There's Bankrupt And Then There's Bankrupt

It was practically the same scene at the White House today, the same anxious tableau behind a President making the claim that the bankruptcy of an American auto giant actually signals a new beginning and a road to profitability and respectability.

General Motors filed for bankruptcy on Monday morning, submitting its reorganization papers to a federal clerk in Lower Manhattan in a move that President Obama said marked “the end of an old General Motors and the beginning of a new General Motors.”The bankruptcy of a once-proud auto giant that helped to define the nation’s car culture and played a part in creating the American middle class immediately rippled across the country, part of a process that the president said would take “a painful toll on many Americans” but lead ultimately to a strong company ready to compete in the 21st century.

Then comes the fine print. General Motors apparently had $82.3 billion in assets and $172.8 billion in debts. $172.8 billion! I don't know how you rack up that much debt without it carrying over through years if not decades.

We're still talking about the closing of over a dozen plants and factories, which will ripple through the supplier market. 21,000 union workers will lose their jobs. 40% of the dealers will close. The retiree health care fund will now be partially composed of stock that right now is trading for pennies.

The government will drop another $30 billion into the car company on top of the $20 billion already dropped, winding up owning 60-70% of the company, and while officials predict a recoup of that investment within five years, I don't think anyone would stake their life on that. With a collapse in wages and wealth, and no more home equity ATM, new car sales just won't rebound without serious prodding from government (like a cash for clunkers deal).

This has been coming for a long time, of course. Michael Moore, who owes a lot of his prominence to GM, in a weird way, with his first major film Roger & Me about the shuttering of a plant in Flint, warned about this 20 years ago.

It is with sad irony that the company which invented "planned obsolescence" -- the decision to build cars that would fall apart after a few years so that the customer would then have to buy a new one -- has now made itself obsolete. It refused to build automobiles that the public wanted, cars that got great gas mileage, were as safe as they could be, and were exceedingly comfortable to drive. Oh -- and that wouldn't start falling apart after two years. GM stubbornly fought environmental and safety regulations. Its executives arrogantly ignored the "inferior" Japanese and German cars, cars which would become the gold standard for automobile buyers. And it was hell-bent on punishing its unionized workforce, lopping off thousands of workers for no good reason other than to "improve" the short-term bottom line of the corporation. Beginning in the 1980s, when GM was posting record profits, it moved countless jobs to Mexico and elsewhere, thus destroying the lives of tens of thousands of hard-working Americans. The glaring stupidity of this policy was that, when they eliminated the income of so many middle class families, who did they think was going to be able to afford to buy their cars? History will record this blunder in the same way it now writes about the French building the Maginot Line or how the Romans cluelessly poisoned their own water system with lethal lead in its pipes [...]

Let's be clear about this: The only way to save GM is to kill GM. Saving our precious industrial infrastructure, though, is another matter and must be a top priority. If we allow the shutting down and tearing down of our auto plants, we will sorely wish we still had them when we realize that those factories could have built the alternative energy systems we now desperately need. And when we realize that the best way to transport ourselves is on light rail and bullet trains and cleaner buses, how will we do this if we've allowed our industrial capacity and its skilled workforce to disappear?

Moore has some very smart suggestions, including one I've made for a while - converting the auto production lines to create clean mass transit vehicles and high speed rail cars, fighting climate change while funding a real economic recovery that is tangible and creates infrastructure. Other factories could be retooled to produce wind turbines and solar panels. He wants a massive increase in the gas tax to pay for it, but we could do just as well using the $30 billion we're about to dump into GM and profiting from the economic growth of added production and jobs.

To the extent that there's any hope from this bankruptcy, it's that we can at least start to move away from the obsessive car culture that has poisoned our planet and cannot sustain itself. Any increase in economic activity will be accompanied by a spike in oil prices - heck, we're already seeing a spike because of less bad economic news. We need to start adjusting away from the oil-based economy, and the collapse of two major car companies can provide at least an impetus.

Leaning On The Tax Code

The lesson I'm drawing from all of these Obama Administration cabinet nominees with tax troubles is that the relevant Senate committee staffers are the only ones performing audits on people of means:

For starters, the IRS strongly disputes a report this week from the Transactional Records Access Clearinghouse that says audits of the wealthy have fallen off.

The bottom line is that "if you're a millionaire, you're a lot more likely to hear from the IRS than taxpayers in any other income bracket," says agency spokesman Terry Lemons.

Taxpayers who make more than $10 million a year or more have nearly a 10% chance of being audited, he adds.

People with $1 million and up are "clearly are getting more scrutiny," says Benson Goldstein, technical manager at the American Institute of Certified Public Accountants.

TRAC, a research group affiliated with Syracuse University, interpreted agency data to show that the IRS audit rate dropped by at least 19% on the 300,000-plus returns reporting income of more than $1 million between fiscal 2007 and fiscal 2008. The decline reflects IRS "failure to keep its eyes on the ball," TRAC co-director Susan B. Long, also associate professor of managerial statistics at the Martin J. Whitman School of Management at Syracuse University, told Dow Jones Newswires.

The IRS, like many bureaucracies, are large and unwieldy and unlikely to have a dedicated system to shield certain classes of taxpayers from audits. But there is such a thing as a culture, and given the permissiveness from government toward the wealthy and powerful in general, particularly in the past three decades, I will have to side with the TRAC on this debate.

The overarching point is that legislating through the tax code often makes bad policy, and without the IRS as an overseer, individuals and companies can frequently get away with murder.

Thanks to an obscure tax provision, the United States government stands to pay out as much as $8 billion this year to the ten largest paper companies. And get this: even though the money comes from a transportation bill whose manifest intent was to reduce dependence on fossil fuel, paper mills are adding diesel fuel to a process that requires none in order to qualify for the tax credit. In other words, we are paying the industry--handsomely--to use more fossil fuel. "Which is," as a Goldman Sachs report archly noted, the "opposite of what lawmakers likely had in mind when the tax credit was established."

Basically, the process of paper making produces a sludge called "black liquor," which is subsequently used to heat pulp and turn it into paper. To qualify for the alternative energy tax credit, paper companies ADD diesel fuel - which is not needed - in the process, and reap the rewards. This PR flak for International Paper is unapologetic.

Despite the obvious contrivance of the procedure, Wrobleski is unapologetic: "The credit is supposed to encourage the use of green fuel." Sure, I said, but isn't it a bit weird you're now adding diesel fuel to the process in order to take advantage of it? "It is what it is," she said.

