We already know about the firing of federal prosecutors for shady political reasons, and several "loyal Bushies" had to resign because of it. Now it was revealed that hiring practices also became politicized under the Bush Admin. The two previous Atty Generals Ashcroft and Gonzalez decided to break tradition and shift the hiring duties for prestigious Justice Dept career-track Honors Program attorneys and even summer interns. Instead of the usual DOJ permanent staff, the AG's "working group", a committee of political appointees, would make the final decisions. Now why would they need to do that? Technically it's against the law to discriminate based on political affiliation, age, race, gender, etc. for DOJ hirings.
So for similarly-qualified individuals with different "apparent" political affiliations (based on group memberships or other participations listed on their CVs), Liberal-leaning applicants had a significantly higher chance of being deselected/rejected versus conservative- or neutral-leaning applicants. Now you might expect the typical red flags of the ACLU, Amnesty International, and Planned Parenthood, but also the Chesapeke Bay Foundation, NAACP, and anything with "Minnesota" in it (seriously!) were considered liberal also. The hiring committee even ran web searches and examined the MySpace pages of applicants, ostensibly to glean their political affiliations beyond what was documented on their CVs. So be careful what you put on your CV and the web! So most of the people who may be found guilty for misconduct have already left the DOJ, though probably now they will be banned from ever holding future positions. As expected, when confronted with these findings, the most guilty members of the hiring committee (Esther McDonald, Michael Elston) seemed surprised and denied that they took politics/ideology into account for hirings. To his credit, current AG Mukasey and his people have worked hard to repair a lot of this damage and restore the previous hiring prodecure. But in terms of restoring public perceptions and confidence in DOJ impartiality, that might take longer.
Probably another whammy is to come when the DOJ soon releases its report on misconduct allegations at their Civil Rights Division.
---------
All Things Considered, June 24, 2008 · A Justice Department audit released Tuesday found that a screening program installed at the department in 2002 kept out Democrat- or liberal-leaning attorneys. Those with Republicans ties, meanwhile, got interviewed for plum positions at the department.
http://www.npr.org/templates/story/story.php?storyId=91853803
Report: Justice Dept. Considered Politics in Hiring
Listen: Nina Totenberg discusses the report on 'Morning Edition.'
add
Read the Report
Investigation into Allegations of Politicized Hiring at the Justice Department (PDF)
A hiring committee at the Justice Department regularly decided who could get key job interviews based upon their political affiliations, according to a report by the department's inspector general. The report showed that young lawyers with Democratic Party and liberal affiliations on their resumes were denied job interviews at the Justice Department, while Republican-affiliated applicants had a better chance at the key jobs. "The screening committees in 2002 and 2006 improperly deselected candidates for interviews based on political and ideological affiliations," the report said.
Considering politics in the hiring process is a violation of department policy and federal law. The report said that everyone who performed screening was contacted, and all denied considering politics when deciding who would be permitted into a competitive honors program for entry-level attorneys or as summer interns. After determining that the hiring process was hugely politicized, the IG contacted the screeners to show them the analysis. The screeners told investigators they were surprised by the findings. The report noted that these hiring practices were changed in 2007 and that Attorney General Michael Mukasey said such practices would not be repeated. In addition, Mukasey said he would adopt the inspector general's additional recommendations.
Wednesday, June 25, 2008
Monday, June 23, 2008
"A War Worth Fighting"
http://www.newsweek.com/id/141501?tid=relatedcl
Dear Newsweek,
In the recent article "A War Worth Fighting," I was bothered by Christopher Hitchens' side comment that after the Allies discovered the horrors of the Final Solution, it somehow retroactively justified their carpet-bombing of German cities. I for one still believe in "The Good German", and do question the wisdom and morality of such a policy, where innocent Germans who may have even been opposed to Hitler's wartime leadership were indiscriminately made to suffer, even though they played no active role in the Holocaust apart from voting the Nazis to power in 1933. The Nazis won but only gained 49% of that vote, so clearly there were plenty of Germans who disagreed with Hitler. So in no way could that result be construed as a nationwide endorsement of the secretive Final Solution that was to come a decade later. It is possible that many German civilians were cruel to Jews and other persecuted peoples, but the punishment for bigotry is not murder.
I suppose some Allies felt that the Germans deserved to see their cities burn after the Blitzing of England and atrocities on the Eastern Front. But American journalist Oswald Garrison Villard said, "What was criminal in Coventry, Rotterdam, Warsaw, and London has now become heroic first in Dresden and now in Tokyo." So not only was the hypocritical bombing of German civilians excessive and irrelevant as punishment for the Holocaust, it also made the targeting of population centers during wartime more "acceptable", especially for the US against Imperial Japan (at least 500,000 dead). Horrible barbarism by the Axis and Allies during WWII probably opened the door for future wartime atrocities against civilians during the Cold War, and more recently, in the Balkans and Iraq.
http://japanfocus.org/products/details/2414
Also I thought this Newsweek article on Churchill, Chamberlain, and the political myths of appeasement/confrontation was interesting:
http://www.newsweek.com/id/141502
Dear Newsweek,
In the recent article "A War Worth Fighting," I was bothered by Christopher Hitchens' side comment that after the Allies discovered the horrors of the Final Solution, it somehow retroactively justified their carpet-bombing of German cities. I for one still believe in "The Good German", and do question the wisdom and morality of such a policy, where innocent Germans who may have even been opposed to Hitler's wartime leadership were indiscriminately made to suffer, even though they played no active role in the Holocaust apart from voting the Nazis to power in 1933. The Nazis won but only gained 49% of that vote, so clearly there were plenty of Germans who disagreed with Hitler. So in no way could that result be construed as a nationwide endorsement of the secretive Final Solution that was to come a decade later. It is possible that many German civilians were cruel to Jews and other persecuted peoples, but the punishment for bigotry is not murder.
I suppose some Allies felt that the Germans deserved to see their cities burn after the Blitzing of England and atrocities on the Eastern Front. But American journalist Oswald Garrison Villard said, "What was criminal in Coventry, Rotterdam, Warsaw, and London has now become heroic first in Dresden and now in Tokyo." So not only was the hypocritical bombing of German civilians excessive and irrelevant as punishment for the Holocaust, it also made the targeting of population centers during wartime more "acceptable", especially for the US against Imperial Japan (at least 500,000 dead). Horrible barbarism by the Axis and Allies during WWII probably opened the door for future wartime atrocities against civilians during the Cold War, and more recently, in the Balkans and Iraq.
http://japanfocus.org/products/details/2414
Also I thought this Newsweek article on Churchill, Chamberlain, and the political myths of appeasement/confrontation was interesting:
http://www.newsweek.com/id/141502
Thursday, June 19, 2008
Energy use reforms
http://news.yahoo.com/s/ap/20080619/ap_on_go_ca_st_pe/mortgage_fraud
With all these known cases of fraud from the subprime fiasco (and who knows how many other crooks got away clean?) as precedent for Western greed, don't you think that something fishy must be going on with $135 oil besides traditional supply and demand market forces?
Bush, McCain, and Obama have been discussing energy a lot recently, for obvious reasons. Bush and McCain want to lift the moratorium on offshore oil exploration and drilling. While this may help, energy experts think that it will add 18M barrels/year at most to our domestic production (a drop in the bucket, since the US consumes 20M barrels a day), and won't be fully developed for 2 decades. Though I guess every little bit helps, but it would be a shame if we spoil the Florida or Southern California coastlines with ugly rigs. And if America can reduce its oil usage by 10%, that's 700+M barrels of savings a year, much better than new drilling.
I just wish the next president can use incentives and fines to encourage changes in energy use habits. I would hope that the DOE could have an auditing wing, to have random inspections of businesses, vehicles, and homes, like the FDA and IRS do. Tax breaks and credits for motion-sensing lights, solar panels, efficient appliances, and other green practices, and penalties for excessive heating/cooling use, poorly maintained automobiles, leaving lights on when the building is empty, etc. Subsidized utilities and gasoline for the first X gallons/month (to help lower income people who can't avoid driving), but huge fees if you surpass your consumption quota, or if you drive wasteful vehicles. Maybe there could be exceptions if you live in remote areas or work a job that requires heavy driving.
So this could help both the rich and poor. The rich may live more wastefully, but they have the money to afford green tech improvements and earn credits. The poor can't, but they consume less and will get subsidies. So you can couple low energy prices with reduced usage. High prices do serve as an effective deterrent, but they mostly hurt the people who are most vulerable and least to blame for waste. I know this is invasive, but survival comes before personal freedoms (man, my rhetoric is starting to sound like War on Terror!). And then maybe we can slash useless NASA and military research projects, and use that money to improve public transit, the electricity grid, and rail freight networks. Also building a few more refineries and nuclear plants without red tape wouldn't hurt. If places like NY and CA have a problem with nuclear power, rural areas in the Midwest and South would gladly accept the risk for all the jobs and commerce that would come with the new plants.
With all these known cases of fraud from the subprime fiasco (and who knows how many other crooks got away clean?) as precedent for Western greed, don't you think that something fishy must be going on with $135 oil besides traditional supply and demand market forces?
Bush, McCain, and Obama have been discussing energy a lot recently, for obvious reasons. Bush and McCain want to lift the moratorium on offshore oil exploration and drilling. While this may help, energy experts think that it will add 18M barrels/year at most to our domestic production (a drop in the bucket, since the US consumes 20M barrels a day), and won't be fully developed for 2 decades. Though I guess every little bit helps, but it would be a shame if we spoil the Florida or Southern California coastlines with ugly rigs. And if America can reduce its oil usage by 10%, that's 700+M barrels of savings a year, much better than new drilling.
