December 2014 archive

Jessica Williams

Martin Freeman’s Second Fiddle

The real news and this week’s guests below.

Democrats Bow Down to Wall Street

Bill Moyers & John R. MacArthur, president and publisher of Harper’s Magazine, Moyers & Company

December 12, 2014

You say if he wins the Trans-Pacific Partnership, he’ll be giving away big chunks of our remaining manufacturing base to Japan and Vietnam and other Pacific Rim countries. Why does he want to do that?

Because he’s the fundraiser in chief. And again, this goes back to Bill Clinton. Because Obama’s really just imitating Bill Clinton. Clinton made an alliance with the Daley machine in Chicago, which Obama, he’s inherited that alliance with the two Daley brothers. The people who were thriving are the people in power. Rahm Emanuel is now mayor of Chicago. Bill Daley and Rahm Emanuel were the chief lobbyists for passing NAFTA under Clinton. They’re the ones who rounded up the votes. They’re the ones who made the deals with the recalcitrant Democrats and Republicans who didn’t want to vote for it. These people are in the saddle.

Full Transcript

The good news is that even Politico is beginning to realize that Alberta Tar Sands are not economically sound and will cost more to extract than they are worth.

Also 2 interviews from Democracy Now at COP 20 in Lima.

Former VP Al Gore Urges Obama to Reject Keystone XL as Kerry, Top U.S. Negotiator Stay Mum

Pipe Dreams? Labor Researchers Say Keystone XL Project May Kill More Jobs Than It Creates

Will cheap oil kill Keystone?

By Elana Schor, Politico

12/15/14 5:35 AM EST

The same collapse in oil prices that is pumping dollars into motorists’ wallets also risks undermining the case for building the 1,179-mile pipeline in two crucial ways: It’s squeezing the western Canadian oil industry that has looked to Keystone as its most promising route to the Gulf Coast. And anti-pipeline activists hope that falling prices will make it politically safer for Obama to reject the project, despite the new Republican Congress’ pledges to put Keystone at the top of its 2015 energy agenda.

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U.S. oil prices have plunged by nearly half since late June, tumbling to around $58 a barrel on Friday, thanks to the refusal of OPEC to cut production amid a glut of global supplies. Gasoline prices have fallen to a five-year low at the same time, reaching a national average of $2.60 a gallon Friday morning.

The oil price is crucial to the Keystone debate because the latest State Department environmental study on the project says prices in the $65-to-$75 range are a potential danger zone for oil production in western Canada – the point where transportation costs driven higher by failing to build the pipeline could “have a substantial impact on” the industry’s growth.

Cheaper oil also makes it easier to blame Keystone for the greenhouse gases that the Canadian oil fields send into the atmosphere. The State Department study said Keystone would be blameless for all that carbon because Canada is likely to keep pumping more oil even without the pipeline, sending the crude to the U.S. by truck or train if necessary. But the rail and truck options are more expensive – so if cheap oil makes them no longer cost-effective, greens argue, the pipeline would be the thing that keeps the pollution coming.

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“It is now impossible to credibly argue that Keystone XL won’t enable significant expansion of the tar sands and associated climate emissions,” Natural Resources Defense Council international program attorney Anthony Swift said by email. “Plummeting global oil prices have highlighted the fact that tar sands only work in a world of expensive crude – and without cheap pipeline infrastructure, many carbon-intensive tar sands projects simply will not be built.”

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Canada’s heavy-fuel producers are facing a cash crunch as cheap crude chokes profits for some of the industry’s most expensive new projects, and Prime Minister Stephen Harper declared last week that trying to regulate oil emissions during the current price crash would be “crazy economic policy.”

Everywhere you look in the region, companies are cutting back: The company Canadian Oil Sands sliced its 2015 budget nearly in half compared with this year’s spending. Baytex slashed its dividends to stockholders by more than half, announcing a focus on U.S. oil assets. Cenovus described its 15-percent budget cut for 2015 as “capital restraint in the year ahead in the face of weaker oil prices.”

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(P)olitical jostling over the murky nuances of oil markets often glosses over some of the escape hatches in the State Department’s price scenario: For the death of the pipeline to slow Canadian oil sands growth – and the resulting greenhouse gas emissions – other major export projects for the Canadian fuel would also have to run into problems, the study said.

That “pipeline-constrained” scenario was taking shape even before this fall’s oil crash, thanks to an obstruction campaign by climate activists and indigenous peoples on both sides of the border. Three other massive pipeline projects that would funnel crude from Canada’s oil-rich Alberta province to its coastlines have met fierce resistance from greens.

Welcome to The Breakfast Club! We’re a disorganized group of rebel lefties who hang out and chat if and when we’re not too hungover  we’ve been bailed out we’re not too exhausted from last night’s (CENSORED) the caffeine kicks in. Join us every weekday morning at 9am (ET) and weekend morning at 10:30am (ET) to talk about current news and our boring lives and to make fun of LaEscapee! If we are ever running late, it’s PhilJD’s fault.

This Day in History

Former Nazi official Adolf Eichmann sentenced to death; Bandleader Glenn Miller disappears over the English Channel; The Bill of Rights takes effect; Sioux Indian Chief Sitting Bull killed; Walt Disney dies at age 65.

Breakfast Tunes

Adapted from Rant of the Week at The Stars Hollow Gazette

The eurozone crisis – history is repeating itself … again

Larry Elliott, The Guardian

Sunday 14 December 2014 06.09 EST

Let’s start with Greece, which was where the eurozone crisis began all those years ago. The French statesman Talleyrand once said of the Bourbons that they had learned nothing and forgotten nothing. The same applies to the bunch of incompetents in Brussels, Berlin and Frankfurt responsible for pushing Greece towards economic and political meltdown.

