Old Well: UNC Chapel Hill Campus

Tuesday, August 21, 2012

I find it horrendous....

I find it horrendous that we continue to rely upon coal as a primary energy resource. Here in Kentucky, a major coal producing state, those who protest dirty power plants and the state's reliance on coal are treated as alarmists, if not environmental extremists, who will take away jobs and inflate energy prices for consumers. As such, they constitute "an attack on Kentucky's way of life" (D-Keith Hall). Kentucky, by the way, subsidizes coal to the tune of $115 million annually.

In Kentucky, coal is king and a driving political force as shown in the $40,000 contribution the industry has made to Andy Barr's renewed efforts to unseat 6th District Congressman, Ben Chandler. Lexington, the heart of the district, just happens to be the home of the Kentucky Coal Association and several mining companies.

One of coal's biggest friends in the state is the University of Kentucky, which recently accepted $20 million from coal interests to build a lodge facility for its basketball players. Money, in short, has defined the issue for the University, not public health or global warming. The University even has a Society for Mining, Metallurgy and Exploration. The University might learn a thing or two from many of its students who have called for transitioning its power plant to a more efficient energy source.

One Kentuckian, noted author Wendell Berry, stood tall in all of this, resigning his teaching position at the University and taking his papers with him, which he has donated this week to the Kentucky Historical Association. I wish there were more like him.

All of this reminds me of the days in Kentucky when tobacco was also a power broker, with government and higher education aligned with its interests. Despite evidence slapping one in the face, for years they denied tobacco's heavy toll on the public's health.

Coal won't be losing its clout anytime soon, at least in Kentucky, given the just announced $7 billion deal made with India for 9 million tons of Kentucky and West Virginia coal, a deal principally involving a Kentucky lawmaker from Pike County, D-Rep Keith Hall. Like many developers, coal advocates often seek elective office to further their business interests. Hall sits on the board of FJCS Energy, the New Jersey company that signed the agreement.

While the U. S. as a whole is making its slow transition to cleaner fuels, the coal company again resembles the tobacco industry in its emphasis on exports to shore up its sagging profits at home. The hell with what happens to the health of those in developing nations.

Worse, is the industry's blatant indifference to global warming and its consequences to all life. What matters is profit. How many more mountains will be leveled and how many streams contaminated? How many toxins belched into the atmosphere?

As they have it, coal is very much a part of our future. Land reclamation has brought benefits such as creation of new forests, recreational areas, housing development, and facilities such as hospitals, nursing homes, and even airports. It's cheaper to store coal than alternative fuels such as wind or solar, geothermal or nuclear. New technology has improved the efficiency of coal fired power plants in reducing carbon emissions. Alternative sources, moreover, can't keep pace with projections of a future doubling of worldwide energy needs. As is, coal is one of the most regulated industries, providing the public with ample protection.

The real story is that we've seen 300 mountaintops leveled, 600,000 acres of hardwood forests permanently decimated. As for reclamation, only 4% of any post-mining productivity has been confirmed (EcoWatch). Mining violations and watershed violations are in the thousands, with little state enforcement. Instead of the promise of diversification to remedy Appalachia's enmeshed poverty, the region faces a future of moving to the forefront in black lung disease and no appreciable amelioration in chronic unemployment, where 60% of mining jobs have been lost to mechanization, not EPA regulation.

Meanwhile, the National Resources Defense Council recently designated Kentucky as the most polluted state in the nation from coal field fuel plants, largely because of the state government's failure to clean-up the industry. As with Keith Hall, Kentucky government continues to be dominated by coal interests. Hall, by the way, is co- chair of the National Resources and Environment Committee. He has said, "I 'm not just a friend of coal, I'm coal's best friend."

As Hall puts it, "I believe in states' rights." Me thinks we've heard all this before and that the Confederacy is alive and well. As with slavery, tobacco, and now coal, Kentucky needs to disengage from an economy that exacts profits from human misery.

Instead of the ubiquitous Friends of Coal bumper stickers, Kentucky would do better with say, Friends of People replacements, and in green, not black, the color of death.


Sunday, August 12, 2012

i want to follow-up....

I want to follow-up on my last post dealing with our economic prospects in the coming year, exacerbated by Sequestration, or mandatory across-the-board budget cuts, beginning in January, 2013.

Things to ponder:

Whatever one's politics, the Obama administration, in its doubtless sincere efforts to stimulate the economy, may have actually done it harm by adding $4 trillion to our national debt, now over a staggering $15 trillion. Nearly a trillion was spent on bailing out the banks, largely responsible for our economic meltdown.

These increases average a trillion dollars per year since this administration has been in office, with little to show for it. In fact, our stagnant economy may well plunge again. Last month's economic figures, while showing a 180,000 job increase, did not alter the grim unemployment fallout, which remains at 8.2 percent. With more than 5 million unemployed, we have to do much better to make this sorry mess go away.

