Euro crisis: Italy at risk of insolvency, European finance ministers warned
Mario Monti must tackle Italian tax evasion to avoid other eurozone economies being damaged, says report
Ian Traynor, Brussels
guardian.co.uk, Tuesday 29 November 2011 12.51 EST
European finance ministers were warned on Tuesday night that Italy's liquidity crisis could leave the eurozone's third biggest economy insolvent with devastating impact on the fate of the single currency and its big core economies, Germany and France.
Eurozone finance ministers met in Brussels in their latest attempt to plot a path out of the EU's worst crisis. With Mario Monti, the new Italian prime minister and finance minister, reporting to the session on his austerity package aimed at saving Italy and shoring up the euro, a confidential report from the European commission and the European Central Bank said Monti would need to do more than already promised.
The report, obtained by the Guardian, said Monti had to go further in his promises to combat rampant tax evasion in Italy, which is estimated to amount to 20% of gross domestic product.
"The sovereign debt crisis has now moved from the periphery to Italy and other core euro area countries. Pressure on Italian sovereign bond yields is particularly acute, reflecting investors' mounting concerns with the sustainability of Italy's large public debt" – almost €2tn, (£1.7tn) – the report said.
"The risks of a full-blown sovereign liquidity crisis can increase rapidly in the absence of a determined policy response … Persistently high interest rates increase the risk of a self-fulfilling 'run' from Italy's sovereign debt. A liquidity crisis could then turn into a solvency crisis, whose repercussions for other large euro area countries would be very acute given their exposure to the Italian economy."
Italy on Tuesday easily raised €7.5bn on the bond markets, but at exorbitant rates above the 7% sustainability threshold.
The European finance ministers were expected to agree to release €8bn in bailout funds to Greece, the latest tranche, after months of haggling over whether Athens had done enough to warrant the receipt and the fall of the Papandreou government. Klaus Regling, head of the European financial stability facility, the main bailout fund, was expected to disappoint the 17 governments by telling them there was little chance of leveraging the €250bn pot of money into a trillion-plus war chest by drawing in Asian investors and sovereign wealth funds.
The leveraging plan was drawn up by eurozone leaders at a summit a month ago. "It doesn't look like it will be [multiplied] 4-5 times," said a Brussels diplomat. "More like 2.5 times. That's probably not enough to restore confidence in Italy or Spain."
Tuesday night's meeting came ahead of another crucial summit of EU leaders next week at which Germany and France, while still at odds over central details, will launch a drive for a eurozone "fiscal union", with governments required to forfeit national powers over fiscal, budget, tax and spending policies to a eurozone body. Angela Merkel, the German chancellor, is the biggest obstacle to any prompt and radical action aimed at stabilising the bond markets and ring-fencing the euro. Others, led by France, want the European Central Bank to be given interventionist powers to defend the currency, print money, and act as lender of last resort as well as the pooling of eurozone debt through the issue of common euro bonds.
Merkel is fiercely opposed to both options, insisting instead on reopening the EU's Lisbon Treaty to entrench new disciplines and intrusive powers of scrutiny over eurozone national budgets. Rather than focus on solving the immediate crisis, Merkel's priority is to create a durable new system eliminating the chances of a recurrence. Launching eurobonds and empowering the ECB to intervene, said Wolfgang Schäuble, German finance minister, would mean "no European country would retain its triple-A rating". "The Germans want treaty change without eurobonds. The others want eurobonds without treaty change," said the diplomat. "In the end the Germans are in control of this."
Wednesday, November 30, 2011
Tuesday, November 29, 2011
Who's the Most Conservative of Them All?
While the nation was digesting its turkey dinner, Rep. Michelle Bachmann was seizing an opportunity to score points at Newt Gingrich's expense. Suggesting that his position on illegal immigration amounts to "amnesty," Bachmann predicted that the GOP electorate would "come home" to the person who has been the most "consistent conservative." That would be, she offers, herself.
The voters may not agree with her solution, but many in the GOP do seem to be looking for a — forgive the expression — "thrill down the leg" candidate to take on Obama in the general election.
Thus, the seismic spikes for Bachmann, Perry, Cain and even, briefly, Trump. It is now, apparently, Newt Gingrich's turn in what Brit Hume called "the single most dangerous place to be in American politics, which is the non-Romney leader in the Republican field."
The adage has it that when the two parties pick their nominees, "Democrats want to fall in love and Republicans want to fall in line." It will probably hold true. But there is more than a whiff of Democrat-style swooning in the Republican contest so far.
The Union Leader's endorsement didn't quite put it the way The Augusta Chronicle did ("Why not Newt?"), but it did cite Gingrich's "courage and conviction." Yet, curiously, within its editorial endorsment, the Union Leader inadvertently cited the best reason not to support Newt Gingrich:
" . . . Republican primary voters too often make the mistake of preferring an unattainable ideal to the best candidate who is actually running."
Just so, but back to Gingrich.
It isn't the three marriages — though the hospital visit to discuss divorce proceedings while his first wife was recuperating from cancer surgery is not an agreeable image. It isn't the ethics violation, for which the House Ethics Committee cited him when he was speaker. (The Internal Revenue Service later ruled that he had not violated the tax laws.) And it isn't his position on illegal immigrants with deep roots in America.
Newt Gingrich is a bad bet because he will embarrass the Republican Party .
He will do so through things he has already said and done and in ways we cannot predict except to be sure — because character will win out — that they will happen.
No sooner had Republicans, with a huge boost from Gingrich, achieved the long-denied prize of control of the House of Representatives than Gingrich embarrassed the party by signing a $4.5 million book deal.
Though an effective, even inspired, backbencher in Congress, Gingrich proved an incompetent and sometimes petulant leader. He explained that his decision to shut down the government in 1995 was in part motivated by Bill Clinton's failure to spend time with him on Air Force One when the two were returning from Yitzhak Rabin's funeral. "It's petty, but I think it's human," said Gingrich.
Gingrich was the only speaker of the House in U.S. history to be removed by his own party. It wasn't a cabal of liberals who forced him out, but Dick Armey, Bill Paxon, Tom DeLay and John Boehner.
Gingrich is lauded as a "conviction" politician and a man of ideas. But his convictions are flexible, and his ideas are half-baked when they're not loopy. Always glib and self-assured, Gingrich declared on March 7 that he would impose a no-fly zone on Libya. On March 23, he just as smoothly declared, "I would not have intervened. I think there were a lot of other ways to affect Qaddafi." Though he now says he doesn't know whether the globe is warming, he filmed a commercial with Nancy Pelosi in 2008 saying, "our country must take action to combat climate change."
Gingrich rose to prominence in the Republican Party by citing the loose ethics of Speaker Jim Wright. Yet in his post-government career, he has been playing the traditional game of selling influence. Among his many lucrative clients was Freddie Mac. The government-sponsored enterprise reportedly paid the former speaker $1.8 million.
Gingrich explained that this was for his "advice as a historian."
Because of his grandiosity, it's possible that Gingrich actually believes this. Either way — whether he was for sale or so vain that he missed what was obvious to others — it's not inspiring leadership.
Gingrich once said that to understand him, you needed to do no more than to read "futurist" Alvin Toffler. The former speaker's sweeping generalizations, flamboyant pronouncements and soaring banalities do indeed seem influenced by Toffler. But Toffler is the opposite of a conservative. In "The Third Wave," he declared that the founders were "obsolete." So should Toffler's acolyte be.
The voters may not agree with her solution, but many in the GOP do seem to be looking for a — forgive the expression — "thrill down the leg" candidate to take on Obama in the general election.
Thus, the seismic spikes for Bachmann, Perry, Cain and even, briefly, Trump. It is now, apparently, Newt Gingrich's turn in what Brit Hume called "the single most dangerous place to be in American politics, which is the non-Romney leader in the Republican field."
The adage has it that when the two parties pick their nominees, "Democrats want to fall in love and Republicans want to fall in line." It will probably hold true. But there is more than a whiff of Democrat-style swooning in the Republican contest so far.
The Union Leader's endorsement didn't quite put it the way The Augusta Chronicle did ("Why not Newt?"), but it did cite Gingrich's "courage and conviction." Yet, curiously, within its editorial endorsment, the Union Leader inadvertently cited the best reason not to support Newt Gingrich:
" . . . Republican primary voters too often make the mistake of preferring an unattainable ideal to the best candidate who is actually running."
Just so, but back to Gingrich.
It isn't the three marriages — though the hospital visit to discuss divorce proceedings while his first wife was recuperating from cancer surgery is not an agreeable image. It isn't the ethics violation, for which the House Ethics Committee cited him when he was speaker. (The Internal Revenue Service later ruled that he had not violated the tax laws.) And it isn't his position on illegal immigrants with deep roots in America.
Newt Gingrich is a bad bet because he will embarrass the Republican Party .
He will do so through things he has already said and done and in ways we cannot predict except to be sure — because character will win out — that they will happen.
No sooner had Republicans, with a huge boost from Gingrich, achieved the long-denied prize of control of the House of Representatives than Gingrich embarrassed the party by signing a $4.5 million book deal.
