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Disaster And Dishonesty

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The recent earthquake in Japan caused one of the worst nuclear accidents in history.  At the aptly-named Fukushima nuclear facility, two reactors (#1 and #3) reportedly experienced “partial meltdowns” and hydrogen blasts while a third (#2) experienced “cooling problems”.  Since the Fukushima nuclear crisis began, we were given spotty, uninformative reports about the extent of the damage to the critical equipment, despite assurances that the “reactor vessels remain intact”.  The video depicting the explosion of the containment building for reactor #1 immediately raised questions about the risk of radiation leakage.

Within minutes after the earthquake struck, we were informed about “an incident” at Fukushima reactor #1, involving “overheating”.  We later learned that people within a 6-mile radius of the plant had been evacuated.  Shortly thereafter, the evacuation zone was expanded to 12 miles, resulting in the evacuation of 180,000 people.  Because the cooling systems for reactors #1 and #3 were not operating properly, it became necessary to pump in sea water to cool the fuel rods.  Despite government assurances that there had been no radiation leakage hazard, we later learned that there had been deliberate releases of reactor steam containing radioactive cesium.  The Union of Concerned Scientists provided this bit of information about cesium:

Cesium-137 is another radioactive isotope that has been released.  It has a half-life of about 30 years, so will take more than a century to decay by a significant amount.  Living organisms treat cesium-137 as if it was potassium, and it becomes part of the fluid electrolytes and is eventually excreted.  Cesium-137 is passed up the food chain.  It can cause many different types of cancer.

The news reports concerning the nuclear facility often seemed idiotic.  One article began with an explanation that the explosion at reactor #1 damaged the containment building only, causing the roof to blow off.  Later in the story, we were assured that although a “partial meltdown” may have been taking place within the reactor core, the reactor vessel remained intact.  Then came the remark that even if the reactor vessel began to leak radioactivity, the containment building would prevent the dissipation of those contaminants into the atmosphere.  The reporter apparently forgot about the statement a few paragraphs earlier that the containment building no longer had a roof.  Whoever wrote that story did an obvious, “cut and paste job” without realizing that the reassuring remarks about the containment building were no longer valid.  This was typical of the sloppy reportage of the Fukushima predicament.   .  .  . But hey – it was a weekend! Another tactic frequently employed in the lame coverage of the radiological situation would involve beginning a report with a stale factoid about reactor cooling problems and shifting the focus of the story over to the earthquake itself or to the tsunami.

A good deal of the frustration experienced by those attempting to ascertain the status of the potential nuclear hazards at Fukushima, was obviously due to the control over information flow exercised by the Japanese government.  I began to suspect that President Obama might have dispatched a team of Truth Suppressors from the Gulf of Corexit to assist the Japanese government with spin control.  An article by Norimitsu Onishi, Henry Fountain and Tom Zeller Jr. of The New York Times provided this history of how nuclear power hazards have been handled in Japan:

Over the years, Japanese plant operators, along with friendly government officials, have sometimes hidden episodes at plants from a public increasingly uneasy with nuclear power.

In 2007, an earthquake in northwestern Japan caused a fire and minor radiation leaks at the world’s largest nuclear plant, in Kashiwazaki City. An ensuing investigation found that the operator — Tokyo Electric — had unknowingly built the facility directly on top of an active seismic fault.  A series of fires inside the plant after the earthquake deepened the public’s fear.  But Tokyo Electric said it upgraded the facility to withstand stronger tremors and reopened in 2009.

Last year, another reactor with a troubled history was allowed to reopen, 14 years after a fire shut it down.  The operator of that plant, the Monju Prototype Fast Breeder Reactor, located along the coast about 220 miles west of Tokyo, tried to cover up the extent of the fire by releasing altered video after the accident in 1995.

Such a track record suggests that the lack of information concerning the Fukushima episode is the result of a lack of probity.

