Citizens for Clean Power Sues Indian River Power, LLC
Citizens for Clean Power yesterday filed suit against Indian River Power, LLC, which is owned by NRG, in U.S. District Court in Wilmington. The complaint cites 6,304 documented violations of the Clean Air Act from 2004 to 2008:
55. The total number of separate opacity violations represented in these tables during the 2004-2008 time period is 6,304. Substantial additional opacity violations from Indian River units which occurred during this period are not reflected in these tables, but may be demonstrated subsequently in this matter. Indian River’s violations of these opacity limitations are likely to continue.
The Indian River coal power plant is required under its operating permit to submit reports on violations of the opacity standard to the state Division of Natural Resources & Environmental Control (DNREC). Even with this data, laid out in tables in the complaint, the company has not faced any significant consequences for the 6,304 violations. The complaint says a civil penalty of up to $32,500 may be assessed for each separate violation. For those keeping score, that exposes NRG to a total of $204,880,000 in fines. The opacity standard is described as a measure of the density of airborne pollutants such as particulate matter being discharged. Put another way, the plant’s neighbors can see the nasty stuff coming out of its smokestacks. This is not the first instance of the plant getting away with an astonishing number of violations. In January of last year, we learned that NRG estimated that the plant killed about 4 million fish a year, prompting this caustic comment from Senator George Bunting:
"Here we've gone to a great extent in Delaware to come up with a fishing license so we know how many fish are taken in our waters, and those intakes alone kill more fish than all the fishermen I know in my district will ever catch," Bunting said.
The Indian River coal plant sits in the middle of a cancer cluster and features an unlined pile of coal ash like the one that wreaked havoc in Tennessee last December.
The fly in the ointment was that First Solar also stated that “the short-term outlook for solar PV has never looked more difficult.” First Solar’s stock price is down 20% today. How can this be? Maybe Speaker Pelosi should have spoken with actual green industry leaders before writing her pork-laden “stimulus” bill. Maybe increased government debt and central planning aren’t the savior that we thought.
Now in finance, I learned that when a stock drops sharply after a company’s earnings are announced, it probably has something to do with the company offering disappointing news—particularly on a generally positive day for the market. First Solar fell 21.8 percent on a day when the NASDAQ fell only 3.3 points, just 0.23 percent. I was taught that when one stock’s price moves in a different direction from the overall market, it is strongly presumed that the movement is due to company news rather than general economic conditions. Not that companies aren’t averse to casting blame on the economy itself, which is perfectly reasonable in the current climate. The company had a strong quarter, but lowered its earnings guidance for the coming year. Reuters reports that the company blamed economic conditions it disappointing outlook:
U.S. thin-film company First Solar Inc (FSLR.O) painted a bleak picture of the industry due to frozen credit markets that are hampering new projects, a weak dollar that is squeezing profits and a risk of mounting inventories.
In response to the lack of credit for customers, First Solar is deferring as much as ten percent of revenue to finance some customer projects itself. The weak dollar is an important factor given the company’s large customer base in Europe. The risk of mounting inventories is attributed to the increased risk of default; the company projects that as many as 15 percent of its customers could default on their purchases this year. Is Charlie Copeland right to lay the blame for these conditions at the feet of the Speaker of the House? Obviously, these business conditions didn’t arise in the last five weeks, and won’t be ameliorated quickly even if the recovery plan is a roaring success. The most optimistic economists believe that it will take at least a year for the economy to turn around. Charlie Copeland is philosophically opposed to the stimulus bill, and can be expected to marshal whatever evidence he can to argue his case. But to suggest that Nancy Pelosi was somehow responsible for the fall in one company’s stock on one particular day is silly.
The breakup of Babcock & Brown (BNB on the Australian Stock Exchange) continues, and Bluewater Wind is on the auction block. To follow the story, pay close attention to the acronyms. Babcock & Brown Wind Partners (BBW) was publicly plotting its succession last year as BNB became mired in debt. BBW lost money last year, but remains a going concern. Yesterday BBW announced an A$88.4 million (US$ 56.8 million) loss for the six months ending December 31. Half of that loss is attributed to the costs of buying its way out of the crumbling BNB empire. But the firm asserts it has a sound balance sheet and is poised to turn a profit in 2009:
BBW said on Tuesday it had submitted an offer to purchase B&B's Australian and New Zealand wind energy project development assets, and its US wind asset management business.
