What's So Smart About Investing in the Smart Grid? By Ronald Bailey
It makes no sense to throw $4.5 billion at electric power infrastructure
Reason, February 3, 2009
Smart grid technology is all the rage. General Electric just paid $2.4 million for a Superbowl ad featuring an animated scarecrow singing "If I Only Had a Brain" to promote its smart grid initiatives. IBM, meanwhile, is running full page "Smarter power for a smarter planet" ads in major newspapers like the New York Times. These corporations are in perfect sync with the new administration in Washington.
Earlier this month, President Barack Obama promised to retrofit America by "updating the way we get our electricity, by starting to build a new smart grid that will save us money, protect our power sources from blackout or attack, and deliver clean, alternative forms of energy to every corner of our nation." To that end, the House version of the American Recovery and Reinvestment Act authorizes the Department of Energy to spend $4.5 billion dollars to stimulate the deployment of smart grid technologies.
The Energy Information Administration (EIA) describes the current national power grid as the "largest interconnected machine on earth." The U.S. electric power infrastructure is worth over $1 trillion. It consists of more than 9,200 electric generating units with more than 1 million megawatts of generating capacity connected to more than 300,000 miles of high voltage transmission lines and 5.5 million miles of distribution lines. Utility companies have only the most rudimentary ability to monitor this vast grid. More often than not, utility companies only learn about a local power outage when customers call to complain.
Creating a smart grid means computerizing the current electric grid using advanced wireless two-way information and communications equipment, deploying an array of sensors to monitor activity, and developing the software to control and track in real time all aspects of electricity generation, transmission, and consumption. The smart grid would also more easily integrate supplies from decentralized renewable energy suppliers and enable consumers to better manage their energy consumption.
Modernization would certainly help the current transmission network, which is so overburdened that blackouts are now bigger, lengthier, and more common. The EIA estimates that outages currently cost the economy as much as $150 billion per year. Even as demand for electricity has grown, transmission capacity has been lagging. In addition, Americans are projected to use about 30 percent more electricity by 2030. The Electric Power Research Institute (EPRI), the think tank of the utility industry, estimates that smart grid technologies could potentially lower projected annual energy consumption in 2030 by 1.2 to 4.3 percent. This would mean that fewer power plants and transmission lines would need to be built in the future.
For many proponents, however, the chief reason to create a smart grid is that it promotes energy conservation. For example, the smart grid concept envisions smart meters in homes or businesses allowing consumers to fine tune their energy consumption, such as setting dishwashers or washing machines to turn on at night when electric power is relatively cheap and more plentiful. And consumers could also grant utility companies permission to send signals that lower the temperatures on residential hot water heaters or reduce air conditioning when the grid is threatened with an overload on hot summer days. Some pilot projects report that consumers using this technology have cut their energy bills by an average of 10 percent.
But why is there such a push to conserve energy, especially electricity? After all, the U.S. has plenty of coal, natural gas, and uranium to generate power and, if promoters of renewable fuels are right, there'll be plenty of those, too. The answer, of course, centers on concerns about man-made global warming. About 50 percent of our electricity is produced using coal and 20 percent more is generated by burning natural gas, both of which emit carbon dioxide that contributes to raising the earth's average temperature.
If the goal is reducing carbon dioxide emissions rather than achieving energy efficiency for its own sake, then the simplest and most effective policy would be to place a price on carbon dioxide emissions. Pricing carbon would push generators and consumers to switch to low and no-carbon fuels while encouraging innovators to develop such fuels. Proponents of the smart grid often liken it to the Internet. And that's actually a pretty good analogy. No central computer distribution company created the Internet by installing a desktop in every home, after all. So why should we jigger electricity rate regimes in order to push utility companies to install smart meters or appliances? As higher carbon prices cause electric bills to increase, consumers themselves will start installing smart meters and appliances while seeking out relatively cheaper low-carbon power.
Here's another question: Why haven't utility companies and electric generation companies already started invested in a smart grid? One word: incentives. The chief problem is that power companies make more money when they sell more electricity to consumers. Building a smart grid means utilities would pay for infrastructure that could reduce the amount of electricity they sell. In other words, given the current regulatory system, utilities would be spending money so that they would make even less money. Obviously, this incentive scheme won't work.
The leading proposal to change the incentive structure is called decoupling. Instead of earning money by selling more electricity, a utility's profits are decoupled from the amount of electricity it sells. Regulators guarantee that a utility's fixed costs, including a profit margin, can be recovered no matter how much energy it sells through a rate adjustment formula. So if a utility sells less than was forecasted, the rates to consumers are adjusted to make up the difference. Generally speaking, such adjustments have amounted to an additional 2 to 3 percent on consumers' bills.
The House stimulus bill contains provisions that require states to consider decoupling as a condition for applying for $3.4 billion in energy efficiency grants. Some free marketers dislike decoupling because consumers could perversely see their energy use go down while their bills remain the same or even go up. Some progressives also reject decoupling on the grounds that it provides windfall profits to utilities.
While decoupling removes the incentive for utilities to sell more power, it doesn't provide much impetus for utilities to boost energy efficiency. One proposed fix for this problem is shared savings. If a utility invests in some type of energy efficiency—say the installation of smart meters or better insulation in houses—the utility shares the energy savings with the consumers. How? Consumers get lower utility bills because they use less energy and regulators award the utility with higher rates to pay back its investment in energy efficiency. For example, California utilities get rate hikes that amount to between 9 and 12 percent of the energy efficiency savings. But again, why rig electricity markets so that utility companies end up in charge of insulating houses, paying for energy efficient appliances, and installing energy management systems? Instead, utilities need to create an open information exchange network that both consumers and power generators can tap into.
In 2004, the Electric Power Research Institute calculated that it would cost $165 billion over the next 20 years—about $8 billion per year—to build out the smart grid. And one of the first challenges is mobilizing sufficient investment. But that problem won't be solved by throwing $4.5 billion at the electric grid as a sop to the environmental lobby—even if it does stimulate the bottom lines of favored corporations.
Ronald Bailey is Reason magazine's science correspondent. His book Liberation Biology: The Scientific and Moral Case for the Biotech Revolution is now available from Prometheus Books.
Friday, February 6, 2009
A Better Way to Generate and Use Comparative-Effectiveness Research
A Better Way to Generate and Use Comparative-Effectiveness Research, by Michael F. Cannon
Cato, Feb 06, 2009
President Barack Obama, former U.S. Senate majority leader Tom Daschle, and others propose a new government agency that would evaluate the relative effectiveness of medical treatments. The need for "comparative-effectiveness research" is great. Evidence suggests Americans spend $700 billion annually on medical care that provides no value. Yet patients, providers, and purchasers typically lack the necessary information to distinguish between high- and low-value services.
Advocates of such an agency argue that comparative- effectiveness information has characteristics of a "public good," therefore markets will not generate the efficiency-maximizing quantity. While that is correct, economic theory does not conclude that government should provide comparative- effectiveness research, nor that government provision would increase social welfare.
Conservatives warn that a federal comparative- effectiveness agency would lead to government rationing of medical care—indeed, that's the whole idea. If history is any guide, the more likely outcome is that the agency would be completely ineffective: political pressure from the industry will prevent the agency from conducting useful research and prevent purchasers from using such research to eliminate low-value care.
The current lack of comparative-effectiveness research is due more to government failure than to market failure. Federal tax and entitlement policies reduce consumer demand for such research. Those policies, as well as state licensing of health insurance and medical professionals, inhibit the types of health plans best equipped to generate comparative-effectiveness information.
A better way to generate comparative-effectiveness information would be for Congress to eliminate government activities that suppress private production. Congress should let workers and Medicare enrollees control the money that purchases their health insurance. Further, Congress should require states to recognize other states' licenses for medical professionals and insurance products. That laissez-faire approach would both increase comparative-effectiveness research and increase the likelihood that patients and providers would use it.
Cato, Feb 06, 2009
President Barack Obama, former U.S. Senate majority leader Tom Daschle, and others propose a new government agency that would evaluate the relative effectiveness of medical treatments. The need for "comparative-effectiveness research" is great. Evidence suggests Americans spend $700 billion annually on medical care that provides no value. Yet patients, providers, and purchasers typically lack the necessary information to distinguish between high- and low-value services.
Advocates of such an agency argue that comparative- effectiveness information has characteristics of a "public good," therefore markets will not generate the efficiency-maximizing quantity. While that is correct, economic theory does not conclude that government should provide comparative- effectiveness research, nor that government provision would increase social welfare.
Conservatives warn that a federal comparative- effectiveness agency would lead to government rationing of medical care—indeed, that's the whole idea. If history is any guide, the more likely outcome is that the agency would be completely ineffective: political pressure from the industry will prevent the agency from conducting useful research and prevent purchasers from using such research to eliminate low-value care.
The current lack of comparative-effectiveness research is due more to government failure than to market failure. Federal tax and entitlement policies reduce consumer demand for such research. Those policies, as well as state licensing of health insurance and medical professionals, inhibit the types of health plans best equipped to generate comparative-effectiveness information.
A better way to generate comparative-effectiveness information would be for Congress to eliminate government activities that suppress private production. Congress should let workers and Medicare enrollees control the money that purchases their health insurance. Further, Congress should require states to recognize other states' licenses for medical professionals and insurance products. That laissez-faire approach would both increase comparative-effectiveness research and increase the likelihood that patients and providers would use it.
Cutting Emissions While Increasing Them
Cutting Emissions While Increasing Them. By Roger Pielke, Jr.
Prometheus, February 6th, 2009
Here is a remarkable display of incoherence. According to a report commissioned by Greenpeace and discussed by The Christian Science Monitor, the economic stimulus package now under debate by the U.S. Congress will reduce greenhouse gas emissions.
What does the report mean by “reduce”? It means that some future emissions that might have occurred will be avoided. Emissions will therefore increase, just not as much as under some other scenario. The difference between that other scenario and the scenario implied by the stimulus package represents a “reduction” in emissions. Yes, you are reading that right.
The great thing about this approach to emissions reductions is that it is an infinite resource. For instance, I just decided not to buy a Hummer and reduced my future emissions by an enormous amount. You can do the same, and if we all pitch in, maybe it will solve the problem. Or as the head of resaerch for Greenpeace observes:
The fact of the matter is that the goal of the stimulus bill is to stimulate the economy. Absent a reduction in the ratio of carbon dioxide emissions to GDP, emissions will go up in the real world, regardless of silly accounting tricks. Of course, silly accounting tricks on emissions are to be expected by those seeking to present BAU as progress, but I’m really surprised that it is Greenpeace that is engaging in such shenanigans.
Prometheus, February 6th, 2009
Here is a remarkable display of incoherence. According to a report commissioned by Greenpeace and discussed by The Christian Science Monitor, the economic stimulus package now under debate by the U.S. Congress will reduce greenhouse gas emissions.
What does the report mean by “reduce”? It means that some future emissions that might have occurred will be avoided. Emissions will therefore increase, just not as much as under some other scenario. The difference between that other scenario and the scenario implied by the stimulus package represents a “reduction” in emissions. Yes, you are reading that right.
The great thing about this approach to emissions reductions is that it is an infinite resource. For instance, I just decided not to buy a Hummer and reduced my future emissions by an enormous amount. You can do the same, and if we all pitch in, maybe it will solve the problem. Or as the head of resaerch for Greenpeace observes:
The fact that the federal government could spend so much money and actually help
slow global warming means we’ve really turned the page as a country,” said Kert
Davies, Greenpeace’s Research Director, in a press release.. “This is a real
sign that we’re starting to move beyond the era of fossil fuels.”
The fact of the matter is that the goal of the stimulus bill is to stimulate the economy. Absent a reduction in the ratio of carbon dioxide emissions to GDP, emissions will go up in the real world, regardless of silly accounting tricks. Of course, silly accounting tricks on emissions are to be expected by those seeking to present BAU as progress, but I’m really surprised that it is Greenpeace that is engaging in such shenanigans.
Napolitano on executive pay caps: They Violate Good Sense and the Constitution
. . . They Violate Good Sense and the Constitution. By Andrew P Napolitano
The government cannot condition benefits on the nonassertion of rights.
WSJ, Feb 06, 2009
The executive compensation caps that President Barack Obama and Treasury Secretary Tim Geithner summarily announced this week violate both the Constitution and Economics 101.
I have argued on this page that the Troubled Asset Relief Program for the banks is itself inherently and profoundly unconstitutional for several reasons. It promotes only short-term private benefit, rather than the general welfare as the Constitution commands of all federal spending. It evades the constitutional requirement of equal protection by saving some businesses and letting others that are similarly situated simply expire. And it delegates to the secretary of the Treasury the power to spend taxpayer dollars as he sees fit, in violation of the express constitutional grant of the nondelegable spending power to the Congress.
Now the federal government wants to interfere with private employment contracts already entered into -- and regulate those not yet signed -- in order to satisfy the perceived populist instincts of the electorate. To do so, it demands salary caps as a condition to the receipt of public assistance.
Salary caps are unconstitutional because they violate the well-grounded doctrine against unconstitutional conditions. Simply stated, the government may not condition the acceptance of a governmental benefit on the non-assertion of a constitutional liberty. The government cannot say to individual welfare recipients that they may not criticize the Congress or their welfare checks will be cut off, because the right to criticize the government is a constitutionally protected liberty. It similarly may not condition corporate welfare on the prohibition of contracts with employees above an arbitrary salary amount, because freedom of contract is protected by the Constitution as well.
The salary caps also constitute a taking. High ranking executives are corporate assets with experience and knowledge unique to their employers' businesses. By arbitrarily reducing their salaries to serve the government's political needs, deflating their worth to their employers, incentivizing them to work less, or chasing them away, the government has stripped these individuals of their personal value and of their value to employers without just compensation. Such a taking is prohibited by the Fifth Amendment.
Moreover, government-mandated salary caps will impede economic progress. We can presume that the senior executives of the banks that have received TARP funds who are paid more than $500,000 annually are worth at least that much to their employers. Otherwise the employers would be violating their fiduciary duties to their shareholders by paying those salaries. These employers are banks which the government has "rewarded for failure," to use the president's phrase, by investing money from taxpayers who would not voluntarily invest their own money there.
So, not only are these banks in distress, not only do they seek federal dollars in order to stay afloat, but under these salary caps they cannot go out and get the best talent to run them. The government that is trying to save them, the government that has forced taxpayer dollars into them, has denied them the freedom of contract necessary to assure their salvation. Why would underpaid executives stay with a bailed out bank when their true worth will be compensated elsewhere?
The government can't run a business. Just look at the Post Office, which loses $6 billion a year and has salary caps. Is this what's coming to the banks? If the government can evade the Constitution and violate the basic laws of economics what will it do to free enterprise next?
Mr. Napolitano, who was on the bench of the Superior Court of New Jersey between 1987 and 1995, is the senior judicial analyst at the Fox News Channel. His latest book is "A Nation of Sheep" (Nelson, 2007).
The government cannot condition benefits on the nonassertion of rights.
WSJ, Feb 06, 2009
The executive compensation caps that President Barack Obama and Treasury Secretary Tim Geithner summarily announced this week violate both the Constitution and Economics 101.
I have argued on this page that the Troubled Asset Relief Program for the banks is itself inherently and profoundly unconstitutional for several reasons. It promotes only short-term private benefit, rather than the general welfare as the Constitution commands of all federal spending. It evades the constitutional requirement of equal protection by saving some businesses and letting others that are similarly situated simply expire. And it delegates to the secretary of the Treasury the power to spend taxpayer dollars as he sees fit, in violation of the express constitutional grant of the nondelegable spending power to the Congress.
Now the federal government wants to interfere with private employment contracts already entered into -- and regulate those not yet signed -- in order to satisfy the perceived populist instincts of the electorate. To do so, it demands salary caps as a condition to the receipt of public assistance.
Salary caps are unconstitutional because they violate the well-grounded doctrine against unconstitutional conditions. Simply stated, the government may not condition the acceptance of a governmental benefit on the non-assertion of a constitutional liberty. The government cannot say to individual welfare recipients that they may not criticize the Congress or their welfare checks will be cut off, because the right to criticize the government is a constitutionally protected liberty. It similarly may not condition corporate welfare on the prohibition of contracts with employees above an arbitrary salary amount, because freedom of contract is protected by the Constitution as well.
The salary caps also constitute a taking. High ranking executives are corporate assets with experience and knowledge unique to their employers' businesses. By arbitrarily reducing their salaries to serve the government's political needs, deflating their worth to their employers, incentivizing them to work less, or chasing them away, the government has stripped these individuals of their personal value and of their value to employers without just compensation. Such a taking is prohibited by the Fifth Amendment.
Moreover, government-mandated salary caps will impede economic progress. We can presume that the senior executives of the banks that have received TARP funds who are paid more than $500,000 annually are worth at least that much to their employers. Otherwise the employers would be violating their fiduciary duties to their shareholders by paying those salaries. These employers are banks which the government has "rewarded for failure," to use the president's phrase, by investing money from taxpayers who would not voluntarily invest their own money there.
