BP Off the Hook for Billions

Many have mentioned and I think it bears repeating that British Petroleum, who, along with Haliburtion, bears full responsibility for the stain of death expanding through the Gulf of Mexico, is only liable for $75 million in damages – what you would call a drop in the bucket. They must pay for 100% of the cleanup, which is substantial, but fishermen and tourist companies, those who have seen their lives ruined for BP’s avarice, can collectively get only $75 million in damages.

The economic damage of this oil spill is sure to run in to the billions of dollars, and many commentators estimate the lost capacity resulting from this spill will run into the tens of billions. All of the property destroyed, the fisheries massacred, the empty tour boats and so forth will have to fight for a slice of the $75 million that BP is offering.

This ridiculous situation came after the fallout of the Exxon-Valdez spill of 1990, which occurred off the coast of Alaska and involved orders of magnitude fewer economic victims. Rikki Ott of Reuters explains how Exxon bargained with the Senate then to shoulder all of the cleanup costs if the Senate could guarantee that they could only be sued for $75 million.

Those are the rules which govern our present disaster, and they are, to say it mildly, unfair. As we know, BP lobbied against the regulation that would have required them to buy a valve ($500,000) which would have prevented this disaster (>$5,000,000,000). They ought to be liable for every cent of damage their avarice caused.

Congress is now working on raising BP’s liability cap from $75 million to $10 billion, a proposal I think we could all get behind.  I’ll be eagerly waiting to see what becomes of it.

Death Threats Against Members of Congress: Old News

Gail Chaddock of the Christian Science Monitor has a nice antidote to the hysteria now gripping our mainstream media regarding the recent death threats and vandalism towards members of congress. As she notes, these actions are, strictly speaking, nothing new:

The House increased security screenings for weapons following 1954 shootings in the House chamber. After a bomb 1971 bomb explosion outside the Senate chamber, metal detectors were installed at doorways in the Capitol. In 1983, after another bombing in the Capitol, metal detectors were extended to Senate and House office buildings. After the 9/11 attacks, Congress completed a Visitors Center and issued tamper-proof badges to staff.

Thankfully we haven’t seen anything like that.

Supreme Court Allows Corporations to Donate Anonymously

The Times reminds us of an unsavory after-effect of the Supreme Court’s recent Citizens United v. FEC case. Under the decision, corporations no longer have to disclose to whom they donate or how much, effectively destroying organizations like Opensecrets.org that attempt to track the influence of money in politics. This is terrible news.

Experts say the ruling, along with a pair of earlier Supreme Court cases, makes it possible for corporations and unions to donate anonymously to nonprofit civic leagues and trade associations. The groups can then use the money to finance the types of political advertisements that were at the heart of last month’s ruling.

Democratic Congressional leaders called the loophole dangerous, and they have proposed legislation that would require nonprofit groups to identify publicly the sources of financing for their political advertisements.

Greece to Get $41 Billion Bailout

The Wall Street Journal reports today that Greece will get a $41 Billion “financing” package from Germany and France, who, I hasten to point out, aren’t exactly swimming in liquidity themselves.

The plan seems to be that Germany and France will soak up some of this Greek debt via public markets and state-owned banks, due to a EU bylaw that prohibits member states from owning the debt of other members. What’s astounding to me is that no one is asking Wall Street to pony up any of this cash. They, after all, are almost entirely responsible for this Greek debt crisis, and they made hundreds of millions of dollars watching Greece go down in flames.

Goldman Sachs alone, who was arguably the single biggest catalyst for Greece’s downward spiral, paid out more than $21 Billion in sheer bonuses to its employees. AIG, another  major player in this, paid out more than $100 million. I mean, shouldn’t some of this money go toward cleaning up the mess they caused? The Times printed an excellent series of articles on Wall Street’s complicity in this just one week ago.

Javier Hernandez  even reported that major bank shares swung upward on rumors of a pending EU Bailout to Greece. So they’re blatantly profiting from their crimes. I mean, how is this legal?

