Dec 29 2008

An open letter to President-Elect Barack Obama

Dear President-Elect Obama,

As you are now working hard to build your new administration cabinet and team I would ask that you reflect on the fact that the hopes of millions of Americans are focused on you and your call for change in Washington D.C. The past eight years have been extremely rough on the country as a whole. We are now involved in two wars, we have watched our civil liberties erode, we have seen a government which has been mishandled and mislead, and we have now watched our value and our fortunes disappear in a puff of smoke in front of us. Many Americans have lost their retirement savings and many have lost their homes. In turn, we watch as the our government throws billions of dollars to banks who are one of the root causes of the current economic morass as well as to automobile manufacturers who have largely ignored the market conditions and refused, at every turn, to change their business models to meet the demands of the new century.

Many Americans are facing the possibility that this will be their last Christmas or Hanukkah or Kwanzaa in their homes. The new year brings with it the reality that Wells Fargo, Fannie Mae and Countrywide will allow their holiday moratoriums on foreclosure proceedings to expire and they will move forward in foreclosing on houses. Many Americans are facing the possibility that this may be the final few weeks of work for them as their employers downsize, factories close, or businesses shutter completely due to the economic downturn now facing the country. Many Americans are wondering what will become of them, their families, and their futures.

We have witnessed how the country has been led down a path of carefree spending as though the piper need never be paid, how our leaders in the White House and in Congress have resolutely refused to acknowledge that the energy infrastructure of yesteryear is inadequate and harmful for the world of tomorrow, and how our stature in the world has diminished greatly because we have failed to lead.

The world we face today is dramatically different that that faced by President Clinton in 1993 when he entered office and by President Bush when he entered office in 2001. We need leadership now in the same way that President Roosevelt led in 1932 and 1936. We truly need a new “New Deal” — one where we, as Americans, can build a better America not just for ourselves but for our children, and for generations to come. We are not asking for handouts without being willing to roll up our sleeves and get our hands dirty. We are not asking for giveaways without a willingness to break a sweat on our brows. We are not asking for you to solve our problems without our input. We are simply asking for you to set a good example and to lead thoughtfully and responsibly.

What do we mean by a good example? Be frugal in what you do — show America that you feel her pain. Show Americans that you understand their plight. Do not be execessive in what you spend but buy what you need. Show Americans that you are saving money, that you are investing in America — in the right places — green energy projects, schools, infrastructure for the 21st century. Help us build a new economy out of the ashes of the old one so that when historians look back they will say that this was the turning point when America became a better place — a beacon, once again, for the world to see, to learn from, and to follow.

Thank You,
Ido Dubrawsky

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Dec 22 2008

And what did you do with that money?

A recent op-ed by Frank Rich of the New York Times made me do a little digging this morning into just where our taxpayer money being used to bailout institutions like Morgan Stanley, Citigroup, and Goldman Sachs (to name a few) is going. Unfortunately the picture is not looking too good at the moment.

It seems that along with throwing $700 billion of taxpayer money (Treasury Secretary Henry Paulson asked for the other half of the $700 billion to be released back on Friday, December 19th after originally indicating that he would leave it available for the incoming administration) at these institutions the government (that would be both the current administration and Congress) has failed to conduct the appropriate oversight necessary to ensure that this money was not being used to pay for bonuses and other compensation. The Government Accountability Office (GAO) recently released a report, GAO-09-161 detailing a lack of specific, enforceable methods of ensuring that the money given to banks is used according to the original intent of the Toxic Asset Relief Program (TARP). Specificially, the GAO report notes

We spoke with representatives of the eight large institutions that initially received funds under CPP [Capital Purchase Program — clarification added, ID], and they told us that their institutions intended to use the funds in a manner consistent with the goals of CPP. Generally, the institutions stated that CPP capital would not be viewed any differently from their other capital—that is, the additional capital would be used to strengthen their capital bases, make business investments and acquisitions, and lend to individuals and businesses. With the exception of two institutions, institution officials noted that money is fungible and that they did not intend to track or report CPP capital separately.