Others are less charitable. "You use the toilet every day," said one hedge fund analyst who's been closely following the issue. "Imagine if you could start pouring a little gasoline into the bowl and get fifty cents a gallon every time you flushed."

If you think this is an anomaly, you haven't been paying attention.

Unlike George Bush, who famously said that taxes shouldn't be raised because rich people will just avoid them, I think the goal should be to both simplify the system to reduce the number of deductions and then stringently look at every single return. And as for the constant efforts to encourage or discourage behavior through the tax code, we need to re-think the over-reliance on that technique. We could outright BAN certain fuels instead of messing with the so-called "free market" to make them more or less attractive. We could mandate wind and solar, instead of trying to even out the price with tax credits. It just takes a new perspective.

Pants On Fire-Gate

I mean, it's getting to be ri-god-damn-diculous.

How do you not remember, or remember when it didn't happen, that you met Mother Teresa? Even worse? How do you remember, incorrectly, that that is how you adopted your daughter? Here is what McCain's campaign Web site used to claim about his wife, Cindy:

Cindy led 55 medical missions to third world and war-torn countries during AVMT's seven years of existence. On one of those missions, Mother Teresa convinced Cindy to take two babies in need of medical attention to the United States. One of those babies is now their adopted daughter, 15 year old Bridget McCain.

It isn't true:

The McCain campaign had also put out the story that Mother Teresa “convinced” Cindy to bring home two orphans from Bangladesh in 1991.

Mrs. McCain, it turns out, never met Mother Teresa on that trip. (Once contacted by the Monitor, the campaign revised the story on its website.)

The worst part of this: McCain started crying when he brought up the story to Rick Warren.

Nothing this guy says is true. I'm surprised his answer to "how many houses do you have" wasn't "Houses? I live in box by Capitol Hill!"

UPDATE: Like I said, liar. TV pundits like McCain lie about things all the time. Just ask Lou Dobbs.

Politicians need a host of skills, but there was one that the old John McCain was proud not to possess: the ability to talk out of both sides of his mouth.

On Tuesday, while perched on an oil rig in the Gulf of Mexico, McCain proved that he's mastered that trick.

"It is time for America to get serious about energy independence, and that means we need to start drilling offshore at advanced oil rigs like this,'' McCain said, from the giant, 10,000-barrel-per-day structure owned by Chevron and Exxon Mobil. Barack Obama has said that offshore drilling "won't solve our problem. . . . He's wrong, and the American people know it," McCain said.

Unfortunately, although many Americans believe that offshore drilling will provide real relief from high energy prices, it's the new McCain who's wrong. Before he switched positions, McCain opposed lifting the ban on offshore drilling and had this to say: "Those resources, which would take years to develop, would only postpone or temporarily relieve our dependency on fossil fuels." That's still true [...]

Last year McCain received a zero rating from the League of Conservation Voters - an organization whose members aren't given to chaining themselves to trees. His lifetime score from the group is just 24 percent. That's less than one-third the ratings given to Hillary Clinton and Barack Obama.

Earlier this summer, McCain backed a gas tax holiday. That's another bad idea. It would have helped to keep demand high and deprived the nation of money needed to repair collapsing roads and bridges. He has opposed moves to eliminate subsidies for oil companies and, until recently, opposed tax incentives to stimulate production of alternative energy sources.

In an issue that will hit home hard in New Hampshire this winter, McCain has also opposed additional funding for the national low-income fuel assistance program because he didn't like how its cost would be borne. Now, however, he says he will support "whatever is necessary to help people meet literally incredible challenges this winter." But what about next year?

Meet Mark Begich, Alaska's Next Senator

This is really good to see.

Alaska’s U.S. Senate race between Republican incumbent Ted Stevens and Anchorage Mayor Mark Begich has been a toss-up for several months now, but the Democratic challenger is now ahead 50% to 41%. When “leaners” are included, Begich leads 52% to 44%.

Begich began running his first television ads of the campaign on July 8 and the survey was conducted nine days later.

I've blogged about those ads previously, but this week I got to know Mark Begich as a person. He held an informal event with a bunch of us bloggers on Thursday at Netroots Nation, and because of the whirlwind of events I haven't gotten around to it until today. Begich, the mayor of Anchorage, which has 43% of the population of the state (and 70% of the media market), got into the campaign late for very calculated reasons. First of all, media is cheap, and an ad buy like he's started can have an immediate impact. Begich outraised Series of Toobz Ted Stevens in the second quarter, so he will have the needed resources. He had the same strategy in 2003, when he beat the sitting incumbent mayor of Anchorage in a close vote, and then went on to manage the city out of fiscal crisis and got them on better footing. The key, to him, is to be direct - to shoot straight with people and tell them what you believe. He calls in to any conservative talk show and even engages with random commenters on the Anchorage Daily News blog - so much so that his campaign staff has had to rein him in a bit!

Alaska is really a different kind of state, one that relies on help from the federal government because of its proximity and relies on the oil and gas industry for its wealth. Ted Stevens has cynically used this to steer contracts to his political friends and allies, but as Begich said "his clout is no longer working for Alaskan families," and there's a disconnect between the state's needs and the rhetoric in Washington. The one question I got to ask him was about oil exploration, because it's interesting that his first ad, in Alaska, was about his commitment to wind energy. "I couldn't have run that ad a couple years ago," he said, "but things are changing. Alaska is starting to view itself as an energy state, not an oil and gas state. He gave the example of salmon fishers off the coast (about 50% of our salmon come from this area) not being able to ice down their catches because it's now too expensive to pay for the energy to generate the ice. So their solution was an ice barge for all the ships and boats, powered by tidal energy. Alaskans are feeling these problems every day, and it's a common thread that unites them. And it can be the spur to real innovations and diversification of our energy future. That comes with a comprehensive energy policy, and while it's clear that Begich would vote for drilling in ANWR - although he said that a lot of the oil could be sucked up by nearby existing fields if they bent their pipes a little bit - he would use it as part of a comprehensive energy policy, which we currently don't have.

There are other issues in the campaign as well, including the SCOTUS (the reduction of the fine necessary for Exxon to pay in the Valdez aftermath weighs big with voters) and veteran's issues (11% of the state are vets, and yet there's NO VA HOSPITAL up there). The good numbers notwithstanding, this race isn't over - Begich described a 3-4 point "rubber band effect" where voters often come back to the GOP in the last week, and the local press is notoriously soft on the legendary Stevens. But there's a real opportunity here to send a pragmatic progressive to Washington who has the competence, the ability and the principles to lead Alaska in the Senate. I was pretty impressed.

