Tea Party:
Where would you start on a 2012 White House proposed budget that is projected to take in $2.6 trillion and spend $3.7 trillion? (http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/budget.pdf)
Numbers with the word trillion after them can be hard to comprehend. I got a quizzical look recently from a family member when I used million-million. So here's what I do.
$3.7trillion = $3,700,000,000,000 = $3700 billion
Drop all the extraneous zeros and start out talking about $3700.00. Thirty seven hundred dollars is a number anyone can understand. That turns tens and hundreds of millions into pennies and dimes, respectively.
Even a number as large as one billion becomes easier to grasp out of 3700 billion when you realize that it's one "dollar" out of 3700. That one (billion) dollar(s) becomes a paltry and practically meaningless - in a relative sense - 0.027% of the total.
With that in mind, I would be curious to know where the following would end up on anyone's list for cuts greater than might already be built into the 2012 budget.
Planned Parenthood (Title X)
“Unlike the House Republicans’ Continuing Resolution for the rest of Fiscal Year 2011, which Congress is debating this week, the president’s budget proposes a $10 million increase to the Title X program, calling for this critical program to be funded at $327 million."
(Source: http://www.plannedparenthood.org/about-us/newsroom/press-releases/statement-planned-parenthood-president-cecile-richards-president-obamas-2012-budget-36197.htm)
327 million = 0.327 billion. That's 33 cents out of 3700 dollars. It's 0.00891% of the total budgeted expense of our federal government.
CPB
"CPB requests a $495 million advance appropriation for FY 2014, an increase of $50 million over the last enacted advance appropriation ($445 million in FY 2012)."
(Source: http://www.cpb.org/appropriation/)
445 million for FY 2012 is 0.445 billion. That's 45 cents out of 3700 dollars, or 0.01216%.
Head Start
"Continues strong support for high-quality early childhood programs with more than $8 billion for Head Start and Early Head Start to serve approximately 968,000 children and families"
(Source: http://www.whitehouse.gov/omb/factsheet_department_health/)
8 (billion) is 0.216% of 3700 (billion)
EPA
The Environmental Protection Agency’s (EPA) mission is to protect human health and the environment. The President’s 2012 Budget includes $9 billion to continue to deliver on this mission, a decrease of $1.3 billion.
(Source: http://www.whitehouse.gov/omb/factsheet_department_epa/)
A $1.3 billion decrease on $10.3 billion is a 12.6% REDUCTION in spending for the EPA.
$9 (billion) is 0.24% of 3700 (billion).
DoD
The President's 2012 Budget for the Department of Defense (DOD) reflects that commitment, proposing $553 billion - an increase of $22 billion above the 2010 appropriation.
(Source: http://www.whitehouse.gov/omb/factsheet_department_defense/)
A $22 billion increase to $553B is a 4% INCREASE in spending on defense.
$553 (billion) is 14.94% of $3700 (billion)
So, do we start with more cuts to tiny programs that may have already had their budgets cut, or do we cut those where there's a planned increase and that account for significant percentages of the total? I say the latter.
Mathematically and logically, do we start with expenses that represent 33 cents, 45 cents, 8 dollars, 9 dollars, or 553 dollars out of 3700? Doesn't make sense to me to cut pennies when hundreds of dollars are possible.
Do we cut more from programs that represent 0.00891%, 0.01216%, 0.216%, 0.24%, or 15% of the total projected expense? I say the one that is 15% ought to be cut first.
Tax Revenues
Depending on what numbers one wants to accept and acknowledging that it seems impossible to do this with any certainty by people way more smarter than I, one thing seems clear even to me. The Bush era tax cuts and their extension is costing the government anywhere from 1.6 to 2.5trillion in uncollected tax revenues - mostly from the rich - and has not done one friggin' thing to improve the economy as far as I can tell.
(Source: http://www.taxfoundation.org/news/show/26314.html)
IMHO, it's crazy and dangerous to pretend the budget can be balanced and the debt reduced only by cutting expenses. Tax revenues also have to be increased.
My plan would be simple because I'm simply not fully informed or smarter than anyone else. It's just where I - a common man like any tea bagger...except without the pointy hat and Ben Franklin get-up - would start.
1. Raise income and capital gains taxes on richest 2% and on corporate profits immediately to Clinton era levels. Even higher would be ok, too. I'm using that era in our history if for no other reason than it was a time when there was economic expansion and a budget surplus.
