Ralph Nader: It’s Time For Renewable Energy

 

After years of opposing or ridiculing renewable energy, the giant oil companies are using a new approach.  A recent ExxonMobil advertising campaign put it this way:

“Oil, gas, coal, biofuels, nuclear, wind, solar….to fuel the future we need them all.”

Not an unexpected maneuver from a fossil fuel company that has owned Washington and received subsidies and tax breaks for decades.  What is unfortunate is that this is the exact kind of energy pitch coming out of the Obama Administration and most Congressional Democrats.  Indeed it is right out of candidate Obama’s 2008 campaign rhetoric last year.

Back then, Senator Obama gave every energy source its due although he spent an inordinate amount of time pushing the mirage of “clean coal” while keeping nuclear energy on the table. 

The problem is that all energy sources are not created equal for purposes of efficiency, and the well being of consumers, workers, the environment and posterity. Regardless of the BTU production, different kinds of energy produce different levels of harms and benefits, short and long term.

Take atomic power.  Wall Street financiers have been adamant for years that lending billions of dollars to utilities to construct a

single nuclear plant requires a 100% U.S. government loan guarantee.  A 90% loan guarantee by taxpayers is rejected by the Wall Streeters.

 

They want a 100% guarantee on the barrelhead. 

The well-known environmentalist and physicist, Amory Lovins argues against nuclear energy just on economic grounds.  He says that he doesn’t even have to get to safety issues to recommend rejection.  I know no one of prominence on the other side willing to debate him.  If you do, let me know.

But the safety issues surrounding the nuclear option will not go away. Neither the unresolved permanent storage of deadly radioactive waste, nor the national security problems, nor risk of a class nine meltdown that could contaminate, in the words of the old Atomic Energy Agency (of the U.S. government), an area the size of Pennsylvania, are going away.

Then there is the missing “source” of energy from the Exxon ad.  This is energy efficiency. Reducing waste. A thousand megawatts you don’t 

waste is a thousand megawatts you don’t have to produce. The same goes for not having to waste a gallon of gasoline in gas guzzling motor vehicles.  Nothing can compete with the payback ratios of energy conservation that includes building and engine construction and use.  Yet again and again it’s not at the top of the list or on many lists at all.

Then there are the renewables—wind, geothermal, water and all the wondrous varieties of solar. A few days ago, the Sustainable Energy Coalition had its 12th annual Congressional renewable energy and energy efficiency EXPO + Forum at the Cannon House Office Building in the U.S. House of Representatives.  This year’s EXPO featured more than 50 businesses, trade associations, government agencies and non-profit policy organizations to hear some members of Congress regale them and converse with visitors. 

I found the exhibits and their  personable exhibitors to be specific, comprehensive and seemingly convinced that renewables are finally, after some failed starts, on an irreversible road to greater market share.  It was not only the advanced hardware and the use of tax credits feeding their optimism. Renewables are branching out in ways that are bringing them nearer to a level playing field with their heavily subsidized and coddled fossil fuel and nuclear “competitors.” More venture capital, better tax credits, rebates and various state and local proposals exist to facilitate  financing for users. 

One spreading incentive comes from my home state of Connecticut which offers a special solar energy leasing plan for homeowners. The Nutmeg State claims it is leading “the way with the nation’s first rate payer supporter residential leasing program for solar energy.”  Catch the details by visiting ctsolarlease.com or phone 888-232-3477.

The point of this column is to demand thoughtful discrimination by our policy makers between different kinds of energy.  Some are clearly better than others.  From the federal government on down to the state and local level, a discriminatory approach is a must if the conversion to renewables and energy conservation from fossils and nuclear is to accelerate.

The old energy lobbies are very stubborn and have their hooks into too many politicians who mouth the ExxonMobil party line.  There are far more jobs in the new energy economy with far more health, efficiency, and security benefits than there are in staying with hydro- carbons and radioactive atoms.   www.nader.org

Ralph Nader: CPA’s MIA

 

Where were the giant accounting firms, the CPAs, and the rest of the accounting profession while the Wall Street towers of fraud, deception and cover-ups were fracturing our economy, looting and draining trillions of dollars of other peoples’ money?

This is the licensed profession that is paid to exercise independent judgment with independent standards to give investors, pension funds, mutual funds, and the rest of the financial world accurate descriptions of corporate financial realities.

It is now obvious that the accountants collapsed their own skill, integrity and self-respect faster and earlier than the collapse of Wall Street and the corporate barons. The accountants—both external and internal—could have blown the whistle on what Teddy Roosevelt called the “malefactors of great wealth.”

