In the Name of Security
By CHRISTOPHER BRAUCHLI
The Gods have their own rules.
Ovid, Metamorphoses
One of the many nice things about being a United States Senator is that you can ask just about anyone in government to explain actions being taken and anticipate a response and, in many cases, a change in conduct. Here is one example of how a United States Senator was able to influence policy. It pertains to Blackwater.
On February 25, 2010 Senator Carl Levin, Chairman of the Senate Armed Services Committee sat down and wrote a letter to Attorney General Eric Holder asking him to investigate whether Xe Services, (formerly known as Blackwater) had made false or misleading statements when it bid for an Army contract in Afghanistan. The reason for his letter was that he had just finished conducting a hearing reviewing the results of an investigation of Blackwater. In his opening statement at the hearing Senator Levin said that: “Blackwater operated in Afghanistan without sufficient oversight or supervision and with almost no consideration of the rules it was legally obligated to follow. The means by which Blackwater acquired weapons for its contractor personnel in Afghanistan showed just how little regard company personnel had for those rules.” Senator Levin did not limit his letter writing to writing the Attorney General. He also sent a letter to Defense Secretary Robert Gates.
In the letter to Secretary Gates he said the Pentagon should consider deficiencies in Blackwater’s past performance before awarding it additional contracts. He said: “[W] e received evidence that Blackwater may have: used a front company for the contract; made false official statements and misled Department of Defense officials in its proposal documents; misappropriated government weapons and carried weapons without authorization; and hired unqualified personnel with backgrounds that included assault and battery, larceny and misappropriation of property, insubordinate conduct, and drug and alcohol abuse; and violated CENTCOM’s movement control policies.” He concluded saying the Department of Defense “should review the transcript of this hearing and consider the deficiencies in Blackwater’s performance . . . before a decision is made to award the police training work to Blackwater.”
The investigations Senator Levin requested may be ongoing. So is the awarding of lucrative contracts to Blackwater. Jeff Stein who writes “Spy Talk”, reported on June 21, 2010 that the State Department gave Xe Services a $120 million contract for providing “protective security services” at new U.S. consulates in Herat and Mazar-e-Sharif. Two days later he reported that the Central Intelligence Agency had hired the company to guard CIA facilities in Afghanistan and other places. Xe was not the only contractor interested in obtaining the work. In connection with both of those contracts DynCorp and Triple Canopy had bid on the jobs but lost out to Blackwater.
Senator Levin’s reaction to these awards has not been reported. Congresswoman Jan Schakowsky’s have. They are hardly surprising. She was outraged. Her outrage was prompted by her familiarity with Blackwater and its performance. In November 2009 she learned that the government had given Blackwater an indefinite extension of a contract to provide “Aviation Services” in Iraq and said: “Given the company’s history of massive abuses and misconduct, I believe it is inappropriate for the United States government to continue doing business with this firm.” Upon hearing of the newest contracts in Afghanistan she said, speaking to ABC news: “I’m just mystified why any branch of the government would decide to hire Blackwater, such a repeat offender. We’re talking about murder . . . . A company with a horrible reputation that really jeopardizes our mission in so many different, different ways.”
For all we know, the Justice Department may be conducting an investigation of Blackwater’s conduct in both Afghanistan and Iraq in response to the letter it received from Senator Levin. For all we know the CIA may be investigating Blackwater’s prior conduct even though it has just agreed to pay the company $125 million for its services. For all we know, the State Department may be conducting its own independent investigation in response to Senator Levin’s letter. Here is what we know for sure, however. The mystery to which Ms. Schakowsky was referring has been unraveled by CIA Director Leon Panetta.
In a June 27 interview on ABC News Mr. Panetta said that in a war zone “we continue to have needs for security. . . . Unfortunately, there are a few companies that provide that kind of security. The State Department relies on them, we rely on them to a certain extent. So we bid out some of those contracts. They . . . . outbid everyone else by about $26 million. And a panel that we had said . . . that they have shaped up their act. So there really was not much choice to but accept that contract..”
That explains it all. Sort of.
Friday, July 9, 2010
Congress and the Oil Spill
Hot Rhetoric, Hollow Reform
By JAMES RIDGEWAY
The way the Washington Post reported the story, Congress has finally pushed through “tougher” off-shore drilling regulations for oil companies.
Two key Senate committees approved legislation before the July 4 holiday that purport to change the way the federal government regulates offshore oil drilling and that penalize companies for oil spills. Both measures passed on bipartisan voice votes. One approved by the Energy and Natural Resources Committee would raise the civil and criminal penalties for a spill, require more safety equipment redundancies, boost the number of federal safety inspectors and demand additional precautions for deep-water drilling. The other, passed by the Environment and Public Works Committee, would remove a $75 million limit on oil company liability and would retroactively remove the liability cap for BP and the Deepwater Horizon explosion.
The Post article stated that these measures ”demonstrat[e] lawmakers’ eagerness to respond to the disaster in the Gulf of Mexico.” The writer ought to have more accurately said that the measures demonstrate lawmakers eagerness to look like they are responding to the disaster. In the real world, the proposed measures will serve mostly as election-year greenwashing, with little genuine impact.
Just about everyone at this point knows that liability awards will be determined not in the hallowed halls of Congress, but by knock-down, drag-out court fights. More safety precautions can gradually be rolled back or ignored, just as earlier safety regulations were rolled back or ignored in the years leading up to the BP spill. And none of this goes to the basic dilemma of whether drilling at these depths should be allowed at all, when the dangers are so great and the stakes so high. Members of Congress can see the heat the White House has gotten for daring (in an uncharacteristic move) to impose even a partial moratorium on deepwater drilling: a federal judge declared the move illegal, while right-wingers attacked it as something just short of a Communistic plot to destroy the nation’s economy.
As long as Congress tinkers around the edges of the issue, its members can avoid the explosive core. As a character in a famous Italian political novel once said, “If we want everything to stay the same, everything must change.”
Let’s talk about the overriding fact that no one, apparently, sees fit to mention: The great bulk of our domestic oil lies in public domain territory along the outer-continental shelf of the United States. Since it is already owned by the public, and is supposed to be held in trust for our well-being, the threat of “nationalizing” oil is simply a strawman. Oil is already nationalized in the United States–it is owned by the nation, and by the people. But we have basically turned over this huge asset to the energy industry, especially the oil and gas companies. This has been done through a huge system of undervalued, under-regulated leases that give companies a free hand to exploit the wealth of the public domain at almost no cost. The government has placed the disposition and oversight of this valuable resource in the hands of the Interior Department, which has a long history of connivance with the extractive industries.
In sum, we citizens of the United States have surrendered the greatest natural resource wealth of our nation to private business interests–who naturally run it for their own profit, rather than for the public good. In return, we have demanded virtually nothing. And the little we have demanded–the most basic of safety precautions, the most modest of demands for fair pricing–have been ignored and derided by companies that regularly top the Global 500 list for profitability.
Keep in mind that these are not the mythological “Main Street” American business interests, the scrappy entrepreneurial spirits so beloved by conservatives and libertarians alike. These are not hundreds and thousands of little companies duking it out in the free market. They’re a few big multinational companies, whose death grip on the world’s energy resources dates back a hundred years or more. They operate in secret through cartels to determine how these resources are parceled out, priced, and used.
One of many obstacles to any real change in this system is the absence of transparency and reliable information. For example, the oil companies, not the government, have been tasked with mapping oil and gas reserves on the public domain. This prevents any real public scrutiny, and any impartial scientific judgement on how to administer the public trust. It also serves to obscure from view the massive ripoff that constitutes the leasing system. Historically, disagreements over this system—over whether reserves are over- or under-estimated, details of environmental impacts, disputes over fair costs–all have come down to information or the lack of information.
In the last energy crisis in the 1970s, I wrote a book called New Energy together with Bettina Conner, a colleague at the Institute for Policy Studies. At that time, there was a move in Congress to make knowledge of oil reserves transparent. My book includes an excerpt from the Joint Economic Committee of the Congress in its investigation of the energy crisis in 1974. That report said:
The lack of accurate,well-analyzed data regarding energy sources and uses has placed the United States government in a ludicrous position.When those officials directly charged with administering energy policy are unable to determine accurately the extent of the present fuel shortage or to estimate reliably its potential impact on the economy. Nor can they determine fuel production costs with anything approaching the degree of accuracy necessary to administer the price control program.The government knows almost nothing about the extent of the vast mineral fuel resources contained in public lands. Tax policy formulation is hampered by the lack of analysis of existing special tax provisos for mineral fuel extraction and consequent ignorance of their impact.
William Simon, Nixon’s administrator of the Federal Energy Office, acknowledged the situation before the joint economic committee in January 1974 when he declared, “Let me say right at the outset that there has never been in existence an adequate energy data system…Today and in the years ahead we need better data on everything from reserves to refinery operations to inventories…Data we can check, verify, and cross check.’’
Despite all the study and debate, the Congress has never done anything to remedy the situation. The late Wisconsin Democratic senator Gaylord Nelson introduced legislation to create independent public libraries of basic information. Under his bill, failure to make public such details would make officials liable to prison sentences and fines. The legislation was bottled up in committee and died a silent death at the hands of powerful energy interests in Congress.
Then there was a move to establish a Federal Energy Corporation to conduct research on alternative energy and new uses of fossil fuels. This Federal Energy Corporation would have been empowered to gather and decipher data on oil and gas holdings, and even produce a limited amount of oil and gas itself, for our strategic reserve. The government would control no more than 20 percent of total oil from public territories offered for leasing, and would be a supplier of last resort. In effect,it would act as a yardstick against which to measure the private petroleum industry. It would be a hedge against the unrestrained power of this industry, which periodically gouges the American public at the pump, even though the public owns the very oil and gas it is buying from these companies. Needless to say, that initiative, too, died a sudden, quiet death.
In the 1970s those measures may have failed; today they would never even be proposed. Set against the national debate that took place four decades ago, the current discussion in Congress and the proposed remedies, the passive stance of Obama and his administration, are extraordinary. It seems like our members of Congress don’t know recent American history–or, when it comes to the older members, even remember it. But they seem to know, by instinct, that adage from the Italian novel: “If we want everything to stay the same, everything must change.”
By JAMES RIDGEWAY
The way the Washington Post reported the story, Congress has finally pushed through “tougher” off-shore drilling regulations for oil companies.
Two key Senate committees approved legislation before the July 4 holiday that purport to change the way the federal government regulates offshore oil drilling and that penalize companies for oil spills. Both measures passed on bipartisan voice votes. One approved by the Energy and Natural Resources Committee would raise the civil and criminal penalties for a spill, require more safety equipment redundancies, boost the number of federal safety inspectors and demand additional precautions for deep-water drilling. The other, passed by the Environment and Public Works Committee, would remove a $75 million limit on oil company liability and would retroactively remove the liability cap for BP and the Deepwater Horizon explosion.
The Post article stated that these measures ”demonstrat[e] lawmakers’ eagerness to respond to the disaster in the Gulf of Mexico.” The writer ought to have more accurately said that the measures demonstrate lawmakers eagerness to look like they are responding to the disaster. In the real world, the proposed measures will serve mostly as election-year greenwashing, with little genuine impact.
Just about everyone at this point knows that liability awards will be determined not in the hallowed halls of Congress, but by knock-down, drag-out court fights. More safety precautions can gradually be rolled back or ignored, just as earlier safety regulations were rolled back or ignored in the years leading up to the BP spill. And none of this goes to the basic dilemma of whether drilling at these depths should be allowed at all, when the dangers are so great and the stakes so high. Members of Congress can see the heat the White House has gotten for daring (in an uncharacteristic move) to impose even a partial moratorium on deepwater drilling: a federal judge declared the move illegal, while right-wingers attacked it as something just short of a Communistic plot to destroy the nation’s economy.
As long as Congress tinkers around the edges of the issue, its members can avoid the explosive core. As a character in a famous Italian political novel once said, “If we want everything to stay the same, everything must change.”
Let’s talk about the overriding fact that no one, apparently, sees fit to mention: The great bulk of our domestic oil lies in public domain territory along the outer-continental shelf of the United States. Since it is already owned by the public, and is supposed to be held in trust for our well-being, the threat of “nationalizing” oil is simply a strawman. Oil is already nationalized in the United States–it is owned by the nation, and by the people. But we have basically turned over this huge asset to the energy industry, especially the oil and gas companies. This has been done through a huge system of undervalued, under-regulated leases that give companies a free hand to exploit the wealth of the public domain at almost no cost. The government has placed the disposition and oversight of this valuable resource in the hands of the Interior Department, which has a long history of connivance with the extractive industries.
In sum, we citizens of the United States have surrendered the greatest natural resource wealth of our nation to private business interests–who naturally run it for their own profit, rather than for the public good. In return, we have demanded virtually nothing. And the little we have demanded–the most basic of safety precautions, the most modest of demands for fair pricing–have been ignored and derided by companies that regularly top the Global 500 list for profitability.
Keep in mind that these are not the mythological “Main Street” American business interests, the scrappy entrepreneurial spirits so beloved by conservatives and libertarians alike. These are not hundreds and thousands of little companies duking it out in the free market. They’re a few big multinational companies, whose death grip on the world’s energy resources dates back a hundred years or more. They operate in secret through cartels to determine how these resources are parceled out, priced, and used.
One of many obstacles to any real change in this system is the absence of transparency and reliable information. For example, the oil companies, not the government, have been tasked with mapping oil and gas reserves on the public domain. This prevents any real public scrutiny, and any impartial scientific judgement on how to administer the public trust. It also serves to obscure from view the massive ripoff that constitutes the leasing system. Historically, disagreements over this system—over whether reserves are over- or under-estimated, details of environmental impacts, disputes over fair costs–all have come down to information or the lack of information.
In the last energy crisis in the 1970s, I wrote a book called New Energy together with Bettina Conner, a colleague at the Institute for Policy Studies. At that time, there was a move in Congress to make knowledge of oil reserves transparent. My book includes an excerpt from the Joint Economic Committee of the Congress in its investigation of the energy crisis in 1974. That report said:
The lack of accurate,well-analyzed data regarding energy sources and uses has placed the United States government in a ludicrous position.When those officials directly charged with administering energy policy are unable to determine accurately the extent of the present fuel shortage or to estimate reliably its potential impact on the economy. Nor can they determine fuel production costs with anything approaching the degree of accuracy necessary to administer the price control program.The government knows almost nothing about the extent of the vast mineral fuel resources contained in public lands. Tax policy formulation is hampered by the lack of analysis of existing special tax provisos for mineral fuel extraction and consequent ignorance of their impact.