Bill Scher at Liberal Oasis and CAF also interviewed Begich and has the video to prove it. That's below. See in particular his thoughts on protecting our fundamental constitutional rights from the politics of fear, and his beliefs about the netroots.

McCain vs. Obama on Energy and Transportation

The Jeddah conference began and ended with nary a word of hope for anyone suffering through high gas prices, and it's clear that they will continue in the near term. In the medium term, the Republican robots calling for more domestic drilling are trying to play the country for suckers. Everyone knows (and I'm including the Republican Speaker of the Florida House on this list) that snapping your fingers and yelling "Drill!" won't immediately alter the price of oil. Moreover, Big Oil already has millions of acres of leased fields that they refuse to bring online, and industry analysts have finally figured out this shell game. Plus, talk of "environmentally safe" drilling is disingenuous, especially considering that the Interior Department - George Bush's Interior Department - is right now suing a company for damaging the environment on a field in Wyoming.

Now, John McCain did something right today. He advocated for an X-Prize type of solution: $300 million dollars for any company that can build a superior car battery. In general I think these are well-spent endeavors; the company that receives the prize can plow that money into assembly and distribution, and they have an incentive to deliver the goods quickly. He also called for bigger fines on any carmaker who violates current fuel efficiency laws, and a large tax credits for purchasers of zero-emission vehicles.

Of course, this is completely askew with his call for more offshore drilling, and maybe that's because he's taken more money from Big Oil than any other Presidential candidate. But it's also because McCain has become the Sybil of this Presidential election, with a sop to moderates one day and the hard right the next. Of course, on the important issues, he's going to stay with the Bush-Cheney agenda.

But what I really notice about McCain's proposals, even the decent ones, is that they exist on a narrow field where the car-based economy remains prominent. All of his ideas have to do with making cars more efficient, stretching the gallon of gas out of existing structures of transportation using technological advancement and market forces. That's maybe a part of the solution, but if we're going to reduce the cost of transportation and mitigate global warming, we have to find different ways to commute. And those solutions are readily available; in fact, people are already taking advantage of them:

Record prices for gasoline and jet fuel should be good news for Amtrak, as travelers look for alternatives to cut the cost of driving and flying.

And they are good news, up to a point.

Amtrak set records in May, both for the number of passengers it carried and for ticket revenues — all the more remarkable because May is not usually a strong travel month.

But the railroad, and its suppliers, have shrunk so much, largely because of financial constraints, that they would have difficulty growing quickly to meet the demand.

Many of the long-distance trains are already sold out for some days this summer. Want to take Amtrak’s daily Crescent train from New York to New Orleans? It is sold out on July 5, 6, 7 and 8. Seattle to Vancouver, British Columbia, on July 5? The train is sold out, but Amtrak will sell you a bus ticket.

“We’re starting to bump up against our own capacity constraints,” said R. Clifford Black, a spokesman for Amtrak.

I rode the bus to work twice last week. There's a public meeting about light rail coming into my town this week. People are ready for mass transit solutions that improve stress, quality of life, their personal budgets and environmental damage. The problem is the investment in rail and bus and subway lines is just not there. It won't surprise you to know that John McCain is a longtime opponent of Amtrak.

Barack Obama, however, has lived in a city, has served constituents who mostly commute by train and bus, and understands the external benefits to mass transit. His speech at the US Conference of Mayors stressed all kinds of innovative transit solutions.

Let’s invest that money in a world-class transit system. Let’s re-commit federal dollars to strengthen mass transit and reform our tax code to give folks a reason to take the bus instead of driving to work – because investing in mass transit helps make metro areas more livable and can help our regional economies grow. And while we’re at it, we’ll partner with our mayors to invest in green energy technology and ensure that your buses and buildings are energy efficient. And we’ll also invest in our ports, roads, and high-speed rails – because I don’t want to see the fastest train in the world built halfway around the world in Shanghai, I want to see it built right here in the United States of America.

The entire heading of the speech was a "Metropolitan Strategy" for America. I don't think there's been one before, and it's important that the connections between cities and their outlying metropolitan areas are made. By allowing those who live outside the city center a transportation option outside their cars, we can reduce oil dependence, clean the air and water, mitigate global warming and most importantly improve people's outlook.

Now, Obama isn't perfect on this front. As Ezra Klein noted he mentioned filling the Federal Highway Fund before investing in intercity rail, and his position on ethanol is dispiriting, although inevitable given that winning Iowa was the difference between his winning or losing the nomination. But clearly, the fact that he's at least THINKING about high-speed rail and metro development and mass transit puts him light years ahead of McCain. Then there's the answer to this question.

What do you see as the gravest long-term threat to the U.S. economy?

Obama: If we don't get a handle on our energy policy, it is possible that the kinds of trends we've seen over the last year will just continue. Demand is clearly outstripping supply. It's not a problem we can drill our way out of. It can be a drag on our economy for a very long time unless we take steps to innovate and invest in the research and development that's required to find alternative fuels. I think it's very important for the federal government to have a role in that process.

McCain: Well, I would think that the absolute gravest threat is the struggle that we're in against Islamic extremism, which can affect, if they prevail, our very existence. Another successful attack on the United States of America could have devastating consequences.

McCain is a caricature about anything outside of his military comfort zone. Obama understands how energy issues threaten our long-term survival, and is going to be aggressive in coming up with alternatives.

The California Report

As we head into this weekend's e-board meetings for the CDP, here's a few things I've noticed around the Web-o-sphere:

• It's a few days old, but I should mention that AB583, Loni Hancock's Clean Money bill for California elections, was amended. The latest is that it will be placed on the June 2010 ballot to enact a pilot program that would provide voluntary public financing in the 2014 Secretary of State's race. The original plan was to make the 2010 Governor's race clean money, along with a selected Assembly and Senate race. While shifting this to the lower-cost Secretary of State's race increases chances of passage, it basically puts off any chance at clean money for another four years. So it's bittersweet, to me.

• This Alex Kozinski situation has gotten a lot of noise on political blogs. Kozinski, the chief judge on the 9th Circuit Court of Appeals in San Francisco, was presumably caught with pornographic materials he stored on a public website, and now he's offering himself up for investigation. But the truth might be more sinister. As Lawrence Lessig explains, Kozinski may have been the victim of a smear campaign by a lone nut who accessed material that was private but unsecure. Worth a read.