Nevertheless, after an entire weekend of attempting to find out what was transpiring in Fukushima, I finally came across an informative article by Thomas Maugh of the Los Angeles Times.  Here is the answer to the question no other media outlets were willing or able to address:

The worst that could happen if all cooling stopped is that the fuel would melt and fall to the floor of the containment vessel.  The containment vessel is designed to hold the hot fuel in, but the type of nuclear reactor in danger at the Fukushima plant —General Electric Mark One boiling water reactors — has been widely reported to have a vulnerability in its design that would let the fuel burn through the floor of the vessel.  If that happened, radiation could spread through the environment, but on a much more limited basis than happened at Chernobyl, where there was no containment vessel and the core contained graphite that burned, dispersing radioactivity widely. A massive plume of radioactive smoke and ash could spread from the site, exposing people for miles away, depending on the wind and weather.

Most news outlets provided us with “answers” from know-nothing politicians such as Chuck Schumer who — when asked about the future of nuclear power in America — seized the opportunity to trumpet the bogus narrative about “foreign oil”, despite the fact that oil is not used to produce electricity.

We are witnessing the hazardous consequences of entrusting unreliable individuals with authority over the use of nuclear reactors.  It’s not looking good.


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Maria Cantwell For President

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I was going to hold off on this and give President Obama the benefit of a doubt – at least for a few months.  Nevertheless, after reading the magnificent piece by Barry Ritholtz, entitled:  “The Tragedy of the Obama Administration”, I decided that it was time to start discussing leadership alternatives for the next Presidential term.

On October 30, the Associated Press published the results of a poll it conducted with Knowledge Networks.  Forty-seven percent of the Democrats surveyed expressed the opinion that Obama should be challenged for the 2012 Democratic Presidential nomination.  In the wake of the mid-term election massacre, I expect that more Democrats will be anxious to find a new standard-bearer for their party in 2012.  The AP article concerning the AP-KN poll, mentioned the theory that the public’s opinion of Obama could change if the economy improves.  Unfortunately, most American consumers will not observe any significant improvement in the economy during the next two years.  There is a greater likelihood that the Chicago Cubs will win next year’s World Series.

We currently find ourselves bombarded with a wide spectrum of opinions, which purport to explain what the results of the 2010 elections really mean.  The most obvious conclusion to be drawn from this event is that the voters resent being taken for chumps.  Obama’s supporters were promised change they could believe in by a President and a party that sold its soul to the Wall Street megabanks at the cost of America’s future economic health.  When he had the opportunity to do so in early 2009, Obama refused to put those too-big-to-fail, zombie banks through temporary receivership.  As a result, we are now approaching a situation which – according to financial risk management expert Chris Whalen – will necessitate another round of bank bailouts.  When President Obama had the opportunity and the public support (not to mention Democratic control over both houses of Congress) to enact an adequate stimulus program to save the economy from a decade(s) – long, Japanese-style recession, he refused to so.  If an extra $600 billion had been added to the $787 billion in 2009 (as part of a better-thought-out, infrastructure-based stimulus program) we would be experiencing significant economic growth and a recovering job market right now.  Australia keeps reminding us of this.  (Oops!  Australia just did it again!)  Instead, America finds itself in a situation wherein the Fed is now appropriating that $600 billion toward another round of quantitative easing, which will serve no other purpose than to push investors into the stock market.  According to economist Andy Xie, those stock investors will have an unpleasant experience when Chairman Bernanke’s latest asset bubble pops in 2012.