So, not only are these banks in distress, not only do they seek federal dollars in order to stay afloat, but under these salary caps they cannot go out and get the best talent to run them. The government that is trying to save them, the government that has forced taxpayer dollars into them, has denied them the freedom of contract necessary to assure their salvation. Why would underpaid executives stay with a bailed out bank when their true worth will be compensated elsewhere?
The government can't run a business. Just look at the Post Office, which loses $6 billion a year and has salary caps. Is this what's coming to the banks? If the government can evade the Constitution and violate the basic laws of economics what will it do to free enterprise next?
Mr. Napolitano, who was on the bench of the Superior Court of New Jersey between 1987 and 1995, is the senior judicial analyst at the Fox News Channel. His latest book is "A Nation of Sheep" (Nelson, 2007).
Attempt to establish non-market prices: The Athenian Grain Merchants, 386 B.C.
Cold Case Files: The Athenian Grain Merchants, 386 B.C. By Wayne R. Dunham
Cato Journal, Vol. 28, No. 3 (Fall 2008). Feb 2009
Food price increases have always been politically sensitive. Price spikes like those that have occurred recently create the demand for action on the part of government to alleviate the problem. Yet, government intervention can often do more harm than good. This article examines one such example of a counterproductive response that occurred in 388 B.C. in Athens, Greece. In response to a negative supply shock to the grain market, regulators encouraged grain importers to form a buyers' cartel (monopsony), hoping that it would reduce retail prices by first lowering wholesale grain prices. In reality, the decrease in wholesale prices resulted in a decrease in the willingness of producers in other regions to supply grain to Athens, and retail grain prices increased substantially. Grain importers soon found themselves on trial for their lives in what is probably the earliest recorded antitrust trial. This article uses the information presented at that trial and other contemporary sources to evaluate the grain merchants. actions. More generally, it analyses the impact of a buyer's cartel or monopsony on prices and consumption.
Cato Journal, Vol. 28, No. 3 (Fall 2008). Feb 2009
Food price increases have always been politically sensitive. Price spikes like those that have occurred recently create the demand for action on the part of government to alleviate the problem. Yet, government intervention can often do more harm than good. This article examines one such example of a counterproductive response that occurred in 388 B.C. in Athens, Greece. In response to a negative supply shock to the grain market, regulators encouraged grain importers to form a buyers' cartel (monopsony), hoping that it would reduce retail prices by first lowering wholesale grain prices. In reality, the decrease in wholesale prices resulted in a decrease in the willingness of producers in other regions to supply grain to Athens, and retail grain prices increased substantially. Grain importers soon found themselves on trial for their lives in what is probably the earliest recorded antitrust trial. This article uses the information presented at that trial and other contemporary sources to evaluate the grain merchants. actions. More generally, it analyses the impact of a buyer's cartel or monopsony on prices and consumption.
Thursday, February 5, 2009
Windfall Profits Tax Would Harm the US Economy, Cost Jobs, and Increase Our Reliance on Imported Oil
New Study Finds That a Windfall Profits Tax Would Harm the US Economy, Cost Jobs, and Increase Our Reliance on Imported Oil
IER, February 4, 2009
A study conducted by CRA International[i] and released February 3rd by the American Petroleum Institute (API) finds that instituting a windfall profits tax on the oil and gas industry would cost the U.S. a net loss in jobs of between 370 to 490 thousand by 2030; reduce U.S. gross domestic product between 0.5 to 0.9 percent, or $140 to 240 billion; and increase crude oil imports by 13 to 18 percent (1.2 to 1.5 million barrels per day). The increase in oil imports results from a decline in domestic crude oil production of 21 to 26 percent, or 1.5 to 1.9 million barrels per day, between 2010 and 2030.
The study results are similar to past US experience. Congress enacted a windfall profits tax on domestic oil producers in 1980 expecting to generate tax revenues. The Congressional Research Service[ii] found that, instead, domestic crude oil production was reduced by 1.2 to 8.0 percent and foreign oil imports were increased by 3 to 13 percent.
While there is no specific windfall profits tax proposal currently being considered by Congress, such a tax was part of President Obama’s campaign platform. When crude oil prices dropped last fall, President Obama’s aides changed course and indicated that with oil prices below $80 a barrel would not be considered for a windfall profits tax. However, whether a windfall profits tax or some other similar tax or combination of taxes is instituted on the oil and gas industry, the impact on US jobs, the economy, and foreign imports of oil and natural gas would be similar.
Other study results are:
References
[i]“Energy and Economic Impacts of a Proposed Windfall Profits Tax on Producers of Oil and Refined Products in the United States “, CRA International, February 2009, http://www.api.org/Newsroom/upload/CRA_WPT_Study_1_30_2009.pdf
[ii] Lazzari, Salvatore, “The Crude Oil Windfall Profit Tax of the 1980s: Implications for Current Energy Policy”, Congressional Research Service, CRS Report for Congress, March 9, 2006
---------
You can request the CRS report to us. Contact Jorge Mata
IER, February 4, 2009
A study conducted by CRA International[i] and released February 3rd by the American Petroleum Institute (API) finds that instituting a windfall profits tax on the oil and gas industry would cost the U.S. a net loss in jobs of between 370 to 490 thousand by 2030; reduce U.S. gross domestic product between 0.5 to 0.9 percent, or $140 to 240 billion; and increase crude oil imports by 13 to 18 percent (1.2 to 1.5 million barrels per day). The increase in oil imports results from a decline in domestic crude oil production of 21 to 26 percent, or 1.5 to 1.9 million barrels per day, between 2010 and 2030.
The study results are similar to past US experience. Congress enacted a windfall profits tax on domestic oil producers in 1980 expecting to generate tax revenues. The Congressional Research Service[ii] found that, instead, domestic crude oil production was reduced by 1.2 to 8.0 percent and foreign oil imports were increased by 3 to 13 percent.
While there is no specific windfall profits tax proposal currently being considered by Congress, such a tax was part of President Obama’s campaign platform. When crude oil prices dropped last fall, President Obama’s aides changed course and indicated that with oil prices below $80 a barrel would not be considered for a windfall profits tax. However, whether a windfall profits tax or some other similar tax or combination of taxes is instituted on the oil and gas industry, the impact on US jobs, the economy, and foreign imports of oil and natural gas would be similar.
Other study results are:
- A decline in natural gas production of 9 to 13 percent, 1.6 to 2.4 trillion cubic feet, between 2020 and 2030. More natural gas imports would result, increasing 14-55 percent, or 0.5 to 1.2 trillion cubic feet, during this period.
- A reduction in refinery output of 2 to 4 percent, or 410 to 660 thousand barrels per day, during the 2010 to 2030 period. The reduction in domestic refinery output could partially be offset by increasing foreign imports of petroleum products by 15 to 21 percent, or 230 to 430 million barrels per day, during the 2010 to 2030 period.
- A reduction in household consumption between $20 to 42 billion by 2030.
- A decline in domestic investment by the oil and gas industry between 20 and 25 percent by 2030.
References
[i]“Energy and Economic Impacts of a Proposed Windfall Profits Tax on Producers of Oil and Refined Products in the United States “, CRA International, February 2009, http://www.api.org/Newsroom/upload/CRA_WPT_Study_1_30_2009.pdf
[ii] Lazzari, Salvatore, “The Crude Oil Windfall Profit Tax of the 1980s: Implications for Current Energy Policy”, Congressional Research Service, CRS Report for Congress, March 9, 2006
---------
You can request the CRS report to us. Contact Jorge Mata
Ex-Pentagon official warns of Japan's decline - ‘‘Few in Japan share my concern’’
Ex-Pentagon official warns of Japan's decline
Japan Today, Friday February 06, 2009, 08:43 AM JST
WASHINGTON — A former senior Defense Department official warned Thursday that Japan must take action to arrest the decline in its regional and international standing. ‘‘The erosion of Japan’s international, regional position has begun,’’ said Richard Lawless, deputy undersecretary of defense for Asia and Pacific security affairs. ‘‘If this marginalization process of Japan is not addressed openly and proactively, the relative decline will accelerate,’’ he said, adding that ‘‘Few in Japan share my concern.’’
Lawless said in a speech that Japan’s decline is partly attributable to the ongoing global financial crisis, which has forced many leading Japanese companies to expect to fall into the red. As well, he pointed out inaction on the part of Japanese policymakers in relation to a plethora of challenges, as exemplified by the recent response to piracy off the coast of Somalia.
It took China ‘‘about 10 seconds’’ to decide to participate in an antipiracy mission there, but Japan spent a tremendous amount of time before deciding this week to send two destroyers on a similar mission, Lawless said.
‘‘It’s not bad, but sad,’’ he said.
A former CIA official, Lawless played a major role in talks with Japan and South Korea over the realignment of U.S. forces and military bases in the two U.S. allies in Asia. He was also active in promoting military exchanges between the United States and China.
He expressed hope a new Japanese government to be launched after the next general election, which must be held by September, will ‘‘get serious’’ about Japan’s decline and take steps to counter it.
‘‘That new government, I think, must take a long, hard look at Japan and the region and the world, and make its own decisions about what it’s going to do,’’ he said.
‘‘If Japan wants to be where it needs to be, it needs to act like it’s in the game,’’ Lawless said. ‘‘It’s not a spectator.’’
Japan Today, Friday February 06, 2009, 08:43 AM JST
WASHINGTON — A former senior Defense Department official warned Thursday that Japan must take action to arrest the decline in its regional and international standing. ‘‘The erosion of Japan’s international, regional position has begun,’’ said Richard Lawless, deputy undersecretary of defense for Asia and Pacific security affairs. ‘‘If this marginalization process of Japan is not addressed openly and proactively, the relative decline will accelerate,’’ he said, adding that ‘‘Few in Japan share my concern.’’
Lawless said in a speech that Japan’s decline is partly attributable to the ongoing global financial crisis, which has forced many leading Japanese companies to expect to fall into the red. As well, he pointed out inaction on the part of Japanese policymakers in relation to a plethora of challenges, as exemplified by the recent response to piracy off the coast of Somalia.
It took China ‘‘about 10 seconds’’ to decide to participate in an antipiracy mission there, but Japan spent a tremendous amount of time before deciding this week to send two destroyers on a similar mission, Lawless said.
‘‘It’s not bad, but sad,’’ he said.
A former CIA official, Lawless played a major role in talks with Japan and South Korea over the realignment of U.S. forces and military bases in the two U.S. allies in Asia. He was also active in promoting military exchanges between the United States and China.
He expressed hope a new Japanese government to be launched after the next general election, which must be held by September, will ‘‘get serious’’ about Japan’s decline and take steps to counter it.
‘‘That new government, I think, must take a long, hard look at Japan and the region and the world, and make its own decisions about what it’s going to do,’’ he said.
‘‘If Japan wants to be where it needs to be, it needs to act like it’s in the game,’’ Lawless said. ‘‘It’s not a spectator.’’
Remarks of President Barack Obama National Prayer Breakfast
"This is my hope. This is my prayer."
Washington Hilton, Washington DC, Thursday, February 5th, 2009 at 12:08 pm
"The particular faith that motivates each of us can promote a greater good for all of us," President Obama said this morning to a crowd of several thousand people gathered for the National Prayer Breakfast at the Washington Hilton in the nation's capital. "Instead of driving us apart, our varied beliefs can bring ustogether to feed the hungry and comfort the afflicted; to make peace where there is strife and rebuild what has broken; to lift up those who have fallen on hard times."
A dozen foreign leaders attended, including former British Prime Minister Tony Blair, who delivered the keynote address.
Rep. Jo Ann Emerson (R-MO) and Sen. Kirsten Gillibrand (D-NY) read from Scripture, Rep. Ike Skelton (D-MO) delivered a prayer for national leaders, Rep. Todd Akin (R-MO) delivered a prayer for world leaders, and Rep. John Lewis (D-GA) delivered the closing prayer. Casting Crowns, a Christian rock group, performed at the event.
The National Prayer Breakfast, currently co-chaired by Reps. Vern Ehlers (R-MI) and Heath Shuler (D-NC), is a yearly event held in Washington, D.C., on the first Thursday of February each year. The event has taken place since 1953 and every U.S. president since Dwight D. Eisenhower has participated in the breakfast.
The President is set to sign an executive order regarding the White House Office of Faith-Based and Neighborhood Partnerships, which we'll have more on later today.
Read the President's remarks here.
Washington Hilton, Washington DC, Thursday, February 5th, 2009 at 12:08 pm
"The particular faith that motivates each of us can promote a greater good for all of us," President Obama said this morning to a crowd of several thousand people gathered for the National Prayer Breakfast at the Washington Hilton in the nation's capital. "Instead of driving us apart, our varied beliefs can bring ustogether to feed the hungry and comfort the afflicted; to make peace where there is strife and rebuild what has broken; to lift up those who have fallen on hard times."
A dozen foreign leaders attended, including former British Prime Minister Tony Blair, who delivered the keynote address.
Rep. Jo Ann Emerson (R-MO) and Sen. Kirsten Gillibrand (D-NY) read from Scripture, Rep. Ike Skelton (D-MO) delivered a prayer for national leaders, Rep. Todd Akin (R-MO) delivered a prayer for world leaders, and Rep. John Lewis (D-GA) delivered the closing prayer. Casting Crowns, a Christian rock group, performed at the event.
The National Prayer Breakfast, currently co-chaired by Reps. Vern Ehlers (R-MI) and Heath Shuler (D-NC), is a yearly event held in Washington, D.C., on the first Thursday of February each year. The event has taken place since 1953 and every U.S. president since Dwight D. Eisenhower has participated in the breakfast.
The President is set to sign an executive order regarding the White House Office of Faith-Based and Neighborhood Partnerships, which we'll have more on later today.
Read the President's remarks here.
Fuel Cell Projects Continue Push for Low-Cost, Environmentally Friendly Coal Power
SECA Fuel Cell Program Moves Two Key Projects Into Next Phase
Projects Continue Push for Low-Cost, Environmentally Friendly Coal Power
Energy Dept, February 5, 2009
Washington, D.C. — The U.S. Department of Energy (DOE) has selected two projects for continuation within the Department's Solid State Energy Conversion Alliance (SECA) Program research portfolio. The projects—led by FuelCell Energy, in partnership with VersaPower Systems, and Siemens Energy—have successfully demonstrated solid oxide fuel cells (SOFCs) designed for aggregation and use in coal-fueled central power generation. Further development of these low-cost, near-zero emission fuel cell systems will substantially contribute to solving the Nation's energy security, climate, and water challenges.
The selections were based upon an assessment of demonstrated progress in developing high-performance, low-cost SOFC technology. FuelCell Energy is testing two ~10 kilowatt SOFC stacks incorporating planar cells; each has surpassed 4,700 hours of operation to date. Similarly, Siemens is testing a ~10 kilowatt SOFC stack incorporating its new higher power Delta cells, with 2,500 hours of operation to date. With the continuation, these projects will pursue cell materials and design development to further improve performance, reduce cost, and integrate the cells into larger stacks for evaluation and incorporation into larger demonstrations beginning in 2012.
From an environmental perspective, fuel cells are one of the most attractive technologies for generating electricity. SOFCs operate by separating oxygen from air and transferring it across a solid electrolyte membrane, where it reacts with a fuel—such as synthesis gas derived from coal, biofuels, or natural gas—to produce steam and carbon dioxide (CO2). Condensing the steam results in a pure stream of CO2 gas, which can be readily captured for storage or other use in a central location. This feature, coupled with very high efficiencies and the fact that fuel cells operate more efficiently at lower temperatures than combustion-based technologies, results in near-zero emissions. In addition, eliminating the need for steam bottoming cycles, and the ability to keep fuel and air streams separate, significantly reduce water withdrawal.
To realize the intrinsic advantages of SOFCs requires achievement of SECA's cost reduction goals. Projects in the SECA portfolio are conducting research and technology development to lower costs and improve reliability, ultimately culminating in the demonstration of fuel cell technologies that can support power generation systems as large as several hundred megawatts capacity. Key program goals, as defined by the Office of Fossil Energy and the U.S. Office of Management and Budget, include:
Projects Continue Push for Low-Cost, Environmentally Friendly Coal Power
Energy Dept, February 5, 2009
Washington, D.C. — The U.S. Department of Energy (DOE) has selected two projects for continuation within the Department's Solid State Energy Conversion Alliance (SECA) Program research portfolio. The projects—led by FuelCell Energy, in partnership with VersaPower Systems, and Siemens Energy—have successfully demonstrated solid oxide fuel cells (SOFCs) designed for aggregation and use in coal-fueled central power generation. Further development of these low-cost, near-zero emission fuel cell systems will substantially contribute to solving the Nation's energy security, climate, and water challenges.
The selections were based upon an assessment of demonstrated progress in developing high-performance, low-cost SOFC technology. FuelCell Energy is testing two ~10 kilowatt SOFC stacks incorporating planar cells; each has surpassed 4,700 hours of operation to date. Similarly, Siemens is testing a ~10 kilowatt SOFC stack incorporating its new higher power Delta cells, with 2,500 hours of operation to date. With the continuation, these projects will pursue cell materials and design development to further improve performance, reduce cost, and integrate the cells into larger stacks for evaluation and incorporation into larger demonstrations beginning in 2012.
