The huge gap between America’s rich and super-rich exposes a fundamental misunderstanding about inequality

Business Insider

The huge gap between America’s rich and super-rich exposes a fundamental misunderstanding about inequality

Pedro Nicolaci da Costa July 7, 2017

Destabilizing levels of income inequality, once a problem reserved for developing nations, is now a defining social and political issue in the United States.

Donald Trump seized on the issue during the presidential campaign, vowing to become a voice for forgotten Americans left behind by decades of widening wealth disparities.

While America’s enormous gap between rich and poor and the sorry state of its middle class are well-documented, a less prominent trend tells an equally important story about the American economy: the divide between the well-off and the stratospherically rich.

This particular pattern is especially important since some economists and conservative commentators have tried to blame inequality on educational levels, arguing that those with college degrees have fared well in the so-called knowledge economy while those with a high school diploma or less lack the skills to do the jobs available.

Others, however, point to runaway salaries for top executives in industries like energy and finance as the key underlying drivers of inflation, which has been characterized by huge gains at the very top of the income distribution. Executive compensation is driven in large part by corporate boards that have cozy relationships with firms’ CEOs, rather than market forces.

From Aspen, Colorado, the New York Times columnist David Brooks recently wrote:

“There is a structural flaw in modern capitalism. Tremendous income gains are going to those in the top 20 percent, but prospects are diminishing for those in the middle and working classes. This gigantic trend widens inequality, exacerbates social segmentation, fuels distrust and led to Donald Trump.”

Gabriel Zucman, an economist at the University of California, Berkeley and a preeminent researcher of inequality, wasted little time in countering the argument.

“Tremendous gains are not going to the top 20%. They are going to top 1%,” he tweeted at Brooks, adding that this is key to understanding the Republican Party’s agenda.

Richard Reeves, a senior fellow at the Brookings Institution, makes a similar case as Brooks.

“The strong whiff of entitlement coming from the top 20 percent has not been lost on everyone else,” he wrote in a recent opinion piece. His book is titled “Dream Hoarders: How the American Upper Middle Class Is Leaving Everyone Else in the Dust, Why That Is a Problem, and What to Do About It.”

Nicholas Buffie, an economic-policy researcher in Washington, eloquently took issue with the 20% argument in a blog he wrote when he was at the Center for Economic and Policy Research.

“The problem with this type of analysis is that it misleads readers into thinking that a large group of well-educated Americans have benefited from the rise in inequality,” Buffie said. “In reality, the ‘winners’ from increased inequality are really a much smaller group of incredibly rich Americans, not a large group of well-educated, upper-middle-class workers.”

In other words, blaming America’s wealth divide merely on educational differences may be easy, but not particularly useful.

The richest US families own a startling proportion of America’s wealth

Pedro Nicolaci da Costa June 28, 2017

Distribution matters.

The United States has long taken pride in being the richest nation in the world. It remains so despite China’s quick game of catch-up and much larger population, at least when it comes to the broadest measure of a country’s economic output, gross domestic product (GDP).

Yet deep inequalities, which became a hot-button political issue in the wake of a deep recession and financial crisis that highlighted those disparities, paint a different picture of how well off most Americans really are.

Research from Berkeley economists has found incomes at the top 0.001% of the income strata surged a whopping 636% between 1980 and 2014, while wages for the bottom half of the population were basically stuck in place.

Critics of that body of work say its use of pre-tax data masks some of the equalizing effects of the tax code, and thus overstates inequality. If that were indeed the case, a look at the distribution of wealth as opposed to just income, while harder to measure, could be a better barometer as to the true state of America’s social divide.

This chart courtesy of Deutsch Bank economist Torsten Slok shows the picture with regards to wealth is even bleaker. The richest 10% of families are worth a combined $51 trillion, equal to 75% of total household wealth. To put that figure in perspective, US GDP totaled $18.5 trillion in 2016.

This eye-popping chart on inequality is a slap in the face of America’s middle class

Pedro Nicolaci da Costa June 13, 2017

Why does the US economy still feel iffy to most Americans despite an eight-year economic expansion and historically low unemployment?

Look no further than this eye-popping chart of income growth between 1980 and 2014 courtesy of Berkeley’s elite-squad of inequality research, including Thomas Piketty, Emmanuel Saez, and Gabriel Zucman.

Featured in a recent blog from the University of Chicago’s Booth School of Business, the graphic highlights just how stratospheric income growth has been for the very wealthiest Americans — and how stagnant, in contrast, wages have been for the rest.

That’s not a typo on the right. Incomes for the top 0.001% richest Americans surged 636% during the 34-year period. Wow.

There’s more. “The average pretax income of the bottom 50% of US adults has stagnated since 1980, while the share of income of US adults in the bottom half of the distribution collapsed from 20% in 1980 to 12% in 2014,” writes Howard Gold, founder and editor of GoldenEgg Investing, in the Chicago Booth blog.

“In a mirror-image move, the top 1% commanded 12% of income in 1980 but 20% in 2014. The top 1% of US adults now earns on average 81 times more than the bottom 50% of adults; in 1981, they earned 27 times what the lower half earned.”

Here’s a link to the full paper for the academically inclined.

Protesters opposing GOP health care bill descend upon lawmakers, some arrested

ABC Good Morning America

Protesters opposing GOP health care bill descend upon lawmakers, some arrested

Ali Rogin and David Caplan, Good Morning America July 7, 2017

https://www.yahoo.com/gma/protesters-opposing-gop-health-care-bill-descend-upon-051305078–abc-news-topstories.html

Protesters around the country on Thursday responded to lawmakers who declined to hold town halls by bringing their complaints straight to the doors of their elected officials’ offices.

