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Economy

Ryan: Cutting Taxpayer Subsidies To Oil And Gas Companies Is ‘Ridiculous Economics’

By Pat Garofalo on Sep 13, 2010 at 5:30 pm

In order to pay for its proposed $50 billion infrastructure investment, the Obama administration wants to cut some of the subsidies that the federal government gives to oil and gas companies. One subsidy in particular, the Section 199 manufacturing credit, would be denied to the oil and gas sector. Today, on CNBC, Rep. Paul Ryan (R-WI) derided cutting these subsidies as “ridiculous economics,” and claimed that such a step would inevitably increase energy prices:

We’re going to single out one sector of our economy, a very important sector of our economy, and say higher tax rates if you produce in the U.S. than any other sector in the economy. This is just ridiculous economics, redistribution, but more importantly, it’s just punitive. It’s punitive and it’s political and it’s not going to help our economy.

Watch it:

I would submit that the only thing “ridiculous” about this situation is that the federal government gives tax subsidies to one of the most mature, profitable industries in the country. Many oil companies have little to no federal corporate income tax liability, yet they still receive taxpayer handouts, something that a supposed free market devotee like Ryan should be staunchly against.

These taxpayer giveaways are particularly egregious when it comes to the Section 199 credit which is meant for “companies that produce goods or software or undertake construction projects in the U.S.” The goal of the credit is to protect manufacturing jobs in an era where cheap labor overseas is proving irresistible to many companies, not to subsidize dirty energy. Denying just this one credit to oil and gas companies can save $13.2 billion over ten years.

Ryan’s claim that removing the subsidies will drive up energy prices is also quite dubious. According to Citizens for Tax Justice, “there is no evidence that the additional profits [from tax credits] lead the companies to explore for more oil so that they can increase the supply.” In fact, the Office of Economic Policy at the Department of Treasury has found that removing subsidies for the oil industry would affect domestic production by less than one-half of one percent.

The CNBC segment was based on a new study by economist Joseph Mason, which purported to show that cutting the subsidies would lead to a slew of job losses, as he assumes domestic production would fall drastically. The study was funded by the American Energy Alliance, whose research arm, the Institute for Energy Research, has received money from ExxonMobil and the Claude R. Lambe Charitable Foundation, which was founded by Charles Koch of the oil and gas giant Koch industries.

Climate Progress

AP: Melting Sea Ice Forces Walruses Ashore in Alaska

By Joe Romm on Sep 13, 2010 at 5:06 pm

walrus

Incident Has Happened Twice Before, in 2007 and 2009, Because Sea Ice They Normally Rest on Has Melted

Tens of thousands of walruses have come ashore in northwest Alaska because the sea ice they normally rest on has melted.

U.S. government scientists say this massive move to shore by walruses is unusual in the United States. But it has happened at least twice before, in 2007 and 2009. In those years Arctic sea ice also was at or near record low levels.

Polar bears are the Brad Pitt and Angelina Jolie of climate-change-endangered Arctic species. They get all the press (see Will polar bears go extinct by 2030?)  Heck, they even get their own TV ad!

But not-so-photogenic animals will suffer at the hands of human-caused global warming, too.  Seth Borenstein has a good AP story today on the plight of the walruses (photo above from USGS via WWF).  It concludes:

Read more

Security

With Referendum, Turkey Becoming Both More Democratic And More Religious

By Matt Duss on Sep 13, 2010 at 4:45 pm

turkey referendumYesterday Turkey held a national referendum to determine whether its constitution would be amended, with supporters (which include Turkey’s ruling AK Party) claiming that the reforms would strengthen Turkish democracy and ease Turkey’s acceptance into the European Union. The referendum passed 58-42%.

The Christian Science Monitor reports “The referendum’s biggest winner was Prime Minister Recep Tayyip Erdogan, who faces a general election next year with his ruling Justice and Development Party (AKP)”:

“We have passed a historic threshold on the way to advanced democracy and the supremacy of law,” said Erdogan to applause from supporters gathered to celebrate the victory. “Supporters of military intervention and coups are the losers tonight.”

