APRIL 2010: 40TH ANNIVERSARY OF EARTH DAY

   An Economic and Political Perspective

  Henry S. Cole, Ph.D.

The 40th anniversary of Earth Day happened last week. I participated in the first Earth Day as a young professor and environmental activist back in1970. We had high hopes. People were jumping on the eco-wagon like there was no tomorrow. Well here we are tomorrow, four decades later. And we've had a busy Earth Month. 

President Obama announced his plans to open up more coastal waters to the oil industry,

 n a stroke of bad timing for the President’s policy, one of BP’s big oil rigs exploded and sunk the    Gulf of Mexico (on Earth Day). The resulting oil slick expanded rapidly week and threatens estuaries and fish and shrimp industries in four states. See ABC TV video.  According to the Wall Street Journal, the rig had no remote shut-off switch used in other oil-producing nations  U.S. regulators don’t require them. On Thursday, the head of the Coast Guard’s efforts, Mary Landry said that the situation is deteriorating and the spill may wind up being one of the worst in history.

The good news. After nine long years, the Interior Department finally approved a 130-turbine wind farm off the coast of Cape Cod providing a real boost to the U.S. offshore wind industry. See NY Times coverage; The U.S. has lots of offshore wind. 

But there are other news in the making that may ultimately have a more important impact on the future of the environment. Consider the Senate the revelations emerging from the Senate subcommittee hearing on the impact of Goldman Sachs on the financial system and the broader economy. Thanks to financial experts like Simon Johnson (See Johnson and Kwak’s best-selling 13 Bankers and their Blog, Baseline Scenario) and this week’s Senate hearing (See the video), we can see how the reckless speculation and avarice of the Wall Street investment banks contributed the financial meltdown of 2008 and the worst recession since the Great Depression. According to a recent CNN Report: the Bailout Tracker our federal government has already spent 3 trillion dollars and committed 11 trillion dollars to bailout the “too-big-to-fails” (TBTFs). Now the Mega-banks are again making billions while the 15 million Americans are unemployed and millions have lost their homes.

The Wall Street fiasco is an outgrowth of the deregulation that started under President Reagan and continues to flourish. Environmental regulation and enforcement was especially hard hit under Reagan and George W. Bush. 

Hopefully Congress will enact legislation strong enough to rein in the TBTFs that profit by betting against the rest of us. However, ultimately, the real solution is for Congress to ensure that no corporation is powerful enough to wreck havoc on our economy or on the environment.

The juxtaposition of these stories points to a monumental fork in the road – not just a choice between renewables and fossil fuels, but a deeper choice about the way that decisions are made and for whose benefit. It’s about whether mega-corporations or “We the People” will mold the future.  

If permitted, large energy corporations will not only “drill, baby, drill,” but will attempt to squeeze oil from shales and tar sands regardless of the environmental consequences. Big Energy also wants a free hand to reopen uranium mines to fuel a new generation of nuclear power plants with big government subsidies regardless of the environmental and financial risks. Note that the President’s energy plan includes tens of billions of dollars in loan guarantees to entice reluctant banks to invest in nuclear power.

The CEO of one of these companies is likely to use the following strategy (1) use political power to regulatory concessions; (2) get big government subsidies (3) make big profits but saddle the tax paying public with the risks (4) suggest that your firm may leave town if you don’t get what you want. The latter is especially scary to a governor in an economically depressed state with high unemployment. So he or she instructs the head of the state environmental department and the Senator to go easy on the guy with the big smoke stack. Somehow the threat of losing another 500 jobs seems a bit more compelling than a few more cancers or a melting glacier on a far off mountain.

Finally, one should ask what if the trillions used for bailouts had been invested directly in the small, local businesses and community-oriented banks. What if we invested to help state and local governments solve their budget crises?  Imagine if even a small part of the $$$ were invested to boost wind and solar industries and to restore damaged ecosystems. Then we might just be able to celebrate fully on the 50th Anniversary of Earth Day. 

