Category Archives: Connecting the Dots

Taxes – The Price We Pay For Civilization

“Taxes are the price we pay for civilization.” – Oliver Wendell Holmes.

Neil Armstrong on the surface of the moon

Your Tax Dollars At Work, Courtesy NASA

Tweet Taxes fund Medicare and Medicaid so the poor and the elderly can see a physician and get treatment when they are sick. Taxes fund education for our children and our neighbors children so they can grow up to be doctors, lawyers, engineers, architects, accountants, teachers, plumbers, electricians, carpenters, builders, actors, etc., so we can buy things that work properly, travel safely, enjoy life, so we can, in a word, thrive. Taxes fund police, fire-fighting, defense, judicial and other services so we can be secure in our homes and our persons, so the innocent do not go to prison, so the guilty pay their debts to society, and so we, when we do foolish things, can compensate those we accidentally harm. Continue reading →

The Crash of 2011

Tweet I thought the market would crash in the wake of the Earthquake / Tsunami / Nuclear Meltdowns at Fukushima. It didn’t. However, something much less serious may be bringing the market – and the economy – to it’s knees. Politics. The Voice of America reported here that Standard & Poors downgraded US debt from AAA to AA+. Click here for the S&P’s Special Report and here for the full report.

S&P’s analysts wrote:

The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.

John Boehner It is clear that the emphasis on cutting government spending, eliminating government jobs, eliminating benefits to unemployed citizens, rather than raising revenues and developing infrastructure is not in the long term or short term interests of the United States. As the 512 point drop in the Dow Jones Average, and the downgrade of US debt indicate, Republicans and the Tea Party should be careful for what they wish for – they just might get it.

In the discussions over the debt ceiling, John Boehner said something to the effect that if a family or a business is borrowing too much it simply must tighten it’s belt. Continue reading →

Why the TVA Wants Nuclear Power

In “Why We Still Need Nuclear,” the “op-ed” piece written in the New York Times, July 30, 2011, Tom Kilgore, the President and CEO of the Tennessee Valley Authority, seems to have made up his mind to attempt to complete the Bellefonte 1 nuclear power plant, in Hollywood, Alabama. Mr. Kilgore is in good company: the President of Iran, Mahmoud Achmadinejad, also wants to build nuclear power plants.

The TVA began work on the Bellefonte nuclear plants in 1974. Construction was suspended in 1988, after the TVA spent about $4.1 Billion on the plant. The TVA wants to spend another $5 Billion over the next six to eight years to complete the plant. It would therefore cost a total of $9.1 Billion to construct a 1.26 gigawatt plant. That’s $7.22 Billion per gigawatt, plus interest, over a period that spans 34 years, with construction in three phases: 14 years of work from ’74 to ’88, 22 years of non-work, from ’88 to 2012, and another six to eight years of work. (Times Free Press, TVA News, TVA Environment).

This suggests the real reason why the TVA wants to complete the plant. Currently Bellefonte 1 a $4.1 billion liability on the TVA’s books. If the TVA adds another $5 Billion, this $4.1 hot white elephant will be magically transformed into a cool (but heat producing) 9.1 billion asset. Continue reading →

Exxon Profits: $10,700,000,000 for the Quarter

The Associated Press via the Sacramento Bee reported that “Exxon Mobil Corp. earned $10.7 billion … its highest quarterly profit since the third quarter of 2008…. However, Exxon officials noted that sluggish business investment, lower consumer spending and high debt would continue to weigh on the economy.”

Let’s do some math – Exxon earned $10.7 Billion this past quarter. Yet Exxon and other big oil companies receives $2 Billion to $3 Billion per year in tax subsidies. If divided equally, then Exxon would get $400 to $600 million per year, $100 to $150 Million per quarter. The subsidies amount to 0.93% to 1.4% of Exxon’s profits of $10.7 Billion this quarter, and 0.108% to 0.16$ of Exxon’s annual revenues of $370 Billion for the year ended 12/31/10 (Google Finance). This is equivalent to giving someone earning $50,000 per year a gift of $54 to $81.

A lot of people need help: American college students need help paying tuition, Americans on Medicare and Medicaid need help paying their medical bills, and Americans on Unemployment need help paying for food, people trying to design and build a renewable sustainable energy infrastructure. But we are helping oil companies.Why?