I just wish the next president can use incentives and fines to encourage changes in energy use habits. I would hope that the DOE could have an auditing wing, to have random inspections of businesses, vehicles, and homes, like the FDA and IRS do. Tax breaks and credits for motion-sensing lights, solar panels, efficient appliances, and other green practices, and penalties for excessive heating/cooling use, poorly maintained automobiles, leaving lights on when the building is empty, etc. Subsidized utilities and gasoline for the first X gallons/month (to help lower income people who can't avoid driving), but huge fees if you surpass your consumption quota, or if you drive wasteful vehicles. Maybe there could be exceptions if you live in remote areas or work a job that requires heavy driving.
So this could help both the rich and poor. The rich may live more wastefully, but they have the money to afford green tech improvements and earn credits. The poor can't, but they consume less and will get subsidies. So you can couple low energy prices with reduced usage. High prices do serve as an effective deterrent, but they mostly hurt the people who are most vulerable and least to blame for waste. I know this is invasive, but survival comes before personal freedoms (man, my rhetoric is starting to sound like War on Terror!). And then maybe we can slash useless NASA and military research projects, and use that money to improve public transit, the electricity grid, and rail freight networks. Also building a few more refineries and nuclear plants without red tape wouldn't hurt. If places like NY and CA have a problem with nuclear power, rural areas in the Midwest and South would gladly accept the risk for all the jobs and commerce that would come with the new plants.
Wednesday, June 18, 2008
Fuel efficiency estimates
I thought this was a great article, not sure if anyone's heard about this guy. My company did a TV show about him last year. It takes almost fanatical dedication, but maybe this is the best way to combat gas costs (a gallon of regular gas costs $4.67 here in Emeryville...yikes). I've started driving with my FCD on, it's interesting to see where I am wasting fuel the most.
"But it was driving his wife's Acura MDX that moved Wayne up to the next rung of hypermiler driving. That's because the SUV came with a fuel consumption display (FCD), which shows mpg in real time. As he drove, he began to see how little things—slight movements of his foot, accelerations up hills, even a cold day—influenced his fuel efficiency. He learned to wring as many as 638 miles from a single 19-gallon tank in the MDX; he rarely gets less than 30 mpg when he drives it."
http://www.motherjones.com/news/feature/2007/01/king_of_the_hypermilers.html
----------
That is amazing driving! I guess the people behind him at a red light must be mad when he accelerates at a snail's pace! But good for him.
It's funny how the EPA fuel economy estimates are calculated. Apparently they are done by the car MANUFACTURERS themselves in their LAB (are their equipment and methods even validated?), and the EPA just reports the results (gotta love half-assed government oversight). They verify only 10-15% of those estimates in their own lab in Ann Arbor. So the automobiles for testing are in tip-top shape, with near-ideal tire pressure, tune up, ambient temperature, etc. Professionals (or maybe even computer controlled?) do the driving routines, so they rarely over-rev. Haha, the second link shows that the max acceleration during city/hwy testing is 3 MPH/sec, so 0-60 would take about 20 sec! I wonder if they even factor in air/road resistance, braking, turning, and such. No wonder why we can hardly ever reach their estimates during "normal, real" driving.
http://www.fueleconomy.gov/feg/how_tested.shtml
http://www.fueleconomy.gov/feg/fe_test_schedules.shtml
The Senate will hear arguments from various viewpoints today on whether speculation is in fact driving up energy futures. As we discussed in previous emails, the CFTC claim that they have seen no evidence that speculation is affecting prices. But an interesting factoid - since Bush took office, budget cuts have forced the CFTC to trim 20% of its workforce (GOP's attitude is the market will work itself out!), while commodities trading has increase 6X over that same time span. So we have fewer already-overworked and underpaid regulators overseeing a much larger trading volume with higher stakes. Also the NY and London energy markets are trying to work out an agreement for better oversight and transparency.
http://biz.yahoo.com/ap/080617/oil_trading_speculation.html?.v=1
---------
As a (former) proud owner of a 2001 Honda Insight (61/68 EPA MPG) I can tell you that "hyper-miling" does work: I was able to get as much as 75MPG driving to/from San Jose using regular unleaded gas and nothing more than a very light foot. I should mention the fact that there is a large community of Insight owners on the internet (e.g. http://www.insightcentral.net/) who are able to garner as little as 50MPG and as much as 100MPG from the same model automobile; however, most drivers would not find the techniques used while "hyper-miling" to be practical on a day-to-day basis and would be better served by simply using cruise control (not available as a standard feature on the Honda Insight) and keepinig a well-maintained, fuel-efficient vehicle.
Tuesday, June 17, 2008
Chinese government sends thugs to disrupt Falun Gong event in NY
Remember that email I sent a while back about the Beijing-sponsored agitators in Seoul who assaulted pro-Tibet demonstrators during the Olympic Torch relay in that city? Well, it turns out an official at the Chinese consulate in NYC admitted that his government helped organize attacks on a recent Falun Gong event in Flushing, NY. I guess they can do whatever they want to dissidents in their own land (Tienanmen, etc.), but they can't just trample on the rights of citizens in other countries with different laws. If China wants to be respected as a legitimate world power, Olympic host, etc., I don't think they should continue such banana republic practices usually associated with corrupt despots like Mugabe and Saddam. Paying thugs to rough up people abroad who dare to have differing political views? What audacity and arrogance. Similar attacks took place in Japan and LA, so Congress is looking into it also. Leave it to the brilliant Chinese government to squander the precious international goodwill following the tragic earthquake for petty politics.
http://www.asianresearch.org/articles/3158.html
Aftershocks: Chinese Mobs Incited to Attack Falun Gong in New York, Elsewhere
Violence and vandalism suggest communist authorities exploiting Sichuan earthquake aftermath for political ends
Falun Dafa Information Center
5/22/2008
NEW YORK -- The Falun Dafa Information Center reported Wednesday that mobs of hundreds have been assembled in Flushing, New York, daily since Saturday, May 17, to assail Falun Gong practitioners even as millions throughout China mourn.
This and similar incidents occurring on the same days elsewhere, coupled with aggressive coverage from state-run media in China, suggest that Beijing authorities are orchestrating these events, post-earthquake, as a means of channeling emotions against political targets.
Several adherents of Falun Gong, including U.S. and Canadian citizens, up to 70 years of age, and including a mother whose two sons are serving in Iraq with the U.S. military, have been physically assaulted by the pro-communist crowds, with others receiving threats on their lives. At least two arrests have been made by Queens police hate crime charges are allegedly pending. Other Falun Gong members have been pelted with bottles, eggs, and stones, and been spit on by the assembled mass. (Details of the events are attached.)
The incidents, which are paralleled by happenings in Japan and Los Angeles, and possibly elsewhere, during the same four-day period, appear to have been coordinated by Chinas authorities and are the culmination of escalating aggression towards Falun Gong and other forms of dissent in recent months. In the run-up to the Olympics, Chinese communist-backed student groups have, notably, harassed and threatened Tibet activists and turned to violence in South Korea, where rights activists were pummeled by a pro-communist Chinese throng.
Each week were seeing acts of increasing belligerence like this, and Falun Gong has become a principal target, said Falun Dafa Information Center spokesperson Erping Zhang today. It is simply preposterous to see American citizens--and specifically, Americans who are trying to uphold values like liberty that are dear to our country--get threatened, berated, and assaulted in their own backyards by mobs who are directed by a foreign dictatorship.
Much suggests that the gatherings and assaults in Flushing were pre-meditated, organized, and trace back to Beijing. Many Chinese student organizations and provincial associations are known to be linked to, and mobilized by, communist authorities in Beijing.
The seething throngs arrived, and left, seemingly on cue witnesses report the group operating in what appears to be shifts, with groups leaving and arriving as if scheduled. Members of the pro-communist pack were equipped with identical red flags. Certain individuals stood out as ringleaders, leading the group in chants, directing actions, and inciting members. Certain others brandished professional cameras, and appeared to be gathering information on Falun Gong participants and supporters. An eyewitness reported that many--perhaps dozens--of mob members had identical iPhones, wrapped in the same green-tinted, transparent, waterproof enclosures.
Chinese journalists were also reportedly dispatched from China to the weekends events this, at a time when the nations attention is fixated on the tragedy of Sichuan province. One woman at the Flushing scene identified herself as a reporter sent from Changchun Television, a state-run media entity in northeastern China. A second individual, a male, identified himself as a Beijing journalist assigned to take photos.
The mass gatherings have been aggressively reported by Chinas state-run press, with a heavy political twist. The mob scene has been cast as a spontaneous backlash against Falun Gong by patriotic Chinese, who, according to one PRC paper, Global Times (Huanqiu Shibao), could not tolerate Falun Gongs alleged indifference to the earthquake and not fighting against the disaster... not donating a penny.
Its almost like one big, bogus publicity stunt, said the Centers Erping Zhang. Beijing seems intent on exploiting the tragedy of the earthquake and its emotional aftermath to stigmatize and attack Falun Gong. Theyre trying to turn Falun Gong into a political rallying point. Its a shameful way of diverting attention from very real problems inside China at this time.
Significantly, similar operations appear to be under way in other regions around the world. On Saturday, May 16, ethnic Chinese assaulted another Party-Quitting Station (see attached), this time in Tokyo, Japan--some 8,000 miles away. In Japan, as in New York, poster displays were kicked or torn down and individuals assaulted.
In both cases the same station, or booth, had been incident-free for years, prior to this one weekend. In Los Angeles on May 20, nonviolent Falun Gong demonstrators outside the Chinese consulate were similarly accosted by ethnic Chinese. The perpetrators again tore down banners and destroyed informational materials.
This is clearly a centrally planned and engineered scheme, and theres no doubt who is behind the scenes. Its the same dictatorship that has deployed scores of angry Chinese to drown out dissenting voices wherever the Olympic torch goes, or whoever tries to speak out about Tibet or Falun Gong, said Zhang.
At least one Chinese source familiar with these matters alleges that Zhou Yongkang, Secretary of the Political and Legislative Affairs Committee of the Chinese Communist Party, is behind the overseas pro-communist groups.