(Government Accountablility Office, TROUBLED ASSET RELIEF PROGRAM Additional Actions Needed to Better Ensure Integrity, Accountability, and Transparency, December 2008, p. 25)

By the way, the definition of the word “fungible” is interchangeable (see dictionary.com). As amazing as it may seem the indications are that the money which the U.S. taxpayer has given these institutions to help right themselves after nearly collapsing last September/October can well be used to pay bonuses to managers and executives. How is this possible? Weren’t we assured that this would not happen?

As originally written the bailout bill would have provided for limitations to the compensation given to Wall Street executives who took money from the Troubled Asset Relief Program (TARP) and provided a framework for reviewing and penalizing those institutions that broke the rules in the program. It seems, however, that as the bailout bill was winding its way through the White House a small, one-sentence change was made to the wording in the bill by the Bush administration. According to the Washington Post

The change stipulated that the penalty would apply only to firms that received bailout funds by selling troubled assets to the government in an auction, which was the way the Treasury Department had said it planned to use the money.

(Paley, Amit R., “Executive Pay Limits May Prove Toothless,” The Washington Post, December 15, 2008 )

Now it appears that this little change has provided a huge loophole. Barely a month after the TARP was put in place Treasury Secretary Paulson indicated that the Treasure would not be using the TARP money to buy the toxic assets off the balance sheets of the banks but rather would invest the money in the banks directly. This about face has left the issue of oversight as to how the money is used in a bit of a limbo. As the GAO report notes

it is unclear whether Treasury plans to leverage bank regulators, which in the case of the largest institutions have bank examiners on site, to conduct any oversight or monitoring related to CPP requirements. However, unless Treasury does additional monitoring and regular reporting, Treasury’s ability to help ensure an appropriate level of accountability and transparency will be limited.(emphasis added)

(Government Accountablility Office, TROUBLED ASSET RELIEF PROGRAM Additional Actions Needed to Better Ensure Integrity, Accountability, and Transparency, December 2008, pp. 25-26)

Without transparency there will be no way to know how these banks are using this money and whether it is being used appropriately or not. As the GAO report notes the initial eight institutions that took the CPP money intended to use the funds in “a manner consistent with the goals of CPP” (Government Accountablility Office, TROUBLED ASSET RELIEF PROGRAM Additional Actions Needed to Better Ensure Integrity, Accountability, and Transparency, December 2008, pp. 25). In other words, at this point we are taking them at their word that they’re doing the right thing. However, when asked many of these institutions remain quiet about the specifics of where the money is going (Herman, Charles, Dan Arnall, Lauren Pearle, Zunaira Zaki, “Morgan Stanley Is One Bank That Cites a Loan From TARP Money,” ABC News, December 17 2008 ). It appears that the American taxpayer could well be taken to the cleaners once again. Paul Krugman of the New York Times had it write…it is truly a “Madoff Economy.”

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Nov 16 2008

Jesse Jackson – Open Mouth, Insert Foot

Published by under Election,Thoughts

Once again Jesse Jackson has managed to open his mouth and insert his foot. It seems that the two are magnetically attracted to one another. While I don’t necessarily attribute much to the New York Post, this piece caught my attention.

As Jackson put it the most important change in American foreign policy will be the end of “decades of putting Israel’s interests first” (Taheri, Amir, “The O Jesse Knows“, The New York Post, October 14th 2008) and that “‘Zionists who have controlled American policy for decades’ remain strong, they’ll lose a great deal of their clout when Barack Obama enters the White House” (Taheri, Amir, “The O Jesse Knows“, The New York Post, October 14th 2008).

Now, Obama’s campaign has already made it quite clear that Jackson does not speak for or advise Senator Obama. It is quite clear from the quote above that the good Reverand is still as anti-semitic as he has always been and goes so far as to bring back the spectre of the “Protocols of the Elders of Zion” in his quote. He is trying to portray American Jews as being a fifth column in America and using our supposed power to guide American foreign policy.

