Monday, September 1, 2008

Spitting in the Fiscal Wind

Responding quickly to save us from tumbling into a recession, President George Bush and House leaders have proudly unveiled an economic stimulus package worth some $150 billion. If approved, the plan will distribute checks to households across the country this summer. The resulting spending spree will spur the economy into a new era of prosperity.

Yeah, right.

The problems with the American economy run deeper than that. Huge overseas trade deficits, a shrinking dollar, federal budget deficits (except in the Clinton era) and incessant consumer borrowing are taking their toll. The chickens are coming home to roost.

We have transitioned from an agricultural economy to a manufacturing economy to a service economy while much of the world still lies in poverty. As a result, it’s cheaper to have paperclips made in China and imported to the United States than to hire American workers to do the job.

While that may keep consumer prices low, it also keeps Americans out of work, and fuels foreign economies that compete for market share. A recent U.S. Business and Industry Council report showed that only five of 114 U.S. industries gained market share against import competition between 1997 and 2006.

Foreign investors, flush with currency from selling paperclips to Americans, have been buying U.S. Treasury notes, in effect financing our budget deficits. But the same interest rate cuts approved by the Fed to stimulate the economy also make the purchase of Treasury notes less attractive to foreign buyers. At some point, those foreign investors will decide U.S. Treasury notes and assets are no longer safe havens, and will either quit buying or start selling them, investing their money elsewhere. At that point, the value of the dollar will plummet and the value of other currencies like the euro will continue to rise.

Meanwhile, we all know the government has been running record deficits, passing our responsibilities to future generations. After the Bush administration’s tax cuts for the super-wealthy, our government only collects enough non-Social Security revenue to cover two-thirds of the government’s non-Social Security expenditures, including a frivolous war that has cost $1 trillion so far. And, of course, the Republicans want to make those tax cuts permanent. That tax policy gives millions of Americans — an entire generation — the message that it’s all right to borrow from the future for instant gratification. That’s not a good message to send. Borrowing another $150 billion to spit in the wind doesn’t help.

It’s clear we need to cut our budget deficit and improve our trade imbalance. But American consumers are hobbled with stagnant income growth, rising energy prices and nagging consumer debt. They consequently shop for the best bargains available, which fuels the demand for cheap foreign goods, and the cycle continues.

The fact is that for most Americans the refund will vanish into the black hole of their everyday bills. Much of that burden consists of high interest rates on credit cards and consumer debt, and even higher rates on heavily promoted payday and signature loans. As consumers become more desperate to stay afloat, a greater percentage of their available cash goes simply to interest, which produces no goods and no real economic benefit. The consumer loan and credit card industries have mushroomed in the past decade, largely unregulated thanks to millions of dollars in lobbying spent to curry favor with Washington under the “pro-business” banner.

CNN’s Lou Dobbs, who has one more Harvard economics degree than I do, says the Fed rate cut and stimulus package are “nothing more than bandages for a hemorrhaging economy.” He’s right. The economy is hemorrhaging because people don’t have enough disposable cash to buy American, thereby putting Americans to work and fueling the nation’s economy. Sure, American goods cost more in part because American workers make more money than Chinese workers. But a Chinese worker isn’t likely to buy American, employ an American or pay U.S. taxes, and it’s that type of demand that’s needed to bolster our economy.

Instead of a token one-time drop in the bucket, consumers need long-term relief. We need to abandon the foolhardy Bush tax cuts to generate additional tax revenue and rebalance the budget. But Congress also needs to direct the Federal Trade Commission to get serious about curbing usurious interest rates and predatory lending practices. That will put real dollars into consumers’ pockets, month after month, with which they can afford to buy durable goods from American manufacturers. The dollar will consequently strengthen, the home mortgage foreclosure rate will drop, and our trade deficit will shrink without excessive inflationary pressures.

The solution therefore is not a hot check from Washington, but sound fiscal policies that help consumers revitalize the U.S. economy for the long haul.

- Edmond (OK) Sun, February 1, 2008
- AP photo

Polar Bears, Big Oil may not mix well

This one was easy to spot. First, on April 29, George Bush railed against Congress for failing to open up Alaska’s Arctic National Wildlife Refuge for drilling. Bush effectively was blaming Congress for today’s soaring gasoline prices, insisting that we should be drilling for oil in America to free ourselves from reliance on foreign oil imports.

