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Author Archive for Brynn Jacobs

is a full-time wage slave and part-time philosopher, writing and living just outside Omaha with his lovely wife and two feline roommates.

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Buffett’s bet on peak oil
By Brynn Jacobs on November 15th, 2009

Buffett’s bet on peak oil

Warren Buffett is lauded as one of the greatest investors of all time, if not the greatest. He’s the second-richest person in the world, and known as the “Oracle of Omaha” for his seemingly prescient investments. For example, in the wake of the collapse of Bear Stearns and during the height of the market panic that followed it, Buffett stepped in and negotiated a deal with Goldman Sachs. He acquired $5 billion worth of preferred shares, which would pay him a 10% dividend, as well as warrants with the rights to sell those shares at any time within 5 years from the time of the transaction. As of September this year, those warrants were “in the money” to the tune of $3.1 billion, and that doesn’t include the $500 million in premium payments that Goldman pays every year. Those lucrative terms (punitive for Goldman Sachs) left others wondering why the Treasury Department could only negotiate a 5% dividend, but that only added to the mystique and legend of Warren Buffett. At the time, Buffett was quoted as saying “If I didn’t think the government was going to act, I would not be doing anything this week,” referring to the massive bailout bill which was indeed enacted by the government.

It’s deals like that that enable one to become one of the richest people in the world. But it’s also that background that has some on Wall Street scratching their heads at the news that he was purchasing Burlington Northern railroad. The Wall Street Journal discussed how the acquisition seemingly broke two of Buffett’s cardinal rules on investments: 1) buy undervalued stocks or companies, for obvious reasons and 2) don’t split your own stocks, as it dilutes the equity of the existing shareholders. Bloomberg quoted a hedge fund principal as saying, “It could be five years before the logic of [Buffett's purchase of] Burlington Northern becomes clear.” Even Buffett admits that the purchase was “not cheap” and that it represents an “all-in wager”on the future of the American economy. And there can be no doubt that it is a significant investment– he’s liquidating other rail investments totaling $691.3 million while the Burlington Northern purchase will cost some $26 billion– an increase in his railroad holdings of some 3,600%. And this bears repeating, he’s splitting stock to get it done. This is the first time ever that Berkshire Hathaway (Buffett’s investment company) has split shares. He’s so reluctant to split shares, the class A shares regularly trade over $100,000 per share, an unheard-of valuation.

Current Events • Economy • Energy • Featured
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“Going Muslim” as the new “going postal”
By Brynn Jacobs on November 11th, 2009

“Going Muslim” as the new “going postal”

The shootings at Fort Hood last week have provoked a media feeding frenzy. Questions abound, and there is no dearth of speculation as to the shooter’s motives. Most articles I have seen waste no time pointing out that the shooter was a Muslim, that he exclaimed “Allahu akbar” before shooting, and that he is linked with radical imams and possibly Al Qaeda. That’s from the ostensibly “impartial” media, but there are also a few extremely distasteful editorial perspectives that are unfortunately quite mainstream that I wanted to comment on today. I’m afraid my ability to edit sarcasm out of my posts declines in direct proportion to the insanity and hypocrisy with which I’m confronted, so bear with me.

First, Forbes featured an article by Tunku Varadarajan entitled “Going Muslim“, a play on the old phrase “going postal”. He describes it thusly:

As the enormity of the actions of Maj. Nidal Malik Hasan sinks in, we must ask whether we are confronting a new phenomenon of violent rage, one we might dub–disconcertingly–”Going Muslim.” This phrase would describe the turn of events where a seemingly integrated Muslim-American–a friendly donut vendor in New York, say, or an officer in the U.S. Army at Fort Hood–discards his apparent integration into American society and elects to vindicate his religion in an act of messianic violence against his fellow Americans. This would appear to be what happened in the case of Maj. Hasan.

Bigotry • Current Events • Featured • Military • Religion
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Kelo vs. New London revisited
By Brynn Jacobs on November 10th, 2009

Kelo vs. New London revisited

Remember the case of Kelo vs. New London? Briefly, it was a case in which homeowners including Susette Kelo sued their municipality to stop it from taking their homes using the power of eminent domain. The city wanted to raze the homes and redevelop the area, making it shiny and new to complement the anticipated Pfizer pharmaceutical research facility. After all, one musn’t allow the shabby dwellings of the peasantry to mar the image of success and corporate uniformity that one is trying to project:

So, the politicians picked a 24-acre lot and sold it Pfizer for $10, adding on special tax breaks. Also, state and local governments promised $26 million to clean up contamination on the lot and a nearby junkyard.

