Help Homeowners, Not Just Wall Street - Call Congress Now

This is a fairly long post, so I will summarize it quickly: Call Obama, Call McCain, Call your Representative and your Senator and tell them: NO BAILOUTS FOR WALL STREET WITHOUT HELP FOR MAIN STREET: INSIST THAT CHAPTER 13 BANKRUPTCY RELIEF BE PART OF ANY BAIL OUT PACKAGE.

In short, if you own seven or ten homes (like some people) you can go into bankruptcy and rewrite your mortgages if you are financially strapped. However, if, like most homeowners you only owe one home, you are not entitled to this relief. The mortgage banking lobby has kept this relief from home mortgage holders since 1978. Now it's time to say no more, if they want taxpayer money for their bailout, they have to accept chapter 13 relief.

There has never been a better opportunity for this, but even Sen. Obama said today maybe this can be considered on a separate track because there is so much opposition to it. If this goes off on a separate track it's as DOA as it was last April.

Call Sen Obama 1-202-224-2854 - tell him not to second-track bankruptcy relief.

Call Sen McCain. 1-202-224-2235, Call Your Senator 1-202-224-3121 (Capitol switchboard), Call Your Representative 1-202-224-3121 (Capital switchboard) - tell them no bail out without bankruptcy relief for homeowners.

Call Barney Frank 1-202-225-5931 - tell him not to back down on bankruptcy relief and let him know that you've told that to your own representatives.

What follows is a more technical analysis.
Please Repost
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Congress is debating whether to buy $700 BILLION worth of bad loans from the banks and investment companies that are responsible for this mess – cleaning up their balance sheets while taxpayers foot the bill (to quote Republican Congressman Mike Pence "nationalizing every bad mortgage in this country doesn't make sense", and I agree).

Meanwhile, distressed homeowners have received virtually no help from the federal government. The economic stimulus package passed by Congress and signed by President Bush this spring was a deeply flawed effort to protect lenders who voluntarily lend (and refinance) on more commercially wise terms. It primarily protects the new construction and financing industry but does virtually nothing to help the PEOPLE who are already in trouble.

Public concern about the state of the economy and outrage over the bail-out of AIG and the proposed $700 BILLION bail-out proposal has provided leverage to gain real relief to homeowners as part of this bail out package. However people need to CALL their congressional representatives and express their concern.

Such relief would amend the Bankruptcy Code to would allow financially distressed homeowners to use the bankruptcy code to write the cost of their home mortgages down to the value of their homes. This is not as extreme as it may sound. The Bankruptcy Code already provides this type of relief for every type of property EXCEPT for a home. The proposed amendment would only eliminate this exception and place homeowners on equal footing with everyone else.

Background

In bankruptcy, claims are roughly classified as either secured or unsecured. A secured claim is a debt that is backed up by collateral, such as a mechanic's lien or a mortgage on a home or business.

Creditors with secured claims have special rights in bankruptcy. The value of the property securing a debt must be paid to that secured creditor before it can be used to pay the claims of other creditors. However, if the value of that property is less than the debt, the secured creditor is treated like every other creditor with respect to the balance.

For example, if GMCC has a security interest in your car, when that car is sold, the money must be used to pay GMCC before any other creditor. In bankruptcy, if GMCC is owed $5,000 but and the car worth only $3,000, than GMCC must receive $3,000, paid over time, at a reasonable interest rate on account of the secured portion of its claim. If the debtor pays that much to GMCC, the debtor may keep the car. The $2,000 remainder would be treated along with other unsecured creditors and might be paid pennies on the dollar. Further, a reasonable rate of interest under existing interpretations of the Bankruptcy Code is a fixed rate between one to three points above the federal funds rate.
There is only one problem. Section 1322(b)(2) of the Bankruptcy Code provides that a chapter 13 repayment plan may "modify the rights of holders of secured claims, other than a claim secured only by a security interest in real property that is the debtor's principal residence. . . ."

It doesn't apply to home mortgages.

A person can modify any secured claim – a car loan, a consumer credit loan (such as for home furniture or applicances), a mortgage on a second residence, a summer home, rental property or any other real estate that the owner doesn't actually live in – any secured claim except for a home loan. In chapter 11, a business can use similar rules to modify secured claims on businesses or property worth hundreds of millions. But if you are trying to save your home, you are out of luck.

If you are trying to save your home from foreclosure, the Bankruptcy Code allows you to cure an existing default over a period of three to five years. However, you must otherwise keep making current payments according to the original terms, no matter how draconian or unrealistic. In other words you have to keep making the payments you currently can't meet, PLUS, something extra to make up for the amount you haven't paid already.

The net result is that the Bankruptcy Code provides no relief to homeowners caught in the current housing crisis.

The Durbin Amendment

The Durbin Amendment would change that. It was introduced by Sen. Richard Durbin and Sen. Charles Schumer on October 3, 2007. The bill was designated "S. 2136: A Bill to Address the Treatment of Primary Mortgages in Bankruptcy, and for Other Purposes". A companion version was submitted in the House of Representatives by Rep. Brad Miller (D. N.C.) and designated H.R. 3609. You can find them on Thomas

The Amendment was DOA when proposed last year. It arrived DOA when Congress debated the April 2008 economic stimulus package. It is heavily opposed by the banking industry.

There is a good chance that it will be included in the stimulus package being debated today. The price of another bail-out for the banking and investment community may be a little real relief for homeowners.

Analysis

The Durbin Amendment would allow an individual, in a bankruptcy case under chapter 13, to modify a home mortgage: just as any other secured claim may be modified. The Durbin Amendment does not give any special right to homeowners: it only gives homeowners almost the same rights that businesses or other individuals have with respect to every type of property except a home.

