Author: Tom Sullivan

The 6-percenters
by Tom Sullivan

Hearing yesterday morning that the snowpack in the Sierras is six percent of average nearly drew a gasp. Records have been shattered:

The Sierra Nevada snowpack, which typically supplies nearly a third of California’s water, is showing the lowest water content on record: 6 percent of the long-term average for April 1. That doesn’t just set a new record, it shatters the old low-water mark of 25 percent, which happens to have been last year’s reading (tied with 1977).

Things are so bad that Governor Jerry Brown decided to slog into the field for the manual snow survey on Wednesday morning. He didn’t need snowshoes but he did bring along a first-ever executive order mandating statewide water reductions.

“We’re in a historic drought and that demands unprecedented action,” he told reporters who made it to the Sierra survey site off of Highway 50.

In the Central Valley, farmers would drill wells if they could stand the two-year wait, the half-million dollar cost, and if there was any point. California celebrates its gold rush history in the appellation, the 49ers. I’m wondering if the 6-Percenters might have a future in California lore.

We don’t have experience with drought at this scale in the east, but it’s not unheard of. In 2007, things got so bad in the Southeast that one small town, Orme, Tennessee, restricted residents to water use a few hours a day. Each night, the mayor himself opened the valve that fed water to the small community.

Water-hungry Atlanta’s thirst drove Georgia lawmakers to uncover what they call a 200 year-old surveying discrepancy that if “corrected” would move a piece of the border a few hundred yards north, giving Georgia (and particularly Atlanta) access to the waters of the Tennessee River.

Atlanta keeps growing like a weed, apparently heedless of nature’s limits.

In 1998, I put in a wastewater neutralization system for a client in an office park in Alfaretta, north of Atlanta. I asked what the small, metal out-building was at the edge of the parking lot. The Culligan Water rep told me it was a well house (in an upscale office park).

He knew clients (including hospitals) drilling wells all over Atlanta because the Metropolitan Sewer District wouldn’t let people use all the water they wanted (both because of the MSD infrastructure capacity and water source limits, I think). So they were drilling their own wells to get unmetered water, as if the supply was limitless.

The Flint River Aquifer has been under strain for decades as Atlanta keeps growing, the developers keep developing, and the water table keeps dropping.

For far too long, we have treated water as a birthright. The American West has fought over water for years, but the complex infrastructure relies on having supplies to manage. Now that water is becoming more scarce, the vultures circling overhead are wearing business suits. Scarcity means profit potential. Whether it is Nestle or the fracking industry, water has become the new gold rush for whomever succeeds in controling it. At least until it runs out.

One from the heart
by Tom Sullivan

This plainspoken message from the Labour Party doesn’t feel as if it’s been massaged to death by consultants, even if it was. I’m not sure the DNC has the guts to deliver a message as unapologetically progressive as this, or if it has the residual credibility to have it believed if it did. But this one works for me.

Can we get Martin Freeman do one for Democrats in 2016?

The Matrix refinanced: Changing a human being into revenue
by Tom Sullivan

Jeff Bryant’s alarming post at Salon details some of the financial services sector’s inventive, new schemes for funding education. Wall Street already saw K-12 schools as “the last honeypot,” a steady, recession-proof, government-guaranteed stream of public tax dollars just waiting to be tapped by charter schools. It first had to convince states to increase competition – meaning eliminating teachers and other public employees standing between investors and their money.

One could argue that the right’s small government, low taxes mantra always had as its goal eliminating the “creeping socialism” of government providing education and other public services on a not-for-profit basis. (What, no middle-man markup?) “Starving the beast” was never about the size of government, but about eliminating public-sector competitors and making sure the right people take a percentage of vital services funded at taxpayer expense.