Greece’s recent economic performance has been pretty good. The economy is growing, unemployment is on the decline and the debt to GDP ratio has come down a bit. Time, you might think, to cut Athens a bit of slack. Not if you are the German government, the European commission or the European Central Bank. No, they are insisting on even more austerity and continued surveillance by the International Monetary Fund.

But the Greeks have had a bellyful of austerity. They have had enough of being pushed around. Predictably, support for the anti-austerity Syriza party is strong and the mood is angry. In an attempt to regain the initiative, the government in Athens brought forward the dates for the votes in parliament to elect a new president. If by the time of the third vote at the end of the December, the centre right’s candidate Stavros Dimas, a former EU commissioner, has not secured 180 votes out of 300 – unlikely as things stand – there will be an election that Syriza could win.

The chances of it doing so will certainly be enhanced unless the Bourbon-in-chief, Jean-Claude Juncker, learns when to keep his mouth shut. By saying he wanted “known faces” rather than “extremist forces” in charge in Greece, the European commission president was the perfect recruiting sergeant for Syriza.

The gamble seems to be that Syriza, assuming that there is an election in which it emerges victorious, will either do a U-turn on austerity voluntarily or be forced to do a U-turn due to hostile market reaction. The collapse of a Syriza government will herald the return of a centre-right government who will do what Juncker and Angela Merkel tell them to do.

But this has not been properly thought through. A crisis in Greece will take months to unfold. Bond yields will rise in every eurozone country seen as vulnerable: Portugal, Spain, Italy and, perhaps, Belgium. Business and consumer confidence will be hit. Concerns about the non-performing loans held by Europe’s shaky banks will be reignited.

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A fresh Greek crisis will have spillover effects. It will lead to a fresh recession and deepen deflation. Weak growth and falling prices are a toxic combination for highly indebted countries, because they raise the real value of debts while cutting national output.

Beppe Grillo of Italy’s Five Star Movement has said. “Eventually will come a time when a politician will hold up a copy of the EMU [European Monetary Union] treaty, declare it null and void, and the debt null and void right along with it. That politician will be elected.”

And the moment that politician will be elected may not be all that far away. The only conceivable way to solve some – if not all – of the design flaws in the euro is for a strategy that involves debt forgiveness, expansionary policies in the countries – such as Germany – that can afford it, a large-scale quantitative easing programme from the European Central Bank and much more aggressive attempts to rid the banks of their toxic assets.

Unfortunately, this is not on the table. Eventually, once the crisis is raging, the ECB may well overcome Germany’s misgivings about buying sovereign bonds and dip its toe in the water with a limited QE programme. It will be too little too late, and in any case contingent on further so-called structural reforms, shorthand for wage cuts and the dilution of labour rights.

Mad as Hellas

Paul Krugman, The New York Times

DEC. 11, 2014

The Greek fiscal crisis erupted five years ago, and its side effects continue to inflict immense damage on Europe and the world. But I’m not talking about the side effects you may have in mind – spillovers from Greece’s Great Depression-level slump, or financial contagion to other debtors. No, the truly disastrous effect of the Greek crisis was the way it distorted economic policy, as supposedly serious people around the world rushed to learn the wrong lessons.

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What happened last time, you may recall, was the exploitation of Greece’s woes to change the economic subject. Suddenly, we were supposed to obsess over budget deficits, even if borrowing costs were at historic lows, and slash government spending, even in the face of mass unemployment. Because if we didn’t, you see, we could turn into Greece any day now. “Greece stands as a warning of what happens to countries that lose their credibility,” intoned David Cameron, Britain’s prime minister, as he announced austerity policies in 2010. “We are on the same path as Greece,” declared Representative Paul Ryan, who was soon to become the chairman of the House Budget Committee, that same year.

In reality, Britain and the United States, which borrow in their own currencies, were and are nothing like Greece. If you thought otherwise in 2010, by now year after year of incredibly low interest rates and low inflation should have convinced you.

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(T)he devastation in Greece is awesome to behold. Some press reports I’ve seen seem to suggest that the country has been a malingerer, balking at the harsh measures its situation demands. In reality, it has made huge adjustments – slashing public employment and compensation, cutting back social programs, raising taxes. If you want a sense of the scale of austerity, it would be as if the United States had introduced spending cuts and tax increases amounting to more than $1 trillion a year. Meanwhile, wages in the private sector have plunged. Yet a quarter of the Greek labor force, and half its young, remain unemployed.

Meanwhile, the debt situation has if anything gotten worse, with the ratio of public debt to G.D.P. at a record high – mainly because of falling G.D.P., not rising debt – and with the emergence of a big private debt problem, thanks to deflation and depression. There are some positives; the economy is growing a bit, finally, largely thanks to a revival of tourism. But, over all, it has been many years of suffering for very little reward.

The remarkable thing, given all that, has been the willingness of the Greek public to take it, to accept the claims of the political establishment that the pain is necessary and will eventually lead to recovery. And the news that has roiled Europe these past few days is that the Greeks may have reached their limit. The details are complex, but basically the current government is trying a fairly desperate political maneuver to put off a general election. And, if it fails, the likely winner in that election is Syriza, a party of the left that has demanded a renegotiation of the austerity program, which could lead to a confrontation with Germany and exit from the euro.

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This is what happens when an elite claims the right to rule based on its supposed expertise, its understanding of what must be done – then demonstrates both that it does not, in fact, know what it is doing, and that it is too ideologically rigid to learn from its mistakes.

Repeat after me- Neoliberal Economics Does.  Not.  Work.