The current Turkish constitution was adopted in 1982, two years after Turkey’s third military coup. Reuters has a list of the accepted amendments. The New York Times notes “The package includes popular and relatively uncontroversial measures that would strengthen the rights of women, children, workers and civil servants. It would also make the military answerable to civilian courts, lifting immunity from prosecution for the leaders of the bloody 1980 coup”:

But proposals to strengthen the control of the president and Parliament over the appointment of judges and prosecutors are seen by critics as a barely veiled attempt to erode the separation of powers between the executive and the judiciary. The amendments assign greater power to Parliament and the president to choose members of the Constitutional Court and the Supreme Board of Judges and Prosecutors, both traditional bastions of secularism that have clashed with Mr. Erdogan’s party in the past.

But the government said the changes were necessary to tame dangerously activist judicial bodies that have consistently undermined the decisions of Parliament and the executive.

“There is an activist understanding of the judiciary in the current system that undermines the will and decisions of the legislative and executive organs,” Justice Minister Sadullah Ergin said before the vote. “This new model will prevent today’s legal system from leading the country into a judicial dictatorship, while paving the way for other progressive reforms.”

At an event hosted earlier today by the Project on Middle East Democracy, Gonul Tol of the Middle East Institute’s Center for Turkish Studies noted that “The developing Turkish identity involves religion, and I don’t think we should be threatened by that.”

Former U.S. Ambassador to Turkey W. Robert Pearson said that the results of the referendum, along with the last several years in Turkey, “represent a fundamental change in the Turkish political system, one that brings in a lot of people who hadn’t participated before.” Pearson went on to say that what was happening in Turkey “is not about one man, Erdogan,” but rather the culmination of attempts at reform that have been building for decades.

Daniel Brumberg of the U.S. Institute of Peace also reminded the audience that “the AK Party is not monolithic.” In addition to it’s religious conservative base, “it has a strong business constituency whose primary goal is Turkish integration into Europe.” In other words, the AK party is religiously conservative, pro-business party that’s against “judicial activism.” This should sound familiar to Americans. But while it’s tempting — and not entirely inaccurate — to make comparisons between the AK Party and the GOP, this is actually pretty unfair to the AK Party, who are a dynamic, modernizing force pushing for greater political inclusivity.

For a deeper analysis of the changes Turkey is undergoing, both domestically and in its regional policy, please see my colleague Michael Werz’s report The New Levant.

Related Posts

Politics

Anti-Park 51 Rally Attendees Echo Fox News Misinformation And Right-Wing Islamophobia

By Ben Armbruster on Sep 13, 2010 at 4:40 pm

For months starting in May, conservatives, right-wing media, and Republican lawmakers engaged in a campaign of misinformation, paranoia, fear, and anger toward Muslims, sparked by (old) news that the Cordoba Initiative led by Imam Feisal Abdul Rauf would begin an effort to build an Islamic community center and mosque near Ground Zero in New York. The hysteria culminated in a protest rally near Ground Zero on the ninth anniversary of the 9/11 attacks on Saturday. Led by the group, Stop the Islamization of America, rally attendees regularly chanted, “No mosque here!”

Fox News and the network’s hosts and Republican guests — such as Glenn Beck and Sean Hannity — led much of the charge against Park 51, regularly trying to tie Rauf and his organization to either terrorists, terror funders or Hamas. Other conservative figures smeared Islam, made no distinction between the terrorists who claim to act on behalf of Islam and normal, moderate Muslims, or claimed Park 51 is a victory monument.

ThinkProgress attended the anti-Park 51 rally near Ground Zero on Saturday and witnessed placards and interviewed dozens of attendees. Not surprisingly, many of them echoed the right-wing noise machine’s anti-Islam rhetoric of the past few months:

– PARK 51 A VICTORY MONUMENT: “History shows us that they do build where they have conquered,” said one woman. “We came, we conquered and now we’re putting our mosque on this sacred spot. That’s what we believe,” said another.