While many Senate Democrats (along with operatives from the Treasury Department) were busy removing all of the teeth from the financial reform bill, Maria Cantwell was fighting those efforts as one of the few advocates for the American taxpayers.  Back on May 19, Arthur Delaney and Ryan Grim of The Huffington Post described how Senator Cantwell stood up to the efforts of Harry Reid to use cloture to push the financial reform bill to a vote before any further amendments could have been added to strengthen the bill.  Notice how “the usual suspects” – Reid, Chuck Schumer and “Countrywide Chris” Dodd tried to close in on Cantwell and force her capitulation to the will of the kleptocracy:

There were some unusually Johnsonian moments of wrangling on the floor during the nearly hour-long vote.  Reid pressed his case hard on Snowe, the lone holdout vote present, with Bob Corker and Mitch McConnell at her side.  After finding Brown, he put his arm around him and shook his head, then found Cantwell seated alone at the opposite end of the floor.  He and New York’s Chuck Schumer encircled her, Reid leaning over her with his right arm on the back of her chair and Schumer leaning in with his left hand on her desk.  Cantwell stared straight ahead, not looking at the men even as she spoke.  Schumer called in Chris Dodd, who was unable to sway her.  Feingold hadn’t stuck around.  Cantwell, according to a spokesman, wanted a guarantee on an amendment that would fix a gaping hole in the derivatives section of the bill, which requires the trades to be cleared, but applies no penalty to trades that aren’t, making Blanche Lincoln’s reform package little better than a list of suggestions.

*   *   *

“I don’t think it’s a good idea to cut off good consumer amendments because of cloture,” said Cantwell on Tuesday night.

Senator Cantwell has proven herself worthy of our trust.  Her nomination as the 2012 Democratic Presidential candidate will revive the excitement and voter enthusiasm witnessed during the 2008 campaign.  On the other hand, if President Obama decides to seek a second term and wins the nomination, we will likely find a greater enthusiasm gap than the example of November 2.  As a result, by January of 2013 we could have a new administration in the White House, espousing what economist Nouriel Roubini describes as “the economic equivalent of creationism”.

Here’s to a bright future!


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Banking Lobby Tools In Senate Subvert Reform

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May 20. 2010

The financial pseudo-reform bill is being exposed as a farce.  Thanks to its tools in the Senate, the banking lobby is on the way toward defeating any significant financial reform.  Although Democrats in the Senate (and the President himself) have been posing as reformers who stand up to those “fat cat bankers”, their actions are speaking much louder than their words.  What follows is a list of the Senate Democrats who voted against both the Kaufman – Brown amendment (to prevent financial institutions from being “too big to fail”) as well as the amendment calling for more Federal Reserve transparency (sponsored by Republican David Vitter to comport with Congressman Ron Paul’s original “Audit the Fed” proposal – H.R. 1207 – which was replaced by the watered-down S. 3217 ):

Akaka (D-HI), Baucus (D-MT), Bayh (D-IN), Bennet (D-CO), Carper (D-DE), Conrad (D-ND), Dodd (D-CT), Feinstein (D-CA), Gillibrand (D-NY), Hagan (D-NC), Inouye (D-HI), Johnson (D-SD), Kerry (D-MA), Klobuchar (D-MN), Kohl (D-WI), Landrieu (D-LA), Lautenberg (D-NJ), Lieberman (ID-CT), McCaskill (D-MO), Menendez (D-NJ), Nelson (D-FL), Nelson (D-NE), Reed (D-RI), Schumer (D-NY), Shaheen (D-NH), Tester (D-MT), Udall (D-CO) and Mark Warner (D-VA).

I wasn’t surprised to see Senator Chuck Schumer on this list because, after all, Wall Street is located in his state.  But how about Senator Claire McCaskill?  Remember her performance at the April 27 hearing before the Senate Permanent Subcommittee on Investigations?   She really went after those banksters – didn’t she?  Why would she suddenly turn around and support the banks in opposing those two amendments?   I suppose the securities and investment industry is entitled to a little payback, after having given her campaign committee $265,750.