The next morning, John Hofmeister, president of the U.S. division of Royal Dutch Shell, sided with Bush’s comments on a television news program. One sentence particularly caught my attention. Hofmeister said his company “has won $2 billion worth of high bids for the Chukchi Sea — that’s a few years off before we could begin production.” I’d never heard of the Chukchi Sea, and maybe you haven’t either. But remember that name.

Then came the clincher. The same day, a federal judge ordered the government to declare by May 15 whether polar bears should be listed as a threatened species. The ruling came because the Department of Interior had failed to announce a decision on the status of polar bears by Jan. 9 as required by the Endangered Species Act, contending in court that the case was “too complicated to decide before June 30.” Once an animal is listed, the Fish and Wildlife Service must designate critical habitat for it, placing restrictions on how that habitat can be developed.

Where do polar bears live? On ice floes in the Arctic, including the Chukchi Sea between Alaska and Russia. Sea ice is critical to the polar bear, which evolved 200,000 years ago to hunt for seals through air holes in the ice. Now, with global warming, the ice is disappearing. No ice, no air holes, no polar bears; by 2050, unless they adapt unnaturally fast, they may all be extinct.

The Chukchi Sea is the size of New Mexico and Arizona combined, and usually is navigable only about four months out of the year. But with rising oil and gas prices and the disappearance of sea ice, the Chukchi Sea has become increasingly attractive to the energy industry. By violating the law, the administration was able to conduct an auction in February for a record $3.3 billion in offshore oil leases across 30 million acres in the Arctic before the Chukchi Sea could be designated as a critical habitat for polar bears. Not too complicated after all, is it?

The truth is, Big Oil isn’t interested in producing more oil in this country. They just want to bank the rights to it. The Bureau of Land Management has issued 28,776 drilling permits on public land — an increase of 361 percent in the past decade — but only 18,954 wells actually have been drilled.

A recent report from the House Committee on Natural Resources shows companies already hold leases to nearly 68 million acres of federal land and waters where they are not producing oil and gas. Those leases could produce an additional 4.8 million barrels of oil and 44.7 billion cubic feet of natural gas each day, nearly doubling total U.S. oil production and cutting oil imports, all without touching the protected ecosystems in the Arctic.

Why the delay in drilling? Oil companies buy and sell their lease holdings all the time. With prices rising, a billion dollars in lease holdings today can be worth millions more tomorrow — a tidy profit without drilling a well that may not hit. Since it’s less expensive to import oil from producing Middle Eastern fields under existing contracts, there’s no motivation for the industry to drill new wells domestically. The real race is to secure government leases before their competitors beat them to it.

For political leverage, however, Bush couches his rhetoric in terms attractive to consumers, weary of soaring energy prices, in order to pressure Congress. One of his biggest fans, Congresswoman Mary Fallin, said last week to find and develop more reserves is an “immediate solution to rising energy prices.” That’s not true, but it’s part of the propaganda.

Notice that Bush is silent on Boone Pickens’ proposal to accelerate wind and solar energy development. That’s not part of Big Oil’s agenda. ExxonMobil raked in more than $40 billion in profit last year, but invested less than half a percent of those profits in clean energy. Meanwhile Americans send $700 billion of our hard-earned dollars overseas every year that should be invested here at home.

The real power play is in oil and gas speculation. By now, that should come as no surprise. We just hope the polar bears will understand.

- Edmond (OK) Sun, July 17, 2008
- photo courtesy Greenpeace

Beijing's Olympic Reward Remains A Big Mistake

I’ll never understand how the 2008 Olympics wound up in Beijing. I guess I’m from the generation that knew China as Red China, the nuclear-armed Communist haunt of Mao Tse-Tung that backed North Vietnam against American soldiers. Instead of conquering us militarily, they’ve taken over our country economically.

After the Communists took power in 1949, their failed Great Leap Forward agricultural policies in the 1950s and the oppression of the Cultural Revolution in the 1960s led to political and economic turmoil and the deaths of tens of millions of Chinese.

