Ensign, Heller follow Bush Lead: Health program, Energy Policy, and Conservation votes

** Senator John Ensign (R-NV) continued his commitment to un-compassionate conservativism by voting against H.R. 5501, the Lantos-Hyde Global Leadership Against HIV/AIDS, Tuberculosis, and Malaria Reauthorization Act). The measure passed 80-16 (4) on Senate vote number 182. Senator Harry Reid (D-NV) voted in favor of the bill. Senator Ensign was one of only 31 members of the Senate to agree with the DeMint Amendment which would have slashed $15 billion from the health programs. [vote 181]

** Representative Dean Heller (R-NV2) was the only member of the Nevada Congressional Delegation to vote against H.R. 6515, the “Drill Responsibly in Leased Lands Act.” The measure failed to achieve the 2/3rds required, on a 244-173 vote. [roll call 511] Both Representatives Berkley (D-NV1) and Porter (R-NV3) voted in favor of the measure which would have (1) authorized leasing in the Alaskan National Petroleum Reserve with at least one lease sale per year until 2013; (2) facilitated pipeline construction from the NPR; (3) required pipeline operators to certify annually that the pipeline is fully maintained and efficiently operated; (4) expedited the construction of a natural gas pipeline from Alaska to continental U.S. markets; (5) repealed provisions of the Mineral Leasing Act that allow the export of Alaskan North Slope oil; (6) amended the Export Administration Act of 1979 to re-impose the prohibition of crude oil exports; (7) require oil companies to use their existing leases before accumulating more; and (8) instructed the Secretary of the Interior to ensure that lessees make prompt, transparent, and accurate royalty payments. [CRS] Evidently, Representative Heller believes that it is perfectly all right for oil corporations to export Alaskan North Slope oil rather than require that it go to American refineries?

** Representatives Heller and Porter both voted against adding the Taunton River, (MA) to the National Wild and Scenic Rivers System, H.R. 415. [roll call 507] Rep. Shelley Berkley (D-NV1) voted in favor of the measure, which passed 242-175. Adding the Taunton to the list means that dams and other ‘projects’ cannot adversely affect river values, agencies must protect natural, cultural, and recreational uses, water quality must be maintained, and there must be a comprehensive river management plan. [Rivers]

Dean Heller invited to tag along with Boehner's Brigade to the Arctic National Wildlife Refuge

Nevada’s Congressional District 2 Representative Dean Heller is among House Minority Leader John Boehner (R-OH) Grand Oil Party entourage to the Arctic National Wildlife Refuge. [RCP] Rep. Boehner doesn’t expect to see much except “drilling opportunities.” [TP] “We're going to look at this barren, Arctic desert where I'm hoping to see some wildlife," Boehner said. "But I understand there's none there. But I'm still going to look for it. If I find any, I'll let you know." [FOX]

Note to Representative Boehner and Representative Heller: There’s a reason they call it a wildlife refuge. The U.S. Fish and Wildlife Service provides the following description: “Renowned for its wildlife, Arctic Refuge is inhabited by 45 species of land and marine mammals, ranging from the pygmy shrew to the bowhead whale. Best known are the polar, grizzly, and black bear; wolf, wolverine, Dall sheep, moose, muskox, and the animal that has come to symbolize the area's wildness, the free-roaming caribou. Thirty-six species of fish occur in Arctic Refuge waters, and 180 species of birds have been observed on the refuge.”

Real Clear Politics posted the guest list for Rep. Boehner’s Grand Tour:
“He will be joined by Reps. Michele Bachmann, of Minnesota, Gus Bilirakis, of Florida, Mary Fallin, of Oklahoma, Dean Heller, of Nevada, Ohio's Jim Jordan and Bob Latta, Colorado's Doug Lamborn, California's Kevin McCarthy, Nebraska's Adrian Smith and newly-elected Steve Scalise, of Louisiana. Of the ten freshmen, only Bachmann is expected to face a close race, though national Democrats are excited about Heller's opponent. Lamborn faces what could be a difficult primary fight.” [RCP]

There may, however, be a wee bit of a glitch in the outcome of this non-fact finding excusion – no sooner did the House Grand Oil Party leadership announce the trip than Senate Republicans seem to have dropped the proposal for drilling in the Wildlife Refuge in favor of promoting more off shore coastal drilling operations. [AnDN] [McClatchy]

Oh well, perhaps the Grand Oil Party caravan can sight some sheep, wolverines, and a few rock ptarmigans? [ANWR] Unfortunately, in wildlife observation, as in politics, timing is everything – and the House GOP leadership’s timing seems a bit off.

McCain's Entitlement Program for the Entitled

Elites don’t sacrifice. Elites can comfortably believe that filling an SUV tank with $4.05 per gallon gas in Reno, NV [NVgas] is inconvenient, but not indicative of deep and abiding economic problems – a little drilling here, and little signal to the market there, and all will be right with the universe. The truly elite can go out and purchase a Tesla. Elites with multiple homes may watch their gross worth decline on paper, but the real estate is still there and still theirs. The elites, like Senator John McCain and his bevy of economic advisers, have another perspective appearing to have very little in common with the middle and working class citizens in this country.

Remember McCain’s “energy policy?” The one that calls for offshore drilling (which he once opposed). This is underpinned by just such a perspective. McCain’s theory of the financial universe holds that prices will come down if “the market gets a signal.” Note the focus: McCain is not talking about increased refinery capacity. McCain is barely talking about significant augmentations to alternative energy development. McCain is not talking at all about decreasing American demand by implementing conservation policies. These would require sacrifice – and, the elites don’t do sacrifice.

Back in 2000 and 2003 Senator McCain was all for closing the Enron Loophole and severely punishing those whom investigation showed were manipulating the commodities markets. [Time] In 2008 we are supposed to trust that Senator McCain’s would lead an administration vigorously investigating and prosecuting speculators and manipulators since he’s offered no specific examples of the “reforms” that ought to be made. [OilWtch]

However, how does one trust that he would, in actuality, conduct his administration with a close eye on market manipulation when former Senator Phil “Enron Loophole” Gramm is a valued economic adviser and has been mentioned as a possible Secretary of the Treasury in a McCain administration?