From Arkansas to Arizona, supporters of Obamacare chanted, sang songs and in some cases, got arrested as they made their case against the Senate Republican health care bill.

ARIZONA

The Arizona chapter of the Progressive Democrats of America, a grassroots PAC operating inside the Democratic Party, said five of its members were arrested at a gathering outside the Phoenix office of Sen. Jeff Flake after a building manager called the police, claiming they were standing on private property. ABC affiliate KGUN reported that the four women and one man were taken into custody for trespassing after they repeatedly refused to leave the private property.

Protesters chanted “Where is Jeff Flake!” and “Now’s the time to stand and fight! Health care is a human right!”

In Tucson, Pima County Sheriff’s deputies arrested two men at a health care-related protest at Sen. Jeff Flake’s office Thursday morning, according to KGUN. Deputies say the men were arrested just before 9 a.m. for reported threats. One of the protesters allegedly referenced the shooting of U.S. Rep. Steve Scalise, according to KGUN.

ARKANSAS

In Arkansas, protesters waited in Sen. Tom Boozman’s Little Rock office, but were told by a staffer to limit themselves to ten people inside the small waiting room.

“Let’s please be respectful of each other,” the staffer told the group.

“Well, we would like for our senator to be respectful,” a protester responded. “If you’re going to have constituents, and if he’s going to be the U.S. Senator, he should have an office where constituents can come sit and speak their minds!”

At Sen. Tom Cotton’s office, in the same building as Boozman’s office, other protesters sang pro-Medicaid songs, to the tune of “Glory, Glory Hallelujah.”

And another protester told a Cotton staffer, “The legislation is supposed to make cuts to VA services … as a veteran Sen. Cotton should have other veterans in mind.” The staffer responded, “We appreciate your service. Thank you.”

TEXAS

Sen. Cruz was one of the few Senate Republicans to hold a town hall. Most of the questions at the event in Austin were on veterans’ health care, but he did have a few spirited exchanges with supporters of the ACA.

“I’m happy to have a conversation, but if we’re just yelling back and forth at each other, we can’t have that,” he told one heckler.

At the end of the event he thanked the largely friendly audience for a “respectful and spirited debate,” adding, “we may not have convinced each other but that’s part of the democratic process.”

Protesters, who chanted songs, also rallied outside of Sen. John Cornyn’s office in Austin.

Police were spotted escorting protesters away, and one of the officers was spotted frisking a male protester.

COLORADO

Obamacare supporters held a “Save Medicaid Rally” in Denver, where several hundred people showed up.

One female protester urged rally-goers to call Sen. Corey Gardner. “Call him at least once a day and tell him to vote no and to commit to us, before he leaves Colorado, to vote no on this ridiculous tax cut for the wealthy!” she said.

Activists at Sen. Corey Gardner’s Denver office didn’t get a face-to-face meeting, but they did get a 15-minute phone chat with their senator, who was not in the Denver area.

They told him they “demanded” that he vote “no” on the Senate bill — but Gardner said he couldn’t say how he would vote because the bill as presented is just a “discussion draft,” not the final version.

“I can’t commit yes or no,” he told the activists, from the Denver chapter of Democratic Socialists of America.

KENTUCKY

A few dozen protesters chanted and held signs outside Sen. Mitch McConnell’s office in Lexington.

“Don’t get sick! Please die quick!” chanted protesters, mocking the GOP’s healthcare plan.

KANSAS

Sen. Jerry Moran was treated warmly by a crowd at a town hall in Palco that seemed largely supportive of Obamacare, because he opposes the current Senate GOP bill.

He had a few exchanges with the liberal members of the audience, but all of them were respectful. This was a crowd that clearly appreciated being among the few that actually had an opportunity to talk to their senator over this recess.

“If public hearings are not held in the Senate on the next Senate bill, will you withhold your vote?” one attendee asked Moran of the health care bill.

“I will not necessarily. That’s not the criteria. I know that’s not the answer you were looking for,” Moran responded.

“No!” she said back, though she listened attentively as he explained why that wasn’t the case.

Moran touched on the scarcity of Republican town halls.

“I’ve been told that it’s silly to hold town hall meetings,” he said. “You may not be my voters, but you are my constituents. And you deserve to have a conversation with me,” he added, to applause.

TwinCities Pioneer Press

Health care bill would have devastating effects on Minnesotans, Dayton says

S.M. Chavey, Pioneer Press July 5, 2017

At a Minneapolis news conference Wednesday, Gov. Mark Dayton and U.S. Rep. Keith Ellison, both Democrats, railed against the proposed health care bill in the U.S. Senate.

The Republican-written health care measure would unwind parts of the 2010 Affordable Care Act, known as Obamacare, and replace them with a less generous and, to backers, a less onerous health insurance program.

The bill threatens health insurance for an estimated 22 million Americans, according to the Congressional Budget Office. The CBO, a nonpartisan office, said the planned Senate health care measure would deliver a 35 percent spending cut to Medicaid, a program for people with low incomes, by 2036.

About 1 million Minnesotans are on Medicaid, with a further 100,000 on the state-run MinnesotaCare. That’s about 20 percent of the state’s population, Dayton said. The national health care bill under consideration would cost Minnesota $2.8 billion a year by 2026 and a total of $31 billion by 2030 — and that’s too big of a cut for the state to back fill, the governor said.

He and Ellison, who represents Minneapolis, urged Minnesotans to speak out against the bill.

“Quality health care is a right, and it should be treated as such,” Dayton said.

The U.S. House replacement for the federal Affordable Care Act passed by just two votes in May. The three Republican House members from Minnesota voted in favor of the measure. The five Democrats voted against it.