William Simon, Nixon’s administrator of the Federal Energy Office, acknowledged the situation before the joint economic committee in January 1974 when he declared, “Let me say right at the outset that there has never been in existence an adequate energy data system…Today and in the years ahead we need better data on everything from reserves to refinery operations to inventories…Data we can check, verify, and cross check.’’
Despite all the study and debate, the Congress has never done anything to remedy the situation. The late Wisconsin Democratic senator Gaylord Nelson introduced legislation to create independent public libraries of basic information. Under his bill, failure to make public such details would make officials liable to prison sentences and fines. The legislation was bottled up in committee and died a silent death at the hands of powerful energy interests in Congress.
Then there was a move to establish a Federal Energy Corporation to conduct research on alternative energy and new uses of fossil fuels. This Federal Energy Corporation would have been empowered to gather and decipher data on oil and gas holdings, and even produce a limited amount of oil and gas itself, for our strategic reserve. The government would control no more than 20 percent of total oil from public territories offered for leasing, and would be a supplier of last resort. In effect,it would act as a yardstick against which to measure the private petroleum industry. It would be a hedge against the unrestrained power of this industry, which periodically gouges the American public at the pump, even though the public owns the very oil and gas it is buying from these companies. Needless to say, that initiative, too, died a sudden, quiet death.
In the 1970s those measures may have failed; today they would never even be proposed. Set against the national debate that took place four decades ago, the current discussion in Congress and the proposed remedies, the passive stance of Obama and his administration, are extraordinary. It seems like our members of Congress don’t know recent American history–or, when it comes to the older members, even remember it. But they seem to know, by instinct, that adage from the Italian novel: “If we want everything to stay the same, everything must change.”
Australian 60 Minutes story about BP Oil Disaster that BP had removed...here!
Blackwater...er, Xe...er, Paravant is back and so are their criminal acts
vidlink
The fact that these douchebag idiots are still being contracted by the govt speaks volumes about their incompetent governance. Why do we use these idiot mercenaries when we have the largest, most capable military in the world? Holy shit!
And now they've changed their name again: Blackwater, then Xe, and now Paravant.
BP is STILL using Corexit in unbelievable quantities in the Gulf
BP is the worst thing in the world as of April, 2010
And they deserve to exponentially reap what they have sewn.
I really don't want to piss you good people off this morning, but knowing most of you are as concerned about the effects of this BP oil disaster as I am, you certainly should be made aware of exactly how shitty the folks at BP are and what their supposed "clean up" consists of, and the results of their "efforts." I am posting two videos here. The first one needs to be watched because the images are mortifying. The second one is something you can just listen to--you can have it open and playing while you do something else with your eyes. But it will affect you, if you have even the smallest blackest heart. The people in charge of BP, and in charge of the govt agencies responsible for overseeing the cleanup--these people have no hearts, no consciences, and as far as I can tell, not the least bit of foresight.
The most destructive thing in the world is "hate." No matter how angry I get about something or at someone, I maintain every single fiber in me to not let my emotions respond with hate, I really do. But every day, I am made aware of more outrageous actions by BP and the govt who enables BP to continue its base level of corruption, it puts such strain on my ability to control my hate, that I am losing that ability. My empathy for people who are suffering--which because of this disaster, will soon mean every single one of us--is such that it is turning me vengeful against these awful, destructive, incapable and negligent BP and govt "people". I can feel the hate amassing in me, and I daydream about one day becoming a story on the news that ends with "... number of BP executives dead before turning the gun on himself."
Of course, that's just my twisted sense of humor trying to help me rationalize and deal with how dark my emotions toward this disaster and the efforts to contain it have become. Please don't worry about me, I control my actions, just not my emotional response toward uncaring, hateful, irresponsible jack-offs who cannot see that all that they do (and don't do) ultimately affects billions of people. In my imagination I want to take 3 truckloads of the hardest, scariest gang bangers you've ever seen, armed out the ass with AKs and more rounds than they could ever shoot, and with another truckload of respirators and other protective gear to deliver to cleanup crews, and the moment some BP corporate dick tries to stop us or confront us, we simply respond by saying, " Really?"
Watch the first video, and listen to the second one. I'm very sorry if this inspires emotions counter to your productivity today--but until we are all outraged so much to change what's going on down there, then it will continue to get worse, and we will all suffer the consequences, not just those poor people down there struggling against the govt agencies and BP trying to clean up this overwhelming nightmare destroying their lives and homes.--jef
Watch...
video link
Listen...
video link
May whatever god you believe in have mercy on us all...
I really don't want to piss you good people off this morning, but knowing most of you are as concerned about the effects of this BP oil disaster as I am, you certainly should be made aware of exactly how shitty the folks at BP are and what their supposed "clean up" consists of, and the results of their "efforts." I am posting two videos here. The first one needs to be watched because the images are mortifying. The second one is something you can just listen to--you can have it open and playing while you do something else with your eyes. But it will affect you, if you have even the smallest blackest heart. The people in charge of BP, and in charge of the govt agencies responsible for overseeing the cleanup--these people have no hearts, no consciences, and as far as I can tell, not the least bit of foresight.
The most destructive thing in the world is "hate." No matter how angry I get about something or at someone, I maintain every single fiber in me to not let my emotions respond with hate, I really do. But every day, I am made aware of more outrageous actions by BP and the govt who enables BP to continue its base level of corruption, it puts such strain on my ability to control my hate, that I am losing that ability. My empathy for people who are suffering--which because of this disaster, will soon mean every single one of us--is such that it is turning me vengeful against these awful, destructive, incapable and negligent BP and govt "people". I can feel the hate amassing in me, and I daydream about one day becoming a story on the news that ends with "... number of BP executives dead before turning the gun on himself."
Of course, that's just my twisted sense of humor trying to help me rationalize and deal with how dark my emotions toward this disaster and the efforts to contain it have become. Please don't worry about me, I control my actions, just not my emotional response toward uncaring, hateful, irresponsible jack-offs who cannot see that all that they do (and don't do) ultimately affects billions of people. In my imagination I want to take 3 truckloads of the hardest, scariest gang bangers you've ever seen, armed out the ass with AKs and more rounds than they could ever shoot, and with another truckload of respirators and other protective gear to deliver to cleanup crews, and the moment some BP corporate dick tries to stop us or confront us, we simply respond by saying, " Really?"
Watch the first video, and listen to the second one. I'm very sorry if this inspires emotions counter to your productivity today--but until we are all outraged so much to change what's going on down there, then it will continue to get worse, and we will all suffer the consequences, not just those poor people down there struggling against the govt agencies and BP trying to clean up this overwhelming nightmare destroying their lives and homes.--jef
Watch...
video link
Listen...
video link
May whatever god you believe in have mercy on us all...
Thursday, July 8, 2010
National Guard Troops Invading Neighborhoods to “Fight Drugs”
Police State
07-08-2010
Fox News 23 out of Albany, NY is airing a story at ten covering National Guard troops being sent to local neighborhoods to fight the ongoing “War on Drugs”.
It’s funny that the National Guard is in Afghanistan right now admittedly helping them grow the very opium that ends up on the streets of US cities. If the military wants to stop the mass distribution of opium in the US, the fight could be better served at the source we control and safeguard rather than our own neighborhoods.
vidlinks
07-08-2010
Fox News 23 out of Albany, NY is airing a story at ten covering National Guard troops being sent to local neighborhoods to fight the ongoing “War on Drugs”.
It’s funny that the National Guard is in Afghanistan right now admittedly helping them grow the very opium that ends up on the streets of US cities. If the military wants to stop the mass distribution of opium in the US, the fight could be better served at the source we control and safeguard rather than our own neighborhoods.
vidlinks
When the Police Control the Press
Thursday, July 8, 2010 by ProPublica
by Stephen Engelberg, ProPublica
The Serbian soldier blocking the bridge cradled his AK-47 assault rifle as he delivered a ruling that brooked no argument: You cannot cross the river. Not today.
We implored him to reconsider. We are journalists. We've driven all the way from Belgrade. Here are our credentials.
No. This road is closed.
Zashto? (Why?)
Ne! (No.)
We never made it to Zvornik, the Bosnian town just across the river. When it came to press access, the final word belonged to the men with guns. As we later learned, the Serbs had plenty to hide that spring day about their activities in eastern Bosnia.
I was reminded of that instant -- admittedly a very different set of circumstances -- when we received a call last week at ProPublica from Lance Rosenfield, a freelance photographer we had hired to work in Texas City, Texas, on stories about BP's refinery there.
Rosenfield said he had been detained by local police after snapping a picture on the road into Texas City. Rosenfield said he had shown the officers and a BP security guard a letter from ProPublica that said he was on assignment. Police said he would be "taken in" if he did not let them look at the photos in his camera.
The senior officer present, Cpl. Thomas Robison, pressed Rosenfield to describe ProPublica's forthcoming story.
Rosenfield demurred but did allow police to review his photos. No threat to national security was detected -- the pictures were innocuous shots of the refinery and signage nearby. Rosenfield was eventually allowed to leave after being warned to clear further photography with the local authorities. At the request of police, he turned over his social security number and date of birth which were promptly given to the BP security officer who was present.
The men with guns had made their determination. It doesn't appear that they had much of a legal or logical basis to do so.
Why would potential terrorists take photos from a public street when they can view detailed reasonably high-resolution satellite photos via Google? What could possibly be gained from a ground-level shot, even with a telephoto lens?
Michael Marr, a BP spokesman in Texas City, said that the company acted because "an unidentified man" had been seen taking photos near refinery facilities, including "marine loading operations." Marr said Department of Homeland Security and U.S. Coast Guard regulations require the company to report anyone "appearing to be engaged in surveillance of any kind (picture taking, note taking, shooting video, asking strange questions, etc)."
David Schulz, a media lawyer who teaches at the Columbia Law School, told me that the rules are not so broad as to allow inspection of a journalist's unpublished photos. "It is not against the law to take photos from a public street," he said.
"While federal regulations do require critical facilities to report suspicious activities, they do not sanction police demands to inspect photos taken by a working journalist," Schulz said. "A demand to see the photos smacks of censorship -- monitoring the news before it's published, with police acting as censors of what they like and don't like. Police simply don't have the power to do that, and we should all be concerned when provisions intended to safeguard our security are twisted to intimidate journalists."
In the weeks since the Deepwater Horizon exploded in the Gulf of Mexico, local authorities in Louisiana and elsewhere have made it more difficult for reporters and television crews to follow the story, restricting access to public beaches and waterways. More recently, the Coast Guard has set limits on how close news crews can come to booms and oily beaches.
There is, of course, good reason to keep the press away from potentially dangerous pollution sites. And there's at least an equally valid public policy rationale for keeping an eye on people who are photographing critical infrastructure like a refinery.
But the public and the press have good reason to be suspicious when a major corporation and the government try to curtail photography or reporters' firsthand access. The American Civil Liberties Union of Louisiana has raised questions about why reporters' movements have been restricted by local sheriffs.
And it's even harder to understand what circumstances justify allowing the police to review a journalist's work before publication.
News organizations fight hard to preserve the privacy of unpublished notes and photographs. The reasons are understandable. People often talk to reporters in confidence. We are not an arm of law enforcement and wouldn't want potential sources to feel that every dealing they have with us is open to scrutiny. News organizations routinely fight to quash subpoenas for unpublished material.
In the Texas City case, there was no confusion about Rosenfield's status as a journalist. He was carrying a letter from ProPublica confirming his assignment. The police officers who detained him made no effort to call editors here before questioning his credentials and detaining him. Marr's statement suggests that he was taking pictures near a marine loading facility. That may be true, but then a good swath of the Texas City is "near" one part of the port or another. And none of the photographs depict such facilities themselves.
This wasn't the first time journalists and the Texas City police have been in conflict. Capt. Ross Clements told me the police have a "standard practice" of reviewing photos snapped by tourists and news photographers because shots of "critical infrastructure" could be of use to terrorists.
A photographer for a local newspaper, The Galveston County Daily News, was detained in 2008 after shooting pictures of refinery workers trying to contain a leak at Marathon Oil Co.
Cpl. Robison, the local police's contact with the Joint Terrorism Task Force and the same officer who tried to get Rosenfield to disclose the contents of ProPublica's story, defended the policy, telling the Daily News:
"There's no law that says you can't take pictures from a public roadway, but the issue becomes: Are any of the shots compromising security measures?"
Michael Smith, associate editor of the Daily News, said the paper has pressed repeatedly for police to identify a federal law that permits them to review photos.
"As far as I can tell, there is no law that grants the police this power," he said.
"Nobody can point to a law of the United States of America or the State of Texas that allows police to do this," Smith continued. "This is an assumed power that the police have taken on themselves based on this amorphous notion that the demands of the security state allow this and if you're a good citizen, you shouldn't make a fuss."
To be fair, the streets of Texas City are nothing like the back roads of war-torn former Yugoslavia. But it's worth recording this historical note: The day I was stopped from entering Zvornik, a group of paramilitary soldiers had begun an "ethnic cleansing" that would leave hundreds of Muslim civilians dead. It was among the more brutal massacres of the war. One reason we know what happened is that one of the paramilitary groups invited an American photographer to accompany it.
If you don't think access matters, take a look at his photos.
by Stephen Engelberg, ProPublica
The Serbian soldier blocking the bridge cradled his AK-47 assault rifle as he delivered a ruling that brooked no argument: You cannot cross the river. Not today.
We implored him to reconsider. We are journalists. We've driven all the way from Belgrade. Here are our credentials.
No. This road is closed.
Zashto? (Why?)
Ne! (No.)
We never made it to Zvornik, the Bosnian town just across the river. When it came to press access, the final word belonged to the men with guns. As we later learned, the Serbs had plenty to hide that spring day about their activities in eastern Bosnia.