I said "almost the same rights". If the Durbin Amendment simply deleted the homeowner's exception from section 1322(b)(2), than homeowners would have the same rights as everyone else. The Durbin Amendment provides protections for home lenders that do not apply to other types of loans. The Durbin Amendment would add a new section 1322(b)(11) to the Bankruptcy Code which would provide that a chapter 13 repayment plan may:

....(A) modify an allowed secured claim secured by the debtor's principal residence, as described in subparagraph (B), if, after deduction from the debtor's current monthly income of the expenses permitted for debtors . . . the debtor has insufficient remaining income to retain possession of the residence by curing a default and maintaining payments while the case is pending. . . ; and

(B) provide for payment of such claim--

..(i) for a period not to exceed 30 years (reduced by the period for which the loan has been outstanding) from the date of the order for relief under this chapter; and (ii) at a rate of interest accruing after such date calculated at a fixed annual percentage rate, in an amount equal to the most recently published annual yield on conventional mortgages published by the Board of Governors of the Federal Reserve System, as of the applicable time set forth in the rules of the Board, plus a reasonable premium for risk
....
To simplify: if a homeowner's disposable monthly income is insufficient to permit the homeowner to (i) cure existing payment defaults, and (ii) continue making other current payments required by the mortgage, then: the mortgage may be rewritten to provide a 30 year term (roughly measured from the date of the original loan), at a fixed annual rate equal to the rate for conventional mortgages published by the Federal Reserve plus a small premium (usually measured by the courts at one to three percent).

This is not quite as generous to homeowners as the treatment of other secured claims. However it balances the competing interests of financially distressed homeowners with those of lender concerns regarding potential abuse of the bankruptcy system by people "who committed fraud or were speculating on the housing bubble" (to quote President Bush).

There are a number of reasons why amending the Bankruptcy Code in this way would provide effective and balanced relief for homeowners.

First, by measuring a homeowner's need for relief against his or her disposable income the amendment ensures that relief is only granted to those who need it. There is no relief for the so-called "bad debtor". Relief is not available to a homeowner who thinks she signed a bad deal but can still afford to pay according to its terms.

This protection is backstopped by the Bankruptcy Code's general requirement that a repayment plan be proposed in "good faith." If a lender proves the homeowner had (i) committed fraud in obtaining the loan, or (ii) was speculating on housing prices, or (iii) otherwise acted in bad faith, the bankruptcy judge may not approve the repayment plan even if it satisfies other requirements.

Second, the Bankruptcy Court considers each case individually, the bad apples can be effectively weeded out by the consideration of the evidence of fraud and bad faith in each individual case. Honest debtors would not be denied relief on account of the dishonest ones.

Third, this can be implemented today. Free of charge. No new bureaucracy is needed to implement this program. The Bankruptcy Courts are already in place, familiar with the law, and have more than a century (since 1898) of experience handling these types of cases.

Fourth, this does not rely upon lenders' voluntary agreement to refinance underwater home loans. The voluntary relief programs approved by Congress in April provide no incentive for lenders to assist besieged homeowners.

Lenders are reluctant to provide financial relief for distressed homeowners. This is true even though foreclosure prices are unlikely to provide returns equivalent to what could be earned from a financial workout.

It makes no practical or economic sense. However, because loans are now packaged, marketed, sold bundled, and securitized to investors all over the world, loan servicers would rather foreclose than risk incurring liability to the investors should they be dissatisfied with a workout arrangement. Additional regulatory and institutional concerns make lenders and loan servicers more willing to foreclose a property than to write forgive or reschedule a portion of the debt. Foreclosure provides finality, even if it may not be the best economic solution.

In bankruptcy, this reluctance is overcome as a matter of law. The repayment plans approved by the Bankruptcy Court are court orders that the banks are required to obey.

Fifth, bankruptcy workouts are not as costly to lenders as below-market, fire-sale foreclosure prices. Lenders will incur losses as a result of these bankruptcies. However, they are already incurring losses, and these losses would be worse if they pursued their foreclosure options.

Further, if, as appears likely, the U.S. Government, is about to buy $700 BILLION in bad home loans, we have to ask: is the Government going to go into the business of foreclosing on millions of homeowners or is it going to try to help those homeowners who were the victims of an irresponsible, rapacious, and unregulated, lending industry. Are we going to bail out the banks only to do their dirty work? Are we going to foreclose millions of homeowners while tens of CEO's are leaving their failing banks with hundreds of millions of dollars in their pockets? And, if we are going to try and aid homeowners, do we need to create a new bureaucracy when the bankruptcy courts are ready to do the job today?

There are one and a half million reasons why this all makes sense: one and a half million homes in foreclosure last month. This is a national record, a national tragedy and a national disgrace. This is the result of the rampant and wanton worship of greed, unfettered, unregulated greed at its worst. To paraphrase a line from Law & Order Criminal Intent: "What terrorists try to do to us with bombs, [these people] did with a fountain pen."

The point of all this is this: Call or write your congressional Representative or Senator today. Tell them "no more bailouts for Wall Street without help for the homeowners." Tell them to support the Durbin amendment to the Bankruptcy Code to allow homeowners to save their homes in chapter 13.

John McCain's Character

Russel Baker's column in today's New York Times made a brief reference to a "crude joke" that John McCain "notoriously told about Janet Reno, Hillary and Chelsea Clinton."

The incident occurred in June 1998:

at a Republican Senate fund-raiser, McCain told a downright nasty joke making fun of Janet Reno, Hillary Rodham Clinton and Chelsea Clinton.

The fact that McCain had made the tasteless joke was reported in major newspapers, as was the vain attempt by his press secretary to initially deny what McCain had done. But in several major newspapers, the joke itself was kept a secret. When McCain subsequently apologized to President Clinton, the Washington Post, in its personality section, noted the apology but said the joke "was too vicious to print."

I remember this vaguely because I recall that at the time I was mystified by the media's rare exercise of restraint and self-censorship. These are, after all, the same media outlets that reported the story of Monica Lewinsky and the cigar.

