Obama Tax Cut Deal - Good Plan or Bad Plan?

President Obama has a tax deal plan in place for a two-year extension of the Bush Tax Cuts. He cut a deal last week with soon-to-be Speaker of the House John Boehner and Senate Minority leader Mitch McConnell to extend the Bush Tax Cuts of 2001 and 2003. The deal would extend all the tax rates that Bush established, including the 35% top rate on all income above $250,000 for the next two years. Without this deal, the Bush tax cuts would have expired and the top rate would go back to 39.6 %, where it was when Bill Clinton was President.

Included in this plan is an extension of unemployment insurance for 13 months, tax credits for renewable energy, and a payroll tax cut for employees. The estate reverts back to 35% on estates above $5 million after it was exempt for 2010. In 2009, the estate tax was 45% on all estates above $3.5 million.

Outgoing Speaker of the House Nancy Pelosi will step down to House Minority Leader on January 5th when the 112th Congress gets sworn in and the GOP becomes the majority. While this tax deal will irritate Progressives and some Tea Partiers for completely different reasons, this just may have saved Obama's Presidency. A $1 trillion-plus National Deficit is not healthy for the American economy because it forces us to borrow more from China. But, Obama escapes the politically untenable position of allowing tax increases, even small ones, to occur on the ever-shrinking middle class. Or the expiration of unemployment benefits with high unemployment. If unemployment remains above 5.0% through January 2012, the GOP House will be on the hook for extending unemployment benefits during an election season. If they do not, they run the risk of losing the House back to Democrats.

This all but ensures a second term for Obama because Progressives surely aren't going to vote for any Republican or Tea Party candidate for President in 2012 since he is going to be the most left-leaning candidate on the ballot. The Republicans figure to run either Sarah Palin, Mitch Romney, or Mike Huckabee against him. None of these Republicans appears to have the ability or widespread popularity to beat him in a national contest. His re-election will also help protect vulnerable Congressional Democrats in 2012.

Offshore Wind for Maryland: Windfall or Blowing Money Away?

I attended a conference Saturday December 4th in Annapolis about the potential of offshore wind power in Maryland. Chesapeake Climate Action Network put it together to show the huge benefits that it could have for this state.

Compared to wind energy, coal costs more per equal amounts of investment in power capacity. Constellation Energy says that it has invested $875 million to upgrade its Brandon Shores coal-fired power plant in northeast Anne Arundel County to meet Maryland's tough clean air laws by using new scrubbers. Constellation also said that this investment created 2,000 union jobs for three years. That works out to an average of $437,500 per job, or $145,833 per job per year. That seems very expensive compared to wind energy. By comparison, Constellation also has a $125 million investment to build a 28-turbine wind farm in Western Maryland to provide 70 Megawatts (MW) of power. This investment will create 110-120 jobs, with 4-6 annual operating and maintenance jobs upon completion. The Brandon Shores plant has a capacity of about 1,300 MW. To get about 1,300 MW of power from wind energy using this project as an example would require an investment of about $2.32 billion and create well over 2,200 jobs.

Would a coal plant would cost more than this? According to Synapse Energy, for one Ohio utility, the construction costs of a 960 MW coal-fired power plant in Ohio more than doubled from about $1.25 billion in October 2005 to almost $3 billion in January 2008. This was due to worldwide competition for raw materials and plant design construction, especially from China and India. (1)

Construction costs aside, one cannot forget the enormous environmental and health costs that coal wrecks on human beings. It pollutes both the water, requiring governments to spend tax dollars to clean it, and the air, driving up healthcare costs by causing asthma and many other ailments such as cancer. Local governments, especially at the state level, can and do pass laws requiring utilities to upgrade their equipment to protect the environment. They do so to make sure the corporate utility's power plants, especially coal-fired ones, comply with environmental goals desired by their commmunities.

Maryland has a choice: do we continue to destroy Appalachian Mountains to meet our energy needs or do we build offshore wind farms to power our lives? We should choose the latter because it will provide environmental benefits, improve the health of Marylanders, and create more good jobs, making it a win-win.