But Pfizer executive David Burnett thought New London needed to do some more cleaning. “Pfizer wants a nice place to operate,” the Hartford Courant quoted Burnett in 2001. “We don’t want to be surrounded by tenements.” The old Victorian houses in the Fort Trumbull neighborhood next door did not match Pfizer’s vision - a high-rise hotel or luxury condominiums would be more fitting.

Corruption • Court Decisions • Current Events • Fraud
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More to the peak oil story
By Brynn Jacobs on November 09th, 2009

More to the peak oil story

A few weeks ago, I wrote a post entitled “The Unspoken Reality of ‘Peak Oil’“, in which I tried to convey the scale of the problem we face. “My main motto never changes, the era of low oil prices is over,” said Dr. Fatih Birol who is the Chief Economist for the International Energy Agency (IEA). Now we have even more confirmation that peak oil has arrived. Today, the IEA released their 2009 version of the annual World Energy Outlook, in which they attempt to forecast supply and demand through 2030. And once again, the IEA continues to forecast that there will be plenty of supply, if only we can muster the needed capital investments. Unfortunately, the needed capital investments are enormous:

The capital required to meet projected energy demand through to 2030 in the Reference Scenario is huge, amounting in cumulative terms to $26 trillion (in year-2008 dollars) — equal to $1.1 trillion (or 1.4% of global gross domestic product [GDP]) per year on average. (p.43)

As if that weren’t bad enough, the release of the report has been almost completely overshadowed by yesterday’s Guardian which has alarming allegations from two different whistleblowers within the IEA

Current Events • Featured • Sustainable Living
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Drugs, the CIA and Afghanistan
By Brynn Jacobs on October 27th, 2009

Drugs, the CIA and Afghanistan

Covert government by defense contractor means corrupt wars of conquest, government by dope dealer. When the world’s traditional inebriative herbs become illegal commodities, they become worth as much as precious metal, precious metal that can be farmed. … Illegal drugs, solely because of the artificial value given them by Prohibition, have become the basis of military power anywhere they can be grown and delivered in quantity. … To this day American defense contractors are the biggest drug-money launderers in the world.— Drug War: Covert Money, Power and Policy, p.318.

Revelations from today’s New York Times that Ahmed Wali Karzai, the brother of president of Afghanistan, has been on the payroll of the CIA for years should be utterly unsurprising to anyone that has followed the history of either the CIA or drugs in Afghanistan. In a considerable understatement, the Times story says “The C.I.A.’s practices also suggest that the United States is not doing everything in its power to stamp out the lucrative Afghan drug trade, a major source of revenue for the Taliban.” Far from “doing everything in its power” to end the drug trade, Afghan poppies are also a major source of revenue for the CIA. As Noam Chomsky said: The close correlation between the drug racket and international terrorism (sometimes called “counterinsurgency,” “low intensity conflict” or some other euphemism) is not surprising. Clandestine operations need plenty of money, which should be undetectable. And they need criminal operatives as well. The rest follows.”

Current Events • History • Military
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The Monsanto monster
By Brynn Jacobs on October 26th, 2009

The Monsanto monster

Monsanto has been a target for many years. They have a terrible environmental and health record, they have harassed small farmers for years, they’ve bribed officials in Indonesia, and they’ve joked about performing “rural cleansing” (a play on the words “ethnic cleansing”, i.e. genocide), and told small seed cleaners that rather than buy them out, “We’d rather put you out of business, it’s more fun that way.” All this from the company that brought Agent Orange to Vietnam, resulting in 400,000 deaths and disabilities, as well as 500,000 children born with birth defects.

However, in the world of corporate PR, no sin is too big. Monsanto has sought to remake its image as the company that’s helping to feed the world. Their website claims that “We apply innovation and technology to help farmers around the world produce more while conserving more. We help farmers grow yield sustainably so they can be successful, produce healthier foods, better animal feeds and more fiber, while also reducing agriculture’s impact on our environment.” High claims, to be sure. Too bad we don’t know if they hold up to scrutiny.

A new article by the editors of Scientific American explains the situation:

To purchase genetically modified seeds, a customer must sign an agreement that limits what can be done with them. (If you have installed software recently, you will recognize the concept of the end-user agreement.) Agreements are considered necessary to protect a company’s intellectual property, and they justifiably preclude the replication of the genetic enhancements that make the seeds unique. But agritech companies such as Monsanto, Pioneer and Syngenta go further. For a decade their user agreements have explicitly forbidden the use of the seeds for any independent research. Under the threat of litigation, scientists cannot test a seed to explore the different conditions under which it thrives or fails. They cannot compare seeds from one company against those from another company. And perhaps most important, they cannot examine whether the genetically modified crops lead to unintended environmental side effects.