• At the moment there are ten initiatives which have qualified for the November ballot; the latest would float $5 billion in bonds to subsidize purchases of clean-energy vehicles and research into renewables. I'm a bit worried that such a long ballot with an what will probably be record turnout is going to bring lots and lots of low-information voters to the polls making decisions on the state's future armed with little in the way of facts. In other words, just another California election.

• On Tuesday, all couples in the state will be permitted to marry regardless of gender. In anticipation, the New York Times ran an interesting article about marriage and gender relationships. Very interesting stuff.

• Fabian Nuñez endorsed Kevin Johnson in his runoff race for Sacramento Mayor. That race will happen in November. No word on Johnson's position on the allegations that refs gave the 2002 Western Conference Finals to the Lakers over the Kings, which may be a salient issue in Sac-town.

Federal Energy Bill: A Lot Of Sludge

It looks as if there will be a new federal energy bill after the Thanksgiving recess, but it's a half-measure.

Congressional negotiators are nearing agreement on the components of an energy bill that would boost fuel efficiency standards for vehicles and require vast increases in the use of biofuels, according to congressional aides and lobbyists.

The auto industry and its champion, House Energy and Commerce Committee Chairman John D. Dingell (D-Mich.), have accepted the target of achieving an average of 35 miles a gallon for each carmaker's fleet of new U.S. vehicles by 2020, set in the version of the bill passed by the Senate in June. However, Dingell and the automakers appeared to have won concessions extending fuel efficiency credits for flexible-fuel vehicles and creating separate mileage standards for cars and light trucks.

The two main and most likely features of the final bill are variations of what the Senate adopted. In addition to the 35 mile-per-gallon target for 2020, the Senate bill ramped up the requirement for gasoline makers to use ethanol and other biofuels, to at least 13 billion gallons by 2012 and 36 billion gallons by 2022.

There has been one change in the biofuels measure. While the Senate bill required that at least 3 billion gallons of "advanced biofuels" derived from sources other than corn be used starting in 2016, escalating to 21 billion gallons by 2022, new language would require that the first advanced biofuels be used in 2013. That might ease demand for corn, which has soared in price, and recognize that companies are making progress in using new feedstocks in pilot projects.

Many elements that were in the version of the energy bill passed in August by the House -- such as a requirement for utilities to use minimum amounts of renewable fuels and a rollback of the oil industry's share of a tax break for manufacturers -- seemed unlikely to be included, congressional sources said.

I'm all for compromise, but these seem to be compromises in the wrong places. The President signed bills in Texas mandating a renewable energy portfolio for utilities. Federally, that gets shunted aside. It's completely unclear that the President would sign a fuel efficiency increase, he's been very resistant to it in the past. Further, there are plenty of loopholes crammed into the bill, particularly regarding light trucks, that would incentivize American car companies against innovation and toward more of the same. (What will eventually push them is the market, as they've become almost irrelevant in the global auto economy.) Plus, there appear to be loan guarantees for nuclear power plants in the bill.

I believe the renewable energy standard would provide a more immediate impact to reducing fossil fuels. In fact, the new bill would ELIMINATE tax breaks for wind and solar, in the hopes that they would be reinserted in a later tax proposal. About the only positive I see from this bill is this:

Dingell is also pressing for a provision that would take the responsibility for regulating tailpipe emissions of carbon dioxide away from the Environmental Protection Agency and give it to the Transportation Department's National Highway Traffic Safety Administration.

Last week, Chrysler circulated a paper arguing that tailpipe emissions were linked to fuel efficiency standards NHTSA oversees. But earlier this year, the Supreme Court said the EPA has the power to regulate carbon dioxide emissions under the Clean Air Act, and congressional sources said it was unlikely that the auto companies would prevail.

Because energy legislation is a difficult issue with all kinds of regional biases toward certain policies, you typically only get a shot at it every decade or so. It seems to me that the Congress is missing an opportunity, albeit in troubled circumstances

Tomorrow - Toward A New Energy Future

As long as we're talking about what we're all doing this weekend, I will be your intrepid reporter tomorrow, live from the Wadsworth Theater in Los Angeles at the Presidential Forum on Global Warming and Our Energy Future, sponsored by the California League of Conservation Voters, the enviro website Grist and PRI's "Living On Earth" radio program. Grist will have a live webcast of the forum tomorrow at 2:00pm PT. You can find it here. I'm expecting to liveblog the event at Calitics as well.

Hillary Clinton, John Edwards and Dennis Kucinich are scheduled to attend, and speak for a half-hour on the environmental and energy proposals they would support as President. The good news is that practically all of our Democratic candidates, even the ones who aren't attending, have put out strong policies on fighting global warming and expanding renewable energy, from Chris Dodd's corporate carbon tax to Bill Richardson's ambitious CAFE standard porposal (50MPG) to Barack Obama's 100% auction for a cap-and-trade system, where polluters would have to buy their carbon credits and not be given them. Clinton and Edwards have also put out bold proposals in this arena, and I'm looking forward to hearing more about them tomorrow.

One thing you all can do TODAY is take action on the imminent federal energy bill. There are three planks that everyone would like to see in it; a federal renewable energy standard that would mandate a healthy percentage of all electricity come from renewables like solar and wind; tax incentives for renewable energy, both for corporations AND for individuals who put solar panels on their house (this would be vital is California is to reach its One Million Solar Roofs Initiative), and a major increase in CAFE standards. I believe that the first two would be signed by the President; he signed similiar legislation as the governor of Texas, and now Texas has MORE wind power than California. Environment California is asking people to email Speaker Pelosi today and ask her to stand strong on the federal energy bill.

UPDATE: This ruling by the 9th Circuit Court of Appeals is a positive step, requiring the Bush Administration to force SUVs and light trucks to meet the already-meager federal CAFE standards. This would close a loophole the automakers have been using for a while.

We Need Better Democrats

The saddest thing about this giveaway on FISA and crossing out of the Fourth Amendment is that the Congress was just starting to get its sea legs. They passed 9/11 Commission recommendations that will ensure all containers will be checked at the ports. They passed S-CHIP expansion in both Houses under threat of a Presidential veto. They passed a clean energy standard in the House that would raise the mandate for renewable sources of electricity to 15% by 2020 for the first time EVER. They passed the most sweeping ethics and lobbying reform in a generation. They pushed the Republicans on Iraq and set the stage for a long month of them listening to their constituents.