1. http://www.synapse-energy.com/Downloads/SynapsePaper.2008-07.0.Coal-Plant-Construction-Costs.A0021.pdf

2. http://www.buildingindianablog.com/2010/12/17/coal-gasification-project-to-generate-1000-construction-jobs/

Christmas Approaching: What do the Red Kettles Represent

With the Christmas season approaching, big malls and shopping center will be packed with people searching for gifts for family and friends. Sometimes, you may run into a Red Kettle, run by the Salvation Army, known worldwide for "Doing the Most Good" to help those in need. Is this the truth?

Having worked as a regional accountant for seven weeks in October-November 2008 at one of their regions, I have a unique view into what the Salvation Army stands for. They let me go after I tried to use some professional judgment in getting my work done that went against their rules. My following comments are not meant as a bitter ex-employee, but rather as insights that can only be provided someone who has worked there and wants people to know what they are giving their money to. Obviously, a current employee would be foolish to criticize this organization while working there. Everyday I worked there, I was busy with accounting work entering transactions into their accounting software program as part of a new system with more standardized procedures. It actually appears that the Red Kettle is symbolic of administrative waste, bigotry towards gays, and environmental ignorance. There are lots of other charities, large and small, that deserve donations because they do great work to help the poor without these problems.

First, the administrative waste is striking. The following article shows that the Salvation Army has paid the price for putting together such a sophisticated accounting system.
(http://www.huffingtonpost.com/2010/01/06/salvation-army-receives-f_n_413792.html) Someone gave them a $25,000 fake check to one of their locations in South Carolina during last year's Christmas season. Its regional accounting system, in its complexity, resembles that of a multi-national corporation with billions of dollars per year in revenues. There were weekly required 10 percent support service checks from each service location to the Divisional Headquarters. Their financial statements contained other administrative costs, of which I had no time to discover their size, total cost, or proper classification. Within the first 3-4 weeks of working there, I could see massive inefficiencies in this system, which required an astounding amount of data re-entry. But, with all the work I had to do within the frame of very tight deadlines, I did not get a chance to use my strengths in finding and correcting these inefficiencies, such as individual bank accounts for each location. With each of its general ledger account numbers broken into four different parts comprising a total of 15 digits each, it easily has millions, if not billions, of different account number combinations. All for a region that takes in about $20 million in annual donations. It even has 40-50 different account codes for mail appeals, one of many ways it takes in donations. By contrast, some for-profit companies that I have worked for have a general ledger with only two parts to each account number for a total seven digits each. This was sufficient even for companies over $200 million in revenue.

The bigotry towards gays, the second thing these kettles represent, is perhaps the most offensive thing about this organization. While the Salvation Army is best known as a charity that helps homeless people and drug addicts, it is also an evangelical church with clear, hardened views on a number of issues. It has been known on occasion to deny assistance to gay people who are poor. It has also chosen to shut down its operations if it is required by local laws and regulations to provide benefits to domestic partners.

Environmental ignorance, the third part of what one is contributing to by dropping change into these kettles, maybe the most confusing part of all. With 17 different locations providing services to people in need throughout West Virginia, it would seem likely that they would hear about stories of people's water being polluted by mountaintop removal coal mining. After running searches at The Salvation Army's USA web site on global warming, climate change, mountaintop removal, and coal, I got no results. It seems like their National Commanders, Officers, and Soldiers have spent so much time reading the Bible and twisting passages to their preferences when they should be responding to crises caused by climate change.

Perhaps the most interesting thing to know about The Salvation Army is that the political views of its leaders do not necessarily reflect on the staff that work there. After running a search on OpenSecrets.org on it, I discovered that most of the donations by individuals who work there went to Democratic candidates. The one donation made by an executive listed on the site was to Jeff Perry, a Massachusetts Republican House candidate who lost on November 2nd.

What Your Stomach says about the Economy

I have battled stomach indigestion problems for nearly 15 years, trying many different remedies until I discovered the apparent cause of my problem just over two months ago. Originally diagnosed as GERD (Gastroesophageal Reflux Disease), I tried many different remedies. At my first appointment with a doctor to figure out the solution to this problem, I received a prescription for Zantac.

Twice this year, I received prescriptions for Prevacid, and two different anitbiotics with the second Prevacid prescription. My doctor gave me these prescriptions to deal with a positive H.Pylori bacteria test that I got both times he tested me for it this year. However, the antibiotics left me feeling sick, dehydrated, and tired. He also diagnosed me with a Vitamin B12 deficiency, which likely caused me to experience occasional numbness and tingling in my arms and legs. I experienced these symptoms on a daily basis this year and they seemd to be getting worse.