Normally I would discount the Rev. Jackson as being a has-been and a wacko…but I, as a Jew, do worry about the untested Obama. My hope is that Biden’s experience will temper Obama’s lack of it in this area and will result in a continued strong support for Israel. I have no immediate problem with Obama’s willingness to speak with Iran and other enemies of the United States. Both Generals Petreaus and McKiernon believe that we should pursue dialogue before military actions and I feel that they have some experience in this matter…clearly the Bush doctrine hasn’t gotten us anywhere but mired in Iraq.

My biggest concern is that an Obama administration will be overtly hostile to Israel and pro-Palestinian given the fact that Senator Obama has relied on the likes of Daniel Kurtzer, former Air Force Chief of Staff “Tony” McPeak, and Anthony Lake as advisors. However, I believe that Senator Obama is smarter than to take the advice of this group seriously. I feel that Senator Obama is still the better choice as he can help put America back on track…and a strong America is the best support for Israel. As it is, we will have to wait and see on November 4th.

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Aug 29 2008

The Difference Between Republicans and Democrats

Published by under Election,Thoughts

Last night’s acceptance speech by Barack Obama as the Democratic Party nominee for president of the United States was excellent. Senator Obama did what he needed to do — define himself and counter Senator McCain’s claims that he’s elitist and out of touch with Americans. The Democrats have done quite well for themselves this week and it was good to see Bill Clinton come out unabashedly in favor and in support of Senator Obama. If anyone is out of touch with the state of America and Americans it’s Senator McCain and the Republicans.

Consider that Senator McCain and the Republicans have been chanting the tired old mantra of “Drill Here! Drill Now!” for several weeks — knowing full well that drilling “here” and drilling “now” will do absolutely nothing to lower energy costs here in the United States in the near or mid-term future. It’s all a matter of producing a platitude that resonates with the fears of Americans rather than their aspirations. The Republicans are way off the mark and out of touch with Americans these days and it represents a dramatic difference in perspective. Paul Krugman in his latest op-ed piece in the New York Times notes

Democrats say and, as far as I can tell, really believe that working Americans are getting a raw deal; Republicans, despite occasional attempts to sound sympathetic, basically believe that people have nothing to complain about.

(Krugman, Paul, “Feeling No Pain“, The New York Times, August 29, 2008 )

As Krugman outlines in his opinion piece the census of 2007 shows that Americans are worried about the direction this country is taking. And that was in 2007 — before the financial crisis really tightened its grip on the economy and made it’s impact known. Median incomes for American families fell between 2000 and 2007, poverty was up, health insurance down. And even with all these indicators pointing to significant problems the Bush administration puts its head in the sand and proclaims that the economy is “basically sound” and there are no problems. At least no problems that tax cuts for businesses and the rich won’t cure.

On the health care side we are facing a looming crisis. Health care costs are increasing faster than the rate of inflation in the United States on a year-over-year basis. Employers, facing an economic downturn, are looking to cut costs whereever they can to stay profitable. That means cutting the health care benefits of workers or pushing more of the costs of health insurance onto workers who are seeing the power of their paycheck decline already due to the skyrocketing costs of gas, food, and electricity. As these individuals face declining health care the Republicans can only repeat their tired old mantra of “tax cuts for businesses will cure the economic ills.” Many Americans don’t even have health care insurance.

visiting the emergency room in a medical crisis is no substitute for regular care. Furthermore, while a hospital will treat you whether or not you can pay, it will also bill you — and the bill won’t be waived unless you’re destitute. As a result, uninsured working Americans avoid visiting emergency rooms if at all possible, because they’re terrified by the potential cost: medical expenses are one of the prime causes of personal bankruptcy.

(Krugman, Paul, “Feeling No Pain“, The New York Times, August 29, 2008 )

As for health care coverage, President Bush and Senator McCain seem to think that the emergency room at the hospital is “affordable” health care. In fact President Bush stated so last year: “I mean, people have access to health care in America. After all, you just go to an emergency room.” (Bush, George W., HealthCareTalk.net,July 10, 2007).