Since the collapse of the housing market, the giant pool of money is looking for other places to invest. So it’s out with the NINA loans and the CDOs and in with the SLABS, CABS, PPPs, and ISAs. Jeff Bryant writes:

It’s not hard to see the allure of SLABS [student loan asset-backed securities]. Student loans seem to be an endless stream of revenue as colleges and universities continue to increase tuition, economic conditions and employment transience feed the unemployed back into continuing education, and political leaders urge everyone to attend college. The income stream is nearly guaranteed to pay off because the loans are next to impossible to discharge in bankruptcy.

A Huffington Post article by Chris Kirkham states, SLABS offer “seemingly unlimited growth potential at virtually zero risk. The burden of college loan repayment falls entirely on students’ backs, shielding corporations from the consequences of default.”

Remember when mortgage-backed securities were a guaranteed, sure thing? There’s much more here: ‘capital appreciation bonds’ (CABs) for financing public schools, “public-private partnerships (P3s) where developers provide capital to build schools they then lease to universities (as happens with K-12 charters). Don’t get me started on P3s.

The ultimate solution in the private edu-debt sphere emerged recently when conservative ex-governor of Indiana, now president of Purdue University, Mitch Daniels proposed to the U.S. Congress that, “Instead of taking out a traditional college loan, students would have the option of finding an investor – possibly a Purdue alum – to finance their degree in exchange for a share of their future income.”

If you read that and said out loud, “indentured servitude,” so did I. Daniels’ (and others’) first swing at these Income Share Arrangements (ISAs) whiffed, Bryant explains. But?

But like what so often happens, quirky proposals from conservatives that appear like blips on the outer edge of the crazy radar, actually have a huge think tank machinery behind them. As a report from an Indiana news outlet explains, the financial vehicles Daniels alluded to are what’s known in the biz as Income Share Arrangements (ISAs). The reporter sourced the concept of ISAs to 1955 and University of Chicago economist Milton Friedman, the god of right-wing privatization advocates.

Beth Akers, a fellow with centrist think tank Brookings, has argued ISAs should “play a role” in financing student loan debt. She posits that the central problem with higher education is there is “almost no incentive” for students to choose schools and courses of study that pay off down the road in terms of lucrative salaries. A broad market for ISAs could change that by enabling students to “collateralize their financing with future earnings, just as home buyers collateralize their mortgage with the house itself.”

Except here, humans themselves are the collateral. This financial Matrix bypasses all the intermediate messiness of productive capitalism. Why should “job creators” bother with the inefficiency of trading in actual products and services when, by plugging them into a matrix of derivatives, you can change a human being into revenue?

Cue Laurence Fishburne. I didn’t give the Wachowskis enough credit.

Treachery with a smile on its face
by Tom Sullivan

The Bush administration’s infamous torture memos were not the first legal documents to use the color of law to whitewash moral obscenities. Jim Crow had etched that tradition deep into the national culture over a century earlier.

Jim Crow may be gone, but the tradition persists in the branding of legal initiatives that purport to do one thing but in fact do the opposite. And in laws advertised as defending one American principle while violating others. And in using the color of law, as Bush and Cheney did, to justify the illegal and the immoral. Whether it is “election integrity” measures meant to limit ballot access or “religious freedom” as justification for discrimination, treachery with a smile on its face has become standard operating procedure where many of this country’s laws are made.

Like a wicked, little boy who stomps a cat’s tail then smiles sweetly — Who, me? — lawmakers figure you can fool some of the people some of the time with such legislation. Then they dare us to stop them.

Indiana’s Religious Freedom Restoration Act isn’t the first of the new, flag-draped attempts at putting “those people,” however defined, back in their places. But it is egregious enough that prominent people are calling bullshit.

“There’s something very dangerous happening in states across the country,” writes Apple CEO Tim Cook in today’s Washington Post. Cook condemns “a wave of legislation” designed to sanction discrimination under color of law:

These bills rationalize injustice by pretending to defend something many of us hold dear. They go against the very principles our nation was founded on, and they have the potential to undo decades of progress toward greater equality.

