Redesign the Paradigm

Economists are warning of another U.S. recession and the Federal Reserve (FED) has stated the U.S. economy is “close to faltering” without additional support. Additional support really means expanding the money supply with another round of Quantitative Easing (QE) or in simpler terms –  printing more money.  This next next recession may be more problematic due to the other economic troubles that are going to accompany it. These toubles include:

1.  The U.S. government is getting itself deep into debt and there is no political will to reign it in. The current debt level is over $15 T  and has surpassed the country’s $14.9 T  Gross Domestic Product (GDP). What is more distressing is the total unfunded liabilities (the real debt) which stands at over $54 T. This lack of fiscal responsibility is causing foreign investors to no longer consider U.S. Treasury Bills the safe investments they used to be. If foreign investors stop purchasing U.S. treasuries (this has already started to happen) the Fed will be forced to print more dollars to cover future deficit spending. Interest rates on Treasuries will also go up since they will have to pay higher yields to attract investors. As Treasury rates raise so do mortgage rates and other interest rates consumers use to purchase goods. This slows GDP growth.

The federal debt is not the only concern. State and municipal (local) government debt is currently $2.9 T and rising. These governments cannot print money to cover their deficits like the federal government does. This means that severe cuts will be needed to balance their budgets and maintain their credit ratings. This usually results in budget cuts in healthcare for the poor, elderly care, and in education. Even with cuts many states and local governments are already on the verge of bankruptcy and close to defaulting on their debts. Budget cuts alone may not be enough to keep state and local government’s solvent forcing them to issue more municipal bonds.  The problem here is the same as with Treasuries. Large investors (mutual funds, insurance companies, wealthy individuals) no longer view municipal bonds as the tax free safe haven they once were and are shifting their holdings out of municipal bonds. This will require local and state governments to also raise interest rates on new bond issues to attract investors.

Growing federal debt represents another problem. The U.S. dollar is the world’s currency of choice for international trade. This provides the U.S. with a purchasing power advantage. To much debt combined with printing to many dollars has laready started country’s discussing the possibility of a different currency or basket of currencies as the currency of choice for world trade. If this were to happen the cost of foreign goods would increase dramatically.

The bottom line – interest rates which have been kept artificially low by the FED in attempts to stimulate the economy are going to rise soon. This makes purchasing goods with credit more expensive which decreases the U.S. consumers purchasing power,  this in turn slows down economic growth.

The next problem is rising inflation. The consumer price Index (CPI-U), which is a measure of inflation, has risen to 3.8% in the past year. This CPI has been criticized as being misleading and not representative of real inflation. When the CPI is calculated, as was done in 1990, inflation is at 5.5%. If calculated according to 1980 methods it rises to over 10%. What is important here is the rising trend in American’s staples: food (groceries) 6%, gasoline 32%, heating oil 35%, electricity 2%, medical coverage 3%, clothing 4%, and housing 2%. Consider your expenses over the past two years. The real rate of inflation is rising and this means higher prices for goods and services.

Rising prices are not the only pinch on consumer pocketbooks. Wages have been stagnant since 2000. In fact median wage stagnation has become a way of life for most Americans. Wage stagnation is attributed to a decline of organized labor unions, erosion of minimum wage, globalization which encourages companies to take advantage of cheap overseas labor, and a trend away from manufacturing towards lower paying service jobs. Low income jobs now account for over 40% of all jobs. In addition, American’s no longer have access to easy credit and can’t borrow against their homes equity.

The bottom line – inflation is raising and goods and services are becoming more expensive while consumer wages remain stagnant. The result is that consumers will purchase less goods and services and will slow GDP even further.

Another critical component is unemployment which has remained above 9% for over a year. This figure is another government reported statistic regarded by many as inaccurate. It doesn’t include workers who’s unemployment benefits have expired but are still out of work, worker’s who are forced to accept part time work or short term contracts both without benefits and at a fraction of their usual salaries, self employed workers whose incomes have drastically decreased, or worker’s who could not get a job and have gone back to school incurring debt.  When all factors are considered the true unemployment rate is probably closer to 16%+/-. Fewer Americans working means fewer Americans are able to purchase the same quantities of goods and services and this is slowing down GDP growth.

High unemployment also increases federal and state government spending which drives up the debt. Unemployment benefits exceeded $160 B with the brunt of it bared by the States. This has required many States unable to meet these payouts to borrow from the federal government. Today one in every six Americans relies on Medicaid. 44 million Americans are on food stamps and this includes one out of every four American children.

The bottom line – As the economy slows unemployment will continue to remain high and many companies will expect their workers to provide the same levels of productivity only with less people or fear loosing their jobs.

The next recession may not only impact the U.S. It may be a global recession. The European economies are on the brink of a debt crisis much worse than here in the U.S. Even private sector business activity in Europe has been falling. European countries in the past have successfully been able to rely on austerity measures which involve raising taxes while decreasing government spending, but with such deep debt levels and a number of country’s about to default on those debts even austerity measures are having little success. The U.S. Treasury recently issued a warning that the European crisis represents a significant risk to U.S. recovery due to the close integration between the U.S. and E.U. and that a severe crisis in Europe would further undermine U.S. consumer confidence and weaken demand. This would in turn slow down GDP and economic growth. There is also growing concern that a European debt crisis may lead to another global recession or worse a financial collapse similar to that experienced in 2008. Even manufacturing powerhouse China has seen three straight quarters of declining orders.

Europe’s austerity measures may be a precursor to what the U.S. may be forced to go through to meet international debtor expectations. Europeans are feeling the pressures of raising payroll taxes, increased retirement age pension cuts, broad cuts in social programs, and privatization of public services followed by higher prices for those services. These measures have driven thousands to the streets in protests.

In so much as a downturn in European economy can effect U.S. growth, a decline in the U.S. economy can also have a great impact on global markets. Consider that 70% of U.S. GDP is consumer spending and that the U.S. is responsible for more than 22% of global activity. Therefore 15% of global activity is directly tied to U.S. consumer purchases. The U.S. consumer’s purchasing capacity is decreasing and will likely continue to do so. This situation is pulling the world economic system down and is evidence of how interconnected the world is.