Bluewater Wind is not among the assets BBW is seeking to buy from its former parent. I am told that there are potential buyers interested in Bluewater. In previous posts on the subject, I incorrectly identified Babcock & Brown Infrastructure (BBI) as Bluewater's parent company. I was wrong on that point; BNB owns Bluewater. BBI was to have built the project and BBW would have run it. (Confused yet? You should be.) Bluewater has the funding it needs to stay in business for the time being, though it has not yet reached the point at which it will need the heavy capital to build the offshore wind project. Bluewater will build a meteorological tower off the shore of New Jersey under contract with the state government, which will reimburse the company up to $4 million. Bluewater Wind, not Babcock & Brown, is the signatory on the power purchase agreement (PPA) with Delmarva Power, which means that a change of ownership may not trigger a review of the PPA. Earlier this month, I noted that a Delmarva Power spokesperson described the breakup of BNB and possible sale of Bluewater as a "non-issue."
In tonight's address to a joint session of Congress, Barack Obama will not underplay the seriousness of our economic plight, but will emphasize that we can and will survive and prosper. The White House has released this excerpt from tonight's speech:
But while our economy may be weakened and our confidence shaken; though we are living through difficult and uncertain times, tonight I want every American to know this: We will rebuild, we will recover, and the United States of America will emerge stronger than before. The weight of this crisis will not determine the destiny of this nation. The answers to our problems don’t lie beyond our reach. They exist in our laboratories and universities; in our fields and our factories; in the imaginations of our entrepreneurs and the pride of the hardest-working people on Earth. Those qualities that have made America the greatest force of progress and prosperity in human history we still possess in ample measure. What is required now is for this country to pull together, confront boldly the challenges we face, and take responsibility for our future once more.
It sounds as though Obama is giving voice to his inner FDR. It helps that Obama will go before Congess with strong favorability numbers in the polls, as in these results released by the Washington Post and the New York Times.
TommyWonk first went up four years ago with a post about this classic conceptual art parody: My, how things have changed. Four years ago, George W. Bush promptly began wasting his political capital by proposing to privatize Social Security and intervening in the sad case of Terry Schiavo. It has been a great year. Michelle and Barack Obama both came to Wilmington in the course of a week. I helped win the fight to make Delaware the first state to approve offshore wind power, despite the worst efforts of Harris McDowell and Charlie Copeland. I sat with the Delaware delegation at the Democratic National Convention, where I was able to survey the hall from above and behind the podium. I was tapped by the Guardianto contribute to its opinion site, Comment is free. The Delaware blogosphere has certainly grown over the last four years. Many of Delaware’s best blogs (listed on the right hand of this page) were not yet in existence, though a few old timers who were online before I came along are still around. I am still struck by the way that blogging, which is in many ways a solitary endeavor, has created a sense of community, complete with social gatherings and charity events. And even in these partisan times, Delaware’s liberal and conservative bloggers still link to one another. Over the last four years, I’ve had some people offer kind words, and been called a few names. One reader last week called me “wonkweasel,” which is still pretty mild stuff for bloggers. But I don’t use profanity, and I don’t tolerate rough language. This may make TommyWonk a little tamer than many blogs, but I still enjoy a good argumentnow and then. My comment from two years ago still holds true:
For me, TommyWonk is a success if I manage to offer interesting, informative, relevant, well-considered and well-written postings that draw an appreciative readership. If I can shape the political discourse in some small way, that would be wonderful. Whether you agree with me or not, I hope that you come away from my blog with a little more clarity of thought on issues that matter.