I was quite disappointed to see Senator Amy Klobuchar on that list.  Back on June 19, 2008, I included her in a piece entitled “Women to Watch”.  Now, almost exactly two years later, we are watching her serve as a tool for the securities and investment industry, which has given her campaign committee $224,325.  On the other hand, another female Senator whom I discussed in that same piece, Maria Cantwell of Washington, has been standing firm in opposing attempts to leave some giant loopholes in Senator Blanche Lincoln’s amendment concerning derivatives trading reform.  The Huffington Post described how Harry Reid attempted to use cloture to push the financial reform bill to a vote before any further amendments could have been added to strengthen the bill.  Notice how “the usual suspects” – Reid, Chuck Schumer and “Countrywide Chris” Dodd tried to close in on Cantwell and force her capitulation to the will of the kleptocracy:

There were some unusually Johnsonian moments of wrangling on the floor during the nearly hour-long vote.  Reid pressed his case hard on Snowe, the lone holdout vote present, with Bob Corker and Mitch McConnell at her side.  After finding Brown, he put his arm around him and shook his head, then found Cantwell seated alone at the opposite end of the floor.  He and New York’s Chuck Schumer encircled her, Reid leaning over her with his right arm on the back of her chair and Schumer leaning in with his left hand on her desk.  Cantwell stared straight ahead, not looking at the men even as she spoke.  Schumer called in Chris Dodd, who was unable to sway her.  Feingold hadn’t stuck around.  Cantwell, according to a spokesman, wanted a guarantee on an amendment that would fix a gaping hole in the derivatives section of the bill, which requires the trades to be cleared, but applies no penalty to trades that aren’t, making Blanche Lincoln’s reform package little better than a list of suggestions.

*   *   *

“I don’t think it’s a good idea to cut off good consumer amendments because of cloture,” said Cantwell on Tuesday night.

Other amendments offered by Democrats would ban banks from proprietary trading, cap ATM fees at 50 cents, impose new limits on the payday lending industry, prohibit naked credit default swaps and reinstate Glass-Steagall regulations that prohibit banks from owning investment firms.

“We need to eliminate the risk posed to our economy by ‘too big to fail’ financial firms and to reinstate the protective firewalls between Main Street banks and Wall Street firms,” said Feingold in a statement after the vote.  Feingold supported the amendment to reinstate Glass-Steagall, among others.

“Unfortunately, these key reforms are not included in the bill,” he said.  “The test for this legislation is a simple one — whether it will prevent another financial crisis.  As the bill stands, it fails that test.  Ending debate on the bill is finishing before the job is done.”

Russ Feingold’s criticisms of the bill were consistent with those voiced by economist Nouriel Roubini (often referred to as “Doctor Doom” because he was one of the few economists to anticipate the scale of the financial crisis).  Barbara Stcherbatcheff of CNBC began her report on Dr. Roubini’s May 18 speech with this statement:

Current efforts to reform financial regulation are “cosmetic” and won’t prevent another crisis, economist Nouriel Roubini told an audience on Tuesday at the London School of Economics.

The current mid-term primary battles have fueled a never-ending stream of commentary following the same narrative:  The wrath of the anti-incumbency movement shall be felt in Washington.  Nevertheless, Dylan Ratigan seems to be the only television commentator willing to include “opposition to financial reform” as a political liability for Congressional incumbents.  Yves Smith raised the issue on her Naked Capitalism website with an interesting essay focused on this theme:

Why have political commentators been hesitant to connect the dots between the “no incumbent left standing” movement and the lack of meaningful financial reform?

Her must-read analysis of the “head fakes” going on within the financial reform wrangling concludes with this thought:

So despite the theatrics in Washington, I recommend lowering your expectations greatly for the result of financial reform efforts.  There have been a few wins (for instance, the partial success of the Audit the Fed push), but other measures have for the most part been announced with fanfare and later blunted or excised.  Even though the firestorm of Goldman-related press stiffened the spines of some Senators and produced a late-in-process flurry of amendments, don’t let a blip distract you from the trend line, that as the legislative process proceeds apace, the banks will be able to achieve an outcome that leaves their dubious business models and most important, the rich pay to industry incumbents, largely intact.

As always, it’s up to the voting public with the short memory to unseat those tools of the banking lobby.  Our only alternative is to prepare for the next financial crisis.



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