The Los Angeles Times, in its Life & Style section, provided an oblique rendering of the joke that did not fully convey its ugliness. When Maureen Dowd penned a column in the New York Times about the joke, she wrote that McCain "is so revered by the press that his disgusting jape was largely nudged under the rug." But Dowd chose not to relay the joke, either.

The joke did appear in McCain's hometown paper, the Arizona Republic, and the Associated Press did report the joke in full, so everyone in the press had access to McCain's words. But by censoring themselves, the Post, the Times and others helped McCain deflect flak and preserved his status as a Republican presidential contender.

Salon feels its readers deserve the unadulterated truth. Though no tape of McCain's quip has yet emerged, this is what he reportedly said:

"Why is Chelsea Clinton so ugly?
Because her father is Janet Reno."

"A Joke to Bad to Print?" published at Salon.com

Yes, it's very un-PC. It's rabidly homophobic. Its anti-feminist. Big deal.

What really bothers me is that the subject of McCain's joke was an 18 year old child, who was guilty only of being the daughter of a man who's politics he disagreed with. Does a man who tells jokes about the CHILDREN of his adversaries really have the moral backbone that John McCain claims?

What kind of a man would really find that funny, and worse, worthy of repeating, except with utter contempt?

When Clinton was first elected in 1992, how many right-wing flamers in internet chat rooms loved to make jokes about Chelsea's appearance. At the time she was only 12, and even then I thought how horrible can these people be to taunt a 12 year old girl they've never even met because they don't like her father? I expect such behavior from children, but not adults.

It is shocking that McCain belabored this sorry, sorry, joke as late as 1998.

But then, he offered up his wife to be "Miss Buffalo Chip" two weeks ago.

Some people never learn.

To Nuke or Not to Nuke? That is a question.

To Nuke or Not to Nuke? That is a question.

In 1962, Rachel Carson first published Silent Spring, and so began the modern re-awakening of environmental awareness. It has taken more than 40 years, but the world seems, at last (and despite George Bush & Dick Cheney), to have reached a consensus that global warming is a serious problem that needs to be addressed.

Unfortunately, pressed by the very real need to reduce global warming, and the equally real need to reduce our reliance on fossil fuels, many politicians, and even some environmentalists, are advocating the need to construct a new generation of nuclear power plants. Both John McCain and Barack Obama have publicly stated their support for building more nuclear power plants as a response to global warming and our reliance on imported fossil fuels. There are even a few notable environmentalists have reversed their opposition to nuclear power.

This is a very bad idea for a number of reasons.

First using nuclear power will NOT reduce greenhouse emissions.

There is a lot of information on the internet regarding the carbon footprint of nuclear power. However, most of it is either on nuclear industry web-sites or regurgitates, without questioning, what can be found on them.

The industry (and certain politicians) want us to believe that nuclear power plants have a much smaller carbon footprint than fossil fuel electric plants.

And the truth is that the OPERATION of nuclear power plants generates fewer carbon emissions than the OPERATION of coal, gas or oil plants.

However, if you take into account the carbon emissions of the entire nuclear cycle, you get a very different picture.

The nuclear cycle includes mining uranium ore, refining it, processing it, fabricating it into fuel rods, recycling the used fueld rods & storage of the spent nuclear fuel. It includes the cost of transporting nuclear fuel. It includes storing depleted uranium (what's left over after processing) and tailings (what's left over after refining. and construction, It includes constructing the plant, operating it during its life cycle, decommissioning it at the end of its useful life and storage of the radioactive containment. the carbon footprint is about the same for both the nuclear and the fossil fuel industry.

Further, the world's known supplies of uranium are expected to be exhausted between 2030 and 2050, as the supplies become more limited in quantity and quality, the environmental footprint becomes increasingly larger.

The net result is that when you consider the entire fuel cycle, not just the operation of the plant, the net result is that the nuclear fuel cycle does not provide any significant reduction in carbon emission over the fossil fuel cycle, and may, in fact result in a net loss.

Second the nuclear fuel cycle CONSUMES more electricity than it Produces

I knew that as of 1980 three percent of total US electric production (25% of total nuclear electric generation) was used simply to run the country's three nuclear fuel processing plants. So I have always assumed that adding in the cost of mining, construction, operation and waste storage had to add significantly to the total power cost.

However, the statistics to which I had access were 28 years old, and I was, after all, only making an assumption. I decided it was time to find something more recent.

It is remarkable how little information there is on this point on the internet. You can easily find estimates of how much electricity is produced by nuclear generating plants. You can also find a wealth of statistics on how much of the electricity in any given area (the world, a country, a state, a county) is produced by nuclear power, and what percentage of that localities power is produced by other means in comparison.You can even find statistics broken down between commercial and residential and various industrial sectors.

But what is almost impossible to find is an analysis of how much electricity the nuclear power industry actually consumes.

Nuclear Power - The Energy Balance, a report by Jan Willem Storm van Leeuwen, Senior Scientist, Ceedata Consultancy, Chaam, Netherlands, and Philip Smith, updated as of February 2008 concludes that after taking into account mining, refining, processing, fabricating, recycling and storing nuclear fuel, constructing, operating, decommissioning and storing nuclear power plants, and the quantity and quality of known and suspected world-wide deposits of uranium ore, that the net electric output of the nuclear cycle is profoundly negative. In particular the report concludes that the industry while marginally positive now, will drop sustantially into the negative between the years 2030 and 2050 as minable uranium deposits decline in quality.

Personally, I think the author has made some assumptions that are more favorable to the nuclear industry than is deserved. For example, he assumes every nuclear power plant will have a useful life of 50 years, though not a single reactor has reached that grand old age and several have been retired prematurely (Chernobyl and Three Mile Island are two well known examples. The Enrico Fermi plant in Detroit, less well known than the other two, melted down on it's first day of operation and was encased in concrete. The story is the subject of the book "We Almost Lost Detroit.", so-titled after a quote by one of the emergency service workers, and Gil Scot Heron's song of the same name.

