Wednesday, January 25, 2012


I like numbers. Here are a few I gleaned from the media this week about taxes and some famous wealthy people. And btw, don't get me wrong, I have nothing against wealthy people in general.

Mitt Romney 2010 income tax return:
Income:  $20,000,000 approx.
Taxes paid: $3,000,000
Tax rate:  13.9%
Charitable donations:  $3,000,000 (15% of income)

Barack Obama 2010 income tax return:
Income: $1,800,000 approx.
Taxes paid: $454,000
Tax rate: $26%
Charitable donations: $250,000  (13.9% of income)

Newt Gingrich 2010 income tax return:
Income: $3,100,000
Taxes paid: $994,708
Tax rate: 31.6%
Charitable donations: $80,600 (2.6% of income)

What do I think about this? Mr. Romney makes a lot of money - good for him. Because most of his income is returns on investments - or capital gains -  it is taxed at a rate of 15%. This is the standard rate for this kind of income, and I think it was established during the G.W. Bush years.

Mr. Obama and Mr. Gingrich make good money also, and they each pay taxes in the 30% range, which is where many Americans are.

I'm a bit shocked that Mr. Gingrich seems a bit stingy with his charitable donations, paying well below the national average for people in his income bracket.

Now, what if wealthy folks like these three were taxed as much as 5% more on their income per year? Here is the additional amount they each would pay:
Romney:  $1,000,000
Obama:   $    90,000
Gingrich: $   155,000.

Would this extra amount break these people? Hardly. Would the extra tax mean that they would each create fewer jobs (a favorite "fact" of the Republicans)? Well, not directly, because these guys don't create jobs. Maybe indirectly in terms of them spending less money and thus less demand for goods translating into fewer jobs? Nope - they each would be left with plenty of cash to spend. So why don't we want to rescind the Bush tax cuts on these guys and help reduce the federal deficit?

Making money and being wealthy isn't a crime, and neither is paying taxes based on the government tax code. The issue here is the lack of a level playing field for all Americans, and the rightness of asking the more fortunate to pay their fair share.

Thursday, January 19, 2012


The U.S. State Department today decided today not to approve, for now, the Keystone XL pipeline project from Canada to Texas. Keystone XL would carry crude oil from the Canadian oil sands in Alberta to coastal Texas. Keystone XL is an extension of an existing network of pipelines (see map).

The proposed Keystone XL pipeline has generated a tremendous amount of controversy, with a host of groups choosing sides: environmentalists, tribes, states, private companies, politicians, and national governments. President Obama has been under a lot of pressure to deny or approve the project, and he tried to put a decision off until after the 2012 elections; however, Congress placed a 60-day ticker on the decision as a rider on a recent must-pass bill.

Speaker of the House John Boehner had this to say about the State Department decision: “President Obama is destroying tens of thousands of American jobs and shipping American energy security to the Chinese. There’s really no other way to put it. The President is selling out American jobs for politics." Ah yes....politics.


Source: Energy Information Administration
So what is really going on here? What's the big deal, anyway?  It's not as if Keystone XL is the only oil pipeline in the USA. The map on the left shows the major existing oil/fuel pipelines in the U.S. The next map shows the regional pipelines. According to the Association of Oil Pipelines there are 168,000 miles of liquid pipelines in the USA, and these are the "safest, economical and environmentally favorable way" to transport oil and petroleum products, other liquid fuels and chemicals. Pipelines, most of them underground, are a fact of life, and we rely on them for the fuels we consume every day. 

Do pipelines have spills? Yes, all the time. So do trucks, trains, ships, barges and etc. Fact of life in the modern world.

Am I supporting the Keystone XL pipeline in this post? Not necessarily; I don't know enough about it to make that kind of decision. It's one of those knowing what I don't know moments! 

My main question is this: how should our government make this kind of decision? (The astute reader now knows that I'm not in the "keep government out of the way of free enterprise" camp; government absolutely needs to regulate this stuff.) The environmental and cultural issues are a matter of risk assessment; how much risk are we willing to take on in order to get the benefits of the proposed project? We assume risks every day in everything we do. 

Other environmental aspects include the negative impacts of recovering oil from oil sands, and the relatively large greenhouse gas emission factor of this type of oil recovery and refining.  