But despite these successes, all anyone will remember (myself included) is that they got trash-talked into sanctioning unaccountable data mining on Americans.

A Breakthrough on Energy

Early in the day it looked like the Democrats' energy package in the Senate was on the rocks. Republicans blocked the centerpiece of the proposal, removing $32 billion dollars in tax breaks and incentives for oil companies and funneling that money into alternative energy research. So the GOP maintained corporate welfare at the expense of working to save the planet. Good times.

However, by the end of the day, a compromise agreement had been reached that is actually fairly solid.

The Senate passed an energy bill late Thursday that includes an increase in automobile fuel economy, new laws against energy price-gouging and a requirement for huge increases in the production of ethanol.

In an eleventh-hour compromise fashioned after two days of closed-door meetings, an agreement was reached to increase average fuel economy by 40 percent to 35 miles per gallon for cars, SUVs and pickup trucks by 2020.

This overcame a watered-down proposal from Michigan's Carl Levin, and is a significant step. As Dianne Feinstein pointed out,

"It closes the SUV loophole," declared Sen. Dianne Feinstein, D-Calif., referring to current requirements that allow much less stringent fuel efficiency standards for SUVs and pickup trucks than for cars. "This is a victory for the American public."

Industry should have closed that loophole years ago, it would have enabled them to sell more cars, but government has a vested interest in planetary survival as well as the survival of the domestic auto industry, and if the carmakers won't help themselves they must be dragged into the 21st century.

This bill could obviously be better, but getting it through the Senate with what amounts to a veto-proof majority (it got 65 votes without Sen. Johnson and I believe Boxer, so that's 67) is major news. The House may be tougher, especially considering John "I loves me some gas guzzlers" Dingell is Chairman of the relevant committee. Apparently Dingell is trying to punt on the CAFE standards issue, the most important part of the bill. Call your Representatives; we cannot let this happen.

End Corporate Welfare

People try to devise these triple bank-shot solutions to our most pressing problems, involving miniscule increases in tax rates to raise revenue, or incentives for engaging in particular actions above a certain threshold, or experimental pilot programs that may be turned into laws at a later date, when in actuality, the simplest and most effective way to solve so many of our problems is just to stop giving away the federal treasury to corporations that don't need the money:

Senate Democrats are seeking a major reversal of energy tax policies that would take billions of dollars in tax breaks and other benefits from the oil industry to underwrite renewable fuels.

The tax increases would reverse incentives passed as recently as three years ago to increase domestic exploration and production of oil and gas. The change reflects a shift from the Republican focus on expanding oil production to the Democratic concern about reducing global warming.

On Tuesday, the Senate Finance Committee will take up a bill that would raise about $14 billion from oil companies over 10 years and would give about the same amount of money on new incentives for solar power, wind power, cellulosic ethanol and numerous other renewable energy sources. The bill is one of the signature issues this year for Democrats, along with immigration and the war in Iraq, and one in which they hope to clearly distinguish themselves from the Republicans.

There's no reason that oil and gas companies need billions of dollars in incentives for domestic exploration. Their incentive to find oil is that they can sell it for a lot of money. That's how capitalism works, I thought. They spend the capital to extract the product, and then sell it at a profit. But we don't have capitalism in this country, we have a rigged system of corporate welfare payouts where a company gets to a certain size where they don't have to spend a dime in labor costs or taxes or infrastructure because it's all paid for them by the government. And we talk about the evils of "nationalizing" industry.

Take away the incentives and subsidies, demand royalties for drilling on federal land and shore, and plow that money into renewables (which, by the way, could go to the same companies, if they wished to alter their business model to a sustainable one). Governments should incentivize what they want more of and tax what they want less of. We do the opposite, and it ought to stop. And I'm not talking about energy independence, which I agree is a stupid poll-tested phrase that doesn't reflect reality. I'm talking about severely reducing greenhouse gas emissions to mitigate the inevitable impact of global warming, instead of just passing out checks to anyone who'll pull oil or coal out of our ground or water.

2008 Matters

We're inching toward a time when what happens in the Presidential race might actually matter, so maybe I'll start doing more of these roundups.

• We'll start on the Republican side, where Rudy Giuliani is learning that the worst place to be in the Republican nomination is the front-runner. Adding to the list of recent revelations is that he paid his wife $125,000 a year to "write" speeches for him, and this New Republic article which chronicles his monomania.

• I think it's significant that the other two front-runners on the GOP side are attacking each other in the expectation that Giuliani will collapse on his own. Today John McCain lashed out at Mitt Romney's criticisms of the immigration compromise:

Mitt Romney has been trying to make quite a bit of political hay out of the compromise immigration bill — he sees it as one of John McCain's key weaknesses as relates to the Republican base and a great way to differentiate himself as the One True Conservative in the race (at least until Fred Thompson jumps in).

Well, today, on a conference call with bloggers, Mr. McCain fired back at the former Massachusetts governor, who has (of course) held varying positions on immigration over the years.

"Maybe I should wait a couple weeks and see if it changes," Mr. McCain said of Mr. Romney's position on immigration this week. "Maybe he can get out his small varmint gun and drive those Guatemalans off his yard."

Ouch. As Romney heads into the front-runner position (he's way ahead in Iowa, according to the last poll), expect more of this. It's amusing that Republicans are giving Democrats all the attack lines they'll use in the general election. But I don't know that this line of attack will work. There are two kinds of flip-flops, the ones that are due to new information and the ones made for political expediency. But people with strongly held views will always believe that a poltician coming to their side is doing it due to new information. Matthew Yglesias has more.

• San Brownback deserves a pat on the back for personally divesting himself of tens of thousands of dollars in companies that do business with Sudan. Brownback's supporters do not deserve a pat on the back for believing that heliocentrism, the idea that the Earth moves around the sun, is an "atheist doctrine."

I support the Bible, and I don’t want my children learning about Heliocentrism in school. I think this doctrine encourages atheism, Darwinism, and anti-Americanism. I don’t want my tax dollars going to finance this kind of false science. It’s complete rot, and I hope that those of us who come to realize this can ultimately prevail against its propogation amongst OUR children with the money from OUR salaries.

At some point, you have to blame Brownback for engendering this kind of anti-intellectualism.

• Somewhere in the middle is New York City Mayor Michael Bloomberg, who may spend a billion dollars on his own third-party run, possibly with Chuck Hagel in tow as Vice President. Somehow this is being spun as trouble for Democrats. Ahem? When a Republican mayor and a Republican Senator run for President, they're not quite likely to take away votes from the Democrat.