Yesterday, Dave Burris said I was too quick to complain that he's already blaming Barack Obama for our economic troubles. I accepted his explanation that his post on the wholesale inflation numbers for January reflected his criticism of the Federal Reserve Bank, and not of Obama. All well and good, but where would I possibly get the impression that Dave is itching to blame Obama for our dismal economic conditions after one month on the job? Perhaps from this post:
First Month Verdicts In Feb 21st, 2009 by Dave Burris The Obama administration has reached the one-month marker, and a few folks have weighed in on the first 30 days. Stock Market Gives Obama’s First Month an F
I can think of a few reasons why stock prices are falling: We're in the middle of the worst economic crisis of our lifetime; businesses are reporting dismal earnings, 600,000 workers are losing their jobs every month, our financial system is in failure mode, and credit is still hard to come by. Clearly these economic troubles are were not set in motion in the last month. More than anything else, a stock price reflects the underlying value of the company. Maybe, just maybe, stock prices are down because businesses are in terrible shape. Yet Dave Burris impatiently points out that Barack Obama hasn't fixed it all yet, and links to an opinion piece giving him an F. Here's some of what I wrote yesterday in the post Dave objected to:
I imagine Republicans like Burris will continue to criticize Obama’s economic policies over the next 47 months. That’s what opposition parties do. But perhaps he could try a little harder to give his arguments the ring of plausibility.
Blaming Obama's economic policies for the falling stock market this early in his term is barely plausible. Perhaps Dave could try a little harder with his arguments.
Dave Burris responded sharply to my previous post on inflation, defending himself by saying he wasn’t criticizing President Obama, but the Federal Reserve Bank. On DelawareLiberal, Dave offered this comment:
I discussed many times on the air with Randy that the hidden problem was not TARP, but the trillions of dollars that the Fed was playing around with.
Since I don’t listen to talk radio, I missed his on-air comments on the subject. So I went back and checked Delaware Politics, and I did find one post that warns that TARP could inflate the money supply; this written by Dave Anderson. So my failure to infer that Dave Burris was talking about monetary policy, not fiscal policy, was based on the public record, or lack thereof: Dave hadn’t written that monetary policy might be fueling inflation since the crisis erupted last fall. But to be fair, saying that monetary policy rather than fiscal policy could be fueling inflation is plausible, and not loony. I still think he's wrong about inflation, but at least we have a basis for talking. So let’s talk. Is the Federal Reserve risking inflation with its monetary policy? The Fed’s Open Market Committee (FMOC) doesn’t think so:
In light of the declines in the prices of energy and other commodities in recent months and the prospects for considerable economic slack, the Committee expects that inflation pressures will remain subdued in coming quarters. Moreover, the Committee sees some risk that inflation could persist for a time below rates that best foster economic growth and price stability in the longer term.
Several meeting participants noted that the expansion of the Federal Reserve's balance sheet along with continued growth of the money supply could help stabilize longer-run inflation expectations in the face of increasing economic slack and very low inflation in coming quarters. Over a longer horizon, however, the Federal Reserve will need to scale back its liquidity programs and the size of its balance sheet as the economy recovers, to avoid the risk of an unwanted increase in expected inflation and a buildup of inflation pressures. Participants observed that many of the Federal Reserve's liquidity programs are priced so that they will become unattractive to borrowers as conditions in financial markets improve; these programs will shrink automatically.
In other words, the Fed recognizes that it will have to squeeze money back out of the system as other sources of liquidity are freed up. Be in no doubt; the Fed did add liquidity to the system starting last fall. M1 and M2, the two principle measures of the money supply, are 14.9 and 9.6 percent higher than a year ago, as they should be, though they are showing signs of peaking. Total borrowings from the Federal Reserve, which reached $698.8 billion in November, are starting to come down again. So is this extra money fueling inflation? So far, no. The wholesale and retail inflation reports both cite energy prices are the principle factors driving increases in January. The New York Times reports that the increase in fuel prices reverses several months in declines:
Inflation crept back into the economy last month as consumer prices rose slightly after three months of declines, the government said Friday. The increase came as a steep slide in oil prices ended, lifting the cost of gasoline, energy and transportation.
Fuel prices don’t correlate very well with money supply. If they did, they would have jumped, not slumped, in the last quarter as the Fed increased liquidity. In fact, consumer prices have only just recovered from the end of October. The Times reports that most observers agree with the Fed that inflation is not a worry just yet:
But analysts expect that the sharp downturn in the economy will probably keep inflation pressures in check in the months ahead. Indeed, prices in January were flat from a year ago, and economists said prices could continue to tumble as unemployment surges and spending weakens.