The Falun Dafa Information Center is deeply troubled by the escalating pattern of intimidation and violence. Of concern is also the right to information of ethnic Chinese who should be able to frequent sites such as the Flushing Party-Quitting Station free of coercion or threat. If Chinas communist rulers fear what such information reveals, it should curb its political persecutions and abide by international norms, thus having less to hide, rather than seek to stifle such facts.
The Center also calls upon all elected officials and relevant federal bodies to immediately take measures to protect those who are targeted by such abusive tactics investigate the happenings in Flushing and elsewhere and take active measures, including legislation, to ensure they do not occur again.
Victims of assault named above as well as others are available for media interviews upon request. Attached are further details of the incidents. A short news clip with footage of the incident (in Chinese) can be found here.
---
Details of Incidents in Flushing, New York, May 17-20, 2008
Incidents in Flushing began on Saturday, May 17, when some 40 individuals gathered outside the Flushing branch of the Queens Borough Public Library to celebrate the disavowal of Chinese communist rule by compatriots back in China. Some 37 million there have reportedly quit the communist party in recent years, with each new million added to the figure being commemorated as a milestone. Those assembled included leaders of local Chinese organizations, democracy and human rights activists, and Falun Gong adherents.
Similar gatherings had been held over the past four years, free of incident, and a small group of individuals had manned a booth at the same spot meant to facilitate breaks from the Party by overseas Chinese. The booth is said to have been staffed daily in recent months, all along free of incident. Similar Party-Quitting Stations have been set up in densely populated Chinese areas elsewhere outside of China.
The group, which gathered outside the library at 12 noon on the 17th, soon found itself dwarfed by throngs of ethnic Chinese, who gathered opposite, across the street. An estimated 300-plus assembled. Witnesses describe the group as seething with anger, and focused almost exclusively on Falun Gong. Chants denouncing Falun Gong and its founder--including death to Falun Gong!--and not the event at hand, were belted out by the group. A glass bottle was soon hurled, along with various plastic beverage containers. At one point the assembled mass brandished red flags, which had apparently been distributed.
One Falun Gong adherent present, surnamed Wu, age 70, was physically assaulted after attempting to distribute an informational leaflet. After a pummeling, Wu heard the assailant on his cell phone say, Call more people to come, $90 for each person!
Throngs of ethnic Chinese similarly assembled again outside the library on May 18, 19, and 20. On the 18th the Party-Quitting booth was physically surrounded by the group, and a number of informational materials were vandalized and seized by the mass. Police disbanded the crowd, only to see it return again, as if on cue, on the 19th when the booth again opened at 10a.m. The group this time came equipped with stones and eggs, the latter of which it hurled regularly, and in several instances spit on persons staffing or supporting the booth.
One woman who practices Falun Gong, Judy Chen, 48, of Flushing, was assaulted on Monday by a Chinese woman in the pro-communist pack. Chen had attempted to take the womans picture after she berated and swore at Chen, who regularly staffs the Party-Quitting booth, only to have her camera seized and smashed. The assailant proceeded to slap Chen about the face and claw her (photo). Chen reports having been told, Ive had a good look at your face... and Im going to kill you. Chen is a naturalized citizen and has two sons, both of whom are in the U.S. military and currently serving in Iraq.
On Tuesday the 20th violence again erupted, this time with greater force and frequency witnesses report as many as four assaults taking place. Upwards of 400 ethnic Chinese were assembled, and again seized and destroyed materials. One of those assaulted was Zenon Dolnyckyj, of Flushing, age 30, who practices Falun Gong. A second is also a Falun Gong adherent, Wenzhong Yu, age 53. Yu was badly beaten by ethnic Chinese at the scene, and had to go to the hospital for lacerations to the ear (photo1 / photo2).
Queens police arrested two men in connection with Tuesdays assaults, Guang Chen, 46, and Wen Q. Li, 33. Both stand charged with assault, and may be prosecuted for a hate crime. The victims identity as Falun Gong members is believed to have been the crimes motive.
NEWS - May 21, 2008
Falun Dafa Information Center, www.faluninfo.net
---
Background
Founded in 1999, the Falun Dafa Information Center is a New York-based organization that documents the rights violations of adherents of Falun Gong (or Falun Dafa) taking place in the Peoples Republic of China. In July of 1999 Chinas autocratic Communist Party launched an unlawful campaign of arrests, violence, and propaganda with the intent of eradicating the apolitical practice it is believed certain leaders feared the influence of the practices 100 million adherents. The campaign has since grown in violence and scope, with millions having been detained or sent to forced labor camps. The Center has verified details of over 3,000 deaths and over 63,000 cases of torture in custody. Falun Gong is a traditional-style Buddhist qigong practice, with roots in the Chinese heritage of cultivating the mind/body for health and spiritual growth.
Police shaking down people in the war on drugs
Federal and state laws, in general, say that a law enforcement agency that seizes assets may not "supplant" its own budget with confiscated funds, nor should "the prospect of receiving forfeited funds … influence relative priorities of law enforcement agencies."
NPR has found examples, mainly in the South, in which both of these things have happened.
Ron Barroso, a longtime criminal defense attorney, says, "I believe a lot of these stops are fishing expeditions, nothing more. They figure they stop enough people out there that they can profile, for whatever reason, sooner or later they are going to hit on something."
"If a cop stops a car going north with a trunk full of cocaine, that makes great press coverage, makes a great photo. Then they destroy the cocaine," says Jack Fishman, an IRS special agent for 25 years who is now a criminal defense attorney in Atlanta. "If they catch 'em going south with a suitcase full of cash, the police department just paid for its budget for the year."
---------
I guess cops figure that if they can't stop the flow of drugs into the US, the might as well stop the flow of cash proceeds from those drugs from returning to Latin and South America. After 9/11, it's much harder for criminal outfits to launder dollars internationally, so increasingly drug gangs are relying on mules smuggling money through our southern border. So in principle, it's good for the police to try to crack down on one or both directions of the drug-money flow. Less money going south means fewer guns and bribes for the cartels, hopefully (maybe the horrible drug war in Mexico might be a future email topic). But giving law enforcement the green light to cavalierly seize private money on the mere "suspicion" of criminal activity, under the pretext of "keeping children safe from drug peddlers", could be a justice nightmare - and it has been in some cases (see NPR vignettes below). I guess for law-abiding citizens, it's just too dangerous to carry around large sums of cash. Maybe it's always been like that in history, but you don't expect the "good guys" to be gunning for your cash along with the criminals!
Some moron made a law allowing local law enforcement departments to keep 80% of seized currency from drug busts, traffic stops, etc., in order to incentivize aggressive crackdown on money trafficking. Heh, since when have cops ever needed a reason to confiscate other people's money? It goes all the way back to the Sheriff of Nottingham. For civil forfeiture, you don't even have to be charged with a crime, but the cops/Feds just have to be able to show a "preponderance of evidence" that the money impounded was "associated" with criminal activity. And unlike "innocent until proven guilty beyond a reasonable doubt", if we want our money back, the burden of proof is on the defendant to demonstrate the money is clean. Though it's hard for Average Joes to get their money back, since the legal costs to challenge the cops are often much larger than the amount seized by law enforcement (though many cases have gone to court, with victories awarded to the defendants).
Yes in many cases law enforcement has properly seized millions in veritably dirty money, which is a good thing for us (though it's debatable how much of an impact those busts have actually had on the overall drug trade). But some innocent citizens had their assets taken by police, often colored people in sparsely-populated areas of the Midwest and South, where police budgets are small and media coverage/legal services are less available to citizens. Granted that it may appear suspicious if blue-collar type minorities, who aren't well-spoken and presentable, are transporting large sums of cash, but that's not illegal (yet) and justice is supposed to be blind. Some immigrants and others come from "cash is king" cultures and don't believe in banks/investing. So what can they do when they need to transport their savings - just hope for the best? Eager cash-strapped cops and prosecutors, non-scrutinizing judges, and semi-defenseless motorists; that is a recipe for abuse if I ever heard one.
Who knows how much cops are keeping on the side, but officially: "Records with the Justice Department show that state law enforcement agencies seized $1.58 billion in 2007 alone, but that doesn't include the tens of millions of dollars that go through the state asset forfeiture programs — which are not tabulated in any central repository."
----------
http://www.npr.org/templates/story/story.php?storyId=91490480#91495507
http://www.npr.org/templates/story/story.php?storyId=91555835
On Sept. 2, 2007, Hunt says he was driving south on I-75 through central Georgia on the way to see his mother in his hometown of Dublin. Hunt was wearing his hair in braids and driving a friend's orange Dodge Charger [profiling!?!], when two Lamar County sheriff's deputies pulled him over for speeding. ... But what really got their attention was the $5,581 Hunt had stuffed in his pockets, which he said was the weekend profits from his car-detailing business.
"They just told me it looked like drug money, that was all," Hunt says. The deputies found no drugs or alcohol in the car; Hunt was not arrested for any offense, nor was he written up for a traffic violation. The U.S. attorney's office in Macon, Ga., has now initiated proceedings to keep Hunt's money based on probable cause that it is "proceeds traceable" to "a controlled substance." Among their strongest evidence:
The deputy smelled burned marijuana.
The deputy observed "an untestable" amount of what appeared to be marijuana on the floorboard.
Drug dogs detected drug residue on the currency when it was brought back to the station. [what money doesn't have drug residue on it!?!]
Hunt has not been charged with any crime as a result of the traffic stop. So the question arises: Why is the government trying to take his $5,581?
Hunt concludes, "It was my hard-earned cash. They had guns and badges and they just took it. If I would have been a drug dealer, I would have just left them and let them have the money."
---------
On Oct. 20, 2005, Gonzalez says he was driving south on U.S. Highway 281 from Austin to Brownsville to look at a car and buy a gravestone for his dying aunt. Gonzalez, who owns a car lot, was carrying $10,032 in a briefcase. About 90 miles north of the Mexican border, two sheriff's deputies of the Jim Wells County Task Force pulled him over for driving without a front license plate.