Let’s look again at the numbers. For the year ending Dec. 31, 2010, Exxon’s Gross Revenues were $383 Billion. Gross Profits were $107 Billion, and Income Before Taxes were $53 Billion. Profit was 27.9% of Gross Revenues. Income before Taxes was 13.8% of Gross Revenues.

Exxon	12/31/10
Total Revenues	$383	B
Gross Profit	$107	B
Income before Taxes	$53	B

Gross Profit / Revenues	27.94%
Income BT / Revenues	13.84%

Period	Income	Nominal Tax
Year ending 12/31/2010	$53 Billion	$18.55 B
Quarter ending 6/30/2011	10.7 Billion	$3.745 B

And according to Valeri Vasquez, at the Center for American Progress, here, Exxon’s tax rate is 17.6%. The nominal corporate rate is 35%. With profits of $53 Billion last year, rather than receiving subsidies. Exxon should have paid $18.55 Billion in taxes last years. With profits of $10.7 Billion last quarter, Exxon should have paid $3.745 Billion.

Continue reading →

U.S. settles with whistleblower Bunny Greenhouse

Below is an excerpt from Erik Eckholm’s piece in the Times, noting the settlement of litigation between Bunnatine “Bunny” Greenhouse and DOD for retaliatory action after her objections, in 2005, to the Halliburton/KBR no-bid contract for logistical support in Iraq. Greenhouse had been the Chief Contracting Officer for the Army Corps of Engineers. She’d previously had a perfect record of performance ratings.

More here

Her primary objections:

the study rationalizing the sole-source KBR contract was itself outsourced – to Halliburton/KBR, which recommended itself as the sole source;
Even if the contract’s premise was justified for the first few months on emergency grounds, it didn’t make sense for a multiyear, potentially indefinite contract.

Which raises the question of how much work KBR/Halliburton are doing now in Iraq, Afghanistan and elsewhere for DOD, CIA, et cet. We note the it’s KBR’s former CEO, and later the United States Vice President, who made famous the phrase “undisclosed location.” (For readers from Brooklyn, “undisclosed location” roughly translates to “going to the mattresses.”) KBR is currently, publicly, one of two logistics contractors in Iraq – but classified contracts are, by definition, outside the scope of public review – and for practical purposes – outside the scope of Congressional review.

Continue reading →

Debt, Catastrophe, and Foreign Entanglements

Tweet
The battle raging today between Democrats and Republicans will not solve the nation’s debt problems, nor avert a financial catastrophe in the future. The politicians do not appear to have a handle on a comprehensive solution to our financial woes. I’m not certain that I do, either, but I feel an obligation as a citizen and a stakeholder in our nation’s present and future to present my ideas and add to the debate.

The issues, as I see them, revolve around the debt ceiling, government obligations, the economy, consumer debt and what George Washington might consider foreign entanglements of the kind he warned us against in his farewell address. The solutions must benefit the American taxpayers today and in the future. Here are the issues and some ideas toward resolution. Continue reading →

Roughing It

Tweet A s they struggle to pay their bills, forced to work, the wealthy cope as only they can. By sending their children to summer camp in private jets. In “To Reach Simple Life of Summer Camp, Lining Up for Private Jets” Christine Haughney, in the New York Times, July 24, 2011, wrote:

“A turboprop Pilatus PC-12 carrying Melissa T., her daughter, her daughter’s friend and a pile of lacrosse equipment took off for their home in Connecticut, following the girls’ three-week stay at Camp All-Star in nearby Kents Hill, Me. Shortly after, a Cessna Citation Excel arrived, and a mother, a father and their 13-year-old daughter emerged carrying a pink sleeping bag and two large duffel bags, all headed to Camp Vega in Fayette. … as the economy limps along, more of the nation’s wealthier families are cutting out the car ride and chartering planes to fly to summer camps. One private jet broker, Todd Rome of Blue Star Jets, BlueStarJets.com, said his summer-camp business had jumped 30 percent over the last year.”