I stumbled upon my the cause of all these in the first or second week of September while walking to a small nearby grocer. After feeling miseable all day long with all of the aforementioned symptoms, I noticed that I was feeling much better all-around while walking there. At that moment, I knew I had to figure out why I suddenly felt better. I then realized that I just ate a gluten-free, wheat-free frozen pasta dinner an hour beforehand and have been occasionally eating this food due its light, never too heavy taste for about 2-3 years. Until this year, I thought gluten-free had something to do with diabetes. I learned this year that gluten is the protein in wheat, which more and more people now have trouble digesting. Intolerance to gluten is often referred to as Celiac's Disease, which doctors usually confirm through a combination of endoscopies and blood tests.

Multi-national pharmaceutical companies do not want you to know about Celiac disease because it affects their bottom line. Pharmaceutical companies such as make enormous profits selling drugs to cover up the symptoms of GERD. GlaxoSmithKline, the maker of Zantac, made a profit of the equivalent of $9.1 billion from revenues of about $45.5 billion (U.S. $). Takeda Pharmaceuticals, the maker of Prevacid, also makes enormous profits. For the year ended March 31, 2010, it made a profit at the equivalent of $3.2 billion from revenues of about $15.76 billion (U.S. $). Food manufacturers such as Monasanto make enormous profits selling genetically-modified food. This explains why we should refer to the U.S. healthcare system as a disease maintenance system, not a true healthcare system.

Evan Bayh's Comments on Bush Tax Cuts

Evan Bayh, Indiana's retiring Senator, made comments on September 17th that ending the Bush Tax Cuts for the wealthiest of Americans will hurt the economic recovery. He said that the wealthy "make most of the hiring and investing decisions" and that "we should want them to do more hiring and investing" to stimulate the economy. I totally disagree with this premise. Just because they have more money does not mean that are smarter investors than the person that has no savings in the bank. Having a job in today's job market is not about skills, expertise, or work ethic. It is about having the right friends in the right places. It some cases, it is even about being able to strip away at the definition of theft and redefine it as smart business decisions.

These are things that the current Congress will have to consider before they leave office. The new Congress, with the House likely to be controlled by Republicans, is even less likely to end the Bush tax cuts.

A Saturday Night Stroll Through The Neighborhood

It was a hot day today, the 4th Saturday of July, and I waited until the evening to get outside of my central Towson apartment. A walk around the neighborhood yielded some rather interesting observations about Baltimore's economy. I noticed that the restaurants within walking distance of my apartment in on Allegheny Avenue in central Towson were nearly empty, leading me to believe that people in Baltimore still don't have money to spend.

Then I went for a walk in Towsontowne Mall and made a rather interesting discovery. This is the premier shopping destination in the Baltimore area north of downtown. The Martin & Osa store inside the mall was to close the following day, despite being open for less than two years. What this says is that Baltimoreans do not want to spend a lot of money on clothing since this is definitely an upscale store with very high prices.

Later on, I noticed that The Cheesecake Factory and Stoney River Legendary Steak restaurants were filled nearly to capacity with customers. These restaurants are visible from Dulaney Valley Road, a major thoroughfare leading to the mall, and near new parking garages. What this says is that Baltimoreans are car-oriented, generally notice restaurants within walking distance of a parking spot, and usually prefer well-known places to eat.

I conclude my evening by researching The Elkhart Project on MSNBC's web site (http://www.msnbc.msn.com/id/29976394/ns/business-stocks_and_economy). The most recent data compares May 2010 wit May 2009. The most striking information is that housing starts are almost 60% higher in Baltimore and Towson, but employment is down 0.65% for the same period. Housing starts in the Washington D.C. area are up between 30 and 40%. Employment in this area is up anywhere between 0.08% and 0.13%. This suggests that some people are choosing to live in Baltimore for its cheaper real estate prices, but work in Washington, D.C., which has higher wages. Martin O'Malley may want to increase the frequency of MARC trains as a result.

Don Blankenship Speech and Aftermath

In an incredible display of arrogance in July, Blankenship talked about America's $13 trillion debt and how Americans are losing their jobs. He said business always looks for low-cost labor and Americans need low-cost electricity. "Green jobs" have trumped "American jobs". I watched one of my friends, along with two others from the Rainforest Action Network, hold signs saying "Massey Coal - Not Clean, Safe, or Forever," when someone asked Blankenship a question about mountaintop removal coal mining.