– ATTACKS ON ISLAM: One attendee said, “They kill in the name of their god, it is not a peaceful religion,” while another claimed, “I don’t think Islam is religious at all.” “They’re not peaceful people,” one woman said. “Islam is a political system parading as religion,” said a gentleman we talked to.

– ATTACKS ON IMAM RAUF: “I think he’s a liar,” a rally-goer said, adding, “It’s gonna be a Sharia law mosque which, they believe in the Jihad.” “His intentions are not what he says,” said another attendee. “Hamas’s financier is financing this,” said another.

ThinkProgress also spoke with one New York resident observing the day’s events. “I’m so emotional here. It’s really crazy. It’s so aggressive…it’s all fear and it’s all anger, and it just makes me cry. … What is wrong with a mosque? It’s just the same, it’s a great religion just as all the others.” Watch a compilation of the interviews:

The Wonk Room’s Matt Duss contributed to this post.

Media

Reporting With the Weekly Standard

By Matthew Yglesias on Sep 13, 2010 at 4:29 pm

Hot on the heels of unearthing the Kenyan anti-colonialist roots of Barack Obama’s ideology, conservative journalists are apparently scouring the progressive community for more shady African ties. The latest began when my colleague Sara Haile-Mariam did a Justin Bieber-themed video for Campus Progress urging young people to vote in the 2010 election:

This prompted a lighthearted Politico article by Patrick Gavin and also a strange press inquiry from Daniel Halper of The Weekly Standard:

I just want to follow-up on the quotations you gave to Politico:

“We’re trying to leverage Bieber fever,” Campus Progress’s Sara Haile-Mariam told POLITICO. “Most of his fans are 12 years old – we acknowledge that.” Still, they hope that Bieber fans will “tell their parents. … The hope is to create something that goes viral and gets young people to be aware of the election.”

Of course, Haile-Mariam admits that part of the motivation was less purely political. “We consider ourselves big Bieber fans,” she confessed, adding that they hope Bieber will give some link love to their project via his Twitter page (and his over 5 million followers).

My understanding is that you’re related to the former Ethiopian leader Haile Mariam Mengistu. Can you confirm whether this is true? If it is true, would you mind telling me how you two are related?

Sara responded that she is not related to the former dictator and asked why he was inquiring about this. “Someone was intrigued by your name — and asked an obvious question,” is the answer. Because, hey, I know every time I see a random news item about a white guy named “Smith” I immediately launch a journalistic inquiry into whether or not he’s related to Rhodesian white supremacist leader Ian Smith.

For the record, “Haile” is to all appearances a very common Ethiopian name.

Justice

FLASHBACK: Crist Was Against Almost All LGBT Equality Measures Before He Was For Them

By Igor Volsky on Sep 13, 2010 at 3:50 pm

crist_stimulus_DV_20090209153611Florida’s leading LGBT organization, Equality Florida, has rightfully praised Charlie Crist (I-FL) for suddenly embracing a wide array of LGBT equality measures, but it’s probably worth pointing out that his conversion comes out of political necessity, not any kind of policy realization. In fact when Crist was running for Governor and for Senator as a Republican, he opposed almost every measure he now supports. Consider the following:

CRIST ON FLORIDA’S GAY ADOPTION BAN:

2010: “That is why I oppose Florida’s current law that requires Family Law judges to ignore what is right for a child in order to adhere to what Florida law blindly demands.”

2006: “Charlie Crist also believes that children are best raised in a traditional family. Accordingly, he does not support repealing the ban on adoption by same-sex couples.”

CRIST ON EMPLOYMENT DISCRIMINATION:

2010: “I support strong anti-discrimination laws including ENDA. Employment and advancement should be based on skill and merit, not hindered by prejudice of any kind.