But little quibbles aside, the report's unmistakable conclusion is that investment in nuclear energy is a losing proposition, that on balance the nuclear industry CONSUMES more electricity than it produces.

Now the point is, of course, arguable and this is the only study I have found. But it is very well researched and I urge you to take a look at it and draw your own conclusions.

Nuclear Power is NOT a smart investment

Even if the net result of forty year's operation of nuclear power plants is negative, either from a standard of greenhouse emissions or net power generation, it may be argued we need the energy now as we develop new technologies. I have two response to this argument.

First, constructing a nuclear power plant is no simple feat. From planning state to completion it takes a minimum of ten years to build one nuclear power plant (Long Island Lighting Company took 20 years from planning stage to completion of its Shoreham Nuclear Power Station, bankrupting itself in the process and ultimately agreeing to be bought out by the Long Island counties that it served). Not a single application for a construction license has been issued in nearly 30 years. If we decided to start building nuclear power plants tomorrow they would have ZERO impact on our energy situation for AT LEAST TEN YEARS and possibly much more.

Second, constructing nuclear power plants is incredibly expensive. When LILCO descited to build the Shoreham NPS it first estimate the cost at $65 million, than $170 billion, than $2.6 billion, than $3.3 billion. When the company finally ceded control to the Long Island Power Authority it had spent in excess of $5.2 billion dollars and had still not put the plant into commercial operation. The $5 billion dollar plus cost of the Seabrook Nuclear Power Station drove its owner/builder, Public Service Co. of New Hampshire into bankruptcy, where it's assets were sold and its shareholders received nothing in return for their investment (it should be considered that many retirees hold stock in public electric companies because they are considered safe investments with stable returns, the bankruptcy of PSCoNH, financially ruined not just a company, but a large number of fixed income retirees who had depended upon their investment in it).

Now, imagine that the cost of constructing a power plant now hasn't inflated in 20 years, the cost of building ten nuclear power plants will be somewhere around $52 billion. The cost of builing 100 will be HALF A TRILLION DOLLARS and they won't produce as much electricity as a AAA battery for at least ten years.

Is that a wise investment strategy? It is if you own a company like Halliburton that constructs nuclear power plants. But for the rest of us, I think we'd be better off if we spent 1/100th of that money on funding truly alternative, renewable energy sources: sources we can start using right now, not ten years in the future.

Walk the Walk or Don't Talk the Talk?

If nuclear power is so obviously the answer, why do we hear so much talk about it? Why aren't they building plants.

If you believe the hype, they stopped building nuclear power plants because of the radical environmentalists and public protests at the plants and the regulatory structure (blamed by the industry on the radical environmentalist agenda, but nowadays credited by the industry with making US designed reactors the world's safest).

Let's debunk that myth really fast. I was there. I became involved with the anti-nuclear power movement in 1976 (three years before Chernobyl). I helped to organize anti-nuclear protest marches and rallies, including a 1979 rally in Battery Park, NYC, that brought 250,000 people and a nuclear freeze rally in Central Park that brought 800,000. I helped plan civil-disobedience actions at the gates of Shoreham and other nuclear power plants. I was frequently quoted by local television, radio and newspapers.

I would LOVE to take credit for stopping the nuclear power industry back then. I really would. But the reality is, and I knew this then, that the nuclear power industry had stopped seeking construction licenses long before Three Mile Island.

[fn. I keep mentioning TMI because it was a watershed moment in the public's perception of the nuclear industry.]

While TMI dramatically exposed the economic and health risks of the industry. This occured in 1979 at a time when a relatively few power companies were struggling to complete the last power plants that had previously commenced construction.

This construction of these few plants, in each case, was impossibly over budget. Theserecord construction costs were passed on to customers (who were not receiving energy in return as the reactors were under construction). For example, At one point in the early 1980's LILCO sought a 51% electric rate increase, wholly for construction costs.

The dramatic public airing of the TMI crisis, joined to the economic interest of homeowners struggling, even then, to pay their energy bills, swelled the ranks of the anti-nuclear environmentalists for a period of time and accorded the movement significant publicity.

However, by that point the movement was only trying to (i) stop the industry from completing the few plants in construction and (ii) close the ones that were already operating. The construction industry had already decided that it was no longer going to build these albatrosses.

Further, the influence of the anti-nuclear power movement waned as the few plants still under construction were completed or cancelled, and public attention drifted. The heyday of political power for the anti-nuclear power movement lasted a glorious three years from 1979-82, and it was never particularly powerful at that, being viewed mostly by the public as a small bunch of radicals marching to and sitting-in at the power plant gates.

Does anyone really believe that we had the kind of political power necessary to overcome the alligned interests of Westinghouse, General Electric, Bechtel Corporation (led by Caspar Weinberger, later Reagan's Secretary of Defense), the mining industry, the electric power companies, the banks that financed them? For christ sake, I walked around back then wearing long hair and a bandana.

I believe in America, I believe in Democacy, I believe that people CAN make a difference. But even I am not that gullible.

So I would LOVE to take credit for ending the nuclear power industry. I would LOVE to take even partial credit for that. Even a tiny, iddy-biddy, little partial. BUT, I have to admit that we had nothing to do with it. Nuclear power generation is economically unsustainable. Three years of occasional back-page news coverage of small ineffectual protests, really had nothing to do with the fact that the nuclear industry, all by itself, decided that nuclear power plants were not worth building. All we managed to do (some of us) was gleefully accept the blame when the power companies blamed us for their own undoing.

When you read about how many nuclear reactors there are in France or another country, the first thing you have to ask yourself is who owns them? In America, most electric power is generated by investor owned utilities. Independent corporations. In most of the world, electric production is considered a public function. There are nuclear power plants in France, but they were built and paid for with French tax francs.