I was reminded of that instant -- admittedly a very different set of circumstances -- when we received a call last week at ProPublica from Lance Rosenfield, a freelance photographer we had hired to work in Texas City, Texas, on stories about BP's refinery there.
Rosenfield said he had been detained by local police after snapping a picture on the road into Texas City. Rosenfield said he had shown the officers and a BP security guard a letter from ProPublica that said he was on assignment. Police said he would be "taken in" if he did not let them look at the photos in his camera.
The senior officer present, Cpl. Thomas Robison, pressed Rosenfield to describe ProPublica's forthcoming story.
Rosenfield demurred but did allow police to review his photos. No threat to national security was detected -- the pictures were innocuous shots of the refinery and signage nearby. Rosenfield was eventually allowed to leave after being warned to clear further photography with the local authorities. At the request of police, he turned over his social security number and date of birth which were promptly given to the BP security officer who was present.
The men with guns had made their determination. It doesn't appear that they had much of a legal or logical basis to do so.
Why would potential terrorists take photos from a public street when they can view detailed reasonably high-resolution satellite photos via Google? What could possibly be gained from a ground-level shot, even with a telephoto lens?
Michael Marr, a BP spokesman in Texas City, said that the company acted because "an unidentified man" had been seen taking photos near refinery facilities, including "marine loading operations." Marr said Department of Homeland Security and U.S. Coast Guard regulations require the company to report anyone "appearing to be engaged in surveillance of any kind (picture taking, note taking, shooting video, asking strange questions, etc)."
David Schulz, a media lawyer who teaches at the Columbia Law School, told me that the rules are not so broad as to allow inspection of a journalist's unpublished photos. "It is not against the law to take photos from a public street," he said.
"While federal regulations do require critical facilities to report suspicious activities, they do not sanction police demands to inspect photos taken by a working journalist," Schulz said. "A demand to see the photos smacks of censorship -- monitoring the news before it's published, with police acting as censors of what they like and don't like. Police simply don't have the power to do that, and we should all be concerned when provisions intended to safeguard our security are twisted to intimidate journalists."
In the weeks since the Deepwater Horizon exploded in the Gulf of Mexico, local authorities in Louisiana and elsewhere have made it more difficult for reporters and television crews to follow the story, restricting access to public beaches and waterways. More recently, the Coast Guard has set limits on how close news crews can come to booms and oily beaches.
There is, of course, good reason to keep the press away from potentially dangerous pollution sites. And there's at least an equally valid public policy rationale for keeping an eye on people who are photographing critical infrastructure like a refinery.
But the public and the press have good reason to be suspicious when a major corporation and the government try to curtail photography or reporters' firsthand access. The American Civil Liberties Union of Louisiana has raised questions about why reporters' movements have been restricted by local sheriffs.
And it's even harder to understand what circumstances justify allowing the police to review a journalist's work before publication.
News organizations fight hard to preserve the privacy of unpublished notes and photographs. The reasons are understandable. People often talk to reporters in confidence. We are not an arm of law enforcement and wouldn't want potential sources to feel that every dealing they have with us is open to scrutiny. News organizations routinely fight to quash subpoenas for unpublished material.
In the Texas City case, there was no confusion about Rosenfield's status as a journalist. He was carrying a letter from ProPublica confirming his assignment. The police officers who detained him made no effort to call editors here before questioning his credentials and detaining him. Marr's statement suggests that he was taking pictures near a marine loading facility. That may be true, but then a good swath of the Texas City is "near" one part of the port or another. And none of the photographs depict such facilities themselves.
This wasn't the first time journalists and the Texas City police have been in conflict. Capt. Ross Clements told me the police have a "standard practice" of reviewing photos snapped by tourists and news photographers because shots of "critical infrastructure" could be of use to terrorists.
A photographer for a local newspaper, The Galveston County Daily News, was detained in 2008 after shooting pictures of refinery workers trying to contain a leak at Marathon Oil Co.
Cpl. Robison, the local police's contact with the Joint Terrorism Task Force and the same officer who tried to get Rosenfield to disclose the contents of ProPublica's story, defended the policy, telling the Daily News:
"There's no law that says you can't take pictures from a public roadway, but the issue becomes: Are any of the shots compromising security measures?"
Michael Smith, associate editor of the Daily News, said the paper has pressed repeatedly for police to identify a federal law that permits them to review photos.
"As far as I can tell, there is no law that grants the police this power," he said.
"Nobody can point to a law of the United States of America or the State of Texas that allows police to do this," Smith continued. "This is an assumed power that the police have taken on themselves based on this amorphous notion that the demands of the security state allow this and if you're a good citizen, you shouldn't make a fuss."
To be fair, the streets of Texas City are nothing like the back roads of war-torn former Yugoslavia. But it's worth recording this historical note: The day I was stopped from entering Zvornik, a group of paramilitary soldiers had begun an "ethnic cleansing" that would leave hundreds of Muslim civilians dead. It was among the more brutal massacres of the war. One reason we know what happened is that one of the paramilitary groups invited an American photographer to accompany it.
If you don't think access matters, take a look at his photos.
Weighing Safety of Weed Killer in Drinking Water, EPA Relies Heavily on Industry-Backed Studies
Agency Says Company's Evidence 'Scientifically More Robust' than Independent Research
by Danielle Ivory, Huffington Post Investigative Fund
Companies with a financial interest in a weed-killer sometimes found in drinking water paid for thousands of studies federal regulators are using to assess the herbicide’s health risks, records of the U.S. Environmental Protection Agency show. Many of these industry-funded studies, which largely support atrazine’s safety, have never been published or subjected to an independent scientific peer review.
Meanwhile, some independent studies documenting potentially harmful effects on animals and humans are not included in the body of research the EPA deems relevant to its safety review, the Huffington Post Investigative Fund has found. These studies include many that have been published in respected scientific journals.
Even so, the EPA says that it would be “very difficult for someone to put a thumb on the scale” to slant the outcome.
Atrazine is one of the most widely used herbicides in the U.S. An estimated 76 million pounds of the chemical are sprayed on corn and other fields in the U.S. each year, sometimes ending up in rivers, streams, and drinking water supplies. It has been the focus of intense scientific debate over its potential to cause cancer, birth defects, and hormonal and reproductive problems. As the Huffington Post Investigative Fund reported in a series of articles last fall, the EPA failed to warn the public that the weed-killer had been found at levels above federal safety limits in drinking water in at least four states. Some water utilities are suing Syngenta to have it pay their costs of filtering the chemical.
Now the EPA is re-evaluating the health risks of atrazine, which was banned in the European Union in 2004 due to a lack of evidence to support its safe use. That ban includes Switzerland, where atrazine’s manufacturer, Syngenta, is headquartered. The EPA expects to announce results of its re-examination of the herbicide in September 2010. It could take action ranging from restrictions on its use on crops to an outright ban. Or it could permit continued use without additional restrictions.
The company, one of the world’s largest agribusinesses, says the chemical has been used safely for decades and restrictions could prove devastating to farmers who are heavily dependent on the inexpensive herbicide. Atrazine poses “no harm” to the general population or to drinking water supplies, said company spokesman Steven Goldsmith.
EPA records obtained by The Huffington Post Investigative Fund show that at least half of the 6,611 studies the agency is reviewing to help make its decision were conducted by scientists and organizations with a financial stake in atrazine, including Syngenta or its affiliated companies and research contractors.
More than 80 percent of studies on which the EPA are relying have never been published. This means that they have not undergone rigorous “peer review” by independent scientists, a customary method to ensure studies are credible and scientifically sound before they can be published in major journals.
At the same time several prominent studies by independent academic scientists in well-respected scientific journals – showing negative reproductive effects of atrazine in animals and humans – are absent from the EPA’s list.
That finding may raise concerns about how the agency is doing its work. Rep. Henry Waxman, chairman of the House Energy and Commerce Committee, which oversees environmental regulators, told the Investigative Fund, “it’s critically important that EPA use all of the information at its disposal.”
Agency scientists may review studies not on the list, but EPA senior policy analyst William Jordan said that the 6,611 studies are those considered “relevant to the assessment of atrazine.”
‘Not Just Atrazine’
EPA spokeswoman Betsaida Alcantara said the list was not exhaustive and that some studies may not be on the list because they were not given an eight-digit “master record identification number,” which the agency uses to keep track of studies. There is “no uniform practice” for assigning numbers to studies submitted by people other than those working for herbicide, fungicide or pesticide manufacturers, she added.
EPA officials said that with a limited budget the agency must rely heavily on research sponsored by parties with a stake in the outcome. The agency’s “test guidelines” governing how experiments are conducted – the types and number of lab animals to be used, for instance. These provide sufficient safeguards against skewed results, officials said.
“Companies have a very strong incentive to follow the guidelines,” said EPA senior analyst Jordan. “We hope and think that we have written the guidelines with enough detail that it would be very difficult for someone to put a thumb on the scale, as it were, to slant the outcome, [or] to make something look safer than it is.”
Jennifer Sass, a senior scientist specializing in health issues at the Natural Resources Defense Council, argues that relying on a company to test the safety of its own product – an “inherent conflict” of interest – is part of a larger pattern at the EPA. “It’s not just happening with atrazine,” she said.
Hundreds of herbicides, pesticides, and other chemicals are regulated by the EPA, whose decisions can have significant implications for public health and on the abilities of an array of multinational companies to earn billions of dollars in the U.S.
By law, industry influence often is built into the regulatory process of the federal government. At the Food and Drug Administration, for instance, clinical trials conducted by pharmaceutical companies are used to determine whether pills and devices work and are safe. Makers of pesticides, herbicides, and fungicides also must pay for studies on their products. If they meet agency rules for conducting the testing, the EPA must accept them.
The ‘Funding Effect’
But is industry-funded research always reliable? A pair of scientists funded by the National Science Foundation, the U.S. Department of Agriculture, and the EPA scrutinized a Syngenta-funded Canadian study – one that is not on the EPA’s list. The scientists said they found numerous inaccuracies and misleading statements.
The scientists who questioned the study, University of South Florida biologists Jason Rohr and Krista McCoy, published their critique in the March 2010 issue of the journal Conservation Letters. In all, they tallied what they said were 122 inaccurate and 22 misleading statements, of which 96.5 percent appeared to support atrazine’s safety. The widely cited study focused on the herbicide’s effects on fish and other aquatic creatures.
Rohr and McCoy also asserted that the Canadian study, which was done in 2008, misrepresented more than 50 other studies. For example, it incorrectly suggested that only one scientist had demonstrated the chemical’s gender-altering effects on frogs. In fact, several other scientists demonstrated such effects.
The study dismissed one of Rohr’s papers as invalid, noting wrongly that the researcher had filtered atrazine out of a water tank while trying to assess the chemical’s effect on the aquatic organisms in the tank.
The Canadian study also misrepresented results, figures, and conclusions of other studies, according to the University of South Florida biologists.
Rohr, who served on an EPA advisory panel examining atrazine last year, told the Investigative Fund that he felt compelled “to set the record straight given the potential policy and environmental implications of these misconceptions and inaccuracies.”
The author of the Canadian study, University of Guelph (Ontario) biologist Keith Solomon, declined to respond to questions from the Investigative Fund about his financial ties to Syngenta, the company’s influence, or the inaccuracies and mischaracterizations the South Florida biologists said they had uncovered. Solomon noted that other scientists had come to similar conclusions, and that governments in the U.S. and Australia had not found any significant risk to creatures living in water.
While the critiqued study is not on the EPA’s list, several other studies by Solomon are.
Wendy Wagner, an expert in environmental policy at the University of Texas law school, said that the criticism of the Canadian study demonstrates a phenomenon sometimes referred to as “the funding effect.”
“It is next to impossible to squeeze all of the discretion out of a researcher, and when he has a strong incentive to find a particular result, the result can be unreliable and badly biased research,” said Wagner, an authority on the influence of politics and special interests on science. “There is compelling evidence that bias still pervades sponsored pesticide research – research that presumably is done in accord with EPA’s guidelines.”
Meanwhile, some independently-funded academic research published in major scientific journals is missing from the list of papers the EPA is using to make its decisions on atrazine. Absent are studies published in Proceedings of the National Academy of Sciences, Environmental Health Perspectives, and Nature. Many works by independent academic scientists such as Tyrone Hayes and Rohr – who have demonstrated a range of potential reproductive and hormonal effects of the chemical – are not on the list.
Some peer-reviewed studies from prestigious journals fail to meet the agency’s standards, said EPA analyst Jordan, citing as an example work by scientists such as Hayes, who recently found that low doses of atrazine could turn male frogs into female frogs.
Jordan explained that the agency couldn’t rely on Hayes’ and the other scientists’ research in part because the government lacked protocols for testing chemicals on frogs. So the EPA developed those guidelines and asked Syngenta to study the issue. The company’s researchers reported that they were unable to replicate Hayes’ findings. Jordan said the Syngenta study “superceded” Hayes’ and the other scientists’ studies. The EPA, on its Website, currently states that atrazine causes no such adverse effects on frogs and that “no additional testing is warranted” to address the issue.
Environmental groups have in the past criticized the EPA for allowing chemical companies to wield disproportionate influence over regulatory decisions. While evaluating the safety of atrazine in 2003, the EPA allowed representatives from Syngenta to participate in closed-door negotiations with the agency, according to documents obtained by the NRDC in 2004.
Missing Evidence
Dale Kemery, an EPA spokesman, defended the practice of omitting some studies. The agency’s safety “review may not include every study that has been conducted, since some may not meet the standards that are appropriate for a regulatory setting or they may not be on target for the issues to be assessed.”
The EPA considers industry-sponsored studies “scientifically more robust than are the studies generated by people in academia,” said Jordan, the agency's senior policy analyst. “That’s generally because companies spend more money on their studies and can attend to details that are potentially important that people in academia just can’t afford to do.”
Jordan added that agency oversight of the thousands of unpublished studies on the list is just as rigorous as a peer-review by scientists prior to publication in a scientific journal. “I know that people might not agree with this proposition, but I believe that the scientists at EPA constitute a peer-review,” he said. “Our scientists go over the studies with a fine tooth comb.”
EPA officials said they were not able to provide a list of all omitted research.
A spokeswoman for CropLife America, the Washington D.C.-based trade association that represents pesticide and herbicide manufacturers, said EPA oversight is thorough, regardless of whether studies have appeared in peer-reviewed journals.