Remember McCain’s policy statements on the mortgage meltdown? “I have always been committed to the principle that it is not the duty of government to bail out and reward those who act irresponsibly, whether they are big banks or small borrowers,” McCain said. “Government assistance to the banking system should be based solely on preventing systemic risk that would endanger the entire financial system and the economy.” [Politico] It would be extremely difficult to find a statement more in line with the Deregulation School of Financial Operators than this. However, consider one of the sources.

It was none other than Texas Senator Phil Gramm who led the charge in 1999 to ‘reform’ U.S. banking laws, with deregulation and a focus on facilitating mergers rather than “creating an efficient regulatory framework.” [Politico] A year after the Gramm bill became law, UBS took over the Paine Webber brokerage house, and two years later Gramm became vice-chairman of UBS’s new investment operations. While Gramm was a lobbyist for UBS the mortgage industry sought Congressional roll backs of state rules restricting or proscribing predatory lending practices used to entice homeowners to take on high cost mortgages. Former Senator Gramm hasn’t been called “Foreclosure Phil” without cause.

A person seeking specific proposals for adequately regulating the mortgage and banking industries should be looking to FDIC Chairman Sheila Bair whose agency approved a proposal to provide bank examiners with better tools to determine the amount of deposits in the event of a bank failure, rather than to Senator McCain and his economic adviser Gramm. [SDUT]

“Foreclosure Phil” advocated diminishing the rules on predatory lending, so it has been left to the Federal Reserve System in the wake of the mortgage meltdown to announce changes that require the verification of assets, and curb penalties for prepayments. Fed Chairman Ben Bernanke, “It seems clear that unfair or deceptive acts and practices by lenders resulted in the extension of many loans, particularly high-cost loans, that were inappropriate for or misled the borrower.” [Blmbrg] Senator McCain’s emphasis on de-regulation is definitely at odds with the actions taken this week by the FDIC and the Federal Reserve.

Elites don’t worry about predatory lending practices; they have their real estate attorneys, their tax accountants and attorneys, and their financial advisers to assist them. Predatory loans happen to those “other” people, greedy little people who might want to live beyond their stations?

Elites sacrifice things like playing golf during war-time (unless it’s a fundraising session for the GOP and its candidates). Elites sell golf wear on their campaign web sites. Elites wonder why those little people want to regulate their industries and impinge on their quarterly profits. After all, aren’t they the Drivers and Captains of Industry entitled to their wealth and the influence it provides? Nothing causes the elites to squeal so vociferously than the mention that some of that influence to which they know themselves to be entitled might not be justified; or, Heaven Forbid, might be curtailed.

So, the elites can opine that conservation (of both money and gasoline) is a fine individual exemplar, but hardly the stuff of which growing consumer based economies are made. Therefore, it is for the rest of us little people sitting out here in the dark to reduce the amount of driving we do, slow down and use less gasoline, economize in our spending habits so we can (1) save for our privatized retirement accounts; (2) put the kids through college; (3) pay for the house; (4) buy our own health insurance; (5) pay our own medical bills; (6) fill our refrigerators and pantries; and (7) put enough gas in the vehicle to get to work – or to find work.

Meanwhile, we are to get out of their way – as the elites fill the tanks, consider their coupons, and check on their portfolios. We are not to consider any proposals that might, in any way, shape, or form, impinge on the influence to which our elites are entitled. After all, they’re elite and they have their candidate, a man ready and willing to perpetuate their sense of entitlement as he moves from one country club to the next receiving their donations.

Update: For an excellent example of the condescending, patronizing, view elite conservatives view the educational capacity of 'public school' children see Smintheus's post.

Coffee and the Papers: Soup to Nuts

** Term limits for public offices are very popular, except with the people who have to accept them. The Nevada Supreme Court is hearing arguments today concerning the constitutionality of the state’s limitations. The Secretary of State is questioning the eligibility of local and county officials, however the decision may end up affecting members of the state Assembly and Senate as well. [LVRJ]

A contrarian view: Term limits make all manner of superficially good sense. Theoretically the imposition of a limit prevents the accumulation of power in uncontested offices, and thereby protects democracy. As with many things in life, the theoretical often doesn’t take into consideration the practical ramifications. (1) Ultimately, term limitations are un-democratic; the voters aren’t allowed to determine when or if State Senator X will be retired from office – the term limit kicks in. (2) Ambivalence becomes a factor when local voters support term limits in general, but think that Assemblyman Y is doing a fine job for them and should be continued in office. (3) Given that power in the state legislature is often based on voter representation (large urban vs. small rural representatives) and seniority, term limits have the effect of transferring influence and authority to urban representatives often at the expense of rural members of the legislature. There are commentators who have a tendency to sneer at rural representatives as backwater buffoons, but the fact remains that since “one man one vote” changed Nevada legislative power structures, seniority is the only avenue along which a rural representative and his or her district achieves any kind of influence. (4) Term limits more severely constrict the participation of those in office having the longest constitutional terms. An Assemblyman, governed by 12 year term limits, may serve in more sessions than a state Senator. Legislative limitations, to be scrupulously fair, ought not to be based on time served.

** What goes around, comes around, and the budget slashing taken by mental health services during previous budget crises (and never fully re-funded) still haunts Nevada’s capacity to deal with a “critical lack of mental health resources” in rural Nevada. [RGJ] The case can also be made that the deficit isn’t confined to the rural side of the ledger.

** Jim Rogers (Rogers Holdings) calls the Bush Administration plan for Fannie and Freddie an “unmitigated disaster.” [Blmbrg]

** Militants “breached” a U.S. base in Afghanistan, killing nine U.S. soldiers. [BBC]
“Obama shifts focus from Iraq, eyes more troops for Afghanistan” [Blmbrg]
“Is Iraq serious about a U.S. withdrawal timetable?” [Reuters]

** “Surging food imports outpace inspection: safety concerns rise as FDA looks at Mexico as a source of salmonella tainted tomatoes.” [Phil Inq] Memory Lane: “Bush Administration’s Un-inspection System III” [DB] “Bush Administration Food Un-inspection: A night in the Senate Dining Room” [DB] “Tastes like chicken could be fish…” [DB]

** President Bush will lift the executive ban on off shore oil drilling this afternoon, and call on Congress to do likewise with the legislative one. [Reuters] The ban has been in place since 1990, signed by none other than President George H.W. Bush. [NYT]

** “Population boom will pressure forests: reports” [Reuters] As world population surges from 6 to 9 billion persons, there will be an “unprecedented and unsustainable demand on the world’s remaining forests.”

