Youngstown, Ohio mayor buys earthquake insurance for city over doubts about fracking

This is ridiculous. Why should any city have to purchase anything like this just because some greedy politicians are bought off by the energy companies and the fracking dollars? Scientists have already made the direct link between fracking and earthquakes so let's quit playing games about whether there's a connection. Instead of asking an already struggling city to pay for insurance, how about we either stop the fracking or make the fracking companies pay for all expenses linked to earthquakes, pollution and flammable water in faucets? Why should they get a free ride and make everyone else pay? Obviously they think that they're Wall Street.

Bloomberg:

“You lose your whole house, that’s your life savings, and if you have no money or no insurance to replace it, then what do you do?” Mayor Charles P. Sammarone said in a telephone interview today. “Information is needed to make the homeowner and the residents feel safe.” There have been 11 earthquakes in this northeastern Ohio city since D&L Energy Inc. began injecting drilling brine, a byproduct of hydraulic fracturing, 9,200 feet (2,804 meters) underground in December 2010. The strongest, magnitude 4.0, hit last week on New Year’s Eve. Sammarone said he has asked the City Council to pass a resolution tonight supporting state Representative Robert F. Hagan, a city Democrat who has called for a moratorium on so- called fracking and injection-well activity “until we can conclude it’s safe.”

Teabagging governor Kasich believes that the earthquakes are isolated incidents. Uh huh. They are isolated to fracking, so he's sort of right. Read the rest of this post...

Update on Hungary's Constitutional Coup: "The Unconstitutional Constitution"

We wrote about the situation in Hungary here; they've basically been taken over by a radical gang that has changed the laws — and the Constitution — using legal means, to be sure, to that the gang in power will never lose power or be challenged by any other part of the government.

Via Paul Krugman, we get this update from Kim Lane Scheppele, who provided the original report.

This matters — this is what a "constitutional coup" looks like. (Michigan, Ohio, take note; my emphasis below.)

On New Year’s Day, the new Hungarian constitution became law. The Hungarian parliament has been preparing for this event by passing a blizzard of “cardinal” – or super-majority – laws, changing the shape of virtually every political institution in Hungary and making the guarantee of constitutional rights less secure. In the last two weeks alone, the parliament has enacted so many new laws that it has been almost impossible to keep up. And to top it off, there was also a huge new omnibus constitutional amendment – an amendment to the new constitution even before it went into effect. By one commentator’s count, the Fidesz government has enacted 359 new laws since it came to power 18 months ago.

All of the laws connected to the new constitutional structure kicked into action yesterday if they hadn’t already taken effect. As a result, with the new year, Hungarians began living in a new constitutional order. In this new order, all of the escape hatches that would permit reentry into a constitutional democracy have been bolted shut. If constitutions are supposed to guarantee checks on political power and ensure the rights of citizens, this is an unconstitutional constitution.

I’ve already explained in an earlier post the major features of the new constitutional order. In this post, I’ll catch you up on the new laws passed in the last two weeks that crucially affect how the new constitutional order works.

The report makes fascinating reading. Scheppele starts with changes to the banking laws which guarantee control of the central bank by the political process.

There are also changes to the tax structure, in particular, the institution of a flat tax. As the author notes: "Prime Minister Orbán has been very dependent on a group of wealthy Hungarians to support his media operations and his political party" and this will guarantee them freedom from progressive taxation.

(Side note: It really helps to have something like a pocket-Murdock operation, a well-funded propaganda service disguised as "media." Berlusconi benefited hugely from self-owned media.)

"All of the escape hatches have been bolted shut." It's fascinating to see what that involves.

By the way, guess what happens when constitutional means of democratic redress are removed? Stalinism — a smothered state in which everyone hunkers down and watches his/her back; chaotic rebellion — where angry people play with the tumbrels a while; or that fun Brown Shirts era in Germany. (The article suggest that latter choice may be on hand.)

Hungary is becoming a viper and a powder keg (both) in the heart of Europe. This isn't getting less "interesting" — in that horrible Chinese way.

GP Read the rest of this post...

Is the U.S. really in hock to China?

Paul Krugman has written an excellent column recently on debt and the deficit, a nice, broad "how to think about it" piece.

It's a good read all round, but I want to focus on one small aspect of it, since this question constantly comes up, usually with raised voices.

Is the U.S. in serious hock to the Chinese? ("Chinese" in this case is code for "foreigners" in that wonderful sinister sense.)

Krugman's answer, No. Here's why (my emphasis and paragraphing):

It’s true that foreigners now hold large claims on the United States, including a fair amount of government debt. But every dollar’s worth of foreign claims on America is matched by 89 cents’ worth of U.S. claims on foreigners.