A quick check on the Camp All Star web site’s “Dates & Rates” page suggests that 3 weeks will cost about $4500. Trips, horseback riding and hockey are extra. Getting there on a private jet, would add $6,318 to $15,240 per party, $2,106 to $5,080 per camper for a camper, his or her mom, and a friend. As I tell people, it’s the trip, not only the destination.

Tell me again, Mr. Boehner, why the wealthy can’t afford to pay taxes?

I did some checking. Went to Blue Star‘s website, priced a charter for three (3) from Allaire Airport in Monmouth County, New Jersey to Augsta State in Maine. I was surprised at how affordable it is. Blue Star offered 5 alternatives, all turboprops:

A Ratheon Super King BE 350, a 9-passenger aircraft, $6,318, which is $2,106 per passenger,
The BE-C90, a 6 passenger turboprop, $11,270, or $3,757 per passenger,
The BE-100, an 8 passenger turboprop: $12,151 for the trip, $4,050 per passenger.
The BE 200, in a 9-passenger configuration, for $13,043, $4,348 per passenger, and
The BE-200 in an 8-passenger configuration: $15,240, $5,080 per passenger.

These data are summarized in the table below.

Plane	Trip	Per Passenger, 3 passengers	Per Passenger If Full
Ratheon Super King BE 3509 Passenger Turboprop	$6,318	$2,106 per person.	$702 per person for 9.
BE-C90, 6 passenger Turboprop	$11,270	$3,757 per person.	$1,878 per person for 6.
BE-100, 8 passenger Turboprop	$12,151	$4,050 per person.	$1,519 per person for 8.
BE-200 9 Passenger Turboprop	$13,043	$4,348 per person.	$1,630 per person for 9.
BE-200 8 Passenger Turboprop	$15,240	$5,080 per person.	$1,905 per person for 8.

I don’t know if the airline serves food, drinks, or offers in-flight movies. But caviar is only $115 per oz (Russian Sevruga, Caviar Express, Glendale, CA).

Clean Energy, Good Jobs, and a Vibrant Economy … But

courtesy NASA (our tax dollars at work)

Tweet It sounds too good to be true:

*   100 gigawatts of offshore wind, $300 Billion,
*   100 gw of landbased wind, $200 Billion,
*   75 gw of solar, $300 Billion,
*   75 gw of geothermal, $200 Billion.
*   200 gigawatt equivalents of efficiency – $200 Billion.
*   100 & Clean, Renewable, Sustaianble Energy: 1.2 Trillion.
*   2.7 Million New Jobs and a Healthy Economy: Priceless!

This is happening, slowly, inexorably, by the “invisible hand of the market.” But it will happen faster if the “invisible mind of the community” acts. This means the government!

Continue reading →

Do you Really Want a Balanced Budget Amendment?

The rainbow in the grey skies is magical and alluring. But take a look at history before suggesting that the USA should operate under the limitations of a balanced budget. A good place to start is by searching on milestone wars that made or saved this country. Try a search such as “US Revolutionary War debt,” “US Civil War debt,” or “US WW2 debt.”

Then try to decide if the US Constitution had such an amendment from day one would we:

Be a British colony?
Have slaves?
Speak German?

Would we have climbed out of the Great Depression without Roosevelt applying Keynes’ ideas on government projects?

The idea of sending America’s youth into battle without proper equipment and financial support is powerful motivator for me. I was in the Air Force during a budget battle and we literally could not fly our fighters because Congress did not approve enough money for fuel while they argued about the overdue budget! Thankfully that was peace time.

Let’s take a look at the financial meltdowns this country has encountered and the effects that a Balanced Budget amendment would have had. Take a look at just two, the Great Depression and the 2008 meltdown. The government did not do all the right things to prevent or solve these problems. The solutions (i.e. the recovery) required combination of forces including government spending, Wall Street and Main Street.

Search on “US Depression debt” and read current events to see the impact of such economic events on the deficit. Thank you Uncle Sam for pitching in to take away the pain and suffering that literally millions of Americans faced during these crashes. I am glad you had a credit card to use to save us!

The metaphorical Atlas – is he the government or the taxpayers? Ours is an experiment in government of the people, by the people, for the people.” Is there a difference?

I probably should stop here but …
Continue reading →

So What If We Default?

Tweet Be careful what you wish for. You just might get it.