I don’t see industrial demand pushing prices up. Capacity utilization is down 10 percent from a year ago. Overall, the January numbers showing higher prices reverse three months of deflation. So while Dave’s concern about monetary forces pushing inflation up is plausible, the evidence doesn’t support his view just now. Still it’s better than bending the laws of causality to suit your argument.
Life is busy enough these days without taking time to pay much attention to the economic nonsense coming from Republicans these days. But I found I just couldn't ignore this tidbit from Dave Burris at DelawarePolitics:
Can't decide whether I should go with "It's Just the Beginning" or "Who Didn't See This Coming?" Wholesale inflation takes biggest jump in 6 months
WASHINGTON (AP) -- Inflation at the wholesale level surged unexpectedly in January, reflecting sharply higher prices for gasoline and other energy products.
The biggest jump had to do with energy prices:
The acceleration was led by a 3.7 percent surge in energy prices with gasoline prices jumping by 15 percent, the biggest gain in 14 months.
I infer from the brief post that Burris imagines that the January numbers are in some way the result of the policies of President Obama. Let's think about that one for a moment. The report is for the month of January. Barack Obama took office on January 20. The stimulus package was passed last Friday, and signed into law on Tuesday, February 17. Even though the bill is intended to get money flowing as quickly as possible, I am not aware that any money has actually been spent yet. Am I missing something? Have the laws of economics (or physics for that matter) been altered to allow for later events to affect prior measurements? Are we stuck in some weird time/space vortex? Dave, whose pronouncements on economics tend to toward the bumper sticker variety, neglected to identify an economic mechanism that could possibly attribute the January inflation results to the actions of our new president. I imagine Republicans like Burris will continue to criticize Obama’s economic policies over the next 47 months. That’s what opposition parties do. But perhaps he could try a little harder to give his arguments the ring of plausibility. Update: Dave Burris comments that he had the Federal Reserve in mind, not President Obama in his post. As for my inference, I went back to November, and couldn't find a post at Delaware Politics criticizing the Fed, though I found plenty of posts criticizing Obama's economic policies.
As I note over at the Guardian, the need for federal bailout money is pushing GM and Chrysler in the direction of more fuel efficient vehicles. GM has experienced what you might call a foxhole conversion to the belief in hybrid or electric vehicles:
This commitment to green technology is a new-found virtue. Only four years ago, GM killed its plans for an electric car, even though sales of Toyota's Prius hybrid were on the rise.
Delaware's offer of $94,140 to AutoPort seems more forward looking, though frugal in comparison:
Delaware's governor Jack Markell isn't waiting for Detroit to create the automotive future. Yesterday, Markell awarded a modest economic development grant to a local company, AutoPort, to convert gasoline-powered vehicles to a new technology called Vehicle to Grid, or V2G, which is being developed at the University of Delaware. V2G enables vehicles to store electricity at night when demand is low and return it to the grid during hours of peak demand. The small but bitter irony, though, is that the company is converting Toyota Scions being shipped into the Port of Wilmington – not the unsold Saturns and Pontiacs piling up at the nearby GM plant.
$194k may seem like pocket change compared to the billions being used to bail out GM and Chrysler, but at least it's an investment in the future and not the past.
“I would say that electricity is a vastly superior fuel for the light vehicle fleet,” said Willett Kempton, a professor and alternative energy specialist at the University of Delaware. And in a true smart grid, electric cars will not only be able to draw on electricity to run their motors, they will also be able to do the reverse: send electricity stored in their batteries back into the grid when it is needed. In effect, cars would be acting like tiny power stations.
Regulators are taking notice:
The Federal Energy Regulatory Commission, which regulates interstate transmission of electricity, is on board with the idea. “Vehicle-to-grid is, I believe, the salvation of the automotive industry in the United States,” declared Marc Spitzer, an agency commissioner who was also on the panel.
V2G technology will likely take eight to ten years to be widely used, but if and when it does, Delaware could be a leader and not just an adopter.
Sen. John McCain, R-Arizona, said Obama was off to "a bad beginning," out of step with the vow of bipartisanship both men made after Obama beat out the Republican presidential nominee for the White House in November. "It was a bad beginning because it wasn't what we promised the American people, what President Obama promised the American people, that we would sit down together," McCain told CNN's "State of the Union With John King."