“Whether or not they have been published, the studies submitted to EPA for registration support of pesticide products are subject to scientific review by EPA scientists that is equally, if not more, rigorous and demanding than the pre-publication peer review conducted by any scientific journal,” said spokeswoman Mary Emma Young.
Some people are skeptical about the rigor of the EPA’s scrutiny. “What worries me,” said the University of Texas’ Wagner, “is the possibility that there isn’t time or energy within EPA to give a lot of oversight to this unpublished, industry-funded research, especially when the number of unpublished studies for a chemical like atrazine are in the thousands.”
A former EPA official, epidemiologist Lynn Goldman, said it is normal and necessary for the agency to accept unpublished and industry-funded studies, most of which would not be interesting enough to publish in scientific journals.
“This is the way that the system was built by Congress. It could be changed but the EPA does not have the authority to turn the system upside down,” said Goldman, a former assistant administrator for toxic substances during the Clinton administration.
The existence of a list of relevant research for EPA review has played a prominent role in public arguments for the herbicide’s safety. Journalists, scientists, and advocates for atrazine have frequently cited the “6,000” studies.
In 2005, Anne Lindsay, then a top official in the EPA’s Office of Pesticide Programs, brought up the number of studies during congressional testimony. “Atrazine is one of the most well-examined pesticides in the marketplace,” she said, noting that “there are nearly 6,000 studies in EPA files on the human health and environmental effect of atrazine.”
Syngenta now cites the number in its press materials and on its website – not merely as a tally of studies but as proof of its safety. “Atrazine passes the most stringent, up-to-date safety requirements in the world,” said spokesman Paul Minehart. “In 2006, the U.S. Environmental Protection Agency (EPA) re-registered atrazine in 2006 based on the overwhelming evidence of safety from nearly 6,000 studies.”
EPA's List of Scientific Studies on Atrazine
by Danielle Ivory, Huffington Post Investigative Fund
Thursday, July 8, 2010
Companies with a financial interest in a weed-killer sometimes found in drinking water paid for thousands of studies federal regulators are using to assess the herbicide’s health risks, records of the U.S. Environmental Protection Agency show. Many of these industry-funded studies, which largely support atrazine’s safety, have never been published or subjected to an independent scientific peer review.
Meanwhile, some independent studies documenting potentially harmful effects on animals and humans are not included in the body of research the EPA deems relevant to its safety review, the Huffington Post Investigative Fund has found. These studies include many that have been published in respected scientific journals.
Even so, the EPA says that it would be “very difficult for someone to put a thumb on the scale” to slant the outcome.
Atrazine is one of the most widely used herbicides in the U.S. An estimated 76 million pounds of the chemical are sprayed on corn and other fields in the U.S. each year, sometimes ending up in rivers, streams, and drinking water supplies. It has been the focus of intense scientific debate over its potential to cause cancer, birth defects, and hormonal and reproductive problems. As the Huffington Post Investigative Fund reported in a series of articles last fall, the EPA failed to warn the public that the weed-killer had been found at levels above federal safety limits in drinking water in at least four states. Some water utilities are suing Syngenta to have it pay their costs of filtering the chemical.
Now the EPA is re-evaluating the health risks of atrazine, which was banned in the European Union in 2004 due to a lack of evidence to support its safe use. That ban includes Switzerland, where atrazine’s manufacturer, Syngenta, is headquartered. The EPA expects to announce results of its re-examination of the herbicide in September 2010. It could take action ranging from restrictions on its use on crops to an outright ban. Or it could permit continued use without additional restrictions.
The company, one of the world’s largest agribusinesses, says the chemical has been used safely for decades and restrictions could prove devastating to farmers who are heavily dependent on the inexpensive herbicide. Atrazine poses “no harm” to the general population or to drinking water supplies, said company spokesman Steven Goldsmith.
EPA records obtained by The Huffington Post Investigative Fund show that at least half of the 6,611 studies the agency is reviewing to help make its decision were conducted by scientists and organizations with a financial stake in atrazine, including Syngenta or its affiliated companies and research contractors.
More than 80 percent of studies on which the EPA are relying have never been published. This means that they have not undergone rigorous “peer review” by independent scientists, a customary method to ensure studies are credible and scientifically sound before they can be published in major journals.
At the same time several prominent studies by independent academic scientists in well-respected scientific journals – showing negative reproductive effects of atrazine in animals and humans – are absent from the EPA’s list.
That finding may raise concerns about how the agency is doing its work. Rep. Henry Waxman, chairman of the House Energy and Commerce Committee, which oversees environmental regulators, told the Investigative Fund, “it’s critically important that EPA use all of the information at its disposal.”
Agency scientists may review studies not on the list, but EPA senior policy analyst William Jordan said that the 6,611 studies are those considered “relevant to the assessment of atrazine.”
‘Not Just Atrazine’
EPA spokeswoman Betsaida Alcantara said the list was not exhaustive and that some studies may not be on the list because they were not given an eight-digit “master record identification number,” which the agency uses to keep track of studies. There is “no uniform practice” for assigning numbers to studies submitted by people other than those working for herbicide, fungicide or pesticide manufacturers, she added.
EPA officials said that with a limited budget the agency must rely heavily on research sponsored by parties with a stake in the outcome. The agency’s “test guidelines” governing how experiments are conducted – the types and number of lab animals to be used, for instance. These provide sufficient safeguards against skewed results, officials said.
“Companies have a very strong incentive to follow the guidelines,” said EPA senior analyst Jordan. “We hope and think that we have written the guidelines with enough detail that it would be very difficult for someone to put a thumb on the scale, as it were, to slant the outcome, [or] to make something look safer than it is.”
Jennifer Sass, a senior scientist specializing in health issues at the Natural Resources Defense Council, argues that relying on a company to test the safety of its own product – an “inherent conflict” of interest – is part of a larger pattern at the EPA. “It’s not just happening with atrazine,” she said.
Hundreds of herbicides, pesticides, and other chemicals are regulated by the EPA, whose decisions can have significant implications for public health and on the abilities of an array of multinational companies to earn billions of dollars in the U.S.
By law, industry influence often is built into the regulatory process of the federal government. At the Food and Drug Administration, for instance, clinical trials conducted by pharmaceutical companies are used to determine whether pills and devices work and are safe. Makers of pesticides, herbicides, and fungicides also must pay for studies on their products. If they meet agency rules for conducting the testing, the EPA must accept them.
The ‘Funding Effect’
But is industry-funded research always reliable? A pair of scientists funded by the National Science Foundation, the U.S. Department of Agriculture, and the EPA scrutinized a Syngenta-funded Canadian study – one that is not on the EPA’s list. The scientists said they found numerous inaccuracies and misleading statements.
The scientists who questioned the study, University of South Florida biologists Jason Rohr and Krista McCoy, published their critique in the March 2010 issue of the journal Conservation Letters. In all, they tallied what they said were 122 inaccurate and 22 misleading statements, of which 96.5 percent appeared to support atrazine’s safety. The widely cited study focused on the herbicide’s effects on fish and other aquatic creatures.
Rohr and McCoy also asserted that the Canadian study, which was done in 2008, misrepresented more than 50 other studies. For example, it incorrectly suggested that only one scientist had demonstrated the chemical’s gender-altering effects on frogs. In fact, several other scientists demonstrated such effects.
The study dismissed one of Rohr’s papers as invalid, noting wrongly that the researcher had filtered atrazine out of a water tank while trying to assess the chemical’s effect on the aquatic organisms in the tank.
The Canadian study also misrepresented results, figures, and conclusions of other studies, according to the University of South Florida biologists.
Rohr, who served on an EPA advisory panel examining atrazine last year, told the Investigative Fund that he felt compelled “to set the record straight given the potential policy and environmental implications of these misconceptions and inaccuracies.”
The author of the Canadian study, University of Guelph (Ontario) biologist Keith Solomon, declined to respond to questions from the Investigative Fund about his financial ties to Syngenta, the company’s influence, or the inaccuracies and mischaracterizations the South Florida biologists said they had uncovered. Solomon noted that other scientists had come to similar conclusions, and that governments in the U.S. and Australia had not found any significant risk to creatures living in water.
While the critiqued study is not on the EPA’s list, several other studies by Solomon are.
Wendy Wagner, an expert in environmental policy at the University of Texas law school, said that the criticism of the Canadian study demonstrates a phenomenon sometimes referred to as “the funding effect.”
“It is next to impossible to squeeze all of the discretion out of a researcher, and when he has a strong incentive to find a particular result, the result can be unreliable and badly biased research,” said Wagner, an authority on the influence of politics and special interests on science. “There is compelling evidence that bias still pervades sponsored pesticide research – research that presumably is done in accord with EPA’s guidelines.”
Meanwhile, some independently-funded academic research published in major scientific journals is missing from the list of papers the EPA is using to make its decisions on atrazine. Absent are studies published in Proceedings of the National Academy of Sciences, Environmental Health Perspectives, and Nature. Many works by independent academic scientists such as Tyrone Hayes and Rohr – who have demonstrated a range of potential reproductive and hormonal effects of the chemical – are not on the list.
Some peer-reviewed studies from prestigious journals fail to meet the agency’s standards, said EPA analyst Jordan, citing as an example work by scientists such as Hayes, who recently found that low doses of atrazine could turn male frogs into female frogs.
Jordan explained that the agency couldn’t rely on Hayes’ and the other scientists’ research in part because the government lacked protocols for testing chemicals on frogs. So the EPA developed those guidelines and asked Syngenta to study the issue. The company’s researchers reported that they were unable to replicate Hayes’ findings. Jordan said the Syngenta study “superceded” Hayes’ and the other scientists’ studies. The EPA, on its Website, currently states that atrazine causes no such adverse effects on frogs and that “no additional testing is warranted” to address the issue.
Environmental groups have in the past criticized the EPA for allowing chemical companies to wield disproportionate influence over regulatory decisions. While evaluating the safety of atrazine in 2003, the EPA allowed representatives from Syngenta to participate in closed-door negotiations with the agency, according to documents obtained by the NRDC in 2004.
Missing Evidence
Dale Kemery, an EPA spokesman, defended the practice of omitting some studies. The agency’s safety “review may not include every study that has been conducted, since some may not meet the standards that are appropriate for a regulatory setting or they may not be on target for the issues to be assessed.”
The EPA considers industry-sponsored studies “scientifically more robust than are the studies generated by people in academia,” said Jordan, the agency's senior policy analyst. “That’s generally because companies spend more money on their studies and can attend to details that are potentially important that people in academia just can’t afford to do.”
Jordan added that agency oversight of the thousands of unpublished studies on the list is just as rigorous as a peer-review by scientists prior to publication in a scientific journal. “I know that people might not agree with this proposition, but I believe that the scientists at EPA constitute a peer-review,” he said. “Our scientists go over the studies with a fine tooth comb.”
EPA officials said they were not able to provide a list of all omitted research.
A spokeswoman for CropLife America, the Washington D.C.-based trade association that represents pesticide and herbicide manufacturers, said EPA oversight is thorough, regardless of whether studies have appeared in peer-reviewed journals.
“Whether or not they have been published, the studies submitted to EPA for registration support of pesticide products are subject to scientific review by EPA scientists that is equally, if not more, rigorous and demanding than the pre-publication peer review conducted by any scientific journal,” said spokeswoman Mary Emma Young.
Some people are skeptical about the rigor of the EPA’s scrutiny. “What worries me,” said the University of Texas’ Wagner, “is the possibility that there isn’t time or energy within EPA to give a lot of oversight to this unpublished, industry-funded research, especially when the number of unpublished studies for a chemical like atrazine are in the thousands.”
A former EPA official, epidemiologist Lynn Goldman, said it is normal and necessary for the agency to accept unpublished and industry-funded studies, most of which would not be interesting enough to publish in scientific journals.
“This is the way that the system was built by Congress. It could be changed but the EPA does not have the authority to turn the system upside down,” said Goldman, a former assistant administrator for toxic substances during the Clinton administration.
The existence of a list of relevant research for EPA review has played a prominent role in public arguments for the herbicide’s safety. Journalists, scientists, and advocates for atrazine have frequently cited the “6,000” studies.
In 2005, Anne Lindsay, then a top official in the EPA’s Office of Pesticide Programs, brought up the number of studies during congressional testimony. “Atrazine is one of the most well-examined pesticides in the marketplace,” she said, noting that “there are nearly 6,000 studies in EPA files on the human health and environmental effect of atrazine.”
Syngenta now cites the number in its press materials and on its website – not merely as a tally of studies but as proof of its safety. “Atrazine passes the most stringent, up-to-date safety requirements in the world,” said spokesman Paul Minehart. “In 2006, the U.S. Environmental Protection Agency (EPA) re-registered atrazine in 2006 based on the overwhelming evidence of safety from nearly 6,000 studies.”
EPA's List of Scientific Studies on Atrazine
Hope and Change Fade, but War Endures
Thursday, July 8, 2010 by TomDispatch.com
Reasons Why We Can’t Stop Making War
Reasons Why We Can’t Stop Making War
If one quality characterizes our wars today, it's their endurance. They never seem to end. Though war itself may not be an American inevitability, these days many factors combine to make constant war an American near certainty. Put metaphorically, our nation's pursuit of war taps so many wellsprings of our behavior that a concerted effort to cap it would dwarf BP's efforts in the Gulf of Mexico.
Our political leaders, the media, and the military interpret enduring war as a measure of our national fitness, our global power, our grit in the face of eternal danger, and our seriousness. A desire to de-escalate and withdraw, on the other hand, is invariably seen as cut-and-run appeasement and discounted as weakness. Withdrawal options are, in a pet phrase of Washington elites, invariably "off the table" when global policy is at stake, as was true during the Obama administration's full-scale reconsideration of the Afghan war in the fall of 2009. Viewed in this light, the president's ultimate decision to surge in Afghanistan was not only predictable, but the only course considered suitable for an American war leader. Rather than the tough choice, it was the path of least resistance.
Why do our elites so readily and regularly give war, not peace, a chance? What exactly are the wellsprings of Washington's (and America's) behavior when it comes to war and preparations for more of the same?