From an environmental perspective, fuel cells are one of the most attractive technologies for generating electricity. SOFCs operate by separating oxygen from air and transferring it across a solid electrolyte membrane, where it reacts with a fuel—such as synthesis gas derived from coal, biofuels, or natural gas—to produce steam and carbon dioxide (CO2). Condensing the steam results in a pure stream of CO2 gas, which can be readily captured for storage or other use in a central location. This feature, coupled with very high efficiencies and the fact that fuel cells operate more efficiently at lower temperatures than combustion-based technologies, results in near-zero emissions. In addition, eliminating the need for steam bottoming cycles, and the ability to keep fuel and air streams separate, significantly reduce water withdrawal.
To realize the intrinsic advantages of SOFCs requires achievement of SECA's cost reduction goals. Projects in the SECA portfolio are conducting research and technology development to lower costs and improve reliability, ultimately culminating in the demonstration of fuel cell technologies that can support power generation systems as large as several hundred megawatts capacity. Key program goals, as defined by the Office of Fossil Energy and the U.S. Office of Management and Budget, include:
- Cost of $175 per kilowatt (2007 dollars) for a minimum 40,000 hour fuel cell stack.
- Cost of $700 per kilowatt (2007 dollars) for an integrated fuel cell power block.
- Maintaining high power density in the large cells necessary for economic manufacturing.
- 2012—Multiple 1‑megawatt systems to demonstrate 5-year life by 2017.
- 2015—Multiple 5‑megawatt systems to demonstrate system integration with heat recovery turbines, power electronics, and other system level features by 2017.
- 2020—Full scale 250–500 megawatt integrated gasification fuel cell plant as part of DOE’s Near-Zero Emissions Coal-Based Electricity Demonstration Program.
Industry Views: Green Jobs That Nobody Wants
1 Green Jobs That Nobody Wants, by Robert Murphy
IER, February 4, 2009
On February 3, 2009, Senator Debbie Stabenow (D-MI) and Rep. Jay Inslee (D-WA), in conjunction with union leaders and environmental groups, released their “Good Jobs First” report. Although advocates of a “green recovery” point to estimates that 456,000 green-collar jobs would be created by the stimulus package, the new Stabenow/Inslee report reveals the dirty little secret that many of these new jobs would offer low pay and poor working conditions. For example, the Good Jobs First report discusses a recycling firm in Los Angeles-which is just the type of operation that will “green” stimulus money-where workers make $8.25 an hour and receive no health insurance.
Of course, the Good Jobs First report doesn’t state the obvious conclusion: government efforts to “help” workers and “stimulate” the economy will only make things worse. Faced with the unintended consequences of their original scheme, the proponents of a green recovery want to double down and shovel more tax dollars at the problem and hope something sticks.
Although critics have pointed out the plan’s flaws since its inception, it is at least encouraging that the unions-the alleged beneficiaries of green-collar stimulus money-are beginning to realize that the deal isn’t as rosy as they have been led to believe. No matter how much politicians might like to claim otherwise, they can’t repeal the laws of economics.
“Demand curves slope downward,” economists say, meaning that people buy more of something only when its price is lower. This law applies to consumers who walk the aisles in grocery stores, but it also applies to businesses that make solar panels. To get the biggest bang of jobs “created” for the stimulus buck, those jobs have to be low-wage. The higher the pay and other perks the unions demand, the fewer jobs that employers will be able to afford-even with government subsidies.
This underscores a basic flaw in the whole notion of a green recovery. Of the millions of unemployed Americans today, not many of them have the specific background and skills necessary for the good-paying jobs that are available in the so-called green sectors of the economy. So even if the government provides the handouts, the only way to get these people into green jobs quickly is if they fill positions requiring no extensive training.
The popular pro-green recovery studies, which purport that there are plenty of American workers with the right skills to fill the new, high-wage positions, suffer from a basic flaw in their methodology. As IER pointed out in its critique of such studies, they count up the number of skilled workers in the work force as a whole, rather than counting up the qualified workers in the current pool of unemployed workers. The only way, then, that these alleged hundreds of thousands of high-paying, “green” jobs could be filled-relying on government subsidies, of course-is to siphon most of their workers away from other industries. No net jobs would be created, because the new green slot would be offset by the existing jobs vacated by the skilled worker.
Confusion between gross and net job creation is typical of the green jobs. For example, the 456,000 figure touted by the Center for American Progress does not take into account the jobs that would be destroyed by the government’s methods of paying for the necessary subsidies. The CAP estimate simply assumes that all 456,000 workers filling these new green slots would have come from the ranks of the unemployed and that the higher taxes and Uncle Sam’s increased borrowing will have no job-destroying impact on the rest of the American economy.
It is refreshing to see that even the unions are catching on. But rather than ask for a bigger handout, they should stop looking to the government to help workers. Only when the government stops trying to pick industrial winners and losers can true economic recovery begin. Only when the government stops changing the rules and throwing around hundreds of billions in borrowed money will the unemployed get good jobs in the private sector.
2 Good Jobs and Green Jobs: Which Road to Take? By Jason Lefkowitz
Change to Win, February 3, 2009 at 10:19 AM
A few days ago, I wrote about how green jobs are not automatically good jobs:
Today, in conjunction with Good Jobs First and the Sierra Club, we’re rolling out a new report that demonstrates in detail just how true that is.
“High Road or Low Road? Job Quality in the New Green Economy” (PDF) looks at a range of existing green jobs in sectors across the economy, including manufacturing, construction, and waste management, and finds that while policy choices have made some of these green jobs good jobs, the connection is by no means automatic:
Given the economic and environmental challenges facing America and the world, the need for a green economy becomes clearer every day. In the push to get there, though, we must make sure that the workers whose labor powers that green economy aren’t left behind by it while its benefits flow to a few plutocrats at the top. If we do not, we risk repeating the mistakes that led us into the current economic crisis in the first place.
IER, February 4, 2009
On February 3, 2009, Senator Debbie Stabenow (D-MI) and Rep. Jay Inslee (D-WA), in conjunction with union leaders and environmental groups, released their “Good Jobs First” report. Although advocates of a “green recovery” point to estimates that 456,000 green-collar jobs would be created by the stimulus package, the new Stabenow/Inslee report reveals the dirty little secret that many of these new jobs would offer low pay and poor working conditions. For example, the Good Jobs First report discusses a recycling firm in Los Angeles-which is just the type of operation that will “green” stimulus money-where workers make $8.25 an hour and receive no health insurance.
Of course, the Good Jobs First report doesn’t state the obvious conclusion: government efforts to “help” workers and “stimulate” the economy will only make things worse. Faced with the unintended consequences of their original scheme, the proponents of a green recovery want to double down and shovel more tax dollars at the problem and hope something sticks.
Although critics have pointed out the plan’s flaws since its inception, it is at least encouraging that the unions-the alleged beneficiaries of green-collar stimulus money-are beginning to realize that the deal isn’t as rosy as they have been led to believe. No matter how much politicians might like to claim otherwise, they can’t repeal the laws of economics.
“Demand curves slope downward,” economists say, meaning that people buy more of something only when its price is lower. This law applies to consumers who walk the aisles in grocery stores, but it also applies to businesses that make solar panels. To get the biggest bang of jobs “created” for the stimulus buck, those jobs have to be low-wage. The higher the pay and other perks the unions demand, the fewer jobs that employers will be able to afford-even with government subsidies.
This underscores a basic flaw in the whole notion of a green recovery. Of the millions of unemployed Americans today, not many of them have the specific background and skills necessary for the good-paying jobs that are available in the so-called green sectors of the economy. So even if the government provides the handouts, the only way to get these people into green jobs quickly is if they fill positions requiring no extensive training.
The popular pro-green recovery studies, which purport that there are plenty of American workers with the right skills to fill the new, high-wage positions, suffer from a basic flaw in their methodology. As IER pointed out in its critique of such studies, they count up the number of skilled workers in the work force as a whole, rather than counting up the qualified workers in the current pool of unemployed workers. The only way, then, that these alleged hundreds of thousands of high-paying, “green” jobs could be filled-relying on government subsidies, of course-is to siphon most of their workers away from other industries. No net jobs would be created, because the new green slot would be offset by the existing jobs vacated by the skilled worker.
Confusion between gross and net job creation is typical of the green jobs. For example, the 456,000 figure touted by the Center for American Progress does not take into account the jobs that would be destroyed by the government’s methods of paying for the necessary subsidies. The CAP estimate simply assumes that all 456,000 workers filling these new green slots would have come from the ranks of the unemployed and that the higher taxes and Uncle Sam’s increased borrowing will have no job-destroying impact on the rest of the American economy.
It is refreshing to see that even the unions are catching on. But rather than ask for a bigger handout, they should stop looking to the government to help workers. Only when the government stops trying to pick industrial winners and losers can true economic recovery begin. Only when the government stops changing the rules and throwing around hundreds of billions in borrowed money will the unemployed get good jobs in the private sector.
2 Good Jobs and Green Jobs: Which Road to Take? By Jason Lefkowitz
Change to Win, February 3, 2009 at 10:19 AM
A few days ago, I wrote about how green jobs are not automatically good jobs:
The old thinking was that it was impossible to grow the economy and clean
the environment at the same time. The green jobs movement has done important
work in freeing the world from the tyranny of that particular dead idea; thanks
to their efforts, there’s a lot of people thinking hard about how to apply the
stimulus in ways that grow green jobs.
But green jobs are not, in and of themselves, good jobs. They can be
good jobs - jobs that provide workers with decent wages, economic security and a
shot at the American Dream - but they can just as easily go the other way. It
all depends on the choices we make.
Today, in conjunction with Good Jobs First and the Sierra Club, we’re rolling out a new report that demonstrates in detail just how true that is.
“High Road or Low Road? Job Quality in the New Green Economy” (PDF) looks at a range of existing green jobs in sectors across the economy, including manufacturing, construction, and waste management, and finds that while policy choices have made some of these green jobs good jobs, the connection is by no means automatic:
- Low pay is not uncommon in the workplaces we profile: the lowest wage we found was $8.25 an hour at a recycling processing plant, but we also discovered jobs in manufacturing facilities serving the renewable energy sector paying as little as $11 an hour.
- Wage rates at many wind and solar manufacturing facilities are below the national average for workers employed in the manufacture of durable goods. In some locations, average pay rates fall short of income levels needed to support a single adult with one child.
- Some U.S. wind and solar manufacturers have already begun to offshore production of components destined for U.S. markets to low-wage havens such as China and Mexico. Examples of offshoring include the manufacture of blades for wind turbines, defying the common assumption that such blades are too large to ship overseas.
- Very few workers at wind and solar manufacturing workplaces identified in the course of our research are covered by collective bargaining agreements. In at least two instances, this appears to be a direct result of aggressive anti-union campaigns run by employers with the help of union-busting consultants. On the construction side, we found that a leading contractor engaged in energy efficiency work has a similarly hostile approach to unions.
- We could not find specific wages for nonunion construction workers employed in green building, but publicly available data on overall construction wages suggest that they are far lower than those of the union members profiled in the report. Analysis provided by the Economic Policy Institute indicates that among nonunion laborers, carpenters, painters, and roofers, a majority make less than $12.50 an hour and a third make less than the federal poverty wage for a family of four ($10.19 an hour).
Given the economic and environmental challenges facing America and the world, the need for a green economy becomes clearer every day. In the push to get there, though, we must make sure that the workers whose labor powers that green economy aren’t left behind by it while its benefits flow to a few plutocrats at the top. If we do not, we risk repeating the mistakes that led us into the current economic crisis in the first place.
Air Force fails new nuclear reviews
Air Force fails new nuclear reviews. By Bill Gertz
Washington Times, Feb 05, 2009
Air Force nuclear units have failed two inspections in the past three months, providing fresh evidence that the military service that jarred the world in 2007 by mistakenly transporting live nuclear weapons across the United States continues to suffer lapses in its management of intercontinental ballistic missiles.
Jennifer Thibault, a spokeswoman for the Air Force Space Command, said the failed "surety" inspections at Wyoming and Montana bases in November and December involved "administrative and paperwork issues." In all, three Air Force nuclear-missile units and two strategic-bomber units failed such inspections in 2008.
Despite the problems, the Air Force said it is making progress addressing issues with the security and handling of nuclear-tipped missiles that came to light after two embarrassing episodes in 2006 and 2007 prompted a widespread review and management changes.
"While we missed the mark in certain areas during the last three inspections of our ICBM wings, overall, we've seen that our airmen are highly capable of operating, maintaining and securing our nuclear forces," Miss Thibault told The Washington Times.
James Schlesinger, the former defense secretary who headed a recent task force on nuclear-weapons management, said Tuesday the continuing problems affect U.S. credibility worldwide - both in deterring attacks and assuring allies of protection - but he said he thinks the Air Force is committed to fixing the problems.
"Whatever the size of the nuclear force is, it has to be run with zero defects," Mr. Schlesinger said in an interview. "We've got to get back to that if we want to have any credibility in the international scene."
The most recent surety-inspection failure took place at the 90th Missile Wing at F.E. Warren Air Force Base in Wyoming from Dec. 2 to Dec. 17. The base is in charge of 150 Minuteman III missiles that are on alert 24 hours a day.
Air Force officials said the 90th was given failing grades by inspectors from the Space Command and the Defense Technology Security Administration for not properly documenting tests on missiles, which require strict monitoring.
The Wyoming base was at the center of one of the two prior nuclear mishaps that cast embarrassment on the Air Force. Nuclear-missile units at F.E. Warren mistakenly transported four Minuteman III forward sections containing sensitive components to Taiwan on two occasions, in October and November 2006. The components were recovered, but the mistake exposed larger security shortfalls.
A subsequent security breakdown allowed live nuclear weapons to be flown improperly from Minot Air Force Base in North Dakota to Barksdale Air Force Base in Louisiana in August 2007.
The incidents prompted Defense Secretary Robert M. Gates to form an eight-member Task Force on Nuclear Weapons Management that produced two reports critical of the Air Force's handling of nuclear missiles. On-site inspections were made stricter and have divulged additional problems, officials confirm.
The two other nuclear-surety-inspection failures took place last year at the 341st Missile Wing at Malstrom Air Force Base, Montana, from Oct. 26 to Nov. 10, and at the 91st Missile Wing at Minot Air Force Base, N.D., from Jan. 22 to Jan. 30, 2008. Both wings also handle 150 nuclear-tipped Minuteman IIIs deployed in underground silos.
Miss Thibault declined to provide details of the inspection failures because of the sensitivity of the information.
Surety inspections are held every 18 months and measure whether troops are prepared to fire missiles during a two-week testing period.
"Nuclear Surety Inspections (NSI) are extremely detailed and demand the absolute highest standards of compliance and accountability [to pass]," Miss Thibault said.
The Air Force defines nuclear-surety inspections as reviews of all nuclear-weapons-related material, people and procedures that "contribute to the security, safety, and reliability of nuclear weapons and to the assurance that there will be no nuclear-weapon accidents, incidents, unauthorized weapon detonations, or degradation in performance at the target."
Last year, the tests were made more rigorous, Miss Thibault said, following the critical report by the task force on nuclear weapons.
"These inspections are tools that our commanders use to determine the readiness of their units to perform the mission to the standard we demand - perfection," she said. "We're seeing progress in ICBM nuclear surety."
As for the test failures, "unsatisfactory inspection results, in the sense of identifying discrepancies, are part of the fix and should not be interpreted as suggesting that the ultimate security or safety of the American people or our allies has been put at risk," Miss Thibault said.
The Defense Department task force report issued in October warned that the Air Force was not doing its job of securing and maintaining nuclear-missile forces. The report identified a "serious erosion of senior-level attention, focus, expertise, mission readiness, resources, and discipline in the nuclear weapons mission."
The Air Force responded by initiating 100 steps to improve nuclear-weapons problems.
Data from the report show that the Air Force failed on five of its 22 surety inspections in 2008. It was the fourth time since 1992 that at least five failing grades were issued, the report stated.
According to the report and the Air Force, the five inspections failures during 2008 included the three at the missile wings and two at strategic nuclear bomber wings.
By contrast, in 2006 and 2007, there were a total of 18 surety inspections, and all received passing grades.
"Over the past 10 years, inspection pass rates point to anomalies that indicate a systemic problem in the inspection regime," the report said. "Something is clearly wrong."
A second task force report, made public Jan. 9, stated that rigorous nuclear surety inspections are "critical to maintaining a credible U.S. deterrent."
"However, the task force believes a significant shortfall exists in the DoD nuclear surety inspection process," the report said.
Mr. Schlesinger, who headed the task force, stated in the October report that the Air Force in recent years focused too much on conflicts in the Middle East and Afghanistan. "Both inattention and conscious budget decisions have led to the atrophy of the Air Force´s nuclear mission," he stated. "But the balance must be restored. Though reduced in scope, the nuclear mission remains essential."
The U.S. nuclear arsenal is still needed despite the demise of the Cold War for deterring nuclear threats to the United States and its allies, he said. The weapons must be maintained as a credible deterrent against nuclear powers such as China and Russia that are in the process of building up their nuclear forces, Mr. Schlesinger said.