The Big Four auditors knew what was going on with these complex, abstractly structured finance instruments, these collateralized debt obligations (CDOs) and other financial products too abstruse to label. They were on high alert after early warning scandals involving Long Term Capital Management, Enron, and others a decade or so ago. 

These corporate casino capitalists used the latest tricks to cook the books with many of the on-balance sheet or off-balance sheet structured investment vehicles that metastasized big time in the first decade of this new century.

These big firms can’t excuse themselves for relying on conflicted rating companies, like Moody’s or Standard & Poor, that gave triple-A ratings to CDO tranches in return for big fees. Imagine the conflict.  After all, “prestigious” outside auditors were supposed to be on the inside incisively examining the books and their footnotes, on which the rating firms excessively relied.

Let’s be specific with names. Carl Olson, chairman of the Fund for Stockowners Rights wrote in the letters column of The New York Times Magazine (January 28, 2009) that “PricewaterhouseCoopers O.K.’d AIG and FreddieMac. Deloitte & Touche certified Merrill Lynch and Bear Stearns. Ernst & Young vouched for Lehman Brothers and IndyMac Bank. KPMG assured over Countrywide and Wachovia. These ‘Big Four’ C.P.A. firms apparently felt they could act with impunity.”

“Undoubtedly they knew that the state boards of accountancy,” continued Mr. Olson, “which granted them their licenses to audit, would not consider these transgressions seriously. And they were right…Not one of them has taken up any serious investigation of the misbehaving auditors of the recent debacle companies.”

“Misbehaving” is too kind a word. The “Big Four” destroyed their very reason for being by their involvement in these and other boondoggles that have made headlines and dragooned our federal government into bailing them out with disbursements, loans and guarantees totaling trillions of dollars. “Criminally negligent” is a better phrase for what these big accounting firms got rich doing—which is to look the other way.

Holding accounting firms like these accountable is very difficult. It got more difficult in 1995 when Congress passed a bill shielding them from investor lawsuits charging that they “aided and abetted” fraudulent or deceptive schemes by their corporate clients.  Clinton vetoed the legislation, but Senator Chris Dodd (D-CT) led the fight to over-ride the veto.  Moreover, the under-funded and understaffed state boards of accountancy are dominated by accountants and are beyond inaction. What can you expect?

As for the Securities and Exchange Commission (SEC), “asleep at the switch for years” would be a charitable description of that now embarrassed agency whose mission is to supposedly protect savers and shareholders. This agency even missed the massive Madoff Ponzi scheme.

The question of accounting probity will not go away.  In the past couple of weeks, the non-profit Financial Accounting Standards Board (FASB)—assigned to be the professional conscience of accountancy—buckled under overt pressure from Congress and the banks. It loosened the mark-to-market requirement to value assets at fair market value or what buyers are willing to pay.  This decision by the FASB is enforceable by the SEC and immediately “cheered Wall Street” and pushed big bank stocks upward. Robert Willens, an accounting analyst, estimated this change could boost earnings at some banks by up to twenty percent. Voilà, just like that. Magic!

Overpricing depressed assets may make bank bosses happy, but not investors or a former SEC Chairman, Arthur Levitt, who was “very disappointed” and called the FASB decision “a step toward the kind of opaqueness that created the economic problems that we’re enduring today.”

To show the deterioration in standards, banks tried to get the FASB and the SEC in the 1980s to water down fair-value accounting during the savings and loan failures. Then-SEC Chairman Richard Breeden refused outright. Not today.

Former SEC chief accountant, Lynn Turner, presently a reformer of his own profession, supports mark-to-market or fair value accounting as part of bringing all assets and liabilities, including credit derivatives, back on the balance sheets of the financial firms. He wants regulation of the credit rating agencies, mortgage originators and the perverse incentives that lead to making bad loans. He even wants the SEC to review these new financial products before they come to market, eliminating “hidden financing.”

Now comes the life insurance industry, buying small banks to qualify for their own large federal bailouts for making bad, risky speculations.  The brilliant Joseph M. Belth, writing in his astute newsletter, the Insurance Forum (May 2009), noted that life insurers are lobbying state insurance departments to weaken statutory accounting rules so as to “increase assets and/or decrease liabilities.” Some states have already caved. Again, voilà, suddenly there is an increase in capital. Magic. Here we go again.

Who among the brainy, head up accountants, in practice or in academia, will join with Lynn Turner and rescue this demeaned, chronically rubber-stamping “profession,” especially the “Big Four,” from its pathetic pretension for which tens of millions of people are paying dearly?