Oh yeah, I keep forgetting. The banks own Congress. They make the laws.

What Brown Means

Apropos Mr. Brown’s victory in Massachusetts, I have already made clear my opinion that for all the endless debate and speculation surrounding this fiasco, very little will substantively change. It seems clear that the Senate will pass some version of the watered-down House bill (perhaps adding a little water themselves), and we’ll be stuck with a mandate nobody wants and uneven subsidies with which to pay for it. The “Democrats” will either tap Ms. Snowe, who has already indicated her favorable stance toward the House bill, or Mr. Brown himself will be persuaded to “flip-flop”, something which, given his voting record, is well inside the realm of possibility.

But I think the idea that Mr. Brown will do as he has hinted and bury this bill warrants consideration. The irony of Mr. Kennedy’s seat being used to block something for which Mr. Kennedy spent his life (albiet, ineffectively) attempting to achieve have seen wide discussion. But personality politics aside, this episode would lay bare the supreme paralysis of our legislative branch, its utter inability to accomplish anything substantial without the president’s intervention. This bill occupied a full year of time during an economic tsunami. It’s been stripped of much of what made it initially attractive. For it to fail would indicate beyond a measure of doubt that our elected officials are incapable of acting in the interests of their constituents.

(As a side note I want to make clear that the gutted, sham-“reform” now being debated in the Senate is precisely what Mr. Obama wanted. There is substantial evidence to suggest Mr. Obama never intended on a public option being in the final bill, and instead considered it an asset to be traded away like so many horses.)

None of this, of course, is new. Mr. Bush, you will recall, saw very little resistance from Congress in funding and prosecuting the Iraq War, massively cutting taxes to the rich, or giving himself wide authority to kidnap, wiretap, torture, etc. The “Democrats” simply went along with it, despite such actions being diametrically opposed to whatever is they believe in. Similarly, a “Democratic” president, Mr. Obama, has seen very little Republican resistance in prosecuting his wars, extending unlimited subsides to the financial industry, or enforcing a health-insurance mandate, something which he specifically campaigned against. “Republican obstructionism” has made itself felt only on issues placing popular interest above business interests, and “Democrats” quickly cave to such tactics. Of course, no anti-corporate “Democratic obstructionism”  exists to counterbalance its “Republican” mirror.

So then what we have in the end is a de-facto single party system, wherein the “two” parties maintain their separateness in name only and conduct theatrical negotiations regarding issues on which there exists considerable agreement.

The “debate” over health-care reform fits this scheme perfectly. As a candidate  Mr. Obama campaigned explicitly for a non-profit publicly owned health care provider (the so-called “public option”) and against an individual mandate, which would legally require all Americans to patronize our bloodthirsty private insurers. His opponent, Ms. Clinton, took the reverse position and so did Mr. McCain. Our vast pharmaceutical and insurance industry, unsurprisingly, supported the Clinton-McCain plan. Soon after election Mr. Obama reversed his position and embraced Clinton and McCain’s vision of “reform”, though he did so by degrees. Up until August he was still nominally for a public option. But we have known since then that Mr. Obama did not really favor a public option, from the moment he uttered those infamous words (“The public option, whether we have it or we don’t have it…”). The health insurance plan now on the table strongly resembles what Ms. Clinton or Mr. McCain would have preferred, and, it would seem, what Mr. Obama wanted all along.

So many bloggers and “analysts” insist on viewing this race through the traditional “Republican-Democrat” dichotomous lens, endlessly arguing over what this means for “Democrats” in 2010, why Ms. Coakley lost (it is always due to ‘party’ considerations, never due to her piss-poor candidacy), and how this will help “Republicans” further obstruct Mr. Obama’s agenda (whatever that may be). Some of the cleverer commentators have demanded a return to majority rule in the Senate and an end to the “automatic filibuster“, something with which I wholeheartedly agree. But such gossip-driven “coverage” misses, I think, the defining feature of this imbroglio, which is the vast similarity between our two “ruling parties”.