Morning Coffee and the Papers

** There is a reason the State of Nevada has an archivist – to remind us, among other things, that the recent cuts in the state budget will be the worst since the Great Depression. [LV Sun] We certainly aren’t alone. Pennsylvania is experiencing similar budget issues. [Forbes] Connecticut has its problems. [Nwsdy] California Republicans are vowing to fight any proposals to increase taxation for the wealthiest citizens. [LAT] CBPP has a run-down of the states currently in trouble and the likely effects of the proposed cuts.

When states cut back on regulatory and oversight programs it becomes more difficult to enforce standards of business conduct – perhaps those who invested in Cetus Mortgage should be pleased the State stepped in now [RGJ] instead of waiting until even fewer resources were available? Inspecting health care clinics and other facilities isn’t going to be easier, and it’s difficult enough already – witness the ongoing legal issues surrounding the hepatitis C outbreak in Las Vegas. [LVRJ]

** Senator John Ensign (R-NV) has a new trick to hold up consideration of the Housing Bill, an amendment to cut $8 billion to pay for tax cuts for companies developing alternative energy. Majority Leader Sen. Harry Reid (D-NV) reminds Republicans – Ensign included – that they had 2 previous opportunities to extend the renewable energy tax credits, and they passed on the opportunity both times. While Ensign stalls, about 8500 homes are being foreclosed daily. [LVRJ] Senator Johnny Isakson (R-GA) says ‘enough is enough’ - “The Senate is a place where you can make your point, but there’s a time at which your point is made and you have to judge the overall totality of the issue, and I think that time has come,” he said.” [CQP]

** Militarization of America? Lockheed Corp. just landed a $1.2 billion deal to handle TSA’s employee payroll and “other human resource functions” for the next 8 ½ years. [WTech] (via ProPub]

** Physicians for Human Rights issued “Broken Laws, Broken Lives,” concerning the experiences of eleven detainees held at Guantanamo Bay, Abu Ghraib, and other military prisons. [MImssngr] Does being stabbed in the cheek with a screwdriver equate to activities in a Boy Scout Camp? [TP]

** In case anyone might have been wondering why Senator John McCain’s ads don’t call for increased fuel conservation measures, and do request more public lands open for oil leases – could the $1,069,854 he’s received from Big Oil come into play? [OW.org]

** ExxonMobil Corp. has announced “it may be forced to close its Altona refinery in Victoria, Australia,” because a 2010 emissions control program would require that the company pay for permits – thus making it “uncompetitive” with refineries in countries that do not require the carbon gas emission permits. [Bloomberg] In short, ExxonMobil would rather decrease production than pay when it can pollute somewhere else? Looks like it.

H.R. 2809: How to Get Out of Jurassic Park? New Apollo Energy Act

U.S. Representative Jay Inslee (D-WA) first introduced the “New Apollo Energy Act” in 2005 (as H.R. 2828) seeking to (1) create clean energy manufacturing jobs; (2) decrease American dependence on foreign oil; and (3) reduce green house gas emissions. [Hs.gov] His initial effort drew 14 co-sponsors; the most recent version of the bill (H.R. 2809) has 27 co-signers; none of whom, unfortunately, are members of the Nevada congressional delegation.

The bill is a compilation of measures directed at market solutions to encourage the production and distribution of clean (or cleaner) energy products and technologies, incentives for business and industry adoption of cleaner energy sources and technology, and among other provisions includes amendments to the Energy Policy Act of 2005 regarding low carbon renewable fuel and carbon capture/storage. [GovTrack]

There are some provisions, especially in Title VIII, against which the Oil Giants can be expected to fight vigorously:

(1) Ending Subsidies for Big Oil Act of 2007 - Amends the Internal Revenue Code to: (1) deny a deduction for income attributable to domestic production of oil, natural gas, and appurtenant primary products; and (2) augment from five years to seven years the amortization schedule for geological and geophysical expenditures of major integrated oil companies;

(2) Royalty Relief for American Consumers Act of 2007 - Prescribes price thresholds for royalty suspension provisions; and

(3) Sets prerequisites for new leases for oil or natural gas production in the Gulf of Mexico. Amends the Energy Policy Act of 2005 to repeal certain federal subsidies for royalty relief for oil and gas, including ones related to Planning Areas Offshore Alaska. [GovTrack]

No doubt, the Oil Giants will use the current situation to argue that they cannot possibly help with efforts to reduce current gasoline prices if they aren’t subsidized by American taxpayers, and that “we” should be more focused on getting oil into the refineries than worried about collecting the royalties due for its development in public lands and under coastal waters.

First, it’s very difficult to give much credence to the “we need subsidies” line of argument when the companies’ ROCE numbers range from 15% to 32%. [DB] It is equally difficult to drum up sympathy when one discovers that ExxonMobil is buying back its stock at a $7 billion per quarter clip. ConocoPhillips announced it had plenty of money to buy back $15 billion worth of its shares through 2008. Chevron said it was going to buy back $5 billion worth of stock in September 2007 – a number that turned out to be more like $7 billion. [DB]

Secondly, it’s extremely short-sighted to believe that the energy companies that got us into the contemporary crunch in which we find ourselves are necessarily the ones to get us out. After all, it’s in the best interests of the Oil Giants to maintain ever increasing consumption of the products they have for sale. They have thus far managed a linkage, “good for the Oil Giants = good for America.”

The nearly wholesale destruction of the American municipal mass transit systems between 1936 and 1950 provides a case in point. In order to sell more “product,” General Motors, Firestone Tire, Standard Oil of California, and Phillips Petroleum combined to buy out electric surface traction systems in 45 cities and replaced their rolling stock with GM buses. [Wik] Construction began on the “freeway system” in California after the “large-scale dismantling of that state’s trolley network.” Quite obviously, what was good for the automobile manufacturers and oil companies in the short run, proved exceedingly myopic public policy over the long term.

Continuing to offer subsidies, tax breaks, and ridiculously low lease agreements, merely serves to sustain the Oil Giants at the expense of the American consumers and taxpayers.

