More Health Reform Needed - In America's Workplaces

I'm a blogger fellow with Brave New Films on their 16 Deaths Per Day campaign for worker safety. Join us on Facebook.



Last week, the House Education and Labor Committee held a hearing on HR 2067, the Protecting America's Workers Act (PAWA). This bill would strengthen and modernize OSHA, the Occupational Safety and Health Administration, and give them the tools to actually carry out their mission of ensuring a safe workplace for all Americans.

We tend to think of health care as simply a matter of insurance and doctors and pills. But workplace safety plays just as vital a role. Most of us spend a majority of our waking hours at our workplaces. We often carry out dangerous tasks at worksites which are not fully screened by regulators. We are offered little training or safety equipment to carry out these tasks. And a lot of us die - 16 deaths per day, in fact, over 5,000 deaths a year due to workplace accidents, and many more - over 50,000 - from occupational disease.

Many of these deaths are preventable, and simply due to OSHA not having the resources or the tools to carry out its mandate. PAWA would change that. It would extend OSHA coverage to state, local and federal government workers, as well as airline and railroad employees, which (incredibly) do not currently get OSHA protections - well over 8 million workers. It actually raises civil penalties for worksite violations, for the first time in two decades, so that fines for keeping a hazardous workplace is not the cost of doing business. Any violation involving a worker death would be susceptible to a mandatory minimum penalty. And PAWA would provide accountability, by allowing prosecutions against employers who allow worker injuries and deaths willfully (employees and their families would have means to hold employers accountable as well). This would represent the first update of the Occupational Safety and Health Law since its enactment in 1970.

A report last week suggested that workplace injuries have declined, despite no changes to the law. Certainly the Chamber of Commerce has been throwing these statistics around. But these numbers from the Labor Department are often preliminary, involve changes to reporting standards, and never count the 50,000-plus deaths due to occupational diseases and toxic exposure. Indeed, the Chamber works hard to create reporting rules beneficial to their businesses, which mitigate reporting statistics. There's also conflicting data, like the jump in workplace suicides. Meager successes - if they exist - do not eliminate the need for continued action.

The regulatory reform at OSHA over the past several years, prior to the Obama Administration, is legendary, and admirably summed up by this report from the Center for Progressive Reform. The current leadership of OSHA - Assistant Secretary David Michaels and Deputy Assistant Secretary Jordan Barab - have been handed a dysfunctional agency without the means to cover every worksite in America, nor the enforcement capabilities to force compliance. An excerpt:

Observing OSHA in its struggle to implement and enforce the OSH Act is a study of regulatory dysfunction. OSHA and its state partners employ fewer than 2,100 inspectors to keep tabs on more than 8 million U.S. workplaces. OSHA must meet so many analytical requirements that it takes more than a decade to implement a single new standard. By one
count, OSHA is subject to 18 different statutory, court-created, and administrative limits on its rulemaking process [...]

If conducted properly, a compliance assessment at a very large worksite might take 2,000 employee-hours. The accompanying legal proceedings can drag on for months or years. In Fiscal Year 2010, OSHA will spend about $227 million on federal enforcement programs, but will only have the capacity to inspect 40,000 of the nation’s more than 8 million workplaces.

Proactive rulemaking to manage emerging hazards, such as lung disease linked to diacetyl, and other flavoring chemicals used in the popcorn industry, can also be a huge resource drain. Every type of OSHA employee – economists, engineers, occupational health specialists, lawyers – is involved in the development of new health and safety standards. Coordinating their work is difficult and costly.

Yet, OSHA operates on a shoestring budget. OSHA’s budget climbed steadily in the 1970s, funding the agency’s growing capacity to develop new rules and enforce the OSH Act, which in turn triggered a backlash from the business community. Under the Reagan and George H.W. Bush administrations, OSHA’s budget was first cut and then held roughly even with inflation. The Clinton administration gave OSHA a boost, and the agency’s budget reached an historic high in 2001. But that was the same year that the agency published its ill-fated ergonomics standard, and, like OSHA’s aggressive enforcement in the late 1970s, the ergonomics standard elicited a backlash in the business community and a subsequent whittling-away of the agency’s budget under George W. Bush.

The whole report is worth reading. You could tell this story in virtually every regulatory agency in America. The Reagan revolution ushered out real enforcement of industry and ushered in industry capture or resource starvation. This has continued largely unchecked until today. PAWA would change that, on a variety of levels.

And this isn't an abstract problem. There are real consequences to inattention to our workplaces. To take just one example: in July 2009, a temporary worker in Camden, NJ named Vincent Smith died from falling into a vat of chocolate. He was untrained, without job security as a temp and making the minimum wage. And it turned out that the food processing plant didn't have a license to make chocolate. They operated for six or seven years without scrutiny from federal or even local inspectors, and workers had no whistleblower protections to call OSHA and report the violations. In an effort to save money, Hershey sub-contracted out their chocolate processing to plants like this, and that savings comes at the expense of worker safety.

Local inspectors took out their wrath on the processing plant, fining them a whopping.... $1,152. Eventually, federal authorities investigated the plant, and they did come up with a fine for the multiple safety violations and the death of Vincent Smith - $39,000. This is considered a major fine for OSHA, and yet it's a mere pittance of the profits for a company operating illegally without a license for 6 years.

Smith's family has filed a personal injury lawsuit. But we cannot rely on the courts, absent regulators, to prevent the next death, or provide the deterrent needed to get employers to provide a safe workplace. We need the Protecting America's Workers Act.