It’s hard to sympathize with the plight of people when you don’t even connect with their problems. And therein lies the Republican’s dilemma. How can they relate to voters when they don’t even recognize their problems. The disconnect is so bad that former McCain economic advisor, the former senator Phil Gramm, described America as a “nation of whiners.” (“Dr. Phil Gramm knows what ails America“, LA Times, July 11, 2008) How out of touch can you be?

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Aug 27 2008

President Bush and the Constitution

Published by under Election,Thoughts

There are people in America that believe that if the election for the President in 2008 does not go to the Republicans then President Bush will “cancel” the elections in one fashion or another. Consider the following YouTube video

Here the poster brings about all sorts of arguments that elements which President Bush and the Republicans have put into place will allow him to suspend the Constitution and cancel the results of the election. Personally, I think this is very far-fetched and that Bush and his cohorts would have more to lose by trying such a tactic. However, don’t think that Bush has much respect for the Constitution. Consider back in 2005 it was reported in the Capitol Hill Blue that when the Patriot Act was up for renewal an argument ensued between President Bush and Congressional GOP leaders. As told by Doug Thompson of Capitol Hill Blue

GOP leaders told Bush that his hardcore push to renew the more onerous provisions of the act could further alienate conservatives still mad at the President from his botched attempt to nominate White House Counsel Harriet Miers to the Supreme Court.

“I don’t give a goddamn,” Bush retorted. “I’m the President and the Commander-in-Chief. Do it my way.”

“Mr. President,” one aide in the meeting said. “There is a valid case that the provisions in this law undermine the Constitution.”

“Stop throwing the Constitution in my face,” Bush screamed back. “It’s just a goddamned piece of paper!” (emphasis added)

(Thompson, Doug, “Bush on the Constitution: A ‘goddamned piece of paper’“, Capitol Hill Blue, December 5, 2005)

So, a document which George W. Bush has sworn to uphold, a document that has defined the basis for the law of this land for over two centuries, a document which has withstood the challenges faced by Lincoln during the Civil War and Roosevelt during the Great Depression…this document…the U.S. Constitution…is nothing more than a “gaddamned piece of paper” to George W. Bush.

When I think about this sort of perspective by the highest government official in the U.S. it makes me shudder. Here’s a document that represents and defines our system of government and is the very foundation for our government and George W. Bush shows such derision and disrespect for it. How this man ever got to be President of the United States is beyond me. It is time to make a change…we need to make sure President Bush, Vice President Cheney, the Republicans and their cohorts understand that you cannot take the Constitution for granted and you cannot actively work to undermine the rights and liberties that are guaranteed by it. It is time to vote these people out of office and return our government to what it should be — a “government of the people, by the people, for the people” (Lincoln, Abraham, “Gettysburg Address“, November 19 1863)

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Aug 27 2008

The Bush Foreign Policy Legacy

Published by under Thoughts

So here it comes…we’re down to the last 150-some-odd days of the Bush presidency. Let’s take a moment and review the foreign policy legacy this man will leave behind: our military in Iraq, European allies pissed off at us, China ignores any human rights criticism from us, and Russia has decided to remake it’s “near abroad” into a more palatable form that it controls. Whatever moral and military might we had is gone…just like the fabled “political capital” that President Bush claimed the day after the 2004 elections. His administration’s mismanagement of U.S. foreign policy has left us in a more dangerous world than the one he inherited on January 21st 2001.

Let’s start from the top…our military in Iraq. Back in 2003 the Bush administration did a major PR campaign to drum up support for going in and getting rid of Saddam Hussein’s arsenal of Weapons of Mass Destruction (WMD). However, as we discovered once we went it, ol’ Saddam didn’t have any WMD in hand. In fact it became quite clear that whatever WMDs he did have were long since destroyed after the first Gulf war. Well…then our message changed (of course there’s the infamous “Mission Accomplished” banner in the background as President Bush declared major offensive operations in Iraq complete) to “bringing Democracy to the Middle East…one country at a time.” This became an embarassment as we managed to make one mistake after another in trying to restore a working government in Iraq. Nevertheless, we broke it, we bought it and we’re going to be paying for it for a long time.