Third, it makes no sense to subsidize 19^th century technologies (combustion engines) and 20^th century corporate organizations that either cannot, or will not, give greater priority to long term sustainability than to quarterly earnings reports in the 21st century. Citizens and their representatives need to clearly differentiate between “greenwashing,” and actual diversification efforts by the Oil Giants and their allies. The Oil Giants are spending millions on public relations campaigns designed to position themselves as part of the “solution” rather than the source of the problem. [NYT] [SrcWtch]

“But, Oh!” cry the Oil Giants, “What about all those pension and mutual fund investors in our nation who will be ‘hurt’ by any drop in our profitability? What about the jobs lost?” The answer, of course, is precisely what the ever-decreasing number of shareholders in the Oil Giants don’t wish to hear – the investors will put their money elsewhere. And those jobs?

The United States now lags behind Denmark, Japan, and Germany in the development of alternative energy sources and technologies, and hence in the resultant job creation. The Danish Wind Industry Association reports that its efforts created over 20,000 jobs. The German Wind Industry reports employing over 214,000 people, 64,000 of whom are directly employed by the GWEA. There are about 35,000 people in Spain employed by the EWEA. Geothermal industry leaders predict they could create 8,764 direct jobs and another 21,910 total by 2026. The Solar Energy Industries Association would like to supply over half the new U.S. energy generation by 2025, and create 260,000 new jobs by 2030 in the process. [EESI]

Instead of moving the nation forward, into new technologies and the generation of new jobs, the Oil Giants and their allies in Congress seem intent on holding us back, almost literally trapped in the Age of the Dinosaurs. It’s one thing to enjoy Jurassic Park, and quite another to be held hostage inside it.

Crude Arguments: Oil Prices, Stock Buy Backs, and ROCE numbers

The next time someone wishes to argue with you about the “need” to drill the planet into swiss cheese because our ‘heroic’ oil companies are doing all they can to keep price increases at a minimum for Nevada drivers who are paying some of the highest retail prices at the pump in the nation – gently ask if the oil companies are as ‘broke as they sound’ and if they are truly doing all they can to produce more oil and gasoline.

Please remember that a previous post cautioned that there was a big difference between the numbers the oil giants use when talking to the press and the public (profit margins) and the numbers they haul out when talking to analysts and investors (ROCE).

The ROCE number is “a measure of the returns that a company is realizing from its capital. Calculated as profit before interest and tax divided by the difference between the total assets and current liabilities. The resulting ratio represents the efficiency with which capital is being utilized to generate revenue.” [InvWrds] Translation into plain English: The ROCE is a more accurate indication of what the company is really earning.

A reasonable person might also ask if the corporation is attending to exploration, development, and production with the same zeal as it sustains for its stock buy back programs, which are designed to reward fewer and fewer shareholders with greater and greater dividends.

The following are the facts as reported to date, use them at your pleasure:

ExxonMobil shared financial data with analysts on March 7, 2008 reporting net income of $39 billion, and a ROCE of 32%. ExxonMobil was pleased to tell the analysts that it had “reduced shares outstanding by 16% since the beginning of 2002.” [Scribd] ExxonMobil is buying back about $7 billion of its stock each quarter. [NYT]

ConocoPhillips’ report for the 4^th quarter 2007 earnings call noted a 15% ROCE for the annualized 4^th quarter. “With respect to our share repurchases, we will be repurchasing between $2 billion and $3 billion in the first quarter. Remember we've got a remaining $10 billion on our program that we have for 2008.” [SkgA] ConocoPhillips said last July that it would spend $15 billion repurchasing shares through 2008. [NYT]

Shell announced its ROCE for the first quarter of 2008 at 24.5% [Shell] On May 9, 2008 Shell announced that it had bought back 750,000 “B” shares of its own stock. [StIn]

Chevron reported to its investors a 23% ROCE for 2007 during its March 2008 meeting. [Chev] Chevron’s stock buy back plan calls for repurchasing $5 billion in shares per year during 2005, 2006, and 2007. [NYT] The $5 billion buy back plan announced in September 2007 turned out to be an actual buy back of $7 billion in 2007. [Chev]

British Petroleum (BP) shows a 21.8% ROCE in its latest financial reports. [DigLk] BP announced on July 1, 2008 that it had repurchased 1,200,000 shares of common stock. [DigLk]

Ensign ignores trucking industry

Bless their hearts, Winnemucca, Nevada’s very own Humboldt Sun has discovered a way to reduce the demand for gasoline, headlining its July 1-3, 2008 edition: “Officials say decreasing speed will increase vehicle gas mileage.” However, the interesting part is Senator John Ensign’s (R-NV) reaction to any suggestion that we might benefit from slowing down nationally. “Sen. John Ensign praised voluntary measures to conserve fuel, but he quickly dismissed the idea of a national speed limit. Just moments after he described himself as a conservationist, the Republican from Nevada told the Humboldt Sun that he would ‘strongly oppose’ any efforts to reinstate the fuel conserving measure – even if it was higher than the 55 mph limit that former President Richard Nixon imposed during the 1970’s era energy crisis.” {Humboldt Sun, paper edition, July 1-3, 2008; vol. 39, issue 53}

What I would have given to hear Senator Ensign describe himself as a “conservationist!” – especially after he’s collected some $399,374 in campaign contributions from oil and gas interests. [LCV] There’s also that 26% rating from the League of Conservation Voters in 2006 to explain which Senator Ensign sniffs is merely a “Washington outfit” compilation. [LCVpdf] However, it isn’t only the environmentalists so often disparaged by the Republicans that may not be pleased with Senator Ensign’s position – the trucking industry likely isn’t either.

The junior Senator seems to be getting well behind the parade. One major freight company, Con-Way, has already announced it will reduce its electronic speed controls from 65 mph to 62 mph, and in doing so save 3.2 million gallons of diesel per year. {HuSun print p.2}[MSNBC] Schneider National cut the top speed of its 10,600 truck fleet from 68 mph to 63 mph, reducing its diesel use by 4 million gallons annually. [MSNBC] The American Trucking Association has been calling for the adoption of a 65 mph national speed limit since this past March, saying that not only would this save fuel, but would increase highway safety as well. [USNWR]

Senator Ensign also didn’t do the trucking industry any favors by voting to sustain the filibuster on H.R. 6049 (Renewable Energy and Job Creation Act of 2008) which included a provision (section 125) supported by the American Trucking Association for an exemption from the Federal Excise Tax for the purchase of auxiliary power units and other devices to reduce the necessity of idling. [GovTrack]

Apparently, “keep on trucking” has an altogether different meaning for Senator Ensign than for those who provide that service for a living.

