Climate Change, Politics and Money

Our political campaigns debate regulation, austerity and stimulus. The multi-millionaires and billionaires funding super-pacs to elect Republicans and Romney abhor taxes and regulations, whether it's building codes, global warming gas emissions or casinos.

Why, they could be on their way to earning trillions if it weren't for "job-killing regulations" and taxes! The Kochs, fossil fuel producers, have been cited over and over for emissions pollution, have paid large fines (small compared to their incomes), and legal fees that probably dwarf the fines: their pac funding dwarfs both. A Texas billionaire is a builder of shoddy developments; he's been sued repeatedly for using inferior materials, and not surprisingly, he's for "tort reform" that would cap jury awards for damages. So, he, the Kochs, and many others donate millions to Romney or GOP-supportive superpacs.

Why do they do this? Simple, in each case, they "donate" to get what they want through Congress and the President--the Congress and President they are buying. And while the money advanced is almost small change to the super-rich, it floods the election process.

What does this have to do with global warming? Warming increased last year faster than expected (3.5% over 2010), and the world is on track to warm 3.5 degrees Celsius; Earth will be a much warmer place than it has ever been since humans evolved. Earth was as warm eons ago, but it's not clear that people can survive it without major disruption and mass die-offs. The reason the earth is warming so rapidly, according to Climate Action Tracker(CAT), is because no nation has even met its (inadequate) targets for cutting emissions, and even if they did, none would be enough to slow global warming. The US's inability to adopt carbon emission reduction programs like cap and trade is symptomatic: Brazil's and Mexico's gestures, according to CAT, are ineffectual or worse. But the world as a whole is even more so: nations appear unable--or unwilling, like the US--to meet their climate change pledges.

The reason for the puny response is political. There is no lack of technology to battle climate change. But private interests are donating funds to prevent its use, and persuade others it's unnecessary. The Kochs, for example, have a stake in preventing programs to ameliorate climate change. Citizens United has opened the financial floodgates, rendering billionaires even more effective at blocking positive action.

The flood from the super-rich parallels the near monopoly of wealth and power of Rome's Senators in the fifth century. Then, everyone else was driven into serfdom; now its wage slavery and debt--if you're lucky enough to get a job--but now the world's people will be corralled into an overheated ditch.

Maybe the billionaires think they can create their own climate-controlled havens to survive?

Buffett's Good Deed

Whee, it's great to be a billionaire! You can do good and make even more money at the same time! I'm writing about Warren Buffett: he sinks $5 billion into Bank of America preferred stock, which pays a guaranteed 6% dividend, gets a warrant for buying 700 million more shares at $7.14: the stock opens at $8.29 and still closes at $7.65.

Buffett supported a bank that has a legion of lawsuits against it for it’s alleged fraudulent mortgage vehicles; it lost 36% of its stock value because of its overexposure to those same mortgages, made worse by the continued decline of the housing market, and its over-investment in European sovereign debt: Greece, Ireland, etc.

Buffett is viewed as doing the administration a favor, by helping to rescue a bank that looked as if it might lead to a replay of 2008. Credit Default Swaps on BAC had reached higher spreads than it faced in 2008-09 at the height of the financial panic.

So, Warren Buffett is not only a rich man getting richer, he's a hero to the administration, especially since he just advocated (in a New York Times op ed) that Congress should raise taxes on people like him. If he weren't so old, perhaps Obama should ask him to run for Vice President, or other Democrats might urge him to run against Obama.

Billionaires. Have you noticed that billionaires seem to be taking over our politics? On the "left" we have Warren, George Soros and… (are there any others?), in the center there is Michael Bloomberg, and on the far right there are the Koch brothers, among many, many others.

Does that tell you something?

One of our two political parties refuses to raise taxes on the wealthy. On the other hand, the GOP wants, in effect, to raise taxes on the middle class. It advocates discontinuing the payroll tax cut put in place last year to stimulate the economy, while insisting on extending the Bush tax cuts permanently.

The Bush tax cuts disproportionately favor the wealthy, which is one of the reasons why there is such a proliferation of billionaires, and other super-wealthy. Not only are the top tax rates the lowest they've been since the 1920's, many dividends are exempt, and capital gains are taxed at less than half the top rate--lower than middle class incomes. On the other hand, the payroll tax is a flat tax with a cap at a bit over the first $100,000 of income. A cut in its rate disproportionately favors those earning under that, but, those with million dollar incomes only pay the tax on one-tenth of their income. The tax cut hardly matters to them, so, the GOP wants to scrap it. Why?

Perhaps to drive the nation back into recession, to enable Republicans to beat Obama, to dismantle the New Deal and to insure that the wealthy rule. The takeover of the new Roman Senators: it could happen here.