James Galbraith is an economist who teaches at the LBJ School of Public Affairs at the University of Texas.  Like his father, Galbraith can write clearly.  Also like his father Galbraith is very good at skewering ideas that should have been put to rest long ago.  What follows is a nice artricle explaining the difference between public and private debt.  This is from an article Galbraith authored earlier this month in the Nation.

“To put things crudely, there are two ways to get the increase in total spending that we call “economic growth.” One way is for government to spend. The other is for banks to lend. Leaving aside short-term adjustments like increased net exports or financial innovation, that’s basically all there is. Governments and banks are the two entities with the power to create something from nothing. If total spending power is to grow, one or the other of these two great financial motors–public deficits or private loans–has to be in action.

For ordinary people, public budget deficits, despite their bad reputation, are much better than private loans. Deficits put money in private pockets. Private households get more cash. They own that cash free and clear, and they can spend it as they like. If they wish, they can also convert it into interest-earning government bonds or they can repay their debts. This is called an increase in “net financial wealth.” Ordinary people benefit, but there is nothing in it for banks.

And this, in the simplest terms, explains the deficit phobia of Wall Street, the corporate media and the right-wing economists. Bankers don’t like budget deficits because they compete with bank loans as a source of growth. When a bank makes a loan, cash balances in private hands also go up. But now the cash is not owned free and clear. There is a contractual obligation to pay interest and to repay principal. If the enterprise defaults, there may be an asset left over–a house or factory or company–that will then become the property of the bank. It’s easy to see why bankers love private credit but hate public deficits.

All of this should be painfully obvious, but it is deeply obscure. It is obscure because legions of Wall Streeters–led notably in our time by Peter Peterson and his front man, former comptroller general David Walker, and including the Robert Rubin wing of the Democratic Party and numerous “bipartisan” enterprises like the Concord Coalition and the Committee for a Responsible Federal Budget–have labored mightily to confuse the issues. These spirits never uttered a single word of warning about the financial crisis, which originated on Wall Street under the noses of their bag men. But they constantly warn, quite falsely, that the government is a “super subprime” “Ponzi scheme,” which it is not.

We also hear, from the same people, about the impending “bankruptcy” of Social Security, Medicare–even the United States itself. Or of the burden that public debts will “impose on our grandchildren.” Or about “unfunded liabilities” supposedly facing us all. All of this forms part of one of the great misinformation campaigns of all time.

The misinformation is rooted in what many consider to be plain common sense. It may seem like homely wisdom, especially, to say that “just like the family, the government can’t live beyond its means.” But it’s not. In these matters the public and private sectors differ on a very basic point. Your family needs income in order to pay its debts. Your government does not.

Private borrowers can and do default. They go bankrupt (a protection civilized societies afford them instead of debtors’ prisons). Or if they have a mortgage, in most states they can simply walk away from their house if they can no longer continue to make payments on it.

With government, the risk of nonpayment does not exist. Government spends money (and pays interest) simply by typing numbers into a computer. Unlike private debtors, government does not need to have cash on hand. As the inspired amateur economist Warren Mosler likes to say, the person who writes Social Security checks at the Treasury does not have the phone number of the tax collector at the IRS. If you choose to pay taxes in cash, the government will give you a receipt–and shred the bills. Since it is the source of money, government can’t run out.

It’s true that government can spend imprudently. Too much spending, net of taxes, may lead to inflation, often via currency depreciation–though with the world in recession, that’s not an immediate risk. Wasteful spending–on unnecessary military adventures, say–burns real resources. But no government can ever be forced to default on debts in a currency it controls. Public defaults happen only when governments don’t control the currency in which they owe debts–as Argentina owed dollars or as Greece now (it hasn’t defaulted yet) owes euros. But for true sovereigns, bankruptcy is an irrelevant concept. When Obama says, even offhand, that the United States is “out of money,” he’s talking nonsense–dangerous nonsense. One wonders if he believes it.

Nor is public debt a burden on future generations. It does not have to be repaid, and in practice it will never be repaid. Personal debts are generally settled during the lifetime of the debtor or at death, because one person cannot easily encumber another. But public debt does not ever have to be repaid. Governments do not die–except in war or revolution, and when that happens, their debts are generally moot anyway.

So the public debt simply increases from one year to the next. In the entire history of the United States it has done so, with budget deficits and increased public debt on all but about six very short occasions–with each surplus followed by a recession. Far from being a burden, these debts are the foundation of economic growth. Bonds owed by the government yield net income to the private sector, unlike all purely private debts, which merely transfer income from one part of the private sector to another.