Who is this "we" of which McCain speaks? The two competing candidates for the presidency? As I recall, they responded quite differently to the financial crisis that erupted in September, and voters put Barack Obama in the White House based on that difference in their responses. After all, as Tom Toles reminds us, politics is still a competitive sport: Writing in the New York Times, Frank Rich notes that Obama's opponents, when not complaining, are claiming victory in the face of legislative defeat:
But the Republicans are busy high-fiving themselves and celebrating "victory." Even in defeat, they are still echoing the 24/7 cable mantra about the stimulus’s unpopularity. This self-congratulatory mood is summed up by a Wall Street Journal columnist who wrote that "the House Republicans’ zero votes for the Obama presidency’s stimulus 'package' is looking like the luckiest thing to happen to the G.O.P.’s political fortunes since Ronald Reagan switched parties."
Governor Jack Markell has scheduled a media conference call on Monday to announce his intention to take part in a "landmark climate prosperity initiative" to promote sustainable economic development. As a candidate, Markell proposed just such an effort that would foster energy modernization services for businesses and homes, a global green supply chain service for Delaware businesses, eco-knowledge clusters and a green talent initiative. These initiatives would benefit homes and businesses here in Delaware by reducing energy costs. But even more important would be developing technologies and expertise that could be exported to customers outside Delaware. For instance, the University of Delaware's vehicle to grid (or V2G) project would use electric cars to store power from the grid during off-peak hours and feed it back when demand peaks. Storing power when it's cheap and feeding it back to the grid when it's expensive would benefit the vehicle owner and all power users. If this succeeds, Delaware could become a leader in an innovative new technology. I'm told the climate prosperity initiative will focus on creating partnerships with academia, businesses and foundations, which is important when the state is facing such a dire budget deficit. But for Delaware to recover, the state has to start promoting new development, and not simply wait for economic conditions to turn around. I'll have more on the proposal on Monday.
Garry Wills, who wrote Lincoln at Gettysburg, the most definitive exegesis of the address, also published an article in The Atlantic on the Second Inaugural, titled "Lincoln's Greatest Speech?" Wills notes that he is not alone in thinking the Second Inaugural may be Lincoln's best, noting that Lincoln himself was pleased with his effort:
Eleven days after delivering it he wrote to Thurlow Weed, the Republican organizer in New York, that he expected it to "wear as well as -- perhaps better than -- any thing I have produced."
Wills notes the speech's brevity:
The first thing to admire, then, is the discipline that kept him from saying anything more than what he considered essential, just as at Gettysburg.
One feature of the speech is the repeated comparison of the two sides in the Civil War. Lincoln neatly contrasted the willingness to go to war with the unwillingness to let the Union die:
Both parties deprecated war; but one of them would make war rather than let the nation survive; and the other would accept war rather than let it perish. And the war came.
He compared the two sides in their devotion to God:
Both read the same Bible, and pray to the same God; and each invokes His aid against the other. ... The prayers of both could not be answered; that of neither has been answered fully.
Wills notes that Lincoln did not declare the triumph of righteousness, but instead invoked God's judgment:
Fondly do we hope -- fervently do we pray -- that this mighty scourge of war may speedily pass away. Yet, if God wills that it continue, until all the wealth piled by the bond-man's two hundred and fifty years of unrequited toil shall be sunk, and until every drop of blood drawn with the lash, shall be paid by another drawn with the sword, as was said three thousand years ago, so still it must be said "the judgments of the Lord, are true and righteous altogether."
Wills notes that the speech contrasts judgment and mercy:
But the appeal to "Gospel forgiveness" is preceded by a submission to "Torah judgment" and divine wrath -- an odd vehicle for a message of forgiveness.
While leaving judgment to God, and with the end of the war in sight, Lincoln delivered his famous peroration:
With malice toward none; with charity for all; with firmness in the right, as God gives us to see the right, let us strive on to finish the work we are in; to bind up the nation's wounds; to care for him who shall have borne the battle, and for his widow, and his orphan -- to do all which may achieve and cherish a just, and a lasting peace, among ourselves, and with all nations.