The January task force report stated that one of the problems for the Air Force's nuclear weapons mission is that troops do not clearly understand the deterrence mission of the expensive and extremely powerful strategic weapons.
Unlike the Air Force, which has numerous problems with its nuclear mission, the Navy has sustained its commitment to nuclear forces but still is "fraying at the edges," the report said.
The task force "did not find in the Navy the kind of deterioration in morale that characterized Air Force nuclear units," the report said.
"The attitude in the Air Force was: 'We know that the president and secretary of defense don´t give a damn about what we do,' " the report stated.
By contrast, a Navy ballistic missile submarine crew told task force investigators that while senior Navy leaders are disinterested in the strategic nuclear deterrence forces, the ballistic missile submariners remain highly motivated.
"The attitude in the Navy was: 'We know that the president and secretary of defense don´t care - but we do,' " the report stated.
However, the final report also contained the conclusion that the problem of "the lack of interest in and attention to the nuclear mission and nuclear deterrence ... go well beyond the Air Force."
"This lack of interest and attention have been widespread throughout DoD and contributed to the decline of attention in the Air Force," the final report stated.
The report called for creating the position of assistant secretary of defense for nuclear deterrence, which would elevate nuclear issues that have been separated and downgraded as the result of a Pentagon reorganization during the Bush administration.
Washington Times, Feb 05, 2009
Air Force nuclear units have failed two inspections in the past three months, providing fresh evidence that the military service that jarred the world in 2007 by mistakenly transporting live nuclear weapons across the United States continues to suffer lapses in its management of intercontinental ballistic missiles.
Jennifer Thibault, a spokeswoman for the Air Force Space Command, said the failed "surety" inspections at Wyoming and Montana bases in November and December involved "administrative and paperwork issues." In all, three Air Force nuclear-missile units and two strategic-bomber units failed such inspections in 2008.
Despite the problems, the Air Force said it is making progress addressing issues with the security and handling of nuclear-tipped missiles that came to light after two embarrassing episodes in 2006 and 2007 prompted a widespread review and management changes.
"While we missed the mark in certain areas during the last three inspections of our ICBM wings, overall, we've seen that our airmen are highly capable of operating, maintaining and securing our nuclear forces," Miss Thibault told The Washington Times.
James Schlesinger, the former defense secretary who headed a recent task force on nuclear-weapons management, said Tuesday the continuing problems affect U.S. credibility worldwide - both in deterring attacks and assuring allies of protection - but he said he thinks the Air Force is committed to fixing the problems.
"Whatever the size of the nuclear force is, it has to be run with zero defects," Mr. Schlesinger said in an interview. "We've got to get back to that if we want to have any credibility in the international scene."
The most recent surety-inspection failure took place at the 90th Missile Wing at F.E. Warren Air Force Base in Wyoming from Dec. 2 to Dec. 17. The base is in charge of 150 Minuteman III missiles that are on alert 24 hours a day.
Air Force officials said the 90th was given failing grades by inspectors from the Space Command and the Defense Technology Security Administration for not properly documenting tests on missiles, which require strict monitoring.
The Wyoming base was at the center of one of the two prior nuclear mishaps that cast embarrassment on the Air Force. Nuclear-missile units at F.E. Warren mistakenly transported four Minuteman III forward sections containing sensitive components to Taiwan on two occasions, in October and November 2006. The components were recovered, but the mistake exposed larger security shortfalls.
A subsequent security breakdown allowed live nuclear weapons to be flown improperly from Minot Air Force Base in North Dakota to Barksdale Air Force Base in Louisiana in August 2007.
The incidents prompted Defense Secretary Robert M. Gates to form an eight-member Task Force on Nuclear Weapons Management that produced two reports critical of the Air Force's handling of nuclear missiles. On-site inspections were made stricter and have divulged additional problems, officials confirm.
The two other nuclear-surety-inspection failures took place last year at the 341st Missile Wing at Malstrom Air Force Base, Montana, from Oct. 26 to Nov. 10, and at the 91st Missile Wing at Minot Air Force Base, N.D., from Jan. 22 to Jan. 30, 2008. Both wings also handle 150 nuclear-tipped Minuteman IIIs deployed in underground silos.
Miss Thibault declined to provide details of the inspection failures because of the sensitivity of the information.
Surety inspections are held every 18 months and measure whether troops are prepared to fire missiles during a two-week testing period.
"Nuclear Surety Inspections (NSI) are extremely detailed and demand the absolute highest standards of compliance and accountability [to pass]," Miss Thibault said.
The Air Force defines nuclear-surety inspections as reviews of all nuclear-weapons-related material, people and procedures that "contribute to the security, safety, and reliability of nuclear weapons and to the assurance that there will be no nuclear-weapon accidents, incidents, unauthorized weapon detonations, or degradation in performance at the target."
Last year, the tests were made more rigorous, Miss Thibault said, following the critical report by the task force on nuclear weapons.
"These inspections are tools that our commanders use to determine the readiness of their units to perform the mission to the standard we demand - perfection," she said. "We're seeing progress in ICBM nuclear surety."
As for the test failures, "unsatisfactory inspection results, in the sense of identifying discrepancies, are part of the fix and should not be interpreted as suggesting that the ultimate security or safety of the American people or our allies has been put at risk," Miss Thibault said.
The Defense Department task force report issued in October warned that the Air Force was not doing its job of securing and maintaining nuclear-missile forces. The report identified a "serious erosion of senior-level attention, focus, expertise, mission readiness, resources, and discipline in the nuclear weapons mission."
The Air Force responded by initiating 100 steps to improve nuclear-weapons problems.
Data from the report show that the Air Force failed on five of its 22 surety inspections in 2008. It was the fourth time since 1992 that at least five failing grades were issued, the report stated.
According to the report and the Air Force, the five inspections failures during 2008 included the three at the missile wings and two at strategic nuclear bomber wings.
By contrast, in 2006 and 2007, there were a total of 18 surety inspections, and all received passing grades.
"Over the past 10 years, inspection pass rates point to anomalies that indicate a systemic problem in the inspection regime," the report said. "Something is clearly wrong."
A second task force report, made public Jan. 9, stated that rigorous nuclear surety inspections are "critical to maintaining a credible U.S. deterrent."
"However, the task force believes a significant shortfall exists in the DoD nuclear surety inspection process," the report said.
Mr. Schlesinger, who headed the task force, stated in the October report that the Air Force in recent years focused too much on conflicts in the Middle East and Afghanistan. "Both inattention and conscious budget decisions have led to the atrophy of the Air Force´s nuclear mission," he stated. "But the balance must be restored. Though reduced in scope, the nuclear mission remains essential."
The U.S. nuclear arsenal is still needed despite the demise of the Cold War for deterring nuclear threats to the United States and its allies, he said. The weapons must be maintained as a credible deterrent against nuclear powers such as China and Russia that are in the process of building up their nuclear forces, Mr. Schlesinger said.
The January task force report stated that one of the problems for the Air Force's nuclear weapons mission is that troops do not clearly understand the deterrence mission of the expensive and extremely powerful strategic weapons.
Unlike the Air Force, which has numerous problems with its nuclear mission, the Navy has sustained its commitment to nuclear forces but still is "fraying at the edges," the report said.
The task force "did not find in the Navy the kind of deterioration in morale that characterized Air Force nuclear units," the report said.
"The attitude in the Air Force was: 'We know that the president and secretary of defense don´t give a damn about what we do,' " the report stated.
By contrast, a Navy ballistic missile submarine crew told task force investigators that while senior Navy leaders are disinterested in the strategic nuclear deterrence forces, the ballistic missile submariners remain highly motivated.
"The attitude in the Navy was: 'We know that the president and secretary of defense don´t care - but we do,' " the report stated.
However, the final report also contained the conclusion that the problem of "the lack of interest in and attention to the nuclear mission and nuclear deterrence ... go well beyond the Air Force."
"This lack of interest and attention have been widespread throughout DoD and contributed to the decline of attention in the Air Force," the final report stated.
The report called for creating the position of assistant secretary of defense for nuclear deterrence, which would elevate nuclear issues that have been separated and downgraded as the result of a Pentagon reorganization during the Bush administration.
Extremism and Social Learning
Extremism and Social Learning. By Edward L. Glaeser & Cass R. Sunstein
The Journal of Legal Analysis, Vol 1, No 1 (2009)
Abstract
When members of deliberating groups speak with one another, their predeliberation tendencies often become exacerbated as their views become more extreme. The resulting phenomenon—group polarization—has been observed in many settings, and it bears on the actions of juries, administrative tribunals, corporate boards, and other institutions. Polarization can result from rational Bayesian updating by group members, but in many contexts, this rational interpretation of polarization seems implausible. We argue that people are better seen as Credulous Bayesians, who insufficiently adjust for idiosyncratic features of particular environments and put excessive weight on the statements of others in situations of (1) common sources of information; (2) highly unrepresentative group membership; (3) statements that are made to obtain approval; and (4) statements that are designed to manipulate. Credulous Bayesianism can produce extremism and significant blunders—the folly of crowds. We discuss the implications of Credulous Bayesianism for law and politics, including media policy and cognitive diversity on administrative agencies and courts.
Introduction (excerpts):
Many people have celebrated the potential value of deliberation, including its uses in democracy (Habermas 1998), and it is tempting to think that group decision-making will both produce wiser decisions and average out individual extremism. In many settings and countries, however, researchers have found that group deliberation leads people to take more extreme positions (Brown 1986). The increased extremism, often called group polarization, is usually accompanied by greater confidence and significantly decreased internal diversity, even when individual opinions are given anonymously (Schkade, Sunstein & Kahneman 2000; Brown 1986, 207). These facts, which are summarized in Section 2 of this article, appear to cast doubt on the wisdom, and certainly the moderation, of crowds. If deliberation leads liberals to become more liberal, and conservatives to become more conservative, the effects of deliberation are unlikely to be desirable in both cases. Deliberation might account for the folly, not the wisdom, of crowds.
Group polarization has evident implications for many issues in law and politics. It suggests, for example, that like-minded jurors, judges, and administrative officials will move to extremes. If group members on a corporate board or in a political campaign are inclined to engage in risk-taking behavior, group deliberation will produce increased enthusiasm for taking risks. But the mechanisms behind group polarization remain inadequately understood, and it is difficult to make predictions or to offer prescriptions without identifying those mechanisms.
In Section 3 of this article, we show that group polarization is predicted by a highly rational process of Bayesian inference. If individuals have independent information, which is shared in the deliberative process, then Bayesian learning predicts that ex post opinions will be both more homogeneous within the group and more extreme than individual opinions. Bayesian inference suggests that individuals with access only to their own private information will recognize their ignorance and hew towards the center. The information of the crowd provides new data, which should lead people to be more confident and more extreme in their views. Because group members are listening to one another, it is no puzzle that their post-deliberation opinions are more extreme than their pre-deliberation opinions. The phenomenon of group polarization, on its own, does not imply that crowds are anything but wise; if individual deliberators tend to believe that the earth is round rather than flat, nothing is amiss if deliberation leads them to be firmer and more confident in that belief.
The Journal of Legal Analysis, Vol 1, No 1 (2009)
Abstract
When members of deliberating groups speak with one another, their predeliberation tendencies often become exacerbated as their views become more extreme. The resulting phenomenon—group polarization—has been observed in many settings, and it bears on the actions of juries, administrative tribunals, corporate boards, and other institutions. Polarization can result from rational Bayesian updating by group members, but in many contexts, this rational interpretation of polarization seems implausible. We argue that people are better seen as Credulous Bayesians, who insufficiently adjust for idiosyncratic features of particular environments and put excessive weight on the statements of others in situations of (1) common sources of information; (2) highly unrepresentative group membership; (3) statements that are made to obtain approval; and (4) statements that are designed to manipulate. Credulous Bayesianism can produce extremism and significant blunders—the folly of crowds. We discuss the implications of Credulous Bayesianism for law and politics, including media policy and cognitive diversity on administrative agencies and courts.
Introduction (excerpts):
Many people have celebrated the potential value of deliberation, including its uses in democracy (Habermas 1998), and it is tempting to think that group decision-making will both produce wiser decisions and average out individual extremism. In many settings and countries, however, researchers have found that group deliberation leads people to take more extreme positions (Brown 1986). The increased extremism, often called group polarization, is usually accompanied by greater confidence and significantly decreased internal diversity, even when individual opinions are given anonymously (Schkade, Sunstein & Kahneman 2000; Brown 1986, 207). These facts, which are summarized in Section 2 of this article, appear to cast doubt on the wisdom, and certainly the moderation, of crowds. If deliberation leads liberals to become more liberal, and conservatives to become more conservative, the effects of deliberation are unlikely to be desirable in both cases. Deliberation might account for the folly, not the wisdom, of crowds.
Group polarization has evident implications for many issues in law and politics. It suggests, for example, that like-minded jurors, judges, and administrative officials will move to extremes. If group members on a corporate board or in a political campaign are inclined to engage in risk-taking behavior, group deliberation will produce increased enthusiasm for taking risks. But the mechanisms behind group polarization remain inadequately understood, and it is difficult to make predictions or to offer prescriptions without identifying those mechanisms.
In Section 3 of this article, we show that group polarization is predicted by a highly rational process of Bayesian inference. If individuals have independent information, which is shared in the deliberative process, then Bayesian learning predicts that ex post opinions will be both more homogeneous within the group and more extreme than individual opinions. Bayesian inference suggests that individuals with access only to their own private information will recognize their ignorance and hew towards the center. The information of the crowd provides new data, which should lead people to be more confident and more extreme in their views. Because group members are listening to one another, it is no puzzle that their post-deliberation opinions are more extreme than their pre-deliberation opinions. The phenomenon of group polarization, on its own, does not imply that crowds are anything but wise; if individual deliberators tend to believe that the earth is round rather than flat, nothing is amiss if deliberation leads them to be firmer and more confident in that belief.
WaPo: The Senate Balks
The Senate Balks. Washington Post Editorial
Why President Obama should heed calls for a more focused stimulus package
WaPo: Thursday, February 5, 2009; page A16
Today in The Post, President Obama challenges critics of the $900 billion stimulus plan that was taking shape on Capitol Hill yesterday, accusing them of peddling "the same failed theories that helped lead us into this crisis" and warning that, without immediate action, "Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse." A thinly veiled reference to Senate Republicans, this is a departure from his previous emphasis on bipartisanship. Still, as a matter of policy, Mr. Obama is justified in signaling that the plan should not be tilted in favor of tax cuts -- and that the GOP should not waste valuable time trying to achieve this.
However, ideology is not the only reason that senators -- from both parties -- are balking at the president's plan. As it emerged from the House, it suffered from a confusion of objectives. Mr. Obama praised the package yesterday as "not merely a prescription for short-term spending" but a "strategy for long-term economic growth in areas like renewable energy and health care and education." This is precisely the problem. As credible experts, including some Democrats, have pointed out, much of this "long-term" spending either won't stimulate the economy now, is of questionable merit, or both. Even potentially meritorious items, such as $2.1 billion for Head Start, or billions more to computerize medical records, do not belong in legislation whose reason for being is to give U.S. economic growth a "jolt," as Mr. Obama himself has put it. All other policy priorities should pass through the normal budget process, which involves hearings, debate and -- crucially -- competition with other programs.
Sen. Susan Collins of Maine is one of the moderate Republicans whose support the president must win if he is to garner the 60 Senate votes needed to pass a stimulus package. She and Democrat Ben Nelson of Nebraska are working on a plan that would carry a lower nominal price tag than the current bill -- perhaps $200 billion lower -- but which would focus on aid to states, "shovel-ready" infrastructure projects, food stamp increases and other items calculated to boost business and consumer spending quickly. On the revenue side, she would keep Mr. Obama's priorities, including a $500-per-worker tax rebate.
To his credit, Mr. Obama continues to seek bipartisan input, and he met individually with Ms. Collins for a half hour yesterday afternoon. We hope he gives her ideas serious consideration.
Why President Obama should heed calls for a more focused stimulus package
WaPo: Thursday, February 5, 2009; page A16
Today in The Post, President Obama challenges critics of the $900 billion stimulus plan that was taking shape on Capitol Hill yesterday, accusing them of peddling "the same failed theories that helped lead us into this crisis" and warning that, without immediate action, "Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse." A thinly veiled reference to Senate Republicans, this is a departure from his previous emphasis on bipartisanship. Still, as a matter of policy, Mr. Obama is justified in signaling that the plan should not be tilted in favor of tax cuts -- and that the GOP should not waste valuable time trying to achieve this.
However, ideology is not the only reason that senators -- from both parties -- are balking at the president's plan. As it emerged from the House, it suffered from a confusion of objectives. Mr. Obama praised the package yesterday as "not merely a prescription for short-term spending" but a "strategy for long-term economic growth in areas like renewable energy and health care and education." This is precisely the problem. As credible experts, including some Democrats, have pointed out, much of this "long-term" spending either won't stimulate the economy now, is of questionable merit, or both. Even potentially meritorious items, such as $2.1 billion for Head Start, or billions more to computerize medical records, do not belong in legislation whose reason for being is to give U.S. economic growth a "jolt," as Mr. Obama himself has put it. All other policy priorities should pass through the normal budget process, which involves hearings, debate and -- crucially -- competition with other programs.