Though an effective, even inspired, backbencher in Congress, Gingrich proved an incompetent and sometimes petulant leader. He explained that his decision to shut down the government in 1995 was in part motivated by Bill Clinton's failure to spend time with him on Air Force One when the two were returning from Yitzhak Rabin's funeral. "It's petty, but I think it's human," said Gingrich.
Gingrich was the only speaker of the House in U.S. history to be removed by his own party. It wasn't a cabal of liberals who forced him out, but Dick Armey, Bill Paxon, Tom DeLay and John Boehner.
Gingrich is lauded as a "conviction" politician and a man of ideas. But his convictions are flexible, and his ideas are half-baked when they're not loopy. Always glib and self-assured, Gingrich declared on March 7 that he would impose a no-fly zone on Libya. On March 23, he just as smoothly declared, "I would not have intervened. I think there were a lot of other ways to affect Qaddafi." Though he now says he doesn't know whether the globe is warming, he filmed a commercial with Nancy Pelosi in 2008 saying, "our country must take action to combat climate change."
Gingrich rose to prominence in the Republican Party by citing the loose ethics of Speaker Jim Wright. Yet in his post-government career, he has been playing the traditional game of selling influence. Among his many lucrative clients was Freddie Mac. The government-sponsored enterprise reportedly paid the former speaker $1.8 million.
Gingrich explained that this was for his "advice as a historian."
Because of his grandiosity, it's possible that Gingrich actually believes this. Either way — whether he was for sale or so vain that he missed what was obvious to others — it's not inspiring leadership.
Gingrich once said that to understand him, you needed to do no more than to read "futurist" Alvin Toffler. The former speaker's sweeping generalizations, flamboyant pronouncements and soaring banalities do indeed seem influenced by Toffler. But Toffler is the opposite of a conservative. In "The Third Wave," he declared that the founders were "obsolete." So should Toffler's acolyte be.
Sunday, November 27, 2011
Good News for Newt :: Fat Presidents Make Good Presidents
The New Republic
Fat Presidents: A Survey
- September 27, 2011 | 5:17 pm
PrintAmid speculation that New Jersey Gov. Chris Christie will enter the presidential race, there's been some talk about the weight issue. How does it affect his health? Would voters judge him harshlyfor it? (Jon Corzine tried and failed to make an issue of it, obliquely, in the 2009 gubernatorial election.) I prefer the historical approach. Who, besides William Howard Taft (300+ pounds)--who may or may not have gotten stuck in the White House bathtub but certainly arranged for a bigger one to be installed there--were America's fattest presidents?
Before its demise, George magazine (where I was a contributing editor during the late 1990s) published a Book of Political Lists, edited by Blake Eskin, that listed the presidents according to body mass index. A BMI of 25 pegs you as overweight and a BMI of 30 as obese. The medical definition of "obese" is, I think, too unforgiving; it includes a lot of people whom we civilians would judge merely overweight. But at least the medical definition recognizes gradations of obesity. Below 35 is "class one." Thirty-five to 40 is "class two." And over 40 is "class three." You really don't want to be class three.
I don't think of Christie as obese, and I don't know his BMI, but it's surely over 30. What kind of presidencies do the over-30 set produce? Here is a table matching the five medically obese presidents with their BMIs and how they fared in Arthur Schlesinger, Jr.'s 1996 "greatness" rankings of all the presidents based on a survey of 32 experts (most of them academic historians). The two presidents we've had since Schlesinger's ratings were compiled (George W. Bush and Barack Obama) are both pretty obviously not medically obese, so we need not concern ourselves with them here. (For comparison's sake: Bill Clinton, at 28.3, was medically "overweight," though, as in so many things, dangerously close to the line.)
| President | BMI | Schlesinger "greatness" score |
| Taft | 42.3 (obesity class 3) | 1.52 (average) |
| Cleveland | 34.6 (obesity class 1) | 2.24 (high average) |
| McKinley | 31.1 (obesity class 1) | 2.11 (high average) |
| Taylor | 30.2 (class 1) | 0.88 (below average) |
| Theodore Roosevelt | 30.2 (obesity class 1) | 3.31 (near great) |
| Obese presidential average | 33.68 (obesity class 1) | 2.012 (high-average) |
There are two lessons here. The first is that even with Taft skewing the average upward, our fat presidents weren't very fat. Besides Taft, the only one who threatened to break out of obesity class one was Grover Cleveland. The second lesson is that obesity is, if anything, a slight presidential plus, with Zachary Taylor pulling the ranking down, Theodore Roosevelt pushing it back up, and Grover Cleveland and William McKinley nudging it a little higher.
The judgment of history, then, is that fat presidents, though not above average, are in the high range of average.
NATO Attack on Pakis in Response to Paki Attack on Afghans. FUBAR
Pakistan has ordered the United States to move out of an airbase on its territory, after shutting down NATO's two main overland supply routes into Afghanistan. Popular anger is mounting in Pakistan after NATO's killing of 24 Pakistani military personnel in a cross-border airstrike Saturday.
American forces have been given 15 days to vacate the Shamsi airbase in southwestern Pakistan, where the U.S. sometimes lands unmanned drone aircraft used to attack militants on Pakistani territory.
Pakistan ordered the departure a day after choking off the two main land routes for moving nonlethal supplies to U.S.-led NATO forces in Afghanistan.
NATO Secretary-General Anders Fogh Rasmussen says Saturday's killing of 24 Pakistani soldiers by U.S. aircraft was a “tragic unintended accident.” He has told Pakistan's prime minister the attack was as “unacceptable and deplorable as the deaths of Afghan and international personnel.”
With a NATO investigation into the matter pending, Pakistan's Foreign Minister Hina Rabbani Khar telephoned U.S. Secretary of State Hillary Clinton to convey the “deep sense of rage” in Pakistan. She said the attack demonstrated “complete disregard for international law and human life, and... negates the progress made by the two countries on improving relations.” Clinton responded by saying she was deeply saddened, and promised to work with Pakistan on the issue.
Pakistan also is reexamining its decision to attend a major Afghanistan peace conference in Bonn next month, but has made no final announcement.
Retired Lieutenant General Talat Masood, an expert on Pakistan's strategic affairs, says the killings have dealt a severe blow to the already negative perceptions of the U.S. among Pakistanis.
“The majority of the people think that it was an aggression committed by the U.S. by design. The public sentiment has become very anti-American," Masood stated. "And, of course, it gives a big handle to the media to spread the nationalist frenzy.”
Pakistani television networks broadcast images of the soldiers' funerals Sunday. Soldiers' coffins were draped in the Pakistani flag and airlifted to their respective hometowns for burial.
Masood says a thorough and transparent investigation into why and how the airstrike took place may have a chance at soothing some of the anger in this country.
“I think if the investigation takes place in which Pakistan is taken into full confidence, and if the truth comes out that this was a gross miscalculation on the part of some of the intelligence people - and they apologize, and they compensate - I think it would make definitely a difference,” Masood said.
Al-Qaida leader Osama bin Laden used Afghanistan as a base to plan and execute the terror attacks of September 11, 2001. U.S. special forces killed bin Laden in a Pakistan compound earlier this year. U.S.-led NATO forces in Afghanistan have faced a constant challenge with the Pakistan border, which is frequently crossed by Pakistan-based militants.
VOA
Saturday, November 26, 2011
Saturday Night Open Thread - The Good Washington
Washington, sometimes called "the other Washington" or the "good Washington" is the northwesternmost state in the contiguous United States.
It is named for its first permanent settlement, which was founded where trappers and traders used to gather every few weeks to scrub their dirty apparel.
The official language of Washington State is Chinook, widely spoken by lumberjacks, fur trappers, fishermen, and drunken grunge music fans. Typical words in Chinook include muckleshoot (which means to give the casino all your money) and skookumchuck (which means to blow salmon chunks).
Washington is divided into western and eastern halves by the rugged Cascade Mountains. People on the dry side of the mountains vote funny. You probably shouldn't call them out on this, though, because the dry side of the mountains used to be in the nuke-making business.
Cultural milestones
Rain.
Bad musical styles inspired by too much rain in the early 1990s.
Bad fashion influences due to the aforesaid musicians dressing for rain.
Starbucks coffee helps keep people warm in the rain.
Plutonium-based nuclear weapons will end the rain...forever.
Mel's Hole - a bottomless pit that brings dead pets back to life.
The Twilight fantasy novel series (and movies based on the novels) were set in the small town of Forks, Washington.
Sleepless in Seattle and Grey's Anatomy present Seattle with far less cloudy days than in reality.
Geology
The Cascade range has a row of active volcanoes, Mt. Adams, Mt. Baker, Mt. Rainier, Mt. St. Helens, and Glacier Peak. St. Helens erupted in 1980 and blew its top, clogging air filters and blotting out the sun from Seattle to Yakima and creating a thriving cottage industry of trinket sellers making tourist souveniers made of "real Mt. St. Helens ash". Any of the other volcanoes could erupt at any time. You have been warned.