Nor is that interest a solvency threat. A recent projection from the Center on Budget and Policy Priorities, based on Congressional Budget Office assumptions, has public-debt interest payments rising to 15 percent of GDP by 2050, with total debt to GDP at 300 percent. But that can’t happen. If the interest were paid to people who then spent it on goods and services and job creation, it would be just like other public spending. Interest payments so enormous would affect the economy much like the mobilization for World War II. Long before you even got close to those scary ratios, you’d get full employment and rising inflation–pushing up GDP and, in turn, stabilizing the debt-to-GDP ratio. Or the Federal Reserve would stabilize the interest payouts, simply by keeping short-term interest rates (which it controls) very low.

What about indebtedness to foreigners? True, foreigners do us a favor by buying our bonds. To acquire them, China must export goods to us, not offset by equivalent imports. That is a cost to China. It’s a cost Beijing is prepared to pay, for its own reasons: export industries promote learning, technology transfer and product quality improvement, and they provide jobs to migrants from the countryside. But that’s China’s business.

For China, the bonds themselves are a sterile hoard. There is almost nothing that Beijing can do with them. China already imports all the commodities and machinery and aircraft it can use–if it wanted more, it would buy them now. So unless China changes its export policy, its stock of T bonds will just go on growing. And we will pay interest on it, not with real effort but by typing numbers into computers. There is no burden associated with this, not now and not later. (If the Chinese hoard the interest, they also don’t help much with job creation here. So the fact that we’re buying a lot of goods from China simply means we have to be more imaginative, and bolder, if we want to create all the jobs we need.) Finally, could China dump its dollars? In principle it could, substituting Greek bonds for American and overpriced euros for cheap dollars. On brief reflection, no Beijing bureaucrat is likely to think this a smart move.

What is true of government as a whole is also true of particular programs. Social Security and Medicare are government programs; they cannot go bankrupt, and they cannot fail to meet their obligations unless Congress decides–say on the recommendation of the Simpson-Bowles Commission–to cut the benefits they provide. The exercise of linking future benefits and projected payroll tax revenues is an accounting farce, done for political reasons. That farce was started by FDR as a way of protecting Social Security from cuts. But it has become a way of creating needless anxiety about these programs and of precluding sensible reforms, like expanding Medicare to those 55 and older, or even to the whole population.

Social Security and Medicare are transfer programs. What they do, mainly, is move resources around within our society at a given time. The principal transfer is not from the young to the old, since even without Social Security the old would still be around and someone would have to support them. Rather, Social Security pools resources, so that the work of the young collectively supports the senior population. The effective transfer is from parents who have children who would otherwise support them (a fairly rare thing), to seniors who don’t. And it is from workers who do not have parents to support, to workers who would otherwise have to support their parents. In both cases this burden sharing is fair, progressive and sustainable. There is a healthcare cost problem, as everyone knows, but that’s not a Medicare problem. It should not be solved by cutting back on healthcare for the old. Social Security and Medicare also replace private insurance with cheap and efficient public administration. This is another reason these programs are the hated targets, decade after decade, of the worst predators on Wall Street.

Public deficits and private lending are reciprocal. Increased private lending generates new tax revenue and smaller deficits; that’s what happened in the 1990s. A credit collapse kills the tax base and generates more spending; that’s what’s happening now, and our big deficits are the accounting counterpart of the massive decline, last year, in private bank loans. The only choice is what kind of deficit to run–useful deficits that rebuild the country, as in the New Deal, or useless ones, with millions kept unnecessarily on unemployment insurance when they could instead be given jobs.

If we could revive private lending, should we do it? Well, yes, up to a point there is good reason to have a robust private lending sector. Government is by nature centralized and policy driven. It works by law and regulation. Decentralized and competitive private banks have much more flexibility. A good banking system, run by capable people with good business judgment who know their clients, is good for the economy. The fact that you have to pay interest on a loan is also an important motivator of investment over consumption.

But right now, we don’t have functional big banks. We have a cartel run by an incompetent plutocracy, with its long fingers deep in the pockets of the state. For functional credit to return, we’ll have to reduce the unpayable private debts now outstanding, to restore private incomes (meaning: create jobs) and collateral (meaning: home values), and we’ll have to restructure the big banks. We need to break them up, shrink the financial sector overall, expose and prosecute frauds, and create incentives for profitable lending in energy conservation, infrastructure and other sectors. Or we could create a new parallel banking system, as was done in the New Deal with the Reconstruction Finance Corporation and its spinoffs, including the Home Owners’ Loan Corporation and later Fannie Mae and Freddie Mac.