"He asked me to get out of the car. I did," Gonzalez says. "He asked me for my driver's license and insurance. I gave it to him. He asked me if I had weapons, drugs or large amounts of money. I told him I did."
The police video shows Gonzalez with a shaved head, wearing baggy shorts, standing beside a Mazda [more profiling!?!]. The incident report states the deputies grew suspicious when Gonzalez and his passenger both appeared nervous, and a drug-sniffing dog signaled the presence of drugs. The deputies took them in for questioning and searched the car. They found no drugs or weapons. Though Gonzalez said he was a businessman and showed them a credit card printed with the name of his car lot, the officers didn't believe him.
The deputies handed Gonzalez a waiver: If he signed over the money and did not claim the currency, he could walk away free. If he did not sign the waiver, he would be arrested for money-laundering. Gonzalez signed the waiver and gave up rights to his money.
"So at that time we got in our car and we left, still trying to figure out what just happened. We got officers that took our cash. We got officers that told us we can't get an attorney. So I'm thinking, are these guys officers of law? Did I just get robbed of my money?"
Gonzalez hired an attorney, who filed a federal civil rights lawsuit. The county fought it, and lost. In April, the county returned his $10,032 and paid him $110,000 in damages, plus attorney's fees.
-----------
On March 15, 2007, Michael Annan was driving his black Nissan Maxima south on I-95 through southeast Georgia. He had just gotten off his job on a dredging barge and was on his way home to Orlando, Fla., when he was pulled over for speeding by deputies in Camden County, just north of the Florida state line.
Annan, a 40-year-old immigrant from Ghana, was carrying $43,720 in hundreds and fifties rolled up in a sock in the pockets of his overalls — everything he had saved from nine years of work in Florida and Georgia. But because he did not trust banks, or his then-wife in Orlando, Annan was carrying his life savings in his pocket.
"They open my car engine and they try to find something," Annan said in an interview from Brunswick, Ga. "But I don't have nothing in my engine, and I don't know what they thinking. … After that, they said they would take me to the office."
At the sheriff's office, a drug dog was brought out to sniff his car, but it detected no narcotics. Annan says he showed them a pay slip from his employer, Great Lakes Dredging. Annan had no drug arrests. Undeterred, the officers confiscated the money anyway, explaining they needed to investigate whether it was drug money. They said he could call them back in two weeks.
Annan says he did call back, a half dozen times, but that no one would help him. So he took a day off from work to drive to the county seat of Woodbine, Ga., to visit the sheriff's office in person. He said they told him they were too busy to see him.
So he hired an attorney in Brunswick, who faxed Annan's work records and tax returns to the sheriff's office as proof he wasn't a drug dealer. Camden County then returned his money. The lawyer charged him $12,000 — more than a quarter of his savings.
"I think maybe they see money like that … maybe they thought I was dealing with the drugs … how can a black man have this much money in his pocket? I think they robbing me, I can't understand they can stop someone and take his money," he says in heavily accented English.
His attorney, Paula Crowe, who is familiar with Camden County, says that in her experience, she's sure Annan never would have seen his money again had he not hired a lawyer.
Lt. William Terrell, of the Camden County Sheriff's Office, said the highway interdiction team was just doing its job.
"The deputies, with all their training and experience, were acting in good faith as sworn officers doing their job. They were not trying to take Mr. Annan's hard-earned money, they were simply trying to verify that the $43,000 was not money made in a drug transaction."
Camden County has an aggressive highway interdiction program that has earned the sheriff's department more than $20 million over the past decade and a half. Sheriff Bill Smith — once considered one of the most successful sheriffs in the nation at confiscating drug money off the highways — is now the subject of a federal grand jury investigation into whether he misused the forfeiture funds.
-----------
The bundles contained $1 million. According to the law, 80 percent of that will go to the Kingsville Police Department. So that one afternoon's work will boost the department's budget by 25 percent.
"Law enforcement has become a business, and where best to hit these narcotics organizations other than in the pocketbook? That's where it's going to hurt the most. And then to be able to turn around and use those same assets to benefit our department, that's a win-win situation as far as we're concerned," says Kingsville Police Chief Ricardo Torres.
In this sleepy city of 25,000 people, with its enviable low crime rate, police officers drive high-performance Dodge Chargers and use $40,000 digital ticket writers. They'll soon carry military-style assault rifles, and the SWAT team recently acquired sniper rifles.
When asked why the Kingsville Police Department needs sniper rifles, Torres says, "With homeland security, we all hear about where best to hit than … Middle America. This can be considered that sort of area. We have to be prepared."
Federal and state rules governing asset forfeiture explicitly discourage law enforcement agencies from supplementing their budgets with seized drug money or allowing the prospect of those funds to influence law enforcement decisions.
There is a law enforcement culture — particularly in the South — in which police agencies have grown, in the words of one state senator from South Texas, "addicted to drug money."
Part of the problem lies with governing bodies that count on the dirty money and, in essence, force public safety departments to freelance their own funding.
In Kleberg County, where Kingsville is the county seat, Sheriff Ed Mata drives a gleaming new police-package Ford Expedition bought with drug funds. This year, he went to his commissioners to ask for more new vehicles.
"They said, 'Well, there ain't no money, use your assets,' " he says. He says his office needs the money "to continue to operate on the magnitude we need."
Another county agency, the Kingsville Specialized Crimes and Narcotics Task Force, survives solely on seized cash. Said one neighboring lawman, "They eat what they kill." A review by NPR shows at least three other Texas task forces that also are funded exclusively by confiscated drug assets.
The concern here is that allowing sworn peace officers — who are entrusted with enormous powers — to make money off police work distorts criminal justice.
Wednesday, June 11, 2008
Don't ever vote an entertainer to politics
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/06/09/BAHA115GAP.DTL&type=printable
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/06/03/MN2S111RJT.DTL&type=printable
Arnold is such a spineless hypocrite. He spends a good chunk of his governorship campaigning all over the world for green reforms to combat climate change, but now that he has failed to control one of the worst state budget crises in US history (now over $17B in the red), he totally reverses his platform. I know CA has to cut costs, but where is the logic in cutting $1.4B in funding for our public transit system that has much room for improvement, especially when gas is so expensive and more people are depending on it to get around? To be more precise, Arnold plans to keep the state public transit budget fixed, but CA voters had previously approved a supplemental $1.4B for various upgrades, which Arnold and the Legislature will probably cancel.
"Even with California's massive deficit, scaling back the state's support for public transportation makes no sense environmentally or economically," said Nathaniel Ford, who runs the San Francisco Municipal Railway. "Every dollar spent on transit helps clean the air by getting people out of their cars. And with gas prices continuing to escalate, we should be doing everything we can to encourage, not discourage, transit use."
The American Public Transportation Administration estimates that national ridership is on pace to be at its highest level in 50 years (another "positive" consequence of high fuel prices, as we alluded to in our previous oil discussion). For a Bay Area example, Arnold is planning to withdraw hundreds of millions that were promised to improve our deficient BART, Caltrain, and muni rail systems (despite their age and other shortcomings, they all had over 4% jumps in ridership so far this year). He's also cutting $19M to the AC Transit bus system (servicing some of the poorest areas in the Bay), even though higher fuel prices are causing millions in cost overruns for them. The timing is horrible, since AC Transit has seen overall ridership increase 3%, with some cross-bay routes increasing 50%. So if Sacramento wants to cut public transit budgets, yet demand is still high, of course the transit authorities will boost fares to stay solvent. This will mostly impact the lower-income urban people who are dependent on public transit, and the least able to weather a price hike.
Only a moron politician would reduce access or stunt growth to a service that is becoming increasingly necessary to the people due to conditions out of our control. If Californians can take advantage of affordable, functional public transit, then they'll waste less money on individual transport, and will have more money to contribute to the economy in other ways and improve revenues for the state. In addition, they'll be polluting less and wasting less time/stress/accidents in traffic, which also saves state resources in the long run. If Arnold really cared about balancing the budget and protecting the environment, then maybe he should cut the salaries to his cabinet and the Legislature, since they can't ever seem to pass a budget on time! Maybe he should lay off some of his bodyguards (who can kill The Terminator anyway?) and reduce trips in the state jet. Maybe he should tax wasteful luxury vehicles (the kind he and his wife drive, SUVs in fact!), as well as large homes that consume more utilities.
Monday, June 9, 2008
Cheaper iPhone
http://tech.yahoo.com/blogs/patterson/22479
Gotta hand it to His Steveness. Stick it to the most die-hard crack-addict Apple fans last year, who just had to have it on release day, with a bloated $600 8 GB iPhone v1.0 (with slow-ass EDGE Internet connectivity and triangulation instead of GPS). And then when sales didn't meet projections, the stock suffered somewhat, over 50% of people in one survey said that the iPhone's price was prohibitive, and rival companies developing more affordable smart-touch phone alternatives, they unveiled a better 3G/GPS 8 GB iPhone that is over 50% cheaper ($199)! Now Apple gets the best of both worlds - over-charging the Mac-addicts, and under-cutting the competition. Well, at least A's prophecy rang true that iPhone v2.0 would be less elitist and more accessible/affordable for the masses, even if most cell phone users wouldn't really use all those bells and whistles, and couldn't afford a $100+/month cell plan.
Friday, June 6, 2008
Obama's nomination
Congrats to nominee Obama! Thank goodness it's over - Round One at least. Tonight's speech was a bit lengthy and trite at times, but was also quite powerful and set a good tone for the upcoming general election. If voters believe in his message, and so far many seem to, then the choice appears fairly straightforward. Obama's change, optimism, and unity versus the GOP's fear, division, and the continuation of questionable policies.