America’s business community recognized a long time ago that discrimination, in all its forms, is bad for business. At Apple, we are in business to empower and enrich our customers’ lives. We strive to do business in a way that is just and fair. That’s why, on behalf of Apple, I’m standing up to oppose this new wave of legislation — wherever it emerges. I’m writing in the hopes that many more will join this movement. From North Carolina to Nevada, these bills under consideration truly will hurt jobs, growth and the economic vibrancy of parts of the country where a 21st-century economy was once welcomed with open arms.

Cook concludes, “This isn’t a political issue. It isn’t a religious issue.” That’s putting it mildly. And far too politely. It is a moral issue.

My only real complaint with Cook’s op-ed is that he argues discrimination is bad for business. That may be. But completely beside the point. These efforts to resurrect and slap a smiley face on Jim Crow are evil.

Who’s afraid of Elizabeth Warren?
by Tom Sullivan

“It will not work,” Massachusetts Sen. Elizabeth Warren said bluntly after reports last week that some Wall Street banks may withhold campaign donations from congressional Democrats over tensions with her:

“They want a showy way to tell Democrats across the country to be scared of speaking out, to be timid about standing up, and to stay away from fighting for what’s right,” Warren wrote. “… I’m not going to stop talking about the unprecedented grasp that Citigroup has on our government’s economic policymaking apparatus … And I’m not going to pretend the work of financial reform is done, when the so-called ‘too big to fail’ banks are even bigger now than they were in 2008.”

It’s that intensity, the appearance that Warren cannot be bought and is in the Senate more to represent the little guys than herself that has the effort to draft Warren for president hard at work in Des Moines, Iowa (funded by Moveon.org and and Democracy for America):

Toria Pinter, a law student who is on medical leave, said that she was drawn to Warren because of the senator’s vocal call to lower the interest rates on student loans. Pinter said people should not misconstrue this campaign as anti-Clinton effort, but rather a pro-Warren movement.

“The campaign is not about Clinton,” she said. “That’s not what we are here to talk about. We are here to talk about Warren and how important she is to us. Because she embodies the ideals and issues that are important to us at the end of the day.”

[Blair Lawton, Iowa Field Director for the Run Warren Run campaign] said even if Warren decides not to run, he believes there are some long-term benefits from this campaign including “putting a big investment into the progressive community.

Meanwhile back in Washington, D.C. (cue theme from The Empire Strikes Back), Republicans are pushing back on Warren, reports Politico:

Republicans are deploying a new taunt to needle Democrats they say refuse to consider even modest changes to financial oversight laws: Why are you so afraid of Elizabeth Warren?

It’s part of an effort by the GOP to portray Democrats as being completely inflexible when it comes to changes to the 2010 Dodd-Frank law because they are running scared from the populist wing of the party that views Warren, the most outspoken Wall Street critic in Congress, as their champion.

In an appearance at the American Bankers Association conference, House Financial Services Chairman Jeb Hensarling (R-Texas) joked that they might need extra help when lobbying Sen. Sherrod Brown (D-Ohio) and Warren: “May the force be with you.”

Reading through the rest of the article about what changes Big Bidness wants to to see in Dodd-Frank, one comes away asking whether Congress would show the same level of effort and concern over the needs and wants of less well-heeled and less well-connected constituents. Which explains why volunteers are busting their tails for Warren in Des Moines.

Who knows what words Republican old boys are actually using in D.C. to cast Democrats as inflexible or “running scared” or weak-kneed by asking “Why are you so afraid of Elizabeth Warren?” But that strikes my ear as, “What are you afraid of, a girl?”

With any luck, someone will catch one on tape saying explicitly what they really think.