Sen. Susan Collins of Maine is one of the moderate Republicans whose support the president must win if he is to garner the 60 Senate votes needed to pass a stimulus package. She and Democrat Ben Nelson of Nebraska are working on a plan that would carry a lower nominal price tag than the current bill -- perhaps $200 billion lower -- but which would focus on aid to states, "shovel-ready" infrastructure projects, food stamp increases and other items calculated to boost business and consumer spending quickly. On the revenue side, she would keep Mr. Obama's priorities, including a $500-per-worker tax rebate.
To his credit, Mr. Obama continues to seek bipartisan input, and he met individually with Ms. Collins for a half hour yesterday afternoon. We hope he gives her ideas serious consideration.
WaPo: Zimbabwe's False Hope
Zimbabwe's False Hope. Washington Post Editorial
South Africa demands that the West aid a 'unity' government under Robert Mugabe. How to answer?
WaPo, Thursday, February 5, 2009; Page A16
SOUTH AFRICA has won a round in its relentless campaign to preserve Robert Mugabe's hold over a dying Zimbabwe. With the help of its allies in the Southern Africa Development Community, South Africa succeeded last week in coercing opposition leader Morgan Tsvangirai -- the winner of last year's presidential election -- into accepting a subordinate role in a "unity" government led by the 84-year-old strongman. The deal, which Mr. Tsvangirai bravely resisted for months, will leave Mr. Mugabe in charge of the country's last functioning institutions -- army and police forces that have been waging a campaign of murder, rape and torture against the opposition and human rights activists.
Mr. Tsvangirai relented because he believed that the frightful humanitarian emergency in Zimbabwe left him with little choice. The United Nations estimates that 7 million of the 9 million people remaining in the country need food aid this month. A cholera epidemic has so far infected more than 62,000 and killed 3,100. Schools, hospitals and most businesses have closed, the national currency has been discarded and unemployment is over 90 percent.
The opposition will be placed in charge of the finance, health and education ministries, which it hopes will allow it to solicit and distribute aid to prevent mass death from starvation and disease. As South Africa and its client more cynically calculate, Mr. Tsvangirai's appointment will compel the United States, Britain and other Western governments to lift sanctions and renew economic support, thus preventing what would otherwise be the inevitable collapse of Mr. Mugabe's regime.
The misery of Zimbabwe is indeed compelling -- but the Obama administration and other Western governments should reject South Africa's demands. It long ago became clear that Zimbabwe cannot recover as long as Mr. Mugabe remains in power. South Africa and other neighbors who insist on supporting the criminal regime are free to supply aid. But Western governments must maintain their sanctions -- especially those aimed at individual members of the Mugabe regime and the companies they control.
A State Department statement this week said the administration would consider new assistance and the lifting of sanctions "when we have seen evidence of true power sharing as well as inclusive and effective governance." What should that include? Mr. Tsvangirai himself is demanding the freeing of more than 30 opposition activists from prison. Legislation must be passed giving the opposition a measure of control over security forces, and replacing the central bank president -- a Mugabe crony -- with a technocrat. Restrictions on the press must be lifted and foreign journalists admitted. Perhaps most important, the government must agree on a plan for a new presidential election, with guarantees for fairness and full international monitoring.
If these steps were taken, Western aid to Zimbabwe might serve some purpose. But they won't be. "Zimbabwe is mine" is Mr. Mugabe's only principle. The first step in any rescue must be prying the country from his grip.
South Africa demands that the West aid a 'unity' government under Robert Mugabe. How to answer?
WaPo, Thursday, February 5, 2009; Page A16
SOUTH AFRICA has won a round in its relentless campaign to preserve Robert Mugabe's hold over a dying Zimbabwe. With the help of its allies in the Southern Africa Development Community, South Africa succeeded last week in coercing opposition leader Morgan Tsvangirai -- the winner of last year's presidential election -- into accepting a subordinate role in a "unity" government led by the 84-year-old strongman. The deal, which Mr. Tsvangirai bravely resisted for months, will leave Mr. Mugabe in charge of the country's last functioning institutions -- army and police forces that have been waging a campaign of murder, rape and torture against the opposition and human rights activists.
Mr. Tsvangirai relented because he believed that the frightful humanitarian emergency in Zimbabwe left him with little choice. The United Nations estimates that 7 million of the 9 million people remaining in the country need food aid this month. A cholera epidemic has so far infected more than 62,000 and killed 3,100. Schools, hospitals and most businesses have closed, the national currency has been discarded and unemployment is over 90 percent.
The opposition will be placed in charge of the finance, health and education ministries, which it hopes will allow it to solicit and distribute aid to prevent mass death from starvation and disease. As South Africa and its client more cynically calculate, Mr. Tsvangirai's appointment will compel the United States, Britain and other Western governments to lift sanctions and renew economic support, thus preventing what would otherwise be the inevitable collapse of Mr. Mugabe's regime.
The misery of Zimbabwe is indeed compelling -- but the Obama administration and other Western governments should reject South Africa's demands. It long ago became clear that Zimbabwe cannot recover as long as Mr. Mugabe remains in power. South Africa and other neighbors who insist on supporting the criminal regime are free to supply aid. But Western governments must maintain their sanctions -- especially those aimed at individual members of the Mugabe regime and the companies they control.
A State Department statement this week said the administration would consider new assistance and the lifting of sanctions "when we have seen evidence of true power sharing as well as inclusive and effective governance." What should that include? Mr. Tsvangirai himself is demanding the freeing of more than 30 opposition activists from prison. Legislation must be passed giving the opposition a measure of control over security forces, and replacing the central bank president -- a Mugabe crony -- with a technocrat. Restrictions on the press must be lifted and foreign journalists admitted. Perhaps most important, the government must agree on a plan for a new presidential election, with guarantees for fairness and full international monitoring.
If these steps were taken, Western aid to Zimbabwe might serve some purpose. But they won't be. "Zimbabwe is mine" is Mr. Mugabe's only principle. The first step in any rescue must be prying the country from his grip.
Criticism of Windpower’s "Homes Served" Claims
Beware Windpower’s "Homes Served" Claims, by Glenn Schleede
Master Resource, February 4, 2009
People who use the phrase “homes served” to describe the potential output from one or more wind turbines either do not understand the facts about wind turbines, believe false claims put forth by the wind industry, or are trying to mislead their reader or listener.
False statements about “homes served” by wind developers and their lobbyists are bad enough, but it is discouraging to hear politicians, reporters, and others adopt and regurgitate them.
The concept of “homes served”The concept of “homes served” has long been used in the electric industry as a way of giving some idea of the amount of electricity that would be produced by a proposed generating plant without using such terms as megawatt- or kilowatt-hours, which mean little to most people. The concept is always misleading since residential users of electricity (i.e., “homes served”) account for only 37% of all U.S. electricity use. [i]
Claims about “homes served” by a proposed “wind farm” or other generating unit are usually based on a three-step calculation:
Start with an assumption (i.e., a guess) about the amount of electricity that would be produced annually by a “wind farm” or other generating unit, in kilowatt-hours (kWh) or megawatt-hours (MWh).[ii]
Employ an estimate (in kWh) of the amount of electricity used annually by an average residential customer in the area or state where their “wind farm” is located. [iii]
Divide the assumed annual production of electricity by the estimated annual average residential electricity use.
“Homes Served” can be useful when talking about reliable generating unitsAlthough misleading, the concept of “homes served” has some validity when used to describe the output from a reliable, “dispatchable” electric generating unit, that is, one that can be called upon to produce electricity whenever it is needed. Such generating units are the ones that are counted on by the electric industry to provide a reliable supply of electricity for customers every day, at all hours of the day, year round.
“Homes served” is NOT a valid concept when referring to wind turbines and “wind farms”Using “homes served” when talking about wind turbines and “wind farms” is both false and misleading for several reasons.
1. NO homes are really served by wind.No homes are served by wind energy because wind turbines produce electricity only when wind speeds are in the right speed range (see below). Homes using electricity from wind must always have some reliable energy source immediately available to provide electricity when there is insufficient wind unless the residents are content to have electricity only when the wind is blowing in the right speed range – a condition that few in America are willing to tolerate.
2. Electricity from wind turbines is inherently intermittent, volatile, and unreliable.Wind turbines produce electricity only when the wind is blowing within the right speed range. Wind turbines typically start producing electricity at about 6 mph, reach rated capacity at about 32 mph, and cut out at about 56 mph. Unless a home owner has an expensive battery storage system, such volatile and unreliable output wouldn’t be suitable for lights, heating, computers, appliances, or many other purposes.
3. Electricity from “wind farms” is seldom available when most needed by home users.Again, the output of wind turbines is dependent on wind conditions. Depending on the specific area, winds tend to be strongest at night in cold months. However, electricity demand in most areas of the United States is heavily concentrated during daytime and early evening hours. Even worse, wind turbines cannot be counted on to produce at the time of peak electricity demand, which often occurs in late afternoon on hot weekdays in July and August. At the time of peak electricity demand, wind turbine output may be in the range of 0% to 5% of rated capacity.
4. The electricity produced by wind turbines is low in value compared to electricity from reliable generating units.That’s because it is inherently intermittent, volatile, unreliable, and not available when most needed—as described in points 2 and 3 above.
5. Not all the electricity produced by a wind turbine actually reaches customers or serves a useful purpose. Some electricity is lost as it is moved over transmission and distribution lines that carry the electricity from generating units to homes, offices, stores, factories and other users. The amount of electricity that is lost depends on the distance and the condition of lines and transformers. These “line losses” are a significant issue for wind energy because huge, obtrusive wind turbines (often 40+ stories tall) and “wind farms” are not welcome near metropolitan areas that account for most electricity demand. Therefore, they are often located at some distance from the areas where their electricity is needed and so require expensive transmission-line capacity, which they use inefficiently. (Ironically, the lucrative federal tax credits provided to “wind farm” owners are based on electricity produced, not the lesser amount that actually reaches customers and serves a useful purpose.)
6. Claims of “homes served” by wind energy are additionally misleading because of the high true cost of electricity from wind turbines.Claims that the cost of electricity from wind turbines is “competitive” with the cost of electricity from traditional sources are false. Such claims typically do not include the cost of (a) the huge federal and state tax breaks available to “wind farm” owners,[iv] or (b) the cost of providing the generating capacity and generation that must always be immediately available to “back up” intermittent, unreliable wind turbine output and keep electric grids reliable and in balance.
Claims of “homes served” should always be challenged Any use of the “homes served” assertion in connection with a “wind farm” should be challenged, whether the assertion is from a wind industry lobbyist, other wind energy advocate, political leader, other government official, or reporter. They should be required to explain each of their assumptions and calculations, and admit that industrial scale wind turbines are useless unless reliable generating units are immediately available to supply electricity when wind is not strong enough to produce significant electricity. Almost certainly, their assertions will be false.
What valid claim could wind industry officials make?As explained above, wind industry developers, promoters, and lobbyists – and politicians and reporters — should never use the false and misleading “homes served” metric. In theory, they could justify an assertion that the estimated amount of electricity produced by a “wind farm” – once discounted for line losses which are likely to be in the range of 5% to 10% — may be roughly equal to the amount of electricity used annually by X homes – after doing a calculation such as that outlined earlier. However, as indicated above, even this assertion would be misleading because it ignores the fact that the output from wind turbines is intermittent, volatile, unreliable, and unlikely to be available when electricity is most needed.
Other false and misleading claims about wind energyAs shown above, “homes served” is not the only or the most important false claim made about wind energy. Other false claims about wind energy include the following:
It is low or competitive in cost. In fact, its cost is high when all true costs are counted.
It is environmentally benign. In fact, it has significant adverse environmental, ecological, scenic, and property value impacts.
It avoids significant emissions that would otherwise be produced. In fact, it avoids few.
It provides big job and economic benefits. In fact, there are few such benefits.
It reduces U.S. dependence on imported oil. In fact, it does not.
It reduces the need for building reliable generating units in areas experiencing growth in peak electricity demand or needing to replace old generating units. The opposite is true.
Such claims as these have been made often during the past decade and more by the wind industry and other wind advocates. Only during the past 3–4 years have these claims begun to be demonstrated as false and misleading. The facts about wind energy are beginning to show up in the media but, unfortunately, have yet to be understood by most political leaders and regulators.
Full text w/references here http://masterresource.org/?p=677
Master Resource, February 4, 2009
People who use the phrase “homes served” to describe the potential output from one or more wind turbines either do not understand the facts about wind turbines, believe false claims put forth by the wind industry, or are trying to mislead their reader or listener.
False statements about “homes served” by wind developers and their lobbyists are bad enough, but it is discouraging to hear politicians, reporters, and others adopt and regurgitate them.
The concept of “homes served”The concept of “homes served” has long been used in the electric industry as a way of giving some idea of the amount of electricity that would be produced by a proposed generating plant without using such terms as megawatt- or kilowatt-hours, which mean little to most people. The concept is always misleading since residential users of electricity (i.e., “homes served”) account for only 37% of all U.S. electricity use. [i]
Claims about “homes served” by a proposed “wind farm” or other generating unit are usually based on a three-step calculation:
Start with an assumption (i.e., a guess) about the amount of electricity that would be produced annually by a “wind farm” or other generating unit, in kilowatt-hours (kWh) or megawatt-hours (MWh).[ii]
Employ an estimate (in kWh) of the amount of electricity used annually by an average residential customer in the area or state where their “wind farm” is located. [iii]
Divide the assumed annual production of electricity by the estimated annual average residential electricity use.
“Homes Served” can be useful when talking about reliable generating unitsAlthough misleading, the concept of “homes served” has some validity when used to describe the output from a reliable, “dispatchable” electric generating unit, that is, one that can be called upon to produce electricity whenever it is needed. Such generating units are the ones that are counted on by the electric industry to provide a reliable supply of electricity for customers every day, at all hours of the day, year round.
“Homes served” is NOT a valid concept when referring to wind turbines and “wind farms”Using “homes served” when talking about wind turbines and “wind farms” is both false and misleading for several reasons.
1. NO homes are really served by wind.No homes are served by wind energy because wind turbines produce electricity only when wind speeds are in the right speed range (see below). Homes using electricity from wind must always have some reliable energy source immediately available to provide electricity when there is insufficient wind unless the residents are content to have electricity only when the wind is blowing in the right speed range – a condition that few in America are willing to tolerate.
2. Electricity from wind turbines is inherently intermittent, volatile, and unreliable.Wind turbines produce electricity only when the wind is blowing within the right speed range. Wind turbines typically start producing electricity at about 6 mph, reach rated capacity at about 32 mph, and cut out at about 56 mph. Unless a home owner has an expensive battery storage system, such volatile and unreliable output wouldn’t be suitable for lights, heating, computers, appliances, or many other purposes.
3. Electricity from “wind farms” is seldom available when most needed by home users.Again, the output of wind turbines is dependent on wind conditions. Depending on the specific area, winds tend to be strongest at night in cold months. However, electricity demand in most areas of the United States is heavily concentrated during daytime and early evening hours. Even worse, wind turbines cannot be counted on to produce at the time of peak electricity demand, which often occurs in late afternoon on hot weekdays in July and August. At the time of peak electricity demand, wind turbine output may be in the range of 0% to 5% of rated capacity.
4. The electricity produced by wind turbines is low in value compared to electricity from reliable generating units.That’s because it is inherently intermittent, volatile, unreliable, and not available when most needed—as described in points 2 and 3 above.
5. Not all the electricity produced by a wind turbine actually reaches customers or serves a useful purpose. Some electricity is lost as it is moved over transmission and distribution lines that carry the electricity from generating units to homes, offices, stores, factories and other users. The amount of electricity that is lost depends on the distance and the condition of lines and transformers. These “line losses” are a significant issue for wind energy because huge, obtrusive wind turbines (often 40+ stories tall) and “wind farms” are not welcome near metropolitan areas that account for most electricity demand. Therefore, they are often located at some distance from the areas where their electricity is needed and so require expensive transmission-line capacity, which they use inefficiently. (Ironically, the lucrative federal tax credits provided to “wind farm” owners are based on electricity produced, not the lesser amount that actually reaches customers and serves a useful purpose.)
6. Claims of “homes served” by wind energy are additionally misleading because of the high true cost of electricity from wind turbines.Claims that the cost of electricity from wind turbines is “competitive” with the cost of electricity from traditional sources are false. Such claims typically do not include the cost of (a) the huge federal and state tax breaks available to “wind farm” owners,[iv] or (b) the cost of providing the generating capacity and generation that must always be immediately available to “back up” intermittent, unreliable wind turbine output and keep electric grids reliable and in balance.
Claims of “homes served” should always be challenged Any use of the “homes served” assertion in connection with a “wind farm” should be challenged, whether the assertion is from a wind industry lobbyist, other wind energy advocate, political leader, other government official, or reporter. They should be required to explain each of their assumptions and calculations, and admit that industrial scale wind turbines are useless unless reliable generating units are immediately available to supply electricity when wind is not strong enough to produce significant electricity. Almost certainly, their assertions will be false.