That's my url. It has come to my attention that the old Blogspot address is no longer working. I migrated to tommywonk.com last summer. The old address isn't redirecting readers to the new url. If you link to me, please use this address:
Should we be rethinking wind power in Delaware because of Babcock & Brown’s pending demise? Bridget Shelton of Delmarva Power said on WHYY's Delaware Tonight last night that Babcock & Brown's financial troubles were a "non-issue." She’s right, at least from Delmarva Power's point of view. The power purchase agreement (PPA) is still in force. As long as Bluewater Wind can build the wind farm, Delmarva Power is obligated to buy electricity from it. If Bluewater can’t find the financing, Delmarva Power and its customers aren’t out a dime. Charlie Copeland, who was against the Bluewater project before he voted for it, is now against it again. His headline in Resolute Determination sums up his current point of view:
Then why did he vote for the Bluewater agreement back in June? It’s the same deal today as it was when he joined 61 of his colleagues in approving the project. By the way, WDEL has posted my interview yesterday with Allan Loudell.
The creditors of Bluewater Wind's grandparent company, Babcock & Brown, have decided the firm is worth less than the sum of its pieces, which means Bluewater could be up for sale. The news did not come as a surprise. A month ago, I wrote this headline:
As the News Journal reports today, Babcock & Brown (BNB), which owns B&B Infrastructure (BBI), which in turn owns Bluewater Wind, is being broken up by its creditors. As I have written before, the fault is with BNB's excessive leverage, not with its assets:
BNB did not collapse because its assets are no longer productive, though some like ports and aircraft leases have seen their revenues drop. (Its energy assets are still pumping out as much electricity as before the firm’s stock plunged.) The firm collapsed because of its over-leveraged business model. BNB is structured like a leveraged buyout, only without the buyout. The firm’s structure worked when capital was cheap and plentiful, but collapsed when the era of easy money came to an end.
As for what I thought might happen:
It’s clear that BNB’s once formidable empire will be broken up, which means that Bluewater Wind may well have a new parent company sometime this year. The original plan was for BBI to own Bluewater during the construction of the offshore wind power project, which would be handed over to BBW after the wind farm became operational. As I have said before, Babcock & Brown is in trouble because of its business model, and not because of any trouble with the wind power project here in Delaware. The power purchase agreement with its guaranteed revenue stream is itself an asset, and will still be attractive to investors once it is separated from the BNB mess.
I will be going on the air with Allan Loudell of WDEL today at 12:15 to discuss what this means for Bluewater Wind and Delaware.
On Feb. 4, President Barack Obama called for limiting executive pay at future recipients of government bailout funds, calling Wall Street bonuses "shameful" and "the height of irresponsibility." Could his public attack on sky-high financial pay have ripple effects on executive compensation in other industries? If history is any guide, the answer is yes. A President, if he chooses the right moment to act, can have enormous impact on public attitudes. In this case, if Obama chooses to make an example of highly paid financial executives, it could make it a lot easier for shareholders and directors elsewhere to challenge multimillion-dollar pay packages.
Mandel compares the present conditions with those in 1981, when Reagan fired the member of the air controllers union, known as PATCO:
To see the best parallel to today's situation, look back to August 1981 and Ronald Reagan's actions against the air traffic controllers' union. At the time, the unemployment rate was up to 7.4%, as the economy was moving into the deepest recession since World War II. Sound familiar?
Mandel points out that the average number of strikes dropped from 269 a year in the decade leading up to the PATCO strike to just 58 a year in the decade following. The drop in the number of strikes was not all due to that one event, but Reagan's action certainly changed the tone in this country. Likewise, Obama’s new rules for the bankers will not in themselves overturn the habits that have insulated corporate executives from any meaningful control over their pay. But the form they take—stock warrants that don’t vest until the government is paid and shareholder resolutions—could set the tone for an overhaul of the way corporate governance is practiced in the U.S.