2. Change the tax code immediately to a more progressive schedule that captures more tax the more income that individuals make (and presumably, then, encouraging the true heroes of capitalism - and I mean it sincerely - the small business owner to make a decent living while having a tax incentive to invest "excess" income back into their business)
3. Close every corporate tax loop hole there is, starting with the ones that benefit oil, coal, gas, and financial services industries. They are doing just fine without them, thank you very much.
4. Not only *not* increase the DoD budget, but find ways to cut it by....I don't know....10% seems reasonable. More is better. Stopping the pissing away of lives and money in the Middle East would help, too.
Just my 2 cents. It's about all I have left.....
Monday, March 14, 2011
Do the Math: Nibbling at the Edges Won't Work
I received an email from a friend recently that was purported to be from a recent speech by Senator Tom Coburn. It's supposed to be his frustration about some items in the federal budget.
I'm all for fiscal responsibility. I wish the GOP was, too.
The federal budget is over 3.6 trillion dollars. I agree that's huge. It's way too big and out of control. I agree that something - lots of things, really - need to be done, but what exactly? And how do we put that "what" into some kind of perspective people can come to some agreement about?
To try to understand this, I started out with what the number 3.6 trillion really is. Yeah, I know. It's BIG! ;)
I had to break it down. It's 3600 billion. Still sounds pretty big! 3600billion is also 3600 million-million. Anytime you start saying "million-million" together, you know it's big!
What I don't understand or care much about is how many trips back and forth to the moon that is or what it's height would be in 100 dollar bills stacked up or some shit like that because that's meaningless to me, too. What I can do to understand all these numbers, though, is to compare them against each other. Here's what I discovered when I compared the total budget to some of the budget items that Coburn talks about.
What does it really mean when legislators complain about $150million for the Smithsonian or $500million for state and local fire stations or even $79billion for state education? Hard to say until one puts those numbers into perspective relative to the total budget. That I can do and understand.
So, $150,000,000 for the Smithsonian out of a total budget of $3,600,000,000,000 is 0.00416% of the total. That's 4 one-thousandths of one percent. $500million for state and local fire stations is 0.0138% of the total. Even $79billion for education is only 2.19%.
Putting it another way that I can actually comprehend, it's like saying that if the total federal budget was $3,600.00 Coburn and his colleagues in the GOP think we need to get fiscally responsible by cutting out 15 cents for the Smithsonian, 50 cents for fire stations, and just 79 bucks for education. I can understand that math............ but not the reasoning behind thinking we don't as a society need museums, fire stations, and well-educated kids.
To be sure, it all adds up and, yes, I agree with him that it isn't very smart or fiscally responsible to spend $448M on a new building and $248M on furniture for the Department of Homeland Security when there's supposedly $1.3trillion in empty buildings sitting on the books. What I wonder about is how come he and everyone else don't talk about big budget items like Defense?
I found it disturbing to read just this morning that the cost overruns alone in the Department of Defense these days are $300billion, an amount equal to Clinton's last FULL defense budget. (http://www.nytimes.com/interactive/2011/03/12/opinion/20100313_Pentagonsboondoggles.html?nl=todaysheadlines&emc=thab1)
Don't get me wrong. I'm all for defending America, but I think it's time to stop pretending we're actually capable of arming Luke Skywalker with missile defense systems costing hundreds of billions of dollars that can actually shoot one missile with another. As the above NY Times piece shows, we've been trying to do that since ancient times - the year I was born - and there's no projected end in sight. The physics and technology are just not realistic, certainly not anytime soon. We seem to be the victims of just a little too much sci-fi.
I didn't realize this until recently, either. According to the Stockholm International Peace Research Institute, we spend as much on our military as the next 15 largest countries combined. Our military expenditures in 2009 were #1 on the list at $663billion. China is #2 at $98.8billion. We outspend just China by 670%. Number 3 on the list is the U.K. Are we worried they'll invade our shores? Seems like we ought to be able to kick anyone's ass in a conventional sense even if we cut back some.
There's certainly more than a little work that needs to be done in this country about our finances. For my part, I'd rather see the so-called and self-proclaimed fiscal hawks in the Republican party doing things like cutting defense spending and having an "adult conversation" as they like to say about the fact that what's really needed are the elimination of tax breaks and subsidies to companies like big oil combined with increases in taxes on those who can afford it most - the richest 2%.