Either way, until we have effective financial reform, public budget deficits are the only way toward economic growth. You don’t have to like budget deficits to realize that we must have them, on whatever scale necessary to restore growth and jobs. And we will need them not just now but for a long while, until we’ve shaped a strategic program for investment, energy and the environment, financed in part by a reformed, restored and disciplined financial sector.

It’s possible, of course, that all the deficit hysteria is intended to divert attention from the dysfunctions of private banking, and so to help thwart calls for financial reform. Is that giving them too much credit? Maybe. Maybe not.”

Watching Fox News and CNBC lately has been painful for Beezer, who was trained initially as a professional print journalist.

Start with CNBC, which bills itself as the world’s premier news channel for business.  While the channel does spend much of its time reporting actual business events, both in the US and around the world, the same people who are reporting spend a lot of time commentating.  It’s as if the journalist who pens a front page news story, also writes the day’s official editorial.

There’s an old adage in journalism.  The editorial writer has an audience of one: The Publisher.  In professional journalism the two writers are kept separate and the need for such a distinction is understood.

When the reporter melds with the editorial writer, you get bad journalism.  Which means you get poor, honest reporting of the facts.  Which means, inevitably, the audience is fed inaccurate, or at minimum, unbalanced, reporting of what’s truly going on.  Editorial writers will subsume facts that don’t support the ideas of the publisher, and highlight those that do.  Journalist are supposed to draw attention to facts that may be inconvenient to one or both sides of a story. 

Journalists do have opinions, of course.  But professional journalists take a sort of grim pleasure in playing the devil’s advocate, even if they agree strongly with the side of a debate that they discomfit with their questions.  They must do this, because not doing so invariably leaves important information in the dark, unseen by the viewer.

Journalists, in a sense, are the world’s referees.  They are supposed to be as unbiased as possible, trained in the art of writing clearly, and knowledgeable enough to challenge questionable assertions by one side or another debating an issue.

Exhibit one for CNBC would be Larry Kudlow.  An economist with experience on Wall Street, Kudlow is much more commentator than journalist.  The facade of honest reporting crumbles almost immediately when Kudlow is at the desk.  Kudlow commented today that “Republicans were put on the earth to cut taxes.”  Which is fine to say if you preface the remark by noting that you are writing an editorial.  But CNBC exists to no small degree based upon the audience’s assumption they’re getting an honest recitation of the facts.    Of course CNBC may exist to get Kudlow’s particularly misogynist form of economics into the mainstream of American thought.

Guests on Kudlow’s show who might knowledgeably present a different opinion appear as foils only.  If they start to make sense (and most do because they are professionals in the area to which they speak), Kudlow waste no time interrupting them, and if that isn’t immediately successful in shutting them up, he literally hollers over them so the audience can barely tell what’s being said by anyone, including Kudlow.  As journalism, as a tool for honest reporting, Kudlow’s show is a total waste of time.  As a platform for espousing Ayn Randian,  conservative economics, it is quite good.

To make matters worse, every segment of the CNBC channel is dominated almost exclusively by Kudlow clones.  They don’t have his chutzpah and are more polite, but given the opportunity they will trot out what amounts to the Kudlow editorial line (the opinion of the publishers).

Experience tells Beezer to be wary of the reportage on CNBC.  People so openly ideological are bound to latch onto facts that might satisfy their preconceptions, but will be relatively unimportant in helping inform the audience about what’s truly going on out in the business world.

Fox news suffers from some of the same ills.  This news channel started out asserting it was going to be “fair and balanced.”  The implication, one assumes, was that the other news channels weren’t fair and balanced. 

That’s possible.  TV journalism has always been held in low esteem by print journalists.  Most TV stories are simply rehashes of a print journalist story.  An “exclusive” for TV is getting to a newsmaker first “live” where the newsmaker repeats what he’s already said, normally many times, in print.

Fox seems to be constructed, instead of fair and balanced, as a counterbalance to its perception of the liberal bias at the other news channels.   Instead of truly being “fair and balanced,” Fox is the conservative counterweight to other news channels.  Here again, honest reporting is tossed in the dustbin as a result. 

For CNBC and Fox, both quite conservative news organizations, it’s partisan debate in lieu of accurate and unbiased reporting.  Sort of like the US Senate, which is partisan debate instead of sensible leadership and legislation.  Under these circumstances the first victim will be honest fact exposition and truthful news journalism.  The second victim will be the audience, who will inevitably end up being ill informed.

Contrast these two conservative channels with MSNBC.  From an editorial perspective, MSNBC is liberal compared to Fox or CNBC.  Other than that bias distinction, there is another important one where MSNBC separates itself from the other two:  MSNBC still maintains the distinction between its journalists and its commentators.  It may be biased, but it clearly identifies it’s biases as coming from “commentators” not journalists.