Republican U.S. Rep. Jason Lewis said the measures being debated in Congress would create a more robust, affordable and nimble health insurance market.

“We undo the price controls, we undo the mandates, so young and healthy people can get back in the insurance pool with lower premiums,” said Lewis, in his first term representing Minnesota’s south-suburban 2nd District.

Lewis defended slowing the growth of Medicaid, saying that the able-bodied poor adults it expanded to cover under the Affordable Care Act shouldn’t be the program’s focus.

In the face of opposition from Senate Republicans, the Senate delayed a vote, originally planned for the end of June, on its replacement until after the July 4 recess.

“It’s not too late to raise your voice to stop this terrible Senate bill,” Ellison said Wednesday. “If we want to preserve ACA and even extend it and make it better, it’s time to raise your voice and to understand that we are right.”

Minnesota Department of Human Services Commissioner Emily Piper said the bill would affect Minnesotans in particular by removing federal funding from MinnesotaCare and by not giving Minnesota credit for the reforms it has made to Medicaid.

“If Congress and the president are serious about reducing health care costs, they should really look to states like Minnesota that have innovated and reformed the way we deliver health care for the people of Minnesota, and not punish us for the reforms,” Piper said.

Piper said Medicaid pays for almost half of substance-abuse treatment in Minnesota. Medicaid enrollee James Robinson, of Minneapolis, said Medicaid helped him work through his addictions.

“If it weren’t for the funding of some of these programs … there would have been no support system that saw the good in me and said, ‘You deserve to live,’ ” Robinson said at the news conference.

David Montgomery contributed to this report.

Is Trump mentally fit to be president? Let’s consult the U.S. Army’s field manual on leadership

LA Times Op-ed

Is Trump mentally fit to be president? Let’s consult the U.S. Army’s field manual on leadership

By Prudence L. Gourguechon June 16, 2017

Since President Trump’s inauguration, an unusual amount of attention has been paid to the 25th Amendment to the Constitution. That’s the measure, ratified in 1967, that allows for removal of the president in the event that he is “unable to discharge the powers and duties” of the office. What does that mean, exactly? Lawyers surely have some ideas. But as a psychiatrist, I believe we need a rational, thorough and coherent definition of the mental capacities required to carry out “the powers and duties” of the presidency.

Although there are volumes devoted to outlining criteria for psychiatric disorders, there is surprisingly little psychiatric literature defining mental capacity, even less on the particular abilities required for serving in positions of great responsibility. Despite the thousands of articles and books written on leadership, primarily in the business arena, I have found only one source where the capacities necessary for strategic leadership are clearly and comprehensively laid out: the U.S. Army’s “Field Manual 6-22 Leader Development.”

The New York Times published a letter signed by 35 psychiatrists, psychologists and social workers. The letter suggests Trump’s “grave emotional instability… makes him incapable of serving safely as president.” (Feb. 21, 2017)

The Army’s field manual on leadership is an extraordinarily sophisticated document, founded in sound psychological research and psychiatric theory, as well as military practice. It articulates the core faculties that officers, including commanders, need in order to fulfill their jobs. From the manual’s 135 dense pages, I have distilled five crucial qualities:

Trust

According to the Army, trust is fundamental to the functioning of a team or alliance in any setting: “Leaders shape the ethical climate of their organization while developing the trust and relationships that enable proper leadership.” A leader who is deficient in the capacity for trust makes little effort to support others, may be isolated and aloof, may be apathetic about discrimination, allows distrustful behaviors to persist among team members, makes unrealistic promises and focuses on self-promotion.

A good leader ‘demonstrates an understanding of another person’s point of view’ and ‘identifies with others’ feelings and emotions.’

Discipline and self-control

The manual requires that a leader demonstrate control over his behavior and align his behavior with core Army values: “Loyalty, duty, respect, selfless service, honor, integrity, and personal courage.” The disciplined leader does not have emotional outbursts or act impulsively, and he maintains composure in stressful or adverse situations. Without discipline and self-control, a leader may not be able to resist temptation, to stay focused despite distractions, to avoid impulsive action or to think before jumping to a conclusion. The leader who fails to demonstrate discipline reacts “viscerally or angrily when receiving bad news or conflicting information,” and he “allows personal emotions to drive decisions or guide responses to emotionally charged situations.”

In psychiatry, we talk about “filters” — neurologic braking systems that enable us to appropriately inhibit our speech and actions even when disturbing thoughts or powerful emotions are present. Discipline and self-control require that an individual has a robust working filter, so that he doesn’t say or do everything that comes to mind.

Judgment and critical thinking

These are complex, high-level mental functions that include the abilities to discriminate, assess, plan, decide, anticipate, prioritize and compare. A leader with the capacity for critical thinking “seeks to obtain the most thorough and accurate understanding possible,” the manual says, and he anticipates “first, second and third consequences of multiple courses of action.” A leader deficient in judgment and strategic thinking demonstrates rigid and inflexible thinking.

Self-awareness

Self-awareness requires the capacity to reflect and an interest in doing so. “Self-aware leaders know themselves, including their traits, feelings, and behaviors,” the manual says. “They employ self-understanding and recognize their effect on others.” When a leader lacks self-awareness, the manual notes, he “unfairly blames subordinates when failures are experienced” and “rejects or lacks interest in feedback.”

Empathy

Perhaps surprisingly, the field manual repeatedly stresses the importance of empathy as an essential attribute for Army leadership. A good leader “demonstrates an understanding of another person’s point of view” and “identifies with others’ feelings and emotions.” The manual’s description of inadequacy in this area: “Shows a lack of concern for others’ emotional distress” and “displays an inability to take another’s perspective.”