• Turning to the Democrats, I thought this was a brilliant move by Barack Obama.

Officially, the event held in a large, muddy parking lot north of the city was called a statewide grassroots canvas. Unofficially, let's call it the first of many "Saul Alinsky" days. Alinsky is the legendary organizer and theorist who Barack Obama reportedly counts as an inspiration [...]

To "canvass," means to go house-to-house and collect something. Today, Obama's team is collecting signatures to to pressure Sens. Gregg and Sununu to end the war in Iraq. Unoffiically, the event serves another,more Alinskian purpose. There are so many Obama volunteers statewide that the campaign itself cannot accomodate all the solicited help. So today's event is a place-holder of sorts, a way for those thousands of volunteers to invest their time for Obama's greater cause. The canvass cements their link to Obama by appealing to another part of their political self-interest.

A side benefit: big early grassroots events impress reporters. I was impressed.

This is a GREAT way to get people involved tangibly 7 months before the election. It kickstarts your activist base to organize, and shows that you can run a successful canvas. There's no downside.

• Richardson announced for President today in Los Angeles. Late last week he unveiled his climate change and energy policy to good reviews. I actually had the opposite reaction to Richardson when I met him, I thought he wasn't impressive at all personally, but I caught him before an important speech, so I'm willing to give him the benefit of the doubt on that. What I'm not willing to waive away is his continued adoption of right-wing frames on tax policy. Matt Stoller has more on the climate policies of all the candidates. It's great that all the Democratic candidates HAVE a climate and energy policy; it's a far cry from 2004. Edwards and Richardson and Dodd all have excellent policies.

I have more on Edwards and Hillary Clinton, but they're going to be separated into their own posts.

"I believe that there is market manipulation at the refinery level"

That was Assembly Speaker Fabian Nunez today at an event in downtown Los Angeles, in front of a Chevron station (that was selling gas for a low low $3.49, I think the advance man could've found stations 30-40 cents higher without too much trouble), as he announced with Assemblymen Mike Davis, Mike Feuer and Mike Eng a series of bills to combat rising gas prices and the artificial depression of refinery supply. The bills will seek to oversee refinery maintenance, expand regulatory authority, and deal with the "hot fuel" issue. The Speaker said that "During the electricity crisis a few years ago, California adopted similar measures to keep energy companies from using these convenient (refinery) shutdowns to amp up their profits, and today we're going to make sure oil companies can't use Enron-like tactics on California consumers."

This is an object lesson in why now was the exact wrong time for the CDP to accept $50,000 from the prime progenitor of those Enron-style tactics. And it actually came up in the press conference.

Nunez referenced a Wall Street Journal article (behind the wall, sadly) that detailed how refineries are cashing in on high gas prices by artificially lowering their supply through various methods, particularly shutdowns. The three bills work out this way:

1) new oversight committee: Nunez and Eng's bill would create the California Petroleum Refinery Standards Committee, made up of the Attorney General, the State Controller and a couple political appointees, which would develop standards for maintenance and operations at California refineries, would look into shutdowns and would increase mandatory reporting from oil companies regarding them, would take audits and inspections, and would ensure compliance. Penalties for not complying to these standards, would be "very stiff" and would be considered felonies, not misdemeanors.

2) "Hot fuels": temperature varies in fuel, and it impacts the weight of gasoline, which since it's sold by the gallon impacts the price. The suspicion is that oil companies are manipulating temperature variations to give the consumer less for its money. Assemblyman Mike Davis' bill would seek a comprehensive study, cost-benefit analysis, and recommendations on what the national standard for gasoline temperature should be. Right now it's 60 degrees; the concern is that the number should be higher.

3) Petroleum Industry Information Reporting Act: oil companies are not releasing enough data to determine properly the efficacy of inventory levels and profit margins. Assemblyman Mike Feuer's bill would mandate monthly financial reports on oil supply, demand, and price issues. It would also allow that information to be shared with the Attorney General and the Board of Equalization.

These appear to be decent bills that correctly address the issue of artificial refinery supply. However, in the question-and-answer session that followed, there was an example of why it is not smart to play both sides of this fence.

The fact that the backdrop of the press conference was a Chevron statement is telling; after all, they own 25% of the refineries in the state, and they are getting rich off the high gas prices being made by their actions at those refineries. The VERY FIRST QUESTION offered to Speaker Nunez was about his trip to South America paid for in part by Chevron. Nunez replied that the trip was "insignificant," that the trip was taken to learn more about alternative fuels in South America, that he stands for issues that are important to Democrats, and that he resented any attempt to question his ethics. And right after the presser was over, during a sort of press gaggle, he told the radio reporter who asked that question that is was either a "cheap shot" or a "chicken shit" question (I wasn't quite close enough to fully make it out). The reporter replied that the information was out there and she was just giving the Speaker a chance to respond.

Clearly that's a fair question. And clearly it's fair to ask whether, at a time where the Speaker of the Assembly is accusing Chevron of market manipulation and of engaging in "Enron-like tactics," it's the best time for the CDP to be taking a $50,000 contribution from that same corporation. Now more than ever, the message should be united, and the perception here is quite confusing, and more hurtful than the money is helpful. I appreciate these efforts to stop market manipulation, but I do not appreciate giving the opposition another arrow in their quiver through the appearance of impropriety of this donation. I renew and strengthen my call for the Party to return the money and work in more innovative ways to fundraise and grow the party.

CDP: Please Give Chevron Back Their Money

I am fairly surprised that more has not been made in the blogosphere of the unwelcome news that Chevron is doing everything it can to buy off the California Democratic Party and some of its top legislators. Outside of this small item in The Oil Drum, pretty much nobody has said a word about the fact that the CDP accepted a $50,000 check from a company that is attempting to artificially depress capacity and manipulate the energy market in a way that is shockingly similar to how Enron made themselves a fortune during the 2000-2001 energy crisis. You can read the details here.

As a delegate to this party, I feel personally tainted by this donation. I feel like there is a concerted effort to buy my silence. It will not work, and I want to outline why I am respectfully asking this party, of which I am a member and to which I pay dues, to return the money.