If our utility companies are not willing to build these plants, if they recognize that they can not build these plants and make money doing so, why should we spend our tax dollars to subsidize them? We're being asked to pay for the electricity twice, to build it for the company, and then to pay them to run it. Are we to anticipate the nationalization of our electric industry as in France? I don't think so.

But as they say, walk the walk or don't talk the talk, there has been nothing preventing any company from seeking a license and constructing a nuclear power plant except for the fact that it doesn't make financial sense to anyone. If it was really a viable business, someone would already be building them.

So when you hear someone touting nuclear power and how much we need to produce more of it, ask them if they are talking about producing energy, or subsidizing some of the wealthiest and most powerful construction companies on the planet. If Halliburton isn't willing to risk it's money on nuclear power, than why should we risk our tax dollars to ensure their profit.

What About Insurance?

Nuclear power is a safe bet right? It's so safe the power companies should be able to insure themselves against any risk of loss right?

Wrong. The insurance industry does not take risks. It makes rational assessments based on extensively researched data sets. Insurance companies don't want to have anything to do with nuclear power.

The insurance industry's unwillingness to take on nuclear power nearly crippled the industry at the outset. No one was willing to build a commercial nuclear plant even though firms were willing (back then) to guaranty construction costs (in business terms, we call this a loss-leader, build one at a guaranty now, even if it's a loss, so we can build ten later at cost plus pricing).

Congress came to the rescue by passing the Price-Anderson Act in 1957. In short, the Price-Anderson Act (as amended in 1988), limits the liability of any single nuclear plant, and the entire nuclear industry, for any single nuclear accident. But allow me to explain it in the words of the Nuclear Information & Resource Service:

The provisions that create liability coverage for nuclear power are interesting: essentially the industry is yoked at the neck--all will pay if any one has a major accident.

First, reactor owners pay into a self-insurance pool of $200 million, designed to cover events that fall short of a Chernobyl-style disaster. A second pool of about $8 billion would be composed of fees levied to every operating reactor in the US, to be triggered by an accident that exceeds the first pool. Each reactor–there are 103 operating today–would pay a share prorated from the total, up to $79 million each ($75 million plus a 5% insurance surcharge), paid over a 7-year period--or $10+ million per reactor, per year. The liability of the nuclear industry for that accident is then capped.

Thus ~ $8 billion is the maximum financial "contribution" that the commercial nuclear industry would make in the event of nuclear catastrophe. Beyond the cap, taxpayers would pick up the tab in the form of disaster relief funds, and /or affected individuals–victims– would absorb the real costs.

Eight billion dollars is a "fine chunk of change," however some estimates have placed the costs of Chernobyl above $350 billion to date. Sandia National Lab in 1982 projected that a major accident at the Indian Point reactors on the Hudson River near Manhattan would exceed $300 billion (in 1982 dollars). Taxpayer exposure to nuclear liability under Price Anderson is significant, and shows $8 billion to be what it is: a small contribution.

In other words, if a Chernobyl type accident were to occur tomorrow, the private company that owns the plant will pay no more than $75 million, the industry will kick in $8 billion over ten years (oh, by the way, that's all charged to the electricity users, consumers, customers, you and me!) and the balance of the damage, possibly as much as $342 billion or more will be paid by Mr. & Ms. John Q. Taxpayer (or we can borrow it from the Chinese like everything else these days).

This is one more example of economics only an idiot could admire.

All That's Besides the Point

Okay, so nuclear power is a wash as far as global warming is concerned, it is a wash as far as our energy future is concerned, and it is financially ruinous.

But all of that is besides the point. Let's suppose the scale really tips out at even, or maybe even a little bit in the industry's favor.

The real issue remains health and safety. The 1986 Chernobyl disaster resulted in the evacuation and resettlement of over 336,000 people. The IAEA has concluded that approximately 9,000 people will die as a result of the 1986 Chernobyl disaster. Chernobyl left an enormous swath of radiation across vast stretches of Ukraine and Byelaruss, formerly the bread-basket of the Soviet Union. Here's a map prepared by the CIA in 1996 - ten years after the event:

Can you imagine that happening to the American Midwest? What if the plant had been near Chicago or NYC. Can we evacuate and resettle everyone in New York City if there is a Chernobyl type catastrophe at Indian Point? And Chernobyl, as bad as it was, was not the worst possible nuclear accident that could have happened. It is simply the worst that has happened to date.

Hardly a day goes by that the Nuclear Regulatory Commission doesn't receive at least one incident report regarding improper or unsafe conditions or procedures, or radioactive releases at one of the country's power plants. Some of these are serious. The industry's safety record is abysmal as can be testified to on a number of sites on the internet. For that matter, you can go to the NRC's own web page and read the daily listing of event reports (for civilian reactors anyway).

And if John McCain repeats the canard that there has never been a nuclear accident in the Navy's history of handling nuclear powered ships don't buy that either. For starters there are the three sailors who died at the Idaho Falls testing facility (one so radioactive his body was cut into parts and buried in separate cannisters). But you can find more about that on the web to.

And then again, there's the Price-Anderson Act. If nuclear power is Soooooooo safe, then why does the industry need an exemption from liability? If the insurance company's can't price a policy high enough to consider taking on this risk, why should the taxpayer? The Chernobyl accident price tag has been estimated at $350 billion, but if it happend here tomorrow, the industry would only pay $8 billion of that amount (barely two percent). If the industry won't take this risk, why should we, the public, uninvolved, as we are, in any part of the process from the day the ore is mined to to the day the reactor is decommissioned and stored as radioactive waste? The industry wasn't willing to take this risk in 1957 when the price of constructing a reactor was guarantied by the construction firm and under $100 million. Is it conceivable they would undertake a $5 billion or more, ten-year, investment in new construction today if they did not still have this cap on liability? If the Price-Anderson Act was not in force today, you wouldn't hear ANYONE advocating building more nuclear power plants, not even Halliburton.