The Army field manual amounts to a guide for the 25^th Amendment. Whether a president’s Cabinet would ever actually invoke that amendment is another matter. There is, however, at least one historical precedent. The journalists Jane Mayer and Doyle McManus tell the dramatic story in their 1988 book, “Landslide: The Unmaking of the President 1984-1988.”

Before he started his job as President Reagan’s third chief of staff, in early 1987, Howard Baker asked an aide, James Cannon, to put together a report on the state of the White House. Cannon then interviewed White House staff, including top aides working for the outgoing chief of staff, Donald Regan. On March 1, the day before Baker took over, Cannon presented him with a memo expressing grave concern that Reagan might not be sufficiently competent to perform his duties. Reagan was inattentive and disinterested, the outgoing staff had said, staying home to watch movies and television instead of going to work. “Consider the possibility that section four of the 25^th Amendment might be applied,” Cannon wrote.

After reading the memo, Baker arranged a group observation of Reagan for the following day. On March 2, Baker, Cannon and two others — Reagan’s chief counsel, Arthur B. Culvahouse Jr., and his communications director, Tom Griscom — scrutinized the president, first at a Cabinet meeting, then at a luncheon. They found nothing amiss. The president seemed to be his usual genial, engaged self. Baker decided, presumably with relief, that Reagan was not incapacitated or disabled and they could all go on with their business.

Much has changed since the Reagan era, of course. Because of Trump’s Twitter habits and other features of the contemporary media landscape, far more data about his behavior are available to everyone — to citizens, journalists and members of Congress. And we are all free to compare that observable behavior to the list of traits deemed critical for leadership by the U.S. Army.

Prudence L. Gourguechon, M.D., is a psychiatrist and psychoanalyst in Chicago.

Damage From Wayward Weedkiller Keeps Growing

NPR Food For Thought

Damage From Wayward Weedkiller Keeps Growing

Dan Charles July 6, 2017

Two weeks ago, in a remarkable move, the State Plant Board of Arkansas voted to ban the sale and use of a weedkiller called dicamba. It took that action after a wave of complaints about dicamba drifting into neighboring fields and damaging other crops, especially soybeans.

That ban is still waiting to go into force. It requires approval from a committee of the state legislature, which will meet on Friday.

Estimates of dicamba’s damage, however, continue to increase. Since the Plant Board’s vote, the number of dicamba-related complaints in Arkansas has soared to 550. Reports of damage also are increasing in the neighboring states of Tennessee, Missouri and Mississippi. The total area of damaged soybean fields could reach 2 million acres.

“I’ve never seen anything even close to this,” says Larry Steckel, a weed specialist at the University of Tennessee. “We have drift issues every year in a handful of fields, but I’ve never seen anything like this.”

Dicamba is not a new weedkiller; it’s been around for 50 years. It’s being used in a new way, though, because the biotech company Monsanto is now selling new soybean and cotton varieties that have been genetically altered to tolerate dicamba.

Farmers are spraying dicamba on those new crops, and they report that it’s working great, killing weeds that farmers have struggled to control lately.

The problem is, dicamba doesn’t always stay where it’s supposed to. In hot weather, dicamba turns into a gas that apparently can drift for miles. And soybeans that haven’t been specifically engineered to tolerate dicamba are extremely sensitive to it.

According to Steckel, soybean farmers in western Tennessee are in one of two camps. Perhaps 60 percent of them are spraying dicamba, because they invested in Monsanto’s new dicamba-tolerant crops. The rest, with soybeans that are vulnerable, likely have seen some fields damaged.

Steckel says it’s difficult to predict how much this will take out of farmers’ pockets. Some of the injured soybeans may recover and produce a normal-size harvest. Others probably will not. Some fields have been hit by drifting dicamba multiple times.

Tom Burnham, who farms land in Mississippi County, Arkansas, and across the state line in Missouri, is one of the farmers pushing for a ban on dicamba spraying. “This technology cannot be allowed to exist,” he says. “It cannot co-exist with other crops.”

In theory, if every farmer bought Monsanto’s dicamba-tolerant soybeans, then their crops all would be safe from dicamba drift. But Burham says “it’s ludicrous to expect everybody to plant this, just to defend themselves. And that doesn’t address vegetable growers, people with orchards, people with vineyards. They’re going to be economically harmed, too.”

Other farmers, meanwhile, who’ve bought dicamba-tolerant seeds and want to use the chemical, have argued for their right to spray dicamba.

Monsanto’s head of crop protection, in an interview posted on the site of CropLife, an industry website, said that farmers were still learning how to use dicamba safely. The current problems, he said, were “just part of the learning curve.”

Scott Pruitt’s short tenure as EPA chief already a scandal

Chicago Sun-Times Opinion

Scott Pruitt’s short tenure as EPA chief already a scandal

Sun-Times Editorial Board July 5, 2017

Scott Pruitt, administrator of the Environmental Protection Agency, is not doing his job. Quite the opposite.

Rather than do the hard work of making our nation’s environmental regulations work better for business while still protecting Americans — always a difficult balancing act — Pruitt wants to incinerate the rules, belching the resulting smoke into the atmosphere and tossing the residue into the nearest creek.

Day by day, he makes it clear he is in the wrong job.

On Monday, a divided federal appeals court shot down Pruitt’s ill-advised effort to delay rules designed to cut down on methane leaks, which contribute to global warming.

But if Pruitt has his way, that will slow him down only temporarily.