Conservatives Never Met A Criminal They Didn't Like

The Bush Administration sure had a knack for letting criminals get away with it, didn't they? They failed to stop 9/11, never caught bin Laden, and now we're learning about the total incompetence of the SEC in responding to Bernie Madoff's Ponzi scheme.

The U.S. Securities and Exchange Commission repeatedly missed chances to catch Bernard Madoff’s $65 billion fraud over 16 years by assigning inexperienced investigators and accepting “implausible” explanations after catching him in lies, the agency’s internal watchdog said.

At least six warnings from sources including a money manager, a “respected hedge-fund manager” and a firm that studied Madoff’s business failed to spur a “thorough and competent” probe, Inspector General H. David Kotz wrote in a summary of a report released today. Madoff, in an interview with Kotz, said even he “was astonished” when investigators failed to check trading records that would have exposed his scam.

“Despite numerous credible and detailed complaints, the SEC never properly examined or investigated Madoff’s trading and never took the necessary, but basic, steps to determine if Madoff was operating a Ponzi scheme,” Kotz wrote.

This is not only an incredible report, it plays into a larger truth about the conservative conception of regulation as a needless bother rather than a diligent effort to protect the consumer. One incredible moment, referenced above but covered in detail by Zachary Roth, shows that Madoff basically thought he was caught and the scheme had been discovered by federal regulators, only to find himself safe once again.

The agency's biggest screw up, says the summary, was the fact that examiners never verified Madoff's trading through an independent third party.

The details of that failure are more astonishing still. Madoff at one point told examiners that all his trades were cleared through his account at the Depository Trust Company (DTC), a clearing agency -- and he gave the examiners his DTC account number. At that point, Madoff told Kotz in an interview, "I thought it was the end game, over. Monday morning they'll call DTC and this will be over." Amazingly, the SEC never followed up with DTC. Madoff said he was "astonished."

The summary almost makes clear that the SEC's right hand didn't know what the left was doing. It notes with astonishment that at one point, two Madoff examinations were going on at the same time within the agency, without either being aware of the other. It was Madoff himself who informed one team of the other's existence [...]

The final, failed Madoff investigation of 2006 -- triggered by a detailed Markopolos complaint -- was perhaps the most egregious. According to the summary, most of the investigative work was done by a staff attorney "who recently graduated from law school and only joined the SEC nineteen months before she was given the Madoff investigation. She had never previously been the lead staff attorney on any investigation, and had been involved in very few investigations overall. The Madoff assignment was also her first real exposure to broker-dealer issues."

According to the summary, that inexperience helps explain why, when Madoff told the examiners that he got such unprecedentedly good return simply because he had a good "feel" for the market, they took that nonsensical explanation at face value.

Bush's SEC didn't bother to check up on Madoff's dealings, and they took his explanations as good enough for them, because their attitude toward regulation was "don't mess with a good thing." Indeed, the entire stock market during the Bush years was kind of operating under a false reality in its own right. Madoff was a crook, but at least an honest crook. And even he couldn't get caught.

This is not just the story of one agency's embarrassing failure. The failure lied in the theory of government, existing to make profits for cronies and lay off the connected and the powerful. The failure to catch Madoff and the failure of conservatism are essentially the same stories.

Stories Of Government Working

After a minor stumble, the House today passed the Food Safety Enhancement Act, which would bolster the Food and Drug Administration's efforts to ensure food that's not contaminated and vomit-inducing. La Vida Locavore has more. Basically, the bill would properly fund the FDA to carry out their mission, paid for by the food producers, and would enact stringent performance standards for food producers, with mandatory trace-back systems and frequent inspections of facilities. And it would apply the standards for domestic food safety to imported food as well.

Given how pretty much almost everyone in America eats food, and given the high profile of food outbreaks during the age of e.coli conservatism, if this gets through the Senate I would hope that somebody would let the public know. It ain't health care reform, but it's an important measure with a tangible effect on people's lives. I'll give you a couple others. The stimulus package provided $100 million dollars for the nation's food banks to make sure the truly needy could find food this year during these economic struggles. Food assistance is up about 30% this year over last year, and so providing some stimulus funds to feed people has a real human benefit, in addition to allowing the hungry some breathing space to get back on their feet. And the House pumped in some more money for highway and unemployment funds, so that people who are jobless can continue to access benefits and construction projects in the states can continue.

We have a problem with the conservative demonization of government, mainly because too few people are out there telling the story of government when it works. It makes it easier to lift the heavy policy objects when you restore a little bit of trust that when government is properly organized and managed it can actually help people.

This is another failure that liberals would be wise to counteract.

UPDATE: The roll call. The food safety bill passed 283-142. A few House liberals voted against it, I'd be interested to hear their thoughts.

UPDATE: The President:

"Today the House of Representatives passed H.R. 2749, the Food Safety Enhancement Act of 2009, legislation that will raise food safety standards, allow the FDA to issue mandatory recalls of harmful products, and enhance our oversight of imported food.

This action represents a major step forward in modernizing our food safety system and protecting Americans from foodborne illness. Those are the goals of the Food Safety Working Group I convened in March and charged with making recommendations to improve our food safety system. And that is why we announced a new rule to control Salmonella contamination in eggs and are working to reduce the presence of harmful pathogens such as E. coli in meat and produce; strengthen our capacity to trace the source of outbreaks; and update our emergency operations procedures.

I commend the House of Representatives for its action today and look forward to working with the Senate to enact critical food safety legislation."

This stuff matters too.

