Thursday, June 24th, 2010
Baton Rouge, Louisiana

SHOULD THE FEDS MAKE LOUISIANA A PROTECTORATE?
HELL YES!

Roseanne Roseannadanna summed it up pretty well in trying to make sense out of the trials and tribulations of Louisiana. "Well, it just goes to show you, it's always something.” Now we are hearing cries that Louisiana is unable to take care of all its problems, and should be treated differently than other states in the U.S. Make it a protectorate of the federal government. And you know what? Maybe that ain’t too bad of an idea.

The proposal took legs early this week when nationally syndicated columnist Froma Harrop, who is an editor for the Providence Journal, broached the idea in print. “Louisiana has had more than its share of tragedies in recent years, and some, such as hurricane Katrina, could be deemed an act of nature. But whatever the cause, every calamity that befalls Louisiana is made worse by a corrupt civic nature. A protectorate could provide the structure of government people need.”
England, Scotland, and Ireland were all protectorates at one time. There is a major move on in Europe today to take Greece under a European protectorate. In Great Britain, a debate is taking place as to whether the Falkland Islands, presently under the wing of the British, should be cut loose as a protectorate and join up with neighboring Argentina.

But in most of these past and present instances, the so called protectorate was receiving much more in financial aid from their respective overseers than the country or state being protected was contributing. Not so in Louisiana. Yes, you will read about all the federal dollars that has been flowing into the Bayou State, particularly post Katrina. But whatever federal sums have been allocated is a drop in the bucket when you add up the massive mineral resources that have been drained from the state.

When it comes to receiving federal dollars in other areas, Louisiana often gets the short end of the stick. Louisiana taxpayers subsidize numerous programs that proportionately benefit other parts of the country significantly more. Here are a few examples:

Federal highway funds. A federal gas tax is charged on every gallon of gasoline that goes into a national highway fund to build highways. For years, a formula has been used to distribute the money that has worked against Louisiana. For every dollar we send to Washington, Louisiana taxpayers are getting a little more that ninety cents back. California receives $1.30 back for every dollar they send in, as is the same for most of the states along the east coast. Louisiana taxpayers are subsidizing roads and bicycle trails throughout California, New York and many other states. A report released last week pointing out the Louisiana is tremendously underfunded in its effort to improve the quality of our roads. One big reason is that the state is paying substantially more into the federal pot that it is getting out.

Louisiana receives federal reimbursement to nursing homes that take care of the poor under the Medicaid program. But the formula works dramatically against Louisiana nursing homes. Where patients in New York nursing homes receive reimbursement of $175.00 a day, the same patient in Louisiana only receives $79.00 a day. Some states are receiving four times what Louisiana gets. Alaska, for example, receives $317.00 per day for Medicaid patient reimbursement. Louisiana has the lowest reimbursement amount in the country.


So maybe the east coast columnist is right. Louisiana might be much better off if it did become a protectorate. There is ample support throughout the country for states considering the option of becoming independent. Just this week, a national Rasmussen poll found that 28% of Americans believe it is at least somewhat likely that some states will try to leave the United States and form an independent country over the next 25 years or so.

How about this! Louisiana becomes an independent protectorate of the U.S., with Washington providing all the international protection like they do for Canada and Mexico. Sure the U.S. can continue to use the port of New Orleans (largest port in the nation), as well as Baton Rouge (third largest in tonnage) and Lake Charles (5th largest in tonnage), but of course there would be fees similar to those charged in other international ports. The oil and gas would continue to flow to the rest of the country, but with adequate severance and processing fees for the quite reasonable sum of five to seven billion dollars (much less than the importation charges the country is paying OPEC countries now.) No more groveling for a small share of offshore oil payouts.


Mississippi might also want to join in the protectorate effort. The two states might even agree to create a “coastal nation of Louisissippi.” The French would be appalled, but who cares.
So who is going to run this new protectorate? The test , knows how to get results? Walking the walk rather than talking the talk. There really are only two candidates for the job. One is former Army General Russell Honore.’ He’s the “John Wayne dude” who blew into New Orleans post Katrina and took charge of the disastrous recovery efforts. He lives in Baton Rouge and seems to be well rested and ready. And right in contention is New Orleans Saints Head Coach Sean Payton. Now he does know how to get the job done.