Consider these seven:
The truth is that no one really knows what would happen if the U.S. disengaged from Afghanistan. But we do know what's happening now, with us fully engaged: we're pursuing a war that's costing us nearly $7 billion a month that we're not winning (and that's arguably unwinnable), a war that may be increasing the chances of another 9/11, rather than decreasing them.
Capping the Wellsprings of War
Each one of these seven wellsprings feeding our enduring wars must be capped. So here are seven suggestions for the sort of "caps" -- hopefully more effective than BP's flailing improvisations -- we need to install:
Nonetheless, if we as a society aren't willing to work hard for actual change -- indeed, to demand it -- we'll be on that military escalatory curve until we implode. And that way madness lies.
Our political leaders, the media, and the military interpret enduring war as a measure of our national fitness, our global power, our grit in the face of eternal danger, and our seriousness. A desire to de-escalate and withdraw, on the other hand, is invariably seen as cut-and-run appeasement and discounted as weakness. Withdrawal options are, in a pet phrase of Washington elites, invariably "off the table" when global policy is at stake, as was true during the Obama administration's full-scale reconsideration of the Afghan war in the fall of 2009. Viewed in this light, the president's ultimate decision to surge in Afghanistan was not only predictable, but the only course considered suitable for an American war leader. Rather than the tough choice, it was the path of least resistance.
Why do our elites so readily and regularly give war, not peace, a chance? What exactly are the wellsprings of Washington's (and America's) behavior when it comes to war and preparations for more of the same?
Consider these seven:
1. We wage war because we think we're good at it -- and because, at a gut level, we've come to believe that American wars can bring good to others (hence our feel-good names for them, like Operations Enduring Freedom and Iraqi Freedom). Most Americans are not only convinced we have the best troops, the best training, and the most advanced weapons, but also the purest motives. Unlike the bad guys and the barbarians out there in the global marketplace of death, our warriors and warfighters are seen as gift-givers and freedom-bringers, not as death-dealers and resource-exploiters. Our illusions about the military we "support" serve as catalyst for, and apology for, the persistent war-making we condone.
2. We wage war because we've already devoted so many of our resources to it. It's what we're most prepared to do. More than half of discretionary federal spending goes to fund our military and its war making or war preparations. The military-industrial complex is a well-oiled, extremely profitable machine and the armed forces, our favorite child, the one we've lavished the most resources and praise upon. It's natural to give your favorite child free rein.
3. We've managed to isolate war's physical and emotional costs, leaving them on the shoulders of a tiny minority of Americans. By eliminating the draft and relying ever more on for-profit private military contractors, we've made war a distant abstraction for most Americans, who can choose to consume it as spectacle or simply tune it out as so much background noise.
4. While war and its costs have, to date, been kept at arm's length, American society has been militarizing fast. Our media outlets, intelligence agencies, politicians, foreign policy establishment, and "homeland security" bureaucracy are so intertwined with military priorities and agendas as to be inseparable from them. In militarized America, griping about soft-hearted tactics or the outspokenness of a certain general may be tolerated, but forceful criticism of our military or our wars is still treated as deviant and "un-American."
5. Our profligate, high-tech approach to war, including those Predator and Reaper drones armed with Hellfire missiles, has served to limit American casualties -- and so has limited the anger over, and harsh questioning of, our wars that might go with them. While the U.S. has had more than 1,000 troops killed in Afghanistan, over a similar period in Vietnam we lost more than 58,000 troops. Improved medical evacuation and trauma care, greater reliance on standoff precision weaponry and similar "force multipliers," stronger emphasis on "force protection" within American military units: all these and more have helped tamp down concern about the immeasurable and soaring costs of our wars.
6. As we incessantly develop those force-multiplying weapons to give us our "edge" (though never an edge that leads to victory), it's hardly surprising that the U.S. has come to dominate, if not quite monopolize, the global arms trade. In these years, as American jobs were outsourced or simply disappeared in the Great Recession, armaments have been one of our few growth industries. Endless war has proven endlessly profitable -- not perhaps for all of us, but certainly for those in the business of war.
7. And don't forget the seductive power of beyond-worse-case, doomsday scenarios, of the prophecies of pundits and so-called experts, who regularly tell us that, bad as our wars may be, doing anything to end them would be far worse. A typical scenario goes like this: If we withdraw from Afghanistan, the government of Hamid Karzai will collapse, the Taliban will surge to victory, al-Qaeda will pour into Afghan safe havens, and Pakistan will be further destabilized, its atomic bombs falling into the hands of terrorists out to destroy Peoria and Orlando.Such fevered nightmares, impossible to disprove, may be conjured at any moment to scare critics into silence. They are a convenient bogeyman, leaving us cowering as we send our superman military out to save us (and the world as well), while preserving our right to visit the mall and travel to Disney World without being nuked.
The truth is that no one really knows what would happen if the U.S. disengaged from Afghanistan. But we do know what's happening now, with us fully engaged: we're pursuing a war that's costing us nearly $7 billion a month that we're not winning (and that's arguably unwinnable), a war that may be increasing the chances of another 9/11, rather than decreasing them.
Capping the Wellsprings of War
Each one of these seven wellsprings feeding our enduring wars must be capped. So here are seven suggestions for the sort of "caps" -- hopefully more effective than BP's flailing improvisations -- we need to install:
1. Let's reject the idea that war is either admirable or good -- and in the process, remind ourselves that others often see us as "the foreign fighters" and profligate war consumers who kill innocents (despite our efforts to apply deadly force in surgically precise ways reflecting "courageous restraint").
2. Let's cut defense spending now, and reduce the global "mission" that goes with it. Set a reasonable goal -- a 6-8% reduction annually for the next 10 years, until levels of defense spending are at least back to where they were before 9/11 -- and then stick to it.
3. Let's stop privatizing war. Creating ever more profitable incentives for war was always a ludicrous idea. It's time to make war a non-profit, last-resort activity. And let's revive national service (including elective military service) for all young adults. What we need is a revived civilian conservation corps, not a new civilian "expeditionary" force.
4. Let's reverse the militarization of so many dimensions of our society. To cite one example, it's time to empower truly independent (non-embedded) journalists to cover our wars, and stop relying on retired generals and admirals who led our previous wars to be our media guides. Men who are beholden to their former service branch or the current defense contractor who employs them can hardly be trusted to be critical and unbiased guides to future conflicts.
5. Let's recognize that expensive high-tech weapons systems are not war-winners. They've kept us in the game without yielding decisive results -- unless you measure "results" in terms of cost overruns and burgeoning federal budget deficits.
6. Let's retool our economy and reinvest our money, moving it out of the military-industrial complex and into strengthening our anemic system of mass transit, our crumbling infrastructure, and alternative energy technology. We need high-speed rail, safer roads and bridges, and more wind turbines, not more overpriced jet fighters.
7. Finally, let's banish nightmare scenarios from our minds. The world is scary enough without forever imagining smoking guns morphing into mushroom clouds.There you have it: my seven "caps" to contain our gushing support for permanent war. No one said it would be easy. Just ask BP how easy it is to cap one out-of-control gusher.
Nonetheless, if we as a society aren't willing to work hard for actual change -- indeed, to demand it -- we'll be on that military escalatory curve until we implode. And that way madness lies.
Sending Us to War Since We Can’t Get Jobs Here
by Laura Flanders
It’s too hot for outdoor activities in New York, so off I went to the cinema. Winter Bone — if you haven’t seen this extraordinary, woman-directed film about a family in trouble in the Ozarks of Missouri, I recommend it. Grim it is. Irrelevant it is not.
Winter Bone features a 17 year old girl, the sole supporter of her catatonic mom, and two younger siblings. Put up as collateral on their disappeared father’s bail, the family’s about to lose their house. 17 year old Ree looks longingly at the ROTC drills in the high school she had to leave. The best possible scenario for her is military recruitment. Actually, it’s the only out on offer, and the $40,000 signing bonus could save her family’s house.
Winter Bone made me think of Michael Massing’s essay in the New York Review of Books. Who fights and why? “With its guarantees of housing, employment, health insurance, and educational assistance,” he wrote, “the US military today seems the last outpost of the welfare state in America.” Massing’s piece appeared in April 2008, before the economic crisis really hit, before unemployment reached 10% officially (and around 16% by more precise calculations — or 44 percent if you’re in Detroit).
The US is currently shedding hundreds of thousands of jobs each month. It’s not just in the Ozarks that the recruiters are the only ones with jobs around. The economy shed 125,000 jobs in June. That’s about the number of troops we have left in Iraq.
Winter Bone just amped up the volume on a creepy question in my head. As Massing noted, “In today’s America, the hunger for a college degree is so great that many young men and women are willing to kill—and risk being killed—to get one.” And what happens to the vets when they have their degree, or when they don’t want one or already have one?
We’ve long heard about fighting people over there so we don’t have to do it here. Is the colder truth becoming that we’re sending people over there because we sure can’t employ ‘em over here? And we’re scared to death of what unrest might come with a massive return of men and women who’ve served and endured — and who expect something better for their families than starvation wages, and no social services when they get back?
It’s too hot for outdoor activities in New York, so off I went to the cinema. Winter Bone — if you haven’t seen this extraordinary, woman-directed film about a family in trouble in the Ozarks of Missouri, I recommend it. Grim it is. Irrelevant it is not.
Winter Bone features a 17 year old girl, the sole supporter of her catatonic mom, and two younger siblings. Put up as collateral on their disappeared father’s bail, the family’s about to lose their house. 17 year old Ree looks longingly at the ROTC drills in the high school she had to leave. The best possible scenario for her is military recruitment. Actually, it’s the only out on offer, and the $40,000 signing bonus could save her family’s house.
Winter Bone made me think of Michael Massing’s essay in the New York Review of Books. Who fights and why? “With its guarantees of housing, employment, health insurance, and educational assistance,” he wrote, “the US military today seems the last outpost of the welfare state in America.” Massing’s piece appeared in April 2008, before the economic crisis really hit, before unemployment reached 10% officially (and around 16% by more precise calculations — or 44 percent if you’re in Detroit).
The US is currently shedding hundreds of thousands of jobs each month. It’s not just in the Ozarks that the recruiters are the only ones with jobs around. The economy shed 125,000 jobs in June. That’s about the number of troops we have left in Iraq.
Winter Bone just amped up the volume on a creepy question in my head. As Massing noted, “In today’s America, the hunger for a college degree is so great that many young men and women are willing to kill—and risk being killed—to get one.” And what happens to the vets when they have their degree, or when they don’t want one or already have one?
We’ve long heard about fighting people over there so we don’t have to do it here. Is the colder truth becoming that we’re sending people over there because we sure can’t employ ‘em over here? And we’re scared to death of what unrest might come with a massive return of men and women who’ve served and endured — and who expect something better for their families than starvation wages, and no social services when they get back?
How the BP Spill Might Be Poisoning People Without Their Knowing It
Invisible Contamination:
by Mac Mcclelland
This post originally appeared on Mother Jones.
Rip Kirby’s got the 365-nanometer UV flashlight and I’ve got the shovel. He’s a grad student in the University of South Florida’s geology department, and we’re standing on Pensacola Beach in the middle of the night digging a hole so he can show me the layers of tar buried beneath new sand the tide has washed up. Some of the tar mat is so thick that it’s visible to the naked eye. Other traces of contamination are so subtle that they can only be seen with Kirby’s ultraviolet light, which makes crude fluoresce an unnaturally bright orange.
We trek around Pensacola Beach with the oversize light, illuminating oil everywhere: on decks, driveways, boardwalks, handrails. Blobs of it, smears of it, perfect imprints of footprints glowing neon, far beyond the waves washing oil from the Deepwater Horizon leak ashore. “The problem,” says Kirby, who works with USF’s Coastal Research Lab, “is that they’re not using proper decontamination practices in the cleanup. What they should be doing is stopping the workers at the edge of the contamination area”—the shore within the reach of the waves—”and having them get totally cleaned up or stripped down before they walk away.”
He complains about the machines that drive around collecting sand in giant sifters that are supposed to collect the tar balls while redepositing the pretty white sand. “But the sifters are breaking up the tar balls and spreading them all over the place,” Kirby says. “This operation and the traffic are spreading the contamination everywhere.”
The “traffic” would refer to tourists. Though Pensacola was hardly at full capacity this 4th of July weekend, there were plenty of beachgoers out. “We’re having fun at the Hampton Inn Pensacola Beach!” the reservations clerk at the Hampton answers. In the lobby, the lady in the asymmetrical top on HLN says the beaches are closed; past the blaring TV, families outside frolic in the emerald surf. As the hotel desk will tell you, the beach is indeed technically open. The Escambia County Health Department has erected some signs warning people to “avoid” swimming, and that children and pregnant women should avoid the area altogether. I drove down 15 miles of beach and saw only two such warnings. It’s definitely possible I missed some—they’re about the size of a sheet of computer paper.
“Did y’all go swimming?” I ask a couple coming off the beach in swimsuits and towels. They did. Did they see this sign, I ask, pointing? They lean in closer. They didn’t. “Oh!” the woman says. “Well, lotsa people are swimmin’ out there, and it seems fine.”
It does. But for the tar balls, Pensacola Beach is still jaw-droppingly gorgeous. And the messages coming out of local government are confusing. The little signs on the beach say “oil product” is present and dangerous even if it’s not visible. But health department director John Lanza made comments to the Miami Herald urging people to stay out of the water only if they saw oil in it or felt it on their skin while swimming. He also said, “We are not advising that anyone go in the water,” right before he said, “If you really want to go into the water, you’re welcome to do that.” He admitted that the EPA hadn’t yet determined if the water is safe, but not that the University of West Florida Center for Environmental Diagnostics and Bioremediation is consistently finding crude in its water samples. Nor did he acknowledge that there appears to be no information available about the presence of BP’s dispersants, which, tourists may or may not know, with excessive repeated exposure can make your red blood cells explode.
The director of the Louisiana ACLU has pointed out that it’s nobody’s business to forbid you from rolling around in tainted sand if you’re so inclined, any more than government officials can slap a cigarette out of your mouth. But as with warnings on cigarette packs, it is government officials’ responsibility to make clear how seriously you could be compromising your health.