The Rise Of The Commodity Futures Trading Commission

Back in the days before George W. Bush, we had these things called "regulators," who independently sought to enforce the nation's laws and protect the public from waste, fraud, abuse and outright criminal activity. The regulatory agencies have been so gutted that it's going to take a while for them to regain their institutional memory and recall their core mission. In particular, the Commodity Futures Trading Commission is making some serious noise. They are out-and-out blaming the speculators for spiking oil prices in 2008 for their personal benefit. That's a shocking admission for a regulator to make.

The Commodity Futures Trading Commission plans to issue a report next month suggesting speculators played a significant role in driving wild swings in oil prices -- a reversal of an earlier CFTC position that augurs intensifying scrutiny on investors.

In a contentious report last year, the main U.S. futures-market regulator pinned oil-price swings primarily on supply and demand. But that analysis was based on "deeply flawed data," Bart Chilton, one of four CFTC commissioners, said in an interview Monday.

The CFTC's new review, due to be released in August, adds fuel to a growing debate over financial investors who bet on the direction of commodities prices by buying contracts tied to indexes. These speculators have invested hundreds of billions of dollars in contracts that were once dominated by producers and consumers who sought to hedge against oil-market volatility.

The review also reflects shifting political winds. Under Chairman Gary Gensler, appointed by President Barack Obama, the CFTC is departing from the more hands-off approach it took under its previous head, a George W. Bush appointee. The agency is widely expected to adopt new rules to limit the amount of investments in commodities by big institutions betting on their direction purely for financial gain.

Gensler was savaged by liberals when he was nominated by the President, particularly because of his history as a Goldman Sachs partner and a Rubinite crony. Releasing a report like this will not fit the profile. What's more, the CFTC is talking about severely limiting trades in energy futures.

The country’s top regulator of commodity markets said Tuesday that the government should “seriously consider” strict limits on the trading of purely financial investors in the futures markets for oil, natural gas and other energy products.

Opening the first of three hearings on proposals to curb “speculative” trading and reduce volatile price swings in oil and gas, the chairman of the Commodity Futures Trading Commission made it clear that he favored tighter volume limits on “non-commercial” traders — banks, hedge funds and other financial institutions — that account for a big share of trading in energy contracts.

“The C.F.T.C. is in the best position to apply limits across different exchanges, and we are most able to strike a balance between competing interests and the responsibility to protect the American public,” the commission chairman, Gary Gensler, said. “I believe we must seriously consider setting strict position limits in the energy markets.”

Mr. Gensler, who was nominated by President Obama, made it clear that he was sympathetic to complaints from Democratic lawmakers and some industry analysts that purely financial traders, who usually never take delivery of a product, have aggravated the violent swings in energy prices in recent years.

We absolutely need this kind of sensible regulation to end the skimming of wealth off the top of the consumer and into the pockets of financial traders. A robust regulatory apparatus is simply vital to the future of the nation and protecting the middle class.

The Financial Regulations

The President unveiled his regulatory overhaul today, refraining from leaving the details to Congress and instead putting together an extremely detailed document. The idea on the top line was to streamline the bureaucracy, as evidenced by the elimination of the Office of Thrift Supervision, a small regulatory agency which has become something of a scapegoat since they were the regulator for AIG. But Felix Salmon says that there is anything but streamlining in these rules:

Were you hoping that the present alphabet soup of regulators would get rationalized and downsized? I know that I was. But there’s only one place that’s going to happen: the OCC and the OTS are going to be folded into a new regulatory entity called the National Bank Supervisor (NBS), which (along with the Fed, natch) will oversee federally-chartered banks.

The National Bank Supervisor will not oversee state-chartered banks: those will remain under the umbrella of the FDIC, which is not being folded into the NBS. And the NBS will similarly not oversee credit unions: the NCUA will retain its independence and continue to regulate those itself.

Why perpetuate these distinctions between federally-chartered banks, state-chartered banks, and credit unions? I have no idea. But in order to get some measure of cohesion over all this, a second brand-new regulatory entity, the Financial Services Oversight Council, or FOSC, which will consist of the leadership of the NBS; the FDIC; the NCUA; the SEC and the CFTC (yes, they are remaining separate too); the FHFA (that, too, gets to remain independent for no obvious reason); the Treasury; the FOMC; and the brand-new Consumer Financial Protection Agency.

Or, to put it another way, FOSC = NBS + FDIC + NCUA + SEC + CFTC + FHFA + FOMC + CFPA + Treasury.

I know what you’re thinking — it can’t possibly be as simple as that. And you’d be right! There’s also a Financial Consumer Coordinating Council, which comprises the Consumer Financial Protection Agency, the Federal Trade Commission, and the SEC’s Investor Advisory Committee.

Oh, and I almost forgot, they’re also creating an Office of National Insurance.

It's so dense it requires a glossary of terms. And in addition, the Fed has kind of oversight provisions over the entire system, by becoming a systemic risk regulator (because they didn't miss the whole thing the first time around).

The streamlining matters less to me than whether or not this thing will actually work. And I think it has a chance. Rhetorically, its heart is in the right place (even Geithner and Summers' take). Obama means to base the regulation of banks on what they do and not what they say they are; seeks to end banks shopping around for their own regulator; and create a Consumer Financial Protection Agency to "protect consumers across the financial sector from unfair, deceptive, and abusive practices." There's also a fair bit on increasing international cooperation on these issues, which is crucial. This excerpt from an interview with Obama is a good look at his thinking on the subject:

Pres. OBAMA: No. I think that what we focused on was, number one, do we have the tools to prevent the kinds of risks that we saw back in September? And our conclusion was we didn't, and we had to make sure that we had a systemic risk regulator. So that is in place. We asked, do we have the resolution authority if an individual institution like an AIG breaks down, to quarantine them so that they're not bringing the whole system down? We didn't have that authority; we wanted to put that in place. Did we have a means of anticipating problems and properly regulating the nonbank sector of the financial system, which obviously has grown massively over the last decade? And we concluded we didn't have that power. So we got those things in place.