Famous Washingtonesians
Jimi Hendrix (he went to Britain for some sun, and to get famous)
Kurt Cobain, who wound up emulating Mt. St. Helens.
Bill "Rich guy" Gates
Bob "get your pets spayed or neutered" Barker
Ted Bundy
Glenn Beck
Orson "Ender's Game" Scott Card
Bing "White Christmas" Crosby, who was kicked out of Gonzaga University in Spokane for drunkenly tossing furniture out of the dorm window.
James "Scotty" Doohan
Kenny "This Elevator Rocks!" G
Frank "Dune" Herbert
Gary "Far Side" Larson
Kenny "Footloose" Loggins
Eddie "Evenflow" Vedder
Adam "Batman" West
Sherman "The Lone Ranger and Tonto Fistfight in Heaven" Alexie
Bigfoot
Ramtha and his "channeler" J.Z. Knight
Pakistan Cuts NATO Supply Lines to Afghanistan.
November 26, 2011
Pakistan to Reexamine Relations with US, NATO After Deadly NATO Raid
VOA News
Pakistan says it plans to review its complete relationship with the United States and NATO in response to a deadly cross-border NATO airstrike early Saturday.
Pakistan says it plans to review its complete relationship with the United States and NATO in response to a deadly cross-border NATO airstrike early Saturday.Pakistani Prime Minister Yousuf Raza Gilani held an emergency meeting late in the day with top military and civilian government leaders in Islamabad on the incident.In a statement, the officials said "the government will revisit and undertake a complete review of all programs, activities and cooperative arrangements with US/NATO/ISAF, including diplomatic, political, military and intelligence."They condemned the NATO attack on two Pakistani military checkpoints in the northwest as "unacceptable." They said the attack, which killed at least 26 troops and wounded 14 others, could not be described as a mistake.They also announced that Pakistan has closed all NATO supply lines through its territory to Afghanistan and ordered the United States to vacate a controversial airbase.The statement did not say how long Pakistan's border crossings into landlocked Afghanistan would remain closed to NATO. However, it gave the United States 15 days to shut down its activities at the Shamsi airbase.So far, U.S. officials have not responded to the statement. Earlier, a NATO spokesman told VOA they were aware of the reported incident and are investigating.((REST OPT))Top NATO and U.S. commander in Afghanistan General John Allen also offered his condolences to families and loved ones of any members of the Pakistani security forces who may have died or were wounded.The United Arab Emirates leases the Shamsi airbase located in a remote southwestern part of Pakistan. The U.S. spy agency, the CIA, reportedly uses the base for covert drone strikes in Pakistan's tribal belt, but the Pakistani military said in June that the United States does not operate out of that base.U.S. officials have said Pakistan's tribal belt provides sanctuary to the Taliban, which has been fighting for 10 years against U.S. troops in Afghanistan.The helicopter raid comes a little more than a year after a similar, less deadly operation in which U.S. helicopters killed two Pakistani soldiers mistaken for insurgents near the Afghan border. Pakistan responded to that attack by closing down one of its border crossings to NATO supplies for more than a week until the United States apologized.Ties between Washington and Islamabad have been unraveling since a covert U.S. commando raid in May killed al-Qaida leader Osama bin Laden who was hiding for years in a Pakistani garrison town. Pakistan was outraged it was not informed beforehand and angered by what it saw as a U.S. violation of its sovereignty.Pakistan says it plans to review its complete relationship with the United States and NATO in response to a deadly cross-border NATO airstrike early Saturday.
Pakistani Prime Minister Yousuf Raza Gilani held an emergency meeting late in the day with top military and civilian government leaders in Islamabad on the incident.
In a statement, the officials said "the government will revisit and undertake a complete review of all programs, activities and cooperative arrangements with US/NATO/ISAF, including diplomatic, political, military and intelligence.”
They condemned the NATO attack on two Pakistani military checkpoints in the northwest as "unacceptable." They said the attack, which killed at least 26 troops and wounded 14 others, could not be described as a mistake.
They also announced that Pakistan has closed all NATO supply lines through its territory to Afghanistan and ordered the United States to vacate a controversial airbase.
The statement did not say how long Pakistan's border crossings into landlocked Afghanistan would remain closed to NATO. However, it gave the United States 15 days to shut down its activities at the Shamsi airbase.
So far, U.S. officials have not responded to the statement. Earlier, a NATO spokesman told VOA they were aware of the reported incident and are investigating.
Top NATO and U.S. commander in Afghanistan General John Allen also offered his condolences to families and loved ones of any members of the Pakistani security forces who may have died or were wounded.
The United Arab Emirates leases the Shamsi airbase located in a remote southwestern part of Pakistan. The U.S. spy agency, the CIA, reportedly uses the base for covert drone strikes in Pakistan's tribal belt, but the Pakistani military said in June that the United States does not operate out of that base.
U.S. officials have said Pakistan's tribal belt provides sanctuary to the Taliban, which has been fighting for more than 10 years against U.S. troops in Afghanistan.
The helicopter raid comes a little more than a year after a similar, less deadly operation in which U.S. helicopters killed two Pakistani soldiers mistaken for insurgents near the Afghan border. Pakistan responded to that attack by closing down one of its border crossings to NATO supplies for more than a week until the United States apologized.
Ties between Washington and Islamabad have been severely strained since a covert U.S. commando raid in May killed al-Qaida leader Osama bin Laden, who was hiding for years in a Pakistani garrison town. Pakistan was outraged it was not informed beforehand and angered by what it saw as a U.S. violation of its sovereignty.
Some information for this report was provided by AFP and Reuters.
Chinese Cynical Exploitation in Sierra Leone: Timber! - Africa Investigates - Al Jazeera English
Sierra Leone: Timber! - Africa Investigates - Al Jazeera English
Imagine what would happen if America barged its way into a developing country, buttered up its homicidal dictator and agreed a back-of-the-envelope deal in which he signed over his nation’s mineral wealth in return for roads, railways and sports stadiums. Everyone would benefit, no?
No. The problem is that the infrastructure turns out to be worth a hell of a lot less than the minerals. Fortunately, Washington has had the foresight to top up the dictator’s Swiss bank account. Problem solved! As for the mining operation, the Americans really don’t want to be bothered by minimum wages or trade unions. They’re banned. And no complaints from the workforce, please, because no one wants a repeat of that “misunderstanding” in which an American mine supervisor opened fire on stroppy employees.
If the United States embarked on this sort of colonial experiment, it would produce a furious “Occupy Grosvenor Square” camp outside the US embassy and a withering play by Sir David Hare at the National. But since these things are actually being done not by America but by the People’s Republic of China across the entire African continent, the “anti-colonialist” Left just yawns.
Ordinary Africans care, of course. The subject of China will loom large in Monday’s election in Congo, though since President Joseph Kabila has arranged to be re-elected, it won’t affect the result. It was Kabila who approved a $6 billion copper-for-infrastructure barter deal with China. Unfortunately, the sale of state mines has left Congo with a $5.5 billion black hole in its budget. Meanwhile, The Economist reports: “The sale of mining licences at below-market value to firms associated with friends of the president has raised eyebrows.”
I can’t say it raised my eyebrows. How else do you think China does business in Africa? It suffered a setback in Zambia last year when President Michael Sata was elected on an anti-Chinese ticket. But Sata hasn’t fulfilled his promise to regulate Zambia’s Chinese-run copper mines, branded “dangerously unsafe” by Human Rights Watch. And this week none other than ex-president Dr Kenneth Kaunda was in Beijing’s Great Hall of the People to discuss “deepening substantial co-operation”.
There’s a school of thought which says that China’s modus operandi, however brutal, at least gets things built. In contrast, Western aid is tipped into dictators’ pockets without anything to show for it. But the benefits of Beijing’s “investment” are elusive, because the Chinese don’t usually employ Africans to perform anything but menial tasks. Chinese construction engineers build motorways and hospitals without passing on the skills to maintain them. The result: everything falls into disrepair within a decade, by which time the copper is safely out of the ground.
From a moral point of view, China’s policy towards Africa is despicable. But it’s ingenious, too. Beijing has worked out that, by virtue of being a non-Western power, it can pose as a “developing country” while creating its sub-Saharan satrapies. The anti-racism lobby in the United Nations makes sure that the finger of guilt is pointed firmly at the former colonial powers, who are always happy to put on a display of breast-beating by, say, the Archbishop of Canterbury. Meanwhile, something close to slavery is being quietly reintroduced to the dark continent (which is how China thinks of it).
For 50 years, it’s been unclear in which direction Africans were heading. Now the question is almost irrelevant: the decision has been made for them.
China builds its African empire while the 'anti-colonialist' Left looks the other way
Imagine what would happen if America barged its way into a developing country, buttered up its homicidal dictator and agreed a back-of-the-envelope deal in which he signed over his nation’s mineral wealth in return for roads, railways and sports stadiums. Everyone would benefit, no?