Taking such into account, “Republican obstructionism” and “Democratic waffling” quickly transform into “corporate rule”.

Telengana Epilogue

Round one of the Telangana dispute has finished, but the struggle is far from over. Citizens of Andhra, the state from which Telengana just won secession, are in a furor, and nightly demonstrations scar their major cities. Angered citizens have already destroyed 30 buses, and incredibly, 79 Members of Legislative Assembly (MLAs) have threatened to resign. Having promised a state to Telangana, the central government now must deliver one, yet it must also answer to its Andhra constituency. No consensus seems possible.

The government has promised that the transfer “will not be in haste”, and clearly the thing it most desires now is time. Meanwhile, cities in Andhra have completely shut down, and there is already talk of a hunger strike to protest a Telangana state. Further complicating the issue is Rayalseema, a neighboring area, who now says  it also wants its own state. The situation is quickly devolving into absurdity.

Hyderabad is an problem for which no one knows the solution. Previously the capital of the consolidated Andhra state, it has been the site of massive capital and human investment. The city has four 5-star hotels, a brand-new airport (which happens to be the largest in India), a massive convention center to European standards and a diminished, though still booming, IT industry. Unfortunately, the city lies square in the middle of Telangana, and separatists have already begun chanting the slogan “Not Without Hyderabad!”. Some vague discussion can be heard of turning Hyderabad into a “Union Territory”, effectively a double capital, but geography should render that plan unfeasible.

Even optimistic forecasters believe it should take at least one year for the new state to become official. Detractors secretly hope Telangana will be mired in legislation and perhaps never happen. But in any case, the Indian government will be spending much time and resources on this issue for years to come.

Telangana Denoument

Hyderabad heaved a sigh of relief today as the general strike and demonstration at the legislative assembly did not happen. Congress leadership has indicated that they have drafted a bill to create a separate Telengana state, K.C Rao has ended his hunger strike, and the city is once again jerking along in its regular rhythms.

Over the past decades India has seen tremendous balkanization, of which this Telangana dispute stands as yet another symptom. Winston Churchill, that magnificent racist, once opined that “India is no more a country than is the Equator”, and while events have later discredited that remark, the ghost of his sentiment has been present throughout. After independence every language group wanted its own state, and once that had been arranged, further interest groups began agitating for their own homeland. Telangana will be the fourth new state created this decade. In developments like these one can very clearly see the divisions still plaguing India today, the “communal sentiments” (as residents like to call them), and the way in which the Indian government operates.

The Telangana issue has stuck in Indian politics for 40 years or so, and its recent resurgence can be attributed mainly to climate change (or “drought”, for you non-believers). Over the years, Telangana has seen its share of water rights gradually diminished, as irrigation projects led by neighboring Andhra have diverted water away from the Telangana countryside. Several years of light rainfall eventually brought this issue to a head, after which one saw emotional speeches by Telengana leaders, hunger strikes, city-wide boycotts, and riots.

Such breakdowns of law and order betray a lethargy on the part of the Central Government, an unwillingness, or at least a perceived unwillingness to take these grievances seriously. One does not declare a fast unto death, sparking riots, police beatings, and paramilitary operations, if one believes he has a decent chance of being heard without these things. So in one sense this episode betrays a failure in the Indian decision-making process. After all, it is clear that the Telangana grievances, though quite real, could still be addressed without the creation of a new state. But it was precisely because the Telangana supporters were convinced their voice would not be heard via the usual channels that they resorted to demonstrations and violence.

Central leadership finally acceded to the protesters’ demands this morning, validating, perhaps, their violent methods. But this is the way in which things happen in India – one generally cannot achieve a result without loud demonstrations. This also indicates the severe strain of emotionalism which runs through Indian politics. Telangana supporters, when asked, will point to drought and jobs as the overriding reasons for their dispute, but the matter goes deeper than that: they know, in their hearts, they “deserve” a Telangana state, and no compromises, no palliative alleviations will suffice. It speaks to the lack of “national identity”, to the general identification with smaller social groups: state, religion, caste, political party, and who knows what else.

