SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Politics : President Barack Obama -- Ignore unavailable to you. Want to Upgrade?


To: RetiredNow who wrote (71780)4/28/2010 11:24:23 PM
From: stockman_scott  Respond to of 149317
 
Obama Said to Announce Fed Board Nominees Tomorrow (Update1)

By Hans Nichols and Scott Lanman

April 28 (Bloomberg) -- President Barack Obama plans to announce his choice of Federal Reserve Bank of San Francisco President Janet Yellen tomorrow as vice chairman of the Fed Board of Governors, according to two people familiar with the decision.

The president will also name Sarah Bloom Raskin, Maryland’s commissioner of financial regulation, and Peter Diamond, an economics professor at the Massachusetts Institute of Technology, for the two remaining open seats on the central bank’s seven-person board, according to the people, who spoke on condition of anonymity before the announcement.

The trio would lend support to Fed Chairman Ben S. Bernanke as he keeps interest rates low to ensure a sustained recovery and prepares for a potentially reduced role in bank supervision. Yellen would replace Donald Kohn, who said in March he would step down June 23 after a 40-year Fed career.

“This will be a group of doves slanted toward job creation and growth, increasing the likelihood of rates staying low for a long time,” said former Atlanta Fed research director Robert Eisenbeis, now chief monetary economist at Cumberland Advisors Inc. in Vineland, New Jersey.

If confirmed by the Senate, the three would give the Fed a full seven-member complement of governors for the first time since April 2006. President George W. Bush tried to fill the slots with three nominees in 2007: Elizabeth Duke was approved in 2008, while Larry Klane and Randall Kroszner were blocked by Senate Democrats. Obama appointed Fed Governor Daniel Tarullo in January 2009.

‘Widely Respected’

“The new nominees, particularly Yellen and Diamond, are widely respected centrists who will help the chairman ensure that reason prevails in FOMC decisions,” said New York University economist Mark Gertler, who co-wrote research with Bernanke.

Yellen, 63, would gain a more prominent role in Fed policy. The move would give her a permanent vote on monetary policy, instead of having a vote one year out of every three as a regional Fed chief. All governors have a vote on rate decisions.

In an April 15 speech, Yellen said she’s increasingly certain the U.S. economy is “on the right track,” and that officials will “at some point” need to lift borrowing costs. Still, “it’s important not to lose sight of just how fragile this recovery is,” she said.

Yellen’s Career

Yellen spent most of her career teaching economics and researching labor markets, joining the University of California at Berkeley in 1980. She and her husband, George Akerlof, a Nobel Prize-winning economist, have written more than a dozen papers that included studies on unemployment, wages, street gangs and out-of-wedlock births.

In 1994, then-President Bill Clinton appointed Yellen to be a Fed governor in Washington, serving until 1997, when he moved her to the White House to chair the Council of Economic Advisers. She left the position in 1999 to return to Berkeley.

Yellen rejoined the Fed in 2004 as president of its San Francisco district bank, which represents the largest region by area and economic output. She has always voted with the majority of policy makers on interest-rate decisions.

Raskin, a 49-year-old attorney, was appointed in August 2007 as Maryland’s top banking regulator. She was previously managing director of Promontory Financial Group, a consulting firm, and worked at the New York Fed and as a counsel for the Senate Banking Committee. She graduated from Harvard Law School in 1986. Her husband, Jamie Raskin, is a law professor and a Democratic Maryland state senator.

Financial Overhaul

Senate lawmakers are preparing to debate an overhaul of financial legislation that currently includes provisions to strip the Fed of oversight of about 5,000 banks across the U.S. and focus its role on supervising about 36 large firms with assets of more than $50 billion. Tarullo is leading an internal revamping of Fed supervision.

Diamond, a specialist in taxation and behavioral economics who turns 70 tomorrow, has written widely on overhauling entitlement programs. His 2003 book “Saving Social Security” was co-written with Peter Orszag, director of the Office of Management and Budget. He joined MIT’s faculty in 1966.

The timing of the announcement fits Yellen’s schedule: She was in Washington attending the Federal Open Market Committee’s meeting today and yesterday. The central bank’s policy panel today restated its intention to keep the benchmark interest rate near zero for an “extended period.” While Yellen doesn’t have an FOMC vote this year, all 12 regional-bank presidents participate at each meeting.