He did well to laud Senator Clinton's achievements and acknowledge her past and future importance to the party/country (emphasizing the importance of her supporters to him). Hopefully in the coming months he can attempt to address his difficulty in reaching some elements of her base. Obama will surely make mistakes and utter silly things on the campaign trail and during debates that will be exploited by the media and McCain's camp. But if he keeps his overall message this focused and positive, without being too preachy and naive, then I think he'll be tough to defeat (that is, if the fight is fair).
Highlights of the transcript:
(CNN) -- Sen. Barack Obama spoke Tuesday to a rally at the Xcel Energy Center in St. Paul, Minnesota:
art.obama.speech.ap.jpg
Sen. Barack Obama and his wife, Michelle, greet the audience Tuesday in St. Paul, Minnesota.
At this defining moment for our nation, we should be proud that our party put forth one of the most talented, qualified field of individuals ever to run for this office. I have not just competed with them as rivals, I have learned from them as friends, as public servants and as patriots who love America and are willing to work tirelessly to make this country better. They are leaders of this party, and leaders that America will turn to for years to come.
That is particularly true for the candidate who has traveled further on this journey than anyone else. Sen. Hillary Clinton has made history in this campaign. She has made history not just because she's a woman who has done what no woman has done before, but because she's a leader who inspires millions of Americans with her strength, her courage and her commitment to the causes that brought us here tonight.
Don't Miss
* Obama clinches Democratic nomination
* Transcript of Sen. John McCain's Tuesday speech
* Transcript of Sen. Hillary Clinton's Tuesday speech
* Election Center 2008
We've certainly had our differences over the last 16 months. But as someone who's shared a stage with her many times, I can tell you that what gets Hillary Clinton up in the morning -- even in the face of tough odds -- is exactly what sent her and Bill Clinton to sign up for their first campaign in Texas all those years ago; what sent her to work at the Children's Defense Fund and made her fight for health care as first lady; what led her to the United States Senate and fueled her barrier-breaking campaign for the presidency -- an unyielding desire to improve the lives of ordinary Americans, no matter how difficult the fight may be. And you can rest assured that when we finally win the battle for universal health care in this country -- and we will win that fight -- she will be central to that victory. When we transform our energy policy and lift our children out of poverty, it will be because she worked to help make it happen. Our party and our country are better off because of her, and I am a better candidate for having had the honor to compete with Hillary Rodham Clinton.
There are those who say that this primary has somehow left us weaker and more divided. Well I say that because of this primary, there are millions of Americans who have cast their ballot for the very first time. There are independents and Republicans who understand that this election isn't just about a change in the party in Washington, but also about the need to change Washington. There are young people, and African-Americans, and Latinos and women of all ages who have voted in numbers that have broken records and inspired a nation.
All of you chose to support a candidate you believe in deeply. But at the end of the day, we aren't the reason you came out and waited in lines that stretched block after block to make your voice heard. You didn't do that because of me or Sen. Clinton or anyone else. You did it because you know in your hearts that at this moment -- a moment that will define a generation -- we cannot afford to keep doing what we've been doing. We owe our children a better future. We owe our country a better future. And for all those who dream of that future tonight, I say -- let us begin the work together. Let us unite in common effort to chart a new course for America.
In just a few short months, the Republican Party will arrive in St. Paul with a very different agenda. They will come here to nominate [Sen.] John McCain, a man who has served this country heroically. I honor -- we honor -- the service of John McCain, and I respect his many accomplishments, even if he chooses to deny mine. My differences with him are not personal; they are with the policies he has proposed in this campaign.
Because while John McCain can legitimately tout moments of independence from his party in the past, such independence has not been the hallmark of his presidential campaign.
It's not change when John McCain decided to stand with George Bush 95 percent of the time, as he did in the Senate last year.
It's not change when he offers four more years of Bush economic policies that have failed to create well-paying jobs, or insure our workers or help Americans afford the skyrocketing cost of college -- policies that have lowered the real incomes of the average American family, and widened the gap between Wall Street and Main Street and left our children with a mountain of debt.
It's not change when he promises to continue a policy in Iraq that asks everything of our brave men and women in uniform and nothing of Iraqi politicians -- a policy where all we look for are reasons to stay in Iraq, while we spend billions of dollars a month on a war that isn't making the American people any safer.
So, I'll say this -- there are many words to describe John McCain's attempt to pass off his embrace of George Bush's policies as bipartisan and new. But change is not one of them.
I won't stand here and pretend that there are many good options left in Iraq, but what's not an option is leaving our troops in that country for the next hundred years -- especially at a time when our military is overstretched, our nation is isolated and nearly every other threat to America is being ignored.
We must be as careful getting out of Iraq as we were careless getting in -- but start leaving we must. It's time for Iraqis to take responsibility for their future. It's time to rebuild our military and give our veterans the care and the benefits they deserve when they come home. It's time to refocus our efforts on al Qaeda's leadership and Afghanistan, and rally the world against the common threats of the 21st century -- terrorism and nuclear weapons; climate change and poverty; genocide and disease. That's what change is.
Change, Minnesota, is realizing that meeting today's threats requires not just our firepower, but the power of our diplomacy -- tough, direct diplomacy where the president of the United States isn't afraid to let any petty dictator know where America stands and what we stand for. We must once again have the courage and the conviction to lead the free world. That is the legacy of Roosevelt, and Truman and Kennedy. That's what the American people demand. That's what change is.
Change is building an economy that rewards not just wealth, but the work and workers who created it. It's understanding that the struggles facing working families can't be solved by spending billions of dollars on more tax breaks for big corporations and wealthy CEOs, but by giving a middle-class tax break to those who need it and investing in our crumbling infrastructure, and transforming how we use energy, and improving our schools and renewing our commitment to science and innovation.
Now, the other side will come here in September and offer a very different set of policies and positions, and that is a good thing, that is a debate I look forward to. It is a debate that the American people deserve -- on the issues that will determine the future of this country and the future of our children. But what you don't deserve is another election that's governed by fear, and innuendo and division. What you won't hear from this campaign or this party is the kind of politics that uses religion as a wedge, and patriotism as a bludgeon. What you won't see from this campaign or this party is a politics that sees our opponents not as competitors to challenge, but enemies to polarize. Because we may call ourselves Democrats and Republicans, but we are Americans first. We are always Americans first.
In our country, I have found that this cooperation happens not because we agree on everything, but because behind all the false labels and false divisions and categories that define us; beyond all the petty bickering and point-scoring in Washington, Americans are a decent, generous, compassionate people, united by common challenges and common hopes. And every so often, there are moments which call on that fundamental goodness to make this country great again.
America, this is our moment. This is our time. Our time to turn the page on the policies of the past. Our time to bring new energy and new ideas to the challenges we face. Our time to offer a new direction for this country that we love.
The journey will be difficult. The road will be long. I face this challenge with profound humility, and knowledge of my own limitations. But I also face it with limitless faith in the capacity of the American people. Because if we are willing to work for it, and fight for it and believe in it, then I am absolutely certain that generations from now, we will be able to look back and tell our children that this was the moment when we began to provide care for the sick and good jobs for the jobless; this was the moment when the rise of the oceans began to slow and our planet began to heal; this was the moment when we ended a war and secured our nation and restored our image as the last, best hope on Earth. This was the moment -- this was the time -- when we came together to remake this great nation so that it may always reflect our very best selves, and our highest ideals. Thank you, Minnesota, God bless you, God bless the United States of America.
---------
Sorry for the naive question which probably has a simple answer, but I'm not familiar with party convention procedure:
Why does Hillary want to retain her delegates and not endorse Obama outright? How are they of any use to her now that she is mathematically eliminated from the nomination? I don't understand how she can use them as leverage to get certain things from the party. Obama doesn't "need" her delegates right?
On NPR this morning, a historian was discussing Hillary's possible next moves, and sadly the VP spot is like her best option. She's still quite a junior Senator, so it would be like 8 years until she gets a chairmanship. The current governor of NY (Spitzer's replacement Patterson) is fairly popular and will be there until 2010 at least. And if Obama wins this fall, she'll be 68 if she wants to run again. Oh well, she could always retire to the private sector and make $10k per speech like her husband.
----------
Basically, she's still hoping Obama will make some kind of dramatic fuck-up that
would allow her to reenter the race at some point before the convention. It's
probably also leverage to try and get the VP slot so as to take this kind of
threat off the table.
---------
Well, I've heard that she has some fairly significant debt from running her campaign and she wants to make it all back by campaigning some more. Although why someone would donate to a campaign that's lost already I don't really know.
He did well to laud Senator Clinton's achievements and acknowledge her past and future importance to the party/country (emphasizing the importance of her supporters to him). Hopefully in the coming months he can attempt to address his difficulty in reaching some elements of her base. Obama will surely make mistakes and utter silly things on the campaign trail and during debates that will be exploited by the media and McCain's camp. But if he keeps his overall message this focused and positive, without being too preachy and naive, then I think he'll be tough to defeat (that is, if the fight is fair).
Highlights of the transcript:
(CNN) -- Sen. Barack Obama spoke Tuesday to a rally at the Xcel Energy Center in St. Paul, Minnesota:
art.obama.speech.ap.jpg
Sen. Barack Obama and his wife, Michelle, greet the audience Tuesday in St. Paul, Minnesota.
At this defining moment for our nation, we should be proud that our party put forth one of the most talented, qualified field of individuals ever to run for this office. I have not just competed with them as rivals, I have learned from them as friends, as public servants and as patriots who love America and are willing to work tirelessly to make this country better. They are leaders of this party, and leaders that America will turn to for years to come.
That is particularly true for the candidate who has traveled further on this journey than anyone else. Sen. Hillary Clinton has made history in this campaign. She has made history not just because she's a woman who has done what no woman has done before, but because she's a leader who inspires millions of Americans with her strength, her courage and her commitment to the causes that brought us here tonight.