But even more than that, this little episode exemplifies the sort of issue that can mobilize large crowds in India. After all, to an outsider (such as myself) it is a matter of profound indifference under which administrative district Telangana happens to fall. The overriding problems facing India as a whole, systemic corruption, massive income disparities, an exploding population, etc., could never elicit such as response as Telangana did. Increasingly, such problems are coming to be seen as somebody else’s mess – namely, India’s: a country with which fewer and fewer identify.

Addendum: Former Chief Minister Rajasekhara Reddy’s untimely death in a helicopter crash this September can explain the precise timing of this movement. A formidable politician, adept at keeping a lid on disputes like these, his absence left a wide diplomatic hole. Reddy’s successor, a self-inflated septuagenarian named K. Rosiah, was not equal to the task of satisfying the Telangana supporters.

Dow Overvalued

Zero Hedge gives us yet more evidence that the Dow is overvalued: industry insiders are selling stock 82 times faster than they’re buying it.

In the most recent data set, $11.6 million in stock was purchased by insiders, while a whopping $957 million was sold. And somehow pundits are still spinning this mass orchestrated sell into the bid by those in the know as a bull market.

For significant holders of stock, now might be the time to unload.

Geithner and AIG, Sitting in a Tree

The Times reports on a recently released audit which concludes, beyond the shadow of a doubt, that Timothy Geithner (now Treasury Secretary, then President of the New York Fed) voluntarily gave up vast negotiating powers when choosing to shower AIG with billions upon billions of dollars.

The article is written in standard Times-ese, which is to say that it seeks to relate truly scandalous information in such a way as to cause as little uproar as possible, but although it must be translated into standard English, some truly damning testimony emerges:

Just two days before the New York Fed paid A.I.G.’s partners 100 cents on the dollar to tear up their contracts with the insurance giant, one bank volunteered to take a modest haircut — but it never got the chance.

UBS, of Switzerland, alone offered to give a break to the New York Fed in the negotiations last November over how to keep A.I.G. from toppling and taking other banks down with it. It would have accepted 98 cents on the dollar.

The Fed “refused to use its considerable leverage,” Neil M. Barofsky, the special inspector general for the Troubled Asset Relief Program, wrote in a report to be officially released on Tuesday, examining the much-criticized decision to make A.I.G.’s trading partners whole when people and businesses were taking painful losses in the financial markets.

So this means: The New York Fed decided to print 100% of the value of AIG’s investors’ bad loans in order to get them to divest from AIG, and (hopefully) save the money-laundering giant. Realize, now, that the Fed was under no obligation whatsoever to guarantee these loans with taxpayer dollars, and certainly not guarantee them at full value. Given that these CDS loans were later revealed to be totally fraudulent, this decision makes even less sense.

If I convinced you to give me real dollars for Monopoly Money, and then you complained to the government that the Monopoly Money you received was actually worthless, would you expect them to just print 100% of the value and give it to you, no questions asked? Or would you expect them to give you nothing and tell you, in effect, to be smarter next time?

What’s truly astounding about this episode is that some of the banks offered to take less than 100% of the value of their worthless investments, but Geithner refused! He said to them, essentially, that “oh well, it doesn’t matter – it’s taxpayer dollars anyway! Go ahead, take the full value!”

This is the man who is now our Treasury Secretary.

CO2: Black, not Green

The Center for Media and Democracy turns us on to a thoroughly scurrilous attempt on the part of Big Gas and Oil to downplay the negative effects of CO2 output.

“CO2 is Green”, a new Montana-based advocacy group, derives its dollars from the Coal and Oil Industry and has the sheer audacity to claim that “There is no scientific evidence that CO2 [carbon dioxide] is a pollutant. In fact higher CO2 levels than we have today would help the Earth’s ecosystems.” without breaking into guilt-induced conniptions.  Here we have yet another example of “The Big Lie” technique. If you can make a such a statement as above on television with a straight face, many people will conclude that it must be true. No one could possibly be audacious enough to repeat such a patently absurd claim unless there was some truth to it of which the public is not aware. Thus, the idea that “CO2 is not a pollutant” will likely enter into mainstream discourse, despite the fact that almost every scientist declares the opposite.