To contact the reporters on this story: Hans Nichols in Washington at hnichols2@bloomberg.net; Scott Lanman in Washington at slanman@bloomberg.net

Last Updated: April 28, 2010 18:16 EDT



To: RetiredNow who wrote (71780)4/28/2010 11:48:41 PM
From: stockman_scott  Read Replies (1) | Respond to of 149317
 
Murphy’s Law and the Stupidity of Obama’s Drill-Drill-Drill Offshore Oil Policy

by Dave Lindorff

Published on Wednesday, April 28, 2010 by CommonDreams.org

British Petroleum had a fail-safe system for it's Deepwater Horizon floating deep-water drilling rig.

You know, the one that blew up and sank in the Gulf of Mexico, leaving a tangled spaghetti pile of 22-inch steel pipe one mile long all balled up on the sea floor a mile below the surface, and that is leaking oil at 42,000 gallons per day...so far.

The thing is, the fail-safe system, about the size of a McMansion sitting at the wellhead on the ocean floor, um, failed. It didn't collapse and shut off the flow of oil as intended, and it could take months now to shut the well down--during which time the leak rate is likely to increase to up to 300,000 gallons per day, or over two million gallons a week.

President Obama claimed last month that off-shore drilling technology had become so advanced that oil spills and blowouts were a thing of the past. Of course, as he said this, Australia and Indonesia were still assessing the damage from a similar offshore oil platform, the Montana, in the Timor Sea, which blew out and poured millions of gallons of oil into the ocean off Western Australia for over three months before it could be sealed off.

Murphy's Law: Anything that can go wrong will go wrong.

Given that this is true, particular of complex technological enterprises, the question that needs to be asked is not, what is the probability of a catastrophic failure of an offshore well, but what is the potential damage in the event of even one such catastrophe for the local environment?

In the case of the Deepwater Horizon, the potential damage if this well really blows is staggering. Just 50 miles off the coast of Louisiana, it poses a near fatal risk to the region's wetlands and bayous, with their shrimp and oyster fisheries, not to mention the breeding grounds they provide for endangered birds, fish and other animals.

But the real lesson of the Deepwater Horizon is what it means for expanded drilling in the Arctic waters north of Alaska.

Oil companies, including BP, Exxon Mobil, Chevron, Shell and others, like Goldman traders looking at a tranch of subprime mortgages, are casting covetous eyes on the Arctic Ocean and the oil and gas that studies suggest lie under the virgin sea floor. Their plan is to drill for these hydrocarbons once the summer sea ice vanishes as a result of rising global temperatures (more about this in a future article).

Obama, as part of his opening of more coastal areas to drilling, is including areas of the Beaufort and Chukchi Seas, which are already ice free during summer.

But let's think about this for a moment. Suppose there were a blowout like the one in the Gulf of Mexico at a rig drilling in the Arctic? Suppose it happened towards the end of the short summer, when the ice was about to return to cover the ocean surface? If it was a blowout that couldn't be plugged, like the Montana blowout in the Timor Sea, or if the fail-safe system at the wellhead failed, as with the Deepwater Horizon, and if the only solution was, as with the Montana well, to drill new wells to ease the pressure on the blown well, how would this be done, once the ice moved in?

Answer? It couldn't be done. Murphy's Law again. And so millions of gallons of crude oil would rise up out of the burst wellhead to spread out underneath the ice, whence it would eventually move on to destroy hundreds of miles of fragile coastline, probably killing untold numbers of species that live in the affected waters. The damage from such a completely predictable disaster wouldn't just be staggering, like the Montana or the Deepwater Horizon blowouts, but incomprehensible!

So why are we even talking about this?

The argument, made ad nauseum by Republicans and Democrats alike, is that the US needs more energy, and that we don't want to be dependent for our oil on "countries that hate us."

And yet, there is a much simpler answer than hanging a hydrocarbon Sword of Damocles over our nation's critical coastal areas. Just copy Europe and impose a 100% tax on gas and oil, to make people turn away from 15 or 20 or 25-mile-per-gallon vehicles and start driving fuel-efficient cars, car-pooling or forgoing cars altogether.

Even better, tax the crap out of cars that don't get at least 35 or even 40 mpg.

Oh, I know. People will say, "but poor people in rural areas or in the suburbs can't pay those rates for gas to get to work, and they have to buy used cars that don't get such high mileage rates."

I understand the problem, but it is solvable, by establishing refundable tax credits for low-income people who can document long commuting distances, for example.

The main point is that the country doesn't need to drill in risky settings. It needs only to cut oil consumption.

What's clear is that drilling in the open ocean is simply disaster after disaster waiting to happen.

*Dave Lindorff is a Philadelphia-based journalist and columnist. He is author of Marketplace Medicine: The Rise of the For-Profit Hospital Chains (BantamBooks, 1992), and his latest book "The Case for Impeachment" (St. Martin's Press, 2006). His work is available at www.thiscantbehappening.net