The Ambassador to Washington? The “Ragin Cajun,” James Carville is the man to demand fair respect for the Bayou State in the nation’s capitol. Also an easy choice is the treasury secretary. New Orleans Saints owner Tom Benson is, hands down, the best guy to go after the foreign aid. He is Louisiana’s greatest robber baron, having talked the Louisiana Legislature out of over $500 million dollars. Remember that no other NFL team has received a penny from their respective states. He’s definitely the man to go after and handle the money.

The state flag would be a combination of black, purple and gold. And of course native born Randy Newman should write the national anthem. Froma Harrop’s column called Louisiana the best run state in the Caribbean. Maybe she’s right, and we should give it a try. Protect Louisiana’s borders and let it keep all its minerals. If you look at the numbers, I have a hunch that any redneck or Cajun would jump at such a deal.
*****
"There is growing sentiment throughout the North in favor of letting the Gulf States go.”

The New York Times (March 21, 1861)

Peace and Justice

Jim Brown

Jim Brown’s syndicated column appears each week in numerous newspapers and websites throughout the South. You can read all is past columns and see continuing updates at www.jimbrownla.com. You can also hear Jim’s nationally syndicated radio show each Sunday morning from 9 am till 11:00 am central time on the Genesis Radio Network, with a live stream at http://www.jimbrownusa.com.

Too Much Rollin' the Dice by Government

Thursday, June 17th, 2010
Baton Rouge, Louisiana

RISK TAKERS STICK IT TO THE TAXPAYERS!

"And if thou stare long enough into an abyss,
The abyss will also gaze into thee.”
Nietzsche

Melville’s Moby Dick is a popular semblance right now for our unquenchable search for oil, and, like Captain Ahab, the consequences that often lead to self destruction. In days of old, whalers ventured further and further into unchartered waters to become excavators of oceanic whale oil that stroked the furnaces of the Industrial Revolution. The same unchartered path has been followed by oil companies pushing technology to new limits. But are they responsibility assessing the risk involved?

The BP gang has continually told us that such a spill never happened before, and therefore they had not anticipated such bleak scenario. That’s the same argument we heard during the financial meltdown from Ben Bernanke and Alan Greenspan when they argued that the housing market would not plummet because “it had never happened before.” But stuff happens. Part of the process is to assess the risk. Time and time again, both industry and government have minimized risk and, in a highly irresponsible way, just played the odds. And much too often, it has turned out to be a bad bet.

Lay the blame for BP’s irresponsible risk taking right at the feet of the United States Congress. Our representatives in Washington passed a little known 1990 law that capped an oil company’s liability, after cleanup costs, at $75 million. For now at least BP has agreed to waive the cap. But who knows for how long? BP stockholders, many of whom have retired on BP dividends, may well feel full justification to challenge disbursement of BP assets when the law says the company is not required to do so.

The federal law limiting BPs liability actually distorts the company’s decision making, so they can ignore the potential damage beyond cleanup costs. It is low probability, high cost, and with legal limits that have been put in to place, you and I are the real losers. How ironic that government policy encourages BP and the financial industry to underestimate the odds of a catastrophe.

In the financial sector, no single example better serves to show how the dice are rolled against the public interest than A.I.G. This insurance giant, which happens to be the single largest insurance conglomerate operating in my home state of Louisiana, ran amok forcing taxpayers to come to its rescue at a price of some $185 billion. This massive insurance bailout was fueled by U.S. Treasurer Tim Geithner’s testimony that the failure of A.I.G would threaten to bring down the entire financial system.

The company was playing “Wall Street Casino” by insuring financial instruments that were, in the warped opinion of the companies’ officers, “sure winners.” And as long as state insurance commissioners failed to examine the company’s books and turned a blind eye to pervasive faulty accounting, A.I.G had free reign to lend and spend, running up massive financial debt that was significantly beyond its ability to pay in case of defaults. Just last week, a new study released by McClatchy Newspapers found that insurance commissioners had “broken all the rules” by allowing A.I.G to continually defy regulatory oversight and become a “corporate Frankenstein.”
Former Louisiana chief insurance examiner W.O. Myrick, who has extensively studied the A.I.G. debacle, criticized state insurance commissioners for allowing companies like A.I.G. to cook their books and “falsify” their balance sheets by continuing to list bonds as assets while they were loaned to banks. Had something been done by insurance regulators at the time of A.I.G.s shenanigans, according to Myrick: “There would have been people that would have been speaking up to avoid long prison terms, leading to action that could have prevented the massive securities losses.”