I don't think I have to go into how Chevron controls the oil market in California by owning most of the refineries, and that in another era that would rightly be called a trust. I don't need to discuss their record profits or their expenditures of $44 million to defeat ballot propositions like Prop. 87 and Prop. 89 last year, or their consistently greedy profit-taking at a time of record gas prices throughout the state, or how they refuse to increase refining capacity to keep that profit artificially high. And I don't need to explain how corporations aren't in the business of charity, and that every expenditure they make has a stated outcome, whether for public relations purposes or to engender favorable legislation or just to keep government off their backs while they continue to rake in billions. What I can talk about is the poverty of imagination that leads the CDP to take a gift like this.

What bothers me most about taking a fat corporate donation like this, from the very interest group you fought tooth and nail against on Prop. 87 just 6 months ago, is how LAZY it is. There are an unlimited amount of ways to raise $50,000 that not only show no appearance of impropriety or corporate favoritism, but bring people into the process and grow the party, which are the key metrics for politics in the 21st century. If you really needed $50,000 in a state of 37 million people, how about this: ask 50,000 to give a dollar to specifically ensure that the CDP won't be beholden to big corporate money. You can hold dollar parties and write about how giving citizens a stake brings them closer to the party. And in return for that dollar, you could give people prominent space on the CDP website to upload a minute of video about what problems facing California most affect them. Then, once the money is collected, PUBLICLY REBUFF Chevron by telling them that their donation has been paid by the people. Not only would you be seen as populist folk heroes, you would be investing in the party by allowing 50,000 Calfornians get a share and a stake. That's called people power. The new metrics for the Presidential campaigns, for example, are not just money but numbers of donors, because that shows a broad base of support. A party that gets rich off fat $50,000 checks is a mile wide and an inch deep. We already have a party like that in California. It's called the Republican Party.

If that corporate money were even drilled in to infrastructure and party building, that would be something. But typically, it's not. And the party that continues on a traditional model of collecting big corporate checks and running big broadcast ads will be obsolete in a new media environment. Stoller:

We need to figure out new metrics for receiving party support aside from money and polling. Perhaps opt-in email addresses acquired? Friends on MySpace? Newly registered voters (I like this one)? Chatter across blogs using sites such as Blogpulse?

I'm not sure, but the whole landscape of politics is shifting. It's like an entirely new grammar is emerging, but we're not there yet.

A "dollar party" strategy, that could spread virally through social networking sites (is the CDP even on MySpace or Facebook?), that would bind more people to the party in a small way and set up a core of activists for GOTV, that would allow a press release that says "50,000 donors!" instead of hiding the fact that one polluting Big Oil ripoff artist gave you 50,000 dollars... would simply be a forward-thinking way to grow the party and gather attention.

I'm sure that there are a host of conciliators and "my-party-right-or-wrong" types that have a problem with me sharing even a scintilla of disagreement with the state party (there's another guy that believes in the silencing of any alternative voices, he resides at 1600 Penn. Ave, Wash, DC, 20500). First of all, I would have them take a look at the rise of DTS voters and the lack of success in joining the progressive wave in 2006 and ask them where all that brushing aside criticism has gotten them. But the second thing I would ask them is, why are you a Democrat? What do you believe, if anything? And how do you square that belief with the fact that one of the companies most committed to stopping any progress on global warming or reducing dependence on foreign oil just handed you - you! - a wad of money in order to shut you up?

The Speaker's Office claims that these donations won't impact Democrats' ability to take a hard look at what Chevron is attempting to do on refining capacity, and that "tough" legislation is forthcoming. I would hope so. I cannot impact what individual candidates receive in gifts; at least, not until election season. I can have an impact when it's my party. I'm a delegate and a member in good standing. I know for a fact that members of the Party leadership read this site. I'm asking those in charge at the CDP, nicely, to give back the Chevron money. I want to work on innovative fundraising solutions that can simultaneously fund the important work of the party and bring it closer to the people whom it serves. But like any addiction, the first step is admitting you have a problem.

Faster Than a Porsche, 250 Miles on a Single Charge - $35 Grand

So, today's "No Gas Tuesday." Every year around this time I get some spam email calling for a one-day boycott of the oil companies. “We’re not going to fill up our tanks for a whole day, man! That’ll show Exxon and Mobil and 76 and Chevron just who’s boss! Nobody buys gas on Thursday. No Gas Thursday!” Of course No Gas Thursday is followed by Buy A Lot of Gas Friday. Because as far as I know, cars still run on gas. And if you don’t buy any on Thursday, it’s not like they’re going to convert to corn overnight.

The smart way to eliminate dependence on foreign oil and the fossil fuel structure, aside from conservation, is to support sustainable cars. I went to this event with the CEO of Tesla Motors over the weekend. Tesla is not interested in making solar-powered golf carts; they are creating high-performance electric vehicles that look sexy and drive fast. The prototype Tesla Roadster goes 0 to 60 in 3.9 seconds, benefiting from the torque generated by an electric battery-powered engine. The carbon fiber body is durable and light. It's faster than a Ferrari and looks just as sleek. The battery will take around an hour to fully charge; just plug in while you eat lunch, and you're ready to go 250 miles.

And the good news to me is that Tesla is not stopping there. The Roadster will hit stores this year and will have the sports car-equivalent price tag of around $100,000. Model II will be a sedan like a Lexus and will price around $50,000. And Model III will be around $35,000. Once they jump the barrier of making electric vehicles sexy, they will compete in the market where most people are buying. That's significant.

There's more at the link. But I was very impressed with Tesla's philosophy. Their dealerships will look more like a Starbucks than anything, with WiFi and good coffee, and mechanics working on the cars right out front ("like a fine restaurant where you can see the food being made," said the CEO). This is what will wean us off oil, not some ephemeral boycott. I believe that repsonsible government action and smart growth, combined with encouraging this kind of innovation, is the only way to change the system as it is today.

Cutting Through Ice

Progressives did a great job getting people in office in 2006 who share the same values. But it's going to take decades before we get enough turnover in office where that's going to make a real difference. Sure, the caucus is for the most part right on the Iraq war, but that's a layup. On too many other fronts, we're not seeing a lot of movement on the issues on which Democrats supposedly ran.

The biggest disappointment is that Democrats are stubbornly refusing to sever the ties between government and Big Money interests in the form of lobbyists.

House Democrats are suddenly balking at the tough lobbying reforms they touted to voters last fall as a reason for putting them in charge of Congress.

Now that they are running things, many Democrats want to keep the big campaign donations and lavish parties that lobbyists put together for them. They're also having second thoughts about having to wait an extra year before they can become high-paid lobbyists themselves should they retire or be defeated at the polls.