As for our European allies…well…let’s just say that at one point back in 2001 we held the moral high ground. After September 11th 2001 our response to the attacks by Al Qaeda was viewed as justified and valid. Yes, the Afghani population really wasn’t responsible, but the Taliban government in power at the time was aiding and abetting Osama bin Laden. Now, fast forward to 2003. We go into Iraq under, at best, dubious pretenses and manage to make a bad situation possibly even worse. The issue was not just that we went into Iraq with questionable evidence which turned out to be wrong but that we went in ostensibly by ourselves. Yes, we had the British and some others on our side but the fact is we really didn’t have much of a coalition. Bush, Cheney and their neo-con buddies figured we could do this like the old west…we’re the sherriff on this planet and we’re going to take this outlaw Hussein fellow — dead or alive. Our European allies watched and cringed as this administration disregarded all the evidence and moved forward single-handedly. Our moral authority went up in smoke and any credibility we had with it.

Now we fast forward a few years to the Summer of 2008 — a mere two weeks ago in fact. China is preparing to show off it’s showpiece effort of the Beijing Olympics. As the President travels to China he criticized the Chinese for their Human Rights record

“America stands in firm opposition to China’s detention of political dissidents and human rights advocates and religious activists,” Bush said.

“We press for openness and justice not to impose our beliefs, but to allow the Chinese people to express theirs.”

(Associated Press,”Bush Criticizes China’s Human Rights Record on Eve of Games“, FOX News, August 7, 2008 )

This immediately prompted a reply from the Chinese telling President Bush to effectively keep his nose out of their internal business. How much influence can America really have with the Chinese when we are indebted to them to such a great extent that they feel quite comfortable in blowing off any criticism so easily. On top of that, our operation of the Guantanamo prison camp for “unlawful combatants” reduces our moral voice dramatically.

Finally, there’s the latest issue with Russia. In the past two weeks we have seen a resurgent Russia with Vladimir Putin pulling the strings on his marionet President Medvedev. Russia has just finished “rearranging” Georgia’s nose and has finally agreed to a cease-fire. However, even though it has agreed to a cease-fire and a pull-back of troops Putin is taking his sweet time getting his troops back, at least, into South Ossetia. Seems like Mr. Putin has decided that even though Russia has signed the cease-fire it can do whatever it pleases — from occupying Gori to destroying Georgia’s infrastructure at will even though the fighting has stopped. It’s clear that Mr. Putin intends to demonstrate to the Georgians and the rest of the world that he is not a man to be messed with. And what can the world do? Nothing really. The only player in the game that theoretically could do something, the United States, is simply overstretched and unable to responsd. As Secretary of Defense Robert Gates put it: “I don’t see any prospect for the use of military force by the United States in this situation.” (Dowd, Maureen, “Russia is not Jamaica“, The New York Times, August 17, 2008 ).

So, here we are…Russia and Vladimir Putin are bullying their close neighbors and threatening even those that are not so close (think Poland), the Chinese blow off our criticism of their human rights record like we were some third world country, and our military is committed and overextended in Iraq and Afghanistan where our dollars are being used to rebuild those countries — even though Iraq’s projected surplus is some 78 billion (that’s billion — with a ‘b’) dollars strong. We have no way of countering these developments effectively and our economy is currently wheezing like a patient with pneumonia. Our foreign policy is a shambles and our standing in the world is at an all time low. Of course, don’t bother the President with these minor details…he’s off on another vacation.

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Aug 02 2008

Doesn't He Get It?

Published by under Energy Policy,Thoughts

President Bush has used his weekly radio address today to, once again, slam Congressional Democrats and tout the need for opening up the coasts of America to offshore oil drilling.

To reduce pressure on prices, we need to increase the supply of oil, especially oil produced here at home

Bush, George, W., Weekly Radio Address, August 2, 2008 as quoted in “Bush pushes offshore drilling
“, MSNBC.