So what can be done to revitalize GDP growth or stifle a recession? The FED is urging Congress not to go the European route of austerity, at least not yet. The FED Chairman has come out requesting that lawmakers not cut spending too hastily in the short term despite public outcry to reign in the debt and international debtors seeking alternatives to both U.S. treasuries and the dollar. Instead they appear to want another round of Quantitative Easing.

If QE3 is enacted it will provide banks and financial institutions money in exchange for Treasury Bills, long term bonds, or perhaps it will be municipal bonds this time. The banks can then use that money to bolster reserves and lend or invest up to ten times that amount. This is the only trick the FED has left to try to jump start the economy. The FED’s main method of revitalizing the economy has been to lower interest rates, but it has already kept interest rates at near zero for years and while its been very lucrative for banks it has not resulted in economic growth for the country.

The problem is that QE1 (the bank bailouts) and QE2 (U.S. Treasury purchases) didn’t really work. In QE1he banks dumped their mortgage backed securities on the FED and didn’t invest the money back into main street America as promised. QE2 resulted in a great deal for Wall Street once again. Large banks and financial institutions used the cash infusions to replenish reserves and increase investing. However, those investments did not find their way into small and medium sized business which represent 85% of jobs. Instead banks invested in more profitable derivatives which contribute nothing to tangible growth and lent to large multi-national corporations with global exposure in the emerging markets of Asia. Those companies were deemed better credit risks despite the fact investment dollars and jobs were going overseas. One thing QE2 did manage to do besides improving Wall Street profitability was to drastically lower real Gross Domestic Product (GDP).

But are these the best solutions for the country or the best solutions for Wall Street? Dropping interest rates to essentially nothing and QE1 and QE2 did little to revitalize economic growth but it did provide massive profits for Wall Street. Austerity
measures in Europe on the other hand are also having little effect and many proponents think it will do more harm than good with the final result being those countries on the brink of default will do so and require bailouts. Another option is debt forgiveness but no one seems to be mentioning this idea.

The U.S. may not be in a recoverable position and it wasn’t main street America who put us in this position it started with Wall Street and the Banks with their relentless drive for profits at any cost, even if it meant long-term economic collapse. This is not what capitalism is suppose to be about.

It appears the FED will take care of large banks and financial institutions which in turn will look out for large Multi National Corporations and wealthy investors. Main Street is going to have to stand up and find their voice.

Oil companies have amassed massive profits over the past decade. BP is the largest oil and gas producer in the United States with over 22,000 oil and gas wells many on federal land) across the United States. It has enjoyed considerable profits along with the other major oil companies over the past five years. BP profits for the first quarter of 2010 alone were $5.59 billion dollars. Since 2005 profits have totaled approximately $105 Billion according to their own annual reports.

In the past three years BP has managed to receive 97% percent of all flagrant violations issued by the Occupational Safety and Health Administration (OSHA). BP accumulated 862 citations (760 classified as egregiously willful) for violations at two of its five U.S. refineries. It is also still under scrutiny by the federal worker – safety monitor for the 2005 explosion at the Texas City refinery that killed 15 workers after failing to correct problems that were pointed out by OSHA inspections.  Last year BP was fined $87 million for violations at the same Texas City refinery and another $3 million for violations at the Toledo Ohio refinery. BP is in the process of contesting the penalties.

It appears clear that BP has displayed a blatant disregard for regulations involving safety, maintenance, and operational procedures and this disregard extended to the rig Deepwater Horizon. Senior managers from BP were overheard “taking shortcuts” that involved substituting salt water for heavy drilling fluid in the well that blew out and resulted in the oil spill currently ravaging the Gulf of Mexico and 11 deaths. BP’s attitude of non-compliance towards regulation seems motivated by profit maximization and the company has not appeared overly concerned with consequences.

This may be due to the “cozy relationship” BP has with the Mineral Management Service who is responsible for safety and environmental regulation. The Obama administration has vowed that this relationship will cease. Another possible reason for non-compliance could be the tens of millions of dollars on lobbying ($16 million spent last year alone) over the past 5 years, much of which was concentrated against regulation. It also donated more than $500,000 in campaign contributions for federal elections. Another factor could be a result of oil industry lobbying influence from the past which resulted in a government reserve fund called the Oil Spill Liability Trust Fund. There is approximately $2 billion in this fund to cover a disaster like the one occurring in the Gulf. The reserve fund also ensures that operators of offshore rigs will be held liable for only $75 million in damages claimed by individuals, companies, States, or the federal government. They can still be held liable for clean up costs.

Regardless of the reasons for non-regulatory compliance, it appears BP will once again rely on lobbying to influence key legislators to reduce long term penalties and to fight violations and lawsuits in court much like Exxon did with the Exxon Valdez spill. They are confident this practice will result in the greatest cost savings and retention of future profits. Once again the U.S. taxpayer will be left picking up the tab, this time for unspecified clean up costs, loss of States revenue from tourism, and the economic damage done to numerous industries that rely on the Gulf. Not to mention the potentially irreversible environmental damage done to coastlines that may even include Atlantic seaboard states. This cannot be allowed to happen!

BP has demonstrated a willingness to take the measures necessary to cap the flow and take the lead in the clean up. Twenty-two thousand people and a small armada of ships are currently working on the spill. But in reality, they have not brought near enough resources to bear quickly enough to stem the flow or to clean up the oil. A small fleet of supertankers used successfully in the Persian Gulf spill, each capable of sucking up to one million gallons of oil / water a day has not been implemented to date. Additional fast moving Coast guard, military, and civilian vessels could have been utilized to skim and remove surface oil. Assistance from Exxon, Shell, Chevron, ConocoPhillips and other industry experts were not sought out quickly enough nor were suggestions acted upon. Many including the U.S. government incorrectly assumed that BP was the expert in such matters and had the best chance of correcting the damaged well.