The All Hat and No Cattle Party: Bush Attempts to Lead Without Moving to the Front

Good luck trying to find any regular unleaded gasoline in the state of Nevada less than $4.00 per gallon. [NVgas] A person might even need more luck to find politicians in the Grand Oil Party willing to take the issue head on – without resorting to bromides predicated on “psychological” impacts, or “just wait until 2028 and things will be better” pontifications. Equally baffling is the Bush Administration’s willingness to saber rattle at Iran, which only serves to make the oil markets ever more nervous. The Bush-McCain crowd appear to want their “Great War on Terror”, but without facing the harsher ramifications and results of it.

President Bush has tried to make the case that his “War on Terror” is comparable to the great conflicts of the 20^th century. His speech on March 19, 2004 definitely had that ring to it: “The war on terror is not a figure of speech. It is an inescapable calling of our generation. The terrorists are offended not merely by our policies -- they are offended by our existence as free nations. No concession will appease their hatred. No accommodation will satisfy their endless demands. Their ultimate ambitions are to control the peoples of the Middle East, and to blackmail the rest of the world with weapons of mass terror. There can be no separate peace with the terrorist enemy. Any sign of weakness or retreat simply validates terrorist violence, and invites more violence for all nations. The only certain way to protect our people is by early, united, and decisive action.” [WHPR]

However, there was, and remains, a wide gap between the President’s rhetoric and his demonstrated willingness to take steps comparable to his predecessors in regard to the Home Front. Not only has he not “acted” like this was the global war he himself described, he hasn’t even taken the steps deemed necessary by former Presidents Nixon and Carter during Oil Crises of 1973 and 1979. Additionally, he’s not done anything comparable to FDR’s leadership during World War II.

Mr. Bush wants to “be a war president” with all the powers accruing in that definitional framework, without really “being” a war president with the responsibilities associated with guiding the nation through a legitimate crisis. President Bush appears to want to play the role, but without taking any steps that would even inconvenience anyone much less take action reminiscent of actions taken by Presidents Franklin D. Roosevelt, Richard Nixon, and Jimmy Carter. The current Oil Crisis is a case in point.

The present situation absolutely isn’t the “Nation’s First Rodeo” when it comes to energy problems. Presidents Roosevelt, Nixon, and Carter addressed these issues far more concretely than the present occupant of the Oval Office.

During World War II it became obvious that voluntary gasoline demand reduction wasn’t working, and by the Spring of 1942 seventeen eastern states had some type of mandatory rationing in place. In December of that year there were nationwide mandatory controls. [EWH] If a driver had an “A” classification the ration was 4 gallons per week, a “B” classification was worth 8, “C” ration status applied to doctors, ministers, mail carriers and railroad workers. The Office of Price Administration handled the classifications and stamps. [STC] There was a “T” sticker for truckers and “x” for members of Congress and VIPs. [AmesHist] [Exhibits] The speed limit was 35 miles per hour.

When OPEC announced embargoes of crude to the United States in 1973 the price of crude quadrupled to $12 per barrel. The national average for a gallon of gasoline increased from $0.38.5 in May 1973 to $0.55.1 cents in June 1974. The embargo was lifted in 1974 but the effects lingered on. [Wik] President Nixon signed the “55 mph” speed limit law in 1974. [Wik]

The second “oil crisis” came as a result of the U.S. backing of the Shah of Iran, and the Carter Administration began a “phased decontrol of oil prices on April 5, 1979. Crude oil prices increased from $15.85 to $39.50 – the highest “real price” until May 7, 2008. Americans lined up at gas stations. The dismantling of price controls established during the Nixon Administration continued under Carter and was completed during the Reagan tenure. Carter advocated energy saving and conservation measures. Americans were advised to turn down thermostats, install solar panels, and make other household lifestyle adjustments. [Wik]

Instead of having the courage to discuss the implementation of speed controls like President Nixon, Mr. Bush has never broached the subject. Unlike FDR who had a very real global conflict with very real standing armies in combat around the planet, Mr. Bush has not called for any sacrifice on the part of American citizens – not even so much as a “war bond” campaign to pay for his militaristic adventures. Unlike President Carter he has not provided a personal example of energy conservation for average Americans to emulate.

Americans were willing (although often begrudgingly so) to reduce their gasoline “for the boys” during World War II. Nevadans tried some gamesmanship with the Nixon Administration’s 55 mph speed limit but included an automatic reversion in the speed limit statute. We demonstrated that as a nation we could make fuel use decisions more wisely when previous Administrations explained the necessity. The Bush Administration has offered no such explanations. All that appears to be emanating from the current Oval Office are more tax and lease holding breaks for the oil giants – without any call for the American public to make any sort of sacrifice, or indeed even any modest life style adjustments.

The Bush-McCain perspective gives every appearance that the Republicans want credit for fighting a “global war on terror” without calling upon the American public to make any serious sacrifices toward that end; and, to “take action” during this oil crisis without really adjusting our lifestyles or our consumption of fuel. There’s an obvious pattern here, most often summarized as “all talk and no action,” or less generously, as the drug-store cowboy – all hat and no cattle.

Coffee and the Papers: National We Shot a Bear Week?

** There’s no calendar in the house designating this “WE shot a bear!” week, but it surely must be. First, Nevada’s Governor Jim Gibbons issues a statement saying how pleased he is that the Legislature bailed him out saying, “the agreement lawmakers reached was very similar to my recommendations.” [KTVN] Perhaps this was because the “lawmakers” had already hammered out most of the package before the Governor made up his mind about what to do?

** No sooner does this executive message come forth than the President of the United States issues this message on the signing of the New G.I. Bill: “I want to thank House and Senate leadership and leaders of the House and Senate Appropriations Committees. I am particularly grateful to Congressmen Boehner, Hoyer, Obey, and Lewis. And I want to thank members who worked hard for the GI Bill expansion -- especially Senators Webb and Warner, Graham, Burr, and McCain.” [WHPR] Uh, it’s already been remarked upon that Senators Graham, Burr, and McCain were opposed to the New G.I. Bill. [NYT] And, what happened to Senator Hagel, who helped draft the bill?