 

By Ralph Nader

Tax The Speculators

 

Let’s start with a fairness point.  Why should you pay a 5 to 6 percent sales tax for buying the necessities of life, when tomorrow, some speculator on Wall Street can buy $100 million worth of Exxon derivatives and not pay one penny in sales tax?  Let’s further add a point of common sense.  The basic premise of taxation should be to first tax what society likes the least or dislikes the most, before it taxes honest labor or human needs. 

In that way, revenues can be raised at the same time as the taxes discourage those activities which are least valued, such as the most speculative stock market trades, pollution (a carbon tax), gambling, and the addictive industries that sicken or destroy health and amass large costs.

So, your member of Congress, who is grappling these days with gigantic deficits on the backs of your children at the same time as that deep recession and tax cuts reduce revenues and increase torrents of red ink, should be championing such transaction taxes.

Yet apart from a small number of legislators, most notably Congressman Peter Welch (Dem. VT) and Peter DeFazio (Dem. OR), the biggest revenue producer of all—a tax on stock derivative transactions—essentially bets on bets—and other mystifying gambles by casino capitalism—is at best corridor talk on Capitol Hill.

There are differing estimates of how much such Wall Street transaction taxes can raise each year.  A transaction tax would, however, certainly raise enough to make the Wall Street crooks and gamblers pay for their own Washington bailout.  Lets scan some figures economists put forth.                                          

The most discussed and popular one is a simple sales tax on currency trades across borders.  Called the Tobin Tax after its originator, the late James Tobin, a Nobel laureate economist at Yale University, 10 to 25 cents per hundred dollars of the vast amounts of dollars traded each day across borders would produce from $100 to $300 billion per year.

There are scores of civic, labor, environmental, developmental, poverty and law groups all over the world pressing for such laws in their countries. (see tobintaxcall.free.fr)  According to the University of Massachusetts economist, Robert Pollin, various kinds of securities-trading taxes are on the books in about forty countries, including Japan, the UK and Brazil.

Pollin writes in the current issue of the estimable Boston Review: “A small tax on all financial-market transactions, comparable to a sales tax, would raise the costs on short-term speculative trading while having a negligible effect on people who trade infrequently. It would thus discourage speculation and channel funds toward productive investment.  He adds that after the 1987 stock market crash, securities-trading taxes “or similar measures” were  endorsed by then Senate Minority Leader, Bob Dole and even the first President Bush. Professor Pollin estimates that a one-half of one percent tax would raise about $350 billion a year. That seems conservative. The Wall Street Journal once mentioned about $500 trillion in derivatives trades alone in 2008—the most speculative of transactions.  A one-tenth of one percent tax would raise $500 billion dollars a year, assuming that level of trading.

Economist Dean Baker says a “modest financial transactions tax would be enough to “finance a 10% across-the-board reduction in the income tax on labor.  The stock transaction tax goes back a long way. A version of this helped fund the Civil War and the  Spanish-American War. The famous British economist, John Maynard Keynes extolled in 1936 a securities transaction tax as having the effect of “mitigating the predominance of speculation over enterprise.”  The U.S. had some kind of transaction tax from 1914 to 1966.

The corporate history scholar, (read his excellent book, Unequal Protection) Thom Hartmann turned three-hour-a-day talk-show-host on Air America (airamerica.com/thomvision), had  discussed the long evolution of what he calls a “securities turnover excise tax” to “tamp down toxic speculation, while encouraging healthy  investment.”

So, why don’t we have such a mega-revenue generator and lighten the income tax load on today and tomorrow’s American worker? (It was one of the most popular ideas I campaigned on last year. People got it.) Because American workers need to learn about this proposed tax policy and ram it through Congress. Tell your Senators and Representatives—no ifs, ands or buts.  Otherwise, Wall Street will keep trampling over people’s pensions and mutual fund savings, destabilizing their jobs and handing them the bailout bill, as is occurring now.

A few minutes spent lobbying members of Congress by millions of Americans (call, write or e-mail, visit or picket) will produce one big Change for the better.  Contact your member of Congress. The current financial mess makes this the right time for action. 

By Ralph Nader

Ralph Nader ~ In the Public Interest

 

In the Public Interest

Open Letter to President Obama on Consumer Protection

 

Dear President Obama:

Underneath many of our country’s economic problems is the 30-year collapse of consumer protection—both the regulatory kind and the self-help kind known as proper access to justice.  Last month consumer groups sent you a letter proposing action to rein in exploitation of consumers as debtors, buyers of oil, gas and electricity, as patients needing health insurance and eaters wanting safe goods.