Governor Jack Markell cites rising unemployment as one of the factors driving the state's budget crisis. According to the Delaware Department of Labor, 27,665 Delawareans were unemployed in December: Based on what I have learned about the methodology used to calculate unemployment, I expect that the rate will climb significantly in the next several months. Anyone who drew even one paycheck would not show up in the unemployment report for the month. Even severance pay counts, since workers don't qualify for unemployment insurance until their severance checks run out. Invista, Chrysler and Circuit City have announced layoffs that did not take effect in December. It could take months for all of their workers to qualify for unemployment benefits. The growing lines of workers applying for benefits will inexorably drive the unemployment number higher. But it won't end there. Bank of America plans to eliminate 30,000 jobs over the next three years. I expect to see some of those job cuts to affect Delaware. All of these job losses are driving down personal income tax revenues for the state, and for Wilmington, with its 1.25% wage tax. Things will get worse before they get better.
Over at the Guardian, I've posted some thoughts on Barack Obama's decision to limit the pay of of banking execs being bailed out with taxpayer dollars:
The world economy is sinking. Tens of thousands of jobs are disappearing in America every day. The US government is pouring hundreds of billions of dollars into its banking system. All of which is leaving Americans shaking their heads — and their fists — at the enormous bonuses paid out to the banking executives who created this mess. Yesterday, Barack Obama decided enough is enough. Standing with treasury secretary Timothy Geithner, Obama announced new pay restrictions for the executives of banks being pumped full of public funds.
I like the part about allowing execs to be paid in restricted stock that wouldn't vest until the government has been paid back in full.
“You and I know that in the history of mankind and womankind, government—federal, state or local—has never created one job,” he said. “It’s destroyed a lot of them.”
In Delaware, this plan will deliver immediate, tangible impacts, including: • Creating or saving 11,300 jobs over the next two years. Jobs created will be in a range of industries from clean energy to health care, with over 90% in the private sector. [Source: White House Estimate based on Romer and Bernstein, “The Job Impact of the American Recovery and Reinvestment Plan.” January 9, 2009.] • Providing a making work pay tax cut of up to $1,000 for 330,000 workers and their families. The plan will make a down payment on the President’s Making Work Pay tax cut for 95% of workers and their families, designed to pay out immediately into workers’ paychecks. [Source: White House Estimate based on IRS Statistics of Income] • Making 8,000 families eligible for a new American Opportunity Tax Credit to make college affordable. By creating a new $2,500 partially refundable tax credit for four years of college, this plan will give 3.8 million families nationwide – and 8,000 families in Delaware – new assistance to put college within their reach. [Source: Center on Budget and Policy Priorities analysis of U.S. Census data] • Offering an additional $100 per month in unemployment insurance benefits to 54,000 workers in Delaware who have lost their jobs in this recession, and providing extended unemployment benefits to an additional 9,000 laid-off workers. [Source: National Employment Law Project] • Providing funding sufficient to modernize at least 28 schools in Delaware so our children have the labs, classrooms and libraries they need to compete in the 21st century economy. [Source: White House Estimate]
Those 11,000 jobs would be good news to the 27,665 Delawareans who were unemployed in December. Governor Jack Markell is reporting that 16,500 residents lost their jobs last year. 11,300 new jobs would knock 1.9 percentage points off Delaware's unemployment rate, and reverse two-thirds of last year's job losses.
After two weeks on the job, Jack Markell may not have fixed the state's fiscal crisis yet, but he has posted his presentation on the budget on the state's website. Page 7 illustrates the sharp decline in revenues over the last two years:Legislators have told me they came away impressed by Markell's grasp of the situation. In a crisis, it helps if the key decision makers share an understanding of the magnitude of the problem.
Ron Williams yesterday published a silly column in the News Journal in which he reveals that, after 12 days on the job, Jack Markell hasn't fixed the state's budget crisis yet. This with only five months left to pass a budget. The $606 million shortfall the state faces represents 20 percent of its operating budget. That's a bigger deficit than Wilmington or Philadelphia faced in the early 1990s. There is no single step that the governor and legislature can take to fix it. As Markell points out in his summary of the situation, the state could cut entire departments or 75 percent of employees and not make up the shortfall. Actually I have heard good reviews of Markell's summary from legislators, including those who backed John Carney. There may be pockets of resentment from Carney supporters downstate, but legislators are focusing on the budget, and happy to have a governor who understands the magnitude of the problem.
My, how things have changed. Four years ago, George W. Bush promptly began wasting his political capital by proposing to privatize Social Security and intervening in the sad case of Terry Schiavo.