If you want real business reporting you’ll have to get Bloomburg, which not only does a more thorough job than does CNBC, but also has an extensive reporting organization with desks around the world.  It’s quite a delight early in the morning to hear journalists from around the world explaining their particular geographic area.   And nary a Kudlow, or Kudlow wannabee in sight.  Refreshing, and more informative.

As for Fox news, I have no clue where one can go for respite.  If Fox is correct and everyone else is liberally biased, then there is no alternative to get truly balanced reporting.  Maybe you can watch Public television and Fox to get a balanced mix.  Like mixing oil and vinegar, with a few spices, to get a tasty salad dressing.

I would like to point out one TV show, Fareed Zakaria’s CNN show ”GPS” on Sunday, as a notable exception to this sorry state of affairs.   As I’ve written previously, Zakaria is refreshingly well informed, and fearless in his questioning–no matter one’s bias.  If you want to see how a good journalist works, watch Zakaria.

It would be nice to get a non business focused news channel equivalent to Bloomburg on business.  But such is not the case, at least it seems to this writer.

The real antidote is to read.  Despite the sorry state of financial affairs in the print news business, there’s still terrific journalism being written.   The New York Times is the unquestioned leader in this field.  The New York Times, a generalist newspaper, has become so good at business analysis that many believe it to be superior to that of the Wall Street Journal.  And there’s numerous general and specialist magazines that regularly churn out great news and analysis.

It’s a lot of work, and costs some money.  But reading may be the only alternative available to the sorry state of reporting by big media, particularly television.

I’ve written a number of posts about this important subject: FDR and the philosophy he believed in.  Without understanding FDR’s philosophy, one can’t understand how he accomplished what he did.

FDR made many brilliant observations during his four terms as President, but none so important to remember as those he made in his first two Inaugural addresses during the throes and misery of the Great Depression.

After fighting the Depression for four years, in his second Inaugural FDR said:

“Nearly all of us recognize that as intricacies of human relationships increase, so power to govern them also must increase–power to stop evil; power to do good.  The essential democracy of our Nation and the safety of our people depend not upon the absence of power, but upon lodging it with those whom the people can change or continue at stated intervals through an honest and free system of elections.  The Constitution of 1787 did not make our democracy impotent.

In fact, in these last four years, we have made the exercise of all power more democratic; for we have begun to bring private autocratic powers into their proper subordination to the public’s government.  The legend that they were invincible–above and beyond of the processes of a democracy–has been shattered.  They have been challenged and beaten.”

Beezer here.  Can you imagine President Obama making such a statement of philosophy today?  If you find it hard to do so, then you are at the beginning stages of realizing why we find ourselves today in such a mess, in a quagmire of indecision and partisanship.  We have forgotten what our government is supposed to be.  And this isn’t the first time it’s happened either.  FDR had to directly address this forgetfulness in his first Inaugural address.

In that address, FDR fingered the bad guys and made no mistaking of his resolve possible.

After noting the nation’s problems FDR said:

“Primarily this is because the rulers of the exchange of mankind’s goods have failed, through their own stubbornness and their own incompetence, have admitted their failure, and abdicated.  Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men.

True they have tried, but their efforts have been cast in the pattern of an outworn tradition.  Faced by the failure of credit they have proposed only the lending of more money.  Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence.  They have no vision, and when there is no vision the people perish.

The money changers have fled from their high seats in the temple of our civilization.  We may now restore that temple to the ancient truths.  The measure of restoration lies in the extent to which we apply social values more noble than mere monetary profit.”

Can you imagine one our our leaders saying this?  Probably not.  And therein lies the core of our nation’s problems.  But FDR wasn’t finished with this theme.  In the same address he followed with these sentiments.

“Recognition of the falsity of material wealth as the standard of success goes hand in hand with the abandonment of the false belief that public office and high political position are to be valued only by the standards of pride of place and personal profit; and there must be an end to a conduct in banking and in business which too often has given to a sacred trust the likeness of callous and selfish wrongdoing.  Small wonder that confidence languishes, for it thrives only on honesty, on honor, on the sacredness of obligations, on faithful protection, on unselfish performance; without them it cannot live.”

Mired in our cynicism and lack of trust, we cannot today imagine someone standing up and espousing such common sense.  It’s possible we wouldn’t know how to respond.  But as for action, FDR identified the number one priority of his first term.

“Restoration calls, however, not for changes in ethics alone.  This Nation asks for action, and action now.

Our greatest primary task is to put people to work.  This is no unsolvable problem if we face it wisely and courageously.  It can be accomplished in part by direct recruiting by the Government itself, treating the task as we would treat the emergency of a war, but at the same time, through this employment, accomplishing greatly needed projects to stimulate and reorganize the use of our natural resources.”