Under the Bush regime, the words “consumer protection” were rarely uttered and the Bush administration almost never initiated pro-consumer efforts, even with massive evidence before it, such as predatory lending and credit card abuses.  You need to recognize and elevate the GDP significance of fair consumer policies along with their moral and just attributes at a time of worsening recession.

I suggest you focus on the state of the poorest consumers in the urban and rural ghettos.  As you know from your days with the New York Public Interest Group (NYPIRG) and as a community organizer in Chicago, consumers in these areas are the most gouged and least protected.  That the “poor pay more” has been extensively documented by civic, official and academic studies, and numerous local newspapers and television news reports.  Unfortunately, neither Congress nor the Executive branch have paid adequate attention to the tens of millions of people who lose at least 25 percent of their consumer dollars to multiple frauds and shoddy merchandise.  You should establish special task forces in the Justice Department and Federal Trade Commission on their plight, and on the many proven but unused remedies to assure a fair marketplace with effective enforcement and grievance procedures.

Working with and galvanizing local and state agencies to enlarge their capacity and staff—with stimulus monies—can produce a triple-header—making the federal effort more effective, providing valuable jobs and freeing up billions of consumer dollars from the financial sink-hole of commercial crimes.  It requires the visibility and eloquence of your personal leadership to launch this long-overdue defense of poor people.

A second area of action is to update major areas of regulatory health and safety that have been frozen for 30-years.  These include modernizing standards for auto  and tire safety, food safety, aviation, railroad safety and occupational health and trauma protection.

New knowledge, new marketing forays, and new technologies have accumulated during this period without application.  It’s the obsolescence of many safety standards hailing from the fifties, sixties and seventies that permits the tricky, corporate advertising claims that products “exceed federal safety standards.”  Example: the SEC has not come close to regulating the recent explosion of myriad collateralized debt obligations (CDOs).  The massive speculation in this area is destabilizing the national and world economies.

Third, articulate and provide a high profile to what western Europeans have long called “social consumerism.”  Citizens are consumers of government services for which they pay as taxpayers.  They are entitled to prompt, accurate and courteous responses to their inquiries and their perceived needs as embraced by the authorizing statutes.  Americans need to be able to get through to government agencies and departments.  Being put on hold interminably with automated messages to nowhere, not receiving replies to their letters, and generally getting the brush- off even with the deadlines explicated in the Freedom of Information Act have been a bi-partisan failure.  

Under the Bush regime, not answering serious letters from dedicated individuals and groups on time-sensitive matters of policy and action—as with the Iraq war and occupation—became standard operating procedure—starting with President Bush himself.  This stone-walling has turned people off so much that they do not even bother to “ask their government” for assistance and that includes an astonishingly unresponsive Congress (other than for ministerial requests such as locating lost VA or social security checks.)

As you shape the Obama White House, bear in mind that the “change you can believe in” is one of kind, not just degree.

 

Sincerely yours,

Ralph Nader

Stay Informed: www.nader.org

 

Questions/comments can be sent to: Book Offer, PO Box 19312, Washington DC 20036.  Per your request we will send you the book, “If the Gods Meant Us to Vote, They’d Have Given Us Candidates,” by Jim Hightower free of charge, by March 1, 2009, or while supplies last.  This offer is from Ralph Nader.

RALPH NADER: Talks Bottom Line

 

 

Bailout…Economy…Auto Industry…Environment…

Nader went for the auto industry’s jugular with a vengeance back in 1965 when he published his first book, ‘Unsafe at Any Speed’ outing car manufacturers for making unsafe vehicles.  He made headlines when executives of General Motors who hired investigators to harass him went before a televised Senate committee hearing and apologized.  With the current financial crash and round of bailouts there was plenty to ask Nader about. 

ST:  What’s your take on the auto companies wanting bailout funds?

RN:  If with a bailout the government becomes a tough insurer, share- holder and creditor in the auto industry it can further all kinds of goals for stronger fuel efficiency, emission control, safety standards to enhance sales, increase pressure on foreign auto companies, and achieve many statutory goals that auto companies have blocked for years by regulators in Washington, the Department of Transportation and EPA.  What the environmental consumer and labor groups couldn’t get through regulation, they get through reciprocity; ‘You want a bailout from Washington?..Here is how you have to perform—A, B,C, D…’  First, since the government will be contributing tax dollars, taxpayers should receive taxpayer warrants or preferred shares held by the Treasury Department for stock in the companies.  Second, since the government would be a senior creditor, it should exercise restructuring powers to remove top executives and Boards of Directors along with other functional re-alignments.  Third, since the government is essentially performing as an insurer, basic standards of loss prevention should be applied.  The three auto giants Ford, General Motors and Chrysler, whose CEOs are begging for a very rapid $34 billion in emergency government loans have few cards to play other than the domino effect on the economy, should they collapse into bankruptcy and liquidation.  Once Congress signals that, on behalf of its sullen taxpayers, going into this abyss will not happen, our national legislature will hold all the cards.  At least the auto companies are being subjected to public Congressional hearings for this latest bailout round.  In contrast, the CEOs of the financial goliaths got private roundtable treatment at the Treasury Department and Federal Reserve for greater rescue packages.   