Hong Lei, spokesman for foreign affairs of China

Chinese Spokesman for Foreign Affairs

If, on August 2, 2011, the United States defaults on various debt obligations, then historians may well consider that date as the date on which the United States of America ceases to occupy the position it has held since the end of World War II. However, August 2, 2011, may be the end of the beginning. If so, it will mark a point of inflection in a curve that maps processes that has been in motion for a long time. The trends in personal debt, bankruptcy, home foreclosures, unemployment, and the disparity of income and assets between the wealthiest 10% of the population and the other 90% have developed over years.

July 14, 2011, Bastille Day in France, may be considered to mark the coming of age of the successor to the United States as the superpower of the 21st Century, and that would be China. In “China Urges U.S. to Protect Creditors by Raising Debt,” Bettina Wassener in Hong Kong and Matthew Saltmarsh in Paris report in the New York Times, that “Hong Lei, a Chinese foreign affairs spokesman, urged the United States to protect the interests of foreign investors.” As one of the United States’s biggest creditors, China, which holds over $1.0 Trillion in US Treasury bills, “urged American policy makers on Thursday to act to protect investors’ interests, highlighting rising concerns around the globe about the protracted budget talks taking place in Washington.”

These mark gradual processes of waxing and waning of cultures and economies. These did not happen overnight. It did not happen with the election and inauguration of Barack Obama as 44th President of the United States, as spokespeople of the Tea-Republican Party, and News Corp (some of whom are in both) may assert. Nor did it happen in 2000 with the Presidential Election, the Supreme Court decision which decided the election, and the subsequent inauguration of George W. Bush as the 43rd President.

The development of the US as a superpower at the end of World War II was facilitated by the election of Franklin Delano Roosevelt to the office of President in 1932, and his reelections in ’36, ’40, and ’44. However, it was less President Roosevelt himself than the progressive economic policies of the New Deal that he put in place. Similarly the descent from superpower status and the crumbling of American infrastructure have been slow processes. Perhaps it began with the conflation of news and entertainment and the elimination of the Fairness Doctrine in 1987 under President Reagan.

In order, therefore, for the United States to continue to be a superpower, we need to return to the progressive economic policies that build infrastructure and finance infrastructure projects by taxes, rather than by mortgaging our children’s futures to potentially unfriendly foreign powers such as Communist China.

The wisest, but least easy course would be to allow the Bush tax cuts to expire and increase taxes. Everyone should pay their fair share.

Finally,

If we increase the debt ceiling, will China continue to buy U.S. Treasury Bills?

China holds over $1 trillion of US Treasury Bills, about 7.5% of our debt. Is that in our national interest?

Karzai half-brother assassinated by confidant

Tweet As reported in The New York Times, Christian Science Monitor, and elsewhere, Ahmed Wali Karzi was killed by Sardar Mohammed. Mr. Mohammed, who is described as “an associate,” was a commander of security posts south of Kandahar. He was reported killed by Mr. Karzai’s bodyguards. The late Mr. Karzai had been linked to the drug trade and corrupt security companies. The Christian Science Monitor sited Wikileaks here as quoting official US concern regarding Ahmad Karzi.

“AWK [Ahmad Wali Karzai] operates parallel to formal government structures, through a network of political clans that use state institutions to protect and enable licit and illicit enterprises,” wrote a US official in one of the leaked cables.

What will happen next? What other shoes will drop?

Given the relative opacity of the situation(s) in Afghanistan, Pakistan, and the United States’ troubled relationships with both countries, the potential parallels to the plot of The Godfather and MacBeth are unsettling. Continue reading →

"Three Meltdowns at Fukushima" – Washington Post

Tweet The earthquake and tsunami that occurred in Japan has led to what the Washington Post now describes as three nuclear meltdowns (here).

“Japan has been bracing for major aftershocks since the 9.0-magnitude earthquake March 11 triggered a powerful tsunami, creating one of the largest disasters in this country’s history. The catastrophe left tens of thousands dead or missing, and scores more without homes or businesses. It also prompted the most serious nuclear crisis in a quarter century at the Fukushima plant, where three reactors sustained meltdowns.” Chico Harlan, July 9, 2011, “7.0 Aftershock Hits Japan Coast,” in the Washington Post, 7/9/11.