Interestingly, he acknowledged that it would be years before any of the oil found offshore could be pumped and made available to the market. So, in essence, he’s admitting that opening up offshore oil leases will do NOTHING to alleviate the situation today. But, and here’s the rub, he gives us a little insight into his reasoning for pushing this idea so vehemently:

lifting the ban would create new opportunities for American workers and businessmen

Bush, George, W., Weekly Radio Address, August 2, 2008 as quoted in “Bush pushes offshore drilling
“, MSNBC.

Now we have the truth — which we’ve really known all along. It’s not about oil prices at all…rather it’s about making his buddies in the oil business more money regardless of the environmental impact. Who cares if a little oil spills here and there and kills some fishes or coral reefs…at least his friends in Exxon-Mobile and Conoco-Phillips will make more money and their companies will make more obscense profits at the expense of the American economy and environment.

Fact is, President Bush is a one-trick pony. And just like he’s managed to put us into this mess, now he wants Congress to give him a shovel to dig even deeper. In fact, energy experts and the government’s own research agency at the Energy Dpartment have said that drilling in the Outer Continental Shelf would have no impact on current gasoline prices and probably would have none for years. (“Bush pushes offshore drilling“, MSNBC, August 2, 2008 ).

But, like the good partisan politician that he is, President Bush wastes no opportunity to blame the Democrats for the problem. Somewhere in Texas a village is missing it’s idiot.

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Aug 01 2008

Here We Go Again

Published by under Energy Policy,Thoughts

In another push to put the blame of high oil and gas prices on the Congressional Democrats President Bush yesterday urged congress to move quickly on lifting the ban on domestic offshore oil drilling. The Senate is currently gridlocked on a variety of energy bills with the Republicans claiming that they want an “open debate” and accuse the Democrat majority in the Senate of limiting amendments to avoid a vote on offshore drilling (Moscrip, Lara, “Bush pushes Congress on oil drilling“, CNN Money, July 30, 2008 ).

The President remarked: “American drivers are counting on Congress to lift the ban and so are American workers…I’ve lifted the ban, I’ve done my part, all Democrats have to do is allow a vote, they should not leave Washington without doing so.” (Moscrip, Lara, “Bush pushes Congress on oil drilling“, CNN Money, July 30, 2008 )

Sorry Mr. President…you haven’t done your part. Your part was to devise an energy policy for the 21st century that would have us weaning ourselves off of oil and gas and moving to more renewable energy technologies. Your administration has failed miserably at that part and now, when the chickens come home to roost, you want to blame Congressional Democrats for the whole situation. Remember, the Democrats have only controlled Congress for just under 2 years. You’ve been at the helm of the ship for almost 8 years. Our reliance on oil and foreign energy sources should have become painfully obvious after September 11, 2001 and you had the opportunity to lead us away from that reliance to a more independent energy future. But you chose not to. If anyone is at fault it is your administration and the Republican Congressional majority (as well as previous administrations and their failure to act as well).

Now the Congressional Democrat response is pretty lame as well. Senator Harry Reid suggested that the President “focus on releasing oil from the strategic oil reserve, speeding up production in areas already open for drilling and cracking down on oil traders.” (Moscrip, Lara, “Bush pushes Congress on oil drilling“, CNN Money, July 30, 2008 ) To me this sounds so weak as a response. Releasing oil from the strategic oil reserve will do nothing to really impact the cost of a barrel of oil and cracking down on oil traders falls into the old argument that it’s the “evil” oil speculators who are responsible for the current cost of oil. No Senator Reid…it’s something called supply and demand market forces. Stop playing populist politics at the level of the President and rise above the fray. Be honest.

As for speeding up production in areas already open for oil drilling…that I agree with. Oil companies are sitting on a lot of leases and doing nothing with them because they figure that the President and this administration will do everything in their power to get them more land (whether it’s offshore or not)…and then they can sit on that as well. The oil companies are raking in the profits at this point…why would they want to see the price of oil go down? Consider that Exxon-Mobil just announced that their second quarter profit rose 14% to 11.68 billion dollars (Werdigier, Julia, “Rising Oil Prices Lift Exxon to Record Profit“, The New York Times, August 1, 2008 ) Even if Congress repealed the ban on offshore oil drilling it would have zero impact on prices at the pump today. It takes years to develop a new oil field to the point that the oil reaches the market and on top of that, remember that this is a global market. The oil found in any new offshore field could just as easily be sold to India or China or to some other country who’s willing to pay top dollar for that oil. Americans need to tighten our belts, conserve, and develop and deploy new automotive technologies like better hybrid cards, electric cars, wind power and solar power to help reduce our consumption of oil and gas. That’s the long term solution to this energy crunch. But don’t ask the President or Congress to act…they’re much more interested in playing politics than doing something substantive to address this crisis.