In his five months on the job, Pruitt has tried to block, delay or entirely uproot more than 30 environmental regulations. He is shredding the Clean Power Plan, designed to reduce emissions of carbon dioxide, a greenhouse gas. He wants to revoke plans to reduce pollution in waterways. He has ended a ban on a pesticide the EPA had found was dangerous to children. He has delayed a rule to stop chemical plant explosions and spills. He has become Donald Trump’s point man in undermining America’s compliance with the Paris climate change accord and wants to gum up the works by starting a debate on whether human-caused climate change is real.

As for going after any new threats to the environment? Not a chance.

Pruitt has a long history of unprincipled attacks on environmental regulations. When he was the attorney general of Oklahoma, he repeatedly sued to block EPA regulations that irked business interests. He signed letters to regulators that were written by industry lobbyists.

As EPA administrator, he mostly ignores the EPA’s career experts. In recent weeks, he has shown the door to 47 members of the EPA’s respected Board of Scientific Counselors. For advice, he turns instead to ex-lobbyists, anti-environment politicians and industry figures themselves.

The Trump administration’s environmental policies need a housecleaning.

Scott Pruitt’s EPA has spun out of control

The Dallas Morning News

Scott Pruitt’s EPA has spun out of control

Written by Dallas Morning News Editorial

Environmental Protection Agency Administrator Scott Pruitt continues to wield an ax to Obama-era environmental regulations, a ham-fisted effort that could come back to haunt consumers and the industries he’s letting off the hook.

In less than four months, Pruitt, formerly Oklahoma’s climate-change-denying attorney general, has rejected, delayed or blocked more than 30 environmental rules. And to make matters worse, he’s done it with scant input from EPA career professionals and relied on political appointees, former lobbyists and industry officials to shape policy.

So much for environmental protection in the public interest. It is natural that different EPA administrators will have different priorities, but previous ones at least demonstrated a commitment to the agency’s core mission.

Not Pruitt. He’s eviscerating Barack Obama’s Clean Power Plan, a voluntary agreement to align states and industries behind a plan to reduce carbon dioxide emissions. Oil and gas companies are about to get a pass on plugging methane leaks from their wells, a blow against reducing greenhouse gases. Pruitt also has delayed compliance with a rule to prevent explosions and spills at chemical plants, reversed a ban on the use of a pesticide that EPA scientists and doctors link to damage of children’s nervous systems, and wants to roll back Clean Waters authority over streams and small bodies of water.

A regulatory agency is supposed to be the cop on the beat and put its public protection mission ahead of corporate profits, ideological myths about climate change and expediency. When regulators allow an industry to go Wild West, people start getting hurt and corporations lose America’s trust. Corporations soon become vulnerable to criticism by activists, whether grounded in reality or not. And when a disaster occurs, the predictable response is: Why didn’t regulators do their job?

Texas knows firsthand the hazards of lax regulation. The fertilizer explosion that virtually leveled the town of West in 2013 was ruled to have been intentionally set. Nonetheless, investigations cited numerous city, state and federal regulatory failures for contributing to the magnitude of the explosion and death toll. Likewise, hydraulic fracturing became a flash-point issue both in Texas and in other states when gas industry bad actors paid too little regard to the environmental and societal concerns.

There is room for industry’s concern about the reasonableness of environmental regulations. No matter how well-intentioned, regulations trigger compliance costs. The answer is not Pruitt’s industry-friendly overcorrection.

The EPA, like other state and federal agencies, has had its share of regulatory failures. Nonetheless, Americans should expect that regulators will try to prevent dangerous excesses whenever possible.

The energy world has a big stake in sensible, strong dependable regulations that citizens can trust. The industry would be wise to not bask in these short-term “gains” and guide the EPA back to a more sustainable policy that recognizes that regulatory laxity is a recipe for corporate irresponsibility and eventually problems for all of us.

The lessons of regulatory failures

Deepwater Horizon (2010): Offshore drilling companies in the Gulf of Mexico claimed they had adequate spill prevention and cleanup plans. They didn’t. Post-disaster reports showed that drillers cut corners and lax federal oversight and coziness with the industry insiders allowed those abuses to go unchecked. The entire industry faced delays and red tape in its wake.

West explosion (2013): Although investigators ruled the ammonium nitrate explosion that virtually leveled the town West was intentionally set, other post-disaster reports indicated that numerous city, state and federal regulatory failures contributed to the magnitude of the disaster.

Fracking: Combine decades of mistrust of the oil industry with the refusal of natural gas and oil producers to go along with even the most benign regulations on fracking, such as disclosing the contents of chemicals used in the process, and grass-roots protests ensued. Now, the industry is banned from fracking in cities and regions across the country.

Amish farmers square off against Big Organic in milk battle

Washington Post Business

Amish farmers square off against Big Organic in milk battle

By Peter Whoriskey July 5, 2017

KALONA, Iowa — This small town has become a landmark in the organic-farm movement, and it has nothing to do with foodies or hippies.

Instead it has been Amish farmers who, in their suspenders and wide-brimmed hats, have helped develop one of the densest clusters of organic farms in the United States. More than 90 operations certified by the Agriculture Department have emerged within a 10-mile radius, producing, among other things, corn, soybeans, eggs and, perhaps most important, milk.

“This is our living and our way of life,” said Eldon T. Miller, 71, an Amish dairy farmer here. A little over 20 years ago, Miller began holding informational meetings in his basement about organics, and the idea slowly spread across the area.

The question for small organic dairy farmers is how long they can hold out against growing competition from very big dairies producing large volumes of organic milk that, in the view of many here, does not deserve the label.