Ask Obama – Internet Town Hall

What would I #AskObama (on Twitter or in person)?

1: #AskObama Economists think in terms of resources. How do we change the conversation to think in terms of processes, systems, interactions?

2: #AskObama Neoclassical Economics: Resources & Wastes. Ecological Economics: Systems: Stocks, Flows, Processes. Burn Coal: Fuel ergo Waste. Solar: No fuel ergo no waste.

3: #AskObama Ecological Economics: “Like neoclassical but a better understanding of time and costs.” Marlboro MBA Managing for Sustainability.

At 2pm EDT, July 6, 2011, President Obama will participate in the first Twitter town hall at the White House to discuss the economy and jobs with Americans across the country. The entire event will be streamed live at WhiteHouse.gov. Right now, thousands of people are talking about the event and asking questions on Twitter, using the #AskObama hashtag. Take a moment to join the conversation and ask your own question.

Fort Calhoun Nuclear Plant – Update

in the Missouri River

Tweet The flooded Fort Calhoun nuclear power plant is not exactly like the nuclear plants at Fukushima Daichi and Fukushima Diana. There are three main differences: First of all, there’s one plant, not 12. The difference of scale is tremendous. Secondly, it was offline – shut down for refueling – when flooded. Meaning, we got lucky, really lucky. Finally, it was hit by the gradually increasing pressures of rising floodwaters, not by an earthquake, a tsunami, and aftershocks. This is huge!

Steve Everly, at the Kansas City Star, reported that David Lochbaum of the Union of Concerned Scientists was “Reassured.” (here). I spoke to Mr. Lochbaum about the flooded plant on June, 29, 2011.

Most of the releases of radioactive material, generally tritium and tritiated water, occur when plants are online. Because the plant was offline, very little radioactive material has been released into the biosphere as a result of the flooding. While it is easy to filter heavy metals, it is very expensive to isolate tritiated water from water.

The damages due to the flooding are likely to be in the ballpark of $1,000,000 per day in lost revenue – $23 Million since June 6 – because the plant produces power worth about $1,000,000 per day. The buildings that have been damaged are collateral buildings, not the reactor itself. Those buildings would be less expensive to repair than the reactor.

At 35 years old, the plant is near the end of its design life. While we can engineer plants that are as safe as the NRC requires, new wind, solar, geothermal, hydro, and efficiency cost less than new nuclear or coal with carbon sequestration. Safety, security, and waste management are not the challenges with sustainable technologies that they present with nuclear and coal. Therefore, it seems logical to consider that once it is decommissioned, the plant will be replaced with wind, solar, geothermal, hydro, and efficiency.

Continue reading →

Brookings, SAP, NRG, and the City of New York on our Energy Future

NRG Energy

Tweet Will moving to the new energy future – deploying Solar, Wind and other sustainable alternatives create 2.7 Million New Jobs?

At “How Cities and Companies Can Work Together to Operate in the New Energy-Constrained Economy” a panel discussion (press release), Bruce Katz, Vice President and Director of the Metropolitan Policy Program, Brookings Institution, said “2.7 million new jobs” will be created in moving to the clean energy / low carbon economy.

Mr. Katz also noted that two out of three Americans – 200 million people – live in the 100 biggest metropolitan areas, and those 200 million people are responsible for 75% of our GDP. High carbon energy is no longer cheap. The people in those metropolitan areas, and elsewhere, therefore, must act. Continue reading →

Popular Logistics

Systems thinking on the biohumanosphere.

Category Archives: Connecting the Dots

Taxes – The Price We Pay For Civilization

The Crash of 2011

Why the TVA Wants Nuclear Power

Exxon Profits: $10,700,000,000 for the Quarter

U.S. settles with whistleblower Bunny Greenhouse

Debt, Catastrophe, and Foreign Entanglements

Roughing It

Clean Energy, Good Jobs, and a Vibrant Economy … But

Do you Really Want a Balanced Budget Amendment?

So What If We Default?

Karzai half-brother assassinated by confidant

"Three Meltdowns at Fukushima" – Washington Post

Ask Obama – Internet Town Hall

Fort Calhoun Nuclear Plant – Update

Brookings, SAP, NRG, and the City of New York on our Energy Future