Food • Health • Intellectual property
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By Brynn Jacobs on October 23rd, 2009

More questions on the reliability of voting machines

Sequoia voting machines has been troubled by allegations of vote irregularities before. (see here, here and here for typical examples). Now Slashdot is reporting that a new analysis of the computer code used by these machines indicates there is probably some truth to the allegations.

The existence of such code appears to violate Federal voting law: “Sequoia blew it on a public records response. … They appear… to have just vandalized the data as valid databases by stripping the MS-SQL header data off, assuming that would stop us cold. They were wrong. The Linux ’strings’ command was able to peel it apart. Nedit was able to digest 800-MB text files. What was revealed was thousands of lines of MS-SQL source code that appears to control or at least influence the logical flow of the election, in violation of a bunch of clauses in the FEC voting system rulebook banning interpreted code, machine modified code and mandating hash checks of voting system code.”
Of course, this barely rises to the level of news in the formerly democratic USA.

Fraud • Politics • computers
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The unspoken reality of “Peak Oil”
By Brynn Jacobs on October 20th, 2009

The unspoken reality of “Peak Oil”

THE world will have to find four Saudi Arabias by 2030 if it wants to maintain its oil dependency, the International Energy Agency says.

The reality of peak oil is fast approaching, and more must be done to develop and encourage the use of alternatives including solar and nuclear, the agency’s chief economist has warned.

“My main motto never changes, the era of low oil prices is over,” Dr Fatih Birol said.

That’s the verdict reported today in The Australian. I thought I’d check to see what other sources had to say about Birol’s assertion, but I cannot find a single U.S.- based source reporting it, other than blogs that are dedicated to peak-oil issues. This is rapidly becoming a crisis, and almost nobody is discussing it in America. Not just here, of course– study groups in Britain have been trying to get their government to begin planning for the reality of peak oil for years, and now they are saying it’s simply too late. (see this also).

Current Events • Economy • Featured • War
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California court declines to publish anti-camera decision
By Brynn Jacobs on October 18th, 2009

California court declines to publish anti-camera decision

Many of us have been caught by those increasingly ubiquitous red-light cameras. Police departments and local governments argue that these sorts of cameras improve safety and increase revenue. Studies are increasingly putting the lie to the safety claim, but nobody’s disputing that these traffic enforcement mechanisms bring in revenue.

The Wall Street Journal reported in March that

… a study in last month’s Journal of Law and Economics concluded that, as many motorists have long suspected, “governments use traffic tickets as a means of generating revenue.” The authors, Thomas Garrett of the St. Louis Fed and Gary Wagner of the University of Arkansas at Little Rock, studied 14 years of traffic-ticket data from 96 counties in North Carolina. They found that when local-government revenue declines, police issue more tickets in the following year. Officials at the North Carolina Association of Chiefs of Police didn’t respond to requests for comment.

California state law prohibits compensation to operators of these red-light cameras based on the number of tickets issued. Localities have been side-stepping this law through “cost-neutrality” provisions, which allow the cities to pay the operators up to a certain monthly amount. After that cap is reached, the city keeps all the revenue beyond that point. The intent of the law is to remove an incentive to ticket as a means of increasing revenue to the private operators. There is now a second appellate court ruling that has struck down the red-light programs as illegal under the state law.

Court Decisions • Economy • Featured
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Nader in Omaha
By Brynn Jacobs on October 01st, 2009

Nader in Omaha

Tuesday afternoon, I was privileged to be able to attend a speech by Ralph Nader, followed by a question-and-answer session and a book-signing. He was promoting his new book, Only the Super-rich can save us! If you weren’t aware that he has a new book out, you aren’t alone. In fact, his presence in Omaha wasn’t well-publicized. I managed to see this article in the local paper which alerted me to both the fact that he had a new book out, and that he was in Omaha. I was fortunate enough to be able to arrange for some time off work, and went to the 3:00 session at McFoster’s Natural-Kind Cafe. Unfortunately, I completely forgot my role as a blogger and so I was woefully unprepared to take notes or photos. So rather than direct quotes, I’ll discuss some of the main themes of his speech, as well as the question-and-answer session.

Nader was scheduled to speak at 3:00 p.m., but didn’t actually take the podium until about 3:15, largely due to the enthusiastic crowd gathered around him peppering him with questions and having their books signed. He spoke for about a half-hour, then took questions for roughly another hour. I estimated the crowd to number about 80, and it was standing-room only in the small upstairs room at McFoster’s. His speech stuck pretty closely to the themes of the book, which asks us to re-imagine the last several years. The book begins with the disastrous fumbling of Hurricane Katrina, and a fictionalized Warren Buffet aghast at the apparent inability of a former first-world country to provide relief to its own citizens. Using his vast economic resources, he marshals the needed supplies and delivers them to a devastated New Orleans. The experience haunts him though, and he decides to convene a group of billionaires to solve some of the most pressing crises confronting American democracy. Using untold billions of their own, they are able to finally provide an effective foil against the big-money interests that would continue using the system to unjustly enrich themselves.