Were we sufficiently focused on consumers? And it turned out that consumer protection, investor protection was scattered among a whole bunch of different agency; we wanted to streamline, consolidate and give somebody line responsibility for that. So what we've started off with was identifying what were the biggest problems that we had, and are we putting in place the tools to prevent the kind of crises that we've seen from happening again?

HARWOOD: But you don't...

Pres. OBAMA: Now...

HARWOOD: ...have a single bank regulator, and some people have talked about judge shopping among banks for favorable regulation.

Pres. OBAMA: This is something that we've been concerned about in the past. What we do have, under our proposal, is that for tier one institutions, the big institutions who, if they fail, require us to shore them up, for those folks they are going to be under a single regulatory body. When it comes to some of the smaller banks, community banks, the FDIC has done a good job on that, and we feel confident that they can continue doing what they do. So our overall concept has been not to completely abandon those aspects of the system that worked, but rather focus on those aspects of the system that didn't, try to close gaps. Did, you know, any considerations of sort of politics play into it? We want to get this thing passed, and, you know, we think that speed is important. We want to do it right. We want to do it carefully. But we don't want to tilt at windmills, we want to make sure that we're getting the best possible regulatory framework in place so that we're not repeating the mistakes of the past.

I guess the best that can be said is that the banking lobby hates it. Unfortunately, they'll have another bite at the apple - Congress has to approve all this, and in so doing they could easily de-fang it.

Robert Reich has some good first principles that any financial regulation should include.

...Kevin Drum, er, doesn't like this much at all.

A Quiet Push On Regulation

There are two arguments about why the regulators and the government missed the financial crisis. One, that the regulations were gutted by corporate interests in both parties; two, that the regulators had all the oversight abilities they needed but simply looked the other way. Really it's a combination of both. Legislation like the Commodity Futures Modernization Act, and to an extent Gramm-Leach Bliley, did remove some of the regulations over the banks, certainly the SEC under Chris Cox and the Bush Administration actively resisted enforcement of any kind. So while I do believe we need a regulatory overhaul, simply enforcing the law with existing tools would improve our ability to manage the financial industry and the risk to the greater economy.

Therefore I'm excited to see, for example, Sheila Bair at the FDIC taking on Citigroup.

The Federal Deposit Insurance Corp. is pushing for a shake-up of Citigroup Inc.'s top management, imperiling Chief Executive Vikram Pandit, people familiar with the matter said.

The FDIC, under Chairman Sheila Bair, also recently pressed a fellow regulator to lower the government's confidential ranking of Citi's health -- a change that would let regulators control the firm more tightly.

The FDIC's willingness to take an increasingly tough position toward one of the nation's largest and most troubled financial institutions is setting up a bitter clash between regulators -- some of whom disagree with the FDIC's position.

It's completely within the purview of the FDIC to regulate Citi, and just this threat is enough to keep them and other banks more in line. Meanwhile, with respect to new regulations, the Obama Administration is floating an executive rule to appoint a Special Master for Compensation that would enforce laws passed during TARP:

The Obama administration plans to appoint a "Special Master for Compensation" to ensure that companies receiving federal bailout funds are abiding by executive-pay guidelines, according to people familiar with the matter.

The administration is expected to name Kenneth Feinberg, who oversaw the federal government's compensation fund for victims of the Sept. 11, 2001, terrorist attacks, to act as a pay czar for the Treasury Department, these people said.

Mr. Feinberg's appointment could be announced as early as next week, when the administration is expected to release executive-compensation guidelines for firms receiving aid from the $700 billion Troubled Asset Relief Program. Those companies, which include banks, insurers and auto makers, are subject to a host of compensation restrictions imposed by the Bush and Obama administrations and by Congress.

Wall Street has been anxiously awaiting more details on how the rules will be applied. "The law is confusing and a bit ambiguous, and so we're looking for certainty as to how to structure pay incentives," said Scott Talbott, senior vice president of government affairs for the Financial Services Roundtable, a trade association.

There's an excellent debate to be had over future regulations. But I think that we would be served perfectly just by making sure the laws on the books are enforced.

Reviving State Regulatory Laws

This is a bit in the weeds, but President Obama reversed a major Bush policy which pre-empted state regulations with federal guidelines that were often threadbare and protected corporate interests over the public. This has implications for consumer product safety, environmental law and all sorts of other regulations. I'd like to see the states-rights conservative argue that it makes more sense for the federal government to pre-empt all kinds of local regulations rather than having those closest to the local issue, and closest to the people, make the decision. While this won't get much attention, it really is the kind of major reversal that leads to something like you saw yesterday, where the federal government adopted California emission standards for cars, instead of fighting them in court.

When Obama does something good, I reward. When he doesn't I beat with a stick. That's how I roll.

We Need A Complete Overhaul Of Labor Laws

You know that labor laws have grown completely insufficient and unenforced when the EEOC is routinely violating the rights of its own employees:

The Equal Employment Opportunity Commission, responsible for ensuring that the nation's workers are treated fairly, has itself willfully violated the Fair Labor Standards Act on a nationwide basis with its own employees, an arbitrator has ruled.

The agency's practice of offering compensatory time off to its employees rather than overtime pay amounted to "forced volunteering" and was a knowing violation of the law, according to the ruling.