Instead, the GOP seems intent on trying to pit middle class Americans against each other over things like a union's ability to bargain collectively, as if killing unions will add one single cent to a budget. They also are trying to sell us bullshit ideas that we need to cut the pennies it costs to keep museums and firehouses open, and the few dollars it takes to educate our kids. Meanwhile, the Defense Department's budget of over $660billion is almost 20% of the total budget and isn't cut but expanded.
Big problems require big courage and big solutions, not politically motivated nibbling at the edges that eliminates vital social functions that are tiny fractions of a percentage of the budget.
I'm all for fiscal responsibility. I wish the GOP was, too.
The federal budget is over 3.6 trillion dollars. I agree that's huge. It's way too big and out of control. I agree that something - lots of things, really - need to be done, but what exactly? And how do we put that "what" into some kind of perspective people can come to some agreement about?
To try to understand this, I started out with what the number 3.6 trillion really is. Yeah, I know. It's BIG! ;)
I had to break it down. It's 3600 billion. Still sounds pretty big! 3600billion is also 3600 million-million. Anytime you start saying "million-million" together, you know it's big!
What I don't understand or care much about is how many trips back and forth to the moon that is or what it's height would be in 100 dollar bills stacked up or some shit like that because that's meaningless to me, too. What I can do to understand all these numbers, though, is to compare them against each other. Here's what I discovered when I compared the total budget to some of the budget items that Coburn talks about.
What does it really mean when legislators complain about $150million for the Smithsonian or $500million for state and local fire stations or even $79billion for state education? Hard to say until one puts those numbers into perspective relative to the total budget. That I can do and understand.
So, $150,000,000 for the Smithsonian out of a total budget of $3,600,000,000,000 is 0.00416% of the total. That's 4 one-thousandths of one percent. $500million for state and local fire stations is 0.0138% of the total. Even $79billion for education is only 2.19%.
Putting it another way that I can actually comprehend, it's like saying that if the total federal budget was $3,600.00 Coburn and his colleagues in the GOP think we need to get fiscally responsible by cutting out 15 cents for the Smithsonian, 50 cents for fire stations, and just 79 bucks for education. I can understand that math............ but not the reasoning behind thinking we don't as a society need museums, fire stations, and well-educated kids.
To be sure, it all adds up and, yes, I agree with him that it isn't very smart or fiscally responsible to spend $448M on a new building and $248M on furniture for the Department of Homeland Security when there's supposedly $1.3trillion in empty buildings sitting on the books. What I wonder about is how come he and everyone else don't talk about big budget items like Defense?
I found it disturbing to read just this morning that the cost overruns alone in the Department of Defense these days are $300billion, an amount equal to Clinton's last FULL defense budget. (http://www.nytimes.com/interactive/2011/03/12/opinion/20100313_Pentagonsboondoggles.html?nl=todaysheadlines&emc=thab1)
Don't get me wrong. I'm all for defending America, but I think it's time to stop pretending we're actually capable of arming Luke Skywalker with missile defense systems costing hundreds of billions of dollars that can actually shoot one missile with another. As the above NY Times piece shows, we've been trying to do that since ancient times - the year I was born - and there's no projected end in sight. The physics and technology are just not realistic, certainly not anytime soon. We seem to be the victims of just a little too much sci-fi.
I didn't realize this until recently, either. According to the Stockholm International Peace Research Institute, we spend as much on our military as the next 15 largest countries combined. Our military expenditures in 2009 were #1 on the list at $663billion. China is #2 at $98.8billion. We outspend just China by 670%. Number 3 on the list is the U.K. Are we worried they'll invade our shores? Seems like we ought to be able to kick anyone's ass in a conventional sense even if we cut back some.
There's certainly more than a little work that needs to be done in this country about our finances. For my part, I'd rather see the so-called and self-proclaimed fiscal hawks in the Republican party doing things like cutting defense spending and having an "adult conversation" as they like to say about the fact that what's really needed are the elimination of tax breaks and subsidies to companies like big oil combined with increases in taxes on those who can afford it most - the richest 2%.