American Culture • Featured • Politics • Reading - Books and Magazines • Social justice
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Right wing calls for military coup
By Brynn Jacobs on September 30th, 2009

Right wing calls for military coup

Occasionally, items in the news make me sit up and take notice of how far from a constitutional republic we really have come. Like this:

There is a remote, although gaining, possibility America’s military will intervene as a last resort to resolve the “Obama problem.” Don’t dismiss it as unrealistic.

That’s the opening salvo from John Perry, a regular columnist with the right-wing website Newsmax, in an article entitled “Obama risks a Domestic Military ‘Intervention’”. I would like nothing more than to provide you with a link to the whole article, but it has apparently disappeared down the memory hole. Perhaps the editors at Newsmax realized it would be inconvenient to have an article speculating on the potential for a military coup at the same time they are trumpeting the peacefulness of the tea-party protestors and wondering why anyone would accuse them of encouraging dangerous, violent extremism. The quote I harvested above came from Mediamatters.org, which detailed this story yesterday. Unfortunately, the did not reproduce the full column. I managed to grab a screenshot of the Newsmax website search function, which proves that the article really did exist, although the hyperlink for the article now returns visitors to the main Newsmax page.

Law • Military
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The ACORN hypocrisy
By Brynn Jacobs on September 23rd, 2009

The ACORN hypocrisy

Over the past few weeks, videotapes have been trickling out that purport to show ACORN employees offered tax advice to those seeking to engage in child prostitution or other salacious activities. Having viewed the tapes, it’s obvious that they have been edited extensively, and that alone should make one wonder what the original tapes may show. Further, Media Matters has a lengthy critique of the credibility of the conservative activists and the manufactured news story that they have created, including failing to report that in at least one instance police were called and the filmmakers were removed from the premises after inquiring about underage prostitution. But really, whether ACORN employees did or did not do everything they are accused of is a side issue.

The Huffington Post yesterday pointed out that the legislative zeal to cut off funding for ACORN may have created an even bigger problem: it may eliminate the entire military-industrial complex. You see, the legislation prohibits federal funding or promotion of organizations that, among other things, “has filed a fraudulent form with any Federal or State regulatory agency”. The Project on Government Oversight (POGO) maintains a database of companies holding federal contracts that also have “histories of misconduct such as fraud” that would ostensibly bar them from receiving any further governmental funding under the “Defund ACORN Act”. Top violators include Lockheed Martin, Boeing, Northrop Grummond, Raytheon, KBR (former Halliburton subsidiary)…. and a staggering number of other large corporations doing business with the federal government. House Republican leader John Boehner released a statement congratulating house Republicans for all they “have done to hold ACORN accountable for its abuse of taxpayer dollars and the public trust.” One wonders whether he will hold these other corporations to the same standard that they require of ACORN? After all, the scale of the violations by the weapons industry dwarfs anything ACORN is accused of. For fiscal year 2007, Lockheed Martin had federal contracts valued at $34.2 billion (with a b) dollars, and the cost of their misconduct since 1995 is valued at $577.2 million. ACORN has only received $53 million in federal funds since 1994, and none of the allegations show any actual harm was done to the government. In other words, Lockeed Martin has committed fraud to the tune of over 10 times the total amount of federal funding ACORN has received.

American Culture • Fraud • Social justice • hypocrisy
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Homeland Security seeks to “simplify” color warning system
By Brynn Jacobs on September 18th, 2009

Homeland Security seeks to “simplify” color warning system

Two weeks ago I briefly pointed out that Janet Napolitano, Secretary for Homeland Security, said that she wanted to reduce the level of fear in this country through improving preparedness for a terrorist attack. Now Homeland Security is seeking to do away with any pretense that we will ever be safe. Their latest proposal is to improve the “public credibility” of the system by”simplifying” the color scheme. If the recommendations are adopted, the new color scheme would consist only of yellow, orange, and red. Or, as Wendy McElroy put it, “the new levels are 1. Be Afraid, 2. Be Very Afraid, 3. Panic!”

While I’m heartened that they at least admit that it’s “institutionally difficult” to lower the threat level, I still don’t believe that the color scheme is an ideal solution. Keeping one’s citizens in a constant state of fear that they will be attacked is, I believe, one way for the government to keep the public’s attention diverted from the causes of terrorist attacks– namely, our governments policies. If we were to stop killing innocent civilians around the world, we may just find that people around the world no longer wish to kill us in retaliation.

Current Events • Featured • Politics
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