2006: “Charlie Crist does not support including sexual orientation within anti-discrimination laws…Charlie Crist opposes giving sexual orientation status equivalent to those currently covered under existing civil rights laws. “

CRIST ON CIVIL UNIONS:

2010: “I believe civil unions that provide the full range of legal protections should be available to gay couples. That includes access to a loved one in the hospital, inheritance rights, the fundamental things people need to take care of their families.”

2006: “Charlie Crist does not believe that the government or private industry should be required to provide health insurance benefits to same sex partners of employees or contractors.”

2008: Opposed civil unions when he supported The Florida Marriage Amendment, or Proposition 2. It said: “This amendment protects marriage as the legal union of only one man and one woman as husband and wife and provides that no other legal union that is treated as marriage or the substantial equivalent thereof shall be valid or recognized.”

CRIST ON DON’T ASK, DONT’ TELL:

2010: “I’m a strong supporter of the men and women of our military. Those willing to risk their lives to defend our country should not be compelled to lie to do so.”

MAY 2010: “I think the current policy has worked pretty well for America. I really do. So I don’t know why there’s any need for change at this time.”

Again, Crist’s progress speaks to the success of LGBT activism in bringing these policies into mainstream and hints to the positions all candidates will have to take in future elections. But the reason for Crist’s evolution should not escape scrutiny. Crist changed his positions to lure moderate and independent voters away from Democratic challenger Rep. Kendrick Meek (D-FL). And now, both men have almost identical positions on LGBT rights, with Crist still hanging on to his support for a state-based same-sex marriage ban. Ideally, of course, Crist’s move to the left would push Meek to embrace full marriage equality — a position that 41% of Floridans already hold (and increase of 15 percentage points from the mid 1990s). But I suspect that LGBT voters will have to wait two if not four more years for that issue to enter the mainstream.

Alyssa

Wholesome

By Alyssa Rosenberg on Sep 13, 2010 at 3:47 pm

I did warn you guys today was going to be girly. But as the last party of my nostalgic self-indulgence this weekend, I watched The Babysitters Club movie for the first time since it came out in theaters fifteen years ago. It’s got this weird flash of temporary nineties starletism: Larisa Oleynik and Rachel Leigh Cook are two of the main characters, on the cusp of their brief breakouts as sex symbols and comediennes. Pretty much everyone else in the movie never even got that far. But really the most striking thing about the movie is how insanely wholesome it is.

Movies these days seem aimed at very young children or at girls who are solidly in their teenage years. The Babysitters Club is aimed squarely in between those periods. There’s one chaste kiss, and a scene where two of the girls are refused admission to a teen club in New York because they’re not sixteen. The girls are young enough to call their fathers “Daddy” and to find a closed amusement park scary, but they’re also grown-up enough to run a pretty good business, and to navigate early conflicts with adults on mutually agreed-upon terms. It’s a world where family, both biological and chosen, matters, where girls are unspoiled enough to expect that guys will behave decently, and the boys are nervous too. But the characters are old enough to understand that not everything will always be all right—fathers can abandon their daughters, irresponsibility carries a price. There’s no pressure to sleep with anyone, in fact, no implication that such a thing is even possible. It’s a space that more girls, and more people period, should be allowed to occupy for a longer time. There’s no shame in taking a little time to grow up.

Politics

Paranoid Palin Hunts For Media ‘Moles’ At Montana Speech

By Alex Seitz-Wald on Sep 13, 2010 at 3:45 pm

Palin3 Former Alaska Gov. Sarah Palin is never shy about bashing the “lamestream media,” concocting conspiracy theories about its bias, and pioneering a media strategy that keeps her as far away as possible from tough questions. Palin’s speakers contract stipulates that journalists are only allowed to record the first three minutes of her remarks, and that all other recording devices, including cell phones, be banned. Palin’s paranoia about the press was on full display Sunday at an event in Missoula, MT, during which she worried there were journalist “moles” in the audience:

During her talk, Palin at times deviated from her awe-filled words of faith to take swipes at the media – at one point proclaiming that “moles” were in the audience texting about her belief in prayer and taking it all out of context, as per usual.

