White House Chronicle

News Analysis With a Sense of Humor

Give Yourself a Present, America

by Leave a Comment

A lightness of countenance has fallen on Washington. I kid you not. Strangers were talking to each other in elevators, smiles in the street made walking a pleasure.

Even President Obama lightened up. At his midweek press conference, the president seemed in an unusually good mood: helping NBC’s Chuck Todd sort out his questions, referring cheerfully to the work ethics of his daughters (and his own), and lampooning the corporate jet set.

Had peace broken out somewhere? On Capitol Hill, in Libya or Afghanistan, between Los Angeles Superior Court judge Stephanie Sautner and Lindsay Lohan — her honor dropping by for a few belts?

No. It all comes down to the prospect of a four-day weekend. It should be three days, but many are able to stretch it to four. Heapings of happiness!

By the joy this little perturbation in routine has wrought, it’s clear that Americans are overstretched, overworked, overstressed and badly in need of R&R — even just a syllable of it — over the Fourth of July weekend.

Also it’s a birthday bash. Uncle Sam has made it through another year and the dollar is still worth having; the barbecue worth lighting; and the hamburger, America’s great contribution to cuisine, worth eating. Even though Budweiser — like so much else nowadays — belongs to a foreign company, millions of us still find it worth drinking.

Hooray! Happy Birthday! For he’s a jolly good fellow! (Uncle Sam, that is).

Unlike many others of the British persuasion, as I once was, I agree with my colleague Martin Walker that Brits shouldn’t feel loss on the Fourth of July, but should be leading the celebration.

Walker, who knows a thing or two about celebrating, says: “I’m not downcast by the victory of honest British colonial farmers over a German king and his German mercenaries.”  

That’s right, Americans love the Brits. Otherwise, why would a country that threw off the imperial yoke on July 4, 1776, go bats for the wedding of Prince Harry, heir to the despised throne once occupied by George III?

One thing the Brits do have over us: their vacations. A worker averages about a month a year of vacation.

Of course, it would never work here — especially not in Washington. Think of the anxiety. Oh the fear of being left out, losing your job or just being bored. Americans on long vacations get surly, marriages creak and desperate couples hunch over lunch in faraway places, trying to decide where to have dinner.

No. No. No. Our special genius has been the creation of the long weekend. We have more of them than most countries; they are envied even by the French who talk about — I kid you not again — le long weekend.

We have something here. Instead of pining for more vacation , we should build on the Fourth of July, Labor Day and Memorial Day by working only a four-day week.

I don’t like to point fingers, but there are those in the bureaucracy who are pioneering the new order for us. Around Washington, in the aisles of the supermarket and the sporting-goods emporium, you can hear it every Friday: Some person of impeccable rectitude about other things, declaring, “I’m working from my home office today.”

At the commuter rail station I use, parking is a big problem every day of the week except Fridays, when more than half the spaces are open. Well, not casting aspersions, I have to advise that 80 percent of the riders are government employees. Ah, the lure of the “home office” on Friday.

Here’s my proposal: Increase the workday to 10 hours and have three-day weekends every week. Once again America will be the envy of the world, even if we have to prohibit home-office work by civil servants on Thursdays. This way we’ll be a happier people. We’ll have given ourselves a present that keeps on giving.

Happy Birthday, America. And spare a kind thought for the Brits, who lost the best piece of real estate on Earth. Poor dears. — For the Hearst-New York Times Syndicate


 

 

 

That’s the Spirit!

by Leave a Comment

Llewellyn King, the British-born host of “White House Chronicle,” stands on a sidewalk in Georgetown, a green and pleasant neighborhood located in northwest Washington, D.C., along the Potomac River waterfront. On Thursday, Georgetown was festooned with flags and filled with pre-Fourth of July revelers.

Georgetown was founded in 1751, well before the establishment of the city of Washington and the District of Columbia, when the Maryland legislature purchased 60 acres of land for the town from George Gordon and George Beall at the price of 280 pounds.

Some believe that Georgetown was named after those two wealthy landowners. Others believe that its name has royal origins, since it was founded during the reign of George II of Great Britain.

Certainly, it wasn’t named after the Father of Our Country. But George Washington frequented Georgetown, including a long-gone watering hole, Suter’s Tavern, which was the site of land deals involved in establishing Washington as the “Federal City.”

In Nuclear, U.S. Is Still the Gold Standard

by 2 Comments

In nuclear industry parlance the “gold standard” has special significance and there is real concern the world may slip below that standard as the U.S. industry falters.

Gold standard is the term applied globally to the U.S. regulation and licensing of nuclear power plants. It is a term of respect for American standards of excellence. It was widely used at a meeting of the Nuclear Infrastructure Council in Washington Tuesday and Wednesday; and surprisingly, coming from French and Chinese lips, was an affirmation of the whole licensing and regulatory apparatus that exists in the United States.