When Mao’s adversary, Deng Xiaoping, became premier after Mao’s death in 1976, relations with the West improved dramatically. Deng modernized the Chinese economy, phased out agricultural collectives and encouraged industrialization and trade with the West. They promoted what they called “socialism with Chinese characteristics,” which encouraged the development of market economies while keeping the state involved in ownership of large enterprises.

Local communities became free to develop their own businesses with few restrictions. As a result, China’s cheap labor sucked industrial output from the United States through joint ventures with Western corporations. By encouraging growth from the bottom up, China embraced capitalism without the trauma endured in the Soviet Union’s centrally planned perestroika a decade later. At least the Russians got a new flag out of the deal.

The change has been more dramatic than the economic growth of the United States in the 1950s. Life expectancy in China soared from 35 years in 1949 to 73 today, with a literacy rate of 91 percent. The Chinese poverty rate has dropped from 64 percent in 1981 to 8 percent today, meaning an amazing 500 million people were lifted out of poverty in a generation. They’ve become the second greatest economic force on earth, consuming half the world’s concrete and steel and more coal than the next three largest countries combined. The environmental devastation is unprecedented. With more than 1.3 billion citizens, nothing is done in a small way in China.

While making the transition to a modern industrialized society, China’s human rights policies remain repressive. Freedom of opinion and expression are severely limited by the one-party government, as student protesters at Tiananmen Square learned in 1989. Many of the forgotten survivors remain in prison today. By some accounts, 90 percent of the state-sponsored executions in the world are held in China, for crimes ranging from murder to tax evasion and even attempted theft. Freedoms of speech, expression, association, religion, the press and labor remain heavily restricted.

China’s “Re-education Through Labor” program involves forced-labor detention designed to reform bad conduct through torture and abuse. There are no charges, no trials, no access to family or legal counsel and no appeals. RTL is intended for what one official newspaper once described as “actions between crime and error.” The practice is used against anyone who steps out of line. Conformity and compliance, after all, are the only acceptable behaviors.

China’s reputation for civil rights abuses is not just domestic. They get much of their oil from Sudan, funding the Sudanese government as it prosecutes the genocide in the Darfur region. The Chinese government also is relentless in suppressing dissent as it asserts sovereignty over Nepal, and they jail people who happen to practice religion.

Some would say politics should be kept out of the Olympics, and in an ideal world that sounds good. But the Olympic Charter requires countries to reject “any form of discrimination … on grounds of race, religion, politics, gender or otherwise” as a condition of participation, and seeks to promote “respect for universal fundamental ethical principles.” When China bid for the 2008 Olympics, they promised to improve upon their human rights record. So far that promise has rung hollow, with no change in sight. Meanwhile, the Olympic Committee looks the other way.

Economic prosperity alone isn’t the bellwether of a great nation. A few fellows on this continent once declared that all men are created equal, and are endowed by their Creator with certain unalienable rights, including life, liberty and the pursuit of happiness. That message hasn’t spread to China yet, but it’s a lesson we should seriously value and never abandon.

The Olympic Committee gambled with another rising star in the 1936 Olympics when they allowed Hitler a world stage. The good name of the Olympic movement doesn’t need another black eye like that, but now the deed is done. Put simply, rewarding Beijing with the Olympics was a mistake that may haunt the Olympic movement for decades to come.

- Edmond (OK) Sun, July 31, 2008

Black Beaver's Oklahoma Legacy Should Not Be Forgotten

As we celebrate Oklahoma’s statehood centennial, we often overlook the fact that life existed on these plains before the land runs began in 1889. One of the most interesting characters of the 1800s in present-day Oklahoma was a Lenni Lenape (Delaware) Indian named Black Beaver.

Phil Pruner, who lives in Oklahoma City, is a great-great-grandson of Black Beaver. He spoke recently at the Chisholm Trail Museum in Kingfisher about his ancestor.

Born in 1806 in Illinois, not far from St. Louis, Black Beaver began trapping and trading beaver pelts as a teenager. During his life he saw the Pacific Ocean seven times as well as New York City and Washington.