"The case before me, in my view, demonstrates action that went beyond mere negligence," arbitrator Steven M. Wolf wrote in a decision released last week.

This is not an isolated incident. While typically, regulatory boards charged with protecting workers aren't simultaneously violating their rights, clearly oversight has fallen short. OSHA barely enforced its own rules on worker safety, leading to multiple unnecessary deaths. The Wage And Hour Division failed to follow up on wage violations flagged by undercover agents posing as workers. Our regulatory structure is corroded, and needs a full overhaul.

Under the leadership of Labor Secretary Hilda Solis, things are starting to change. Prevailing wages under the Davis-Bacon Act have been applied to the federal stimulus package, meaning that hundreds of thousands of construction workers will be paid what they're worth. And the regulatory agencies will get staff concerned more with enforcing laws than shielding corporations from them. Obviously the dim prospects for the Employee Free Choice Act is disheartening - although labor continues to press forward with national ads, and allies in the civil rights community are advocating for it as well - but there are additional parts of the labor laws in America where we can make progress.

The Return Of Competence

At the very least, the transition from Bush to Obama will renew a sense that government is serious about its mission and determined to fulfill it, instead of a determination to destroy government from within.

In early 2001, an epidemiologist at the Occupational Safety and Health Administration sought to publish a special bulletin warning dental technicians that they could be exposed to dangerous beryllium alloys while grinding fillings. Health studies showed that even a single day's exposure at the agency's permitted level could lead to incurable lung disease.

After the bulletin was drafted, political appointees at the agency gave a copy to a lobbying firm hired by the country's principal beryllium manufacturer, according to internal OSHA documents. The epidemiologist, Peter Infante, incorporated what he considered reasonable changes requested by the company and won approval from key directorates, but he bristled when the private firm complained again [...]

Current and former career officials at OSHA say that such sagas were a recurrent feature during the Bush administration, as political appointees ordered the withdrawal of dozens of workplace health regulations, slow-rolled others, and altered the reach of its warnings and rules in response to industry pressure.

The result is a legacy of unregulation common to several health-protection agencies under Bush: From 2001 to the end of 2007, OSHA officials issued 86 percent fewer rules or regulations termed economically significant by the Office of Management and Budget than their counterparts did during a similar period in President Bill Clinton's tenure, according to White House lists.

Another example of this is the Consumer Product Safety Commission, which hasn't had a chairman in two years.

Moreover, the three-person commission has been without a chairman since July 2006.

That's when Hal Stratton, an appointee of President Bush, departed to take a job with a law firm that specializes in shooting down class-action lawsuits filed by consumers. In March 2007, Bush nominated Michael Baroody, a manufacturing industry lobbyist, to head the commission.

Baroody withdrew from consideration after lawmakers demanded copies of his severance agreement with the National Assn. of Manufacturers. Bush never nominated anyone else.

In August, after the recalls of millions of toys and other products, the Consumer Product Safety Improvement Act was signed into law. It will significantly streamline and enhance the commission's operations, including new resources for disclosure of defective goods.

"A blueprint for success has been set in place for the commission," said Rachel Weintraub, director of product safety for the Consumer Federation of America. "Now all we need is the leadership to act on it, and to restore the commission's funding and resources."

Political appointees have stifled any meaningful action from these regulatory agencies, and indeed the administrative leaders are commonly former industry lobbyists or lawyers whose prior role was to block regulatory oversight of business. One would suspect that an Obama Administration would staff these agencies with competent technocrats who will work in the public interest rather than the interests of multinational corporations. I think it's pretty clear that he will follow this dictate.

Competency was a hallmark of Obama's cabinet picks, and while it will not save us completely from the mess that has been made of the federal government, it's definitely a step forward. We won't have the philosophy of "government is the problem" guiding us anymore. And as a result, Americans will be safer from harm.

When Government Breaks Down

Here are just a few stories I've collected over merely the past week, the little outrages that aren't as substantial as, say, killing over a million Iraqis in an unnecessary war or leaving 47 million without health insurance or torturing prisoners at Guantanamo. But they provide shocks to the conscience nonetheless.

• The Department of Labor is rushing to make rules that would make it tougher for the government agency to regulate the amount of chemicals and toxins in the workplace.

• The Wage And Hour division of the Labor Department has been charged by the GAO with delaying and misplacing hundreds of overtime and minimum-wage complaints from individuals being shortchanged.

• Fifteen percent of all women serving in Iraq and Afghanistan who have visited a VA facility have tested positive for sexual trauma through rape, assault or harrassment.

• An immigrant was handcuffed while giving birth in jail and separated from her infant within two days and she continued her imprisonment.

• In Louisiana, Baron Pikes was tasered nine times and killed after failing to comply swiftly enough with police demands. He wasn't resisting arrest, he just didn't comply fast enough.

• Supplies designed to go to victims of Hurricanes Katrina and Rita were massively undercounted due to a math error, resulting in a reduction of $70 million worth of aid.

• Pentagon auditors, whose role is to conduct oversight over government military contracts, were pressured by superiors to produce reports favorable to the contractors and shielding them from wrongdoing and overbilling, according to a GAO report. And at that time, the Air Force was spending counterterrorism funds on comfort capsules that can spirit them around the world in the height of luxury.

Now mind you, this is simply a partial list of the last week or so. This kind of venality, callousness and contempt for anyone but the rich and connected has characterized the last eight years. Corporations are to be protected instead of the poor. Authority is to be demanded but assaults on the downtrodden tolerated. Regulations are eliminated and help for the needy denied. This has become America in the first decade of the 21st century - an authoritarian kleptocracy. The level of rot is so great that the next President won't be able to get at all of it. Remember that these are just some of the LESSER stories.