No. The problem is that the infrastructure turns out to be worth a hell of a lot less than the minerals. Fortunately, Washington has had the foresight to top up the dictator’s Swiss bank account. Problem solved! As for the mining operation, the Americans really don’t want to be bothered by minimum wages or trade unions. They’re banned. And no complaints from the workforce, please, because no one wants a repeat of that “misunderstanding” in which an American mine supervisor opened fire on stroppy employees.
If the United States embarked on this sort of colonial experiment, it would produce a furious “Occupy Grosvenor Square” camp outside the US embassy and a withering play by Sir David Hare at the National. But since these things are actually being done not by America but by the People’s Republic of China across the entire African continent, the “anti-colonialist” Left just yawns.
Ordinary Africans care, of course. The subject of China will loom large in Monday’s election in Congo, though since President Joseph Kabila has arranged to be re-elected, it won’t affect the result. It was Kabila who approved a $6 billion copper-for-infrastructure barter deal with China. Unfortunately, the sale of state mines has left Congo with a $5.5 billion black hole in its budget. Meanwhile, The Economist reports: “The sale of mining licences at below-market value to firms associated with friends of the president has raised eyebrows.”
I can’t say it raised my eyebrows. How else do you think China does business in Africa? It suffered a setback in Zambia last year when President Michael Sata was elected on an anti-Chinese ticket. But Sata hasn’t fulfilled his promise to regulate Zambia’s Chinese-run copper mines, branded “dangerously unsafe” by Human Rights Watch. And this week none other than ex-president Dr Kenneth Kaunda was in Beijing’s Great Hall of the People to discuss “deepening substantial co-operation”.
There’s a school of thought which says that China’s modus operandi, however brutal, at least gets things built. In contrast, Western aid is tipped into dictators’ pockets without anything to show for it. But the benefits of Beijing’s “investment” are elusive, because the Chinese don’t usually employ Africans to perform anything but menial tasks. Chinese construction engineers build motorways and hospitals without passing on the skills to maintain them. The result: everything falls into disrepair within a decade, by which time the copper is safely out of the ground.
From a moral point of view, China’s policy towards Africa is despicable. But it’s ingenious, too. Beijing has worked out that, by virtue of being a non-Western power, it can pose as a “developing country” while creating its sub-Saharan satrapies. The anti-racism lobby in the United Nations makes sure that the finger of guilt is pointed firmly at the former colonial powers, who are always happy to put on a display of breast-beating by, say, the Archbishop of Canterbury. Meanwhile, something close to slavery is being quietly reintroduced to the dark continent (which is how China thinks of it).
For 50 years, it’s been unclear in which direction Africans were heading. Now the question is almost irrelevant: the decision has been made for them.
Friday, November 25, 2011
Thursday, November 24, 2011
The Obama & NATO Human Rights Victory Celebration Continues in Libya
INDEPENDENT
The detention of 7,000 people in prisons and camps by the anti-Gaddafi forces is not surprising. The conflict in Libya was always much more of a civil war between Libyans than foreign governments pretended or the foreign media reported.
The winning anti-Gaddafi militia are not proving merciful. Often they have had relatives killed in the fighting or imprisoned by the old regime who they want to avenge. Sometimes they come from tribes and towns traditionally hostile to neighbouring tribes and towns. Gaddafi supporters are being hunted down. According to one person in Gaddafi's home town of Sirte, they are facing a "continuing reign of terror".
"There is a deep and spreading frenzy, particularly among some of the youth militia and the Islamists, to hunt down anyone associated with the former regime," the source said.
The National Transitional Council, whose control is largely theoretical, is not in a position to stop this purge because many of its members are themselves frightened of being accused of links with the old regime.
Some groups are particularly vulnerable. The then-rebels were convinced earlier this year that many of those they were fighting were mercenaries recruited in Central or West Africa. But when these alleged "mercenaries" were arrested in Tripoli, many turned out to be black migrant labourers without identity papers.
According to Amnesty International, some of those who were put on television by the rebels as mercenaries were later quietly freed because they were migrant workers. Others faced mob justice before they were able to prove their identities.
The international media was overwhelmingly hostile to Gaddafi's regime and tended to highlight atrocities committed by it and disregard or underplay human rights violations carried out by his opponents. An example of this occurred when eight or nine bodies of Libyan soldiers were found who appeared to have been executed. The rebels claimed they had been shot by Gaddafi's men because they tried to change sides. But Amnesty located a film of the soldiers being captured alive by the rebels and it was presumably the rebels who killed them.
The purge of Gaddafi supporters is made more dangerous by the infighting between the militias, and between them and the politicians. Association with the old regime can be used to discredit an opponent. There may also be self-interest since death squads are reported to be taking their property.
Wednesday, November 23, 2011
Gingrich / Perry 2012: Because any other choice would be heartless
What part of "illegal" are they missing here? Anyone? Bueller?
Republican presidential contender Newt Gingrich took issue with rival Mitt Romney's hard-line stance on immigration Tuesday night as the GOP candidates returned to a pivotal issue in their latest nationally televised debate.
Gingrich said he did not want the Republican Party, which says it puts a premium on "family values," to promote immigration policies that would break up families that have been in this country for many years by expelling those who are here illegally.
"I'm prepared to take the heat for saying 'let's be humane,' " said Gingrich, staking out a moderate position similar to one that proved hazardous to Texas Gov. Rick Perry in earlier debates.
A Gold Rush of Subsidies in Clean Energy Search
New York Times
WASHINGTON — Halfway between Los Angeles and San Francisco, on a former cattle ranch and gypsum mine, NRG Energy is building an engineering marvel: a compound of nearly a million solar panels that will produce enough electricity to power about 100,000 homes.
The project is also a marvel in another, less obvious way:
Taxpayers and ratepayers are providing subsidies worth almost as much as the entire $1.6 billion cost of the project.
Similar subsidy packages have been given to 15 other solar- and wind-power electric plants since 2009.
The government support — which includes loan guarantees, cash grants and contracts that require electric customers to pay higher rates — largely eliminated the risk to the private investors and almost guaranteed them large profits for years to come.
The beneficiaries include financial firms like Goldman Sachs and Morgan Stanley, conglomerates like General Electric, utilities like Exelon and NRG — even Google.
A great deal of attention has been focused on Solyndra, a start-up that received $528 million in federal loans to develop cutting-edge solar technology before it went bankrupt, but nearly 90 percent of the $16 billion in clean-energy loans guaranteed by the federal government since 2009 went to subsidize these lower-risk power plants, which in many cases were backed by big companies with vast resources.
When the Obama administration and Congress expanded the clean-energy incentives in 2009, a gold-rush mentality took over.
As NRG’s chief executive, David W. Crane, put it to Wall Street analysts early this year, the government’s largess was a once-in-a-generation opportunity, and “we intend to do as much of this business as we can get our hands on.”
NRG, along with partners, ultimately secured $5.2 billion in federal loan guarantees plus hundreds of millions in other subsidies for four large solar projects.
“I have never seen anything that I have had to do in my 20 years in the power industry that involved less risk than these projects,” he said in a recent interview. “It is just filling the desert with panels.”
From 2007 to 2010, federal subsidies jumped to $14.7 billion from $5.1 billion, according to a recent study.
Most of the surge came from the economic stimulus bill, which was passed in 2009 and financed an Energy Department loan guarantee program and a separate Treasury Department grant program that were promoted as important in creating green jobs.
States like California sweetened the pot by offering their own tax breaks and by approving long-term power-purchase contracts that, while promoting clean energy, will also require ratepayers to pay billions of dollars more for electricity for as long as two decades.
The federal loan guarantee program expired on Sept. 30. The Treasury grant program is scheduled to expire at the end of December, although the energy industry is lobbying Congress to extend it. But other subsidies will remain.
The windfall for the industry over the last three years raises questions of whether the Obama administration and state governments went too far in their support of solar and wind power projects, some of which would have been built anyway, according to the companies involved.
Obama administration officials argue that the incentives, which began on a large scale late in the Bush administration but were expanded by the stimulus legislation, make economic and environmental sense. Beyond the short-term increase in construction hiring, they say, the cleaner air and lower carbon emissions will benefit the country for decades.
“Subsidies and government support have been part of many key industries in U.S. history — railroads, oil, gas and coal, aviation,” said Damien LaVera, an Energy Department spokesman.
A Case Study
NRG’s California Valley Solar Ranch project is a case study in the banquet of government subsidies available to the owners of a renewable-energy plant.
The first subsidy is for construction. The plant is expected to cost $1.6 billion to build, with key components made by SunPower at factories in California and Asia. In late September, the Energy Department agreed to guarantee a $1.2 billion construction loan, with the Treasury Department lending the money at an exceptionally low interest rate of about 3.5 percent, compared with the 7 percent that executives said they would otherwise have had to pay.
That support alone is worth about $205 million to NRG over the life of the loan, according to an analysis performed for The New York Times by Booz & Company, a strategic consulting firm that regularly performs such studies for private investors.
When construction is complete, NRG is eligible to receive a $430 million check from the Treasury Department — part of a change made in 2009 that allows clean-energy projects to receive 30 percent of their cost as a cash grant upfront instead of taking other tax breaks gradually over several years.