BP is still cutting corners even in the face of this disaster choosing to use almost 800,000 gallons of the cheaper less effective and much toxic chemical dispersant Corexit to break the oil up even after the EPA asked it to cease. Corexit is produced by Nalco and BP enjoys a tight relationship with Nalco sharing board of director members .The Obama administration has also been accused of being at fault and not pressuring BP enough to ensure appropriate action was implemented rapidly enough.

Hopefully the Top Kill or Junk shot procedures will be effective in the next few days and a relief well will be drilled into the original borehole and drilling mud pumped in to permanently stop the oil flow. But even if these measures are implemented quickly there is no guarantee of complete success. Note – Top Kill was not successful.  All these practice were used on the Ixtox 1 back in 1979 in water 160 ft deep (Deepwater Horizon is at 5000 ft),  they were all unsuccessfull. That well was not sealed for 9 months until the releif wells were completed.

BP needs to be incentivized to ensure that it will take all actions necessary to ensure that not only the well is sealed, but that clean up is rapid and thorough, the coastlines have been restored to the fullest extent possible, and that the livelihoods of those affected by the Gulf spill are re-established or they are compensated accordingly. BP must not be allowed to lobby and litigate there way out of accountability.

The Obama administration should demand that BP have the well fully sealed by relief wells within 90 days, the bulk of surface oil be removed from the Gulf within 180 days and if necessary from Florida and the East Coast, and that the oil be cleaned from the affected coast lines and marshlands within 180 days. Note – these timelines are arbitrary and should be determined by the EPA, independent environmental, and industry experts. Failure to meet these conditions will result in:

• Suspension of all U.S. contracts and barring of future contracts – this will cease BP’s access drilling operation on all federal lands both onshore and offshore.
• Seizure of BP’s holdings on U.S. federal lands. Negotiate settlement requiring all profits derived from oil and gas obtained on U.S. federal lands be allocated clean up measures and restitution to affected parties. If BP attempts to use litigation to delay negotiations, turn over operations to U.S. base competitors and split the profits with federal/state governments until adequate cleanup measures and restitutions are made.
• Federal government will spearhead lawsuits and provide litigation support for individuals and companies affected by the Gulf disaster . Litigation will be directed at BP both domestically and abroad where applicable.
• Put a moratorium on BP’s lobby access and campaign contributions that would result in favorable legislation regarding the Gulf oil spill. This will include barring BP from hiring any third party (ie. the Chamber of Commerce) to lobby for them for the next five years or until the matter is rfully esolved in the U.S.

An investigation needs to be conducted to determine if BP was criminally liable, and to what extent TransUnion or Halliburton were at fault. If this appears harsh, it is meant to be. The long term effects of this disaster are immeasurable. It will affect people’s lives for years and the U.S. taxpayer should not be left paying the long term expenses.

My intention is not to put BP out of business, simply to stimulate the company to respond to its full potential, and not allow it to remain focused on maximizing its profits. It has lost that option concerning this situation. BPs profits over the past year should be more than suitable to cover all the expenses associated with this disaster. This will also send a strong message to the other oil and gas companies that strict adherence to the safety and maintenance protocols is serious, mandatory and can prove extremely costly.

This incident is just another in a long string of reasons as to why it is time to shift the focus away from fossil fuels and towards renewable energy sources such as cellulosic ethanol, biodiesel derived from jatropha, halophytes, and bioalgae, wind energy, solar thermal and geothermal. 

http://www.bp.com/extendedsectiongenericarticle.do?categoryId=9021605&contentId=7040949

http://www.osha.gov/dep/bp/bp.html

http://www.grist.org/article/2010-05-17-bp-has-numerous-safety-violations-at-refineries-study-finds/

http://www.opensecrets.org/lobby/clientsum.php?year=2009&lname=BP&id=

http://www.propublica.org/feature/epa-officials-weighing-sanctions-against-bps-us-operations

http://www.politifact.com/truth-o-meter/statements/2010/may/02/lamar-mckay/bp-letter-mms-urges-reduced-regulation/

http://en.wikipedia.org/wiki/Deepwater_Horizon_oil_spill

Is lobbying a beneficial component of government decision making, or an avenue for corporations and special interest groups to guarantee that legislation will favor their goals, often at the expense of the public at large?

The purpose of lobbying is to influence legislators and government officials who are responsible for regulation on behalf of a special interest group. Lobbying is protected by the right to petition found in the first amendment of the constitution. The right to petition guarantees citizens the right to request or appeal to our government for or against policies that will affect them or they may have strong opinions or beliefs about. It also guarantees that these actions will be free from punishment or reprisal. But what percentage of actual lobbying goes towards defending a citizen or a groups right to petition versus influencing legislators in order to acquire government contracts, remove regulation, lower corporate taxes, limit competition, etc. in order to create an environment conducive to greater profits?

A lobbyist is defined as anyone who “directly or indirectly, solicits, collects, or receives money or any other thing of value to be used principally . . . to influence, directly or indirectly, the passage or defeat of any legislation by the Congress of the United States”. The intended rationale of lobbyists today involves not simply influencing legislators but explaining the goals of the special interest and assisting to overcome potential obstacles legislators may face meeting those goals. Lobbying occurs at the city, state and federal level.

Organized lobbying in the U.S. is almost as old as the country is. William Hull in 1792 represented Virginia veterans in attempts to acquire additional compensation for their services in the War of Independence. Early lobbying practices were free from any form of regulation and utilized far less legitimate techniques than found today. Early lobbyists quickly attained a reputation by both press and public as disreputable, corrupt and a subversive influence on democracy. All attempts to regulate lobbying over the past 200 years have been met with only limited success. Obviously, lobbyists lobby best on their own behalf.