What valid claim could wind industry officials make?As explained above, wind industry developers, promoters, and lobbyists – and politicians and reporters — should never use the false and misleading “homes served” metric. In theory, they could justify an assertion that the estimated amount of electricity produced by a “wind farm” – once discounted for line losses which are likely to be in the range of 5% to 10% — may be roughly equal to the amount of electricity used annually by X homes – after doing a calculation such as that outlined earlier. However, as indicated above, even this assertion would be misleading because it ignores the fact that the output from wind turbines is intermittent, volatile, unreliable, and unlikely to be available when electricity is most needed.
Other false and misleading claims about wind energyAs shown above, “homes served” is not the only or the most important false claim made about wind energy. Other false claims about wind energy include the following:
It is low or competitive in cost. In fact, its cost is high when all true costs are counted.
It is environmentally benign. In fact, it has significant adverse environmental, ecological, scenic, and property value impacts.
It avoids significant emissions that would otherwise be produced. In fact, it avoids few.
It provides big job and economic benefits. In fact, there are few such benefits.
It reduces U.S. dependence on imported oil. In fact, it does not.
It reduces the need for building reliable generating units in areas experiencing growth in peak electricity demand or needing to replace old generating units. The opposite is true.
Such claims as these have been made often during the past decade and more by the wind industry and other wind advocates. Only during the past 3–4 years have these claims begun to be demonstrated as false and misleading. The facts about wind energy are beginning to show up in the media but, unfortunately, have yet to be understood by most political leaders and regulators.
Full text w/references here http://masterresource.org/?p=677
Wednesday, February 4, 2009
Relationships with the Drug Industry: Build Trust Based on Good Science
Relationships with the Drug Industry: Build Trust Based on Good Science. By Scott Gottlieb, M.D.
AEI, Wednesday, February 4, 2009
How do the current tensions in the relationship between the pharmaceutical industry, physicians, and patients affect individual health? Dr. Scott Gottlieb explores the possible causes for the breakdown in communication between these groups and charts a strategy to improve the productivity of their interactions and leverage these relationships in order to advance public health.
Medical treatments are becoming increasingly more individual, with respect to both disease and patient. They are also becoming more complex, and precise diagnoses and close monitoring are needed to optimise their use. In this environment, consumers and doctors need to work more closely with product developers. Yet increasing regulation of the drug industry is restricting its ability to disseminate the results of its clinical studies. This risks shrinking the opportunities patients have to improve their health. In the face of regulatory steps to restrain their scientific speech, drug makers need to take new steps in their relationship with doctors and patients and establish transparent guidelines for those interactions. They should also focus more squarely on matters of advancing science, monitoring for safety, and improving health education.
Science not marketing
A large part of the industry’s current problems stems from the way its relationship with academic physicians and medical institutions has evolved over the past few decades. Formerly, the industry depended on academic doctors to conduct basic and clinical research. Now more of that work is done in house.[1] As a consequence, the relationships forged with the academic medical community are often based on marketing related activities. This feeds the regrettable perception that drug makers ally themselves with medical thought leaders to advance marketing goals, not science, and that information they generate cannot be trusted.
Relationships should be predicated on genuine scientific work. This doesn’t mean that drug makers should stop engaging leading physicians to help companies generate and share information about new advances, but that they need to engage with doctors who had a role in discovering those advances rather than those with no or little link to the underlying science. The latter creates the unfortunate appearance that opinions are being rented; the former is unassailable, as a scientist is the most appropriate champion for his work.
Overcoming mistrust
As patients are taking an increasingly active role in treatment decisions drug companies need to take new steps to improve health literacy and patient education while they continue to invest in better ways to monitor the performance and safety of their products. Unfortunately, the existing mistrust means that policy makers continue to create restrictions that impede the ability of drug companies to speak to patients. This creates information asymmetry and denies patients the opportunity to receive truthful, non-misleading information about new products, thus hurting health outcomes.[2] [3] It also leads to a regulatory edifice that makes it harder for drug companies to monitor the performance of their drugs by talking directly with patients and makes it harder for them to provide targeted information to patients on proper use of prescription drugs. The bottom line remains that the drug firms remain one of the few actors in this marketplace with the financing and incentives to share and collect information. Under proper regulation, public health imperatives should compel us to make better use of these resources on behalf of patients.
Scott Gottlieb, M.D., is a resident fellow at AEI.
Notes
1. Bodenheimer T. Uneasy alliance--clinical investigators and the pharmaceutical industry. N Engl J Med 2000;342:1539-44.
2. Sentell TL, Halpin HA. Importance of adult literacy in understanding health disparities. J Gen Intern Med 2006;21:862-6.
3. Schillinger D, Grumbach K, Piette J, Wang F, Osmond D, Daher C, et al. Association of health literacy with diabetes outcomes. JAMA 2002;288:475-82.
Full text w/links in the references here
AEI, Wednesday, February 4, 2009
How do the current tensions in the relationship between the pharmaceutical industry, physicians, and patients affect individual health? Dr. Scott Gottlieb explores the possible causes for the breakdown in communication between these groups and charts a strategy to improve the productivity of their interactions and leverage these relationships in order to advance public health.
Medical treatments are becoming increasingly more individual, with respect to both disease and patient. They are also becoming more complex, and precise diagnoses and close monitoring are needed to optimise their use. In this environment, consumers and doctors need to work more closely with product developers. Yet increasing regulation of the drug industry is restricting its ability to disseminate the results of its clinical studies. This risks shrinking the opportunities patients have to improve their health. In the face of regulatory steps to restrain their scientific speech, drug makers need to take new steps in their relationship with doctors and patients and establish transparent guidelines for those interactions. They should also focus more squarely on matters of advancing science, monitoring for safety, and improving health education.
Science not marketing
A large part of the industry’s current problems stems from the way its relationship with academic physicians and medical institutions has evolved over the past few decades. Formerly, the industry depended on academic doctors to conduct basic and clinical research. Now more of that work is done in house.[1] As a consequence, the relationships forged with the academic medical community are often based on marketing related activities. This feeds the regrettable perception that drug makers ally themselves with medical thought leaders to advance marketing goals, not science, and that information they generate cannot be trusted.
Relationships should be predicated on genuine scientific work. This doesn’t mean that drug makers should stop engaging leading physicians to help companies generate and share information about new advances, but that they need to engage with doctors who had a role in discovering those advances rather than those with no or little link to the underlying science. The latter creates the unfortunate appearance that opinions are being rented; the former is unassailable, as a scientist is the most appropriate champion for his work.
Overcoming mistrust
As patients are taking an increasingly active role in treatment decisions drug companies need to take new steps to improve health literacy and patient education while they continue to invest in better ways to monitor the performance and safety of their products. Unfortunately, the existing mistrust means that policy makers continue to create restrictions that impede the ability of drug companies to speak to patients. This creates information asymmetry and denies patients the opportunity to receive truthful, non-misleading information about new products, thus hurting health outcomes.[2] [3] It also leads to a regulatory edifice that makes it harder for drug companies to monitor the performance of their drugs by talking directly with patients and makes it harder for them to provide targeted information to patients on proper use of prescription drugs. The bottom line remains that the drug firms remain one of the few actors in this marketplace with the financing and incentives to share and collect information. Under proper regulation, public health imperatives should compel us to make better use of these resources on behalf of patients.
Scott Gottlieb, M.D., is a resident fellow at AEI.
Notes
1. Bodenheimer T. Uneasy alliance--clinical investigators and the pharmaceutical industry. N Engl J Med 2000;342:1539-44.
2. Sentell TL, Halpin HA. Importance of adult literacy in understanding health disparities. J Gen Intern Med 2006;21:862-6.
3. Schillinger D, Grumbach K, Piette J, Wang F, Osmond D, Daher C, et al. Association of health literacy with diabetes outcomes. JAMA 2002;288:475-82.
Full text w/links in the references here
Cheney warns of new attacks
Cheney warns of new attacks. By John F Harris, Mike Allen and Jim VandeheiPolitico, Feb 04, 2009
http://www.politico.com/news/stories/0209/18390.html
Former Vice President Dick Cheney warned that there is a “high probability” that terrorists will attempt a catastrophic nuclear or biological attack in coming years, and said he fears the Obama administration’s policies will make it more likely the attempt will succeed.
In an interview Tuesday with Politico, Cheney unyieldingly defended the Bush administration’s support for the Guantanamo Bay prison and coercive interrogation of terrorism suspects.
And he asserted that President Obama will either backtrack on his stated intentions to end those policies or put the country at risk in ways more severe than most Americans—and, he charged, many members of Obama’s own team—understand.
“When we get people who are more concerned about reading the rights to an Al Qaeda terrorist than they are with protecting the United States against people who are absolutely committed to do anything they can to kill Americans, then I worry,” Cheney said.
Protecting the country’s security is “a tough, mean, dirty, nasty business,” he said. “These are evil people. And we’re not going to win this fight by turning the other cheek.”
Citing intelligence reports, Cheney said at least 61 of the inmates who were released from Guantanamo during the Bush administration—“that’s about 11 or 12 percent”—have “gone back into the business of being terrorists.”
The 200 or so inmates still there, he claimed, are “the hard core” whose “recidivism rate would be much higher.” He called Guantanamo a “first-class program,” and “a necessary facility” that is operated legally and with better food and treatment than the jails in inmates native countries.
But he said he worried that “instead of sitting down and carefully evaluating the policies,” Obama officials are unwisely following “campaign rhetoric” and preparing to release terrorism suspects or afford them legal protections granted to more conventional defendants in crime cases.
The choice, he alleged, reflects a naïve mindset among the new team in Washington: “The United States needs to be not so much loved as it needs to be respected. Sometimes, that requires us to take actions that generate controversy. I’m not at all sure that that’s what the Obama adminstration believes.”
The dire portrait Cheney painted of the country’s security situation was made even grimmer by his comments agreeing with analysts who this recession may be a once-in-a-century disaster.
“It’s unlike anything I’ve ever seen,” Cheney said. “The combination of the financial crisis that started last year, coupled now with, obviously, a major recession, I think we’re a long way from having solved these problems.”
The interview, less than two weeks after the Bush administration ceded power to Obama, found the man who is arguably the most controversial—and almost surely the most influential—vice president in U.S. history in a self-vindicating mood.
He expressed confidence that files will some day be publicly accessible offering specific evidence that waterboarding and other policies he promoted—over sharp internal dissent from colleagues and harsh public criticism—were directly responsible for averting new September 11-style attacks.
Not content to wait for a historical verdict, Cheney said he is set to plunge into his own memoirs, feeling liberated to describe behind-the-scenes roles over several decades in government now that the “statute of limitations has expired” on many of the most sensitive episodes.
His comments made unmistakable that Cheney—likely more than former President Bush, who has not yet given post-White House interviews—-is willing and even eager to spar with the new administration and its supporters over the issues he cares most about.
His standing in this public debate is beset by contradictions. Cheney for years has had intimate access to the sort of highly classified national security intelligence that Obama and his teams are only recently seeing.
But many of the top Democratic legal and national security players have long viewed Cheney as a man who became unhinged by his fears, responsible for major misjudgments in Iraq and Afghanistan, willing to bend or break legal precedents and constitutional principles to advance his aims. Polls show he is one of the most unpopular people in national life.
In the interview, Cheney revealed no doubts about his own course—and many about the new administration’s.
“If it hadn’t been for what we did—with respect to the terrorist surveillance program, or enhanced interrogation techniques for high-value detainees, the Patriot Act, and so forth—then we would have been attacked again,” he said. “Those policies we put in place, in my opinion, were absolutely crucial to getting us through the last seven-plus years without a major-casualty attack on the U.S.”
Cheney said “the ultimate threat to the country” is “a 9/11-type event where the terrorists are armed with something much more dangerous than an airline ticket and a box cutter – a nuclear weapon or a biological agent of some kind” that is deployed in the middle of an American city.
“That’s the one that would involve the deaths of perhaps hundreds of thousands of people, and the one you have to spend a hell of a lot of time guarding against,” he said.
“I think there’s a high probability of such an attempt. Whether or not they can pull it off depends whether or not we keep in place policies that have allowed us to defeat all further attempts, since 9/11, to launch mass-casualty attacks against the United States.”
If Cheney’s language was dramatic, the setting for the comments was almost bizarrely pedestrian. His office is in a non-descript suburban office building in McLean, in a suite that could just as easily house a dental clinic. The office is across the hall from a quick-copy store. The door is marked by nothing except a paper sign, held up by tape, saying the unit is occupied by the General Services Administration.
At several points, Cheney resisted singling out Obama personally for criticism, at one saying he wants to give him a break after just two weeks in office. He said he admires Obama’s choice to keep Defense Secretary Robert Gates on the job.
But if he treated Obama gingerly, Cheney was eager to engage in the broader philosophical debate he was with Democrats and even many in his own party about the right way to navigate a dangerous planet. He said he fears the people populating Obama’s ranks put too much faith in negotiation, persuasion, and good intentions.
“I think there are some who probably actually believe that if we just go talk nice to these folks, everything’s going to be okay,” he said.
He said his own experience tempers his belief in diplomacy.
“I think they’re optimistic. All new administrations are optimistic. We were,” he said.
“They may be able, in some cases, to make progress diplomatically that we weren’t,” Cheney said. “But, on the other hand, I think they’re likely to find—just as we did—that lots of times the diplomacy deosn’t work. Or diplomacy doesn’t work without there being an implied threat of something more serious if it fails.”
As examples of the dangerous world he sees—and one he predicted Obama and aides would find “sobering”—were Russia’s backsliding into authoritarianism and away from democracy, and the ongoing showdowns over the nuclear intentions of Iran and North Korea.
But it was the choice over Guantanamo that most dominated Cheney’s comments.
“If you release the hard-core al Qaeda terrorists that are held at Guantanamo, I think they go back into the business of trying to kill more Americans and mount further mass-casualty attacks,” he said. “If you turn ’em loose and they go kill more Americans, who’s responsible for that?”
Of one alternative—moving prisoners to the U.S. prisons—Cheney said he has heard from few members of Congress eager for Guantanamo transfers to their home-state prisons, and asked: “Is that really a good idea to take hardened al Qaeda terrorists who’ve already killed thousands of Americans and put ’em in San Quentin or some other prison facility where they can spread their venom even more widely than it already is?”
While Cheney’s words were dire, his own mood was relaxed, even loquacious. He was not on crutches—much less the wheelchair he rode to Obama’s inauguration—from an injury while moving a box of books into his new home.
Suddenly a man of leisure, Cheney has a Kindle, Amazon’s wireless reading device, and said he used it recently to read James M. McPherson’s new “Tried by War: Abraham Lincoln as Commander in Chief.” About a week ago, he had a phone conversation with former President George W. Bush, the first time the two had talked since they appeared together at a rally at Andrews Air Force Base just after Obama’s swearing-in.
“He’s fine,” Cheney said. “We had a pleasant chat on the phone. It was a private, personal conversation – not about policy. We’re both citizens – civilians.”
Other highlights of the 90-minute interview:
*What Cheney called “the trillion-dollar so-called stimulus bill”: “It looks to me like there’s a lot of stuff in there that has nothing to do with stimulus – it’s a sort of a wish list of a lot of my congressional Democratic friends,” he said.
*The potential consequences of $1 trillion in deficit stimulus spending: “It’s huge, obviously – potentially huge. You worry about what ultimately happens to inflation. You worry about what’s going to happen to the ability of the government to borrow money. … I’m nervous.”
*Whether the Bush administration should have done more about the economy: “We did worry about it, to some extent. … I don’t think anybody actually foresaw something of this size and dimension occurring. It’s also global. We only control part of the world economy – a very important part.”
*On the chance of progress in the Israeli-Palestinian peace process in the foreseeable future: “I think it’s unlikely.”
After leaving office, Cheney and his wife, Lynne, went first to his home in Wyoming, then returned to Washington to enjoy their grandchildren. He’s working on a book about his career, which has included stints as a House member, White House chief of staff and secretary of Defense.
His daughter, Liz Cheney, the former principal Deputy Assistant Secretary of State for Near Eastern Affair, supervised the interview and at one point was looking for a tape recorder.
“I’m not a very good press aide,” she joshed.
Cheney found one on his own. “See, you don’t need staff,” she said.
http://www.politico.com/news/stories/0209/18390.html
Former Vice President Dick Cheney warned that there is a “high probability” that terrorists will attempt a catastrophic nuclear or biological attack in coming years, and said he fears the Obama administration’s policies will make it more likely the attempt will succeed.
In an interview Tuesday with Politico, Cheney unyieldingly defended the Bush administration’s support for the Guantanamo Bay prison and coercive interrogation of terrorism suspects.
And he asserted that President Obama will either backtrack on his stated intentions to end those policies or put the country at risk in ways more severe than most Americans—and, he charged, many members of Obama’s own team—understand.
“When we get people who are more concerned about reading the rights to an Al Qaeda terrorist than they are with protecting the United States against people who are absolutely committed to do anything they can to kill Americans, then I worry,” Cheney said.
Protecting the country’s security is “a tough, mean, dirty, nasty business,” he said. “These are evil people. And we’re not going to win this fight by turning the other cheek.”