Since this speech at the National Press Club, Blankenship has even tried buying off the families of the victims of the Upper Big Branch Disaster, reaching settlements with four of them, possibly between $3-5 million each.(http://www.istockanalyst.com/article/viewiStockNews/articleid/4437998)

I find these settlements to be laughably low. They likely included provisions that these families could no longer pursue any additional litigation, including criminal indictments of executives, against Massey. It is now seven months since the Upper Big Branch explosion took the lives of 29 miners. But, the one slightly positive thing is that the people of West Virginia did not buy into Tea Party type candidate John Raese for the U.S. Senate seat vacated by the death of Robert Byrd. Based on his history as an executive, Raese likely would have loosened mine safety regulations if elected. The winner of the election, Joe Manchin, certainly got some votes because he will likely push for tougher mine safety laws. Manchin's problem is that he still supports mountaintop removal coal mining.

Don Blankenship Speech at National Press Club

Don Blankenship, guilty of running his mines in an unsafe manner to maximize profits, is speaking today to members of the National Press Club. On April 5th, 29 of his miners died in an explosion at the Upper Big Branch mine near Montcoal, WV. There will be numerous environmental activists attending this luncheon. There have been 52 mining deaths over the past 10 years. This is all in addition to the damage caused by mountaintop removal coal mining. If I were in attendance, would ask him these questions:

1) Do you understand how many lives you have endangered by subjecting your miners to unsafe, deadly working conditions?

2) Do you understand that the 29 lives lost on April 5th meant dozens more lives wrecked?

3) Do you understand that thousands of people in Appalachia have dirty drinking water, due to the explosives used by your company to flatten mountains?

Bodies' Exhibit May Explain Why MTR Mining is Happening

The biggest source of electricity in the U.S. is coal, easily the most damaging to the health of human beings and all life on Earth. I personally learned of this in July 2008 when I attended the Bodies exhibit at the Maryland Science Center. This exhibit was made possible because people agreed to donate their body parts when they passed away to help educate people about human health. I saw three sets of lungs there. First, there was a deceased non-smoker's lungs, which had a healthy, reddish-pink look. Then, I saw a smoker's lungs, which had looked grey and slightly smaller than the non-smoker's lungs. Finally, my jaw dropped when I saw a coal miner's lungs, which had turned black and shrank even more than the smoker's lungs. It looked almost as if the coal miner's lungs had turned into two giant lumps of coal.

Perhaps, a desire to avoid the liability for miners' health explains why coal companies operating in Appalachia started the practice of mountaintop removal (MTR)coal mining, which has even more disastrous consequences to the communities where it takes place. Mountain Justice (www.mountainjusticesummer.org), a West Virginia non-profit committed to ending MTR, explains the damage it does, including clear-cutting of forests, giant pieces of "fly rock", coal ash that pollutes the air, and millions of pounds of mining waste that contaminates the streams below. The plants and trees that are removed make the adjacent valleys prone to flooding.

The awareness of mountaintop removal coal mining is spreading. I first became aware of this last year when I volunteered at the Power Shift national youth global warming conference in February-March 2009 in Washington, D.C. Recently, I have seen
books such as "Plundering Appalachia: The Tragedy of Mountaintop Removal Coal Mining" and "Coal Country: Rising Up Against Mountaintop Removal Mining" in bookstores and on Amazon. Hopefully this awareness will do two things: make the EPA ban this practice permanently; and lead more people to invest in clean, renewable energy.

Economic and Environmental Crises - How are they Related

I chose the title for my new blog, "Cleaning Up the Great Recession", because I believe that our current economic recession, is part of the price we are paying for our failures to make hard choices regarding our environment. Having been laid off several times since September 2007, despite working as an accountant, has let me know that our nation is facing the worst economic crisis since the Great Depression. Within the past year, I have discovered that there is an environmental component to this crisis. I did not know until almost a year ago that coal companies were blowing off the tops of mountains using explosives to mine coal. This is known as mountaintop removal. You can almost sense the injustice of this practice right away. Its toxins pollute the rivers, streams, and other waterways in its wake. The air becomes too toxic and can make anyone living or working near the mountain site ill. If coal companies are forced to pay for all the damage caused by this barbaric practice, it would stop immediately.