Instead, the GOP seems intent on trying to pit middle class Americans against each other over things like a union's ability to bargain collectively, as if killing unions will add one single cent to a budget. They also are trying to sell us bullshit ideas that we need to cut the pennies it costs to keep museums and firehouses open, and the few dollars it takes to educate our kids. Meanwhile, the Defense Department's budget of over $660billion is almost 20% of the total budget and isn't cut but expanded.
Big problems require big courage and big solutions, not politically motivated nibbling at the edges that eliminates vital social functions that are tiny fractions of a percentage of the budget.
Sunday, February 27, 2011
The End of Clean Water in PA?
The New York Times published a disturbing article today, "Regulation Lax as Gas Wells’ Tainted Water Hits Rivers".
---
With hydrofracking, a well can produce over a million gallons of wastewater that is often laced with highly corrosive salts, carcinogens like benzene and radioactive elements like radium, all of which can occur naturally thousands of feet underground. Other carcinogenic materials can be added to the wastewater by the chemicals used in the hydrofracking itself.
While the existence of the toxic wastes has been reported, thousands of internal documents obtained by The New York Times from the Environmental Protection Agency, state regulators and drillers show that the dangers to the environment and health are greater than previously understood.
The documents reveal that the wastewater, which is sometimes hauled to sewage plants not designed to treat it and then discharged into rivers that supply drinking water, contains radioactivity at levels higher than previously known, and far higher than the level that federal regulators say is safe for these treatment plants to handle.
---
Pennsylvanians and Americans anywhere near hydrofracking are left to wonder about just how safe their tap water (and well water) really is. Bottled water is no answer as it's a path in all the wrong directions because of the amount of oil used to make the bottles, the health hazards those bottles themselves create, and the problem that billions and billions of them going into landfills create for thousands of years to come.
It's crazy what we tolerate as citizens from our elected officials who are supposed to be working for us. That has proven to be a complete fantasy in the Koch Party, and the Dems are not much different it seems.
Some interesting and disturbing facts about bottled water:
Out of the 50 billion bottles of water being bought each year, 80% end up in a landfill, even though recycling programs exist.
17 million barrels of oil are used in producing bottled water each year.
Bottled water costs 1,000 times more than tap water. Drinking 2 Litres of tap water a day only costs 50 cents per year.
Plastic leaches toxins into the water, which have been linked to health problems such as reproductive issues and cancer.
Here's a challenge for all the pro-business GOP shills out there: Take a drink from one of the water treatment facilities that have no means for testing for radiation and which are located downstream from a sewage plant where fracking water was sent, and then have that water tested.
---
With hydrofracking, a well can produce over a million gallons of wastewater that is often laced with highly corrosive salts, carcinogens like benzene and radioactive elements like radium, all of which can occur naturally thousands of feet underground. Other carcinogenic materials can be added to the wastewater by the chemicals used in the hydrofracking itself.
While the existence of the toxic wastes has been reported, thousands of internal documents obtained by The New York Times from the Environmental Protection Agency, state regulators and drillers show that the dangers to the environment and health are greater than previously understood.
The documents reveal that the wastewater, which is sometimes hauled to sewage plants not designed to treat it and then discharged into rivers that supply drinking water, contains radioactivity at levels higher than previously known, and far higher than the level that federal regulators say is safe for these treatment plants to handle.
---
Pennsylvanians and Americans anywhere near hydrofracking are left to wonder about just how safe their tap water (and well water) really is. Bottled water is no answer as it's a path in all the wrong directions because of the amount of oil used to make the bottles, the health hazards those bottles themselves create, and the problem that billions and billions of them going into landfills create for thousands of years to come.
It's crazy what we tolerate as citizens from our elected officials who are supposed to be working for us. That has proven to be a complete fantasy in the Koch Party, and the Dems are not much different it seems.
Some interesting and disturbing facts about bottled water:
Out of the 50 billion bottles of water being bought each year, 80% end up in a landfill, even though recycling programs exist.
17 million barrels of oil are used in producing bottled water each year.
Bottled water costs 1,000 times more than tap water. Drinking 2 Litres of tap water a day only costs 50 cents per year.
Plastic leaches toxins into the water, which have been linked to health problems such as reproductive issues and cancer.
Here's a challenge for all the pro-business GOP shills out there: Take a drink from one of the water treatment facilities that have no means for testing for radiation and which are located downstream from a sewage plant where fracking water was sent, and then have that water tested.
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