Citing intelligence reports, Cheney said at least 61 of the inmates who were released from Guantanamo during the Bush administration—“that’s about 11 or 12 percent”—have “gone back into the business of being terrorists.”
The 200 or so inmates still there, he claimed, are “the hard core” whose “recidivism rate would be much higher.” He called Guantanamo a “first-class program,” and “a necessary facility” that is operated legally and with better food and treatment than the jails in inmates native countries.
But he said he worried that “instead of sitting down and carefully evaluating the policies,” Obama officials are unwisely following “campaign rhetoric” and preparing to release terrorism suspects or afford them legal protections granted to more conventional defendants in crime cases.
The choice, he alleged, reflects a naïve mindset among the new team in Washington: “The United States needs to be not so much loved as it needs to be respected. Sometimes, that requires us to take actions that generate controversy. I’m not at all sure that that’s what the Obama adminstration believes.”
The dire portrait Cheney painted of the country’s security situation was made even grimmer by his comments agreeing with analysts who this recession may be a once-in-a-century disaster.
“It’s unlike anything I’ve ever seen,” Cheney said. “The combination of the financial crisis that started last year, coupled now with, obviously, a major recession, I think we’re a long way from having solved these problems.”
The interview, less than two weeks after the Bush administration ceded power to Obama, found the man who is arguably the most controversial—and almost surely the most influential—vice president in U.S. history in a self-vindicating mood.
He expressed confidence that files will some day be publicly accessible offering specific evidence that waterboarding and other policies he promoted—over sharp internal dissent from colleagues and harsh public criticism—were directly responsible for averting new September 11-style attacks.
Not content to wait for a historical verdict, Cheney said he is set to plunge into his own memoirs, feeling liberated to describe behind-the-scenes roles over several decades in government now that the “statute of limitations has expired” on many of the most sensitive episodes.
His comments made unmistakable that Cheney—likely more than former President Bush, who has not yet given post-White House interviews—-is willing and even eager to spar with the new administration and its supporters over the issues he cares most about.
His standing in this public debate is beset by contradictions. Cheney for years has had intimate access to the sort of highly classified national security intelligence that Obama and his teams are only recently seeing.
But many of the top Democratic legal and national security players have long viewed Cheney as a man who became unhinged by his fears, responsible for major misjudgments in Iraq and Afghanistan, willing to bend or break legal precedents and constitutional principles to advance his aims. Polls show he is one of the most unpopular people in national life.
In the interview, Cheney revealed no doubts about his own course—and many about the new administration’s.
“If it hadn’t been for what we did—with respect to the terrorist surveillance program, or enhanced interrogation techniques for high-value detainees, the Patriot Act, and so forth—then we would have been attacked again,” he said. “Those policies we put in place, in my opinion, were absolutely crucial to getting us through the last seven-plus years without a major-casualty attack on the U.S.”
Cheney said “the ultimate threat to the country” is “a 9/11-type event where the terrorists are armed with something much more dangerous than an airline ticket and a box cutter – a nuclear weapon or a biological agent of some kind” that is deployed in the middle of an American city.
“That’s the one that would involve the deaths of perhaps hundreds of thousands of people, and the one you have to spend a hell of a lot of time guarding against,” he said.
“I think there’s a high probability of such an attempt. Whether or not they can pull it off depends whether or not we keep in place policies that have allowed us to defeat all further attempts, since 9/11, to launch mass-casualty attacks against the United States.”
If Cheney’s language was dramatic, the setting for the comments was almost bizarrely pedestrian. His office is in a non-descript suburban office building in McLean, in a suite that could just as easily house a dental clinic. The office is across the hall from a quick-copy store. The door is marked by nothing except a paper sign, held up by tape, saying the unit is occupied by the General Services Administration.
At several points, Cheney resisted singling out Obama personally for criticism, at one saying he wants to give him a break after just two weeks in office. He said he admires Obama’s choice to keep Defense Secretary Robert Gates on the job.
But if he treated Obama gingerly, Cheney was eager to engage in the broader philosophical debate he was with Democrats and even many in his own party about the right way to navigate a dangerous planet. He said he fears the people populating Obama’s ranks put too much faith in negotiation, persuasion, and good intentions.
“I think there are some who probably actually believe that if we just go talk nice to these folks, everything’s going to be okay,” he said.
He said his own experience tempers his belief in diplomacy.
“I think they’re optimistic. All new administrations are optimistic. We were,” he said.
“They may be able, in some cases, to make progress diplomatically that we weren’t,” Cheney said. “But, on the other hand, I think they’re likely to find—just as we did—that lots of times the diplomacy deosn’t work. Or diplomacy doesn’t work without there being an implied threat of something more serious if it fails.”
As examples of the dangerous world he sees—and one he predicted Obama and aides would find “sobering”—were Russia’s backsliding into authoritarianism and away from democracy, and the ongoing showdowns over the nuclear intentions of Iran and North Korea.
But it was the choice over Guantanamo that most dominated Cheney’s comments.
“If you release the hard-core al Qaeda terrorists that are held at Guantanamo, I think they go back into the business of trying to kill more Americans and mount further mass-casualty attacks,” he said. “If you turn ’em loose and they go kill more Americans, who’s responsible for that?”
Of one alternative—moving prisoners to the U.S. prisons—Cheney said he has heard from few members of Congress eager for Guantanamo transfers to their home-state prisons, and asked: “Is that really a good idea to take hardened al Qaeda terrorists who’ve already killed thousands of Americans and put ’em in San Quentin or some other prison facility where they can spread their venom even more widely than it already is?”
While Cheney’s words were dire, his own mood was relaxed, even loquacious. He was not on crutches—much less the wheelchair he rode to Obama’s inauguration—from an injury while moving a box of books into his new home.
Suddenly a man of leisure, Cheney has a Kindle, Amazon’s wireless reading device, and said he used it recently to read James M. McPherson’s new “Tried by War: Abraham Lincoln as Commander in Chief.” About a week ago, he had a phone conversation with former President George W. Bush, the first time the two had talked since they appeared together at a rally at Andrews Air Force Base just after Obama’s swearing-in.
“He’s fine,” Cheney said. “We had a pleasant chat on the phone. It was a private, personal conversation – not about policy. We’re both citizens – civilians.”
Other highlights of the 90-minute interview:
*What Cheney called “the trillion-dollar so-called stimulus bill”: “It looks to me like there’s a lot of stuff in there that has nothing to do with stimulus – it’s a sort of a wish list of a lot of my congressional Democratic friends,” he said.
*The potential consequences of $1 trillion in deficit stimulus spending: “It’s huge, obviously – potentially huge. You worry about what ultimately happens to inflation. You worry about what’s going to happen to the ability of the government to borrow money. … I’m nervous.”
*Whether the Bush administration should have done more about the economy: “We did worry about it, to some extent. … I don’t think anybody actually foresaw something of this size and dimension occurring. It’s also global. We only control part of the world economy – a very important part.”
*On the chance of progress in the Israeli-Palestinian peace process in the foreseeable future: “I think it’s unlikely.”
After leaving office, Cheney and his wife, Lynne, went first to his home in Wyoming, then returned to Washington to enjoy their grandchildren. He’s working on a book about his career, which has included stints as a House member, White House chief of staff and secretary of Defense.
His daughter, Liz Cheney, the former principal Deputy Assistant Secretary of State for Near Eastern Affair, supervised the interview and at one point was looking for a tape recorder.
“I’m not a very good press aide,” she joshed.
Cheney found one on his own. “See, you don’t need staff,” she said.
John Kyl: "President Bush's Lasting Legacy: Missile Defense"
President Bush's Lasting Legacy: Missile Defense. By John Kyl
The Bush-Cheney Alumni Association, Feb 03, 2009
When the history of the Bush administration's national security achievements is written, one of the most significant accomplishments will be the building of a national missile defense system.
The idea of a national ballistic missile defense system to supplement the nuclear deterrent was born 25 years ago by our 40th president, Ronald Reagan, who said, "I've become more and more deeply convinced that the human spirit must be capable of rising above dealing with other nations and human beings by threatening their existence."
But, something stood in President Reagan's way: the 1972 Anti-Ballistic Missile (ABM) Treaty. This treaty was a classic example of arms control promising much more than it was ever able to deliver.
The theory was that by ensuring mutual vulnerability to nuclear missile attack, the incentive to build increasing numbers of offensive forces would be removed. History proved that theory wrong. And, in fact, strategic nuclear forces expanded not just quantitatively, but also qualitatively.
The ABM treaty also stood in the way of developing defenses against rogue regimes that were - and are - developing ballistic missiles. Deterrence is simply inadequate in dealing with rogue dictators. To depend only on nuclear deterrence - that is, rational decision making - with the Iranian and North Korean regimes would be irresponsible. And so, President Bush officially withdrew the United States the ABM treaty in June 2002.
Four years later, in 2006, the wisdom of President Bush's action was demonstrated when North Korea tested its Tae Po Dong 2 missile and detonated a nuclear device. Had it been necessary, the Missile Defense Agency was able to provide the president a real missile defense capability to combat the threat posed to the American people by a rogue regime armed with ballistic missiles and weapons of mass destruction.
The United States missile defense system is now composed of 26 Ground-Based Interceptors in California and Alaska; 18 Aegis ballistic missile defense warships, complete with 65 interceptors on board; an advanced system of command and control; and surveillance and targeting radars. This is a significant capability, but it represents only the beginning of what's needed to protect the American people.
It is now President Obama's responsibility to ensure the safety of the American people against all threats, including the ballistic missile threat. The available evidence suggests this will not be easy. In recent years, Democrats in the House and Senate have made significant cuts to the missile defense budget, including restricting the development of defenses against future threats we know our adversaries are developing.
Our new president should also welcome Congress' recent decision to reverse an ill-conceived decision that it and President Clinton made in 1993 to abandon the study of space-based interceptors for missile defense. As a result of this reversal, the Department of Defense can now move forward on a study that could provide a roadmap for both a future defense of the United States from ballistic missile attack and a defense of our critical national security space systems. Opponents of this decision are already at work to stop the positive momentum created by Congress' decision to fund this study. They will not only attempt to cancel it, they will attempt to permanently shackle the defensive capability of the United States with a "space weapons ban" treaty, which could not work and would effectively amount to nothing more than feel good arms control.
President Bush left office having provided the American people, and his successor, a significant new defense capability. History will not be able to ignore this legacy. President Obama's opportunity to follow this good example has just begun. May history prove his judgment to be as good as his predecessor.
Sen. Kyl serves on the Senate Finance and Judiciary committees and as the Senate Minority Whip. Visit his website at www.kyl.senate.gov.
The Bush-Cheney Alumni Association, Feb 03, 2009
When the history of the Bush administration's national security achievements is written, one of the most significant accomplishments will be the building of a national missile defense system.
The idea of a national ballistic missile defense system to supplement the nuclear deterrent was born 25 years ago by our 40th president, Ronald Reagan, who said, "I've become more and more deeply convinced that the human spirit must be capable of rising above dealing with other nations and human beings by threatening their existence."
But, something stood in President Reagan's way: the 1972 Anti-Ballistic Missile (ABM) Treaty. This treaty was a classic example of arms control promising much more than it was ever able to deliver.
The theory was that by ensuring mutual vulnerability to nuclear missile attack, the incentive to build increasing numbers of offensive forces would be removed. History proved that theory wrong. And, in fact, strategic nuclear forces expanded not just quantitatively, but also qualitatively.
The ABM treaty also stood in the way of developing defenses against rogue regimes that were - and are - developing ballistic missiles. Deterrence is simply inadequate in dealing with rogue dictators. To depend only on nuclear deterrence - that is, rational decision making - with the Iranian and North Korean regimes would be irresponsible. And so, President Bush officially withdrew the United States the ABM treaty in June 2002.
Four years later, in 2006, the wisdom of President Bush's action was demonstrated when North Korea tested its Tae Po Dong 2 missile and detonated a nuclear device. Had it been necessary, the Missile Defense Agency was able to provide the president a real missile defense capability to combat the threat posed to the American people by a rogue regime armed with ballistic missiles and weapons of mass destruction.
The United States missile defense system is now composed of 26 Ground-Based Interceptors in California and Alaska; 18 Aegis ballistic missile defense warships, complete with 65 interceptors on board; an advanced system of command and control; and surveillance and targeting radars. This is a significant capability, but it represents only the beginning of what's needed to protect the American people.
It is now President Obama's responsibility to ensure the safety of the American people against all threats, including the ballistic missile threat. The available evidence suggests this will not be easy. In recent years, Democrats in the House and Senate have made significant cuts to the missile defense budget, including restricting the development of defenses against future threats we know our adversaries are developing.
Our new president should also welcome Congress' recent decision to reverse an ill-conceived decision that it and President Clinton made in 1993 to abandon the study of space-based interceptors for missile defense. As a result of this reversal, the Department of Defense can now move forward on a study that could provide a roadmap for both a future defense of the United States from ballistic missile attack and a defense of our critical national security space systems. Opponents of this decision are already at work to stop the positive momentum created by Congress' decision to fund this study. They will not only attempt to cancel it, they will attempt to permanently shackle the defensive capability of the United States with a "space weapons ban" treaty, which could not work and would effectively amount to nothing more than feel good arms control.
President Bush left office having provided the American people, and his successor, a significant new defense capability. History will not be able to ignore this legacy. President Obama's opportunity to follow this good example has just begun. May history prove his judgment to be as good as his predecessor.
Sen. Kyl serves on the Senate Finance and Judiciary committees and as the Senate Minority Whip. Visit his website at www.kyl.senate.gov.
The news of Daschle's withdrawal shocked his Democratic colleagues
Obama on Daschle: I take responsibility. By Josh Gerstein
Politico, Feb 03, 2009
Excerpts:
[...]
The news of Daschle's withdrawal shocked his Democratic colleagues, many of whom had vowed to fight for his nomination.
"It's a big loss for the country," said Sen. Kent Conrad (D-ND.).
Conrad called Daschle "one of the most honest men" he had ever known, but said it was a case where "the story never caught up with headlines."
"I think it"s a tragedy," said a visibly irate Conrad.
"I wish Tom Daschle had not decided to withdraw his nomination," Sen. John Kerry (D-Mass.) said in a statement. "While Tom’s decision is a reminder of his loyalty to President Obama and his determination not to be a distraction, this was no ordinary appointment and today is not a good day for the cause of health care reform."
Obama told NBC Tuesday afternoon that the twin withdrawals made him "angry and disappointed and it's something I have to take responsibility for. I appointed these folks."
The distraction Daschle referred to was the mounting furor over his tax problems - a controversy that threatened to become a permanent blot on Obama's promise to clean up Washington's ethical quagmire. The White House appeared to have the votes to confirm Daschle in the Senate- but seems to have made the judgment that there were larger forces at play, forces that could bring long-term harm to the young administration.
Baucus said Daschle's withdrawal was "surprising" and "unfortunate."
"I just learned of it 15, 20 minutes ago," Baucus said. "I was a little surprised. I thought he was going to get confirmed. He's a good man. I thought he'd be confirmed."
[...]
The issue for Obama was one of credibility. The new president ran and won as a reform candidate, promising a new brand of politics. The day after being sworn in, he immediately put in place what he touted as far-reaching ethical reforms. But Obama quickly granted exceptions to his purportedly hard-line ban on lobbyists serving in his administration and is now offering explanations as to why it is acceptable for two of his top cabinet officers to serve despite failing to pay taxes.
These issues threaten to divert Obama from his focus on rejuvenating the economy and are prompting questions from otherwise political allies on his commitment to changing the political culture of the capital. Obama is not just getting flak from predictable political opponents: the Daschle nomination was savaged Tuesday morning by the New York Times editorial page and has also been criticized by the Nation magazine, a touchstone of Democratic liberalism.
On MSNBC, Andrea Mitchell said she had just spoken with Daschle - who said that when he read the New York Times this morning, he realized he could never pass health care reform if he was such a distraction.
Killefer's decision to step down also seemed a result of the mounting drumbeat of criticism of the new Obama team. “Said a Senate source of Killefer: "She has nanny tax problems that may not have been insurmountable on their own, but given the Geithner and Daschle cumulative effect, she had to withdraw.”
Gibbs said Daschle and Killefer came to the realization that their mistakes would be seen as tarnishing Obama’s mandate for change. “I think they both recognize that you can’t set a standard of responsibility but set a different example in who serves,” he said.
Obama ignored a shouted question Monday morning from CNN’s Ed Henry after a White House ceremony announcing the selection of Sen. Judd Gregg as Commerce Secretary as to why so many administration appointees are having tax troubles.
John Bresnahan, Carol E. Lee, Jonathan Martin and Manu Raju contributed to this story.
Politico, Feb 03, 2009
Excerpts:
[...]
The news of Daschle's withdrawal shocked his Democratic colleagues, many of whom had vowed to fight for his nomination.
"It's a big loss for the country," said Sen. Kent Conrad (D-ND.).
Conrad called Daschle "one of the most honest men" he had ever known, but said it was a case where "the story never caught up with headlines."
"I think it"s a tragedy," said a visibly irate Conrad.
"I wish Tom Daschle had not decided to withdraw his nomination," Sen. John Kerry (D-Mass.) said in a statement. "While Tom’s decision is a reminder of his loyalty to President Obama and his determination not to be a distraction, this was no ordinary appointment and today is not a good day for the cause of health care reform."