In each of these cases, neither the regulators, nor those being regulated did anywhere close to an adequate job of estimating the risks involved. Many companies ended up incurring enormous costs both in money, and, in the case of BP, environmental destruction. The odds normally would not justify such a risk. But with the government backing up these calamities with bailouts and laws that gave perpetrators limited liability, why not go for broke? Companies like BP and A.I.G. did just that, and we as tax payers are the real losers.

With BP’s financial picture looking more precarious as each day goes by, how can those damaged be assured that losses will be recovered? Waiting around for payment, or possible bankruptcy, raises the possibility that, just like the Exxon Valdez disaster, the reimbursement process could go on for years. So what can be done to assure adequate recompense?

Simply seize the gushing oil well. It will eventually be capped, and there is a projected $70 billion of oil yet to come from this crippled hole in the ocean floor. Remember that BP is only leasing the drilling rights, and they have certainly and repeatedly violated the terms of the lease. The Minerals Management Service has the legal authority to terminate the lease due to the numerous safety and environmental violations incurred by the lessor, BP. Sure litigation will take place. But the value is there, and a number of legal scholars have concluded that the federal government has strong legal standing to take the well back.

Two things lulled BP into ignoring the possibility of a major catastrophic spill. First, these disasters rarely happen. It’s the proverbial “black swan” theory. In ancient literature, a black swan was a proverbial phrase for something extremely rare or non-existent. Certainly a good metaphor for the mindset of both BP and federal regulators. But this ignores the basic premise we all know as Murphy’s Law. "Anything that can go wrong, will go wrong". Then knowing full well their liabilities were limited by federal law, why not just go for broke?

The envelope has being pushed by Wall Street and now Big Oil. They rolled the dice and lost. But under our dysfunctional federal and state regulatory systems, it’s the taxpayers who are the losers.

******

"Living at risk is jumping off the cliff and building your wings on the way down."
— Ray Bradbury

Peace and Justice

Jim Brown


Jim Brown’s syndicated column appears each week in numerous newspapers and websites throughout the South. You can read all is past columns and see continuing updates at www.jimbrownla.com. You can also hear Jim’s nationally syndicated radio show each Sunday morning from 9 am till 11:00 am central time on the Genesis Radio Network, with a live stream at http://www.jimbrownusa.com.

Who's Watching the Regulators?

Thursday, June 10th, 2010
Grand Isle, Louisiana

IS THERE ANYONE IN THE GOVERNMENT
WE CAN TRUST?

If one lesson can be learned from both the Gulf Oil spill and the Wall Street financial bailout debacle, it’s that oversight by competent regulators is critical to protect the public. At every level of the governmental process, elected officials and both state and federal agencies either stood by and took no action at all, or worse, turned the regulatory process over to those private companies that caused all the damage.

The current and ongoing oil spill disaster points once again to the fact that there is a wretched epic of “regulatory” failure and our knowledge of the fact that literally nothing has changed in the attitude or actions of these governmental derelicts is the most graphic proof yet of the absolute, irrecoverable failure of this political system.

So where does the fault lie? There is plenty of blame to aim at both major political parties. The Demodon’ts and the Republican’ts have both shown, time and time again, an inability to put teeth into a system of public protection. Their mantra has been “free enterprise” and “get the government off our backs.”
We all want a “leave us alone” mentality, that is, until Katrina, Wall Street rip-offs, insurance fraud, 9/11 and Gulf oil spills. Just like there are no atheists in foxholes, we turn from free enterprise capitalists to socialists when disaster strikes. But then we presume that the government can put things right because it is so big and powerful. Yeah, right! Like FEMA, the Corps of Engineers, the dysfunctional Office of Homeland Security, and the SEC regulators that let Wall Street run wild.

In the current oil spill crisis, our politicos along the Gulf Coast can’t seem to get enough face time as they pontificate over the importance of the coastal wetlands, and how the economy, culture and the future of this vast area are at stake. Yet congressional oversight panels in Washington, charged with seeing that strong environmental protections are in place, have failed to both properly monitor and establish strong regulations to limit the risk of such a catastrophic spill.
And here is the sad note. These same oversight panels include a number of Gulf Coast congressman and senators, who now are screaming for BP blood, but who for years turned a blind eye to strong regulation and readily accepted campaign contributions from BP and other national and international conglomerates these elected officials were supposed to be regulating.

We have read the numerous lurid reports about how Department of Interior employees, working in the Minerals Management service, turned the whole regulatory effort over to the oil companies in the Gulf. And all the while, these federal employees were accepting gifts, trips, and carrying on “personal relationships” with oil company executives that undermined any credible effort to fairly regulate these companies that were regularly compromising on numerous safely standards. Interior Secretary Ken Salazar has been quoted time and time again that he is ‘keeping his foot on BP to perform.” He needs to start using the same foot to kick out and clean house in his own backyard.