Don't Miss
* Obama clinches Democratic nomination
* Transcript of Sen. John McCain's Tuesday speech
* Transcript of Sen. Hillary Clinton's Tuesday speech
* Election Center 2008
We've certainly had our differences over the last 16 months. But as someone who's shared a stage with her many times, I can tell you that what gets Hillary Clinton up in the morning -- even in the face of tough odds -- is exactly what sent her and Bill Clinton to sign up for their first campaign in Texas all those years ago; what sent her to work at the Children's Defense Fund and made her fight for health care as first lady; what led her to the United States Senate and fueled her barrier-breaking campaign for the presidency -- an unyielding desire to improve the lives of ordinary Americans, no matter how difficult the fight may be. And you can rest assured that when we finally win the battle for universal health care in this country -- and we will win that fight -- she will be central to that victory. When we transform our energy policy and lift our children out of poverty, it will be because she worked to help make it happen. Our party and our country are better off because of her, and I am a better candidate for having had the honor to compete with Hillary Rodham Clinton.
There are those who say that this primary has somehow left us weaker and more divided. Well I say that because of this primary, there are millions of Americans who have cast their ballot for the very first time. There are independents and Republicans who understand that this election isn't just about a change in the party in Washington, but also about the need to change Washington. There are young people, and African-Americans, and Latinos and women of all ages who have voted in numbers that have broken records and inspired a nation.
All of you chose to support a candidate you believe in deeply. But at the end of the day, we aren't the reason you came out and waited in lines that stretched block after block to make your voice heard. You didn't do that because of me or Sen. Clinton or anyone else. You did it because you know in your hearts that at this moment -- a moment that will define a generation -- we cannot afford to keep doing what we've been doing. We owe our children a better future. We owe our country a better future. And for all those who dream of that future tonight, I say -- let us begin the work together. Let us unite in common effort to chart a new course for America.
In just a few short months, the Republican Party will arrive in St. Paul with a very different agenda. They will come here to nominate [Sen.] John McCain, a man who has served this country heroically. I honor -- we honor -- the service of John McCain, and I respect his many accomplishments, even if he chooses to deny mine. My differences with him are not personal; they are with the policies he has proposed in this campaign.
Because while John McCain can legitimately tout moments of independence from his party in the past, such independence has not been the hallmark of his presidential campaign.
It's not change when John McCain decided to stand with George Bush 95 percent of the time, as he did in the Senate last year.
It's not change when he offers four more years of Bush economic policies that have failed to create well-paying jobs, or insure our workers or help Americans afford the skyrocketing cost of college -- policies that have lowered the real incomes of the average American family, and widened the gap between Wall Street and Main Street and left our children with a mountain of debt.
It's not change when he promises to continue a policy in Iraq that asks everything of our brave men and women in uniform and nothing of Iraqi politicians -- a policy where all we look for are reasons to stay in Iraq, while we spend billions of dollars a month on a war that isn't making the American people any safer.
So, I'll say this -- there are many words to describe John McCain's attempt to pass off his embrace of George Bush's policies as bipartisan and new. But change is not one of them.
I won't stand here and pretend that there are many good options left in Iraq, but what's not an option is leaving our troops in that country for the next hundred years -- especially at a time when our military is overstretched, our nation is isolated and nearly every other threat to America is being ignored.
We must be as careful getting out of Iraq as we were careless getting in -- but start leaving we must. It's time for Iraqis to take responsibility for their future. It's time to rebuild our military and give our veterans the care and the benefits they deserve when they come home. It's time to refocus our efforts on al Qaeda's leadership and Afghanistan, and rally the world against the common threats of the 21st century -- terrorism and nuclear weapons; climate change and poverty; genocide and disease. That's what change is.
Change, Minnesota, is realizing that meeting today's threats requires not just our firepower, but the power of our diplomacy -- tough, direct diplomacy where the president of the United States isn't afraid to let any petty dictator know where America stands and what we stand for. We must once again have the courage and the conviction to lead the free world. That is the legacy of Roosevelt, and Truman and Kennedy. That's what the American people demand. That's what change is.
Change is building an economy that rewards not just wealth, but the work and workers who created it. It's understanding that the struggles facing working families can't be solved by spending billions of dollars on more tax breaks for big corporations and wealthy CEOs, but by giving a middle-class tax break to those who need it and investing in our crumbling infrastructure, and transforming how we use energy, and improving our schools and renewing our commitment to science and innovation.
Now, the other side will come here in September and offer a very different set of policies and positions, and that is a good thing, that is a debate I look forward to. It is a debate that the American people deserve -- on the issues that will determine the future of this country and the future of our children. But what you don't deserve is another election that's governed by fear, and innuendo and division. What you won't hear from this campaign or this party is the kind of politics that uses religion as a wedge, and patriotism as a bludgeon. What you won't see from this campaign or this party is a politics that sees our opponents not as competitors to challenge, but enemies to polarize. Because we may call ourselves Democrats and Republicans, but we are Americans first. We are always Americans first.
In our country, I have found that this cooperation happens not because we agree on everything, but because behind all the false labels and false divisions and categories that define us; beyond all the petty bickering and point-scoring in Washington, Americans are a decent, generous, compassionate people, united by common challenges and common hopes. And every so often, there are moments which call on that fundamental goodness to make this country great again.
America, this is our moment. This is our time. Our time to turn the page on the policies of the past. Our time to bring new energy and new ideas to the challenges we face. Our time to offer a new direction for this country that we love.
The journey will be difficult. The road will be long. I face this challenge with profound humility, and knowledge of my own limitations. But I also face it with limitless faith in the capacity of the American people. Because if we are willing to work for it, and fight for it and believe in it, then I am absolutely certain that generations from now, we will be able to look back and tell our children that this was the moment when we began to provide care for the sick and good jobs for the jobless; this was the moment when the rise of the oceans began to slow and our planet began to heal; this was the moment when we ended a war and secured our nation and restored our image as the last, best hope on Earth. This was the moment -- this was the time -- when we came together to remake this great nation so that it may always reflect our very best selves, and our highest ideals. Thank you, Minnesota, God bless you, God bless the United States of America.
---------
Sorry for the naive question which probably has a simple answer, but I'm not familiar with party convention procedure:
Why does Hillary want to retain her delegates and not endorse Obama outright? How are they of any use to her now that she is mathematically eliminated from the nomination? I don't understand how she can use them as leverage to get certain things from the party. Obama doesn't "need" her delegates right?
On NPR this morning, a historian was discussing Hillary's possible next moves, and sadly the VP spot is like her best option. She's still quite a junior Senator, so it would be like 8 years until she gets a chairmanship. The current governor of NY (Spitzer's replacement Patterson) is fairly popular and will be there until 2010 at least. And if Obama wins this fall, she'll be 68 if she wants to run again. Oh well, she could always retire to the private sector and make $10k per speech like her husband.
----------
Basically, she's still hoping Obama will make some kind of dramatic fuck-up that
would allow her to reenter the race at some point before the convention. It's
probably also leverage to try and get the VP slot so as to take this kind of
threat off the table.
---------
Well, I've heard that she has some fairly significant debt from running her campaign and she wants to make it all back by campaigning some more. Although why someone would donate to a campaign that's lost already I don't really know.
Thursday, June 5, 2008
More on oil
There's an interesting briefing on oil in last week's Economist which takes a fairly different tone.
The section Stocks, bonds and barrels in http://www.economist.com/opinion/displaystory.cfm?story_id=11453090 argues against the suggestion that price increases are the result of speculation. They look at other commodity markets which have seen similar market behavior without similar price behavior, and look at the ability of futures trading to effect the market price. The financial analysis is interesting, but it basically boils down to this: the market is set by supply and demand of real barrels, and oil speculators are not hoarding barrels. The Economist's read on the furor about speculators is that this is political hay-making: politicians are desperately afraid of an election year with radically high oil prices, and they're searching frantically for a way to deflect blame. "Wall Street fat cats" are a great populist target for that sort of thing. It's worth noting that the CFTC, the government's own regulator for commodities markets, investigated oil speculation and found little reason for concern - it's the CFTC's chief economist who's getting cited most frequently in the "no it's not speculation" camp.
Their suggestion is that price increases have a more prosaic basis in supply and demand. Oil is a commodity with very little short-term demand elasticity (if the price goes up, people generally pay it rather than doing without) and very little short-term supply elasticity (it takes years to find/develop new fields). And it's a market which suffers various short-term supply shocks: much of the world's oil production is in countries where the rule of law is less than complete, and every time rebels blow up a pipeline there's a price movement. There's a good discussion of this at the end of the previously-linked article ... my knowledge of the differences between heavy and light crude and the various manufacturing impacts there was pretty minimal, and they have some interesting data.
There's some interesting commentary on the effects of fuel subsidies in http://www.economist.com/finance/displaystory.cfm?story_id=11453151. In China, for example, the price of petrol to a consumer hasn't risen since the start of the year (during which time the price in the US has increases 33%) because of government subsidies there. That helps reduce the elasticity of demand, and also apparently is causing Chinese oil firms to reduce their output.
Finally, there is a hopeful point underneath all of this. From their leader article, http://www.economist.com/opinion/displaystory.cfm?story_id=11454989:
"The 1970s showed how demand and supply, inelastic in the short run, eventually give rise to conservation and new production. When all those new fields are on-stream, when the SUVs have been sold and the boilers replaced, the downcycle will take hold. By then the slow-motion oil shock could have catalysed momentous change. Right now motorists have no substitute for oil. But it is no coincidence that car companies are suddenly accelerating their plans to sell electric hybrids that are far cheaper to run than petrol or diesel cars at these prices. The first two oil shocks banished oil from power generation. How fitting if the third finished the job and began to free transport from oil's century-long monopoly."
----------
Thanks for the links and I'd tend to trust E's analysis over CNN's, but of course there are many sides to this issue and some journalists (and bloggers) tend to get myopic to make their argument, obviously myself included. So probably the truth is a combination of many factors. I don't believe that speculation is a stronger force than traditional supply/demand, but we can't just dismiss it completely. When the oil companies themselves are reaping huge profits yet claiming the sky-high prices are a result of "supply and demand economics", I think that's a smoke screen that may even suggest the converse.