In his 1859 guide book “The Prairie Traveler,” Randolph Marcy wrote that Black Beaver “had visited nearly every point of interest within the limits of our unsettled territory. He had set his traps and spread his blanket upon the head waters of the Missouri and Columbia; and his wanderings had led him south to the Colorado and Gila, and thence to the shores of the Pacific in Southern California. His life had been that of a veritable cosmopolite, filled with scenes of intense and startling interest, bold and reckless adventure. He was with me two seasons in the capacity of guide, and I always found him perfectly reliable, brave, and competent. His reputation as a resolute, determined, and fearless warrior did not admit of question, yet I have never seen a man who wore his laurels with less vanity.

“The truth is,” Marcy added, “my friend Beaver was one of those few heroes who never sounded his own trumpet; yet no one that knows him ever presumed to question his courage.”

Black Beaver spoke fluent English, French, Spanish and about ten Indian languages, and was able to communicate with even more tribes through sign language. His skills became invaluable to white settlers and military expeditions. When Marcy escorted the first five hundred emigrants from Ft. Smith to California during the gold rush days of 1849, he engaged Black Beaver as his guide. On the way back, Black Beaver, anxious to return home, took a shortcut across the prairie that reduced the two month trip to two weeks. Thousands of future emigrants followed his California Trail west.

By 1860 Black Beaver was the wealthiest and most famous Lenape Indian in America, and was living comfortably at present-day Anadarko. But that was soon to change. In May of 1861, General W. H. Emory, stationed at Fort Arbuckle, learned that 6,000 Confederate troops were advancing toward him from Texas and Arkansas. He gathered the soldiers from Forts Washita, Cobb and Arbuckle near Minco, but to escape to Kansas across the open prairie he would need a guide.

All the other Indian guides turned him down because they knew the advancing rebels would punish them for aiding the Union troops. Desperate, Emory guaranteed Black Beaver the government would reimburse him for any losses, so he agreed to help. He scouted the approaching Confederate troops and provided information for Emory to capture their advance guard, the first prisoners captured during the Civil War. Black Beaver then guided over 800 Union soldiers, their prisoners, 200 teamsters, eighty wagons and 600 horses and mules in a mile-long train across 500 miles of open prairie to safety at Ft. Leavenworth without the loss of a single man, horse or wagon.

Sure enough, the Confederate Army destroyed Black Beaver’s ranch and placed a bounty on his head that kept him in Kansas for the rest of the war. His losses were never fully compensated by the government.

After the war, Black Beaver and his friend Jesse Chisholm returned and converted Black Beaver’s escape route into what we now call the Chisholm Trail. Three million head of stray Texas cattle were herded to railheads in Kansas, from which they were shipped east to feed a hungry nation.

Black Beaver resettled at Anadarko, building the first brick home in the area. He had 300 acres of fenced and cultivated land as well as cattle, hogs and horses. He died at his home on May 8, 1880, and was buried on his ranch. In 1976 his grave was moved to Ft. Sill.

He was the first inductee in the American Indian Hall of Fame in Anadarko, which was only fitting because it is located on part of his ranch.

Phil Pruner has good reason to be proud of his legacy. It’s a story that should not be forgotten in today’s busy world.

I-40 Plan May Derail

In a remarkable turnabout, a federal agency has thrown a kink in the reconstruction of the I-40 Crosstown Expressway. The decision brings new hope for passenger rail service in Oklahoma, and headaches for the Oklahoma Department of Transportation in the face of soaring costs and dwindling resources.

The federal Surface Transportation Board, which succeeded the Interstate Commerce Commission in its 1995 reorganization, has jurisdiction over the railroad industry in this country, including line abandonments. In January 2007 the board was persuaded that the rail lines in downtown Oklahoma City had been abandoned for more than two years, triggering a federal regulation that allowed the lines to be expeditiously removed and clearing the way for the I-40 rerouting project.

As it turns out, the rail lines had not been abandoned. While construction began on the highway project, Ed Kessler of Norman filed a petition to reopen the abandonment decision. He presented evidence, including photographs, indicating BNSF and Stillwater Central Railroad trains still were using the line to serve businesses in the area.

The federal regulation is pretty cut and dried. If a rail line has been out of service for at least two years, the carrier easily can abandon the line through an expedited procedure. But that process depends on the truthfulness of the information submitted. If the application “contains false or misleading information,” federal regulations require the application to be rejected.