There are the environmental groups that are busy protecting us against BP’s shenanigans, right? Well, maybe not. The largest environmental group acting throughout the Gulf Coast is the Nature Conservancy. This national organization has long positioned itself as the leader of a nonconfrontational arm of the environmental movement, and raised millions of dollars annually. So who is one of its business partners? Who else but BP! As the Washington Post points out: “The Conservancy has given BP a seat on its International Leadership Council, and has accepted nearly $10 million in cash and land contributions from BP and affiliated corporations.”

So it would seem that the only recourse for public protection from BP’s antics is the federal courts. Since the damages took place in numerous gulf Coast states, the legal confrontations and demand for compensation will take place at federal courthouses with in the Fifth Circuit Court of Appeals that includes Texas, Louisiana and Mississippi. Fair federal judges doing their thing to protect the public, right? Hold on there for a moment.

More than half of all federal judges in this district that will hear these spill-related lawsuits have (I kid you not) financial connections to BP and the other related oil companies involved in the rig spill disaster. Thirty seven of the 64 federal judges have a variety of financial interests in the oil industry. Many have a direct economic interest through ownership of stocks and bonds, as well as relatives who are on oil company payrolls. Others are wined and dined along with receiving full expenses for being “distinguished lecturers” at conferences regularly hosted by the oil industry. BP and other companies involved in the spill are large contributors to such conferences.

So it’s you and me baby, against the elected officials, the regulators, the environmentalists, and the judges. Driven by campaign contributions, gifts, and hush money, the system, some might say, just sucks. And like balladeer Leonard Cohen poignantly sings in his hit song, “Everybody knows:”

Everybody knows that the dice are loaded
Everybody rolls with their fingers crossed
Everybody knows that the war is over
Everybody knows the good guys lost
Everybody knows the fight was fixed
The poor stay poor, the rich get rich
That's how it goes
Everybody knows

Peace and Justice

Jim Brown

Jim Brown’s syndicated column appears each week in numerous newspapers and websites throughout the South. You can read all is past columns and see continuing updates at www.jimbrownla.com. You can also hear Jim’s nationally syndicated radio show each Sunday morning from 9 am till 11:00 am central time on the Genesis Radio Network, with a live stream at http://www.jimbrownusa.com.

Just who cleans up the Gulf oil mess?

`Thursday, June 3rd, 2010
Baton Rouge, Louisiana

IF YOU DESTROY BRITISH PETROLEUM,
THEN WHO IS THE REAL LOSER?

British Petroleum, the overseas oil giant, is under siege from every direction as they struggle to cap the massive Gulf oil spill. The BP stock price has plummeted 25% since the start of the spill, and company officials have been hauled daily before a litany of federal and state regulatory and legislative committees. It’s hard to keep track of the numerous daily lawsuits that have been filed all along the Gulf Coast. And in the latest salvo, Attorney General Eric Holder launched a criminal investigation, noting that there is “a wide` range of possible criminal violations.” But if BP collapses under the weight of all this cross fire, who are the real losers?

How about quite buying BP gasoline? Ralph Nader’s consumer-advocacy group Public Citizen is calling for a national moratorium to boycott BP gas stations. You can go to Facebook where thousands of members swear to bypass any BP retail outlets. But most of the BP service stations are independently owned, so a boycott hurts individual retailers who live in the local community that is doing the boycotting. Does this really hurt the BP corporate entity that operates internationally?
The criminal investigation will cause BP executives to scurry and find lawyers, who will strongly advise all those being investigated to say nothing.
This is a critical time when company officials should be solely focused on shutting down the spill and cleaning up their mess. Is it wise to put a chill on their efforts by waiving possible criminal charges over their heads? It’s like the farmer who accidently starts a grass fire and has the only tools to bring the fire under control. He’s told to just put his efforts aside and come to town so as to answer possible charges. Just let the fire burn.

If laws were broken, then a full investigation, both civil and criminal, should be undertaken. But is it wise to pull away the folks who have a great deal of institutional knowledge about the problem, and who have a huge vested interest in getting the spill contained? There will be plenty of time to get into the “fault” business. Now should be the time to gather every resource, including those with the knowledge to solve the crisis, and move the clean up forward. It would seem that the public officials in charge are cutting off their nose to spite their face.