 Please join the conversation with a post

We present President Obama the Flip Flop of the Year Award for his remarkable switch on offshore drilling.

In response to our April Fools Day parody of President Obama's speech announcing a big expansion in offshore drilling, We received a reminder from an anonymous subscriber reminding us that Candidate Obama opposed basically the same plan when it was proposed by McCain and Palin as in "drill baby drill!" Here is a quote from candidate Obama's speech in Jacksonville, FL on June 8, 2008.


"This is a proposal that would only worsen our addiction to oil and put off needed investments in clean, renewable energy. It's not the kind of change that the American people are looking for."

If this is hard to believe, go the linked website and read or see a video of his speech in 2008. He blasts offshore drilling.


You may be interested in several related stories that illustrate the problems with offshore drilling: 

• The Diane Rehm show, April 1, 2010. One issue discussed is the need for additional refining capacity (currently at 98 % capacity); what east coast city will want another oil refinery?

• Local opposition to drilling, refining and transportation facilities is likely to be intense and to create bitter divides between opponents and supporters. Case in point: 

          Culver City challenges new oil drilling

A Texas company wants new wells in the Inglewood Oil Field, which lies along the city's    border and already has 1,463 active, idle and abandoned wells. By Louis Sahagun, April 3, 2010
See also yesterday's article on the poor safety record of oil refineries:  Study Shows US Refineries Have Bad Safety Record: Report shows US oil refineries have bad safety record as blast kills 4 in Washington state, 




By SETH BORENSTEIN AP Science Writer, 

WASHINGTON April 2, 2010 (AP)

 

President's April First Clarification on Offshore Drilling and Energy Policy

Early this morning we received this advance copy of the opening comments that President Obama will give at a press briefing late this afternoon. I'm sure you'll feel relieved. 

April 1, 2010: White House Rose Garden

THE PRESIDENT:  Thank you, everybody. Thank you so much for coming out on this beautiful day (Applause.)  Please have a seat. My speech yesterday that announced the opening up our coastal waters to offshore drilling drew a great deal of heat. Today, I am here to clear up any confusion I may have caused. Yesterday’s speech was meant to be an April Fools Joke. As a candidate I promised to safeguard the environment, and I mean to do so. Unfortunately, the White House schedulers thought yesterday was April first. Apparently they thought that March only had 30 days.

Photo: The President's April Fools Speech mistakenly made on March 31. The speech was given in a hangar at Andrews Air Force (MD). The fighter jet is the Green Hornet, which will run on 50 % biofuels,

So today, I am proud to announce our real energy policy – no jokes about it. Let me say it loudly and unequivocally.

1. There will be no additional offshore drilling for oil during my administration. The risks are much greater than the benefits.
2. My announced multi-billion dollar loan guarantees for nuclear power was another bad joke. Lindsey, my good friend from S. Carolina, you wouldn’t want to mess up Myrtle Beach, would you?
3. Clean coal is another bad joke and is off the table. No more mountain-top mining. Senator Byrd – you’ll have all the wind power you want for those long ridges.
4. Gas mileage for vehicles – that wasn’t part of the April Fools Day fiasco -- they stay.

 

This energy policy decision is based on our needs in three critical areas: economics, the environment, and national security

Economics: Millions of jobs in our coastal states depend on tourism and fishery. No one will eat fish that tastes like a can of Mobil 5W30. And no one likes to sun themselves on a beach covered with oil goo. Then there is nuclear power. If the banks won’t provide the loans for nukes why should the tax payers? These things are expensive, take years to build and if there’s an accident who shells out the billions to clean up the mess? Sounds like too big to fail to me.