The total number of registered lobbyists at the federal level for 2009 was 13,700 and at the state and local levels 38,800 representing some 53,400 clients. There are of course more lobbyists who have chosen not to register or have deregistered over the past few years but are still engaged in lobbying activities. This is easily done by adopting a title other than lobbyist such as senior advisor then claiming that no more than 20 percent of a persons time is spent lobbying, this is relatively simple since federal laws do not require that lobbyists document the activities they claim they are doing. Actual numbers of fulltime lobbyists are probably closer to 70,000 and this doesn’t include large public relations and marketing firms engaged in numerous activities that clearly fall under the definition of lobbying.

Lobbyists and their clients spent more than $3.47 billion last year up from $2.85 billion in 2007 attempting to influence legislators. How much of that amount went solely towards lobbying dedicated to increasing corporate profits? The numbers break down for the three major sectors and sub sectors as follows:

Miscellaneous Business Sector

Total Miscellaneous Business expenditures from 1998 to 2010 was $4,050,396,479

Miscellaneous business expenditures increased $145,000,000 or 35 percent from 2007 to 2009

        Sub Sectors

• Business Associations sector – Massive 173% increase in lobbying from the Chamber of Commerce which claims to represent approximately 3 million businesses and organizations but has been criticized for being primarily a republican lobbying machine focused on removing climate change legislation and healthcare reform and disproportionately lobbying for oil companies, pharmaceutical giants, and automakers.
• Manufacturing & Distributing sector – 25% increase in the past three years as fortune 500 companies ramped up lobbying. The top spenders in 2009 were:
  • GE increased expenditures to almost $24 million for a variety of lobbying to get government contracts and subsidies one of the largest was for wind turbines and clean coal research.
  • Honeywell spent $7 million more for aero space defense contracts, aircraft safety & technologies, and energy conservation / biofuels).  
  • Procter & Gamble paid $4.5 million to lobby for positive tax and foreign trade legislation in addition to having input on food and drug safety for its products.
  • Food & Beverage sector was led by the American Beverage Assn who is the major lobbying representative for the beverage industry ($18,850,000) and companies like Coca-Cola Co. ($9,390,000) and PepsiCo Inc. ($9,159,500), all totaled spent more than $40,000,000, a 400% growth over prior year, to successfully defeat the National Soda Tax of 1 penny per ounce designed to pay for obesity related health care costs.

Health Sector

Total Health sector expenditures from 1998 to 2010 was $3,980,184,031

Health expenditures increased $97,579,000 or 22% from 2007 to 2009

Sub Sectors

• Pharmaceuticals/Health Production sector – 18% increase since 2007 as the determined pharmaceutical and health services industry increased lobbying to fight against the democrat lead health care bill. The big spenders in 2009 were:
  • Pharmaceutical Research & Mfrs of America (PhRMA), is an exceptionally powerful and influential lobbying organization that represents 48 of the largest pharmaceutical companies. In 2009 alone it spent $26 million defending pharmaceutical intellectual property rights, fighting against price controls, creating favorable regulation, and a broad attack against healthcare reform. PhRMA also uses numerous other organizations to advocate on its behalf. 
  • Pharmaceutical / Health Product companies – Lobbying amongst all pharmaceutical companies was concentrated on overturning healthcare reform. Other lobbying interests included those lobbied for by PhRMA as well as specific industry related tax breaks. Largest individual lobbying expenditures included:
    • C Pfizer Inc spent $24,619,268 in 2009 as compared to $12,180,000 in 2008
    • Amgen Inc $12,440,000 in 2009 as compared to $10,800,000 in 2008
    • Eli Lilly  $11,215,000 spent less than 2008 amount of $12,485,000
    • The next 10 largest pharmaceutical companies all spent between $5,000,000 and $9,000,000.        
  • Health Services/HMOs sector – increased spending almost $23,000,000 a 45% increase over 2008. This sector represents large health care insurance companies like United Health Group ($4,770,000), Blue Cross / Blue Shield ($4,700,000), and Humana ($3,180,000). It also represents companies that provide health care related services such as DaVita Inc. ($2,870,000) and Medco Health Solutions ($3,977,000). This sectors principle lobbying interests involved defeating healthcare reform and ensuring Medicare and Medicaid payments / overpayments continue unimpeded.

Finance, Insurance, and Real Estate Sector

Total Finance, Insurance, & Real Estate expenditures from 1998 to 2010 was $4,050,396,479

Finance, Insurance expenditures increased $45,639,000 or 18% from 2007 to 2009

Sub Sectors

• Insurance sector – 18% increase since 2007. The principle increase in the insurance industry was from healthcare related insurance companies or healthcare divisions within insurance companies to once again overturn the new health care bill. The big spenders in 2009 were:
  • Blue Cross/Blue Shield spent $14,805,439 in 2009, as compared to $11,770,165 in 2008 and included measures to use the issue of state’s rights to render the proposed health care reform and its regulation of insurance unconstitutional
  • America’s Health Insurance Plans spent $8,850,000 in 2009, as compared to $7,540,000 in 2008 and included efforts to create the Campaign for an American Solution. This was an attempt to generate grassroots support for a suitable healthcare reform based on existing practices that would incorporate coverage, quality, affordability, choice, and core portability.
  • American Council of Life Insurers (ACLI) spent $7,530,583 in 2009, up from $6,375,032 in 2008 representing 300 insurance companies which accounts for over 90% of all U.S. life insurance companies focusing on privacy regulations, tax issues, and pension reform.
  • The next 10 largest insurance companies all spent between $4,000,000 and $7,000,000 and included life insurance, automobile insurers, and health insurance companies. Many insurance companies lobbied for legislative support to enforce and expand the Financial Services Act of 1999 which enables insurance companies to provide financial services.
  • Finance / Visa Credit Companies increased spending 26% since 2007. This sector represents large credit companies like Visa Inc ($6,010,000), American Express ($3,260,000), MasterCard Inc ($3,100,000) all of which spent heavy on legislation to curtail credit card restrictions, overdraft fees, consumer financial protection, and data security issues. It also represents companies like Sallie Mae (SLM)( $480,000) who increased lobbying drastically to fight against legislation designed to cut SLM and other private lenders out of student loan programs, and GMAC LLC ($5,320,000)  which lobbied for new consumer protections, assistance for struggling mortgage holders, foreclosure prevention, and against proposed regulation on the derivatives markets.