So, based on Kessler’s evidence and some of BNSF’s own admissions, on June 5 the board reopened its January 2007 decision and declared the application void. BNSF can file a new application to abandon the line, but that process will not be an expedited one.

Our national rail policy is “to ensure the development and continuation of a sound rail transportation system,” “to foster sound economic conditions in transportation and to ensure effective competition and coordination between rail carriers and other modes” of transportation, as well as to encourage and promote energy conservation and other goals.

In an application to abandon the Union Station tracks, it seems BNSF would have to convince the board that the integrity of Oklahoma’s statewide rail system “is not necessary” to carry out that transportation policy. It becomes more than a simple question of whether a short rail line actually has been abandoned for a couple of years. That option is no longer on the table.

Oklahomans also should thank Ed Kessler for his persistence. He and a small band of other concerned residents have proven that the system can work, and that powerful interests cannot use “false or misleading information” to frustrate public policy. It’s been a long time since we’ve seen David take on Goliath, but in this case right won over might.

The decision raises new concerns about the massive highway project and the castration of rail service possibilities in Oklahoma. A lot has changed since ODOT decided a 10-lane, 70 mile per hour serpentine raceway was needed through downtown Oklahoma City. Gas prices have soared. The economy has soured. The housing bubble has burst, and the commute from suburbia is no longer as attractive. The nation’s largest independent oil and gas producer wants to build the city’s tallest skyscraper in the heart of downtown, with no means to move 2,000 employees in and out of the urban core.

The public has indicated light rail transit is its No. 1 priority for MAPS III. Oklahoma needs to follow through on its commitment to develop rail transportation before too much time and money are wasted. The Union Station link is the keystone to that system; remove it, and the entire structure collapses.

Union Station was acquired in 1989 with mostly federal funds, expressly to be returned to use as a multimodal transportation center. That promise has not been fulfilled. The state already owns 866 miles of rail from border to border that connect through Union Station. For the most part, it sits idle today. That remarkable system could be the foundation of a model intrastate transportation system that would be the envy of other states and a boon to economic growth throughout Oklahoma for years to come.

Old Will Rogers would have had a field day with the Crosstown Expressway. He once said if you find yourself in a hole, the first thing to do is to stop digging. That’s the dilemma we’re in. The Department of Transportation needs to curb this monstrosity before it gets out of hand, and revise it to spare the Union Station rail yard for Oklahoma’s future growth and prosperity.

- Edmond (OK) Sun, June 13, 2008

Where Is Will Rogers When Oklahoma Needs Him?