The Environment:  Spending so much on coal, oil and nuclear simply encourages their use; we build the very parts of the economy that are most unsustainable. And in doing so we sap vital resources from wind and solar energy that contribute to the solution of our environmental problems. Let me say something else about nuclear power. As we all know, the high level wastes stay deadly for hundreds of centuries. I asked our Interior Secretary Ken Salazar to see if he could find a governor who wanted a permanent nuclear repository in their state. He told me he got a few unnamed takers, but only if we agreed to bail out their deficits for the next ten thousand years.

Then there is an issue that not many talk about. My good friends at the Southwest Research and Information Center have reminded me that hundreds of abandoned uranium mines have not been cleaned up and present health risks in many Navajo communities. In addition to this, Navajo communities now have to face proposed new uranium solution mining that threatens the only source of drinking water for 10,000 to 15,000 people living in the Eastern Navajo Agency in northwestern New Mexico. Besides my daughters made me watch Avatar. (See http://serc.carleton.edu/research_education/nativelands/navajo/environmental.html)

And on biofuels. Biofuels won’t work if they require huge government subsidies, and if they require massive application of fertilizers and pesticides that harm the environment – or if they promote the destruction of rain forests and other critical ecosystems.

National Security: Our generals keep telling us that our dependence on foreign sources of oil is a threat to our national security. I share their call for energy independence. We all want it. But let’s talk about real energy independence. Do we want to shift our dependence to large multi-national corporations who are only interested in big centralized solutions that suck capital out of our communities and our domestic economy? Surely it would be better to invest in energy solutions that spread the wealth to communities across the country. Solutions like energy efficiency which lowers costs for families and businesses; wind power – there are lots of family farms in windy places. The experts our telling us that our nation is beginning to lag behind in the development of renewables; we are losing out to Europe and China and we are losing out important opportunities to create millions of jobs. The bottom line: without energy security, there is no national security.

Thank you very much;  I will now take your questions.

President: Yes, Sam

Sam Donaldson: Mr. President, Happy April Fools Day. 

Please submit your questions and comments for the President by clicking on post! We will send them to the White House. 

Join a Credit Union, good for your finances -- good for the economy

What do these two pictures have in common? The “leaf litter,” the uppermost layer of soil, represents nature’s credit union.  The fallen leaves in the photo represent a savings deposit made by nearby oak and tulip trees. A host of creatures turn the leaves into organic rich humus that replenishes the nutrient content, beneficial structure and the capacity of soil to hold water. These “savings” will payoff in subsequent growing seasons. This is just one of the many economic lessons that ecosystems have to offer. The lesson here – put your savings in something that helps to build the community, like the Wisconsin Credit Union shown in the second photo. The mega-banks on the other hand provide mega-profits to absentee investors and mega-bonuses to the executives.                        

Why should we join credit unions? We have started to shift our family and business finances to a credit union.  Here’s why. Unlike banks, credit owners are owned by their members (savers and borrowers); as non-profits credit unions are exempt from taxes. As non-profits they can payer higher rates on savings and charge lower rates on loans than commercial banks. They also pay dividends to their members – members of the community. There are other advantages to cooperative financial institutions. Our family has its home mortgage with a non-profit lender, Colonial Farm Credit, a non-profit lender that provides loans for both farms and homes. Like a credit union, the FCT is owned by the members, in this case the borrowers. Not only do we get a good (constant) rate, but we get on the order of $2000 per year in dividends.

Credit Unions: good for small, local businesses, good for jobs: Henry S. Cole & Associates, Inc. (my company) has had a Bank of America Small Business Credit Card for more than a decade; we have paid our bills on time. Both the company and my family have numerous accounts with Bank of America. Despite the long term relationship, I recently received a letter from Bank of America stating that my company’s credit line was cut from $20,000 down to $1700 (just $200 over my balance). My company is not at all unique in this regard. The major banks have virtually stopped loaning to small businesses. A number of these banks including Bank of America received billions in a tax-payer funded bailout (politely called the Troubled Asset Fund or TARP). The major bank executives who received major bonuses must be laughing all the way to the bank. But small business owners are not welcome.