Quick, Find Someone To Blame!

This idea that Chuck Schumer is to blame for IndyMac's bank failure is totally ludicrous, as Hubris Sonic at GNB adequately explains.

Its fairly easy these days to google up all the news stories available about this sort of thing and google finance can put that information in context for you.



finance.google.com?q=NYSE:IMB

Clearly Schumer's statements had little or no effect. This bank was in freefall well before his statement on 6/26. There was a bit of a sell off, small compared to what had come before now, and nothing compared to when the bank itself announced it would issue no new loans, and fire half it's staff on 7/8. On the same day S&P changes their rating to complete JUNK.

On top of all this, while I know the market is sensitive and information flies around quickly, the idea that a letter from some Senator to regulators would send individual customers all across the country scurrying to their banks is completely dubious. It failed because... it failed. Its executives failed, the regulatory system failed, and this entire financial market is on the verge of failure. Nobody was checking to see if the folks receiving the loans could pay them. Chuck Schumer had nothing to do with it.

But of course, the party of personal responsibility wants to find a scapegoat, and hopefully a prominent Democrat, to justify even more profit-taking and risk socialization.

Laying Of Landmines

We've been talking quite a bit about how Bush-Cheney will leave little landmines inside the government, codifying their vision of radical executive power, a hollowed-out set of regulatory agencies and a civil service dedicated to a deeply conservative vision. In a fantastic new article, the very first by the best hire the New York Times has made in the past decade, Charlie Savage (on this one he was aided by Robert Pear), we get another example of this in the area of regulatory rules changes.

The Bush administration has told federal agencies that they have until June 1 to propose any new regulations, a move intended to avoid the rush of rules issued by previous administrations on their way out the door.

The White House has also declared that it will generally not allow agencies to issue any final regulations after Nov. 1, nearly three months before President Bush relinquishes power.

Sounds harmless, right? Why would this provoke any outcry?

While the White House called the deadlines “simply good government,” some legal specialists said the policy would ensure that rules the administration wanted to be part of Mr. Bush’s legacy would be less subject to being overturned by his successor. Moreover, they said, the deadlines could allow the administration to avoid thorny proposals that are likely to come up in the next few months, including environmental and safety rules that have been in the regulatory pipeline for years.

So there are two rationales at work here. The deadline of tomorrow would make it virtually impossible to impose rules changes that have been sorely needed for years and on which the Administration have been dragging their feet. Some examples include the Labor Department updating construction safeguards and standards that industry and labor have already agreed to. They may have prevented crane accidents like the one we saw in New York City yesterday. Another example is a needed Department of Agriculture rule to put more stringent requirements on genetically modified crops.

The flip side to this is that getting rules changes completed outside the 60-day window for regulations to take effect after issuance will stop the future President's ability to postpone or revise them. And since official secrecy is a hallmark of the Administration, even finding out what these rules changes are will be a tortuous process for a new chief executive.

And what are some of those rules?

Rick Melberth, the director of regulatory policy for OMB Watch, a nonpartisan government watchdog group, predicted that the administration, in keeping with its longstanding skepticism about regulation, would make it a priority to complete rules that relax regulations on industrial pollution and other burdens on business.

Mr. Melberth also predicted that the administration would be willing to invoke the exception for “extraordinary circumstances” to allow rules that give businesses more flexibility than Mr. Bush’s successor might, especially if the next president is a Democrat.

“They get to define emergency,” Mr. Melberth said.

“On other things, they could do ‘Sorry, we can’t do anything on this’ ” because of the deadline, he added.

This is about the White House implementing and locking in their agenda to the bitter end, along the same principles of deregulation and laissez-faire capitalism that has put the entire economy in turmoil and put lives at risk from enivronmental decay and overall health and safety. The only figure outside the Administration quoted in the article praising the plan is a vice president of the US Chamber of Commerce. Just so you know where this is headed.

There's nothing all that insidious about this - the President can make rules changes whenever he wants. But the modus operandi for the final months of the Administration is clear: preserve as much of their agenda as possible, codify it, make sure the successor can't change it, and make sure there are enough malefactors installed throughout the government so that a Democratic President can be endlessly undermined. That and covering their own asses through things like immunity legislation in FISA is really all they're concerned about.

Now Is The Time To Act Like Fighting Global Warming

Either Al Gore's big-media campaign is bearing fruit, or the Republicans have sensed that triangulating on global warming makes sense, or John McCain needs some help with younger people, but whatever the reason, the President has decided on a legacy.

President Bush is poised to change course and announce as early as this week that he wants Congress to pass a bill to combat global warming, and will lay out principles for what that should include.

Specifics of the policy are still being fiercely debated, but Bush administration officials have told Republicans in Congress that they feel pressure to act now because they fear a coming regulatory nightmare. It would be the first time Mr. Bush has called for statutory authority on the subject.

"This is an attempt to move the administration and the party closer to the center on global warming. With these steps, it is hoped that the debate over this is over, and it is time to do something," said an administration source close to the White House who is familiar with the planning and who said to expect an announcement this week.

I think what's going on is that the Administration knows they'll lose upcoming lawsuits that will force the EPA to allow regulation of greenhouse gas emissions and they're trying to get in front of it with some toothless policy. It'll reward polluters and do nothing to solve the problem, but Democrats will be "extremists" for not wanting to line up behind the President on his bold and glorious plan.

Bush wants you to know as well that just because he's finally waking up to the need for Congressional action doesn't mean he hasn't been teh awsom on climate change already.