The fear is that as the United States lags in the construction of reactors and while it continues to eschew fuel reprocessing, the gold standard will lose its luster to a world that is building new nuclear at breakneck speed and is, or plans, to reprocess the used fuel.

Most of today’s concern is about China, now committed to the fastest growth in nuclear. But India is also building and others like the United Arab Emirates, Jordan, Brazil and Argentina are thinking about it.

Will a deterioration in the quality of construction, regulation and operation occur? Not if the gold standard continues to be respected and reflects the latest innovations, according to industry sources in Europe and America. Otherwise, a slew of new reactors could be less safe than they might be.

At present, according to the companies involved in China including Westinghouse Electric, the Shaw Group, a U.S. construction firm and the French giant Areva, they are maintaining the gold standard. The term embraces total quality assurance from licensing integrity to concrete and steel specifications, to analysis of components and certification of welds.

What is surprising about the idea of the gold standard is how long it has endured. It goes back to the Eisenhower administration and the Atoms for Peace program. This was an ambitious idea that the civilian benefits of atomic power would be spread across the world. Implicit in the program was the assumption that the U.S. nuclear industry would control world nuclear commerce and, as a result, safety standards would be the highest. Proliferation and accidents would be guarded against by the gold standard, exercised through the dominance of the U.S. industry.

The world’s fledgling nuclear industry accepted this U.S. technological hegemony happily. No one wanted a nuclear accident; and those who wanted to build a weapon would do so clandestinely, as Saddam Hussein tried to do in Iraq.

The gold standard regime was first challenged when President Jimmy Carter — a nuclear engineer who was ambivalent about nuclear — yielded to the left wing of the Democratic Party and decided that the United States would unilaterally not process used nuclear fuel. Carter’s point man in this folly was Joseph Nye of Harvard. The industry and those interested in maintaining the gold standard were appalled.

I crossed swords with Nye, highly regarded as an academic and intellectual, at the Uranium Institute (now the World Nuclear Association) annual meeting in London in September 1977. So heated was our discussion that Nye followed me out of the hall into the street, urging me to accept his point of view.

 

Although that was decades ago, it was the first blow to the gold standard. Other countries proceeded with reprocessing: Areva and British Nuclear Fuels claim it is a very profitable business, as well as greatly reducing waste volumes.

Despite this insult to nuclear, the gold standard held — possibly at 18 carats rather than 24 carats.

But the Obama administration is doing what Carter did all over again.

Carter tepidly endorsed nuclear, while opposing reprocessing and a demonstration fast breeder reactor authorized by Congress. Obama has been less severe, but he has nixed the Yucca Mountain waste repository in Nevada — and $15 billion spent there — and set back a waste-storage solution by as much as 50 years.

Now the world will store and reprocess waste without a gold standard to guide it.

It matters because slipping standards — anywhere from China to Jordan — endanger all nuclear power and a lot of people. A meltdown in Japan has battered nuclear acceptance and that was because of a once-in-history natural event. The next one could be because of lower licensing standards, bad concrete, fake parts or a bribed inspector. — For the Hearst-New York Times Syndicate

 

 

 

 

John Bryson, the Right Man for Commerce

by Leave a Comment

John E. Bryson, who is President Obama's nominee to be Secretary of Commerce, has a soft heart and a hard head; an admirable duopoly, one might think. Ideal, really.

But not in the United States Senate. Not these days.

The fight over the Bryson nomination, like so much else in Washington, is a fight among pit bulls: a fight for the sake of fighting, a fight without purpose. Dogs fight over bitches, over food, over defensiveness toward their owners and over territory. Pit bulls just fight. Proximity is casus belli.

In today's Senate, an administration nominee is casus belli.

It causes one to wonder why a man like Bryson would shatter the tranquility of his retirement years to endure besmerchment in Washington. He does not need the job or indignity of the process, but we need him or people like him. As the confirmation process has grown uglier and uglier, they have become fewer and fewer,

If I were a senator questioning Bryson, or some similar nominee, the one question I would ask is: “Why in God's name would you submit yourself to this?”

It is as though people of otherwise sound mind voluntarily placed their heads and hands in the stocks and allowed a howling mob of self-righteous idiots to pelt them with rotten vegetables and invective. Minus the vegetables, that is what the procedure of “advise and consent” has now come down to. It is a travesty of the Founders' purpose. It has become an opportunity for the talentless and graceless to abuse the talented and accomplished.

Accomplishment is the rub. If you have left an edifice in print, in business, in public works, stay away from the U.S. Senate. Senate pit bulls will sink their teeth into any record of accomplishment.

Among Bryson's sins, enumerated in an editorial in The Washington Times, is that he and other Yale graduates founded the Natural Resources Defense Council. Bryson did not author any of the council's more controversial excursions. Instead he was part of its idealistic founding; at a time when environmental abuse was a national reality that had been exposed eight years earlier by Rachel Carson in her seminal book, “Silent Spring.”

Despite the wishing of an editorial writer at The Washington Times, Bryson was a free-market innovator.