So how have credit unions faired during the financial crisis and recession?

The following graphs presented by Ronald Covey, President of St. Mary’s Bank Credit Union in his testimony to the House Small Business and Financial Services Committee this past week. He spoke on behalf of CUNA the Credit Union National Association. Not only have credit unions increased their lending to businesses, but have done so with less risk than banks for all sorts of loans. (Second graph bars show lost loans). 

Congress needs to act: The potential role of credit unions in spurring economic recovery is limited by federal restrictions on the share of a credit union's available funds that can be loaned to businesses. 

Major credit unions and their associations are 

lobbying to lift the cap. Sen. Mark Udall (D-Colo.) introduced legislation in December that would lift the lending cap to 25 percent. A similar bill is pending in the House. Not surprisingly, banks against the lifting these important bills. The Obama  Administration, despite its effort to increase loans to small businesses seems to be blind to the potential of credit unions to further expand its loans to job generating local businesses. 
Bottom Line: Tell your members of Congress to support this bill .... and join a credit union!

Nature has a full employment economy - The U.S. economy -- eliminating livable-wage jobs by the millons

The theme of this blog is learning from nature. Ecosystems (free from human onslaught) are basically resilient, full employment economies; they have many mechanisms which prevent the loss of resources including soil and nutrients. Roots hold the soil. The decomposition of fallen leaves releases organic matter and nutrients into the soil where they help nourish the plants in the forest and the animals and microorganisms which depend on plants for their food. The biosphere run entirely on solar power meets the basic needs of an amazingly diverse biota.  
In sharp contrast, it becomes clearer and clearer that the dominant global economies including the U.S. are failing to provide for the basic needs of their people. Consider this quote from an excellent article in Today's NY Times by Peter Goodman, "The New Poor: Millions of Unemployed Face Years Without Jobs." 
A New Scarcity of Jobs

 "Some labor experts say the basic functioning of the American economy has changed in ways that make jobs scarce…Large companies are increasingly owned by institutional investors who crave swift profits, a feat often achieved by cutting payroll. The declining influence of unions has made it easier for employers to shift work to part-time and temporary employees. Factory work and even white-collar jobs have moved in recent years to low-cost countries in Asia and Latin America. Automation has helped manufacturing cut 5.6 million jobs since 2000 — the sort of jobs that once provided lower-skilled workers with middle-class paychecks. 

“American business is about maximizing shareholder value,” said Allen Sinai, chief global economist at the research firm Decision Economics. “You basically don’t want workers. You hire less, and you try to find capital equipment to replace them.” Graph from NY Times, Feb. 21, 2010.                                         

But the same drive for profit without regards to consequence is also displacing traditional peoples and their economies in many poor nations. 

Consider the following: 

"Indigenous people are being pushed off their lands to make way for an expansion of bio-fuel crops around the world, threatening to destroy their cultures by forcing them into big cities." The  clearing of forests to make room for these new crops is jeopardizing the survival of the 60 million indigenous people who depend on these forests. "

Tauli-Corpuz, Chair of the UN Permanent Forum on Indigenous Issues

One might be tempted to say that bio-fuels as a renewable resource will reduce carbon emissions and global warming. However,bio-fuels will require heavy inputs of fertilizer, and its hard to imagine that they will over the long-term match the ability of a forest to absorb carbon. In fact bio-fuels will drastically reduce bio-diversity and the resilience of forests. .

             

But, it get's worse. Agribusiness (e.g Monsanto et al.) pushing to expand cash crop monocultures, another trend that marginalizes and displaces large numbers of people. Without major structural change the globally dominant financial system these trends will continue to create needless poverty and suffering -- so that a small minority with untold wealth can continue their binge. 

Whereas natural economies are restorative, the G-economies are based on massive extraction and disruption. 

Why progress on the environment is endangered

In nature there is no separation between the economics and the environment.