A glut of organic milk has sunk prices across the United States, threatening livelihoods and rekindling long-standing suspicions that some of the large organic dairies that have emerged are swamping the market with milk that does not meet organic standards. Over the years, some of these very large dairies, most of them in the West, have been cited for violating organic rules by the USDA or inspection agencies. To the chagrin of many here, most have been allowed to continue operating.

[How millions of cartons of ‘organic’ milk contain an oil brewed in industrial vats of algae]

Then, last month, The Washington Post reported that one of the nation’s largest dairy producers, Colorado-based Aurora Organic Dairy, a supplier to Walmart, Costco and Albertsons, appeared to fall short of organic grazing standards.

“Nobody’s real happy right now,” said James Swantz, an Amish father of eight who milks about 70 cows here. “We’d like to know what our milk check will be, and right now we can’t tell.”

Over the past year, the price of wholesale organic milk sold by Kalona farms has dropped by more than 33 percent. Some of their milk — as much as 15 percent of it — is being sold at the same price as regular milk or just dumped onto the ground, according to a local processor. Organic milk from other small farmers across the United States is also being dumped at similar rates, according to industry figures.

“At first, when the prices started falling, the guys here were just really mad,” said Phil Forbes, a liaison between the Amish farmers here and the company that buys their milk and sells it under a brand called Kalona SuperNatural, which can be found at Whole Foods and similar grocers. “But it’s been going on so long, they’re telling me, ‘I can’t keep going much longer at these prices.’ What kills me is the customers of those big brands think it’s something like a small Amish farmer who is producing the milk. But the reality is quite different.”

What makes milk ‘USDA Organic’?

The central issue in the debates over whether the mega-dairies are producing legitimately organic milk revolve around the concept of “grass-fed.”

Organic cows are supposed to be grass-fed during grazing season, and many consumers prefer grass-fed milk in the belief that grazing is more natural, is better for the cows and produces higher-quality milk. It is one of the reasons that people pay roughly double for milk with the “USDA Organic” label.

Organic dairies, on the other hand, have an incentive to skimp on grazing: A grass-fed cow produces less milk; keeping a cow in a feed lot eating grain boosts production. Adding to the suspicions about the industry, there is statistical evidence of a curiously large increase in the amount of milk each organic cow is producing.

Between 2008 and 2015, the number of organic cows in the United States rose from 202,000 to 229,000, a jump of about 13 percent. The amount of organic milk products, however, rose from 1.8 billion pounds to 2.4 billion pounds, a 35 percent jump, according to USDA statistics.

Why did the amount of organic milk rise almost three times as fast as the number of organic cows? Some of the increase in production is attributable to better practices, said Edward Maltby, chief of the Northeast Organic Dairy Producers Alliance. Some of it could be from the larger dairies reducing the amount of grazing to the very minimum required by the regulations.

“But the reason for such a large jump,” Maltby said, also has to do with “the increase in those mostly larger herds where the cows are fed in the barn instead of going out to pasture as the organic regulations require.”

Questions about enforcement

Another reason for skepticism about whether the milk from these large dairies is truly organic arises from the perception that enforcement of “USDA Organic” standards has been lax.

To manage enforcement, the USDA relies on inspection agencies hired by the farmers. The Cornucopia Institute, a Wisconsin-based watchdog group representing small farmers and consumers, has filed repeated complaints against some of the massive dairies out West. But even when violations are reported, punishments can be mild.

Ten years ago, for example, the USDA found “willful violations” of organic standards at Aurora because of, among other things, a lack of grazing. In 2008, an inspection agency found that the Rockview Farms operation in Nevada was violating the organic pasture requirement and suggested that related dairy records could have been falsified. In 2010, an inspection agency proposed suspension of a large Arizona dairy, known as Shamrock, for denying pasture to its herd.

In those three cases, however, the USDA did not fine the dairies for the violations of organic rules even though the agency has the power to do so.

These investigations all began with Cornucopia, not the USDA or the inspection agencies. “The USDA has shown a remarkable lack of interest in whether these big organic dairies are really organic,” said Mark Kastel of the Cornucopia Institute. “Most times, they don’t even investigate. And when they find a problem, there’s very little punishment, if any. It’s a gross betrayal of the spirit of the organic law.”

Many retailers, thus far, have continued to trust the “USDA Organic” seal on milk from the large mega-dairies. The Post reported last month that, based on visits to pastures and a chemical analysis of the milk, Aurora appears to be falling short of organic grazing requirements. In response, Aurora said it operates according to organic standards.

Reactions from the major retailers that use Aurora milk as their house-brand milk were varied. Walmart would not say whether it will continue to use Aurora’s organic milk.

Costco said it has “investigated” but will continue to use Aurora: “Costco Wholesale has discussed with Aurora and otherwise investigated recent media statements concerning Aurora,” John Sullivan, a company senior vice president and general counsel, wrote in an email. “Costco has satisfied itself that its continued reliance on the [National Organic Program] certification of Aurora’s organic milk remains appropriate.”

From Albertsons: “Aurora is a minority supplier to Albertsons for our O Organic brand today and we will continue to ensure through our agreement with [inspection agency Quality Assurance International] that they are compliant with all Organic standards.”

The USDA said it is reviewing the information provided in The Post’s reporting, but others said the agency ought to be doing more enforcement. “The USDA ought to have boots on the ground at Aurora,” said Richard Mathews, former assistant deputy of the USDA office that oversees the organic program and other efforts. “But they don’t. They should be looking at farmers. They should be looking at certifiers. If they’re not doing that, they’re not doing it right.”

Bigger herds need bigger pastures

While consumers might picture organic milk coming from a small family farm, the reality is often quite different.