But Brian Kennedy, spokesman for the Institute for Energy Research, said Mr. Bush should realize that the U.S. is already ahead of the Europeans.

"U.S. taxpayers are already spending more than $40 billion a year to address climate change, and to date we're achieving better results than the Europeans are under a bureaucratic regulatory framework," he said. "That should be kept in mind before any rash — or political — decisions are made inside the White House. Excessive regulations would come with significant economic consequences and additional costs for consumers."

That's just not true. Our efforts to date have been insufficient to control the problem, and our failure of leadership on climate change globally has led to the potential impacts becoming ever more catastrophic. This idea that regulations would be worse than the consequences of inaction is a deeply held conservative myth that has never been proven true. Global warming is a public health, energy, national security and economic issue, and volunteer efforts to fight it will fall short.

If Bush wants to pick up a sign and lash himself to a tree to stop bulldozers from building new coal-fired power plants, great. But somehow I'm skeptical that his plan will have any, whaddyacallit, impact.

Whoops!

Here's a little more on that e.coli conservatism I was talking about. In this case it's the FDA, apparently indistinguishable from the Keystone Kops.

The Chinese facility that supplies the active ingredient of the widely used blood thinner heparin was never inspected by the Food and Drug Administration because the agency confused its name with another just like it, agency officials said yesterday [...]

Joseph Famulare, deputy director for compliance at the FDA's center for drug evaluation and research, said yesterday in a conference call with reporters that when the company that makes the active ingredient for heparin applied for FDA approval, the FDA thought the application had come from a different company with a similar name that had already been inspected.

"To date this is an isolated situation, but the wrong firm was put into the database," he said. Famulare declined to name the Chinese company approved by mistake.

I mean, we don't have any Arabic speakers gathering intelligence, why would we have any Chinese speakers at the regulatory agency dealing with products from China? Not like they're a big importer or anything.

It takes time to properly train regulators. They need to be experts in their respective fields and to know what to look for. This is a project that will take years and years after this Administration is gone. Bush has put us all at risk; that's not hyperbole.

E. Coli Conservatism

By now you've heard about the 134 million pound recall of beef, after a Humane Society video showed employees at a slaughterhouse abusing downer cows and forcing them into the food supply.

The recall applies to beef slaughtered at the Hallmark/Westland Meat Packing Co. since Feb. 1, 2006. The company has produced no meat since Feb. 4 of this year, when operations were suspended.

The action came nearly three weeks after the Humane Society of the United States released a video showing workers at the plant using forklifts and water hoses, among other methods, to rouse cattle too weak to walk. In addition to issues of animal cruelty, the video raised questions about whether so-called downer cattle were entering the food chain in violation of federal regulations.

Although the Humane Society said at least four non-ambulatory cattle had been slaughtered for food, the USDA had repeatedly said it had no such evidence. On Sunday, federal officials said for the first time that they had evidence such cattle from Hallmark had been processed for food.

There have been enough of these videos made by PETA, the Humane Society, and other groups, that you have to figure that this kind of animal cruelty is the norm. Businesses want to maximize their profit and that means using every animal as meat, regardless of their physical health or disease. And the reason is very simple: there aren't enough resources for the USDA to inspect all of the plants. They have too few inspectors and not enough funding. With little oversight comes many opportunities for abuse, because there won't be any consequences. Democrats can investigate the process all they want; like the pet food recall, like the toy recall, they'll discover that nobody's doing any overwatch.

This is how the "drown government in the bathtub" ideology of conservatism ends up impacting everyone's real life. Their goal is to strip as much regulation as possible for business, and you can only infer that they don't care about the results. Just another thing at stake in this election.

Please Don't Allow Us To Do Our Jobs!

The Consumer Product Safety Commission is begging for less money and less staff. Welcome to George Bush's America.

The nation’s top official for consumer product safety has asked Congress in recent days to reject legislation intended to strengthen the agency, which polices thousands of consumer goods, from toys to tools.

On the eve of an important Senate committee meeting to consider the legislation, Nancy A. Nord, the acting chairwoman of the Consumer Product Safety Commission, has asked lawmakers in two letters not to approve the bulk of legislation that would increase the agency’s authority, double its budget and sharply increase its dwindling staff.

Ms. Nord opposes provisions that would increase the maximum penalties for safety violations and make it easier for the government to make public reports of faulty products, protect industry whistle-blowers and prosecute executives of companies that willfully violate laws.

At this point, I don't think you can give her the money, as it certainly won't be put to good use - or any use.

What's sad is that this comes at a time when product safety is more necessary than ever. China is getting rid of all their excess lead in our toys, making sticky buns out of cardboard, toothpaste out of antifreeze, and the one regulatory agency that could at least provide a small firewall to this runaway poisoning of Americans doesn't want to do the job. Because actually doing their job might lessen some CEO's balance sheet by a few bucks. The Bush Administration has consistently resisted efforts to regulate products coming in from China. This Nancy Nord is a former US CHAMBER OF COMMERCE official.

This is what they call "drowning government in the bathtub." And furthermore, caveat emptor was never more needed. I'm bringing testing equipment the next time I go to the dollar store.

They Don't Care About What You Eat

The crisis in food safety has just grown larger, and this is a slow-motion train wreck that is laying bare the failure of conservative government to fulfill any of its obligations. Now we've learned that millions of chickens were fed melamine-tainted feed, and that millions of consumers ate those chickens.

People have eaten millions of chickens that were given feed tainted with recalled pet food, federal officials said Tuesday, though they said the threat to human health is minimal.

The announcement came after an investigation of chicken farms in Indiana found that 38 of the facilities had given contaminated feed to poultry raised for human consumption, and that 2.5 million to 3 million people ate them.