Where is Will Rogers when we need him?
It’s hard to understand the impact Rogers had in his day. Never shy about his Cherokee heritage, he personified Oklahoma to kings and presidents and everyday Americans. It’s striking that Oklahoma hasn’t generated a comparable national figure in half a century. Rogers, Jim Thorpe, Woody Guthrie, Alfalfa Bill Murray and even Robert S. Kerr, characters who peppered Oklahoma’s first generation, have no modern peers.
But Rogers stood above the rest on the world stage. His daily newspaper column – he wrote four thousand of them - was carried in more than 500 newspapers. He wrote six books, countless magazine articles, and is credited with putting some two million words in print on a manual typewriter. Between his columns and his Sunday night radio show, his thoughts reached one out of three Americans before the dawn of television and the Internet. He starred in innumerable stage performances and fifty silent pictures before adding another 21 “talkies” to his resume in his last five years. His political wit poked at both Democrats and Republicans, influencing public opinion and keeping people sane in an insane age.
He was Stephen Colbert and Will Smith and George Nigh and Lance Armstrong and Bono and Dr. Phil and Richard Branson and Mark Twain and Garrison Keillor all wrapped up in one grinning whirlwind.
He wasn’t just a glib talker, either. He was a skilled horseman, and his roping skills won him a place in the Guinness Book of World Records for successfully throwing three lassos at once. He loved polo, and sometimes would wear overalls and cowboy boots to high-society polo clubs, just to bring them down a notch.
His observations about the human condition are timeless. About political conventions, he wrote, “No wonder they only hold these things every four years. It takes that long to get a straight face for the next one.” When he learned the 1928 Republican Convention opened with a prayer, he said, “If the Lord can see His way clear to bless the Republican Party the way it's been carrying on, then the rest of us ought to get it without even asking.”
His quotes speak for themselves:
- Alexander Hamilton started the U.S. Treasury with nothing, and that was the closest our country has ever been to being even.
- Democrats never agree on anything, that's why they're Democrats. If they agreed with each other, they would be Republicans.
- Diplomacy is the art of saying "Nice doggie" until you can find a rock.
- Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it.
- Live in such a way that you would not be ashamed to sell your parrot to the town gossip.
- The income tax has made liars out of more Americans than golf.
- The man with the best job in the country is the vice-president. All he has to do is get up every morning and say, "How is the president?"
- The schools ain't what they used to be and never was.
- I'm not a real movie star. I've still got the same wife I started out with twenty-eight years ago.
- If the other fellow sells cheaper than you, it is called dumping. 'Course, if you sell cheaper than him, that's mass production.
- Get someone else to blow your horn and the sound will carry twice as far.
- Half our life is spent trying to find something to do with the time we have rushed through life trying to save.
- The more you read and observe about this Politics thing, you got to admit that each party is worse than the other. The one that's out always looks the best.
- When the Oakies left Oklahoma and moved to California, it raised the I.Q. of both states.
- We will never have true civilization until we have learned to recognize the rights of others.
Rogers’ death on August 15, 1935 at age 55 jarred the world. He left a legacy, not only in print and film, but in how we interact with other people. His famous adage that he’d never met a man he didn’t like meant that he never began a relationship with someone with a preconceived notion that they were evil. A thousand self-help books couldn’t have said it better.
Oklahoma’s image could use another Will Rogers today – a face to represent Oklahoma in a positive way, a voice to personify an aw-shucks, home-spun common sense that cuts through the silliness of life and tells the unvarnished truth.
- The Edmond (OK) Sun, August 15, 2008

Saturday, June 28, 2008

A report came out recently that indicated Oklahoma City and Tulsa were the two cities least prepared for the ramp-up of gasoline prices. We have no mass transit infrastructure. Unless you have a car, you have no practical means of getting around the nation's third largest city in land area.

When OKC was just a pup, the Classens and Shartels developed trolleys to their then-rural land holdings as a way of developing them into residential neighborhoods and increasing their value. Oklahoma City abandoned those trolleys before WWII as the internal combustion engine became popular. But the layout of the city - Classen Blvd., Exchange Blvd., Northwest Expressway, Linwood, etc. - still follows the lines of either the original passenger trolleys or the rapid expansion of the city. Doug Loudenback has an excellent site about the history of Oklahoma City's early transportation system.

When Devon Energy builds their Dubai-sized tower in downtown Oklahoma City (on probably the most congested block of land in the entire metro!), they're going to significantly impact the ingress and egress of Oklahoma City. It's looney to let them do it without some significant infrastructure change to handle the volume. One reason there's not more economic activity downtown is the difficulty of getting in and out. You either pay upwards of $5 to park in a lot blocks from your destination, or you circle around looking for a curb-side parking space. Meanwhile, think how much easier parking is at any of the malls or strip centers around town - they're free and nearby! Who'd want to go downtown if they can avoid it?

Well, the city has lots of streets, and doesn't hesitate to pour new asphalt over bad (when they have the money). I think it's about time to get radical about light rail. Let's start laying down some track! Instead of "that won't work," let's hear city officials start saying, "Where can we start? Where can we get the most bang for our buck?" It may take years to re-establish a vast network of light rail to move people in and out of the city, and it won't be cheap, but it must be done, and the only way to start is to start.


Welcome to Et tu Oklahoma!

It's time to start talking about some of the things that need to be done in Oklahoma to improve the quality of life in the Sooner State! I'll be posting my thoughts, rantings and ravings, but feel free to join in. What do you like about our land that is grand? What needs to just go away? Maybe we can cuss and discuss some ideas to bring Oklahoma into the 21st century, to make the dream of the Promised Land a reality before we're six feet under it.

Let the discussions begin!