Energy and Natuaral Resources Sector

Total Energy & Natural Resources expenditures from 1998 to 2010 was $2,902,630,507

Energy & Natural Resources expenditures increased $156,606,000 or 50% from 2007 to 2009

   Sub Sectors

• Oil & Gas sector – The unprecedented 100% increase since 2007 in lobbying from the major oil & gas companies was due to the growing impression that fossil fuel dominance may be beginning its decline. Lobbying from all companies concentrated on battling the proposed cap and trade policy, debunking climate change, ensuring that the oil & gas industries remain influential over energy policies,  maintaining decades-old tax incentives and subsidies, and in successfully convincing the Obama administration to grant access to offshore and domestic drilling.
  • Exxon Mobil – Spent $27,430,000 which was down from 2008’s $29,000,000 but a substantial increase over $16,940,000 in 2007. Exxon Mobil also funded climate change denial groups to promote their climate views via publications and Web sites which were not reviewed or verified by the scientific community. In addition, strongly lobbied for free market advocacy.
  • Chevron Corp – Spent $20,815,000 up from $12,844,000 in 2008.  Chevron devoted extra attention shaping an effective U.S. energy policy representing oil industry interests. It also lobbied hard to establish political barriers to renewable energy companies and clean energy.
  • ConocoPhillips – Spent $18,069,858 up from $8,459,053 in 2008. Lobbying also focused on the federal government where ConocoPhillips was seeking additional time to pay for millions of dollars worth of fines for pollution related cleanup expenses associated with its refineries and favorable legislation for Alaskan oil drilling.
  • BP – Spent $15,990,000 up from $10,450,000 in 2008. BP has lobbied successfully over the past few years to win insider access and many believe has received lenient treatment on a number of violations. It also spent heavily to rebrand its image more towards an overall energy company embracing clean energy in addition to fossil fuels.
  • The remaining top ten companies spent between $12,000,000 and $2,000,000 and included Koch Industries ($12,300,000) which operates oil gathering systems and pipelines and American Petroleum Institute (API) ($7,320,000) which is the industries main trade association representing over 400 companies.
  • Electrical Utilities sector – 28% increase in expenditures over the past three years. This sector consists of the largest utilities companies across The U.S. such as Southern Co ($13,450,000),  American Electric Power ($7,297,245), and  IPG&E Corp ($6,280,000). All of the power utility companies lobbied to influence congress on new climate change legislation before and after it passed in the house. The new federal energy bill would require a reduction of greenhouse gas emissions, mainly carbon dioxide, that has been credited with climate change, this is significant since up to 80% of portfolio’s are concentrated in fossil fuels. Edison Electric Institute (EEI) ($10,500,000), the countries largest electric power company association led lobbying opposition against one of the new federal energy bill provision’s that would require utility companies to produce at least 15% of electricity from renewable sources.

Summing up these findings and looking at each of the top four sectors it becomes apparent that the vast amount of lobbying dollars spent is to improve the bottom line of a lot of corporations. The issue at heart is not that they are simply trying to influence favorable legislation from the U.S. government it is that the corporations then end up controlling a disproportionate amount of the federal budget, which ultimately means our U.S. taxpayer dollars.  There seems to be an unspoken calculation that if a certain amount is invested on lobbying and campaign contributions by corporations it can be expected they will receive both favorable legislation and a certain amount of money allocated through the federal budget (through government contracts, subsidies, tax breaks, etc). This just further exaggerates the imbalance of favorable legislation and access to federal dollars between those with millions of dollars available for lobbying and those who cannot afford it. As a taxpayer I am concerned how this benefits the US and the long term interests of its citizens.

Analysis of the each sector further demonstrates how  lobbying  favors well funded special interests. The Chamber of Commerce is the largest lobbying spender. It is supposed to represent businesses of all types and sizes. In reality, the vast majority of lobbying expenditures were focused on protecting fossil fuel and pharmaceutical interests and bailing out the automotive industry. Small and medium size companies the backbone of U.S. job growth were disproportionately represented. It could be argued saving the automobile industry would save jobs but lobbying for the fossil fuel and pharmaceutical industries was designed to protect profits.

The manufacturing sector concentrated on lobbying for tax breaks and subsidies and to acquire government contracts whether they were the best candidate or not. In some cases they lobbied to create contracts that may or may not be needed or directly benefitting the taxpayers.

In the health sector, large pharmaceutical interests revolve solely around defeating health care reform and limiting any price control measures that may be implemented. While this may benefit corporate profitability but we are the only country that pays the high prices for pharmaceutical drugs. All the while the taxpayer will be paying more money into Medicare and Medicaid to help pay for the high costs of health care and pharmaceutical drugs. Health service companies and HMOs successfully lobbied to defeat health care reform in order to protect their profits from government sponsored health care insurance or a non-profit healthcare system similar to countries in Europe.

The financial sector lobbied to limit regulation on lucrative financial arrangements and financialization. This is certainly not beneficial to taxpayers since it led to the financial collapse in early 2008. However, tens of millions of dollars has successfully stalled any significant regulation against financial instruments. The insurance companies may very well be an example of not meeting the before mentioned unspoken calculation, they did not spend or influence to the same levels as the pharmaceutical companies did and while they were able to defeat the government sponsored health care insurance system, they were not successful in completely defeating the pre-existing condition exemptions.

Finally, in the energy sector, the oil and gas companies lobbied strongly to discredit climate change, defeat cap and trade and reduce proposed climate change regulation. The fossil fuel industries were protected from legislation that was designed to limit pollutants and CO2 emissions while removing the requirement that 15% of energy use had to come from renewable sources. This has resulted in an energy policy still overwhelmingly influenced by the fossil fuels industries at a time when we need to be weaning the country off of oil and gas and into renewable energy sources.