** If Senator John McCain would like voters to believe that he has the credentials to be the President of the United States it would be very helpful if his campaign staff was a bit more careful about vetting associates. Last month five people left the McCain camp because of lobbying ties. [HuffPo] Also during the merry month of May McCain staffers told the press that the controversial endorsements from Reverend John Hagee and Patriot Pastor Rod Parsley resulted from poor vetting. [TP] [ABC] June begins with the McCain campaign launching its Truth Squad, and who shows up on the roster? Col. Bud Day, who still claims, “The Swift Boat attacks were simply a revelation of the truth,” has been welcomed as a member of the newly established McCain “Truth Squad.” [TP] [HuffPo]

** Better yet, McCain who once said of the Swift Boat ads: “In an interview with the Associated Press, McCain called the ad "dishonest and dishonorable." Asked if the White House was behind it, McCain said: "I hope not, but I don't know. But I think the Bush campaign should specifically condemn the ad." [WaPo August 6, 2004] Of the top twenty contributors to the Swift Boat group, 9 donors and members of their families have donated $69,100 to the McCain campaign. Bob Perry and his wife have each donated $4,400. Sam Fox and his family have donated $11,000. [USAT]

** People might be more impressed with Senator McCain’s foreign policy credentials if he were to stop confusing nations, sects, and issues. During a March visit to the Middle East he confused Sunnis and Shiites. [WSJ] On April 8^th he confused Al Qaeda with a Shiite sect. [TP] All in all, the candidate managed to make the same mistake five times in five months. [Dem.Org] Further evidence that the Senator is geographically challenged came on June 30^th when the GOP presidential candidate confused Somalia with Sudan. [TP] It’s tempting to suggest a trip to “Google Earth,” but the candidate has already admitted he’s “computer illiterate.” [HuffPo]

** The New York Times has picked up on the story of Senator John Ensign’s (R-NV) blockage of the housing bill, “The bill was expected to pass, but the vote was derailed by petty politics. Senator John Ensign, Republican of Nevada, for example, demanded that the Senate add a multibillion dollar package of tax breaks for renewable energy.” […] “This sort of delay achieves political ends, like denying Democrats the chance to campaign on the accomplishment during the recess, but it’s exceedingly poor policy.”

** If one reads the ‘presser’ in the New Jersey Blog from Congressman Jon Porter concerning the "Fostering Connections to Success Act of 2008" a person might get the idea that Rep. Porter (R-NV3) originated the measure? (H.R. 6307) There were 27 co-sponsors of the bill, including Rep. Shelley Berkley (D-NV1). The bill passed on a voice vote, June 24^th and is now in the Senate Finance Committee.

** A court says the Bush Administration cannot rely on evidence comparable to “Twas brillig, and the slithey toves did gyre and gimble in the wabe: All mimsy were the borogoves, and the mome raths outgrabe,” when seeking to keep detainees at Guantanamo. [WaPo] The Administration must therefore find another ‘vorpal sword’ to take in hand against the frumious Bandersnatch? Actually, the poem in question was "The Hunting of the Snark," as in, what I tell you three times is true...

** MessO’Potamia: “Wounded Iraqi forces say they’ve been abandoned” [NYT] “After deaths, U.S. inspects electric work done in Iraq” [NYT] “Iraq opens oil fields to global bidding” [WaPo] “RAND releases delayed Iraq History” [NYT] “Factbox: Security developments in Iraq” [Reuters] “Iraq: 10 American casualties identified” [LAT]
“Many killed in Iraq bomb attacks” [BBC]
“Pentagon announces new deployments to Iraq” [Army Times]
“Wartime contracting commission members named” [GovExec]

“June is deadliest month for troops in Afghanistan war” [LAT]
“Civilians killed in Afghanistan” [BBC]
“Factbox: Security developments in Afghanistan” [Reuters]

** “Oil trades above $140 on concern Iran may face military attacks” [Bloomberg]
“White House mum on alleged covert ops in Iran” [AFP]
“U.S. supports PKK linked separatists against Iran, report” [Hurriyet]
“Iran exiles back armed opposition” [BBC]
“Iran Contra’s Lost Chapter” [Common Dreams]

** How can we expect the Department of Energy to keep the Yucca Mountain site safe when they’re having demonstrable problems with Hanford? GAO Report “DoE lacks critical information needed to assess its tank management strategy at Hanford.” Another GAO release isn’t going to make people feel much safer either, “NRC’s oversight of fire protection at U.S. commercial nuclear reactor units could be strengthened.” This GAO report doesn’t make a person feel all warm and fuzzy either: “Homeland Security – First responders’ ability to detect and model hazardous releases in urban areas is significantly limited.”

** “The GOP’s December Surprise? Is the GOP cooking the books to avoid recession till after election day?” [MJ]
“UBS clients may ‘come clean’ to IRS in U.S. tax evasion probe” [Bloomberg]
“UBS introduces new governance rules, board members depart” [MrktWtch]
“Florida sues Countrywide over mortgages” [Reuters]
“Mortgage insurers slump again, defaults stayed high in May” [MrktWtch]
“Chrysler shows $300 million loss through April, plant to close” [Bloomberg]
“Global profit warnings could be next shoe to drop” [Reuters]
“Expanding Medicaid a less costly way to cover more low income uninsured than expanding private insurance” [CBPP]

** Remember the Big Easy? “New HUD chief says New Orleans public housing is back on track” [NOLA] “HOPE worldwide mobilizes 1,300 students to help rebuild New Orleans on July 4^th” [Earth Times]

Weasel Wagon rolls into Las Vegas, McCain presents energy policy and secures another Deck Bass nomination

Leave it to “Jukebox John” McCain to ride the Weasel Wagon into Las Vegas, NV and present his “Lexington Project” energy proposals for the benefit of his audience.