Californians are also making a big contribution. Under a state law passed to encourage the construction of more solar projects, NRG will not have to pay property taxes to San Luis Obispo County on its solar panels, saving it an estimated $14 million a year.
Assisted by another state law, which mandates that California utilities buy 33 percent of their power from clean-energy sources by 2020, the project’s developers struck lucrative contracts with the local utility, Pacific Gas & Electric, to buy the plant’s power for 25 years.
P.G.& E., and ultimately its electric customers, will pay NRG $150 to $180 a megawatt-hour, according to a person familiar with the project, who asked not to be identified because the price information was confidential. At the time the contract was awarded, that was about 50 percent more than the expected market cost of electricity in California from a newly built gas-powered plant, state officials said.
While neither state regulators nor the companies will divulge all the details, the extra cost to ratepayers amounts to a $462 million subsidy, according to Booz, which calculated the present value of the higher rates over the life of the contracts.
Additional depreciation tax breaks for renewable energy plants could save the company an additional $110 million, according to Christopher Dann, the Booz analyst who examined the project.
The total value of all those subsidies in today’s dollars is about $1.4 billion, leading to an expected rate of return of 25 percent for the project’s equity investors, according to Booz.
Mr. Crane of NRG disputed the Booz estimate, saying that the company’s return on equity was “in the midteens.”
NRG, which initially is investing about $400 million of its own money in the project, expects to get all of its equity back in two to five years, according to a statement it made in August to Wall Street analysts.
By 2015, NRG expects earnings of at least $300 million a year before interest, taxes, depreciation and amortization from all of its solar projects combined, making these investments some of the more lucrative pieces in its sprawling portfolio, which includes dozens of power plants fueled by coal, natural gas and oil.
NRG is not the only company gobbling up subsidies. At least 10 of the 16 solar or wind electricity generation projects that secured Energy Department loan guarantees intend to also take the Treasury Department grant, and all but two of the projects have long-term agreements to sell almost all of their power, according to a survey of the companies by The Times.
These projects, in almost all cases, benefit from legislation that has been passed in about 30 states that pushes local utility companies to buy a significant share of their power from renewable sources, like solar or wind power. These mandates often have resulted in contracts with above-market rates for the project developers, and a guarantee of a steady revenue stream.
“It is like building a hotel, where you know in advance you are going to have 100 percent room occupancy for 25 years,” said Kevin Smith, chief executive of SolarReserve. His Nevada solar project has secured a 25-year power-purchase agreement with the state’s largest utility and a $737 million Energy Department loan guarantee and is on track to receive a $200 million Treasury grant.
Because the purchase mandates can drive up electricity rates significantly, some states, including New Jersey and Colorado, are considering softening the requirements on utilities.
Brookfield Asset Management, a giant Canadian investment firm, will receive so many subsidies for a New Hampshire wind farm that they are worth 46 percent to 80 percent of the $229 million price of the project, when measured in today’s dollars, according to analyses for The Times performed by Booz and two other two industry financial experts. (The wide range reflects a disagreement between the experts on the future price of electricity in New Hampshire.)
Richard Legault, the chief executive of Brookfield Renewable Power, the division that oversees the Granite Reliable project in New Hampshire, declined to discuss his profit expectations in detail, but said the project might not have happened without government assistance.
“When everything has come together, it is a good investment for Brookfield, it is no doubt,” Mr. Legault said. “We are quite happy with it.” (Brookfield is also the owner of the small park in Manhattan that is home to the Occupy Wall Street protesters.)
Even companies whose business has little to do with energy or finance, like the Internet giant Google, benefit from the public subsidies. Google has invested in several renewable energy projects, including a giant solar plant in the California desert and a wind farm in Oregon, in part to get federal tax breaks that it can use to offset its profits from Web advertising.
Industry executives and other supporters of the subsidies say that the public money was vital to the projects, in part because financing for renewable energy projects dried up during the recession. They also note that more traditional energy sectors, like oil and natural gas, get heavy subsidies of their own. For example, in the 2010 fiscal year, the oil and gas producers got federal tax breaks of $2.7 billion, according to an analysis by the Energy Information Administration.
“These programs just level the playing field for what oil and gas and nuclear industries have enjoyed for the last 50 years,” said Rhone Resch, president of Solar Energy Industries Association. “Do you have to provide more policy support and funding initially? Absolutely. But the result is more energy security, clean energy and domestic jobs.”
Michael E. Webber, associate director of the Center for International Energy and Environmental Policy at the University of Texas, Austin, said renewable energy subsidies were a worthy investment. “It is a form of corporate welfare that is consistent with other social goals like job creation, clean air and boosting a domestic source of energy,” he said.
Overflowing Breaks
Obama administration officials said the subsidies were intended to help renewable-energy plants that were jumbo-sized or used innovative technology, both potential obstacles to getting private financing. But even proponents of the subsidies say the administration may have gone overboard.
Concerns that the government was being too generous reached all the way to President Obama. In an October 2010 memo prepared for the president, Lawrence H. Summers, then his top economic adviser; Carol M. Browner, then his adviser on energy matters; and Ronald A. Klain, then the vice president’s chief of staff, expressed discomfort with the “double dipping” that was starting to take place. They said investors had little “skin in the game.”
Officials involved in reviewing the loan applications said that Treasury Department officials pressed the Energy Department to respond to these concerns.
Officials at both agencies declined to discuss the anticipated financial returns of the clean-energy projects the federal government has agreed to guarantee, saying the information was confidential.
But Energy Department officials said they had carefully evaluated every project to try to calculate how much money the developers and investors stood to make. “They were rejected, if they looked too rich or too risky,” Mr. LaVera, the Energy Department spokesman said.
In at least one instance — NRG’s Agua Caliente solar project in Yuma County, Ariz. — the Energy Department demanded that the company agree not to apply for a Treasury grant it was legally entitled to receive. The government was concerned the extra subsidy would result in excessive profit, NRG executives confirmed.
In other cases, the agency required that companies use most of the Treasury grants that they would get when construction was complete to pay down part of the government-guaranteed construction loans instead of cashing out the equity investors.
“The private sector really has more skin in the game than the public realizes,” said Andy Katell, a spokesman for GE Energy Financial Services, which like Goldman Sachs, Morgan Stanley and other financial firms has large investments in several of these projects.
But there is no doubt that the deals are lucrative for the companies involved.
G.E., for example, lobbied Congress in 2009 to help expand the subsidy programs, and it now profits from every aspect of the boom in renewable-power plant construction.
It is also an investor in one solar and one wind project that have secured about $2 billion in federal loan guarantees and expects to collect nearly $1 billion in Treasury grants. The company has also won hundreds of millions of dollars in contracts to sell its turbines to wind plants built with public subsidies.
Mr. Katell said G.E. and other companies were simply “playing ball” under the rules set by Congress and the Obama administration to promote the industry. “It is good for the country, and good for our company,” he said.
Satya Kumar, an analyst at Credit Suisse who specializes in renewable energy companies, said there was no question the country would see real benefits from the surge in renewable energy projects.
“But the industry could have done a lot more solar for a lot less price, in terms of subsidy,” he said.
---
This article has been revised to reflect the following correction:
Correction: November 18, 2011
An article on Saturday about public subsidies for renewable energy projects described incorrectly the earnings that the utility company NRG projected by 2015 from its solar projects. The company told investors that it expected the projects to generate $354 million annually in Ebitda, or earnings before interest, taxes, depreciation and amortization; it did not project “more than $300 million a year in profits.” (While Ebitda is one common method of viewing profitability, “profits” is more typically used to describe pretax income, which the company said would be $49 million a year.)
WASHINGTON — Halfway between Los Angeles and San Francisco, on a former cattle ranch and gypsum mine, NRG Energy is building an engineering marvel: a compound of nearly a million solar panels that will produce enough electricity to power about 100,000 homes.
The project is also a marvel in another, less obvious way:
Taxpayers and ratepayers are providing subsidies worth almost as much as the entire $1.6 billion cost of the project.
Similar subsidy packages have been given to 15 other solar- and wind-power electric plants since 2009.
The government support — which includes loan guarantees, cash grants and contracts that require electric customers to pay higher rates — largely eliminated the risk to the private investors and almost guaranteed them large profits for years to come.
The beneficiaries include financial firms like Goldman Sachs and Morgan Stanley, conglomerates like General Electric, utilities like Exelon and NRG — even Google.
A great deal of attention has been focused on Solyndra, a start-up that received $528 million in federal loans to develop cutting-edge solar technology before it went bankrupt, but nearly 90 percent of the $16 billion in clean-energy loans guaranteed by the federal government since 2009 went to subsidize these lower-risk power plants, which in many cases were backed by big companies with vast resources.
When the Obama administration and Congress expanded the clean-energy incentives in 2009, a gold-rush mentality took over.
As NRG’s chief executive, David W. Crane, put it to Wall Street analysts early this year, the government’s largess was a once-in-a-generation opportunity, and “we intend to do as much of this business as we can get our hands on.”
NRG, along with partners, ultimately secured $5.2 billion in federal loan guarantees plus hundreds of millions in other subsidies for four large solar projects.