“It’s the economy stupid.”  James Carville advised in 1992. When it comes to environmental issues such as global warming it would be wised to heed this savvy advice. Right now the environmental agenda has been shoved off the stove. Consider:

·  The Climate Conference in Copenhagen ended with no real agreement on tangible steps to solve the problem. Getting Congress to ratify even small cuts in carbon emissions will be tough sledding for the Obama Administration.

·  Even Democratic members of the Senate and House are sponsoring legislation to stop EPA from its attempt to regulate carbon emissions.

·  Obama pledges $54 billion in loan guarantees to promote nuclear power. Imagine what this could do for wind and solar. 

On the other hand, the political right and their corporate funders are waging ever aggressive campaigns to paint the climate change issue as a “green scare” or a “snow job.” In California, conservative forces have launched a ballot initiative that if passed would rescind California's landmark requirements to curb carbon emissions -- until unemployment is reduced from its current 12.5 percent to 5 percent. The message is anything but subtle -- environmental regulations are killing the economy. To make matters work Republicans will use this initiative to unseat Senator Barbara Boxer, a long time champion, of environmental issues and climate change legislation (She chairs the critical Senate Environment and Public Works Committee).  

The conservatives are winning right now because:  (1) they are connecting with working and middle class anger and fears on economic security (2) they have framed the issue – the first step in a winning strategy.

The Democrats have not helped. With command of the White House, Senate and House, they have not taken serious steps to regulate the financial industry (now more consolidated and too-big-to-fail than ever). They have not prevented foreclosures for millions of families. The Administration’s Geithnerist strategy (appeasement) toward the credit-stingy, profit-hungry mega-banks is not very likely to win the favor of angry people who see their economic well being going down the drain while bank executives  enjoy ten billion dollar + bonuses. Unless the Administration acts visibly and aggressively to create jobs and regulate the financial industry, the right will continue to win in their efforts to take back the Congress and derail efforts to protect the environment.It's our job to remind the President of his promises and to awaken the people's movement that elected him.

                                                             "Let's be reasonable

The Friday Funnies: Skeptic calls global warming giant snow job

-- February 5 - 2010 Minneapolis -- As a monster snowstorm moved in on the Washington, DC area, Dr. Heinrip Schplochmann, a maverick climatologist pointed to storm as proof that the climate warming theory is all wrong. Schplochmann, head of the climate department at Endrun University in Muskeegamissing, MN told reporters that this year's record snow falls along the east coast shows that conventional wisdom relating global warming to man's impact is all wrong. "With all the hot air coming out of the capital you would expect to see palm trees -- but you don't -- it looks more like Minnesota." He displayed records showing that North America has seen cooler not warmer temperatures in recent years. He also passed out hacked emails in which several renowned global warming experts discussed their upcoming ski trip. "The slopes are booming," said Schplochmann.
                                                                                                     NOAA Radar

Huffington Post: President Obama trudges to work.


Asked to comment, internationally recognized NASA scientist, Dr. James Hansen, said that an enormous body of peer reviewed studies clearly shows that the globe as a whole is warming. "An outgrowth of warmer sea temperatures may be more intense storms." He added that Schplochmann's reports have not been peer reviewed "and he is funded by a narrow self interests that don't want to see carbon regulated."

Schplochmann denied that his funding sources were narrow and told reporters that he had received major grants not only from major oil companies but from coal and tar sands interests as well. "I even got funding from the nuclear industry -- and they support global warming theory."

In a related development the fundamentalist preacher the Reverend Vernon T. MacEntyre said "the Lord is sending a powerful message to Washington to stop its sinful ways." He noted that God is also giving a boost to Republicans efforts to close down the Capitol. MacEntyre warned, "this is just the first and not the worst."

Notably, Pat Robertson, had no comment and declined to answer reporter's questions. A spokesman said he was taking a break after the firestorm that followed his remarks saying the recent earthquake In Haiti was God's punishment for the voodoo deal that Haitians made with the Devil.


Robertson, Dallas News