Palin also said, “Be careful. There may be some media that sneaked into the room.” In response, the editor of The Missoulian, which reported Palin’s comments, said her reporter had credentials to cover the speech and “didn’t sneak in or out.” Palin’s comments are “intended to create distrust of the professional journalists…who take their jobs very seriously and work hard to accurately and fairly report the news,” editor Sherry Devlin said. (HT: GOP12)

Climate Progress

Science makes strong case for rapid deployment

By Joe Romm on Sep 13, 2010 at 3:34 pm

Analysis: “Avoiding key impacts of climate change depends on the success of efforts to overcome infrastructural inertia and commission a new generation of devices that can provide energy and transport services without releasing CO2 to the atmosphere.”

A major new study in Science magazine, “Future CO2 Emissions and Climate Change from Existing Energy Infrastructure” (subs. req’d), makes a powerful case for rapid deployment of low-carbon technology.

The study, one of whose authors is climatologist Ken Caldeira, looks at current and future emissions from existing energy infrastructure.  It concludes that if the world built no new polluting infrastructure, we would end up with “mean warming of 1.3°C (1.1° to 1.4°C) above the pre-industrial era and atmospheric concentrations of CO2 less than 430 parts per million.”

So while we are inevitably going to build some new CO2-emitting infrastructure, the study makes clear that aggressive deployment of low-carbon infrastructure starting as soon as possible is a crucial strategy for avoiding carbon lock-in and the relatively higher cost of shuttering existing infrastructure before the end of its life, which in turn is critical for minimizing the cost of stabilizing atmospheric concentrations of carbon dioxide at 450 ppm or lower.

This conclusion isn’t terribly surprising for those who follow energy and climate policy.  Last year, in releasing its World Energy Outlook, International Energy Agency Executive Director Nobuo Tanaka explained:

Read more

Yglesias

Europe and America, Before and After Tax and Transfer

By Matthew Yglesias on Sep 13, 2010 at 3:31 pm

howtopayforit-figure1-version2

Reihan Salam wades into the inequality waters to make the important point that if looked at before taxes and transfers then European inequality has increased by a quite a lot during the same period US inequality increased. The reason actual European gini coefficients haven’t exploded as much is that European voters have elected politicians who engage in a great deal of income redistribution.

As illustrated by the Lane Kenworthy chart I’ve reproduced at the right, low-inequality countries tend to spend large sums of money on transfer payments that reduce the gini coefficient. I would further add that in many of these countries public services are simply of higher quality, which further diminishes the reality of post-tax inequality.

That said Tyler Cowen’s October 2007 post on this subject ended up concluding that Europe and the United States are pretty different after all (Alderson & Doran [PDF] “How Has Income Inequality Grown? The Reshaping of the Income Distribution in LIS Countries” offer a detailed analysis of the point):

One very eminent source emailed me and he wishes to stress that the (relatively) high level of the European Gini stems from higher levels of unemployment, whereas the relatively high level of the American Gini stems from the rich being very rich. He points out that although the final Ginis may be similar, the underlying patterns are very different and it would be misleading to conclude that America and Germany have ended up at the same pre-tax point. This is absolutely correct, my apologies if the post created a misleading impression.

However you slice it, there are fundamental differences in the labor markets. Corporate executives in the United States (and to a lesser though still noteworthy extent) are simply paid much more than non-Anglophone executives.

The labor market for CEOs remains a somewhat odd beast. Nokia has just this week announced the appointment of its first-ever non-Finnish CEO and he immediately hastened to identify himself with Finnish values and clarify that he’s Canadian, not American, despite having attended US universities and worked for a succession of US firms while living in the United States. In general, the trend seems to be toward increased globalization of the CEO market (at least as pertains to North America and Europe) but this is a process that’s been only very imperfectly undertaken at a time when we take for granted the internationalization of other aspects of corporate operations.

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