“I have never seen anything that I have had to do in my 20 years in the power industry that involved less risk than these projects,” he said in a recent interview. “It is just filling the desert with panels.”
From 2007 to 2010, federal subsidies jumped to $14.7 billion from $5.1 billion, according to a recent study.
Most of the surge came from the economic stimulus bill, which was passed in 2009 and financed an Energy Department loan guarantee program and a separate Treasury Department grant program that were promoted as important in creating green jobs.
States like California sweetened the pot by offering their own tax breaks and by approving long-term power-purchase contracts that, while promoting clean energy, will also require ratepayers to pay billions of dollars more for electricity for as long as two decades.
The federal loan guarantee program expired on Sept. 30. The Treasury grant program is scheduled to expire at the end of December, although the energy industry is lobbying Congress to extend it. But other subsidies will remain.
The windfall for the industry over the last three years raises questions of whether the Obama administration and state governments went too far in their support of solar and wind power projects, some of which would have been built anyway, according to the companies involved.
Obama administration officials argue that the incentives, which began on a large scale late in the Bush administration but were expanded by the stimulus legislation, make economic and environmental sense. Beyond the short-term increase in construction hiring, they say, the cleaner air and lower carbon emissions will benefit the country for decades.
“Subsidies and government support have been part of many key industries in U.S. history — railroads, oil, gas and coal, aviation,” said Damien LaVera, an Energy Department spokesman.
A Case Study
NRG’s California Valley Solar Ranch project is a case study in the banquet of government subsidies available to the owners of a renewable-energy plant.
The first subsidy is for construction. The plant is expected to cost $1.6 billion to build, with key components made by SunPower at factories in California and Asia. In late September, the Energy Department agreed to guarantee a $1.2 billion construction loan, with the Treasury Department lending the money at an exceptionally low interest rate of about 3.5 percent, compared with the 7 percent that executives said they would otherwise have had to pay.
That support alone is worth about $205 million to NRG over the life of the loan, according to an analysis performed for The New York Times by Booz & Company, a strategic consulting firm that regularly performs such studies for private investors.
When construction is complete, NRG is eligible to receive a $430 million check from the Treasury Department — part of a change made in 2009 that allows clean-energy projects to receive 30 percent of their cost as a cash grant upfront instead of taking other tax breaks gradually over several years.
Californians are also making a big contribution. Under a state law passed to encourage the construction of more solar projects, NRG will not have to pay property taxes to San Luis Obispo County on its solar panels, saving it an estimated $14 million a year.
Assisted by another state law, which mandates that California utilities buy 33 percent of their power from clean-energy sources by 2020, the project’s developers struck lucrative contracts with the local utility, Pacific Gas & Electric, to buy the plant’s power for 25 years.
P.G.& E., and ultimately its electric customers, will pay NRG $150 to $180 a megawatt-hour, according to a person familiar with the project, who asked not to be identified because the price information was confidential. At the time the contract was awarded, that was about 50 percent more than the expected market cost of electricity in California from a newly built gas-powered plant, state officials said.
While neither state regulators nor the companies will divulge all the details, the extra cost to ratepayers amounts to a $462 million subsidy, according to Booz, which calculated the present value of the higher rates over the life of the contracts.
Additional depreciation tax breaks for renewable energy plants could save the company an additional $110 million, according to Christopher Dann, the Booz analyst who examined the project.
The total value of all those subsidies in today’s dollars is about $1.4 billion, leading to an expected rate of return of 25 percent for the project’s equity investors, according to Booz.
Mr. Crane of NRG disputed the Booz estimate, saying that the company’s return on equity was “in the midteens.”
NRG, which initially is investing about $400 million of its own money in the project, expects to get all of its equity back in two to five years, according to a statement it made in August to Wall Street analysts.
By 2015, NRG expects earnings of at least $300 million a year before interest, taxes, depreciation and amortization from all of its solar projects combined, making these investments some of the more lucrative pieces in its sprawling portfolio, which includes dozens of power plants fueled by coal, natural gas and oil.
NRG is not the only company gobbling up subsidies. At least 10 of the 16 solar or wind electricity generation projects that secured Energy Department loan guarantees intend to also take the Treasury Department grant, and all but two of the projects have long-term agreements to sell almost all of their power, according to a survey of the companies by The Times.
These projects, in almost all cases, benefit from legislation that has been passed in about 30 states that pushes local utility companies to buy a significant share of their power from renewable sources, like solar or wind power. These mandates often have resulted in contracts with above-market rates for the project developers, and a guarantee of a steady revenue stream.
“It is like building a hotel, where you know in advance you are going to have 100 percent room occupancy for 25 years,” said Kevin Smith, chief executive of SolarReserve. His Nevada solar project has secured a 25-year power-purchase agreement with the state’s largest utility and a $737 million Energy Department loan guarantee and is on track to receive a $200 million Treasury grant.
Because the purchase mandates can drive up electricity rates significantly, some states, including New Jersey and Colorado, are considering softening the requirements on utilities.
Brookfield Asset Management, a giant Canadian investment firm, will receive so many subsidies for a New Hampshire wind farm that they are worth 46 percent to 80 percent of the $229 million price of the project, when measured in today’s dollars, according to analyses for The Times performed by Booz and two other two industry financial experts. (The wide range reflects a disagreement between the experts on the future price of electricity in New Hampshire.)
Richard Legault, the chief executive of Brookfield Renewable Power, the division that oversees the Granite Reliable project in New Hampshire, declined to discuss his profit expectations in detail, but said the project might not have happened without government assistance.
“When everything has come together, it is a good investment for Brookfield, it is no doubt,” Mr. Legault said. “We are quite happy with it.” (Brookfield is also the owner of the small park in Manhattan that is home to the Occupy Wall Street protesters.)
Even companies whose business has little to do with energy or finance, like the Internet giant Google, benefit from the public subsidies. Google has invested in several renewable energy projects, including a giant solar plant in the California desert and a wind farm in Oregon, in part to get federal tax breaks that it can use to offset its profits from Web advertising.
Industry executives and other supporters of the subsidies say that the public money was vital to the projects, in part because financing for renewable energy projects dried up during the recession. They also note that more traditional energy sectors, like oil and natural gas, get heavy subsidies of their own. For example, in the 2010 fiscal year, the oil and gas producers got federal tax breaks of $2.7 billion, according to an analysis by the Energy Information Administration.
“These programs just level the playing field for what oil and gas and nuclear industries have enjoyed for the last 50 years,” said Rhone Resch, president of Solar Energy Industries Association. “Do you have to provide more policy support and funding initially? Absolutely. But the result is more energy security, clean energy and domestic jobs.”
Michael E. Webber, associate director of the Center for International Energy and Environmental Policy at the University of Texas, Austin, said renewable energy subsidies were a worthy investment. “It is a form of corporate welfare that is consistent with other social goals like job creation, clean air and boosting a domestic source of energy,” he said.
Overflowing Breaks
Obama administration officials said the subsidies were intended to help renewable-energy plants that were jumbo-sized or used innovative technology, both potential obstacles to getting private financing. But even proponents of the subsidies say the administration may have gone overboard.
Concerns that the government was being too generous reached all the way to President Obama. In an October 2010 memo prepared for the president, Lawrence H. Summers, then his top economic adviser; Carol M. Browner, then his adviser on energy matters; and Ronald A. Klain, then the vice president’s chief of staff, expressed discomfort with the “double dipping” that was starting to take place. They said investors had little “skin in the game.”
Officials involved in reviewing the loan applications said that Treasury Department officials pressed the Energy Department to respond to these concerns.
Officials at both agencies declined to discuss the anticipated financial returns of the clean-energy projects the federal government has agreed to guarantee, saying the information was confidential.
But Energy Department officials said they had carefully evaluated every project to try to calculate how much money the developers and investors stood to make. “They were rejected, if they looked too rich or too risky,” Mr. LaVera, the Energy Department spokesman said.
In at least one instance — NRG’s Agua Caliente solar project in Yuma County, Ariz. — the Energy Department demanded that the company agree not to apply for a Treasury grant it was legally entitled to receive. The government was concerned the extra subsidy would result in excessive profit, NRG executives confirmed.
In other cases, the agency required that companies use most of the Treasury grants that they would get when construction was complete to pay down part of the government-guaranteed construction loans instead of cashing out the equity investors.
“The private sector really has more skin in the game than the public realizes,” said Andy Katell, a spokesman for GE Energy Financial Services, which like Goldman Sachs, Morgan Stanley and other financial firms has large investments in several of these projects.
But there is no doubt that the deals are lucrative for the companies involved.
G.E., for example, lobbied Congress in 2009 to help expand the subsidy programs, and it now profits from every aspect of the boom in renewable-power plant construction.
It is also an investor in one solar and one wind project that have secured about $2 billion in federal loan guarantees and expects to collect nearly $1 billion in Treasury grants. The company has also won hundreds of millions of dollars in contracts to sell its turbines to wind plants built with public subsidies.
