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Archive for June, 2010

Crude Offender

FlowingData makes it clear that compared to even the low standards of other oil companies, BP is in a class of its own for negligence and disregard for the safety of its workers and of its wells. 



In The Sunday Times, Andrew Sullivan lets off some steam. (Whole column worth reading)

At first blush, the onslaught against BP does seem a little much. But once you examine its recent record, the cornercutting and recklessness that precipitated this calamity, and the company’s enmeshment with the regulators who are supposed to be keeping watch … well, you tend to get more angry, not less. Take a simple comparison with other multinational oil companies. Over the past three years, the US government department that monitors compliance with health and safety regulations has cited several companies for negligence or corner-cutting. Sunoco and ConocoPhillips have had eight “egregious, wilful” safety violations apiece. Citgo had two. Exxon had one. BP had … 760.

[…]

Alas, what won’t change is the oil addiction that has forced the US to drill deeper and deeper in more and more treacherous waters, where techniques carry more risks precisely because the terrain is brand new. If you want to assign real, structural blame, it belongs in the end to the American people, who simply refuse to wean themselves off carbon and want to continue having the cheapest petrol in the West. This habit bolsters America’s enemies, empowers oil-rich Islamic states and is slowly cooking the planet. 

Sullivan again endorses my favorite solution to our oil addition: a carbon tax


There is plenty to be upset about in this whole fiasco, but certainly one of those things isn’t Obama’s tone or emotion. Here’s Clive Crook in the Financial Times.

The criticism of Mr Obama’s handling of the oil spill has been especially and flamboyantly unreasonable. So far as capping the leak is concerned, the relevant expertise resides with BP and the other oil companies. The notion that they should be “pushed aside” is risible. In any case, of course, the administration is in charge – overseeing the operation, as opposed to directing it in detail, which is as it should be. A deepwater drilling moratorium is in place and a thoroughgoing review of the regulatory regime is under way. The White House has been active in mobilising resources to contain damage to the coastline.

[…]

The view seems to be that staying calm in a crisis is all very well, except in a crisis. Then, the president must radiate rage and fear, pretend to direct operations, race about uselessly, weeping and hugging as he goes, doing stuff that will not help and might make things worse. 

Crook has been very reasonable about this issue from early on. I’m sure he’d appreciate this video.


(video via Ta-Nehisi Coates)
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Heartbeats

Sorry dear readers for my lack of posts recently. I’ve just been really busy.

Also I want to wish my beautiful little niece and her two great parents well. Thanks to all the doctors and nurses working hard to ensure her heart surgery is successful.  

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Tax Credits = Government Spending

Bruce Bartlett explains why tax expenditures are just government spending in disguise. They have the same effect on the deficit as spending and should be treated as such. 

To see just how similar a refundable tax credit is to direct spending, imagine that instead of having the Defense Department pay $1 billion to Lockheed Martin for some spare parts for the Air Force, it instead gave it a $1 billion refundable tax credit that was tradable. If Lockheed Martin didn’t have at least a $1 billion federal tax liability, it could simply sell the unused portion to another company that did. Either way the company gets paid $1 billion and $1 billion worth of resources are extracted from the private sector for government’s use.

There’s not a tax expert on the left or the right who doesn’t recognize the illegitimacy, inefficiency and ineffectiveness of many tax expenditures. There is a desperate need to clean up the Tax Code, as Ronald Reagan and a Democratic Congress did in 1986. Unfortunately, Republicans now take the view that eliminating any tax expenditure constitutes a tax increase, and they oppose it because they oppose all tax increases for any reason.

If one wants to defend government promotion of a particular activity (or something like a military purchase), it should be defended on its own merits and in a cost/benefit analysis not some vague notion of wanting to have lower taxes or more tax breaks. The case for low marginal taxes and for promoting desirable behavior through the tax code are two different arguments. Until we can understand that we’ll continue to have a convoluted and inefficient tax code – and probably higher deficits too. 

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