If they won't walk the walk, why should we listen when they talk the talk?

That IS the Question.

So the question is, if nuclear power, at best, is only a very minor improvement over fossil fuels in terms of net energy production and carbon emissions, if it is a hopelessly uneconomic industry that can not exist without vast government subsidies on the scale of the Iraq war (money we will, of course, have to borrow from the chinese), if we can not know when we spend ten years and five or more billion dollars building a plant whether it will operate for one day or fifty years, if there is a risk that at any moment in the plant's life-cycle that an accident can occur rendering entire cities or vast sections of America's heartland unlivable and unusable, if NOONE is willing to PAY for any of this, if they are only willing to do it if they can place all of the costs and risks on the consumer, taking all of the profits for themselves, and otherwise disclaiming any liability, if all of these things are as true today as they were 30 years ago when the industry stopped spending its own money on these things:

WHY IN THE WORLD WOULD ANYONE THINK IT MAKES SENSE TO INVEST ONE SINGLE PUBLIC TAX DOLLAR IN THEM NOW?

And THAT is the question.

[There is a lot of loose talk and speculation about so-called new "safer" nuclear technologies such as the use of MOX (varieties of uranium oxide fuel mixtures), and pebble bed reactors or PBR's. None of these technologies are any more risk free than those currently in use. MOX fuels are powerful alpha emitters and they cause containment rods (for fuel) and containment vessels (for the reactor) to decay more quickly than other fuels. PBR pellets are just as capable of melting down as are fuel rods. If any of these technologies was truly viable, or truly safe, the industry would be adopting them on a commercial scale.]

Ready to be President

Enough Already!

Earlier this week, former Pres. Bill Clinton was asked by an interviewer whether Barack Obama was "ready" to be president of the United States. Bill's replied that nothing, not even eight years serving as Vice President, really prepared anyone to be president.

The media response has been an overwhelming banshee wail of "why did Bill dis Obama?" so.

Why must the media respond to every thoughtful comment with such over the top hyperbole?

President Clinton knows, as only three or four other people do, what it is like to actually be president. Let's take his words at face value. What DOES prepare someone to be President? Is there any other job in the world that places that much responsibility on the head of one person? I thought his answer was fair and if it was a dis to Obama, it was just as much a dis to McCain, and if anyone had asked Clinton the follow-up question, there is little doubt he would have said the same thing about John McCain.

But let's go beyond that for a minute.

Our current President, George Bush, prepared for the presidency by avoiding the draft and the Vietnam war, coking up and boozing when he was younger, and bankrupting every company he ever ran. His term as Governor of Texas is notable only for the large number of executions and an astonishing increase in environmental pollution.

Exactly how did that qualify George Bush to be President?

Ronald Reagan. What prepared him to be President? Before becoming President, Reagan was a has-been actor and a hammy corporate spokesman. His term as Governor of California was notable only for the rioting he presided over.

What were John Kennedy's qualifications? He was rich, he had an attractive wife, mob connections, and one (or two?) terms in the Senate.

Arguably the only two Presidents we have had in my 50 years who were prepared, or nearly so on day one were Richard Nixon (he was VP under Eisenhower), and George Bush the First (who had been VP for eight years and before that was the US Ambassador to China and director of the CIA among others).

And look how their terms turned out.

Aside from George Bush, Ron Reagan was the least qualified President of the last 50 years, and yet many Americans (sorry, I'm not one of them) credit him with ending the Cold War and believe he was one of America's greatest presidents. (By contrast, George Bush the Second is easily one of America's worst presidents and will almost certainly be convicted as a war criminal if he is ever brought to trial for his crimes against the American and Iraqi people, and all of the Disappeareds he and his cronies have sent off to be tortured in secret.)

So I guess I have two points. First, what the hell does that question mean anyway: "is he ready to be President"? What makes someone ready? Second, Clinton had it exactly right. There is nothing that prepares anyone for the job.

So what we have to rely on is our impression of the candidates' judgment. Not "are they ready" - but do we think that in a crisis this person is more or less likely to come up with the proper response.

The bottom line to me, is that the scorn being leveled on Clinton for his remarks should have been leveled at the interviewer. The question was not merely pointless, but it was unfair. A "fair and balanced" question would have been "do you think EITHER Obama or McCain is ready to be President?" or it should have been followed up with a question about Clinton's opinion concerning McCain's readiness.

Obviously, I believe Obama is more likely to make the right decisions than McCain. McCain has flip-flopped on every principled position he held before George Bush became president. His short-term "solutions" to our country's energy and economic problems are gimmicks that will do nothing to help America in the short-term or the long-term. He is in the pockets of the Banks (hey, remember the Keating Five scandal?) and Big Oil, the industries that have been bleeding this country dry. He supported the Iraq war when it was obvious to Obama (as it should have been to everyone) that the case for war was FALSE. Yes... McCain was right, we should have gone into Iraq with more troops than we did, but (i) that ASSUMES that we should have gone into Iraq in the first place, and (ii) he wasn't a "maverick" on this issue, he was listening to what the Generals Bush fired for not telling him what he wanted to hear (at least as far as troop levels were concerned).

Hey, dropping bombs on villagers from 20,000 feet and spending four years in a vietnamese torture camp may make McCain a war hero, but it DOESN'T qualify him to make military decisions. He skated through Annapolis as a legacy (the son and grandson of Admirals, he might not have gotten into Annapolis at all but for the distinguished history of his family, kind of like the way GWB got his degree from Yale (the so-called "gentleman's C"). If anything, McCain's years in a tiger cage and under torture ought to DISQUALIFY him because the psychological impact of what he endured will certainly color any military decision he makes, and likely make him to quick to support an unnecessary war... whoops, he already did that.