Proposal One: “Fairness also requires that we reform the oil futures market. We must purge the market of the reckless speculation, unrelated to any kind of productive commerce, that has inflated the price of gasoline -- at the expense of working men and women across our country. With new regulations, I intend to assure integrity in oil-futures trading, and to protect the public interest.” [NYT]

What new regulations? Closing the Enron Loophole, so helpfully opened by McCain’s economic adviser Phil Gramm’s wife? This element of the plan is going to earn Senator McCain another Sunday Deck Bass nomination, because on May 18, 2008 the Baltimore Sun reported: “Sen. John McCain says he opposes the $307 billion farm bill because it would dole out wasteful subsidies, but his chief economic adviser Phil Gramm also wants to stop its proposed regulation of energy futures trading, a market that was famously abused when Enron Corp. manipulated California’s electricity prices in 2001.”

Proposal Two: “…if I am elected president, I will set this nation on a course to building 45 new reactors by the year 2030. And I will set the goal of 100 new plants to power the homes and factories and cities of America.” Senator McCain’s audience knows that the waste from these plants needs to “go somewhere,” so the candidate offers “Faith in Science: “…we will need to solve complex problems of moving and storing materials that will always need safeguarding. We will need to do all of these things, and do them right, as we have done great things before.”

Senator McCain gave Nevadans essentially the same assurances made by President George W. Bush some years ago, telling citizens of the Battle Born State that “science will determine how to proceed with the Yucca Mountain facility. Nevadans have some experience with statements of this ilk. The Gleaner has some appropriate commentary.

Proposal Three: “I will commit two billion dollars each year, until 2024, to clean-coal research, development, and deployment.” The candidate offers the standard Grocery Manufacturers’ Association blast at ethanol technologies: “Support for corn-based ethanol has been a case study in the law of unintended consequences, distorting food markets through cropland competition, depriving America of better and cheaper alternative fuels,” a position unencumbered by crop land production facts currently provided by the Department of Agriculture. [USDA]* The “crop land competition” at the moment is coming from increasing acreage devoted to wheat and soybeans, not because more acreage is being taken by corn for ethanol production. [USDA]

And, before we get too excited about that “clean coal” technology it might be well to step back and consider some facts: “The world standard for efficiency at a power plant using pulverised fuel technology, the most common technique, stands at 37.5%. Advanced pulverized fuel technology increases the average efficiency to just 41-44 percent with a forecast improvement to 50 percent in the next 100 years. Other clean coal combustion technologies are still in early stages of development and are unlikely to improve efficiency beyond 43%.” [GP]

Proposal Four: “In place of the current patchwork of incentives and credits for hybrids and other carbon-cutting vehicles, we will issue a Clean Car Challenge to the automakers of America, in the form of a single and substantial tax credit to buyers based on the reduction of carbon emissions.”

Excuse me, I must have been temporarily blinded by the Arizona Senator’s dazzling rhetoric about using NEW methods, techniques, and strategies to address the energy issues facing America – because what I’m seeing here is the same old Standard Republican Tax Credit Argument. We can add this to tax credits for health care, tax credits for child care, tax credits for business investments, tax credits for any and all ailments in the U.S. economy – which, of course, don’t address the needs of those who don’t otherwise have a need to itemize their expenses. Once again, it becomes abundantly clear that Republicans really don’t know how to talk to people who don’t prepare itemized tax returns.

Proposal Five: “Instead of playing favorites among the lobbyists, our government must also level the playing field for all alcohol fuels that break the monopoly of gasoline, to lower both gasoline prices and carbon emissions. This can be done with a simple federal standard to hasten the conversion of all new vehicles in America to flex-fuel technology -- allowing drivers to use alcohol fuels instead of gas in their cars.”

Go back to proposal number Three for just a second. Someone in the McCain campaign may wish to issue some alterations in the Lexington Plan, because the flex-fuel technology to which Senator McCain is referring, presumably including e85, is ethanol. There are several forms of ethanol. Methanol is “top fuel” class used by funny cars, and Indy cars until 2007. Indy cars now run on 100% ethanol. Gasohol is ethanol blended fuel and can be used in just about any car that uses gasoline. E85 is a 15% ethanol mixture most commonly associated with Flex Fuel. [e85]

Proposal Six: “Instead, cars can run on battery power alone, or as plug-in hybrids using both liquids and electricity. Some talented engineers are on the case, but this is a national priority and we must give it national focus. To add urgency to the mission, we’ll offer a prize: 300 million dollars – one dollar for every citizen -- to the creator of a battery package of a size, capacity, cost, and power far surpassing existing technology.”

Interesting, but when Boeing developed the B-17 during World War II it did so without being the recipient of any prize money, at one point the company wasn’t even sure it would get a contract; and, no prize was awarded to the NASA team working on Project Mercury. Bell Labs didn’t get any prize for the Complex Number Calculator designed by George Stibitz, which performed calculations remotely (Bell Lab to NYC) using a teletype connected by special phone lines in 1940 – the first demonstration of remote access computing. [CH] In each of these instances either private or public funds, or a combination of public and private investments were directed toward specific goals, and the payoff was certainly more than a monetary prize.

Proposal Seven: Cap and Trade – “Under the cap-and-trade system, this can happen. In all its power, the profit motive will suddenly begin to shift and point the other way toward cleaner fuels, wiser ways, and a healthier planet. As never before, the market would reward any person or company that seeks to invent, improve, or acquire alternatives to carbon-based energy.”

The Boston Globe fills in some of the gaps in the McCain presentation to the Las Vegas audience: “McCain would initially distribute all of the allowances free of charge to emitters, which the experts agree would likely mean a windfall to these polluters. McCain would have Congress punt to an unelected commission to make a decision - somewhere down the road - on when and in what amounts allowances might be auctioned.” (emphasis added) Not only is McCain’s proposal vague, but rather than control the polluters it rewards them with a “windfall” of credit allowances. By contrast the Obama Cap and Trade plan calls for all the allowances to be auctioned off from the very start of the program.

Senator McCain got one thing correctly: “This Project is not a plan calibrated to please every interest group or to meet every objection.” Yes, not only should it not please every interest group – it may not even please anyone who isn’t a major polluter, auto manufacturer, or coal corporation. The plan certainly won’t meet every objection, in fact, it doesn’t even meet a few basic ones. It would also be helpful if the proposals, such as numbers 3 and 5, didn’t contradict one another.