Mr. Katell said G.E. and other companies were simply “playing ball” under the rules set by Congress and the Obama administration to promote the industry. “It is good for the country, and good for our company,” he said.
Satya Kumar, an analyst at Credit Suisse who specializes in renewable energy companies, said there was no question the country would see real benefits from the surge in renewable energy projects.
“But the industry could have done a lot more solar for a lot less price, in terms of subsidy,” he said.
---
This article has been revised to reflect the following correction:
Correction: November 18, 2011
An article on Saturday about public subsidies for renewable energy projects described incorrectly the earnings that the utility company NRG projected by 2015 from its solar projects. The company told investors that it expected the projects to generate $354 million annually in Ebitda, or earnings before interest, taxes, depreciation and amortization; it did not project “more than $300 million a year in profits.” (While Ebitda is one common method of viewing profitability, “profits” is more typically used to describe pretax income, which the company said would be $49 million a year.)
Tuesday, November 22, 2011
Los Angeles Offers To Give Occupiers Free Office Space, Housing And Farmland
(LA Times) — Los Angeles officials have offered Occupy L.A. protesters a package of incentives that includes downtown office space and farmland in an attempt to persuade them to abandon their camp outside of City Hall, according to several demonstrators who have been in negotiations with the city.
The details of the proposal were revealed Monday during the demonstration’s nightly general assembly meeting by Jim Lafferty, an attorney with the National Lawyers Guild who has been advocating on behalf of the protest since it began seven weeks ago.
Lafferty said city officials have offered protesters a $1-a-year lease on a 10,000-square-foot office space near City Hall. He said officials also promised land elsewhere for protesters who wish to farm, as well as additional housing for the contingent of homeless people who joined the camp.
A spokesman for the mayor would not comment on the proposal, saying only: “We are in negotiations with organizers of Occupy L.A.”
Sunday, November 20, 2011
Obama’s Cold Move, The Pacific President
BBC
US President Barack Obama's announcement that he is going to send 2,500 Marines to Australia and increase visits of ships, submarines and aircraft to the country is of real significance.
One observer calls it a cold and clever move.
Politicians tend to tell every region and country they visit how important they are.
When President Obama says: "The United States of America has no stronger ally than Australia," you might want to remember that he said it about France at the beginning of the year.
But when he says to Australians: "We are two Pacific nations," it is from the heart.
When he declares: "The Asia-Pacific region is absolutely critical to America's economic growth," and ''We're here to stay. This is a region of huge strategic importance to us,'' you can believe he means it.
Sending the troops annoys China, which as it grows in economic power is becoming a lot more interested in being the boss of its own backyard.
There have been pretty tense confrontations over who owns what bit of the South China Sea and China's "blue-water strategy" - making its presence felt throughout the Pacific Ocean - worries some.
The Chinese say of President Obama's move: "It may not be quite appropriate to intensify and expand military alliances and may not be in the interest of countries within this region."
It is part of a bigger picture.
They are also not keen on a new military pact Secretary of State Hillary Clinton has signed with the Philippines, bolstering its navy.
They dislike even more President Obama's plan to raise territorial disputes over the South China Sea at a meeting of the Association of South East Asian Nations this weekend.
China wants the disagreements sorted out through negotiations between individual countries. The US wants a grander multi-nation agreement.
But sending the Marines to Australia is not about any crude confrontation on the high seas.
It is about America signalling to its allies in the region that it is in this for the long haul.
There are plenty of countries in the region who eye China with suspicion and will welcome help from America with a lot more enthusiasm than Afghans or Iraqis.
The US Marines are not likely to end up intervening in a confrontation between a Japanese fishing boat and a Chinese destroyer.
But as the century progresses, they or their heirs could well find themselves dealing with a humanitarian crisis as Bangladesh disappears under water, helping as refugees from Burma flood into Thailand or mitigating the chaos of the reunification of Korea.
Born on America's Pacific Islands, raised for a time in Indonesia, President Obama is of course more likely be a Pacific President than the transtlanticists of the past, whose ancestors came from Europe, the continent which once defined and dominated the whole world.
But it is not about sentiment. Foreign policy is usually linked to economic interest and President Obama makes this explicit.
If he is confronting China it is because that is the inevitable consequence of being a power in the region.
He says: "The economy in this area is going to be the engine for world economic growth for some time to come. The lines of commerce and trade are constantly expanding.
"And it's appropriate then for us to make sure that not only our alliance but the security architecture of the region is updated for the 21st century, and this initiative is going to allow us to do that."
President Obama thinks he sees the big picture and where America's long-term interests lie. The Pacific region gives him a chance to practise his doctrine of leadership through alliances.
But it is also a region with some big, tough and seemingly intractable problems.
What sort of leadership America provides and with what aims will be a critical question not only for him but presidents to come.
Bloody Awful Useless Wind Farms
Wind farms are useless, says Duke
The Duke of Edinburgh has made a fierce attack on wind farms, describing them as “absolutely useless”.
In a withering assault on the onshore wind turbine industry, the Duke said the farms were “a disgrace”.
He also criticised the industry’s reliance on subsidies from electricity customers, claimed wind farms would “never work” and accused people who support them of believing in a “fairy tale”.
The Duke’s comments will be seized upon by the burgeoning lobby who say wind farms are ruining the countryside and forcing up energy bills.
Criticism of their effect on the environment has mounted, with The Sunday Telegraph disclosing today that turbines are being switched off during strong winds following complaints about their noise.
The Duke’s views are politically charged, as they put him at odds with the Government’s policy significantly to increase the amount of electricity generated by wind turbines.
The country has 3,421 turbines — 2,941 of them onshore — with another 4,500 expected to be built under plans for wind power to play a more important role in providing Britain’s energy.
Chris Huhne, the Energy Secretary, last month called opponents of the plans “curmudgeons and fault-finders” and described turbines as “elegant” and “beautiful”.
The Duke’s attack on the turbines, believed to be the first public insight into his views on the matter, came in a conversation with the managing director of a leading wind farm company.
When Esbjorn Wilmar, of Infinergy, which builds and operates turbines, introduced himself to the Duke at a reception in London, he found himself on the end of an outspoken attack on his industry.
“He said they were absolutely useless, completely reliant on subsidies and an absolute disgrace,” said Mr Wilmar. “I was surprised by his very frank views.”
Mr Wilmar said his attempts to argue that onshore wind farms were one of the most cost-effective forms of renewable energy received a fierce response from the Duke.
“He said, 'You don’t believe in fairy tales do you?’” said Mr Wilmar. “He said that they would never work as they need back-up capacity.”
One of the main arguments of the anti-wind farm lobby is that because turbines do not produce electricity without wind, there is still a need for other ways to generate power.
Their proponents argue that it is possible to build “pump storage” schemes, which would use excess energy from wind power to pump water into reservoirs to generate further electricity in times of high demand and low supply.
It emerged last year that electricity customers are paying an average of £90 a year to subsidise wind farms and other forms of renewable energy as part of a government scheme to meet carbon-reduction targets.
Mr Wilmar said one of the main reasons the Duke thought onshore wind farms to be “a very bad idea” was their reliance on such subsidies.
The generous financial incentives being offered to green energy developers have led landowners to look to build wind farms on their estates, including the Duke of Gloucester, the Queen’s cousin.
Prince Philip, however, said he would never consider allowing his land to be used for turbines, which can be up to 410ft tall, and he bemoaned their impact on the countryside.
Mr Wilmar said: “I suggested to him to put them on his estate, and he said, 'You stay away from my estate young man’.
“He said he thought that they’re not nice at all for the landscape.”
The Duke’s comments echo complaints made by his son, the Prince of Wales, who has refused to have any built on Duchy of Cornwall land.
Yet a turbine will be erected opposite the Castle of Mey in Caithness, where he stays for a week every August, if a farmer succeeds in gaining planning permission from Highland Council.
While they are opposed to onshore wind farms, the Royal family stands to earn millions of pounds from those placed offshore.
Last year, the Crown Estate, the £7billion land and property portfolio, approved an increase in the number of sites around the coast of England. The Crown Estate owns almost all of the seabed off Britain’s 7,700-mile coastline.
Experts predict that the growth in offshore wind farms could be worth £250million a year. Britain has 436 offshore turbines, but within a decade that number will reach nearly 7,000. From 2013, the Royal family’s Civil List payments will be replaced, and instead they will receive 15 per cent of the Crown Estate’s profits, although the Queen, the Duke, the Prince of Wales and other members of the family do not have any say over how the estate makes its money.
Mr Wilmar was at a reception last week in Chelsea, west London, marking the 70th anniversary of the Council of Christians and Jews at which the Queen and Duke were guests of honour.
The Dutch businessman’s company describes itself as committed to preserving the planet. Infinergy, which is a subsidiary of the Dutch firm KDE Energy, is planning to build on a number of sites across the country, from the north of Scotland to Totnes in Devon.
Mr Wilmar claims that onshore turbines are less reliant on subsidies and more cost-effective than those built in the sea. “If you go offshore it costs you twice as much as being on-shore because you have to lay foundations in the sea,” he said. “It’s very expensive for very obvious reasons.”