Almost all of the top 15 sectors (see data below) with the exception of labor, ideological, civil service, non-profits, and education (the bulk of this subsector isn’t for education but for subsidies for universities) were lobbying to create an environment conducive to increase profitability and could be argued that the overwhelming amount of dollars spent supports profitability while not contributing much towards the well being of the country.

While lobbying is in compliance with the right for citizens and special interests to redress government legislation it is being exploited by corporations and those with enough financial backing.  Lobbying as it has evolved unequally provides favorable legislation and other perks at the expense of the citizens/taxpayers as a whole.  In addition, it is ensuring profitability in sectors that cause environmental damage, resulted in unnecessary and over spending, and even financial collapse of the country. This is the time that government spending and perks need to be reigned in to help rebalance the federal and state budgets. Tax dollars need to be allocated towards systems that actually benefit the public good and the long term viability for our country.

The problem that lobbying demonstrates is not that companies are not only lobbying to ensure their profits, they are lobbying to ensure profits in arenas that are hurting the US citizens and taxpayers. Lobbying for practices within industries that cause environmental problems, collapse of our country, lock us into long term fossil fuel use as opposed to clean energy, and intend to maintain the same type of healthcare system that will soon price itself out of the range of affordability are not in the best interests of humanity.

Other items of interest:

Over the last 10 years, 198 members of congress or 43 percent of legislators have left public office to become registered lobbyists. Similar percentages are applicable at the state level, fewer at local levels.

Lobbying fees have risen from $10,000 to $15,000 a month a decade ago to $20,000 to $25,000 a month or more now.  Republican lobbyist firms can charge even more.

Lobbying activity has increased despite the economic downturn demonstrating that lobbying is truly recession proof.

http://www.lobbyists.info/

http://www.washingtonpost.com/wp-dyn/content/article/2005/06/21/AR2005062101632.html

http://www.followthemoney.org/database/graphs/lobbyistlink/lobbymap.phtml?p=1&y=2009&l=1

 http://www.opensecrets.org/news/2010/02/federal-lobbying-soars-in-2009.html

 http://www.wilsoncenter.org/index.cfm?event_id=4244&fuseaction=events.event_summary

 http://www.sourcewatch.org/index.php?title=Southern_Company

Water is essential for human survival.  It is considered a renewable resource but its limits are determined by the water cycles within a geographic location. Water availability is directly affected by population growth.  There are approx. 83 million people added to the earth each year. Many of these people are born into impoverished and population dense areas, which in turn, escalates the burden on that regions surrounding water supplies. There already exist many regions in the world where population levels have surpassed what can be sustained by the local water resources. Numerous geographical regions also have high population growth rates and barring natural disaster or famine these rates are expected to escalate.

Geo-political tension is developing between nations over fresh water supplies especially from rivers. Disputes over who has water rights are becoming more prevalent as countries upriver are using increasing amounts of water for their farming or hydroelectric power generation leaving less water for those countries downriver.  Even in regions or countries once considered abundant with water, problems exist due to declining water tables. This is occurring because increasing population centers are draining aquifers and ground water faster than precipitation or underground rivers can replace it. Fossilized aquifers are not  replenishable, once depleted that source is gone for good. Projected demand for water has already exceeded available supplies in many regions. Those countries most affected by water shortages (developed and undeveloped) are falling behind in their attempts to seriously address this problem.

There are other issues affecting water shortages. Water is being drained out of aquatic environments (i.e. the Everglades) at an increasing rate which affects not only ecosystems but the regions ability to replenish ground water supplies.  Pollution is contributing to reducing potable ground water rendering some underground sources unusable due to toxicity or increasing the filtration costs beyond economically viable levels. This is due predominantly to industrial dumping, farming, mining, landfills, etc. Developed countries have experienced some success in curtailing pollution due to regulation and new technology but the developing world with its large population growth and reduced economic resources is struggling.

Fresh water availability is what is critical to humanity as 97.5% of the earth’s water is salt water and 90% of the earth’s fresh water is frozen in Antarctica, Greenland and North Pole ice sheets. Most of the remaining fresh water is soil moisture, and very deep aquifers that would require considerable drilling costs. This leaves approximately 1% of fresh water available for human use and includes mountain glaciers, surface sources like lakes, rivers, and reservoirs, and underground shallow aquifer sources. This amount is also renewable through rain water and snowfall.

The U.S. is an example of a country that has done fairly well with fresh water conservation and increasing efficiencies in fresh water use. In 2005 the U.S. decreased fresh water consumption levels down to 349 billion gallons per day (bgal/day) or a 5% decrease over the past 25 years. Fresh water consumption of 268 bgal/day was pulled from surface sources and 79 bgal/day was removed from underground sources. Most of the rest of the world is experiencing increased demand for fresh water.  

Consumption levels for fresh water in the U.S. are as follows: 41% or 143 bgal/day of all fresh water went for thermoelectric power generation; almost that entire amount was from surface sources. Farming utilized 129 bgal/day or 37 percent of freshwater. This amount has decreased 5% over the past decade due to sprinkler system and micro irrigation advances but are expected to increase again as population growth overtakes irrigation efficiencies. Farming uses also account for 67% of all the ground water extracted. Public supply is at 45 bgal/day or 13% and includes water requirements for residential homes, commercial factories, and other business needs. Industry used almost 15 bgal/day or approximately 4%. This amount is also decreasing due to efficiencies mostly in the mining sector. These figures roughly reflect worldwide demand as well.

Populations will continue to increase world wide especially in poorer developing countries with high poverty with less access to education and birth control. Farming requirements necessary to feed these increasing populations will strain existing water supplies to their limits and require developed countries to increase their farming output to help mitigate famine and starvation. This will in turn increase their water demands. Ground and surface water pollution will continue to increase especially in regions where government regulation for pollution does not keep pace industrial and economic growth.