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Jul 30 2008

Steal From Mass Transit to Pay for Highways

Published by under Energy Policy

I was scanning TerraPass’ stories early this morning (yeah…I get up really early in the morning to fit everything into a day 🙂 ) and I came across this one that caught my attention and left me shaking my head. Seems that the Secretary of Transportation, Mary Peters, reported yesterday that vehicle miles traveled on U.S. roads in May fell by 3.7 percent from May 2007. You would think that’s something to applaud. What it means is that Americans are driving less and possibly finding alternative transportation such as, let’s say, mass transit to get where they want to go. However, the administration reports that this drop in driving has reduced the proceeds derived from the federal tax on vehicle fuel: 18.4 cents per gallon of gasoline and 24.4 cents per gallon of diesel (Wald, Matthew, “Drop in Miles Driven Is Depleting Highway Fund; Loan From Mass Transit Is Urged“,The New York Times, July 28 2008 ).

What does this mean in the longer term perspective? It means that the Highway Trust Fund is getting less money because people are driving less (and hence using less gas). Of course the upside to this is that oil is now $123 per barrel rather than $145 as it was a few weeks ago (looks like conservation is working since oil price is driven by supply and demand market forces…I guess Vice President Cheney was wrong). However, the nations bridges are in such a dilapidated shape that about 25% of them will need replacement in the next 10 years (NPR News, July 29, 2008 ). The Highway Trust Fund’s highway account started the current federal fiscal year with $8 billion dollars in it and it is predicted to drop to $4 billion the end of the fiscal year. However, given the decline the Transportation department expects that sometime in the next fiscal year the account would hit zero and at the end of the next fiscal year would have a $3.1 billion deficit and this account is what finances the construction and repair of roads in the U.S.

So what’s the solution? The Highway Trust Fund is actually comprised of two accounts: the highway account and the mass transit account. Well, it seems that the short term solution, according to the Department of Transportation, is to pull funds from mass transit account to cover the highway account. The House however has a different perspective. They want to allocate $8 billion from general tax revenue to cover the fund’s highway account. The White House is against this as they claim that the proper thing to do is to use the money in the mass transit account to cover the highway account since the mass transit account is in surplus and using general tax revenue would “not harm transit spending and would not increase the deficit.” (Wald, Matthew, “Drop in Miles Driven Is Depleting Highway Fund; Loan From Mass Transit Is Urged“,The New York Times, July 28 2008 ) (of course, the current GAO estimate of the budget deficit for the next fiscal year stands around $480 billion not including the estimated $80 billion that will be asked by the administration for the wars in Iraq and Afghanistan).

The Transportation Department’s plan is detrimental overall. As William Millar, the president of the American Public Transportation Association points out:

“Robbing Peter to pay Paul is not the way to go…The administration proposal is shortsighted and would mean that the mass transit account would be reduced to the point where there would not be enough money to fund the federal transit program in 2010, even at the current level.”

(Wald, Matthew, “Drop in Miles Driven Is Depleting Highway Fund; Loan From Mass Transit Is Urged“,The New York Times, July 28 2008 )

The one bright spot in this whole thing was Secretary Peters’ longer term proposal where she indicated that “she would propose a new arrangement for paying for highways, based in part on private capital financing and use of tolls that vary by time of day.” (Stein, Adam, “Short-term, yes. Solution, no.“, Terrapass, July 29, 2008 ). A good idea given that this would shoulder more of the burden on the users of the infrastructure and localizing the funding effort more effectively. The only thing I disagree with Secretary Peters in her plan is the concurrent reduction in the gas tax. The fact is that we have reached a time when oil is more expensive than ever before and burning gas is more detrimental to the environment than we ever realized in the past. The idea of shifting the funding from a general gas tax to a “usage” tax based on tolls and congestion seems counter-intuitive if we want to see a general push in the direction of developing clean, renewable energy for us in our homes and transportation. Reducing the gas tax would lower some of that incentive (even with the concomittant tolls being used to pay for road and highway maintenance).