Some of you may recall this is not the first time our oil companies have undertaken such an advertising campaign. Indeed, as Greenpeace revealed earlier this year, Exxon-Mobil secretly funded much of the Global Warming denial we saw earlier this decade. On podium after podium, cable news show after fabricated report, their hired “scientists” spread the claims that (a) Global warming doesn’t exist and (b) even assuming it does, Global Warming isn’t man-made. Now, of course, we see both of those statements for the patent falsehood  they present, but at the time they proved quite influential and likely set us back years in dealing with this problem.

Today, a new generation of pseudo-scientists, such as our friend H. Leighton Steward, a former executive of Enron, wish to spread the message that CO2 is a “net benefit” for the planet – and, presumably, that we are doing our earth a huge service by burning coal and oil.

Please watch their commercial. It gives an excellent overview of the false populism and junk science employed by the coal and oil industries to defend what remains, in the last analysis, a thoroughly indefensible business. And I would encourage everyone to do precisely what they suggest at the end by contacting your Senator, except instead of agitating for even more pollution, ask them to clear our airwaves of deleterious propaganda.

A Hole in the Universe

There is a gaping hole in our scheme for “universal” healthcare, and Ezra Klein was good enough to mention it, albiet offhandedly.

As President Obama thundered during his speech, so-called “illegal” immigrants will under no circumstances benefit from his proposed health plan. Representative Wilson got his 15 minutes by shouting “You Lie!”, but unfortunately this is a rare example of verisimilitude from our commander-in-cool. Klein and others have noted that the proposed scheme will require proof of documentation in order to participate in the “health insurance marketplace”, effectively barring anyone who doesn’t have their papers in order.

Senator Conrad has since promised that undocumented residents will be able to purchase insurance, but cannot receive subsidies. He does not mention, however, that documentation will still be requested upon application in the current scheme, which would effectively bar anyone unwilling to disclose their status (read: everyone). So it amounts to the same thing – a cruel exclusion of “illegals” not only from subsidized health care, but indeed, any health coverage whatsoever.

One often hears the “moral hazard” argument applied to this situation. If illegal immigrants are allowed free healthcare, the argument runs, the only effect will be to exacerbate the immigration problem. Such reasoning assumes the only reason Mexicans and Central Americans begin the often deadly road to America is to take advantage of our “freedoms”. If that be the case, however, the end of the traveller’s dangerous journey must come as an utter disappointment.

They arrive as second-class citizens, and so they remain, barred even from minimum wage employment, under the constant threat of deportation, possessing no true rights of which to speak. Most barely eke out a living picking vegetables or doing dangerous construction for criminal wages, sending all but the most essential money back to their impoverished families.

Very, very few commentators in our mainstream discourse will dare to mention the real root of our so-called “immigration problem.” The North America Free Trade Agreement (or NAFTA) allows the US to dump its subsidized grain surpluses on Mexico (in the name of “free trade), undercutting their traditional farmers and driving them out of business. In the years since NAFTA’s inception (in 1994) the wave of dispossessed villages and out-of-business farmers has flown north, in search of some sort of livelihood.

Our economic policies drove these villagers to risk their lives to become second-class American citizens. And while the prospect of “free healthcare to illegals” seems difficult to swallow, the economic calamities wrought upon them (largely by our hand), should be doubly so.

Virulent Protests against “Big Government”

Rally in Washington. Photo courtesy of The Huffington Post

This is truly surreal, and lends a new tone of absurdism to what is turning out to be a thoroughly scurrilous health care “debate”.

Not that protests against “out-of-control spending” (as the AP worded it) are absurd in themselves. Indeed, it seems clear that the Obama deficit presents a mortal danger to our long-term economic health. But with the 2001 tax cuts to the rich still in effect, the trillions printed for the benefit of our financial industry, and the tear-inducing costs of our overseas adventures, the idea that uninsured citizens with preventative care could ignite such fury seems exceedingly bizarre. Particularly as the currently debated scheme would leave insurance industry profits largely intact.