Measures must be implemented world wide that:  

1. Conserve existing fresh water supplies while aligning population size to a regions water availability.  This may mean establishing population growth limits in some areas regardless of religious or cultural belief systems. Another possibility is redistributing some percentage of a population to more suitable regions, but this may create ethnic rivalries.
2. Create energy efficient and cost effective desalinization plants and pipeline infrastructure for large scale water distribution. This will be expensive and desalinization plants create their own set of problems beyond costs, but outside of transporting icebergs across large distances it is the only realistic solution available.
3. Generate legislation in both developed and undeveloped countries that addresses and limits industrial dumping processes. Another unpopular and expensive measure that will not likely be affordable to under developed countries and require the financial assistance of developed countries.

Failure to meet these requirements will result in decreased water availability, rationing, severe water shortages with decreased food production, and enough political tension to eventually result in regional wars over water. Water is one of the basic requirements of a civilization and more than one civilization has seen its demise due to sustained drought or a long term change in the ecosystem. Problems with limiting access are already upon us and will continue to grow. Sticking our collective heads in the sand and pretending the problem doesn’t exist or that there is still plenty of time to deal with it will put society’s in a reactive, self-preservation mode which generally triggers a reaction towards war to solve the immediate crisis. My conclusion is start funding and allocating resources now for long term, sustainable solutions or pay more money later for: escalating prices for water and the inevitable costs associated with war.

http://www.waterinfo.org/resources/water-facts

http://pubs.usgs.gov/circ/1344/

The global warming debate rages on, and despite spending way too much of my time reading articles about it I am not convinced about either side’s conclusions. My main questions still remain: to what level is global warming or climate change occurring? are human’s contributing to it with green house gas (GHG) emissions and if so to what level? If we are contributing to it can we fix the problem preferably without devastating our economy? How dangerous will temperature increases be to our cities and population, and how soon will they occur? It appears that my much of my confusion exists because of two opposing groups themselves. 

The group supporting global warming is called the consensus but seem to be made up largely of the Intergovernmental Panel on Climate Change (IPCC). This is a large group of scientists (2500 from the IPCC alone), many of whom have been engaged in climate research for many years. They propose that man-made GHG emissions driven mostly by carbon dioxide (CO2) are heating the surface of the planet. The second group is referred to as dissenters or skeptics of global warming. They do not believer man-made GHG contributions are having any significant impact on temperature change and in some cases doubt whether it is occurring at all. 

The consensus believes that from data collected from climate research, ice core analysis, and computer modeling that certain conclusions can be determined: 

• Human activity has changed the composition of the lower atmosphere (troposphere). The composition has been changed through the emissions of GHG’s
• Changing the composition of the troposphere is warming the planet. Increasing GHG’s increases the amount of reflected IR heat that is absorbed in the troposphere; this in turn heats the troposphere which causes more evaporation and leads to increased amounts of water vapor. It is water vapor that has the greatest impact on temperature increase.
• Human activity driven by GHG emissions (carbon dioxide, methane, and nitrous oxide and ozone) has been making significant changes to atmospheric conditions that have been increasing over the past 100 years. These changes are now becoming evident by increasing surface temperatures, increasing water temperatures, and glacial melting
• If man-made GHG emissions from fossil fuel consumption (oil, coal, and natural gas) continue it will becoming increasingly difficult to stop or slow the heating process. Human activity has changed the climate in a few hundred years what it takes natural events 10 million years.
• Changes may occur more rapidly or become more severe. We will see the effects within our lifetimes. Disappearing glaciers and melting ice sheets at the north pole both resulting large fresh water losses, sea water levels rise flooding coastal regions, climate tier shifting i.e. the northern states will have temperature similar to the mid level states and so on.
• To slow global warming down will require decades of dramatic action. We will need to use less fossil fuel while increasing renewable energy sources. It doesn’t mean economies have to loose jobs and services but to realign them into new renewable industry.

Source: Listen to the Scientists: Global Warming & the I.P.C.C.              

The consensus has determined that man-made emissions are affecting our climate. They want to continue research to better understand the problem and the behaviors (burning of fossil fuel for power, transportation, and industry use) that perpetrate the problem. They want to stop what they call the false debate. They claim the science has already been agreed upon and dissenting opinions addressed numerous times. They want to begin to look for methods to deal with the basic problem of fossil fuel consumption and get renewable fuels established. Their goal is to have policy make the economy especially the energy and transportation sectors more efficient. Finally, most have come to some form of conclusion that temperature increases probably cant be stopped at this point, we will not be going back to where we were, but it can slowed down enough to provide governments a better chance to adapt and possibly avoid the worst case scenarios such as tipping point where positive feed back effects might lead to rapid warming. 

The dissenters or skeptics believe the data collected from climate research is inconclusive, ice core samples illustrate the irrelevancy of CO2’s contribution towards temperature increases, and that data and variables plugged into the sophisticated climate models are inaccurate or of little significance to predicting temperature change. They present a litany of errors found in the global warming theory and site numerous factors they believe are considerably more important causes of surface heating. Some examples Include: 

• Water vapor is the most significant GHG and the primary driver of surface heating. CO2 concentrations and its atmospheric heating capabilities are insignificant by many magnitudes compared to water vapor.
• The GHG effect is a naturally occurring phenomenon that has occurred multitudes of times in our past and will occur again in the future. It is driven by the sun which goes through its own heating and cooling cycles and it is the heat from the sun that warms the ocean which in turn creates precipitation and water vapor. IR radiation or heat reflected from the surface of the Earth becomes trapped by the water vapor and this increases the troposphere’s temperature.
• Ice core readings from Vostok and EPICA Antarctica demonstrate CO2 level increases that lag temperature increases by hundreds of years and therefore could not be the contributing factor for heating.
• The oceans release and absorb between 100 – 115 giga tons of CO2 each year. That’s a variance of approximately 15 giga tons. Ocean temperatures have increased 1 degree since 1960. As the ocean warms it absorbs less CO2 which causes a potentially greater variance. Trees exhale CO2 at night when not conducting photosynthesis at a rate of 40 to 50 giga tons each year. The variance there is approximately10 giga tons of CO2. Man-made GHG emissions constitute 3 giga tons per year. Skeptics claim that man-made CO2 contributions are insignificant compared to the natural carbon cycles of the ocean or all the trees on the planet. Plus GHG’s don’t warm the oceans, the sun does.
• Trees have a greater effect than CO2 in raising temperature. The northern hemisphere has experienced increased forest growth due to fire prevention. Also boreal trees do not act as the carbon sinks the same way tropical rainforests do and actually contribute more precipitation and hence water vapor into the atmosphere. When considering surface temperature increases, the increases are from the northern half of the hemisphere. The southern half is actually cooling probably due to the ongoing thinning of the Amazon and central African rainforests.
• Some site that heat and even CO2 may actually be good. It will create a warmer climate extending the growing seasons and food production. It will also reduce severe weather pointing out the middle ages between 1000 and 1500 as a period with relatively milder storm activity