Finally, it scares me how clueless McCain really appears to be. Five years into the Iraq war, he still doesn't understand the difference between Sunni and Shia, doesn't know that Iraq and Afghanistan don't share a border, and doesn't realize that Czechoslovakia hasn't been a country for more than a decade. He doesn't know how to turn on or use a computer (true). He doesn't know that inflating your tires properly can save gas (that isn't even controversial). He doesn't even know (unless he and Cyndi are secret kinks) that a convention of biker gangs is not really the place to enter your wife in the local "beauty" pageant.

He has no energy policy other than more drilling and more nukes... the same policy that we have pursued over the last 30 years.... which allowed our dependence on foreign oil to go from 20% to 70%. He has no economic policy other than no new taxes (although he's been in Congress for every tax increase of the last 26 years, and I believe, voted for the majority of them). That's not a policy. It's a recipe for deepening America's financial hole.

So what is it exactly that makes McCain ready to be President? I honestly have no idea. What makes Obama ready to be President? Same answer.

But I can tell you this. I trust that Obama is more likely to make the right call when he has to, because so far, I believe that where Obama and McCain have both been asked to take a position on the same issue Obama's choices have impressed me more than McCain's.

Oh, and all of that is before we start talking about Judicial appointments.

So let's get over Bill Clinton's comment. Is there ANYONE in this country that believes he wasn't right? Media hyperbole notwithstanding, I don't think so.

Who trusts the judgment of Rudy Giuliani?

Sen. Joe Biden notoriously quipped that for Rudy Giuliani a sentence is "a noun and a verb and 9/11." A bon mot for anyone to be proud of.

Well, Rudy is exploiting 9/11 big time these days, according to a recent NY Times article. Take this little gem regarding the assassination of Benazir Bhutto:

“For me this is a particularly personal experience,” Mr. Giuliani said in Florida as he discussed the assassination of Ms. Bhutto on Thursday, “because I lived through Sept. 11, 2001, and then I lived through the attacks in London a few years later.”

Giuliani, Seeking to Gain Ground, Returns to a Familiar Theme: 9/11, NY Times, December 29, 2007).

Hello! Earth to Rudy. I lived through 9/11 too... as did about seven million other of my fellow New Yorkers - and 300 million other Americans. And we all lived through the attacks in London too. Not to mention the attacks in Spain.

And before that we all lived through Munich and the Achille Lauro, the FALN bombings around Manhattan in the early '80's, the weather underground and SLA of the 70's, Europe's Red Brigade, etc. etc. etc.

Guess what Rudy: BIG F'ing Deal. You lived through it? How does that make the assassination of Benazir Bhutto any more personal to you than any of the other billion's of people on people on this planet who live in these times?

Doesn't he have one advisor with the nerve to tell him how full of himself he sounds? Is Bhutto' assassination more personal to him than even ONE of the millions of Pakistanis who so desperately supported her and her quest to modernize and democratize their country? Can't Rudy find something to say about this great woman than that "her death reminds me to talk about me?"

Again, talking about 9/11, Giuliani had this to say:

“It is part of my life that helps to define me. It isn’t the only part of my life. But it would seem to me that maybe the critics want you to, like, remove a part of your life in which people have every right to draw judgments about how you would handle a crisis, how you would handle a difficult situation, how you would handle terrorism.”

Id.

I don't think anyone, critics included wants Rudy to "remove" 9/11 from their judgment of Giuliani's ability to handle a crisis.

I think that the justified criticism is intead that Rudy's much vaunted judgment was sorely lacking before 9/11, on 9/11, and after 9/11.

Three fast examples:

• Against all advice, he insisted in placing New York City's emergency command center in the basement of the World Trade Center - after it had already been the target of a previous terrorist bombing attemp. This incredible error in judgment left the Police, Firefighters and other emergency workers without a central command center at the time they most needed one (and is very probably the cause of so many firefighters being trapped inside the World Trade Center when it fell.
• He did nothing to intervene in the (still ongoing) dispute between the Police and Fire Departments which refuse to share a joint radio frequency to coordinate with each other in time of emergency.
• He led a photo op "march" away from the Towers, dragging along the heads of the Police and Fire and other mission critical emergency service departments at a time when they should have been in their command offices overseeing their response teams.
• Following the collapse of the towers (on September 11), he publicly supported the idea of "postponing" elections. . . essentially trying to declare himself the indispensable emperor of New York.

Hey Rudy. Even FDR didn't try to suspend elections during WWII. Ike didn't try to suspend elections during the Korean War. For that matter no one suggested suspending elections during the 1960's despite the Vietnam War, a wave of domestic terrorist attacks, urban riots in Watts, Newark and elsewhere and the assassinations of JFK, RFK, MLK, Jr. and Malcolm X.

Then of course, there's the stuff that has nothing to do with 9/11:

Like Giuliani's highly public campaign to shut down one of the most respected museums in the entire country (the Brooklyn Art Museum) because HE was offended by a single painting that he hadn't even seen.

Like the kind of good judgment he showed by holding a press conference to inform his second wife that he was seeking a divorce.

Like the good judgment he showed by using City funds to provide transportation and security for his mistress (now his third wife). Or the good judgment he used by hiding those expenses in in departments that were supposed to be protecting the homeless and most needy New Yorkers.

Or the good judgment he shows by failing to recognize that with 100,000 handgun deaths (yes, that's 100,000) in this country since 9/11 (that's 33 dead to handgun violence for every 9/11 victim), maybe, just maybe, terrorism is NOT America's greatest threat or our most important priority.

Or the good judgment he showed in making Bernard Kerik chief of city police and recommending him to be head of homeland security. The same Bernard Kerik who stashed HIS mistress in an apartment the City supposedly maintained for 9/11 emergency workers. The same Bernard Kerik who is now under federal indictment stemming from various charges of corruption.