I agree that big shot Wall Street banks are an easy and maybe exaggerated culprit to blame in an election year. You are right that the CFTC experts dispute the effect of speculation on oil futures trading, but what else can they say? It's hard for them to collect meaningful data and draw any conclusions actually, since they lack access to so much of the trading that is offshore or OTC without public disclosure. If they admit that speculators are manipulating prices, then they effectively confess their incompetence and impotence as regulators. However, the oil traders themselves are saying the opposite. I know some people have incentive to dress up the truth based on their priorities, but why would the oil traders accuse the hedge funds of meddling if they were actually causing no harm? Oil traders are professionals who do this for a living, and they are saying the recent influx of Wall Street billions are making their lives more difficult. And yes, it's a two-way street as the article said. Trading activity doesn't just make the price go up, but high prices encourage more investment so they don't miss the boat if the price goes even higher.
But here's where the conventional supply/demand arguments get tricky. Oil's record rise from $70 to $130 over the past year is actually not reflected at the pump. And the price trickle-down delay from NYMEX to the pump is a month or less, so we should have seen a bigger change. If gasoline prices went up commensurate with oil's, gas would be at or over $6/gallon (taxes and surcharges included). Diesel is so much higher than regular gas because of recent refining capacity miscalculations, but even diesel hasn't reached $6 yet. Actually automobile fuel accounts for only 8% or so of US oil consumption (according to the link below), so even if the whole country drives 30% less (quite a challenge), we're reducing overall US fossil fuel consumption by a measley 2.5%. So much of our consumption is inelastically tied to industry, power/heating, and commercial transport, so it's much harder for them to conserve since they have business operations to run. Fishermen and truckers in Europe protested their diesel prices, but the airlines are getting screwed even worse. So sure global demand is going up, but only about 1M barrels/year or 1.25% according to The E graph, so why did prices rise nearly 100%? Well as you said, people get somewhat irrational when it comes to securing energy supplies, since a shortage is so catastrophic to an industrialized nation. So it's scary that traders are willing to buy up futures contracts like crazy, even at $130.
http://www.gravmag.com/oil.html
Another argument The E makes doesn't seem to hold water. They say that oil prices are tremendously sensitive to even small supply disruptions. That may be true in general, but it can't explain the recent price jump, because there have been no significant crises in oil producing zones besides the brief border standoff between Venezuela, Ecuador, and Colombia. And on the flipside, during the bad two years where we had Katrina, genocide in Darfur, the Israeli invasion of Lebanon, posturing for war with Iran, a plummetting dollar, a nuclear test in N Korea, and overt civil war in Iraq, oil prices did not surge as much as now!
Maybe we haven't reached Peak Oil yet, but it looks fairly close. According to my mom (30 years in the business), global output in most countries has plateaued or decreased since 2000, and only the Saudis and UAE have excess capacity, but it's like 3% or less. All the "low hanging fruit" and easy oil wells are maxed out. Now we have to drill deeper through tougher rock (in land or water) if we want to access new reserves. Russia and China have probably lied for years about their domestic production and stockpiling, so it's hard to tell what is going on over there, but it's not like Putin is sitting on 10% excess capacity. As The E said, refining and drilling overhead has risen over 70% since 2000, so it's more expensive to maintain historical production levels, but the obscene trading prices more than compensate. Therefore, nations and companies have little incentive to explore more, innovate, and increase supply to keep up with demand (the Saudis basically laughed in Bush's face when he begged them to boost output). Why would they risk out-pacing demand and making the price dip? They'll only act when their best wells start to run out, but there are plenty of new technologies to extract the last drops of oil from wells previously thought to be dry, if you have the skilled workforce and industrial capacity to implement them.
I just feel bad because these price jumps hurt the poor the most, as usual, and it's worse abroad. So if rich Westermers are profiting from that through trading, it's unacceptable. These funds just grow wealth for their clients yet add no value to the host industry; at least oil companies reinvest their windfall profits in R&D to improve future production. And as your last link showed, plenty of less developed oil-producing nations are forced to subsidize energy and even import refined fuels, or their people won't be able to afford it and they couldn't keep up with consumption. Plus they'll revolt against the government, as we saw in Iran when they decided to implement gas rations in preparation for a possible UN embargo/US war over their nuclear program. Most of the nations on that list could use a lot of improvement to their schools, health care, infrastructure, etc. Their huge oil profits could help, but much of it has to be siphoned off for subsidizing ever more expensive fuel (and military spending to defend against a possible Bush invasion). It's not their fault the prices are rising at NYMEX (they are at max capacity), but they're hurting too - just in other areas besides the explicit price at the pump.
-------
One thing to keep in mind is that the term "speculation" is being used in a rather loose fashion; most commentators include the creation of ETFs and Index Funds which deal exclusively in oil (and, implicitly, oil futures contracts) when attributing the rapid increases in prices & volatility to "speculation". I read the articles you referenced this last weekend... though the only one I shared via Google Reader was the article regarding inflation (the indisputable result of sustained increases in energy prices).
-------
Well I guess after the first Gulf War, there was more or less global political stability, drilling/pipeline technologies were improving, and nations like Venezuela, the former Soviet bloc, and OPEC as a whole were growing output, so the excess supply made the global price of oil plummet to below $20/barrel. Companies had to tighten their belts and even universities closed their petroleum engineering departments for lack of interest/funding. So I'm sure that oil producing nations/companies were secretly (or not) celebrating when Bush went into Iraq - the shot in the arm that the industry craved. BTW, Iraqi production has still not yet returned to late 1980s levels under Saddam (post Iran-Iraq War of course).
If I may address some of R & J's last points for a bit: well, I tend to think that commodities futures index funds are speculative by nature. They're betting on prices to move the way they want, and even if prices dip they can potentially sell short. Diversification aside, if there were more attractive investment options, they would take them. Investment in commodities funds has increase ten-fold in the last few years.
Actually that CNN piece did bring up a good point that no one wanted to comment on, the influence of the credit crunch. With the dollar weak and interest rates at stupid low levels, of course commodities look more attractive. Why have foodstuffs, precious metals, and energy all made astronomical gains during the same short time period? Asia is buying up more food, energy, and jewelry than ever before, but it can't be explained away by supply/demand, since the West still accounts for the majority of trading/consumption. I guess on the surface there is nothing wrong with investing in commodities futures; it can be a safe move. But I don't know much about this subject. However, when a fund buys up a million shares of Google or GE, they're not really hurting anyone, no matter how the stock moves. Of course huge sell-offs can hurt other investors, but buying up stocks doesn't seem to have many negative side-effects, apart from artificially inflating market cap. But when speculators are massively buying up commodities, they impact the people who are competing for those resources and may not be able to withstand large price spikes. How can people living on less than $5/day, and their struggling governments, afford 70% jumps in basic essentials that Wall Street traders casually toss around like baseballs? By playing that market, they are essentially "playing with people's lives", which is what I object to. Commodities are consummables that people depend on for survival, not just pieces of paper or blips on a broker's computer. It almost reminds me of The Grapes of Wrath during the Depression, where big farmers in CA would rather destroy their excess produce than give it to the starving Okies, in order to keep the market prices from falling. But all the while, the poor people's wrath was growing, and it's growing again now.
And like J said, shortages and rising prices are the only factors that can ultimately get stubborn economies to move towards better efficiency and alternative sources. However, this change won't come overnight, so what do the disadvantaged people do in the meantime who are dependent on prices not surpassing a certain threshold? And we're way beyond that threshold for some commodities already. Some people need to drive to work and feed families of 8. They are conserving because they have to. Some people don't have the ability or mobility to change jobs or some living habits though (socioeconomic factors are more to blame than personal choices in those cases). Of course well-to-do people, who may be the ones most able to conserve and still maintain a quality life, keep over-consuming because they can afford to. Without subsidies and donations, probably a billion people wouldn't be able to eat or travel with these current prices, some even as close to home as Tracy, CA. So yes, the high prices are affecting consumer habits and what companies are able to provide us. Whole Foods is losing business, airlines are laying off thousands and cutting routes, and GM is contemplating the future of their Hummer line. On the flipside, VC investment in green tech is growing rapidly, though not all American cities can benefit from growth in this new sector (actually the sad part is the growth is in areas that are already rich, like urban CA). So while the industrialized world is transitioning to a new way of living and working under the realities of $100 oil, what do the underclasses do in the meantime?
The section Stocks, bonds and barrels in http://www.economist.com/opinion/displaystory.cfm?story_id=11453090 argues against the suggestion that price increases are the result of speculation. They look at other commodity markets which have seen similar market behavior without similar price behavior, and look at the ability of futures trading to effect the market price. The financial analysis is interesting, but it basically boils down to this: the market is set by supply and demand of real barrels, and oil speculators are not hoarding barrels. The Economist's read on the furor about speculators is that this is political hay-making: politicians are desperately afraid of an election year with radically high oil prices, and they're searching frantically for a way to deflect blame. "Wall Street fat cats" are a great populist target for that sort of thing. It's worth noting that the CFTC, the government's own regulator for commodities markets, investigated oil speculation and found little reason for concern - it's the CFTC's chief economist who's getting cited most frequently in the "no it's not speculation" camp.
Their suggestion is that price increases have a more prosaic basis in supply and demand. Oil is a commodity with very little short-term demand elasticity (if the price goes up, people generally pay it rather than doing without) and very little short-term supply elasticity (it takes years to find/develop new fields). And it's a market which suffers various short-term supply shocks: much of the world's oil production is in countries where the rule of law is less than complete, and every time rebels blow up a pipeline there's a price movement. There's a good discussion of this at the end of the previously-linked article ... my knowledge of the differences between heavy and light crude and the various manufacturing impacts there was pretty minimal, and they have some interesting data.