“Being on the beach will cause respiratory problems,” a woman at the Escambia County citizens’ information line told me. “A lot of people who’ve been in contact with the oil are having that.” When I ran that past the county public information officer, she said she had no idea what I was talking about, and that neither the EPA nor the health department had advised the county to shut down the beach. The Escambia County commissioner says he’s “not afraid to close the beach” if he gets “the right kind of information.” But, understandably, he doesn’t “want to err on the side of putting several people into bankruptcy.” One anonymous health department employee knows that Pensacola’s economics will continue to temper the official messages about possible health effects. “The only way this beach is going to close,” he admitted to a group of environmentalists, “is if it’s on fire.” In the meantime, the top of the Escambia Disaster Response web page announces, “The beaches are open and ready for business!”
And so, there are people everywhere, under the impression that they’re “fine,” picking up and spreading contamination, the full extent of which is visible only under Kirby’s UV light. One of the resorts has put up oil-washing stations on its beaches—not, according to the accompanying signs, for health reasons, but so you don’t bring it into the buildings. The pier is packed with tourists fishing. When I arrive there, someone has just caught a blacktip reef shark longer than me. I join the crowd to watch the fisherman wrestle it onto its side, pin it beneath his knees, and start stabbing it to death. Just a few yards further down the pier, another fisherman has snared another one, almost as big. He picks it up by the tail, and when I turn my face away before he can swing it face-first into a wooden post, I see that the guy watching next to me is also wincing.
“This is horrible,” I say to him.
“Yeah,” he nods, but then reconsiders, and relaxes his furrowed brow. “Though I guess with all this oil, it was just gonna die anyway.”
by Mac Mcclelland
This post originally appeared on Mother Jones.
Rip Kirby’s got the 365-nanometer UV flashlight and I’ve got the shovel. He’s a grad student in the University of South Florida’s geology department, and we’re standing on Pensacola Beach in the middle of the night digging a hole so he can show me the layers of tar buried beneath new sand the tide has washed up. Some of the tar mat is so thick that it’s visible to the naked eye. Other traces of contamination are so subtle that they can only be seen with Kirby’s ultraviolet light, which makes crude fluoresce an unnaturally bright orange.
We trek around Pensacola Beach with the oversize light, illuminating oil everywhere: on decks, driveways, boardwalks, handrails. Blobs of it, smears of it, perfect imprints of footprints glowing neon, far beyond the waves washing oil from the Deepwater Horizon leak ashore. “The problem,” says Kirby, who works with USF’s Coastal Research Lab, “is that they’re not using proper decontamination practices in the cleanup. What they should be doing is stopping the workers at the edge of the contamination area”—the shore within the reach of the waves—”and having them get totally cleaned up or stripped down before they walk away.”
He complains about the machines that drive around collecting sand in giant sifters that are supposed to collect the tar balls while redepositing the pretty white sand. “But the sifters are breaking up the tar balls and spreading them all over the place,” Kirby says. “This operation and the traffic are spreading the contamination everywhere.”
The “traffic” would refer to tourists. Though Pensacola was hardly at full capacity this 4th of July weekend, there were plenty of beachgoers out. “We’re having fun at the Hampton Inn Pensacola Beach!” the reservations clerk at the Hampton answers. In the lobby, the lady in the asymmetrical top on HLN says the beaches are closed; past the blaring TV, families outside frolic in the emerald surf. As the hotel desk will tell you, the beach is indeed technically open. The Escambia County Health Department has erected some signs warning people to “avoid” swimming, and that children and pregnant women should avoid the area altogether. I drove down 15 miles of beach and saw only two such warnings. It’s definitely possible I missed some—they’re about the size of a sheet of computer paper.
“Did y’all go swimming?” I ask a couple coming off the beach in swimsuits and towels. They did. Did they see this sign, I ask, pointing? They lean in closer. They didn’t. “Oh!” the woman says. “Well, lotsa people are swimmin’ out there, and it seems fine.”
It does. But for the tar balls, Pensacola Beach is still jaw-droppingly gorgeous. And the messages coming out of local government are confusing. The little signs on the beach say “oil product” is present and dangerous even if it’s not visible. But health department director John Lanza made comments to the Miami Herald urging people to stay out of the water only if they saw oil in it or felt it on their skin while swimming. He also said, “We are not advising that anyone go in the water,” right before he said, “If you really want to go into the water, you’re welcome to do that.” He admitted that the EPA hadn’t yet determined if the water is safe, but not that the University of West Florida Center for Environmental Diagnostics and Bioremediation is consistently finding crude in its water samples. Nor did he acknowledge that there appears to be no information available about the presence of BP’s dispersants, which, tourists may or may not know, with excessive repeated exposure can make your red blood cells explode.
The director of the Louisiana ACLU has pointed out that it’s nobody’s business to forbid you from rolling around in tainted sand if you’re so inclined, any more than government officials can slap a cigarette out of your mouth. But as with warnings on cigarette packs, it is government officials’ responsibility to make clear how seriously you could be compromising your health.
“Being on the beach will cause respiratory problems,” a woman at the Escambia County citizens’ information line told me. “A lot of people who’ve been in contact with the oil are having that.” When I ran that past the county public information officer, she said she had no idea what I was talking about, and that neither the EPA nor the health department had advised the county to shut down the beach. The Escambia County commissioner says he’s “not afraid to close the beach” if he gets “the right kind of information.” But, understandably, he doesn’t “want to err on the side of putting several people into bankruptcy.” One anonymous health department employee knows that Pensacola’s economics will continue to temper the official messages about possible health effects. “The only way this beach is going to close,” he admitted to a group of environmentalists, “is if it’s on fire.” In the meantime, the top of the Escambia Disaster Response web page announces, “The beaches are open and ready for business!”
And so, there are people everywhere, under the impression that they’re “fine,” picking up and spreading contamination, the full extent of which is visible only under Kirby’s UV light. One of the resorts has put up oil-washing stations on its beaches—not, according to the accompanying signs, for health reasons, but so you don’t bring it into the buildings. The pier is packed with tourists fishing. When I arrive there, someone has just caught a blacktip reef shark longer than me. I join the crowd to watch the fisherman wrestle it onto its side, pin it beneath his knees, and start stabbing it to death. Just a few yards further down the pier, another fisherman has snared another one, almost as big. He picks it up by the tail, and when I turn my face away before he can swing it face-first into a wooden post, I see that the guy watching next to me is also wincing.
“This is horrible,” I say to him.
“Yeah,” he nods, but then reconsiders, and relaxes his furrowed brow. “Though I guess with all this oil, it was just gonna die anyway.”
MASTERS OF MAIN STREET
by James Surowiecki | JULY 12, 2010 | The New Yorker
The financial-reform bill that Congress appears ready to pass is not the panacea for financial crises that some wanted. But, given the influential Wall Street lobbies that were trying to emasculate the law, it’s surprising that it turned out to be as tough as it is. The bill limits banks’ trading activities, brings transparency to the derivatives market, gives the government the power to take over troubled institutions, and creates a new consumer financial-protection agency. This means that it will have a real impact on the bottom lines of some of the country’s biggest firms, including powerhouses like Goldman Sachs and J. P. Morgan. Yet there was one group of businessmen that succeeded where Wall Street failed, beating back regulation and insuring that Congress would let them carry on with business as usual. These unexpected masters of Capitol Hill? The nation’s auto dealers.
The reform bill was potentially alarming for auto dealers because they’re major players in the consumer-credit business. There are close to eight hundred and fifty billion dollars’ worth of auto loans outstanding in the U.S.—about as much as our total credit-card debt—and car dealers broker about eighty per cent of them. Since the central task of the new consumer financial-protection agency is to oversee the market for consumer credit, which has become something of a cesspool in recent years, it would have been natural for car dealers to fall under its jurisdiction. Instead, the dealers won a special exemption: the agency can’t touch them.
The dealers argue that this is as it should be, since they are just middlemen between borrower and lender. The subprime crisis, though, taught us that middlemen can do enormous damage: mortgage brokers (the housing market’s middlemen) were among the key culprits, originating loans based on little or no documentation, encouraging borrowers to fudge their income, and brokering loans for more than borrowers could actually afford. Auto dealers aren’t that shady, but they’re no angels, either. As a recent study of the industry by Raj Date and Brian Reed shows, dealers routinely get incentive payments for steering customers toward particular lenders, and sometimes use the financing process to tack on additional fees. Some also mark up loans to a higher rate than the lender is charging and pocket the difference—a practice that, the Center for Responsible Lending estimates, cost car buyers more than twenty billion dollars in one year.
The auto dealers won their exemption the old-fashioned way, by lobbying the hell out of Congress. But the fact that they succeeded where bigger, more powerful companies didn’t reveals something important about the politics of influence on Capitol Hill: lobbying isn’t just about money. The companies that lobbied most successfully around the financial-reform bill didn’t necessarily pay the most. Instead, they were able to bring grassroots pressure to bear on individual congressmen and to present themselves as remote from Wall Street. The auto dealers were perfectly placed to make this pitch: there are some eighteen thousand auto dealerships around the country, employing close to a million people, which means that every congressman has lots of constituents whose livelihood depends on a dealership. Auto dealers have long been among the most powerful lobbies at the state level, and that influence helps in Washington, too. The dealers leveraged their power by defining themselves as clean-living Main Street businesses rather than plutocratic Wall Street ones. It seemed like every communiqué from the dealers’ association included the phrase “Main Street auto dealers.” This was a disingenuous argument—something like seventy per cent of auto loans are securitized or financed by Wall Street—but rhetorically effective. Auto dealers may collectively make up a huge industry, but most of them are small businessmen, just the kind of regular Americans that congressmen like to be seen as standing up for.
The dealers’ victory wasn’t an anomaly: associations of small businesses and producers are often surprisingly influential. A classic example is the wool-and-mohair subsidy, which was first put in place after the Second World War, to subsidize the production of material for soldiers’ uniforms. But the subsidy stayed in place long after its military purpose disappeared, because there were wool producers in nearly every state, and they all cared a lot about keeping the subsidy intact. Similarly, among the most vociferous opponents of tougher regulations in the financial-reform bill were small banks and credit unions (which will also be exempt from the new agency’s jurisdiction). This time around, at least, the fact that small and community banks opposed a provision may well have mattered more than what a behemoth like Citigroup thought.
One could say, of course, that this is just the way interest-group democracy is supposed to work—enabling little guys to band together into effective lobbies. The problem is that the system does nothing for the littlest guy of all—the consumer. In giving the dealers their exemption, Congress may have said that it was helping Main Street over Wall Street. But what it was actually doing was putting the dealers’ interest in no oversight ahead of the public’s interest in a fair marketplace. The result is a consumer financial-protection agency that’s prevented from overseeing one of the most common, and most important, financial products that consumers buy. It’s like creating the F.D.A. and then denying it authority over pain relievers.
The financial-reform bill that Congress appears ready to pass is not the panacea for financial crises that some wanted. But, given the influential Wall Street lobbies that were trying to emasculate the law, it’s surprising that it turned out to be as tough as it is. The bill limits banks’ trading activities, brings transparency to the derivatives market, gives the government the power to take over troubled institutions, and creates a new consumer financial-protection agency. This means that it will have a real impact on the bottom lines of some of the country’s biggest firms, including powerhouses like Goldman Sachs and J. P. Morgan. Yet there was one group of businessmen that succeeded where Wall Street failed, beating back regulation and insuring that Congress would let them carry on with business as usual. These unexpected masters of Capitol Hill? The nation’s auto dealers.
The reform bill was potentially alarming for auto dealers because they’re major players in the consumer-credit business. There are close to eight hundred and fifty billion dollars’ worth of auto loans outstanding in the U.S.—about as much as our total credit-card debt—and car dealers broker about eighty per cent of them. Since the central task of the new consumer financial-protection agency is to oversee the market for consumer credit, which has become something of a cesspool in recent years, it would have been natural for car dealers to fall under its jurisdiction. Instead, the dealers won a special exemption: the agency can’t touch them.
The dealers argue that this is as it should be, since they are just middlemen between borrower and lender. The subprime crisis, though, taught us that middlemen can do enormous damage: mortgage brokers (the housing market’s middlemen) were among the key culprits, originating loans based on little or no documentation, encouraging borrowers to fudge their income, and brokering loans for more than borrowers could actually afford. Auto dealers aren’t that shady, but they’re no angels, either. As a recent study of the industry by Raj Date and Brian Reed shows, dealers routinely get incentive payments for steering customers toward particular lenders, and sometimes use the financing process to tack on additional fees. Some also mark up loans to a higher rate than the lender is charging and pocket the difference—a practice that, the Center for Responsible Lending estimates, cost car buyers more than twenty billion dollars in one year.
The auto dealers won their exemption the old-fashioned way, by lobbying the hell out of Congress. But the fact that they succeeded where bigger, more powerful companies didn’t reveals something important about the politics of influence on Capitol Hill: lobbying isn’t just about money. The companies that lobbied most successfully around the financial-reform bill didn’t necessarily pay the most. Instead, they were able to bring grassroots pressure to bear on individual congressmen and to present themselves as remote from Wall Street. The auto dealers were perfectly placed to make this pitch: there are some eighteen thousand auto dealerships around the country, employing close to a million people, which means that every congressman has lots of constituents whose livelihood depends on a dealership. Auto dealers have long been among the most powerful lobbies at the state level, and that influence helps in Washington, too. The dealers leveraged their power by defining themselves as clean-living Main Street businesses rather than plutocratic Wall Street ones. It seemed like every communiqué from the dealers’ association included the phrase “Main Street auto dealers.” This was a disingenuous argument—something like seventy per cent of auto loans are securitized or financed by Wall Street—but rhetorically effective. Auto dealers may collectively make up a huge industry, but most of them are small businessmen, just the kind of regular Americans that congressmen like to be seen as standing up for.
The dealers’ victory wasn’t an anomaly: associations of small businesses and producers are often surprisingly influential. A classic example is the wool-and-mohair subsidy, which was first put in place after the Second World War, to subsidize the production of material for soldiers’ uniforms. But the subsidy stayed in place long after its military purpose disappeared, because there were wool producers in nearly every state, and they all cared a lot about keeping the subsidy intact. Similarly, among the most vociferous opponents of tougher regulations in the financial-reform bill were small banks and credit unions (which will also be exempt from the new agency’s jurisdiction). This time around, at least, the fact that small and community banks opposed a provision may well have mattered more than what a behemoth like Citigroup thought.