Obama told NBC Tuesday afternoon that the twin withdrawals made him "angry and disappointed and it's something I have to take responsibility for. I appointed these folks."
The distraction Daschle referred to was the mounting furor over his tax problems - a controversy that threatened to become a permanent blot on Obama's promise to clean up Washington's ethical quagmire. The White House appeared to have the votes to confirm Daschle in the Senate- but seems to have made the judgment that there were larger forces at play, forces that could bring long-term harm to the young administration.
Baucus said Daschle's withdrawal was "surprising" and "unfortunate."
"I just learned of it 15, 20 minutes ago," Baucus said. "I was a little surprised. I thought he was going to get confirmed. He's a good man. I thought he'd be confirmed."
[...]
The issue for Obama was one of credibility. The new president ran and won as a reform candidate, promising a new brand of politics. The day after being sworn in, he immediately put in place what he touted as far-reaching ethical reforms. But Obama quickly granted exceptions to his purportedly hard-line ban on lobbyists serving in his administration and is now offering explanations as to why it is acceptable for two of his top cabinet officers to serve despite failing to pay taxes.
These issues threaten to divert Obama from his focus on rejuvenating the economy and are prompting questions from otherwise political allies on his commitment to changing the political culture of the capital. Obama is not just getting flak from predictable political opponents: the Daschle nomination was savaged Tuesday morning by the New York Times editorial page and has also been criticized by the Nation magazine, a touchstone of Democratic liberalism.
On MSNBC, Andrea Mitchell said she had just spoken with Daschle - who said that when he read the New York Times this morning, he realized he could never pass health care reform if he was such a distraction.
Killefer's decision to step down also seemed a result of the mounting drumbeat of criticism of the new Obama team. “Said a Senate source of Killefer: "She has nanny tax problems that may not have been insurmountable on their own, but given the Geithner and Daschle cumulative effect, she had to withdraw.”
Gibbs said Daschle and Killefer came to the realization that their mistakes would be seen as tarnishing Obama’s mandate for change. “I think they both recognize that you can’t set a standard of responsibility but set a different example in who serves,” he said.
Obama ignored a shouted question Monday morning from CNN’s Ed Henry after a White House ceremony announcing the selection of Sen. Judd Gregg as Commerce Secretary as to why so many administration appointees are having tax troubles.
John Bresnahan, Carol E. Lee, Jonathan Martin and Manu Raju contributed to this story.
Howard Dean for HHS or Health Czar
Howard Dean for HHS or Health Czar. By Cenk Uygur
HuffingtonPost, Feb 04, 2009
Remember Tom Daschle was selected for two different positions in the Obama administration. The Secretary of Health and Human Services and Health Czar. These can be and are meant to be two distinct jobs (otherwise, why bother having a health czar).
At this point, if Howard Dean is not selected for at least one of these positions, it is a clear snub. But not just to Dean, but to all like-minded progressives. There's no way that Rahm Emanuel's animosity toward Dean can be explained away if they pass over him again, especially given his tremendous success at the DNC. That success is not a claim he holds over the Democratic Party, it is a testament to his ability to get things done.
We still want to get things done, right? We don't just want to bargain with the Republicans all day long and walk away without real change, do we? Are we playing a political game of who can appear to be more bi-partisan or are we really going to bring the change that was promised?
You know who promised change and then really delivered? Howard Dean. No one believed that he could change the mindset at the DNC and have the kind of success he did with the 50 state strategy. But he got it done. It would be unconscionable to ignore that. If they don't tap Dean for at least one of these positions, there is something seriously wrong with the way this administration is going about its business. This would bring things to the point where I would begin to question if they actually want to affect change or not.
By the way, why is there always room for another Republican in this team of rivals cabinet, but never room for one strong progressive voice we all trust like Howard Dean?
HuffingtonPost, Feb 04, 2009
Remember Tom Daschle was selected for two different positions in the Obama administration. The Secretary of Health and Human Services and Health Czar. These can be and are meant to be two distinct jobs (otherwise, why bother having a health czar).
At this point, if Howard Dean is not selected for at least one of these positions, it is a clear snub. But not just to Dean, but to all like-minded progressives. There's no way that Rahm Emanuel's animosity toward Dean can be explained away if they pass over him again, especially given his tremendous success at the DNC. That success is not a claim he holds over the Democratic Party, it is a testament to his ability to get things done.
We still want to get things done, right? We don't just want to bargain with the Republicans all day long and walk away without real change, do we? Are we playing a political game of who can appear to be more bi-partisan or are we really going to bring the change that was promised?
You know who promised change and then really delivered? Howard Dean. No one believed that he could change the mindset at the DNC and have the kind of success he did with the 50 state strategy. But he got it done. It would be unconscionable to ignore that. If they don't tap Dean for at least one of these positions, there is something seriously wrong with the way this administration is going about its business. This would bring things to the point where I would begin to question if they actually want to affect change or not.
By the way, why is there always room for another Republican in this team of rivals cabinet, but never room for one strong progressive voice we all trust like Howard Dean?
PPI: "US and China: Grappling Over Economic Rescue -- Part II"
US and China: Grappling Over Economic Rescue -- Part II. By Edward Gresser
The two nations must first coordinate stimulus plans, then engage in currency diplomacy
PPI Online, February 2, 2009
WASHINGTON: As the United States bails out banks and shoe-factories close their doors in China, should the two governments worry about exchange rates?
The question arose after Timothy Geithner, new US treasury secretary, suggested in a congressional hearing that China is "manipulating" the value of its currency. China then fired back, echoed by a chorus of financial-gallery alarm over potential trade conflicts. But a reading of Geithner's full comment should dispel fear of a looming trade war over exchange rates: What the US seeks is a coordinated approach to save both economies from sinking.
Geithner's argument was that Chinese currency rates are a topic that both governments need to address, but not the immediate issue. Noting
"We look forward to a productive economic dialogue with the Chinese government on a number of short- and long-tem issues. The Yuan is certainly an important piece of that discussion, but given the crisis the immediate focus needs to be on the broader issue of stabilizing domestic demand in China and the US.... Because China accounts for such a large fraction of the world economy, a further slowdown in China would lead to a substantial fall in world growth (and demand for US exports) and delay recovery from the crisis. Therefore, the immediate goal should be for us to convince China to adopt a more aggressive stimulus package as we do our part to try to pass a stimulus package here at home."
This is the right context. The world needs more balanced growth in the next decade. Change in Chinese currency policy is part of this. But the immediate problem is accelerating economic collapse, which confrontation between America and China could easily worsen. Meanwhile, the immediate reason for currency diplomacy -- the imbalances that can arise from currency misalignments -- is at least for the moment fading as America's imports and deficits shrink. So, though both countries need to address the causes of their illness, they can afford to wait until both patients feel better.
Why, an observer might ask, are currency rates relevant at all?
Fundamentally, currency rates are a way to moderate swings in global growth and trade flows. A high currency value makes exports expensive, imports cheap and can slow growth when inflation threatens. A low currency value helps countries escape from economic slumps through cheaper exports. The currencies of most big economies -- the dollar, the euro, yen and pound -- swing back and forth in this way, traded at rates of $3 trillion per day. China's yuan is the exception, set in a band by government policy.
This is not inherently unworkable. But if the setting does not change with economic conditions, it can lead to big surpluses, deficits and risks. Here, we have one source of the crisis.
Leaving office, Geithner's predecessor Henry Paulson pointed to international imbalances as one of the crisis' causes. He meant that Americans were borrowing and spending too much, and Asia -- China in particular -- was saving too much and spending too little.
This is not a new phenomenon. Americans shop a lot and save little, relying on the worth of home ownership to build wealth. They save 5 or 6 percent of GDP in normal times; Asians by contrast save 20 to 40 percent of GDP, and spend less time in malls. The result is an imbalance, with Americans buying more of what everyone makes and Asians selling more than buying.
These habits have fairly deep roots: Americans have run deficits with Asia not only since the 1970s, but throughout the 19th century and the first half of the 20th century. But the imbalances of this decade grew larger and faster than those of earlier periods. US government policy, through steady tax cuts and low interest rates, drove American savings rates to just above 1 percent of GDP, the lowest figures recorded since 1934. Chinese hyper-savings and low consumption, meanwhile, helped create an anomalously high pool of capital and a steadily growing trade surplus. By 2006, America maintained a current-account deficit -- the balance between spending and receiving trade revenue, investment income, charitable donations and foreign aid -- equivalent to almost 6 percent of American GDP -- an all-time record, and double the deficit of 2001. China's surplus, meanwhile, rose from rough balance in 2003 to a 10 percent of GDP surplus in 2007, with a mirroring increase in American manufacturing-trade deficits. A fixed currency rate for the Chinese RMB, at 8.28 to the dollar from 1994 to 2005, meant currency did not respond to these changing conditions.
Geithner is therefore right to say that the yuan level is an important issue. Nor is he alone -- in the high-growth period of 2004 to 2007, economists at the International Monetary Fund and universities politely protested both Chinese currency policy and America's low savings and tax-cut mania. Nobody in a position to do something did much because solving imbalances is painful. Americans would have to save more, shop less and live modestly. Chinese would need to export less, sell more at home and shift employment from apparently reliable export factories to new sources of prosperity and create domestic demand. Chinese currency did appreciate after 2005, and America's imbalance did begin to shrink, but only by a modest amount and China's surplus continued to grow.
At some point, which nobody can quite predict, a rising imbalance becomes a risk. Both countries are seeing the consequences -- trembling banks in America, shuttering factories in coastal China, and rising unemployment in both countries.
Over time, governments need to set their recovery on a more solid foundation than the one of 2003-2006. This will require a more flexible currency in China that can moderate any returning boom, as well as better regulation and more savings in America.
But as Geithner pointed out, timing is everything. For the moment, imbalances are not the world's big problem. Markets reduce them by force, as demand collapses. With unemployment up, American families no longer go to the mall each Saturday for clothes and TVs. Imports are therefore plunging, from $229 billion in July to $183 billion by November; imports from China fell from about $33 billion to $28 billion. This is the fastest US import drop since the Second World War. As imports fall, America's trade gap shrinks, from an annualized $720 billion in early 2008 to $530 billion by the winter. Across the Pacific, Chinese migrant workers from the coastal industrial zone head home as export orders dry up. China's surplus may accordingly drop.
This collapse in demand is now the big evil governments must meet. Rising imports and imbalances may return, but are not the problem today. A confrontation over these matters would do little to solve the day's big evils, but could make them worse.
Therefore, as Geithner pointed out, currency should not be the immediate concern. Instead the US and Chinese governments need to cooperate, coordinating stimulus policies to give maximum support to demand.
As they restore growth, though, they must find ways to make it balanced growth. Yes, as ordinary people worry about jobs and growth, governments should think about the foreign-exchange markets. But they should act at the right time. Geithner's comment about currency, taken in its full context, implies that the Obama team is thinking along these lines. If so, they suggest the intention to restore health first, then place the prosperity of the 2010s on a stronger foundation than this decade's expansion -- not a bad goal at all.
Edward Gresser is director of the Trade & Global Markets Project with the Progressive Policy Institute.
The two nations must first coordinate stimulus plans, then engage in currency diplomacy
PPI Online, February 2, 2009
WASHINGTON: As the United States bails out banks and shoe-factories close their doors in China, should the two governments worry about exchange rates?
The question arose after Timothy Geithner, new US treasury secretary, suggested in a congressional hearing that China is "manipulating" the value of its currency. China then fired back, echoed by a chorus of financial-gallery alarm over potential trade conflicts. But a reading of Geithner's full comment should dispel fear of a looming trade war over exchange rates: What the US seeks is a coordinated approach to save both economies from sinking.
Geithner's argument was that Chinese currency rates are a topic that both governments need to address, but not the immediate issue. Noting
"We look forward to a productive economic dialogue with the Chinese government on a number of short- and long-tem issues. The Yuan is certainly an important piece of that discussion, but given the crisis the immediate focus needs to be on the broader issue of stabilizing domestic demand in China and the US.... Because China accounts for such a large fraction of the world economy, a further slowdown in China would lead to a substantial fall in world growth (and demand for US exports) and delay recovery from the crisis. Therefore, the immediate goal should be for us to convince China to adopt a more aggressive stimulus package as we do our part to try to pass a stimulus package here at home."
This is the right context. The world needs more balanced growth in the next decade. Change in Chinese currency policy is part of this. But the immediate problem is accelerating economic collapse, which confrontation between America and China could easily worsen. Meanwhile, the immediate reason for currency diplomacy -- the imbalances that can arise from currency misalignments -- is at least for the moment fading as America's imports and deficits shrink. So, though both countries need to address the causes of their illness, they can afford to wait until both patients feel better.
Why, an observer might ask, are currency rates relevant at all?
Fundamentally, currency rates are a way to moderate swings in global growth and trade flows. A high currency value makes exports expensive, imports cheap and can slow growth when inflation threatens. A low currency value helps countries escape from economic slumps through cheaper exports. The currencies of most big economies -- the dollar, the euro, yen and pound -- swing back and forth in this way, traded at rates of $3 trillion per day. China's yuan is the exception, set in a band by government policy.
This is not inherently unworkable. But if the setting does not change with economic conditions, it can lead to big surpluses, deficits and risks. Here, we have one source of the crisis.
Leaving office, Geithner's predecessor Henry Paulson pointed to international imbalances as one of the crisis' causes. He meant that Americans were borrowing and spending too much, and Asia -- China in particular -- was saving too much and spending too little.
This is not a new phenomenon. Americans shop a lot and save little, relying on the worth of home ownership to build wealth. They save 5 or 6 percent of GDP in normal times; Asians by contrast save 20 to 40 percent of GDP, and spend less time in malls. The result is an imbalance, with Americans buying more of what everyone makes and Asians selling more than buying.
These habits have fairly deep roots: Americans have run deficits with Asia not only since the 1970s, but throughout the 19th century and the first half of the 20th century. But the imbalances of this decade grew larger and faster than those of earlier periods. US government policy, through steady tax cuts and low interest rates, drove American savings rates to just above 1 percent of GDP, the lowest figures recorded since 1934. Chinese hyper-savings and low consumption, meanwhile, helped create an anomalously high pool of capital and a steadily growing trade surplus. By 2006, America maintained a current-account deficit -- the balance between spending and receiving trade revenue, investment income, charitable donations and foreign aid -- equivalent to almost 6 percent of American GDP -- an all-time record, and double the deficit of 2001. China's surplus, meanwhile, rose from rough balance in 2003 to a 10 percent of GDP surplus in 2007, with a mirroring increase in American manufacturing-trade deficits. A fixed currency rate for the Chinese RMB, at 8.28 to the dollar from 1994 to 2005, meant currency did not respond to these changing conditions.
Geithner is therefore right to say that the yuan level is an important issue. Nor is he alone -- in the high-growth period of 2004 to 2007, economists at the International Monetary Fund and universities politely protested both Chinese currency policy and America's low savings and tax-cut mania. Nobody in a position to do something did much because solving imbalances is painful. Americans would have to save more, shop less and live modestly. Chinese would need to export less, sell more at home and shift employment from apparently reliable export factories to new sources of prosperity and create domestic demand. Chinese currency did appreciate after 2005, and America's imbalance did begin to shrink, but only by a modest amount and China's surplus continued to grow.
At some point, which nobody can quite predict, a rising imbalance becomes a risk. Both countries are seeing the consequences -- trembling banks in America, shuttering factories in coastal China, and rising unemployment in both countries.
Over time, governments need to set their recovery on a more solid foundation than the one of 2003-2006. This will require a more flexible currency in China that can moderate any returning boom, as well as better regulation and more savings in America.
But as Geithner pointed out, timing is everything. For the moment, imbalances are not the world's big problem. Markets reduce them by force, as demand collapses. With unemployment up, American families no longer go to the mall each Saturday for clothes and TVs. Imports are therefore plunging, from $229 billion in July to $183 billion by November; imports from China fell from about $33 billion to $28 billion. This is the fastest US import drop since the Second World War. As imports fall, America's trade gap shrinks, from an annualized $720 billion in early 2008 to $530 billion by the winter. Across the Pacific, Chinese migrant workers from the coastal industrial zone head home as export orders dry up. China's surplus may accordingly drop.
This collapse in demand is now the big evil governments must meet. Rising imports and imbalances may return, but are not the problem today. A confrontation over these matters would do little to solve the day's big evils, but could make them worse.
Therefore, as Geithner pointed out, currency should not be the immediate concern. Instead the US and Chinese governments need to cooperate, coordinating stimulus policies to give maximum support to demand.
As they restore growth, though, they must find ways to make it balanced growth. Yes, as ordinary people worry about jobs and growth, governments should think about the foreign-exchange markets. But they should act at the right time. Geithner's comment about currency, taken in its full context, implies that the Obama team is thinking along these lines. If so, they suggest the intention to restore health first, then place the prosperity of the 2010s on a stronger foundation than this decade's expansion -- not a bad goal at all.
Edward Gresser is director of the Trade & Global Markets Project with the Progressive Policy Institute.
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