Much of that milk is being produced by huge dairies with thousands of cows, including a few with herds of more than 10,000 animals. By contrast, the average herd at an organic dairy is about 100 cows, and in Kalona the herd sizes are even smaller. The large dairies are staffed by employees rather than family members.

The difference between the mega-dairies and the typical organic dairy is not just a matter of scale. Most of the large, new dairies have emerged in Western states — Colorado, Texas, Arizona and New Mexico — where the weather is drier and pasture is harder to grow, but where the land is cheaper.

But it is the vast scale of the mega-dairies out West that raises suspicions around Kalona.

The larger the herd, the more pasture is required to feed it. But at a certain point, the acreage needed to feed a herd grows so large that it’s impractical to expect a cow to walk all the way to the pasture’s outer edges to graze and then back to the barn, typically twice day, to get milked. Some farms do have multiple milking facilities.

[The surprising number of American adults who think chocolate milk comes from brown cows]

“We know with that high concentration of cows that it’s impossible to meet the grazing rule,” Swantz said. “They’re not organic. No way.”

During a break driving a steel-wheeled tractor over his fields, Amish farmer Glen Mast asked, “Fifteen thousand cows out there, and that’s certified organic?”

“The cows would go hungry looking for grass,” Miller said, asserting that the Iowa pasture is better than any out West. “Those cows probably get as much cactus as grass.”

The Kalona farmers say the organic movement dovetails with Amish ideals. The higher prices on organic products allow their small farms to turn a profit, allowing community members to stay on the farm and away from town. (Their tractors have steel wheels to lessen the temptation to head off the farm, too.) And some said they had harbored doubts about the health effects of the chemicals they had used on their fields before going organic.

“The Amish are more inclined to doing things naturally,” Mast said as his oldest son worked a tractor. Mast, 38, has seven children, ages 1 to 14. “We have large families, and we have a close connection to the soil.”

But critical to the future of organic dairy, several here said, is for the USDA and the inspection agencies to enforce the organic rules on the large players in the industry.

“The little guy is getting hurt here,” said Bill Evans, who shares ownership with a trust of Amish farmers of the processing company behind the Kalona SuperNatural brand. “The USDA really needs to apply the rules. Otherwise, it’s not a fair game.”

Peter Whoriskey is a staff writer for The Washington Post handling projects in business, healthcare and health. You can email him at: peter.whoriskey@washpost.com

Volvo to go all electric with new models from 2019

Reuters

Geely’s Volvo to go all electric with new models from 2019

By Niklas Pollard, Reuters July 5, 2017

STOCKHOLM (Reuters) – All Volvo car models launched after 2019 will be electric or hybrids, the Chinese-owned company said on Wednesday, making it the first major traditional automaker to set a date for phasing out vehicles powered solely by the internal combustion engine.

The Sweden-based company will continue to produce pure combustion-engine Volvos from models launched before that date, but its move signals the eventual end of nearly a century of Volvos powered solely that way.

While electric and hybrid vehicles are still only a small fraction of new cars sales, they are gaining ground at the premium end of the market, where Volvo operates and where Elon Musk’s Tesla Motors has been a pure-play battery carmaker from day one. As technology improves and prices fall, many in the industry expect mass-market adoption to follow.

“This announcement marks the end of the solely combustion engine-powered car,” Volvo Cars CEO Hakan Samuelsson said.

The company, owned by Zhejiang Geely Holding Group, said five new models set to be launched in 2019 through 2021 – three of them Volvos and two Polestar-branded – would all be fully electric.

“These five cars will be supplemented by a range of petrol and diesel plug in hybrid and mild hybrid 48-volt options on all models,” Volvo said. “This means that there will in future be no Volvo cars without an electric motor.”

The electric models will be produced at Volvo plants world-wide – it has factories in Europe and China and is building one in the United States – while development costs will be met from within its existing budget, Samuelsson told Reuters.

“This also means we won’t be doing other things. We of course will not be developing completely new generations of combustion engines,” he said about future investment needs.

Volvo has invested heavily in new models and plants since being bought by Geely from Ford in 2010, establishing a niche in a premium auto market dominated by larger rivals such as Daimler’s Mercedes-Benz and BMW.

Part of its strategy has also been to embrace emerging technologies that allow higher performance electric vehicles as well as, eventually, self-driving cars.

Only last month, Volvo said it would reshape its Polestar business into a standalone brand, focused on high-performance electric cars aimed at competing with Tesla and the Mercedes AMG division.

Volvo has also said it will build its first fully electric car in China based on its architecture for smaller cars which will be available for sale in 2019 and exported globally.

Still, Volvo is not alone among traditional carmakers in pushing strongly into electrics and plug-ins – or among premium brands in resorting to 48V mild hybrid systems to lower fuel consumption and CO2 emissions from their combustion-engine cars.

Among them, BMW plans to introduce an electric version of its popular 3 series in September to meet the challenge from Tesla, Handelsblatt reported last month.

Volvo has also taken steps towards an eventual listing, raising 5 billion crowns from Swedish institutional investors through the sale of newly issued preference shares last year, though the company has said no decision on an IPO has been made.

“It is still an option and a question for our owner,” Samuelsson said.

(Additional reporting by Laurence Frost; Editing by David Evans and Mark Potter)

Missouri Republicans Lower St. Louis Minimum Wage From $10 To $7.70

Just when you thought things couldn’t get any worse for Missouri workers, after their Republican legislature passed (and their governor signed) a “right to work” (for less) law, they did! Attacking low wage workers is a clear signal that Missouri Republi-cons don’t value labor nor believe in a living wage. Its quite apparent that Missouri’s employment prospects are a dead end, and its time for their educated young folks to move to a more progressive state like Illinois. Will these anti-labor zealots wake up when all the young folks have fled the state?