One could say, of course, that this is just the way interest-group democracy is supposed to work—enabling little guys to band together into effective lobbies. The problem is that the system does nothing for the littlest guy of all—the consumer. In giving the dealers their exemption, Congress may have said that it was helping Main Street over Wall Street. But what it was actually doing was putting the dealers’ interest in no oversight ahead of the public’s interest in a fair marketplace. The result is a consumer financial-protection agency that’s prevented from overseeing one of the most common, and most important, financial products that consumers buy. It’s like creating the F.D.A. and then denying it authority over pain relievers.
THE SIGHT OF MUSIC
by Sally Law
A musical score without any measures or clefs sounds confusing—until you see it. That’s the idea behind the Music Animation Machine, which sets the work of Bach, Satie, Chopin, and other composers to an animated, Atari-like series of colored bars and dots, to visually explain pitch and timing to those who can’t understand conventional music notation. The result is a sort of meditative “Guitar Hero” experience, with each note lighting up as it’s played across a scrolling screen. MAM’s most recent video, created in June, is Beethoven’s “Great Fugue,” the last movement of his String Quartet No. 13. When the quartet premiered, the audience called for encores only of the middle movements. “And why didn’t they encore the Fugue?” Beethoven reportedly demanded. “That alone should have been repeated! Cattle! Asses!”
How to Make an American Job Before It's Too Late
By Andy Grove - Jul 1, 2010 | Bloomberg
Recently an acquaintance at the next table in a Palo Alto, California, restaurant introduced me to his companions: three young venture capitalists from China. They explained, with visible excitement, that they were touring promising companies in Silicon Valley. I’ve lived in the Valley a long time, and usually when I see how the region has become such a draw for global investments, I feel a little proud.
Not this time. I left the restaurant unsettled. Something didn’t add up. Bay Area unemployment is even higher than the 9.7 percent national average. Clearly, the great Silicon Valley innovation machine hasn’t been creating many jobs of late -- unless you are counting Asia, where American technology companies have been adding jobs like mad for years.
The underlying problem isn’t simply lower Asian costs. It’s our own misplaced faith in the power of startups to create U.S. jobs. Americans love the idea of the guys in the garage inventing something that changes the world. New York Times columnist Thomas L. Friedman recently encapsulated this view in a piece called “Start-Ups, Not Bailouts.” His argument: Let tired old companies that do commodity manufacturing die if they have to. If Washington really wants to create jobs, he wrote, it should back startups.
Mythical Moment
Friedman is wrong. Startups are a wonderful thing, but they cannot by themselves increase tech employment. Equally important is what comes after that mythical moment of creation in the garage, as technology goes from prototype to mass production. This is the phase where companies scale up. They work out design details, figure out how to make things affordably, build factories, and hire people by the thousands. Scaling is hard work but necessary to make innovation matter.
The scaling process is no longer happening in the U.S. And as long as that’s the case, plowing capital into young companies that build their factories elsewhere will continue to yield a bad return in terms of American jobs.
Scaling used to work well in Silicon Valley. Entrepreneurs came up with an invention. Investors gave them money to build their business. If the founders and their investors were lucky, the company grew and had an initial public offering, which brought in money that financed further growth.
Intel Startup
I am fortunate to have lived through one such example. In 1968, two well-known technologists and their investor friends anted up $3 million to start Intel Corp., making memory chips for the computer industry. From the beginning, we had to figure out how to make our chips in volume. We had to build factories; hire, train and retain employees; establish relationships with suppliers; and sort out a million other things before Intel could become a billion-dollar company. Three years later, it went public and grew to be one of the biggest technology companies in the world. By 1980, which was 10 years after our IPO, about 13,000 people worked for Intel in the U.S.
Not far from Intel’s headquarters in Santa Clara, California, other companies developed. Tandem Computers Inc. went through a similar process, then Sun Microsystems Inc., Cisco Systems Inc., Netscape Communications Corp., and on and on. Some companies died along the way or were absorbed by others, but each survivor added to the complex technological ecosystem that came to be called Silicon Valley.
As time passed, wages and health-care costs rose in the U.S., and China opened up. American companies discovered they could have their manufacturing and even their engineering done cheaper overseas. When they did so, margins improved. Management was happy, and so were stockholders. Growth continued, even more profitably. But the job machine began sputtering.
U.S. Versus China
Today, manufacturing employment in the U.S. computer industry is about 166,000 -- lower than it was before the first personal computer, the MITS Altair 2800, was assembled in 1975. Meanwhile, a very effective computer-manufacturing industry has emerged in Asia, employing about 1.5 million workers -- factory employees, engineers and managers.
The largest of these companies is Hon Hai Precision Industry Co., also known as Foxconn. The company has grown at an astounding rate, first in Taiwan and later in China. Its revenue last year was $62 billion, larger than Apple Inc., Microsoft Corp., Dell Inc. or Intel. Foxconn employs more than 800,000 people, more than the combined worldwide head count of Apple, Dell, Microsoft, Hewlett-Packard Co., Intel and Sony Corp.
10-to-1 Ratio
Until a recent spate of suicides at Foxconn’s giant factory complex in Shenzhen, China, few Americans had heard of the company. But most know the products it makes: computers for Dell and HP, Nokia Oyj cell phones, Microsoft Xbox 360 consoles, Intel motherboards, and countless other familiar gadgets. Some 250,000 Foxconn employees in southern China produce Apple’s products. Apple, meanwhile, has about 25,000 employees in the U.S. -- that means for every Apple worker in the U.S. there are 10 people in China working on iMacs, iPods and iPhones. The same roughly 10-to-1 relationship holds for Dell, disk-drive maker Seagate Technology, and other U.S. tech companies.
You could say, as many do, that shipping jobs overseas is no big deal because the high-value work -- and much of the profits -- remain in the U.S. That may well be so. But what kind of a society are we going to have if it consists of highly paid people doing high-value-added work -- and masses of unemployed?
Since the early days of Silicon Valley, the money invested in companies has increased dramatically, only to produce fewer jobs. Simply put, the U.S. has become wildly inefficient at creating American tech jobs. We may be less aware of this growing inefficiency, however, because our history of creating jobs over the past few decades has been spectacular -- masking our greater and greater spending to create each position.
Tragic Mistake
Should we wait and not act on the basis of early indicators? I think that would be a tragic mistake because the only chance we have to reverse the deterioration is if we act early and decisively.
Already the decline has been marked. It may be measured by way of a simple calculation: an estimate of the employment cost- effectiveness of a company. First, take the initial investment plus the investment during a company’s IPO. Then divide that by the number of employees working in that company 10 years later. For Intel, this worked out to be about $650 per job -- $3,600 adjusted for inflation. National Semiconductor Corp., another chip company, was even more efficient at $2,000 per job.
Making the same calculations for a number of Silicon Valley companies shows that the cost of creating U.S. jobs grew from a few thousand dollars per position in the early years to $100,000 today. The obvious reason: Companies simply hire fewer employees as more work is done by outside contractors, usually in Asia.
Alternative Energy
The job-machine breakdown isn’t just in computers. Consider alternative energy, an emerging industry where there is plenty of innovation. Photovoltaics, for example, are a U.S. invention. Their use in home-energy applications was also pioneered by the U.S.
Last year, I decided to do my bit for energy conservation and set out to equip my house with solar power. My wife and I talked with four local solar firms. As part of our due diligence, I checked where they get their photovoltaic panels -- the key part of the system. All the panels they use come from China. A Silicon Valley company sells equipment used to manufacture photo-active films. They ship close to 10 times more machines to China than to manufacturers in the U.S., and this gap is growing. Not surprisingly, U.S. employment in the making of photovoltaic films and panels is perhaps 10,000 -- just a few percent of estimated worldwide employment.
Advanced Batteries
There’s more at stake than exported jobs. With some technologies, both scaling and innovation take place overseas. Such is the case with advanced batteries. It has taken years and many false starts, but finally we are about to witness mass- produced electric cars and trucks. They all rely on lithium-ion batteries. What microprocessors are to computing, batteries are to electric vehicles. Unlike with microprocessors, the U.S. share of lithium-ion battery production is tiny.
That’s a problem. A new industry needs an effective ecosystem in which technology knowhow accumulates, experience builds on experience, and close relationships develop between supplier and customer. The U.S. lost its lead in batteries 30 years ago when it stopped making consumer-electronics devices. Whoever made batteries then gained the exposure and relationships needed to learn to supply batteries for the more demanding laptop PC market, and after that, for the even more demanding automobile market. U.S. companies didn’t participate in the first phase and consequently weren’t in the running for all that followed. I doubt they will ever catch up.
Job Creation
Scaling isn’t easy. The investments required are much higher than in the invention phase. And funds need to be committed early, when not much is known about the potential market. Another example from Intel: The investment to build a silicon manufacturing plant in the 1970s was a few million dollars. By the early 1990s, the cost of the factories that would be able to produce the new Pentium chips in volume rose to several billion dollars. The decision to build these plants needed to be made years before we knew whether the Pentium chip would work or whether the market would be interested in it.
Lessons we learned from previous missteps helped us. Years earlier, when Intel’s business consisted of making memory chips, we hesitated to add manufacturing capacity, not being sure about the market demand in years to come. Our Japanese competitors didn’t hesitate: They built the plants. When the demand for memory chips exploded, the Japanese roared into the U.S. market and Intel began its descent as a memory-chip supplier.
Intel Experience
Though steeled by that experience, I remember how afraid I was as I asked the Intel directors for authorization to spend billions of dollars for factories to make a product that didn’t exist at the time for a market we couldn’t size. Fortunately, they gave their OK even as they gulped. The bet paid off.
My point isn’t that Intel was brilliant. The company was founded at a time when it was easier to scale domestically. For one thing, China wasn’t yet open for business. More importantly, the U.S. hadn’t yet forgotten that scaling was crucial to its economic future.
How could the U.S. have forgotten? I believe the answer has to do with a general undervaluing of manufacturing -- the idea that as long as “knowledge work” stays in the U.S., it doesn’t matter what happens to factory jobs. It’s not just newspaper commentators who spread this idea.
Offshore Production
Consider this passage by Princeton University economist Alan S. Blinder: “The TV manufacturing industry really started here, and at one point employed many workers. But as TV sets became ‘just a commodity,’ their production moved offshore to locations with much lower wages. And nowadays the number of television sets manufactured in the U.S. is zero. A failure? No, a success.”
I disagree. Not only did we lose an untold number of jobs, we broke the chain of experience that is so important in technological evolution. As happened with batteries, abandoning today’s “commodity” manufacturing can lock you out of tomorrow’s emerging industry.
Our fundamental economic beliefs, which we have elevated from a conviction based on observation to an unquestioned truism, is that the free market is the best economic system -- the freer, the better. Our generation has seen the decisive victory of free-market principles over planned economies. So we stick with this belief, largely oblivious to emerging evidence that while free markets beat planned economies, there may be room for a modification that is even better.
No. 1 Objective
Such evidence stares at us from the performance of several Asian countries in the past few decades. These countries seem to understand that job creation must be the No. 1 objective of state economic policy. The government plays a strategic role in setting the priorities and arraying the forces and organization necessary to achieve this goal.
The rapid development of the Asian economies provides numerous illustrations. In a thorough study of the industrial development of East Asia, Robert Wade of the London School of Economics found that these economies turned in precedent- shattering economic performances over the 1970s and 1980s in large part because of the effective involvement of the government in targeting the growth of manufacturing industries.
Consider the “Golden Projects,” a series of digital initiatives driven by the Chinese government in the late 1980s and 1990s. Beijing was convinced of the importance of electronic networks -- used for transactions, communications and coordination -- in enabling job creation, particularly in the less developed parts of the country. Consequently, the Golden Projects enjoyed priority funding. In time, they contributed to the rapid development of China’s information infrastructure and the country’s economic growth.
Job-Centric Economy
How do we turn such Asian experience into intelligent action here and now? Long term, we need a job-centric economic theory -- and job-centric political leadership -- to guide our plans and actions. In the meantime, consider some basic thoughts from a onetime factory guy.
Silicon Valley is a community with a strong tradition of engineering, and engineers are a peculiar breed. They are eager to solve whatever problems they encounter. If profit margins are the problem, we go to work on margins, with exquisite focus. Each company, ruggedly individualistic, does its best to expand efficiently and improve its own profitability. However, our pursuit of our individual businesses, which often involves transferring manufacturing and a great deal of engineering out of the country, has hindered our ability to bring innovations to scale at home. Without scaling, we don’t just lose jobs -- we lose our hold on new technologies. Losing the ability to scale will ultimately damage our capacity to innovate.
Blade Didn’t Drop
The story comes to mind of an engineer who was to be executed by guillotine. The guillotine was stuck, and custom required that if the blade didn’t drop, the condemned man was set free. Before this could happen, the engineer pointed with excitement to a rusty pulley, and told the executioner to apply some oil there. Off went his head.
We got to our current state as a consequence of many of us taking actions focused on our own companies’ next milestones. An example: Five years ago, a friend joined a large VC firm as a partner. His responsibility was to make sure that all the startups they funded had a “China strategy,” meaning a plan to move what jobs they could to China. He was going around with an oil can, applying drops to the guillotine in case it was stuck. We should put away our oil cans. VCs should have a partner in charge of every startup’s “U.S. strategy.”
Financial Incentives
The first task is to rebuild our industrial commons. We should develop a system of financial incentives: Levy an extra tax on the product of offshored labor. (If the result is a trade war, treat it like other wars -- fight to win.) Keep that money separate. Deposit it in the coffers of what we might call the Scaling Bank of the U.S. and make these sums available to companies that will scale their American operations. Such a system would be a daily reminder that while pursuing our company goals, all of us in business have a responsibility to maintain the industrial base on which we depend and the society whose adaptability -- and stability -- we may have taken for granted.
I fled Hungary as a young man in 1956 to come to the U.S. Growing up in the Soviet bloc, I witnessed first-hand the perils of both government overreach and a stratified population. Most Americans probably aren’t aware that there was a time in this country when tanks and cavalry were massed on Pennsylvania Avenue to chase away the unemployed. It was 1932; thousands of jobless veterans were demonstrating outside the White House. Soldiers with fixed bayonets and live ammunition moved in on them, and herded them away from the White House. In America! Unemployment is corrosive. If what I’m suggesting sounds protectionist, so be it.