What about economics, including jobs? A project of this size will create thousands of construction jobs, and a smaller number of long-term jobs. And US companies could make money supplying materials and equipment for the project. (An interesting sideline: Evraz Steel, a major employer in Portland, Oregon is counting on a major order of steel pipe for the Keystone XL pipeline. An interesting twist - Evraz is a Russian company that bought Oregon Steel a few years ago.) 

There is also a geopolitical issue: should the US allow a Canadian company to build a major pipeline through the United States? What if the main use of this pipeline is to get Canadian oil to a seaport so it can be shipped overseas (this is one claim by project opponents who cite recent data showing that the US is now a net exporter of petroleum products)? 

And energy security. Does this project make the United States more secure in terms of energy resources and supplies, and reduce our dependence on oil from less-friendly or stable countries than Canada (we get a lot of our oil from Nigeria and Venezuela, although Canada is our largest supplier)?

Complicated, eh what? I think part of the answer lies in the energy policy of the United States. Unfortunately, I don't know that we have a comprehensive energy policy, although I am confident that President Obama will try to push one through in his second term. (Remember the Bush Energy Policy crafted by Cheney and his oil industry cronies behind closed doors?) 

In conclusion, the decision to allow or not allow the Keystone XL pipeline will most likely be a political decision, and this is unfortunate. We have now, and will always have many of these kinds of decisions to make. Local examples where I live: several proposals to build export facilities on the Columbia River to ship Montana coal to China, and other proposals to ship liquefied Canadian and US natural gas to Asia. It seems that the Canadians and Americans have large reserves of coal, oil and gas and prices are high in other parts of the world. And by the way, the companies wanting to build these export facilities are not all American companies. 

We need to think and act more globally, and our government needs to have a solid set of policies that will guide these kinds of decisions. Can we ever wrest these decisions out of the political arena? Sometimes. Maybe. 

  are the safest, most reliable, economical and environmentally favorable way to transport oil and petroleum products and other energy liquids and chemicals throughout the U.S.

Saturday, January 14, 2012


I've stopped laughing at the Republican presidential candidates comedy show; it's not funny anymore. I now realize that this bizarre episode in U.S. history is only one of many indicators of a war brewing within our country, the Un-civil War.

The signs have been right in front of us for a few years, most evident since the election of President Barack Obama. Our Congress has devolved into a snake pit of partisanship, with the minority leadership pledging to uphold only one goal - to beat Barack Obama in 2012. Both sides of the aisle play the game; the losers are the American people.

There is a large and widening chasm running down the middle of the American people, dividing us into mostly two camps - the left and the right. But "left" and "right" are terms that are too simplistic, and not really correct. The divide runs along a seam of what Americans think about who we are or should be. The geographic features on either side of this chasm have labels like religion/secularism, capitalism/socialism, gay/straight, 1%/99%, big government/small government, private/public, basic rights/survival of the fittest, union/non-union and others.

When G. W. Bush was President, I often talked about taking back our country from what I considered to be dangerous men in control of our government. Now I hear people interviewed on the radio saying that we have to take back our country, except they mean from Obama and his supporters. Obama is characterized as a European-style socialist who, according to Mitt Romney, is using the "politics of envy" as part of his attack on and deconstruction of free enterprise.

What I initially considered to be loony tunes statements and ideas expressed by candidates for the Republican presidential nomination are actually serious, and supported by many voters. Some examples (and these are actually mild compared to others):
  - Ron Paul was endorsed by a pastor who once spoke about executing homosexuals,
  - Rick Perry pledged to devote predator drones and thousands of troops to protect the U.S. - Mexico border
  - Governor Perry also said that voters should serve god by voting for him,
  - Rick Santorum promised not to be cowed by "the craven secularists who believe that a stable, healthy household need not be headed by god-fearing moms and dads,"
  - and Newt Gingrich stated that only people of faith should have the right to be citizens of this country.

The lack of civility in the national discourse has reached great heights. The Congress is a prime example, and a number of congressional old-timers have talked about this sea change in how members of Congress relate to one another. Some have announced their retirement, citing this new lack of civility and collaboration as a primary reason.

I think this is serious. I think this is more than election year rhetoric. I think the United States of America is headed for an Un-civil War within, the result of which will be a great tear in the fabric of our society. We are slipping from greatness. We are devolving into a country of meanness in which many good people will be hurt economically, socially, politically and, yes, even physically. I fear for our future.

Does this sound dire? I think it is, and the lack of leadership in this country at this critical time does not bode well for the American future.