The fury, at least, seems real enough. The newspapers report  thousands of citizens descending upon Washington from all across our considerable landmass, toting signs with instructive messages such as “ObamaCare Makes Me Sick”.  Nearly every article begins with the profile of a protester who took a train, two buses, and hitchhiked to attend the event. It’s hard to believe such furor has been raised only by the prospect of expanded healthcare – something else is clearly at play.

The Washington Post gives us a hint:

Jeff Mapps, 29, a stagehand and labor union member from South Philadelphia, left home about 6 a.m. to come to the protest. He said he hadn’t been involved in previous Tea Party demonstrations, but he watches Fox News host Glenn Beck “all the time” and he wanted to be a part of something he thinks will be historic. Beck has been drumming up support for the march.

Glenn Beck, as you may know, is a verminous talking head at Fox News, formerly at CNN. A “conservative” thoroughly opposed to ‘big government’, he nonetheless cheered loudly for every bit of Bush-era deficit spending, from the Iraq War to the TARP bailout.

And again:

Like countless others at the rally, Joan Wright, 78 of Ocean Pines, Md., sounded angry. “I’m not taking this crap anymore,” said Wright, who came by bus to Washington with 150 like-minded residents of Maryland’s Eastern Shore. “I don’t like the health-care [plan]. I don’t like the czars. And I don’t like the elitists telling us what we should do or eat.”

So it would appear the issue is not truly with the idea of “big government”, but merely this government.

As far as one can tell, much of this event was organized by a collection of “conservative” political action groups, including FreedomWorks, and the Tea Party Campaign. Their agenda seems entirely corporatist in nature. Anyone truly worried about the deficit would protest against our overseas engagements or the terrifying actions of our Federal Reserve. Instead, they have chosen this particular manifestation of “big government” to oppose – the very same one that promises to drive down insurance industry costs.

Our sponsored media has also answered the siren call, whipping up the public ire against this and only this program of Mr. Obama’s. In doing so, they reveal a real fear among the pharmaceutical industry regarding the so-called “public option”. For an easy reminder of the role pharmaceuticals play in cable news, observe how many ads for their products you encounter in a half-hour of Fox or CNN programming. I once counted twelve.

In the end, I don’t really think they have much to worry about. If a government-sponsored non-profit health insurance option is available when all this is over, you may color me pink. But the fact that a bit of petty demagoguery can mobilize thousands of citizens against their material benefit – well, that leaves me rather blue indeed.

Like countless others at the rally, Joan Wright, 78 of Ocean Pines, Md., sounded angry. “I’m not taking this crap anymore,” said Wright, who came by bus to Washington with 150 like-minded residents of Maryland’s Eastern Shore. “I don’t like the health-care [plan]. I don’t like the czars. And I don’t like the elitists telling us what we should do or eat.”

How the Government Spends our Money

I found this great chart at Federalbudget.com which I think illustrates our government’s priorities far better than dry prose. In particular, please note the huge commitment to the Treasury Dept. (bank bailouts) and the Department of “Defense” (war spending). For contrast, please observe the pittance given to the Department of Education, the Environmental Protection Agency, or the Department of Energy. Who says the system doesn’t work?

The Federal Budget + National Debt

Even More on Blackwater

New Blackwater Crimes Surface

Jeremy Scahill’s journalism on Blackwater has been indispensable to the average man trying to make sense of this shadow organization. Now, in addition to Nisour Massacres, an assassination scheme with the CIA and illegal deployment to Mexico for the “War on Drugs”, it turns out that Erik Prince, founder of Blackwater USA “views himself as a Christian crusader tasked with eliminating Muslims and the Islamic faith from the globe.”

This has been independently confirmed by several ex-Blackwater USA employees. Mr. Prince really believes himself to be a “Christian Crusader”

Score one for religious extremism.