Certainly, this present recession, perhaps a euphemism, invites comparison with the Great Depression of the 1930s. While the latter was the mother of all depressions, with unemployment reaching a 26% level, making our present crisis seem puny, it does resemble our situation in its stubbornness, despite the Roosevelt's fervent efforts, to yield results. What most people don't know is that unemployment had actually increased under Roosevelt when he ran for reelection in 1936. It would take a world war to purge our economic woes.

I must confess I don't think anyone has a definitive solution to what ails us, despite the heated rhetoric in an election year. Simple answers won't do more than sugar coat a complex problem.

What's more, our fate in a global economy isn't entirely within our hands.

What if Israel attacks Iran?

Or if the economic malaise in Europe has no bottom and nations like Greece, Italy, Spain and Portugal default? Like the tsunami debris from Japan now washing-up on our West coast shores, we can't escape the tidal impact of a European collapse resulting in reduced imports of American goods.

Back to our own shores again, if automatic cuts affecting defense go into effect next year it's estimated that a million jobs will be lost. That's more than all the projected jobs created in the American economy this year!

It seems a given that without confidence in the private sector, which is our primary catalyst for job creation, we're doomed to a tortoise pace in achieving remedy.

And there are yet other mitigating factors that may compromise economic recovery. Although the health care reform measure has several desirable features, it may be the wrong time for it in a down economy. A recent survey indicates many employers anticipate costs increases with its implementation, so add this to the mix. If I were an employer, I'd certainly opt for caution when it comes to hiring or expanding inventory.

To be sure, economics has rightly been called "the dismal science," except I'd underscore "dismal," and eliminate "science," since that implies probability corroborated by empirical data. Again, no one has the definitive answer, so be wary of snake oil formulas in this election year.

It's all like some devastating disease that, despite our best efforts, defies our remedies. Much as we'd like, there's no quick fix.


Sunday, August 5, 2012

A day of financial reckoning will soon come....

A day of financial reckoning will soon come to America, resulting in a substantial redistribution of income and entitlement payouts. It will see its genesis early in 2013, or shortly after this fall's election.

We've already witnessed the opening skirmish of this inevitable transition to a more restricted access to America's economic pie, beginning with the recommendations of the Congressional appointed Joint Selection Committee on Deficit Reduction, more commonly known as the "Super Committee". The Committee, however, failed in its mandate to reduce the federal deficit by 1.5 trillion over the next decade, triggering automatic cuts (sequestration) to the tune of 1.2 trillion to be divided between Defense and other programs. Partisan politics had intervened, denting courage, and the chasm between Democrats and Republicans couldn't be bridged.

The truth is that the economic meltdown we see in Europe is theater for what's coming here. Thus far we've been able to either borrow or print money to shore up our stagnant economy. We've even cut taxes.

We've become like irresponsible credit card users, postponing tomorrow's reckoning, to meet insatiable wants. Ultimately, we'll have to pay our bills or close up shop. Presently, our national deb stands at a staggering $15 trillion and we pay $200 billion interest on that debt annually.

In January, the cuts will go into effect. When you take defense and entitlement programs into consideration, you've only got $600 billion left in the kitty to spend elsewhere.

Do we really want to cut our defense budget in an unsafe world or Social Security, Medicare, and Medicaid?

The social and political ramifications promise to be enormous and tax revenues will need to be raised. Ultimately, the poor and low wage earner will be sheltered, and while the rich will see higher taxes, the declining middle class will continue to bear the brunt.

Actually, things have been eroding for several decades. As a serviceman, I was once guaranteed health benefits. Today, a sliding wage scale applies, ruling out the middle class.

Each year, a retiree's costs for Medicare increases, ultimately compromising monthly Social Security checks.

As for Social Security, after payroll deductions for over forty years, I pay out several hundred dollars in taxes on the rather paltry sum I receive.

And more is coming. Social Security outlays will be reconfigured. Age eligibility for full benefits will advance to 67.

You will pay more for Medicare while getting less coverage.

Let's take some specific examples of the potential fallout for education, based upon current sequestration projections by the Congressional Budget Office (CPO):

ESEA Title I,Part A):: Funding cut: $17,958,000 affecting 27,660,000 students. Potential job losses: 280,000.

Special Education Grants to States (IDEA-B-611): $14,316,000 affecting 5,900,000 students. Potential layoffs: 230,000.

Head Start (HSA, section 639): $9,841,000 affecting 1,340,000 students. Potential job losses: 440,000.

Even for the financially marginalized, the slice of the pie is getting smaller, particularly at the state level, where budgets have imitated the faulty federal model, forcing cuts in Medicaid and welfare outlays.

At the state level, too, an ominous trend has begun of cities declaring bankruptcy, three in California this year alone. Much of this comes from budgets overburdened with generous retirement obligations to public workers.

The times are a-changing and we may find ourselves entering into an era of social rancor not seen since the Vietnam debacle. The battle will spill over into the streets,
and all, all will be utterly changed. It all comes down to who will pay and how much. (Most people think it's ok for the neighbor to pay more, but not themselves.)

The great challenge is mustering cuts without dampening the economy. That's been what's gone wrong in Europe: austerity without stimulus.

Yet like your credit card balance, the bills will have to be paid.