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Jul 30 2008

Politics and the DOJ

Published by under Uncategorized

The NY Times today highlighted an article that focused on an internal DOJ investigation that identified aides to former attorney-general Alberto Gonzales who used political affiliation in their hiring and promotion process. They apparently picked less-qualified applicants for non-political positions over others because of their political affiliations or passed over better qualified applicants because of their or their spouse’s political affiliation or activities. The articles continues by detailing a few examples of such behavior.

A longtime prosecutor who drew rave reviews from his supervisors was passed over for an important counterterrorism slot because his wife was active in Democratic politics, and a much-less-experienced lawyer with Republican leanings got the job, the report said.

Another prosecutor was rejected for a job in part because she was thought to be a lesbian. And a Republican lawyer received high marks at his job interview because he was found to be sufficiently conservative on the core issues of “god, guns + gays.”

(Lichtblau, Eric,”Report Faults Aides in Hiring at Justice Dept.“,The New York Times, July 29, 2008 )

What, of course, is not surprising at all is that the report also determined that White House officials were also actively involved in these hirings and promotion decisions. Does this surprise me? Not in the least. The Bush administration has continually flaunted the legal limits on a wide variety of issues — be it wiretapping without warrants to the firing of U.S. attorneys because of political affiliations or leanings. The fact is this administration has made a rather severe mockery of the law by behaving, and encouraging the behavior, that it is above the law. Former Attorney General Gonzales should have kept better tabs on his department.

The [Department of Justice] report released on Monday goes much further in documenting pervasive evidence of political hiring for some of the department’s most senior career positions, including immigration judges, assistant United States attorneys and even senior counterterrorism positions.

The pattern appeared most damaging in the hiring of immigration judges, as vacancies were allowed to go unfilled — and a backlog of deportation cases grew — while Mr. Gonzales’s aides looked for conservative lawyers to fill what were supposed to be apolitical jobs.

(Lichtblau, Eric,”Report Faults Aides in Hiring at Justice Dept.“,The New York Times, July 29, 2008 )

Since these are apolitical positions within the Justice Department it is illegal according to Civil Service Law and contrary to the department’s own internal policies to use political affiliation as a benchmark for hiring and promotion decisions. Obviously Ms. Goodling and her predecessor, Susan Richmond, felt that they knew better than the law. An example of Ms. Richmond’s interference can be seen in the extension of an attorney’s appointment in the deputy attorney general’s office. When an aide in the deputy attorney general’s office inquired abount the delay he

summed up his frustration in an e-mail message recounting his inability to keep the lawyer in his office. “I also probed whether there is something negative about him that I did not know,” Mr. Levey wrote. “Turns out there is: he is a registered Democrat,” he wrote, and Jan Williams, an official in the White House, “thinks everyone in the leadership offices should have some demonstrated loyalty to the President. She all but said that he should pack his bags and get out of Dodge by sunset.”

(Lichtblau, Eric,”Report Faults Aides in Hiring at Justice Dept.“,The New York Times, July 29, 2008 )

Now, is this something endemic to just this White House? Probably not. But it is interesting to see how pervasive this behavior is in this administration. Sure there were scandals in the Clinton administration, some of them politically oriented and motivated. But this White House has taken this behavior to a new level. And it runs counter to the concept that President Bush is a “Uniter…not a divider” and of trying to portray himself and his administration as being principled. And of course the response from the White House to this report is as expected: Tony Fratto, a spokesman for the White House said of Monday’s report, “There really is not a lot new here.” (Lichtblau, Eric,”Report Faults Aides in Hiring at Justice Dept.“,The New York Times, July 29, 2008 )

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