Or the good judgment he continues to show by hiring and relying on the advice of Alan Placa.
As reported in the Village Voice, Placa is a defrocked, pedophile priest and worse. Placa was in a position to cover-up not only his own abuse of young boys, but the abuses committed by other priests as well.

Placa was "Often the first person contacted by a victim because of his role as the bishop's top attorney and head of a three-member "intervention team." Suffolk DA Tom Spota put it bluntly: "This is a person who was directly involved in the so-called policy of the church to protect children, when in fact he was one of the abusers." David Clohessy, the national director of the Survivors Network for Those Abused by Priests (SNAP) said Placa "connived to keep desperately wounded child sex victims trapped in silence and shame and self-blame. He is the worst of the worst. He's worse than other child abusers, because he molested and he covered up other investigations." Wayne Barrett, No Wafer for Rudy, Village Voice (June 26, 2007).

Placa is also Giuliani' "best friend, business associate, and lifelong link to the church."

In August 2002, Placa was hired as a three-day-a-week consultant at Giuliani Partners, despite allegations that he had groped four minors in Long Island's Diocese of Rockville Center. Despite these charges (and a 2003 Grand Jury report), Placa remains on salary at Giuliani Partners. Michael Hess, the managing partner of Giuliani Partners (and the city's former top lawyer), represents Placa against the ongoing sexual molestation charges .

I could go on, and on.

But here's the question: 9/11 aside, can we really trust the judgments of this man if he is given the awesome power and responsibility of the office of President of the United States?

Memories II - June 2003 - How many more?

Shock and awe indeed! The sheer stupidity of the Bush administration's headlong rush to war is best demonstrated by the idiotic belief that there was no need to plan for what happens after. The problem with the "Mission Accomplished" banner is that the Bush, Cheney, Rumsfeld cabal made the mistake of believing that the "mission" ended with the battle for Baghdad. This is a case in which the US planned to win a battle not a war. Having won the battle, victory had been accomplished because it the mission had been defined on terms that were narrowly idealogical and bore no relation whatsoever to the actual tactical or strategic situation.

This did no have to be the case. The French told George Bush he was getting in over his head. So did the Germans and virtually every other important US ally and strategic partner. So did the overwhelming numbers of people who marched to oppose this war - all over the world - before it even began. Bush simply refused to listen to anything.

I noted this on June 25, 2003:

To the Editor

Before the war it was obvious that the US was prepared to win the battles, but unprepared to to win the peace. Today, every headline provides further evidence the Bush administration's failed to consider or prepare properly for our "victory" in Iraq. Thomas Friedman's June 25 op-ed column "Bad Planning" (along with many of his excellent columns) drives this point home.

Iraq is deteriorating daily. Unemploment, malnutrition and disease are rampant. There is no electricity or safe drinking water in large parts of the country.

US troops are teaching democracy to the Iraqis by censoring the press, shooting at demonstrators, enforcing curfews, and arbitrarily entering private homes at gunpoint. Our effort to select those Iraqi's who will form and serve in a new government is about as democratic as an
election in China. Our award of reconstruction contracts to US, rather than indigenus Iraqi, businesses is similarly undemocratic, and of dubious legality.

The Iraqi people, who welcomed us with open arms, grow angrier by the day. The result is increasing casualties and deaths among US troops. It is only a matter of time before more US soldiers will have died trying to maintain the peace, than fighting the war.

The administration claims it had no warning that it would be harder to maintain peace than to oust Saddam Hussein. The truth is that President Bush was informed of this before the war
by our longtime allies, France and Germany, and by the vast numbers of American people who had the courage to demonstrate their opposition.

President Bush ignored the advice of all but the handful of idealogues he had chosen for his cabinet. Were it not for his heedless rush to sound-bites and photo-ops, our sons and daughters in uniform might not now be giving their lives, fighting a losing war against anarchy, starvation, disease, fanaticism and the growing anger of the Iraqi people.

The only question is how many US soldiers are going to die before the American people finally express their anger at this badly planned, and poorly executed debacle.

Four and a half years and nearly 4,000 soldiers later, I am still wondering how long this can go on.

Memories I - A rose by any other name

There are times (when pocketwatches drip from blue skies) being right can seem surreal.

Recently a significant number of news sources reported that the euphemism "enhanced interrogation techniques" favored by the Bush administration is the same term used by Hitler's Gestapo and SS to describe the same torture techniques being used by the Bush Administration today (i.e. waterboarding) and which were declared "tortue" and crimes against humanity at the Nuremburg trials.

As much a surprise as this may have been, it was not the first usurpation of the Third Reich's vocabulary, as indicated in my letter to the editor dated May 27, 2003:

To the Editor:

Donald Rumsfield said " "What will follow will not be a repeat of any other conflict. It will be of a force and scope and scale that has been beyond what has been seen before." Thurs. March 20, 2003.

Mr. Rumsfield is wrong. The force and scope may be greater than ever before. However this conflict is an uninspired, unoriginal carbon copy of a familiar battle plan.

Blitzkrieg.

Prescience or Common Sense - Revisiting the Iraq War

Before I discovered the joys of blogging, I frequently wrote letters to the editor of the New York Times. I did not write because I wanted to be published. Indeed, the New York Times won't publish two letters from the same author within six months of each other. I believed (and still do) that a paper's editors read every letter and are at least influenced by the volume of letters they receive on any given topic.

Looking back at the letters I wrote concerning Iraq, I keep asking "how is it I saw this coming, but George Bush, and his advisors couldn't see it?" How did they get this war past so many smart people, when they were so obviously wrong or lying about so many things?

Happily, the most recent NIE has likely ended the possibility that Bush will invade Iran. However, it is painfully obvious that he does not intend to end the war in Iraq during the year and 25 days he will remain in office.

With the coming political season a review of some of the Bush administration's outstanding mistakes of strategic and political judgment is warranted. For what it is worth, what follows are letters to the editor of the New York Times that I wrote during the period March 2003 through May 2006.