I think Obama needs to start sounding a lot more like FDR.  In fact, I think he needs to start quoting him directly and often.  To try and “modernize” these sentiments would diminish their insight.  To quote one of the Nation’s most revered Presidents would capture some of what we’ve lost.

FDR encapsulated better than anyone the need for a Nation to demand ethical behaviour from both its Government and its businessmen.  The misogynist philsophy of the Republican Party, that corporations can be trusted above our government, is so misguided in light of history that it amazes. 

It’s time Obama publicly remind the Nation of FDR’s philosophy:  A philosophy that left absolutely no doubt that the public’s government comes before private corporations.  FDR did not apologize when he closed thousands of banks.  He did not apologize when he directly hired millions of unemployed men.  He didn’t have to because he had communicated a clear philosophy that demanded ethics from everyone and most decidedly favored the public’s corporation:  The United States government.

The industrialization of our food industry is churning out great volumes of lousy food.  It looks OK, and tastes OK, but it’s shadow food.  It really isn’t the same food your grandparents ate.  It’s a shadow of that food.

Even if you don’t consciously understand, your body does.  It knows you’re eating shadow food.  The bulk is there, but the nutrients aren’t.  So your body says “Eat More.”  And you do.  Couple that with a sedentary lifestyle and Bingo!  You’re fat.  Keep it up and you’re really fat.  And really develop diabetes and a host of other debilitating, expensive, illnesses.

Which is just fine for Industrial Ag because they’re making a fortune on shadow food.   And of course our federal government is pleased too because they’ve instituted policies and subsidies that feed Industrial Ag.  No shadow food for Industrial Ag.  They get the real dough.

Plus, Industrial Ag has figured out that they can get us to eat this shadow food in quantity by simply adding more sugar, salt and fat.  They cram more of this stuff into their shadow food to make it tasty, tasty.  For it’s part, the government steps up to the plate by subsidizing corn so the sugar part (via High Fructose Corn Syrup) can be ladled in without limit.  Walk down your supermarket store and look at the list of ingredients in almost any can of food.  There it is, high fructose corn syrup.  It is literally in every can.

Unless, of course, if it’s organic.

Take, for one example, comparisons between organic foods versus the conventional “shadow” food.

From “The Kind Diet” by Alicia Silverstone:

“Organic foods outperform their conventional cousins like this: 

• 63% more calcium
• 78% more chromium
• 73% more iodine
• 59% more iron
• 138% more magnesium
• 125% more potassium
• 390% more selenium
• 60% more zinc

And remember, nonorganic food is not only sprayed with nasty chemicals, it comes from soil filled with them, so they actually get into the vegetables as they grow.  There’s no escaping the chemical cocktail.”

And here’s a nice, brief summary article about this overeating from the blog “opposing views.”

As the waistlines of Americans continue to grow, Dr. David Kessler provides answers to some of my lingering questions about the causation of this epidemic. What is it about food that does not let us stop with one piece of cake or a single slice of pizza? Why do we override our innate fullness sensor and continuously overeat? How can this be stopped? Dr. Kessler tackles all these questions in his recent book, The End of Overeating.

Question 1: What is it about food that does not let us stop with one piece of cake or a single slice of pizza?

Food today has three major additives that have been added to our food in major quantities compared with days of past: sugar, fat, and salt. These three components make manufactured food addicting, as proved by recent studies. A University of Washington researcher added sugar to skim milk, whole milk, half and half, and a heavy cream safflower oil mixture. Participants in the study preferred the cream and oil mixture (containing the most fat and sugar) to all others. Food companies have picked up on the fact that sugar, salt, and fat sell and are using it to their benefit.

Question 2: Why do we override our innate fullness sensor and continuously overeat?

Simply put, sugar, salt, and fat are rewarding. Think about a time when you have a plate of cookies in front of you. You eat one, it is delicious, you eat another and it is still delicious. Before you know it, the plate is half gone. Your control in this situation is damped by the sugar and fat. Continued exposure to overwhelming rewards from foods leads to conditioned overeating, a term used by Dr. Kessler. “Chronic exposure to highly palatable foods changes our brains, conditioning us to seek continued stimulation. Over time, a powerful drive for a combination of sugar, fat, and salt competes with our conscious capacity to say no.”

Question 3: How can this be stopped?

Sadly, we are incapable of changing the manufacturing procedures of food. Therefore, we must learn to control ourselves. First, understand conditioned overeating. No progress can be made in our battle with food if we do not acknowledge that hyper palatable foods are to blame. Next, you must learn to say no. Dr. Kessler reminds us that we have a choice when it comes to what goes into our bodies, and the urges we have for that next cookie can be ignored. We are warned that this is difficult, and there will be times when we slip. After practice, food will lose its captivating power over us… freedom at last!