Choice Is Simple
Every day, that Palo Alto restaurant where I met the Chinese venture capitalists is full of technology executives and entrepreneurs. Many of them are my friends. I understand the technological challenges they face, along with the financial pressure they are under from directors and shareholders. Can we expect them to take on yet another assignment, to work on behalf of a loosely defined community of companies, employees, and employees yet to be hired? To do so is undoubtedly naive. Yet the imperative for change is real and the choice is simple. If we want to remain a leading economy, we change on our own, or change will continue to be forced upon us.
Recently an acquaintance at the next table in a Palo Alto, California, restaurant introduced me to his companions: three young venture capitalists from China. They explained, with visible excitement, that they were touring promising companies in Silicon Valley. I’ve lived in the Valley a long time, and usually when I see how the region has become such a draw for global investments, I feel a little proud.
Not this time. I left the restaurant unsettled. Something didn’t add up. Bay Area unemployment is even higher than the 9.7 percent national average. Clearly, the great Silicon Valley innovation machine hasn’t been creating many jobs of late -- unless you are counting Asia, where American technology companies have been adding jobs like mad for years.
The underlying problem isn’t simply lower Asian costs. It’s our own misplaced faith in the power of startups to create U.S. jobs. Americans love the idea of the guys in the garage inventing something that changes the world. New York Times columnist Thomas L. Friedman recently encapsulated this view in a piece called “Start-Ups, Not Bailouts.” His argument: Let tired old companies that do commodity manufacturing die if they have to. If Washington really wants to create jobs, he wrote, it should back startups.
Mythical Moment
Friedman is wrong. Startups are a wonderful thing, but they cannot by themselves increase tech employment. Equally important is what comes after that mythical moment of creation in the garage, as technology goes from prototype to mass production. This is the phase where companies scale up. They work out design details, figure out how to make things affordably, build factories, and hire people by the thousands. Scaling is hard work but necessary to make innovation matter.
The scaling process is no longer happening in the U.S. And as long as that’s the case, plowing capital into young companies that build their factories elsewhere will continue to yield a bad return in terms of American jobs.
Scaling used to work well in Silicon Valley. Entrepreneurs came up with an invention. Investors gave them money to build their business. If the founders and their investors were lucky, the company grew and had an initial public offering, which brought in money that financed further growth.
Intel Startup
I am fortunate to have lived through one such example. In 1968, two well-known technologists and their investor friends anted up $3 million to start Intel Corp., making memory chips for the computer industry. From the beginning, we had to figure out how to make our chips in volume. We had to build factories; hire, train and retain employees; establish relationships with suppliers; and sort out a million other things before Intel could become a billion-dollar company. Three years later, it went public and grew to be one of the biggest technology companies in the world. By 1980, which was 10 years after our IPO, about 13,000 people worked for Intel in the U.S.
Not far from Intel’s headquarters in Santa Clara, California, other companies developed. Tandem Computers Inc. went through a similar process, then Sun Microsystems Inc., Cisco Systems Inc., Netscape Communications Corp., and on and on. Some companies died along the way or were absorbed by others, but each survivor added to the complex technological ecosystem that came to be called Silicon Valley.
As time passed, wages and health-care costs rose in the U.S., and China opened up. American companies discovered they could have their manufacturing and even their engineering done cheaper overseas. When they did so, margins improved. Management was happy, and so were stockholders. Growth continued, even more profitably. But the job machine began sputtering.
U.S. Versus China
Today, manufacturing employment in the U.S. computer industry is about 166,000 -- lower than it was before the first personal computer, the MITS Altair 2800, was assembled in 1975. Meanwhile, a very effective computer-manufacturing industry has emerged in Asia, employing about 1.5 million workers -- factory employees, engineers and managers.
The largest of these companies is Hon Hai Precision Industry Co., also known as Foxconn. The company has grown at an astounding rate, first in Taiwan and later in China. Its revenue last year was $62 billion, larger than Apple Inc., Microsoft Corp., Dell Inc. or Intel. Foxconn employs more than 800,000 people, more than the combined worldwide head count of Apple, Dell, Microsoft, Hewlett-Packard Co., Intel and Sony Corp.
10-to-1 Ratio
Until a recent spate of suicides at Foxconn’s giant factory complex in Shenzhen, China, few Americans had heard of the company. But most know the products it makes: computers for Dell and HP, Nokia Oyj cell phones, Microsoft Xbox 360 consoles, Intel motherboards, and countless other familiar gadgets. Some 250,000 Foxconn employees in southern China produce Apple’s products. Apple, meanwhile, has about 25,000 employees in the U.S. -- that means for every Apple worker in the U.S. there are 10 people in China working on iMacs, iPods and iPhones. The same roughly 10-to-1 relationship holds for Dell, disk-drive maker Seagate Technology, and other U.S. tech companies.
You could say, as many do, that shipping jobs overseas is no big deal because the high-value work -- and much of the profits -- remain in the U.S. That may well be so. But what kind of a society are we going to have if it consists of highly paid people doing high-value-added work -- and masses of unemployed?
Since the early days of Silicon Valley, the money invested in companies has increased dramatically, only to produce fewer jobs. Simply put, the U.S. has become wildly inefficient at creating American tech jobs. We may be less aware of this growing inefficiency, however, because our history of creating jobs over the past few decades has been spectacular -- masking our greater and greater spending to create each position.
Tragic Mistake
Should we wait and not act on the basis of early indicators? I think that would be a tragic mistake because the only chance we have to reverse the deterioration is if we act early and decisively.
Already the decline has been marked. It may be measured by way of a simple calculation: an estimate of the employment cost- effectiveness of a company. First, take the initial investment plus the investment during a company’s IPO. Then divide that by the number of employees working in that company 10 years later. For Intel, this worked out to be about $650 per job -- $3,600 adjusted for inflation. National Semiconductor Corp., another chip company, was even more efficient at $2,000 per job.
Making the same calculations for a number of Silicon Valley companies shows that the cost of creating U.S. jobs grew from a few thousand dollars per position in the early years to $100,000 today. The obvious reason: Companies simply hire fewer employees as more work is done by outside contractors, usually in Asia.
Alternative Energy
The job-machine breakdown isn’t just in computers. Consider alternative energy, an emerging industry where there is plenty of innovation. Photovoltaics, for example, are a U.S. invention. Their use in home-energy applications was also pioneered by the U.S.
Last year, I decided to do my bit for energy conservation and set out to equip my house with solar power. My wife and I talked with four local solar firms. As part of our due diligence, I checked where they get their photovoltaic panels -- the key part of the system. All the panels they use come from China. A Silicon Valley company sells equipment used to manufacture photo-active films. They ship close to 10 times more machines to China than to manufacturers in the U.S., and this gap is growing. Not surprisingly, U.S. employment in the making of photovoltaic films and panels is perhaps 10,000 -- just a few percent of estimated worldwide employment.
Advanced Batteries
There’s more at stake than exported jobs. With some technologies, both scaling and innovation take place overseas. Such is the case with advanced batteries. It has taken years and many false starts, but finally we are about to witness mass- produced electric cars and trucks. They all rely on lithium-ion batteries. What microprocessors are to computing, batteries are to electric vehicles. Unlike with microprocessors, the U.S. share of lithium-ion battery production is tiny.
That’s a problem. A new industry needs an effective ecosystem in which technology knowhow accumulates, experience builds on experience, and close relationships develop between supplier and customer. The U.S. lost its lead in batteries 30 years ago when it stopped making consumer-electronics devices. Whoever made batteries then gained the exposure and relationships needed to learn to supply batteries for the more demanding laptop PC market, and after that, for the even more demanding automobile market. U.S. companies didn’t participate in the first phase and consequently weren’t in the running for all that followed. I doubt they will ever catch up.
Job Creation
Scaling isn’t easy. The investments required are much higher than in the invention phase. And funds need to be committed early, when not much is known about the potential market. Another example from Intel: The investment to build a silicon manufacturing plant in the 1970s was a few million dollars. By the early 1990s, the cost of the factories that would be able to produce the new Pentium chips in volume rose to several billion dollars. The decision to build these plants needed to be made years before we knew whether the Pentium chip would work or whether the market would be interested in it.
Lessons we learned from previous missteps helped us. Years earlier, when Intel’s business consisted of making memory chips, we hesitated to add manufacturing capacity, not being sure about the market demand in years to come. Our Japanese competitors didn’t hesitate: They built the plants. When the demand for memory chips exploded, the Japanese roared into the U.S. market and Intel began its descent as a memory-chip supplier.
Intel Experience
Though steeled by that experience, I remember how afraid I was as I asked the Intel directors for authorization to spend billions of dollars for factories to make a product that didn’t exist at the time for a market we couldn’t size. Fortunately, they gave their OK even as they gulped. The bet paid off.
My point isn’t that Intel was brilliant. The company was founded at a time when it was easier to scale domestically. For one thing, China wasn’t yet open for business. More importantly, the U.S. hadn’t yet forgotten that scaling was crucial to its economic future.
How could the U.S. have forgotten? I believe the answer has to do with a general undervaluing of manufacturing -- the idea that as long as “knowledge work” stays in the U.S., it doesn’t matter what happens to factory jobs. It’s not just newspaper commentators who spread this idea.
Offshore Production
Consider this passage by Princeton University economist Alan S. Blinder: “The TV manufacturing industry really started here, and at one point employed many workers. But as TV sets became ‘just a commodity,’ their production moved offshore to locations with much lower wages. And nowadays the number of television sets manufactured in the U.S. is zero. A failure? No, a success.”
I disagree. Not only did we lose an untold number of jobs, we broke the chain of experience that is so important in technological evolution. As happened with batteries, abandoning today’s “commodity” manufacturing can lock you out of tomorrow’s emerging industry.
Our fundamental economic beliefs, which we have elevated from a conviction based on observation to an unquestioned truism, is that the free market is the best economic system -- the freer, the better. Our generation has seen the decisive victory of free-market principles over planned economies. So we stick with this belief, largely oblivious to emerging evidence that while free markets beat planned economies, there may be room for a modification that is even better.
No. 1 Objective
Such evidence stares at us from the performance of several Asian countries in the past few decades. These countries seem to understand that job creation must be the No. 1 objective of state economic policy. The government plays a strategic role in setting the priorities and arraying the forces and organization necessary to achieve this goal.
The rapid development of the Asian economies provides numerous illustrations. In a thorough study of the industrial development of East Asia, Robert Wade of the London School of Economics found that these economies turned in precedent- shattering economic performances over the 1970s and 1980s in large part because of the effective involvement of the government in targeting the growth of manufacturing industries.
Consider the “Golden Projects,” a series of digital initiatives driven by the Chinese government in the late 1980s and 1990s. Beijing was convinced of the importance of electronic networks -- used for transactions, communications and coordination -- in enabling job creation, particularly in the less developed parts of the country. Consequently, the Golden Projects enjoyed priority funding. In time, they contributed to the rapid development of China’s information infrastructure and the country’s economic growth.
Job-Centric Economy
How do we turn such Asian experience into intelligent action here and now? Long term, we need a job-centric economic theory -- and job-centric political leadership -- to guide our plans and actions. In the meantime, consider some basic thoughts from a onetime factory guy.
Silicon Valley is a community with a strong tradition of engineering, and engineers are a peculiar breed. They are eager to solve whatever problems they encounter. If profit margins are the problem, we go to work on margins, with exquisite focus. Each company, ruggedly individualistic, does its best to expand efficiently and improve its own profitability. However, our pursuit of our individual businesses, which often involves transferring manufacturing and a great deal of engineering out of the country, has hindered our ability to bring innovations to scale at home. Without scaling, we don’t just lose jobs -- we lose our hold on new technologies. Losing the ability to scale will ultimately damage our capacity to innovate.
Blade Didn’t Drop
The story comes to mind of an engineer who was to be executed by guillotine. The guillotine was stuck, and custom required that if the blade didn’t drop, the condemned man was set free. Before this could happen, the engineer pointed with excitement to a rusty pulley, and told the executioner to apply some oil there. Off went his head.
We got to our current state as a consequence of many of us taking actions focused on our own companies’ next milestones. An example: Five years ago, a friend joined a large VC firm as a partner. His responsibility was to make sure that all the startups they funded had a “China strategy,” meaning a plan to move what jobs they could to China. He was going around with an oil can, applying drops to the guillotine in case it was stuck. We should put away our oil cans. VCs should have a partner in charge of every startup’s “U.S. strategy.”
Financial Incentives
The first task is to rebuild our industrial commons. We should develop a system of financial incentives: Levy an extra tax on the product of offshored labor. (If the result is a trade war, treat it like other wars -- fight to win.) Keep that money separate. Deposit it in the coffers of what we might call the Scaling Bank of the U.S. and make these sums available to companies that will scale their American operations. Such a system would be a daily reminder that while pursuing our company goals, all of us in business have a responsibility to maintain the industrial base on which we depend and the society whose adaptability -- and stability -- we may have taken for granted.
I fled Hungary as a young man in 1956 to come to the U.S. Growing up in the Soviet bloc, I witnessed first-hand the perils of both government overreach and a stratified population. Most Americans probably aren’t aware that there was a time in this country when tanks and cavalry were massed on Pennsylvania Avenue to chase away the unemployed. It was 1932; thousands of jobless veterans were demonstrating outside the White House. Soldiers with fixed bayonets and live ammunition moved in on them, and herded them away from the White House. In America! Unemployment is corrosive. If what I’m suggesting sounds protectionist, so be it.
Choice Is Simple
Every day, that Palo Alto restaurant where I met the Chinese venture capitalists is full of technology executives and entrepreneurs. Many of them are my friends. I understand the technological challenges they face, along with the financial pressure they are under from directors and shareholders. Can we expect them to take on yet another assignment, to work on behalf of a loosely defined community of companies, employees, and employees yet to be hired? To do so is undoubtedly naive. Yet the imperative for change is real and the choice is simple. If we want to remain a leading economy, we change on our own, or change will continue to be forced upon us.
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