There's some interesting commentary on the effects of fuel subsidies in http://www.economist.com/finance/displaystory.cfm?story_id=11453151. In China, for example, the price of petrol to a consumer hasn't risen since the start of the year (during which time the price in the US has increases 33%) because of government subsidies there. That helps reduce the elasticity of demand, and also apparently is causing Chinese oil firms to reduce their output.
Finally, there is a hopeful point underneath all of this. From their leader article, http://www.economist.com/opinion/displaystory.cfm?story_id=11454989:
"The 1970s showed how demand and supply, inelastic in the short run, eventually give rise to conservation and new production. When all those new fields are on-stream, when the SUVs have been sold and the boilers replaced, the downcycle will take hold. By then the slow-motion oil shock could have catalysed momentous change. Right now motorists have no substitute for oil. But it is no coincidence that car companies are suddenly accelerating their plans to sell electric hybrids that are far cheaper to run than petrol or diesel cars at these prices. The first two oil shocks banished oil from power generation. How fitting if the third finished the job and began to free transport from oil's century-long monopoly."
----------
Thanks for the links and I'd tend to trust E's analysis over CNN's, but of course there are many sides to this issue and some journalists (and bloggers) tend to get myopic to make their argument, obviously myself included. So probably the truth is a combination of many factors. I don't believe that speculation is a stronger force than traditional supply/demand, but we can't just dismiss it completely. When the oil companies themselves are reaping huge profits yet claiming the sky-high prices are a result of "supply and demand economics", I think that's a smoke screen that may even suggest the converse.
I agree that big shot Wall Street banks are an easy and maybe exaggerated culprit to blame in an election year. You are right that the CFTC experts dispute the effect of speculation on oil futures trading, but what else can they say? It's hard for them to collect meaningful data and draw any conclusions actually, since they lack access to so much of the trading that is offshore or OTC without public disclosure. If they admit that speculators are manipulating prices, then they effectively confess their incompetence and impotence as regulators. However, the oil traders themselves are saying the opposite. I know some people have incentive to dress up the truth based on their priorities, but why would the oil traders accuse the hedge funds of meddling if they were actually causing no harm? Oil traders are professionals who do this for a living, and they are saying the recent influx of Wall Street billions are making their lives more difficult. And yes, it's a two-way street as the article said. Trading activity doesn't just make the price go up, but high prices encourage more investment so they don't miss the boat if the price goes even higher.
But here's where the conventional supply/demand arguments get tricky. Oil's record rise from $70 to $130 over the past year is actually not reflected at the pump. And the price trickle-down delay from NYMEX to the pump is a month or less, so we should have seen a bigger change. If gasoline prices went up commensurate with oil's, gas would be at or over $6/gallon (taxes and surcharges included). Diesel is so much higher than regular gas because of recent refining capacity miscalculations, but even diesel hasn't reached $6 yet. Actually automobile fuel accounts for only 8% or so of US oil consumption (according to the link below), so even if the whole country drives 30% less (quite a challenge), we're reducing overall US fossil fuel consumption by a measley 2.5%. So much of our consumption is inelastically tied to industry, power/heating, and commercial transport, so it's much harder for them to conserve since they have business operations to run. Fishermen and truckers in Europe protested their diesel prices, but the airlines are getting screwed even worse. So sure global demand is going up, but only about 1M barrels/year or 1.25% according to The E graph, so why did prices rise nearly 100%? Well as you said, people get somewhat irrational when it comes to securing energy supplies, since a shortage is so catastrophic to an industrialized nation. So it's scary that traders are willing to buy up futures contracts like crazy, even at $130.
http://www.gravmag.com/oil.html
Another argument The E makes doesn't seem to hold water. They say that oil prices are tremendously sensitive to even small supply disruptions. That may be true in general, but it can't explain the recent price jump, because there have been no significant crises in oil producing zones besides the brief border standoff between Venezuela, Ecuador, and Colombia. And on the flipside, during the bad two years where we had Katrina, genocide in Darfur, the Israeli invasion of Lebanon, posturing for war with Iran, a plummetting dollar, a nuclear test in N Korea, and overt civil war in Iraq, oil prices did not surge as much as now!
Maybe we haven't reached Peak Oil yet, but it looks fairly close. According to my mom (30 years in the business), global output in most countries has plateaued or decreased since 2000, and only the Saudis and UAE have excess capacity, but it's like 3% or less. All the "low hanging fruit" and easy oil wells are maxed out. Now we have to drill deeper through tougher rock (in land or water) if we want to access new reserves. Russia and China have probably lied for years about their domestic production and stockpiling, so it's hard to tell what is going on over there, but it's not like Putin is sitting on 10% excess capacity. As The E said, refining and drilling overhead has risen over 70% since 2000, so it's more expensive to maintain historical production levels, but the obscene trading prices more than compensate. Therefore, nations and companies have little incentive to explore more, innovate, and increase supply to keep up with demand (the Saudis basically laughed in Bush's face when he begged them to boost output). Why would they risk out-pacing demand and making the price dip? They'll only act when their best wells start to run out, but there are plenty of new technologies to extract the last drops of oil from wells previously thought to be dry, if you have the skilled workforce and industrial capacity to implement them.
I just feel bad because these price jumps hurt the poor the most, as usual, and it's worse abroad. So if rich Westermers are profiting from that through trading, it's unacceptable. These funds just grow wealth for their clients yet add no value to the host industry; at least oil companies reinvest their windfall profits in R&D to improve future production. And as your last link showed, plenty of less developed oil-producing nations are forced to subsidize energy and even import refined fuels, or their people won't be able to afford it and they couldn't keep up with consumption. Plus they'll revolt against the government, as we saw in Iran when they decided to implement gas rations in preparation for a possible UN embargo/US war over their nuclear program. Most of the nations on that list could use a lot of improvement to their schools, health care, infrastructure, etc. Their huge oil profits could help, but much of it has to be siphoned off for subsidizing ever more expensive fuel (and military spending to defend against a possible Bush invasion). It's not their fault the prices are rising at NYMEX (they are at max capacity), but they're hurting too - just in other areas besides the explicit price at the pump.
-------
One thing to keep in mind is that the term "speculation" is being used in a rather loose fashion; most commentators include the creation of ETFs and Index Funds which deal exclusively in oil (and, implicitly, oil futures contracts) when attributing the rapid increases in prices & volatility to "speculation". I read the articles you referenced this last weekend... though the only one I shared via Google Reader was the article regarding inflation (the indisputable result of sustained increases in energy prices).
-------
Well I guess after the first Gulf War, there was more or less global political stability, drilling/pipeline technologies were improving, and nations like Venezuela, the former Soviet bloc, and OPEC as a whole were growing output, so the excess supply made the global price of oil plummet to below $20/barrel. Companies had to tighten their belts and even universities closed their petroleum engineering departments for lack of interest/funding. So I'm sure that oil producing nations/companies were secretly (or not) celebrating when Bush went into Iraq - the shot in the arm that the industry craved. BTW, Iraqi production has still not yet returned to late 1980s levels under Saddam (post Iran-Iraq War of course).
If I may address some of R & J's last points for a bit: well, I tend to think that commodities futures index funds are speculative by nature. They're betting on prices to move the way they want, and even if prices dip they can potentially sell short. Diversification aside, if there were more attractive investment options, they would take them. Investment in commodities funds has increase ten-fold in the last few years.
Actually that CNN piece did bring up a good point that no one wanted to comment on, the influence of the credit crunch. With the dollar weak and interest rates at stupid low levels, of course commodities look more attractive. Why have foodstuffs, precious metals, and energy all made astronomical gains during the same short time period? Asia is buying up more food, energy, and jewelry than ever before, but it can't be explained away by supply/demand, since the West still accounts for the majority of trading/consumption. I guess on the surface there is nothing wrong with investing in commodities futures; it can be a safe move. But I don't know much about this subject. However, when a fund buys up a million shares of Google or GE, they're not really hurting anyone, no matter how the stock moves. Of course huge sell-offs can hurt other investors, but buying up stocks doesn't seem to have many negative side-effects, apart from artificially inflating market cap. But when speculators are massively buying up commodities, they impact the people who are competing for those resources and may not be able to withstand large price spikes. How can people living on less than $5/day, and their struggling governments, afford 70% jumps in basic essentials that Wall Street traders casually toss around like baseballs? By playing that market, they are essentially "playing with people's lives", which is what I object to. Commodities are consummables that people depend on for survival, not just pieces of paper or blips on a broker's computer. It almost reminds me of The Grapes of Wrath during the Depression, where big farmers in CA would rather destroy their excess produce than give it to the starving Okies, in order to keep the market prices from falling. But all the while, the poor people's wrath was growing, and it's growing again now.
And like J said, shortages and rising prices are the only factors that can ultimately get stubborn economies to move towards better efficiency and alternative sources. However, this change won't come overnight, so what do the disadvantaged people do in the meantime who are dependent on prices not surpassing a certain threshold? And we're way beyond that threshold for some commodities already. Some people need to drive to work and feed families of 8. They are conserving because they have to. Some people don't have the ability or mobility to change jobs or some living habits though (socioeconomic factors are more to blame than personal choices in those cases). Of course well-to-do people, who may be the ones most able to conserve and still maintain a quality life, keep over-consuming because they can afford to. Without subsidies and donations, probably a billion people wouldn't be able to eat or travel with these current prices, some even as close to home as Tracy, CA. So yes, the high prices are affecting consumer habits and what companies are able to provide us. Whole Foods is losing business, airlines are laying off thousands and cutting routes, and GM is contemplating the future of their Hummer line. On the flipside, VC investment in green tech is growing rapidly, though not all American cities can benefit from growth in this new sector (actually the sad part is the growth is in areas that are already rich, like urban CA). So while the industrialized world is transitioning to a new way of living and working under the realities of $100 oil, what do the underclasses do in the meantime?
Subscribe to:
Posts (Atom)