John Hanno

HuffPost

Missouri Republicans Lower St. Louis Minimum Wage From $10 To $7.70

Dave Jamieson, HuffPost July 3, 2017

If you thought the minimum wage only moved in one direction, then Missouri Republicans have a surprise for you.

After St. Louis leaders raised the wage floor for workers within city limits, the state GOP recently passed what’s known as a statewide “preemption” law, forbidding localities from taking such matters into their own hands. On Friday, Missouri Gov. Eric Greitens (R) said he would let the law go into effect, thereby barring cities and counties from setting a minimum wage higher than the state level.

For low-wage earners in St. Louis itself, the new law will have a startling consequence: It will actually push the minimum wage back down, from the city-approved $10 per hour to the state-approved $7.70. The downgrade is slated to take effect on Aug. 28.

For someone earning the bare minimum, that’s a potential cut of 23 percent.

It’s impossible to say how many St. Louis employers will take the GOP up on the offer to slash pay, given the effect such a move could have on competitiveness and morale. But if businesses agree with Republicans that the city wage hike is too aggressive, then at least some of them are likely to revert to the lower pay rates, particularly in low-wage industries like fast food.

Greitens wasn’t eager to own the state-sponsored pay cut, opting not to sign the bill. But he doesn’t have to sign it for it to become law. Under the Missouri Constitution, a bill passed by state legislators eventually goes into effect so long as the governor doesn’t veto it.

The governor said the St. Louis minimum wage would “kill jobs.” “And despite what you hear from liberals, it will take money out of people’s pockets,” he added, according to the St. Louis Post-Dispatch.

The Fight for $15 ― the union-backed campaign behind the St. Louis initiative and other wage-boosting efforts around the country ― called Greitens’ passive approval of the law “disgusting.”

If St. Louis’ existing measure were to stay in effect, the city’s minimum wage would be $10 this year and would then climb to $11 in 2018. The statewide rate of $7.70 typically goes up just a few cents a year, since it’s tied to an inflation index.

St. Louis originally passed a minimum wage hike two years ago, prompting business groups to sue to stop it in court. The Missouri Supreme Court recently ruled that the St. Louis measure was lawful, but the new state preemption law renders it irrelevant.

The concept of preemption laws has been around for years, but they’ve become increasingly popular in GOP-controlled states as more cities and counties have tried to raise the minimum wage. Business groups have struggled to blunt local wage legislation and referendums, but they’ve had better luck convincing Republican state legislators to block them from the state capitol.

St. Louis is one of the more glaring case studies, since the wage floor will now sink lower due to a state law. But at least 17 states have preemption laws that stand in the way of local minimum wage legislation, according to a recent study by the National League of Cities.

In Alabama, GOP state legislators passed a preemption law taking aim at the city of Birmingham’s $10.10 minimum wage. The Alabama chapter of the NAACP ended up filing a civil rights lawsuit against the state, claiming that the majority-white legislature was disenfranchising Birmingham residents, who are 73 percent African-American.

The suit was originally dismissed but is now on appeal.

DC appeals court orders EPA to move ahead with methane rule

Associated Press

DC appeals court orders EPA to move ahead with methane rule

Michael Biesecker, Associated Press July 3, 2017

WASHINGTON (AP) — A federal appeals court in Washington ruled Monday that the head of the Environmental Protection Agency overstepped his authority in trying to delay implementation of an Obama administration rule requiring oil and gas companies to monitor and reduce methane leaks.

In a split decision, the three-judge panel from the U.S. Court of Appeals for the District of Columbia Circuit ordered the EPA to move forward with the new requirement that aims to reduce planet-warming emissions from oil and gas operations.

EPA Administrator Scott Pruitt announced in April that he would delay by 90 days the deadline for oil and gas companies to follow the new rule, so that the agency could reconsider the measure. The American Petroleum Institute, the Texas Oil and Gas Association and other industry groups had petitioned Pruitt to scrap the requirement, which had been set to take effect in June.

Last month, Pruitt announced he intended to extend the 90-day stay for two years. A coalition of six environmental groups opposed the delay in court, urging the appeals judges to block Pruitt’s decision.

In a detailed 31-page ruling, the court disagreed with Pruitt’s contention that industry groups had not had sufficient opportunity to comment before the 2016 rule was enacted. The judges also said Pruitt lacked the legal authority to delay the rule from taking effect.

“This ruling declares EPA’s action illegal — and slams the brakes on Trump Administration’s brazen efforts to put the interests of corporate polluters ahead of protecting the public and the environment,” said David Doniger, director of climate and clean air program for the Natural Resources Defense Council.

EPA spokeswoman Amy Graham said the agency was reviewing the court’s opinion and examining its options. The EPA could seek to appeal the matter to the Supreme Court.

Natural gas is largely made up of methane, a potent greenhouse gas that traps dozens of times more heat in the planet’s atmosphere than the same amount of carbon dioxide. Environmental groups contend that actual methane emissions from leaks and intentional venting at fossil-fuel operations are many times greater than what is now publicly reported.

Oil and gas companies say they were already working to reduce methane emissions and that complying with the new rules would make many low-production wells unprofitable.

Pruitt has repeatedly moved in recent months to block or delay environmental regulations opposed by corporate interests.

Prior to his appointment by President Donald Trump to serve as the nation’s chief environmental regulator, Pruitt was attorney general of Oklahoma and closely aligned with the state’s oil and gas industry. In recent weeks, Pruitt has moved to scrap or delay numerous EPA regulations enacted during the Obama administration to curb air and water pollution from fossil fuel operations.