I encourage you to read The End of Overeating in its entirety. It offers a new perspective on food and our addiction to it.

By Mitzi Dulan with research assistance from Kaylee O’Connell

Beezer here.  I disagree with the kind Dr. Kessler when he says we can’t do anything about it but to limit our eating.  We can change the subsidies flowing into conventional Industrial Ag and, instead, redirect this money to balanced, organic farming.

Instead of subsidizing corn to feed cows (it makes them sick and us too because the corn fed cows need antibiotics) and make cheap suger substitutes, why can’t we subsidize organic farming?  It’s healthier by far for everyone, and modern organic techniques have produced some of the most efficient farms in America.

I’m an optimist.  And stubborn to boot.  Particularly when I spot something that is so inefficient and unhealthy for us all like our modern, warped food system.  Or Wall Street.  Oligopolies both dominated by huge corporations which have purchased our government into their fold and point of view.

Time for change.

Don’t you just love conservative ideology on steroids?

While the US Senate Republicans block needed health care and financial industry reform efforts, over at our highest court a conservative majority are unwinding the protections of the EPA and have unleashed the money hungry dogs of commerce on our political system.

The “dogs of commerce” rule overturned a century of legislation and Supreme Court rulings.  This court has ruled that corporations, just like real humans, can spend as much as they like on whatever they like and whenever they like–most particularly on elections–which before this ruling had some sensible limitations.

Now the largest corporate welfare Queens, like those on Wall Street or in Industrial Ag., can bury any political campaign with snarky advertising.  Want to clean up Industrial Ag so our food is healthier?  Forget it buddy.  No way you can come close to matching what Archer Daniel Midland or Cargill can spend with the stroke of a corporate treasurer’s pen.

We’re already witness to what big oligopolies can do, particularly to the US Senate Republicans, even without an election underway.  They crippled the legislation, through their Republican Senate operatives, the old fashioned way:  Buying their votes with lobbying favors and campaign funding promises.  Now they can buy election directly. 

So with freedom of speech so cleverly neutered (your and my freedom of speech, not that of rich corporations) it now comes out the Supreme Court has moved on to another big government fish:  Pollution control, particularly that regarding our water.

This from the New York Times:

“Thousands of the nation’s largest water polluters are outside the Clean Water Act’s reach because the Supreme Court has left uncertain which waterways are protected by that law, according to interviews with regulators.

As a result, some businesses are declaring that the law no longer applies to them. And pollution rates are rising.

Companies that have spilled oil, carcinogens and dangerous bacteria into lakes, rivers and other waters are not being prosecuted, according to Environmental Protection Agency regulators working on those cases, who estimate that more than 1,500 major pollution investigations have been discontinued or shelved in the last four years.

“We are, in essence, shutting down our Clean Water programs in some states,” said Douglas F. Mundrick, an E.P.A. lawyer in Atlanta. “This is a huge step backward. When companies figure out the cops can’t operate, they start remembering how much cheaper it is to just dump stuff in a nearby creek.”

“This is a huge deal,” James M. Tierney, the New York State assistant commissioner for water resources, said of the new constraints. “There are whole watersheds that feed into New York’s drinking water supply that are, as of now, unprotected.”

The court rulings causing these problems focused on language in the Clean Water Act that limited it to “the discharge of pollutants into the navigable waters” of the United States. For decades, “navigable waters” was broadly interpreted by regulators to include many large wetlands and streams that connected to major rivers.

But the two decisions suggested that waterways that are entirely within one state, creeks that sometimes go dry, and lakes unconnected to larger water systems may not be “navigable waters” and are therefore not covered by the act — even though pollution from such waterways can make its way into sources of drinking water.

Some argue that such decisions help limit overreaching regulatory efforts.

“There is no doubt in my mind that when Congress passed the Clean Water Act in 1972 they intended it to have broad regulatory reach, but they did not intend it to be unlimited,” said Don Parrish, the American Farm Bureau Federation’s senior director of regulatory relations, who has lobbied on Clean Water issues.

But for E.P.A. and state regulators, the decisions have created widespread uncertainty. The court did not define which waterways are regulated, and judicial districts have interpreted the court’s decisions differently. As regulators have struggled to guess how various courts will rule, some E.P.A. lawyers have established unwritten internal guidelines to avoid cases in which proving jurisdiction is too difficult, according to interviews with more than two dozen current and former E.P.A. officials.