And because foreigners tend to put their U.S. investments into safe, low-yield assets, America actually earns more from its assets abroad than it pays to foreign investors.

If your image is of a nation that’s already deep in hock to the Chinese, you’ve been misinformed. Nor are we heading rapidly in that direction.

Note that those are two separate reasons.

To recap: Let's say you owe your neighbor $10,000. Sounds bad, right? But only if you ignore the fact that he owes you $9,000 back. The net debt ($1,000) is a lot less frightening. (And note that only the ignorant or scare-mongering quote that first number alone.)

Now apply the second piece of information on top of the first — His $10,000 is earning 0.5% at best (since he bought U.S. Treasuries at sky-high prices and almost no yield at shorter, safer maturities).

Meanwhile, your $9,000 is earning, say, 3% (since you're invested in growth companies abroad).

If you do the math (his $10K x .005 = $50; your $9K x .03 = $270), you'll see who's got the better deal, by far. Every year this setup continues, you make $220 more than your neighbor, doing nothing. Bottom line, you're earning a cool $270 on a net debt of $1000 (that's a sweet 27%, mind you); plus you've got his $10,000 to play with.

This isn't hard to understand or remember. My suggestion — keep this logic handy the next time someone screams about Chinese ownership of the U.S. debt. If they're simply ignorant, they'll appreciate the information.

We really are losing to the Chinese, of course; but it isn't because we're selling them our Treasuries; it's because the über-rich are selling off our jobs.

GP Read the rest of this post...

Reddit co-founder speaks about SOPA/PIPA

It's worth the six minutes to watch if you have the time. Alexis Ohanian makes a great point that startups are too busy creating new technology and new jobs to also lobby whereas the larger and more mature industries have plenty of time and money to lobby. This also helps explains why the prices of movies and music is so high (and so consistent in terms of pricing) and why the internet services in the US are so expensive and so bad compared to other parts of the world. Washington needs to quit shoving through everything that the corporate elite want and start thinking about small business and consumers. Read the rest of this post...

Battlestar Galactica as a first generation 1980s video game

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ADP report shows big jump in private jobs growth

There's some good news on the economic front. We still have to see what the official numbers say but this is an encouraging batch of reports. CNBC:

The news is all good for the jobs market so far in 2012: Separate reports Thursday showed a surge in private-sector job creation, a sharp drop in weekly unemployment claims and planned layoffs at their lowest level in six months. Though the December data flowing in is sensitive to seasonal revisions, the trend is moving in the right direction. Private-sector jobs surged by 325,000, according to ADP and Macroeconomic Advisors, while the government said weekly jobless claims fell 15,000 to 372,000 — still at an elevated level but consistent with recent data showing a consistent if grudging turnaround.

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Video: God was clearly not interested in Rick Perry being president (or Michele Bachmann)

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Video: Julia Sugarbaker vs Michele Bachmann

(h/t Bilerico) Read the rest of this post...

Why Romney won't show his tax return

It is no secret that the GOP is the party of the 1%. But Romney isn't a 1%-er, he is amongst the 1% of the 1%, a 0.01%-er.

Democrats have started hitting Romney hard on this. Romney won't release his tax returns and it isn't hard to see why. The Bush tax cuts coupled with the 'carried interest' loophole allow people like Romney and Warren Buffet to pay a 14% tax rate.

A typical tax rate for the 99% is 35%. To find out how your tax rate compares to the 0.01%-er, go visit the Democrat's tax calculator, www.whatmittpays.com.

And for those of you who would like us to stop the election 'horse race' coverage and go back to policy, the two biggest reasons that the US is currently facing a deficit crisis are the Bush tax cuts designed to benefit speculative bankers[1] like Romney and the Bush recession caused by speculative bankers like Romney.

[1] The term 'investment banking' really does not seem appropriate to describe what groups like Bain Capital do. Read the rest of this post...

Just found an official Romney ad on Santorum’s "frothy mix" site

How long until Chris Matthews apologizes? Read the rest of this post...

Republican operatives launch group that tries to imitate most Democratic groups, blogs

Ben Smith reports in Politico that Republican operatives, and bloggers Michael Goldfarb and Matthew Continetti, are launching a new organization called the Center for American Freedom.

Remarkably they are modeling it on the Center for American Progress, and will have their own blog, imitating ThinkProgress.org. If that wasn't enough, the Center for American Freedom will also attempt to be like the Center for American Progress Action Fund (which does more political messaging and research), Media Matters for America, Talking Points Memo and the Huffington Post. Gee, I wonder why someone didn't try to take on this very modest project before?