The growing resistance to several proposed reforms now threatens passage of a bill that once seemed on track to fulfill Democrats' campaign promise of cleaner fundraising and lobbying practices.

"The longer we wait, the weaker the bill seems to get," said Craig Holman of Public Citizen, which has pushed for the changes. "The sense of urgency is fading," he said, in part because scandals such as those involving disgraced lobbyist Jack Abramoff and former Rep. Duke Cunningham, R-Calif., have given way to other news.

Lobbying is a protected right in the First Amendment, and I don't want to see it go away any more than I would want a free press to be stopped. But making former lawmakers wait a couple years before crossing over and becoming lobbyists, and making lobbyists disclose details about the big money they scrounge up in contributions, is just sensible good-government stuff. Furthermore, it's terrible politics to rant and rave about a culture of corruption, only to leave the door open for that corruption after the election is over.

Second is this pernicious secret trade deal, the details of which have still yet to be released to the general public or the media. Of course, this didn't stop the traditional media from defending the deal and calling it a grand breakthrough in the spirit of high Broderist bipartisan compromise. The only compromise here is that members on both sides of the aisle have no problem screwing the American worker. Fair-trade Democrats were denied a chance to see the final agreement before the announcement (the US Chamber of Commerce, on the other hand, got a nice long look). Worse, the deal is just a precursor to giving the President fast-track authority, essentially a line-item veto for trade, so that the puny and unenforceable labor and environmental standards that might be in the deal could be legally wiped out with the stroke of a pen. The good news is that the majority of Democrats don't support the deal and will fight its passage, but it's not clear that will be enough.

The story on trade is really about seniority in the leadership and the top Congressional committees means that the majority opinion of the caucus can always be overridden by someone at the top. An additional example is fuel economy. All of the top Presidential candidates want to boost mileage averages, and even the Senate Commerce Committee approved a bill that would raise CAFE standards to 35mpg by 2020. But in the House, the relevant committee chair is John Dingell. Of Michigan. And he's not likely to budge, stiffening at the very hint of criticism.

U.S. Rep. John Dingell said he’s just a simple Polish lawyer from Detroit who is not running for higher office and not trying to make political points.

So he took umbrage today with a speech given last week by U.S. Sen. Barack Obama, an Illinois Democrat who is running for president. In a speech to the Detroit Economic Club, Obama chastised the auto industry for not working harder to achieve better fuel-efficiency standards.

Dingell used his speech to the same organization to shoot back:

"I admire Sen. Obama’s enthusiasm..… But with all due respect, as the Sopranos would say — I would not travel to Chicago for the purpose of teaching people how to butcher hogs."

They don't butcher hogs in Chicago anymore, incidentally. And if I fucked up the auto industry the way the Big 3 have in the US over the past decade, including having to sell Chrysler for a fraction of what it was purchased for in 1998, I'd welcome any advice I could get. The truth is that fuel economy is the killer app of the 21st century, and the technology is with us today to make cars faster and to go further using less. But stubborn men like John Dingell want to protect the profits of their corporate buddies.

This is a major problem, not atypical, where the status quo bumps up against those who want real change. Progressives want to reduce the corrosive power of money in politics, give American workers a chance to compete without being priced out of the global market, and create a revolution in alternative energy in the name of environmental and national security. These are not controversial issues. But there is a generational political divide that is going to take a long time to breach.

Obama's Leadership on Alternative Energy

Barack Obama walked into the belly of the beast in Detroit today and told the automakers something they should have heard a long time ago: Nobody wants to buy your cars because they cost too much to power.

"For years, while foreign competitors were investing in more fuel-efficient technology for their vehicles, American automakers were spending their time investing in bigger, faster cars," he said, according to a text of his remarks. "And whenever an attempt was made to raise our fuel efficiency standards, the auto companies would lobby furiously against it, spending millions to prevent the very reform that could’ve saved their industry." In his speech, Mr. Obama proposed stricter fuel economy standards, greater availability of tax credits to consumers who buy hybrids or other ultra-efficient vehicles and subsidies to help automakers pay health care expenses in return for greater investment in advanced technology.

The health care-for-hybrids legislation was the one signature legislation Obama proposed in the 109th Congress. I thought it was pretty brilliant, and it was typical of Obama in that it sought to find areas of agreement among competing actors and make compromise. The plan is that America will help remove the crushing burden of health care legacy costs for US automakers if they'll just get off their ass and innovate, using those savings to step up alternative energy research and production.

Hilariously, Arnold Schwarzenegger rushed to put out a press release showing that Obama mentioned him in putting forward his full energy and climate change initiative, as if the Terminator owns the global warming issue or something. He'd do well to actually implement AB32 in California and stop putting out press releases every time someone mentions his name.

In fact, there's been significant global movement on coming up with plans to mitigate the effects of climate change.

The document made clear that nations have the technology and money to decisively act in time to avoid a sharp rise in temperatures that scientists say would wipe out species, raise ocean levels, wreak economic havoc and trigger droughts in some places and flooding in others.

Under the most stringent scenario, the report said the world must stabilize the amount of greenhouse gases in the atmosphere by 2015 - eight years from now - at 445 parts per million to keep global temperatures from rising more than 3.6 degrees over preindustrial levels.

Delegates said the approval of the report should conclusively debunk arguments by skeptics that combatting global warming was too costly, that it would stifle development in poorer countries, or that the temperature rise had gone too far to change.

"If we continue doing what we are doing now, we are in deep trouble," said Ogunlade Davidson, the co-chair of group responsible for finalizing the report this week.

Delegates hailed the policy statement as a key advance toward battling global warming and setting the stage for an even stronger international agreement to replace the 1997 Kyoto Protocol on greenhouse emissions when it expires in 2012.

3.6 degrees in temperature is still a lot and would still wreak havoc. But the report shows that the technology is here today to at least slow things down; the only thing that isn't is commitment and leadership. That's why Obama's speech in Detroit today is so important. I don't need to hear about what needs to be done; the people who have been holding out for decades do. I do wish hee added a bit more of a sense of urgency to his pitch; for Obama, the question is always "Will he hold to principle when tested and resisted?" I'm not saying he won't, it's just that his instinct for compromise is well-known, and I'm hoping he doesn't just compromise the benefit out of any proposal. But this speech is a reassuring first step.

UPDATE: John Edwards had a very good response on this subject in a YouTube to DFA supporters (he's always the first one out of the gate on these; his campaign team really understands how to reach the netroots).