The decisions “reduce E.P.A.’s ability to do what the law intends — to protect water quality, the environment and public health,” wrote Peter S. Silva, the E.P.A.’s assistant administrator for the Office of Water, in response to questions.

About 117 million Americans get their drinking water from sources fed by waters that are vulnerable to exclusion from the Clean Water Act, according to E.P.A. reports.

The E.P.A. said in a statement that it did not automatically concede that any significant water body was outside the authority of the Clean Water Act. “Jurisdictional determinations must be made on a case-by-case basis,” the agency wrote. Officials added that they believed that even many streams that go dry for long periods were within the act’s jurisdiction.

But midlevel E.P.A. officials said that internal studies indicated that as many as 45 percent of major polluters might be either outside regulatory reach or in areas where proving jurisdiction is overwhelmingly difficult. ing every major polluter. But today, regulators may be unable to prosecute as many as half of the nation’s largest known polluters because officials lack jurisdiction or because proving jurisdiction would be overwhelmingly difficult or time consuming, according to midlevel officials.

And even in situations in which regulators believe they still have jurisdiction, companies have delayed cases for years by arguing that the ambiguity precludes prosecution. In some instances, regulators have simply dropped enforcement actions.

In the last two years, some members of Congress have tried to limit the impact of the court decisions by introducing legislation known as the Clean Water Restoration Act. It has been approved by a Senate committee but not yet introduced this session in the House. The legislation tries to resolve these problems by, in part, removing the word “navigable” from the law and restoring regulators’ authority over all waters that were regulated before the Supreme Court decisions.

But a broad coalition of industries has often successfully lobbied to prevent the full Congress from voting on such proposals by telling farmers and small-business owners that the new legislation would permit the government to regulate rain puddles and small ponds and layer new regulations on how they dispose of waste.

“The game plan is to emphasize the scary possibilities,” said one member of the Waters Advocacy Coalition, which has fought the legislation and is supported by the American Farm Bureau Federation, the National Association of Home Builders and other groups representing industries affected by the Clean Water Act.

“If you can get Glenn Beck to say that government storm troopers are going to invade your property, farmers in the Midwest will light up their congressmen’s switchboards,” said the coalition member, who asked not to be identified because he thought his descriptions would anger other coalition participants. Mr. Beck, a conservative commentator on Fox News, spoke at length against the Clean Water Restoration Act in December.

The American Land Rights Association, another organization opposed to legislation, wrote last June that people should “Deluge your senators with calls, faxes and e-mails.” A news release the same month from the American Farm Bureau Federation warned that “even rainwater would be regulated.”

“If you erase the word ‘navigable’ from the law, it erases any limitation on the federal government’s reach,” said Mr. Parrish of the American Farm Bureau Federation. “It could be a gutter, a roadside ditch or a rain puddle. But under the new law, the government gets control over it.”

Legislators say these statements are misleading and intended to create panic.

“These claims just aren’t true,” said Senator Benjamin L. Cardin, Democrat of Maryland. He helped push the bill through the Senate Environment and Public Works Committee. “This bill,” he said, “is solely aimed at restoring the law to what it covered before the Supreme Court decisions.”

The consequences of the Supreme Court decisions are stark. In drier states, some polluters say the act no longer applies to them and are therefore refusing to renew or apply for permits, making it impossible to monitor what they are dumping, say officials.

Cannon Air Force Base near Clovis, N.M., for instance, recently informed E.P.A. officials that it no longer considered itself subject to the act. It dumps wastewater — containing bacteria and human sewage — into a lake on the base.

More than 200 oil spill cases were delayed as of 2008, according to a memorandum written by an E.P.A. official and collected by Congressional investigators. And even as the number of facilities violating the Clean Water Act has steadily increased each year, E.P.A. judicial actions against major polluters have fallen by almost half since the Supreme Court rulings, according to an analysis of E.P.A. data by The New York Times.

The Clean Water Act does not directly deal with drinking water. Rather, it was meant to regulate the polluters that contaminated the waterways that supplied many towns and cities with tap water.

The two Supreme Court decisions at issue — Solid Waste Agency of Northern Cook County v. United States Army Corps of Engineers in 2001 and Rapanos v. United States in 2006 — focused on the federal government’s jurisdiction over various wetlands. In both cases, dissenting justices warned that limiting the power of the federal government would weaken its ability to combat water pollution.

“Cases now are lost because the company is discharging into a stream that flows into a river, rather than the river itself,” said David M. Uhlmann, a law professor at the University of Michigan who led the environmental crimes section of the Justice Department during the last administration.