Left, right agree on reducing prison population
by Tom Sullivan

The Bipartisan Summit for Criminal Justice Reform in Washington, D.C. on Thursday brought together a strange-bedfellows coalition focused on reducing the country’s swollen prison population: from former House Speaker Newt Gingrich to former Obama adviser Van Jones. The ACLU and Koch Industries were listed as program partners. Press coverage seems limited. Time wrote:

If you mistakenly wandered into the Bipartisan Summit on Criminal Justice Reform, you might have thought you had fallen into an alternate universe. Scores of liberal and conservative activists, policy wonks and lawmakers gathered for an all-day conference that seemed to defy all the old saws about Washington gridlock. Former GOP House Speaker Newt Gingrich lauded Democratic Senator Cory Booker, who volleyed back praise for his Republican partners. Even Attorney General Eric Holder drew warm applause in a ballroom dotted with conservatives.

But as unusual as that may be in Washington, it’s becoming a routine sight when it comes to criminal justice reform. In recent months, a growing bipartisan alliance has formed around the need to change a prison system that critics say is broken and bloated. Thursday’s crowd was the clearest sign yet of the coalition’s breadth. “When you have an idea whose time has come,” said Jones, one of the hosts of the summit, “it winds up being an unstoppable force.”

This has been a long time coming. Since passage of New Gingrich’s Taking Back Our Streets Act, part of his 1994 “Contract With America,” and the Violent Crime Control and Law Enforcement Act, “written by Joe Biden … and signed by Bill Clinton,” the country’s prison population doubled, writes Shane Bauer for Mother Jones:

Today, Gingrich has changed his tune. “There is an urgent need to address the astronomical growth in the prison population, with its huge costs in dollars and lost human potential,” Gingrich wrote in a 2011 op-ed in the Washington Post. “We can no longer afford business as usual with prisons. The criminal justice system is broken, and conservatives must lead the way in fixing it.”

The goal of Jones’ #cut50 campaign is to reduce the U.S. prison population by 50 percent in ten years. The question is just how that happens. It’s not just low-level drug offenders occupying those cells.

“Half the people in state prisons today have been convicted of a violent offense,” Marc Mauer, the executive director of the Sentencing Project, told Slate. But “violent offender” is a rather loosely defined category:

… there are criminal statutes all over the country that routinely result in defendants being classified as “violent” in the eyes of the law even though most people would never describe their deeds that way. Many crimes are legally considered violent “even if no force is used, let alone injury suffered,” said Jonathan Simon, the director of the Center for the Study of Law & Society at the University of California in Berkeley, in an email. He added, “violence is a much more capacious legal category than most people assume.”

Sen. Cory Booker (D-NJ) told the conference, “We need to redefine what is considered violent crime.” But, writes Leon Neyfakh in Slate, none of the proposed reform currently addresses that issue. Defining down “violent crime” might not sit too well in certain sectors.

The alliance naturally raises concerns about what other political goals might come wrapped in proposed solutions. Still, if the left was acting alone pursuing this goal, conservatives opponents likely have the money and clout to stop it cold. An alliance, however uneasy and expedient, could get it done. But that remains to be seen. As Jones put it, “There’s no asterisk on the vote total if some of these people are opportunists…. If somebody’s sitting in a prison cell someplace doing thirty years for a nonviolent drug offense, are they going to care why somebody voted to shorten their sentence? They probably aren’t….”

I think he’s right about that.

Never created a job?
by Tom Sullivan

Again this morning, Paul Krugman knocks down some of the right’s cherished beliefs about its economic theories:

At a deeper level, modern conservative ideology utterly depends on the proposition that conservatives, and only they, possess the secret key to prosperity. As a result, you often have politicians on the right making claims like this one, from Senator Rand Paul: “When is the last time in our country we created millions of jobs? It was under Ronald Reagan.”

Actually, if creating “millions of jobs” means adding two million or more jobs in a given year, we’ve done that 13 times since Reagan left office: eight times under Bill Clinton, twice under George W. Bush, and three times, so far, under Barack Obama. But who’s counting?