Two-thirds of the country’s wind turbines are owned by foreign companies, which are estimated to reap £500million a year in subsidies.
A spokesman for the Duke said that Buckingham Palace would not comment about a private conversation.
Saturday, November 19, 2011
The GOP Fields its “B” Team
November 19, 2011
The Party's Over
By Robert J. Mack
AMERICAN THINKER
As that famous philosopher and grammarian, Professor Henry Higgins, bellowed in the musical My Fair Lady when he heard that Eliza Doolittle was going to marry Freddy Einsford-Hill: "It's doomed before they even take the vow." That exclamation popped into my head just recently when I thought about all of the candidates for the Republican presidential nomination. Not only have many of these candidates been sniping at one another, but because there are so many debates, the news media (the PR arm of the White House) is able to dig up all kinds of dirt about every one of them. Along with that is the revelation involving some of them, punctuated by the debates, that they are not ready for prime time when it comes to foreign policy -- or even debating, for God's sake.
Americans have been down the unqualified and incompetence roads before when it comes to presidential candidates and presidents. Do we need to go there again? It is painful to list below the gaffes that the Republican candidates have made, but one of them will go against the great campaigner in 2012, and that one had better be prepared.
Mitt Romney
-He has so many flip-flops on issues in his career, including abortion, that he is out-John Kerrying John Kerry, whom the term flip-flop was used effectively against in 2004. The Democrats will obviously use those against Romney, but, of course, Obama outright lies also, so they will have to tread carefully. Nevertheless, Romney will be weak against the Democrats' anointed one because he has been so duplicitous in the past, which Obama and crew will exploit relentlessly.
Herman Cain
-Talk about baggage. Even if this guy is totally innocent of all the sexual harassment charges leveled against him, which he may very well be, just the accusations are enough to turn a large number of female voters against him. He is toast based on that alone. Plus his ignorance of foreign affairs is appalling. Not knowing the Palestinian position on right of return? Come on! Someone vying for the presidency, where he might have to negotiate with those Palestinians, has to know their positions. He is unqualified simply based on his lack of knowledge and experience regarding foreign affairs.
Newt Gingrich
-Who knew until just the other day that he accepted between 1.6 and 1.8 million dollars over eight years from Freddie Mac to act as a consultant for them? Meanwhile, after he left their employ and during and after the financial crisis, he was castigating that organization and Fannie Mae -- rightfully so -- for contributing to the mortgage disaster that led to the financial meltdown. Is there a smoking gun there regarding hypocrisy, or was he trying to warn Freddie Mac about the mortgage bubble they were creating? We'll have to see, but it sure smells funny. Gingrich is the smartest guy in a room full of any politicians you could name. But he is also a rogue when it comes to issues. For example, that image of him and Nancy Pelosi on the couch talking about the threat of global warming is indelible in the minds of Republicans.
Michele Bachmann
-She started out like a house on fire in the Iowa straw poll in Ames, Iowa, back in August, and then she fell off a cliff. Her gaffe about the actor John Wayne being born in Waterloo, Iowa was classic. It turns out the only "John Wayne" born in Waterloo was John Wayne Gacy, the infamous serial killer. Bachmann comes originally from Waterloo, Iowa, having moved to Minnesota when she was thirteen years old. She should have known that the actor wasn't born there, but she didn't. The media crucified her for the gaffe (they can't stand conservative women) and will continue to do so if she gets some traction after the Iowa caucuses. However, she lacks the resources to go much farther.
Rick Perry
-How can you go up against Obama in possibly three seminal debates in October 2012 when you can't name the three government agencies you want to eliminate? These are from your own talking points and literature. How did this guy win in Texas? He is sinking like a stone in the polls and will hopefully drop out soon.
Ron Paul
-This libertarian candidate wants to legalize drugs and make nice-nice with Iran because they have every right to build a nuclear weapon according to his painful logic. So, America, circle the wagons when it comes to foreign policy according to Ron Paul. As John McEnroe used to say whenever he questioned a line judge's call on the tennis court: "You can't be serious!" Unfortunately, Ron is serious and also dangerous to America's and Israel's security.
Gary Johnson
-See Ron Paul above.
Jon Huntsman
-This guy should run as a Democrat challenger to Obama in the Democrat primary. The fact that he worked under Obama as part of his diplomatic team is a huge albatross around his neck. Enough said.
Rick Santorum
-How can anyone who lost his Senate seat by 18 points think that he can actually overcome that shameful campaign and win the Republican nomination, let alone the general election? Especially in an important swing state like Pennsylvania. The loss was the largest margin of defeat ever for an incumbent Republican senator in Pennsylvania. Why would anyone dis the homosexual community like he did in that campaign? Santorum hasn't discovered yet that he has lost his 2012 run for Republican presidential candidate.
All of this would be hilarious if we weren't talking about electing the political leader of the free world, the economic leader of America's fiscal future, and the moral leader of Western civilization. It's that serious. There are dark forces in the world committed to the destruction of our Western civilization and its Judeo-Christian heritage. There are also other totalitarian forces committed to world economic dominance and eventually world military dominance at the expense of the United States and its allies. It's obvious who those dark, totalitarian forces are. And we thought the Cold War was long and tough. It was. But these two wars are tougher and may get white-hot real soon. In short, it's dangerous to be living as an American right now.
And many Americans are clueless about those struggles. There is a myopia involving economic issues in the country because the politicians and the media don't want to really talk about those macro-forces that threaten our liberty. All they want to discuss is the unemployment rate and jobs. They feel they can get a better handle, however sloppily, around those bread-and-butter issues versus the larger issues of our era.
So, even though the macro-forces are alive and well and deadly, in the upcoming election, it will again be about the economy, stupid. And the Republican field of primary candidates is pathetically second-shelf, even on the economic front. Where is Marco Rubio when you need him? Obama, in full campaign mode, has used the class warfare card effectively to trash the Republicans, with not one of them mounting a direct emotional attack on that dishonesty that would resonate with the American people. This is why Obama, barring a major catastrophe, has already won. Sadly, the election party is over for the Grand Old Party.
Read more:
Friday, November 18, 2011
Ehud Barak Pisses on Netanyahu’s Parade.
This is interesting. There must be confusion on Capital Hill. Our Rulers and Masters in the Potomac Politburo must be wondering if they missed an email or perhaps got the wrong playbook. OMG, the horror! What are they to do when they hear an honest evaluation from a politician? Hannity will be double checking to see if he missed some nuance on the meaning of “existential”. Poor Bibi must have had to pop an additional Toprol. Hell man, if he can’t control his defense minister, at least he can control his blood pressure.
No one in their right mind wants Iran to be a nuclear power, except the Iranians. Barak stated the case as to why Iran would want to have nuclear weapons. Netanyahu does not want Iran to have nuclear weapons. The US executed Julius and Ethel Rosenberg for giving nuclear secrets to the Russians but the Russians got them anyway as did the Chinese, the Indians and worst of all the Pakistanis and North Koreans. The argument rests on what Israel and the US can do about it and what they should do about it.
Anyone care for a slam-dunk? They go down rather nicely but the hangover can be dreadful.
Thursday, November 17, 2011
Only monetisation of debt across euroland will now halt the market response to Eurocrat policy.
The French and Italian bond auctions this morning were awful. Spain sold €3.8 billion at 7.088%. These rates are forcing banks to deflate their balance sheets. Despite Merkel’s denial, Germany appears to be in recession. This weekend, the third European government in three weeks will fall as Spain holds an election on Sunday. We're past where Euro bonds would contain this issue. The Bundesbank has already accepted €465bn of liabilities under the so-called "Target2" payment system from the central banks of Greece, Ireland, and Portugal, The market is saying forget the Euro collectively and is pricing each country as though it were an individual country. It is increasingly clear that fiscal reforms will prohibit the necessary growth necessary to service these countries debts. Besides, if each country assumes that bailouts are coming, why should they implement painful fiscal reforms? Only deflating the Euro or breaking it will restore some currency based competition necessary to assist growth. That response will likely be answered by other world currency markets. All of this will affect China. Can that be the reason for the new US presence of Obama all over Asia?. As usual, things are changing and this time not getting better.
Wednesday, November 16, 2011
Nigel Farage, Patriot, Defender of Freedom, Patrick Henry Incarnate
Sorry, I cannot get enough of this guy. Is there one American politician that could hold a candle to Nigel Farage?
Tuesday, November 15, 2011
Why is RT News a more interesting source of news than CNN?
RT, previously known as Russia Today, is a global multilingual television news network based in the Russian Federation run by RIA Novosti. It is an interesting channel and surprising in the depth and balance of its reports. Here is a link to RT America Capital Account
Monday, November 14, 2011
Cain on Libya: How do you rate this response?
I saw some press reports critisizing Cain for this response to a question about Libya. It is time to go home baby. Thanks for your service, it’s been fun. Let’s get together for lunch some time.
Can you imagine the political commercials using this tape. It does make one harken to the good old days when the level of intelligence of the Ameriocan public was far more elevated:
…and can you believe this one?
…and of course we have the genius that leads us today.
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