There is also growing agreement among skeptics that as future fossil fuel production begins to decrease and oil, coal, and natural gas prices increase, the market will support the introduction of new alternative energy sources. This does not need to be prematurely forced onto the country at the cost of billions of dollars and thousands of lost jobs. 

There has definitely been mudslinging from both parties. Consensus believers argue that global warming or climate change has been endorsed by every national science academy including the science academies from every major industrial country. The final holdout – the American Assoc of Petroleum Geologists even revised their statement in 2007. The consensus scientists believe that  there is an attempt to replace the  scientific analysis conducted over that past two decades with politically motivated ideologies developed under the Bush administration and carried out today by overlapping groups of skeptical scientists, media commentators, and think tanks. The goal is an organized attempt to confuse public opinion with seemingly unrelated controversies or provide the public with an endless stream of seemingly important but irrelevant facts and questions. The real motivations are to preserve the status quo and big oil and coal profits while avoiding the economic hardships required to address the issues. They believe the actions of oil companies in their attempts to pay scientists to make dissenting comments or create / fund organizations whose main function is promoting global warming skepticism is both immoral and employs the same subversive tactics used by the tobacco companies to hide nicotine addiction. ExxonMobile alone they claim created a massively successful disinformation campaign between 1998 and 2005 where $16 million dollars was channeled to a sophisticated network of ideological organizations whose sole function was to generate uncertainty. 

The Skeptics site leftist political motivations and agendas as the driving force behind the consensus, and that the concensus scientists are altering science to create the appearance of something that either doesn’t exist or is not within the power of mankind to change. The IPCC they claim does not contain 2500 senior scientists and that global warming was created to ensure a continual stream of funding and research grants. They question why the same individuals doing the research are then allowed to lead the assessment committees assigned to evaluate the research. The IPCC they warn have used intimidation and censorship to limit any dissenting scientist’s ability to speak against any part of the global warming theory. They charge that any eminent scientist who wants to get grants and needs grad students to help with research will have to say yes to CO2 as the cause for global warming if they want to see the funding. They site numerous scientists who have complained about being placed under considerable pressure to distort or with hold research data that does not support human activity as the cause for global warming. They also claim that other more accurate hypothesis are not given the same level attention and that the so called consensus is not correct at all. Septics also claim that the IPCC stands to make a fortune if carbon becomes taxed or from a cap and trade system, and this is what is really motivates their actions. Finally, they warn that if global warming is occurring we should be looking for ways to predict and adapt to changes from the natural warming cycle as they occur and not engage in measures that drain 3 – 5% of our nation’s GDP away for something that cannot be controlled. 

There are at least a few things that the majority from both sides agrees on: 

• The Earth is showing signs of some type of climate change
• Since 1880 average temperatures have increased1.4 degrees Fahrenheit
• The rate of warming appears to be increasing
• The northern hemisphere artic is feeling a greater effect than the world at large
• Glaciers and mountain ice are melting
• Artic ice is showing signs of thinning and in some cases disappearing

Getting back to my original question, I would like to see information that is not tainted by political ideology and funding from either the left or the right. Tainted meaning information coming from scientists that have received financial compensation or are reliant on research funding from either the fossil fuel industry and their supporters or from the IPCC and those who stand to profit from cap and trade. I also don’t want to see or hear any more information from scientists / engineers who are not directly involved in climate research. This means scientists in other fields, think tank personnel, and media spokesman’s. If there is anything I have learned from the articles I have read,  it is that data can be manipulated to fit any agenda, and if the public is repetitively presented with even the most outlandish representation of the facts often enough from different sources many will come to believe it. There is certainly enough of this going on. 

Could some of the scientist’s actually conducting the climate research from both sides of the spectrum come together in a forum and discuss what is actually going on?  We need valid members from all sides, including the consensus, dissenting or skeptic scientists, and any neutral climate researchers to check their biases at the door and gather in the spirit of working together. This group could then go on to address the concerns of those who don’t agree that human activity is the cause of climate change. They could identify relevant data for analysis and determine what level if any the contribution of man-made GHG’s (mainly CO2) is having on the atmosphere.  Then if necessary decide what measures would be required to reduce the warming affect on the planet. The conclusions could then be presented through multiple channels to the public. If action is required the conclusions could be turned over to economic and professional councils to determine best potential solutions, courses of action to take, and economic costs associated with those actions. These recommendations could then be provided to the world governments and if necessary discussed at global summits or forums. What I am definitively not talking about, is any council or entity given authority to override a country’s sovereignty or introduce coercive tactics like economic sanctions to influence a country to its will. 

We are going no where with the constant back and forth bickering. It only sustains doubt and confusion and ensures that nothing meaningful will get done, which is probably the goal of some. I am not a scientist or researcher, so please provide corrections, comments, and constructive suggestions.   I only ask that you refrain from pointing out that these things have already been discussed since they have yet to be resolved despite the discussion. 

http://news.nationalgeographic.com/news/2004/12/1206_041206_global_warming.htmvl 

http://www.realclimate.org/index.php/archives/2005/11/650000-years-of-greenhouse-gas-concentrations/ 

http://www.worldviewofglobalwarming.org/ 

http://en.wikipedia.org/wiki/Global_warming_controversy 

http://science.howstuffworks.com/global-warming7.htm