The officials added that they expect to discover that chickens on possibly hundreds of farms in other states were also given tainted feed.

In a teleconference with reporters, an official with the Food and Drug Administration said no recall has been issued because "the likelihood of illness after eating chicken fed the contaminated product is very low."

This is of course what the FDA says now, although last week they said that no consumers ate anything tainted with melamine, and they also said it was only a couple hundred pets that have died when it was actually tens of thousands. So what will next week bring?

Well, don't worry, because there's now a food safety czar. Isn't that supposed to be the head of the FDA?

The Bush administration appointed a new "food safety czar" yesterday and directed him to develop a plan for addressing shortcomings exposed by recent scares in the human food supply.

Dr. David W.K. Acheson, a former University of Maryland medical school professor who had been chief medical officer at the Food and Drug Administration's food safety center, immediately stepped into the job.

The creation of the new position underscored the extent of public concern about the country's food safety system over a dangerous chemical found in pet food entering the human food supply, in addition to recent outbreaks of bacterial contamination in bagged spinach, Taco Bell lettuce and Peter Pan peanut butter. But Democrats said fears have intensified to a degree that a new appointment alone won't quell.

You're darn right it won't quell those fears. You hire a "czar" when you have admitted that you can't handle the problem. It's a way to place blame apart from the system itself.

Conservatives care nothing about government, and yet they act surprised when the mechanisms of government breaks down. They will somehow try to blame liberals for dismantling the public safety apparatus that has served the country well for decades. But this is an obvious conclusion to the consistent attempts to delegitimize government, drown the funding of public programs in a bathtub and staff regulatory agencies with the lobbyists for the industries they mean to regulate. I'm watching Robert Kuttner take down Bill Kristol in a conference called "The Failure of Conservatism." Bob, don't forget the food.

UPDATE: The audience didn't. A sample question from them: "Why is it that, 5 years after 9-11, the Bush Administration cannot guarantee my cat's food supply?"

Arnold Schwarzenegger is not that great on the environment

It's darn near impossible to compete with the PR machine of a global action superstar. If he says "I'm taking the lead in fighting global warming," most people will believe it - and never look at the details. So I applaud Senate Democrats for making the valiant effort to set the record straight.

Impatient with Gov. Arnold Schwarzenegger's leadership in combating global warming, leaders of the Democratic-controlled state Senate plan to unveil a sweeping legislative package today that would impose new regulations on industries and government agencies.

The measures reflect long-standing tensions between Schwarzenegger and the Legislature over how best to reduce greenhouse gases produced by vehicles, electricity suppliers, landfills and other sources.

The point here is that Schwarzenegger has foregrounded market-based solutions that aren't even in AB32, the environmental law passed last year. Carbon trading is fine as far as it goes, but the Governor is completely stonewalling on other elements of the law, reasonable regulations that would go much further in stopping the creation of greenhouse gas emissions.

Leading Senate Democrats successfully fought inclusion of a mandatory market trading system in last year's law, Assembly Bill 32, but now contend that the Republican governor is promoting it while moving too slowly on regulation.

They and Assembly leaders also objected when Schwarzenegger signed an executive order last fall placing his appointee, state Environmental Protection Agency Secretary Linda Adams, in charge of climate policy. Legislators pointed out that AB 32 specifically gave the independent Air Resources Board authority for implementing the policy, not Cal/EPA.

That's called breaking the law, and when the President does it with a signing statement, it's a subversion of democracy. For some reason, when the star of "Last Action Hero" does it, fugheddaboutit because he's practically a Democrat? Wrong.

It's good to see Don Perata being this forceful.

"The implementation of Assembly Bill 32 is getting bogged down in arcane discussions over intercontinental trading schemes, 'carbon markets' and free 'credits'…. That may work for Wall Street traders and Enron economists, but it doesn't work for Californians."

According to drafts of the bills obtained by The Times, the proposed regulations would ban methane releases from garbage dumps and sharply curtail black carbon spewed from trucks, school buses and construction equipment.

Utilities could be ordered to increase the amount of energy acquired from renewable sources to 33% from 20%.

State and local transportation agencies would be required to draw up plans to slash greenhouse gas emissions in their jurisdictions, funded in part by bond money approved by voters last year.

"Senate Democrats are unveiling new bills to ensure our climate program actually cleans up the air, reduces asthma and reduces greenhouse gases without market gimmicks and trading schemes," Perata said.

If Schwarzenegger wanted to only solve climate change through market-based solutions, he shouldn't have signed AB32. There were regulatory standards set into that bill on which the governor is simply dragging his feet in favor of soaking in the adulation.

The bottom line is that if you give business an opt-out, they're pretty likely to opt out. And without applying regulatory pressure, they can cap and trade to their heart's content, but still spew pollution into the air, whether in California or elsewhere. The Chamber of Commerce will not support any regulatory standards; they want to give their corporations a convenient out. Unless cap-and-trade is global, it's ineffective. You need something with real teeth.

Interesting that Fabian Nuñez, who was instrumental in crafting AB32, was fairly noncommital on the Senate's aggressive approach.

A Nuñez spokesman was noncommittal, saying, "The pioneering global warming bill we passed last year with the governor's support is the gold standard in reducing greenhouse gases. If these measures dovetail into what we've done, are practical and don't hinder the process that's been hammered out, then they may well win support in the Assembly."

The governor (and maybe the Speaker) are likely to skate on this, considering that the image is implanted in everybody's mind that they are pro-environment. But when you look at the facts, it's hard to actually believe that.