In 2007, for instance, after a pipe manufacturer in Alabama, a division of McWane Inc., was convicted and fined millions of dollars for dumping oil, lead, zinc and other chemicals into a large creek, an appellate court overturned that conviction and fine, ruling that the Supreme Court precedent exempted the waterway from the Clean Water Act. The company eventually settled by agreeing to pay a smaller amount and submit to probation.

Some E.P.A. officials say solutions beyond the Clean Water Restoration Act are available. They argue that the agency’s chief, Lisa P. Jackson, could issue regulations that seek to clarify jurisdiction of the Clean Water Act.

Mrs. Jackson has urged Congress to resolve these issues. But she has not issued new regulations.

“E.P.A., with our federal partners, emphasized to Congress in a May 2009 letter that legislation is the best way to restore the Clean Water Act’s effectiveness,” wrote Mr. Silva in a statement to The Times. “E.P.A. and the Army Corps of Engineers will continue to implement our water programs to protect the nation’s waters and the environment as effectively as possible, including consideration of administrative actions to restore the scope of waters protected under the Clean Water Act.”

In the meantime, both state and federal regulators say they are prevented from protecting important waterways.

“We need something to fix these gaps,” said Mr. Tierney, the New York official. “The Clean Water Act worked for over 30 years, and we’re at risk of losing that if we can’t get a new law.”

Beezer back again.  It’s now certifiable.  The conservative ideology has gone stark raving mad.  Unfortunately, the ideology has a majority on our highest court, and completely controls the Republican Party.

For those who watched the six hour health care summit Thursday, as Beezer did, my sympathies.  The Republicans made an effort to explain themselves, but eventually got quite frustrated because unlike the tea party parties and town hall meetings, there were other people at the summit who knew when the Republicans were blowing smoke.  And said so.  Got kind of embarrassing I suspect.

Eventually they fell back on their ideological underpinnings and just said they believed free market solutions were better than what would arise from health care reform.  Well heck, we all knew that was their ideology.  Why waste everyone’s time talking about reforming what one doesn’t, in fact, want to reform?

There was one part of the discussion about whether premiums would rise, or fall, if the reform passed.  Republicans said they would rise.  Democrats basically said if they did rise, it would be because a lot of people would have the chance to receive far better policies compared to what they have now, and would take advantage of the opportunity to trade up.

But that’s about as far as the discussion got.   It needs more explaining.  And the explaining has been done by the New York Times.  The author is journalist Catherine Rampell who writes about economics for the Times.

“Better health doesn’t seem to explain why so many young people forgo health insurance. Rather, income does, according to new survey data released by Gallup.

First, some background. One of the explanations for rising health care costs is that relatively healthy people are taking their chances and going without insurance.

The relatively sick pool of insured customers who are left then drives up the cost of premiums, at least if there is any form of risk-sharing (like community rating) within that pool. Which drives out the healthiest people who are willing to take their chances, which drives the cost of premiums up further, and so on. This is sometimes referred to as the “death spiral” of health insurance.

The trend shown in the chart below — which shows what percentage of people at each age is uninsured — is sometimes used as empirical evidence for the presence of this “adverse selection” in health insurance:

As you can see, young adults are significantly less likely to have health insurance than their older counterparts. The percentage of people with health insurance troughs at age 22, when just 66 percent of Americans are covered.  Many people assume that this is because young people are also less likely to have health problems than their older, presumably more decrepit peers. Perhaps young adults don’t buy health insurance because they don’t think they’ll need it; this would be a relatively rational conclusion for young people to make, statistically speaking.

But if you look a little closer at health insurance purchases among young people alone, this demographic actually appears more risk-averse about their health than is commonly believed.

In fact, last year, healthy young adults were much more likely to have health insurance than their sicker peers, according to Gallup:

Of course, figuring out why healthy young people are more likely to have health insurance coverage is tricky; maybe the causality runs in the other direction, in that insurance helps keep people healthier. There is some debate about the effects of health insurance on health, however.

Perhaps people who are likely to have health insurance are also likely to be healthy for an independent reason: It costs money to buy health insurance, and it costs money to maintain a healthy lifestyle. In other words, perhaps it is money, not perceived risk of getting sick, that determines whether young people get insurance.

As it turns out, people who can afford health insurance are much, much more likely to get it:

Among young adults, 86 percent of those in the top third of the income distribution (people earning $48,000 or more annually) have health insurance. In the middle third (those earning between $24,000 and $48,000), 72 percent have health insurance. And in the bottom third (those making less than $24,000), just 58 percent are on a health plan.

It appears to be affordability, not recklessness (or even rational cost-benefit analysis of health risk), that is driving young people away from insurance policies.

One policy implication of all this is that cheaper health insurance premiums — or, I suppose, across-the-board real wage gains — might encourage more people to buy insurance voluntarily.”