The project is being bankrolled by the Koch Brothers. They are taking a Ben Domenech-inspired stance in terms of how they are describing themselves:

The real inspiration for the Center for American Freedom, though, is the Center for American Progress — the new group’s mission statement, for instance, appears at points to be literally copied and pasted from CAP’s, with the word “freedom” substituted for “progress” — as well as other unabashedly liberal websites.

That's pretty shameless.

Republicans have repeatedly tried to launch online campaigning organizations that ape such capacities on the left and have repeatedly failed. The grandeur of this attempt seems to immediately make it destined to join other failed efforts, with little to show for it but fancy K Street offices and small dents in the Koch Brothers' fortune. Read the rest of this post...

Obama admin to force airlines to disclose the full fare, fees and all, up front

Hallelujah.  I for one am sick and tired of paying $50 extra for bags, and God knows what else, only to find that my $230 ticket is really $300.  What's worse, some online air travel sites include the fees in the advertised price, some don't.  It's a cute little gimmick the airlines came up with, charging us for every little thing they can come up with since they're all in collusion anyway, and they're basically a monopoly industry in this country, where adequate cross country train travel is non-existent (meaning, I have no reasonable alternative to flying to Chicago from DC when the train takes 24 hours and I don't have a car).  So kudos to the Obama administration for forcing the airlines to be up front about their fares.  Maybe next  we can find out how all the airlines magically charge the same fare, to the penny, for the same routes. Read the rest of this post...

Why not Santorum?

So far Rick Santorum has been little more than a source of amusement in the GOP nomination race. But is he really any worse or any more ridiculous than the other anti-Romney candidates were?

Just consider for a moment just how low the bar is set. We have discovered that neither adultery (Gingrich and allegedly Cain) nor serial sexual harassment (again, allegedly Cain) is a disqualification by itself, it takes both to force a candidate out of the race. This is an electorate that cheers when a candidate boasts of the number of people he has executed. Santorum has said plenty of really stupid stuff but I haven't heard any Republican repudiating any of it.

Santorum is a hate-monger. But Gingrich and Paul have both pandered to the same prejudices. Mitt Romney spends so much time pandering that if he ever visits China the authorities will throw him in a cage and feed him bamboo shoots.

None of the commentators I have read think that Santorum is likely to beat Obama. But at this point Romney does not look a lot better. Republicans don't seem to think any better of him than Democrats.

Santorum would deliver social conservatives to the polls in November. He would not be a catastrophic nominee as Paul or Gingrich would be. That might be enough for the GOP to pick him. If the establishment can't get their candidate of choice, Santorum is the least worst alternative. This may be the reason that George Will has been talking him up. Read the rest of this post...

Myanmar releases more political prisoners

British foreign secretary William Hague is currently visiting Myanmar, following Hillary Clinton's visit last month. There seems to be a new interest from Myanmar in opening to the west but their track record is not great. When I visited Myanmar nearly ten years ago, it was a country that had mostly stood still and not progressed. Is Myanmar eager to be the next factory country for the west or do they have other plans? Surely they have a plan though it's not yet clear. BBC News:

Mr Hague's visit is the latest by top world diplomats after Burma's first elections in 20 years which brought in a nominally civilian government. Since then the new administration has freed pro-democracy leader Aung San Suu Kyi and begun a process of dialogue. Last month she formally registered her National League for Democracy as a political party, after boycotting the 2010 polls because of electoral laws that prevented her taking part. In December US Secretary of State Hillary Clinton visited Burma, in what was seen as an endorsement of the reform process - although Western observers say much more is needed.

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EU banks continue to make investors nervous

It's all very Wall Street 2008 these days in Europe. The US authorities claimed that the situation moved so quickly, they had little room for debate and were too focused on saving the banks to consider how they really saved the bankers and their precious lifestyle. (If you believe that line that Paulson and Geithner used, you probably believe in the Easter Bunny too.) This time, Europe has had plenty of time to see the negative impact of poor policy in the US, so hopefully lessons have been learned. Doubtful, but hey, maybe I want to believe in my own Easter Bunny who believes in fairness. The Guardian:

Some €453bn (£378bn) was lodged in the ECB's "deposit facility" on Tuesday night in a move that some analysts feared showed banks were so concerned about lending it out to rivals that they would rather earn just 0.25% in interest from the central bank. The ECB also revealed that €15bn had been used from its emergency lending facility overnight on Tuesday, following €14.8bn borrowed the previous day. Bank stocks retreated from a stronger start to the new year after the Italian bank UniCredit attempted to entice investors to back a €7.5bn cash call by offering a big discount on the existing price of its shares.

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