After the president fact-checked his critics in Cleveland last week, Susan Crabtree of the Washington Examiner, appearing on “The Last Word,” tried to tamp down his taking credit for unemployment falling to 5.5 percent, citing 30 million people who have dropped out of the workforce. Eugene Robinson would have none of it, pointing out that the Bureau of Labor Statistics figure is the “standard way that we have measured unemployment for many, many decades.” When the game is not going your way, you don’t get to move the goalposts. (IOKIYAR)

Krugman continues:

As a number of observers have pointed out, however, for big businesses to admit that government policies can create jobs would be to devalue one of their favorite political arguments — the claim that to achieve prosperity politicians must preserve business confidence, among other things, by refraining from any criticism of what businesspeople do.

Under “the confidence con,” any criticism of these “sensitive souls” will prompt Job Creators to take their investments and go home. But there is another free-market dogma not heard much anymore, one voiced by former RNC chair Michael Steele in 2009: “Not in the history of mankind has the government ever created a job.” Yet during the 2012 debate over whether the sequester would hurt the defense industry, the goalposts moved again. But worry not. Like Ah-nold, “never created a job” will be back.

Imagine a self-serving, industry-funded Sunday talk show ad:

One million workers in this country owe their cars, their homes, their kids’ education, and their steady paychecks to the private-sector, free-market entrepreneurs of the American defense industry.

The Defense Industry — meeting demand for fine consumer products like the F-35 Joint Strike Fighter, the fuel-efficient M1 Abrams tank, Tomahawk cruise missiles, the new Zumwalt class guided missile destroyer, and the Hellfire-equipped Predator drone. Predator — for when you really want to reach out and touch someone.

Free Market Capitalism — because government never created a job.

Why aren’t these con men in jail?
By Tom Sullivan

“The lack of prosecutions, quite frankly, does not indicate a lack of evidence,” Richard Bowen told Bloomberg’s “Market Makers” last week. The former Citigroup Chief Underwriter for Consumer Lending has testified before the Financial Crisis Inquiry Commission but contends that evidence he provided never made it to the Department of Justice for further investigation and prosecution.

A lengthy article on Bowen in New Economic Perspectives outlines some of what the whistle blower might have provided. Furthermore, that the FCIC, DOJ, and the SEC might not (or might not want to) understand how the accounting control fraud “recipe” at the heart of the financial crisis actually worked. Once you explain how the “sure thing” at the heart of the recipe works, writes William Black, “jurors understand quickly that the officers were acting in a manner that makes no sense for honest bankers but is optimal for officers leading frauds.”

Matt Taibbi (citing Yves Smith at Naked Capitalism) looks at corruption in the Private Equity business, and the seeming indifference of Andrew Bowden, the SEC’s Director of Compliance Inspections and Examinations. A study “found that over half of the companies they looked at were guilty of ripping off their clients” using hidden fees. Bowden mentioned the discovery in a speech within the last year. Since then … crickets:

By this month, Bowden had achieved a complete 180, telling a conference of PE professionals that their business was just “the greatest.”

This is Bowden on March 5th, on a panel for PE and Venture Capital issues at Stanford. Check out how he pooh-poohs the fact that his SEC has seen “some misconduct,” before he goes on to grovel before his audience:

Is a slightly less worshipful attitude too much to ask from people charged with oversight? Taibbi asks.

Apparently, yes.

(h/t MS)

Your daily apocalypse
by Tom Sullivan

Rush Limbaugh’s popularity during the Clinton administration prompted some restaurants to create “Rush Rooms” where you could listen to el Rushbo piped in over speakers while you washed down your burger and onion rings with iced tea. Two Minutes Hate that lasted for hours. A daily dose of outrage to get the juices flowing.