This is far from any defense for BP, and the various subcontractors that failed time and time again to carry out required checks and balances. But those in the private sector, who know they have vast exposure and who are desperately trying to find a way to cap the spill, are dealing with contradictory messages and orders from federal regulators. Just a week ago, Interior Secretary Ken Salazar proclaimed: “If we find that BP is not doing what they’re supposed to be doing, we’ll push them out of the way appropriately.”

Not so, says Coast Guard head and national incident commander Thad Allan, who the next day at the White House said: “To push BP out of the way, it would raise a question: Replace them with what?”

Allan, who is in the trenches fighting the “Spill War” daily, is blunt in observing that: “What makes this an unprecedented anomalous event is access to the discharge site that is controlled by the technology that was used for the drilling, which is owned by the private sector.” In simple English, BP and team have whatever helpful knowledge is available, and the feds do not. So be careful to whom you start hollering about criminal charges, at least until the problem is solved.

Maybe BP should not be the source of solving the problem, and there should have been a rapid and forceful federal response. But this presupposes that both the feds and the Gulf States had the foresight to have put together a “Plan B.” Whose fault is it that so much authority and knowledge exists only in the private sector? If this is a public body of water, then where is the public response? None such exists say any knowledgeable observers.

The Washington Post’s E.J.Dionne writes that “deregulation is wonderful until we discover what happens when regulations aren’t issued or enforced. Everyone is a capitalist until a private company blunders. Then everyone starts talking like a socialist, presuming that the government can put things right, because they see it as being just as big and powerful as its tea party critics claim.”

The fact is that we are stuck with BP and whatever technical drilling knowledge they can bring to the table. Government has sat on the sidelines for years giving vast responsibilities over to the oil industry. Even worse, there is ample evidence that the little regulation that took place by the Minerals Management Service was in full collusion with BP and other major oil companies.

The public interest was far from being served. The country cannot have it both ways. If there is any doubt about this, one only needs to look at the sludge in the Gulf, which is, sadly, a product of our own contradictions.
*****
“We will die a slow death over the next two years as this oil creeps ashore.”

Plaquemines Parish President Billy Nungesser

Peace and Justice.

Jim Brown

Jim Brown’s syndicated column appears each week in numerous newspapers and websites throughout the South. You can read all is past columns and see continuing updates at www.jimbrownla.com. You can also hear Jim’s nationally syndicated radio show each Sunday morning from 9 am till 11:00 am central time on the Genesis Radio Network, with a live stream at http://www.jimbrownusa.com.

WHAT A WEEK TO BE ON THE RADIO!

When it comes to picking “hot topics” for my regular radio programs, the skies have opened up with subjects this week. There will be much to talk about.

Oil, Oil and more Oil topes the agenda with everyone hollering and screaming about responsibility, criminal charges, and the blame game. But first, should’t we stop the spill and clean up the mess? I wrote about setting priorities and giving BP some wiggle room to first stop the spill in my weekly column. Sure, nail BP to the wall, but who’s going to first plug the hole? The federal government certainly knows nothing about dealing with such a catastrophe. Many disagree with my thinking, but take a look yourself at http://www.jimbrownusa.com.

And on a lighter note, we will also be discussing the baseball no hitter that should have been. The umpire blew the call that cost Detroit Tigers picture Armando Galarraga a perfect game. But what class on all concerned when the pitcher just shrugged it off and the umpire apologized in tears. Life should be more like this, especially our confrontational politics.

And are you going to immediately run out and buy the new book of Richard Burton’s love letters to Liz Taylor? I met them both once and will tell you a mesmerizing tale of how the Hollywood “beautiful people” act when together.

My radio week starts off on this Sunday, June 6th, with my nationally syndicated program on the Genesis Radio Network, from 9:00 am until 11:00 am central time. I broadcast on stations all over the country, and you can listen live, as well as see video clips and listen to past shows all at http://www.jimbrownusa.com.

Then next week, beginning Monday, June7th, you can hear my wisdom, rants and insights on WJB0 radio, 1150 am out of Baton Rouge, Louisiana from 5:00 pm until 7:00 pm. You can also listen over the worldwide web at http://www.WJBO.com.

So a busy week coming up for me. Next weekend, I’ll be broadcasting live from Venice, Louisiana, in the very heart of the oil spill damage. So stay tuned and keep an eye on my website. I’ll see you on the radio.

****

James H. Brown,Jr.
Common Sense Radio Show
3115 Old Forge Drive
Baton Rouge, Louisiana
(
www.jimbrownusa.com