(Note: USDA statistics are inquiry based and clicking on the link may yield a “no report” message. To find the statistics go to the Crops and Plants quick statistics page. Click on “Field Crops.” Select the crop (corn), and click on search.)

McCain Surrogate Disses Main Street: Only Wall Street Can Reduce Gas Prices

Little would do more to prove the Grand Oil Party’s pandering delusions about energy policy than McCain adviser Douglas Holtz-Eakin’s commentary on Senator Barack Obama’s message to supporters in Las Vegas, NV yesterday. [LV Sun]

* Obama on McCain’s view that opening up more public land for oil production development would send a message that would ‘psychologically’ cause oil companies to lower their prices, and cause speculators to move their money elsewhere: “The American people don’t need psychological relief or meaningless gimmicks. They need real relief that will help them fill up their tanks and put food on their table.” [LV Sun]

* Holtz-Eakin rejoinder: “McCain’s campaign responded swiftly, with energy adviser Doug Holtz-Eakin saying the comments “revealed (Obama) doesn’t understand the fundamentals of a modern financial market and how it’s a usual way to convey information to participants in our economy.” [LV Sun] (emphasis added) And, “McCain's economic adviser, Douglas Holtz-Eakin, defended the concept of offshore drilling's "psychological impact." Futures markets, he said, would respond to the prospect of increased drilling capacity by lowering oil prices right away.” "If the United States makes a strong commitment to additional exploration ... that sends a strong signal to the traders in the market that future supplies will be greater," he said.” [LVRJ]

First, Holtz-Eakin probably didn’t mean to convey the message quite so bluntly that the prime cause of high gasoline prices is a function of the Wall Street herd mentality. All this might serve to accomplish is re-enforcing the notion that speculation is a prime factor in the current increases in gasoline prices. His candidate’s unwillingness to support closing the Enron Loophole and regulating the CFTC seem in conflict with the underlying premise of the “psychological” solution.

Secondly, Holz-Eakin’s focus is interesting; instead of defending the efficacy of his candidate’s energy policy his comments are wholly attentive to Wall Street. Holtz-Eakin is responding as if Wall Street, and only Wall Street, is central to the overall solution. If this is indeed McCain’s focus, then Holz-Eakin’s statement further establishes McCain as the Wall Street (not the Main Street) candidate. Historically, this has not been an alignment with much appeal to independent voters.

Third, notice how Holz-Eakin defines “participants in our economy,” as if sending a “psychological message” to the members of the Wall Street herd is sufficient in itself to significantly reduce gasoline prices. McCain’s surrogate appears to be dismissing anyone not connected to “the Street” from membership as ‘participants’ – no construction workers, no plant employees, no small business owners, no ranchers, farmers – only The Street “really” participates in the prime forces of our economic life. The arrogance would be appalling if the focus were not so patently egocentric.

Fourth, the validity of Holz-Eakin’s premise relies on the action of the Herd, “IF there is the ‘prospect’ of more production then prices will drop.” The notion was tested last week when the Saudis announced another 200,000 bbl production and the commodities markets barely moved. Futures traders don’t make money by being stupid – the numbers still apply – if the U.S. has 3% of the reserves and uses 25% of the world’s production there will still be shortages in some markets – why then, would prices drop if production prospects were so limited?

And, why would oil companies fully develop all their possible production capacity when prices are high? Last time I looked, scarcity was the mother of price increases and profitability. A more likely prospect was suggested in Kirk Caraway’s column, that the oil giants may simply avail themselves of the opportunity to place more lands under lease and wait for the price drop signaling the need to increase actual production.

It remains to be seen if Senator John Sidney McCain III, as the candidate of the Grand Oil Party, can offer more than “green a few government buildings,” “offer a big prize for a battery,” and “drill more holes in more places,” in his energy proposals. If not, then all those other participants in our nation’s economy may find Senator Obama’s proposals for long term solutions more appealing.

Coffee and the Papers

Whatever would we do without Senator John Ensign’s (R-NV) aphotic non sequiturs and jabberwocky pronouncements? “Energy is actually a huge opportunity for Republicans," said Sen. John Ensign, R-Nev., who chairs the Senate Republicans' re-election campaign. "Energy has the opportunity to change the climate if it's done right." [SFC] Huh?

The Las Vegas Sun continues its series on Las Vegas and the Water Wars: “Not this water: in a bid to save his family’s livelihood after Las Vegas laid the groundwork for a water pipeline that could reduce his land to dust, a White Pine County rancher joins forces with Utah.

NV Governor Jim Gibbons ‘buddy’ Warren Trepp now finds himself at loggerheads with a billionaire businesswoman – charges and countercharges continue to fly! [RGJ]* Which may have the wrong identifications for its photos.

More squawking chickenhawks – William Kristol wants a war with Iran [TP] John Bolton wants a war with Iran [TP] ElBaradei says an attack “would transform the Middle East region in to a ball of fire.” [SMH] Admiral Michael Mullen doesn’t seem to think an attack is such a good idea either, and suggests diplomatic engagement. [TP]

The Splurge: “Iraq’s provincial elections could be delayed – MPs” [TPM-Reuters] “Reporters say networks put wars on back burner” [HuffPo-NYT]
“U.S. network falters in Mid East mission” [WaPo] “Alhurra: Part One” [ProP]
“From Afghanistan, NATO shells militants in Pakistan” [NYT]
“Afghanistan grows more dangerous for foreigners” [SFC]

Bush-Cheney-McCain version of supporting the troops: When the Bush Administration decided to cut back on Medicare payments, did anyone stop to think that payments for military related TRICARE services, which are tied to the Medicare regulations, might be cut back as well? [McClatchy]
“VA Secretary: Care of women vets will improve” [Army Times]
“Some spec ops skills being lost, official says,” [Army Times]

“After lawsuit, Medicare to ease drug benefit enrollment for poor” [The Hill]
“Agency sees theft risk for ID card in Medicare” [NYT]

Uncivil liberties and Urban Legends: “New report demolishes “Gitmo 30” talking point used by Scalia and McCain” [Perrs] Full report here in PDF format.
“Panel tees off on Justice grant official’s golf outings” [GovExec]
“DoJ grantees getting by with help from their friends” [ProP]

“McCain under Democratic fire for Air Force fiasco” [