In an interview at Salon, historian Rick Perlstein looks at how other conservative hucksters such as Mike Huckabee and Glenn Beck peddle outrage and miracle cures. The practice has its roots in evangelical culture and in Richard Viguerie’s mass marketing:

What he ended up mastering was a rhetorical style which is very familiar to viewers of Fox News, in which the apocalypse is right around the corner, and his innovation was to intimate that you could help stop it with a, y’know, $5, $10, $50 donation. His business model, as was very soon discovered, was taking 95 percent to sometimes even more than 100 percent of the take for his own purposes and profit and giving in only a minuscule percentage of the proceeds to the ostensible beneficiary, whether it was a fund that supposedly helped FBI officers injured in the line of duty or sending Bibles to Africa or supporting something like the National Conservative Political Action Committee.

Perlstein responds to Huckabee’s diabetes ad:

Let’s not forget 1988, when Pat Robertson won the New Hampshire primary. A lot of this stuff comes from Evangelical culture, which is a culture of witness, so the hawking of miracles is absolutely baked into the cake. Someone like Pat Robertson was followed by a figure like Pat Buchanan or any number of candidates in the last two or three Republican primary seasons, who make a lot of noise by doing decently well in early polls but then fade out once the seasoned pros take over and the money becomes preeminent.

If this historical pattern holds, Mike Huckabee, if he does well early, will flame out before the second or third inning but I see no impediment whatsoever for him to be disqualified by the conservative rank-and-file, simply because this stuff has been going on without much complaint since the 1970s. This is part of the hustle, right? If Huckabee can claim to have been victimized because of his activities, he can always claim it’s the conspiracy of the liberal elites… and then it’s off to the races.

Like Flannery O’Connor’s bible salesman, except selling reverse mortgages and diet pills via multilevel marketing.

“Aren’t you,” she murmured, “aren’t you good country people?”

What’s infuriating is that now everybody’s getting in on the daily apocalypse style. This DCCC appeal came in from Nancy Pelosi last night:

Thomas — I don’t have much time:

The House is voting TOMORROW on the Republican budget.

Paul Ryan, blah, blah, blah …

That’s why I’m coming to you. We need to raise $80,000 more before the vote tomorrow to show our Democratic strength.

Are you ready to fight back with me before it’s too late?

Hang on tight to your wooden legs.

From the red wood forest to the xxxx xxxxxx waters
by Tom Sullivan

I got yer trickle-down right here, pal. Those melty glaciers in the Antarctic and Greenland? Well:

The Gulf Stream that helps to keep Britain from freezing over in winter is slowing down faster now than at any time in the past millennium according to a study suggesting that major changes are taking place to the ocean currents of the North Atlantic.

Scientists believe that the huge volumes of freshwater flowing into the North Atlantic from the rapidly melting ice cap of Greenland have slowed down the ocean “engine” that drives the Gulf Stream from the Caribbean towards north-west Europe, bringing heat equivalent to the output of a million power stations.

Scientists say the change has largely taken place since 1970. According to Stefan Rahmstorf at Potsdam’s Institute for Climate Impact Research, this could be … bad:

The Gulf Stream is just one component — albeit the largest and most powerful — of the system of ocean water flows known as the Atlantic Meridional Overturning Circulation. Similar overturning systems happen in all of the world’s oceans. The latest research supports previous studies that suggest overturning has slowed abruptly over the last several decades.

“If the slowdown of the Atlantic overturning continues, the impacts might be substantial,” Rahmstorf said in a statement. “Disturbing the circulation will likely have a negative effect on the ocean ecosystem, and thereby fisheries and the associated livelihoods of many people in coastal areas. A slowdown also adds to the regional sea-level rise affecting cities like New York and Boston.”

The latest research was published this week in the journal Nature Climate Change.

Charlie Pierce speculates that the American conservative response will be:

a) Don’t trust the science-y scientists with their scientific science and Al Gore is fat, and what are “proxy measurements,” anyway? or

b) Look at England and how nice and temperate it’s been. Carbon dioxide is our amigo!

So long, Gulf Stream, it’s been good to know ya. Maybe Arlo can do the rewrite on “This Land Is Your Land.”