Time Passes…But What Changes?

Nader’s name has appeared as an Independent candidate on four consecutive presidential election ballots, and the 2008 election was no exception.  Along with his V.P. running mate San Francisco attorney Matt Gonzalez, a former deputy public defender with a track record of fighting for ethics reform and defending civil rights, the two gave their progressive platform a serious go, and their reform motto was simple and to the point: ‘The more things change, the more they stay the same!’  The laundry list of gripes Nader has had for years stay the same for years with no change for us:  Single payer healthcare system; cuts on the wasteful military budget; create a sustainable economy by using solar, wind, and other renewable energy sources; make minimum wage a living wage; end corporate crime through the enforcement of law; no more Wall Street bailouts; and put  citizens, not corporations first…all crucial for our country’s well-being.  Nader’s gripe is change never happens.

Widely acknowledged as founder of the consumers’ rights movement, with regards to consumer safety and improving the environment, Nader pushes reform to the wall, and then some.  A key player in creating the Environmental Protection Agency, the Occupational Safety and Health Administration, the Freedom of Information Act and the Consumer Product Safety Commission, he is the Everready Energizer battery bunny incarnate bringing public awareness to subjects that he feels are contributing to the deterioration of our society and country.

ST:  How do you feel about the $700-billion plus bailout?

RN:  The economy is collapsing faster every week.  Starting with the Wall Street speculators and crooks which for no reason other than greed, speculation and too much control over a deregulatory environment launched this relentless slide in our economy.  But this is also an opportunity for the foremost corporate reform in the last 70 years.  This is Chinese ‘character for crisis’ which means opportunity.  If Washington is going to be an insureor, guaranteeor, bailoutor and a taxpayer subsidizeor…then there are all kinds of conditions that can be imposed on the auto companies, investment banks, insurance companies…whoever has a hand out in Washington for corporate welfare.  As to banks and insurance companies, the government can require them to allow inserts in all of their monthly statements and billing envelopes inviting consumers and investors to form their own group, with their own pull time advocates and those are called CUBS (Citizen Utility Board) this is an idea we got passed in Wisconsin, Illinois and San Diego years ago for household utility customers so when they get their telephone, electric and gas bills, out falls a little insert that says, Do you want to band together for your own interests against these companies?  If you do send in $5 or $10 which will hire the accountants, lawyers and organizers to pay for the work.

ST:  I think most are still scratching their heads over how fast the bailout happened.

RN:  I call the financial bailout—’Bailout by Press Release’…in that Bear Stearns, Citibank, AIG and others got to the cliff and were facing the abyss.  It was near the end of the week, they rush to Washington for Saturday and Sunday marathons with the Secretary of the Treasury and the Federal Reserve Chair, and their staff, saying the sky’s falling… the sky’s falling.  So, without congressional hearings or congressional reviews, the Secretary of the Treasury and Federal Reserve Chair arrogate themselves authority to bail them out.  There are no conditions, no transparency, no agreement the public—taxpayers who are paying for this can even see.  Is it an agreement?  A memorandum of understanding between the Treasury Department, Citibank and the others?  What is it?  This is unheard of in American history; they’re performing as the legislature and executive in closed door deals.  Then Monday morning they issue the bailout press release, and no one asks taxpayers about it, as the taxpayer representatives testified before Congress.  We now see Congress tougher on auto companies to produce evidence of need compared to the blanket authority they gave the Treasury and Fed Reserve to provide sweetheart deals for CitiBank, Bear Stearns, AIG and the others.  In 1938 Franklin Delano Roosevelt sent a message to Congress on corporate power and said, “When government is controlled by private economic power it is fascism.”  This is fascism.

ST:  Let’s talk about Obama and his new appointees and Congress.

RN:  With the upcoming installation of Obama, a new, and supposedly reformist president and a Democratically dominated Congress, the current process must be reversed and White House-corporate understandings we now have need to be reconsidered and if maintained, revised.  The balance of power for the people of our country can turn, but it will take prompt new exertions by the people, citizen groups, organized investors, taxpayers and workers.  Seize the moment.

Stay Informed: www.nader.org

:::Suzanne Takowsky