When Bryson was chairman of the California Public Utilities Commission, he asked me to speak at a conference he was convening at Stanford on regulating electric generation. We were both talking about deregulation a decade ahead of time. And Bryson was talking about it when it had no political traction.

From state service, Bryson went on to run Edison International, parent of Southern California Edison Company, for 18 years.

He has served on the boards of some of the country's largest companies including Boeing and Disney. He has also been a trustee of Stanford University and the California Institute of Technology.

Yet his detractors, the sum of all their ignorance and folly neatly assembled in The Washington Times' editorial, accuse him of destroying jobs. The evidence for this: he supported cap-and-trade legislation as a free-market solution to the problem of greenhouse gas emissions. That support was shared by many electric utilities (including Exelon) and oil companies (ConocoPhillips among them).

If these are institutions of the Left, then lead on.

Like all men who get things done, some of Bryson's endeavors have been less successful than others: Remember, Ben Franklin's stove was not a success. But Bryson's record is the record of a man of his times, prepared to instigate and manage change.

As the commerce secretary job involves managing the changes that come with globalization, a nimble man like Bryson, who has served capitalism and idealism, should be just the ticket. — For the Hearst-New York Times Syndicate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

t

 

 

 

The Next Big Idea: An Infrastructure Bank

by Leave a Comment

The late, great senator from New York Daniel Patrick Moynihan used to lament that Americans had lost the courage for big projects like the one he championed for the lower West Side of Manhattan, Westway. He wondered what had happened to the civic courage that allowed the building of the Erie Canal, the Hoover Dam (a giant jobs project), the transcontinental railroads and the Interstate Highway System.

And his lament was when we could still afford to build big things.

Civic timorousness has now been joined by fiscal constraint. New Jersey Gov. Chris Christie has canceled a project to build a much-needed new tunnel from his state into Manhattan. A station on a new subway line between Dulles Airport in Virginia and Washington, D.C. hangs in the balance, as local jurisdictions throw up their hands at the cost. The issue is whether a less-costly station above ground should replace a planned, underground station in the airport terminal. High speed rail was rejected in Florida ostensibly over cost fears.

But it is the lack of big projects, in a time of financial crisis, that are beginning to threaten the competitiveness of America’s future.

Our infrastructure — once the envy of the world — is in deplorable shape, and declining faster than it is being rejuvenated: airports, bridges, canals, passenger rail, ports, roads, sewage and water systems are all falling apart.

In short, America seems broken. And those things that are not yet broken, like the air traffic control system and the electric grid, are showing signs of mortal strain.

An additional blow to infrastructure has been the zeal of Congress in getting rid of earmarks; a funding device that, at its best, when done openly, directed some miniscule parts of the federal budget to places where the infrastructure was strained to breaking, or simply did not exist.

Because it was abused in the middle of the night, with dollars going to dubious projects and firms, Congress has, to quote Sen. John Kerry (D –Mass,) “thrown the baby out with the bathwater.”

Against this background of impotence, brought on by budget paralysis, there is a stirring in Washington among academics, some politicians (particularly Kerry and Sen. Kay Bailey Hutchison (R-Tex.) who have introduced a bill), the think-tanks, the craft unions and the columnists — in short, the establishment — that there should be an infrastructure bank, a public-private partnership bank, devoted to the long-term (up to 45 years) financing of infrastructure projects.

The idea, as espoused by panelists at a recent meeting on Capitol Hill, representing interests from the construction contractors, financiers like The Carlyle Group, to the AFL-CIO, is that the bank would make direct loans, guarantee private-sector loans, and verify the creditworthiness of projects that could be financed by the private sector on favorable terms with guarantees from the bank against default. Robert Dove of The Carlyle Group beamed when he described a model project of public-private cooperation along highways in Connecticut.

Although it is very unpopular to say in Washington that anything in Europe works, the model for an American bank might well be the highly successful European Investment Bank with a nod to the Export-Import Bank of the United States, a successful public-private financial partnership.

Whether the bank is the institution proposed by Kerry and Hutchison, talk of an infrastructure bank that would create jobs and help reverse years of infrastructure decay will be coming to a town hall near you soon.

The concept of “infrastructure” is vague, but the word “jobs” is a powerful political opiate. And there are plenty of sound-bite-friendly statistics, such as one from the American Society of Civil Engineers that says that it will take $2 trillion over five years to restore the U.S. infrastructure, or that we spend less than 2 percent of our Gross Domestic Product on fixing up the country while China is spending 9 percent.

No wonder Kerry gets misty-eyed when he talks about the shame he feels at riding the fastest train in the world in China or of sliding from London to Paris in two hours and 15 minutes with his cell phone and computer plugged in. 

— For the Hearst-New York Times Syndicate

Chronic Fatigue Syndrome to Get Web Television Presence

by 1 Comment

A new Web-based television program aims to shine a light on Chronic Fatigue Syndrome, sometimes referred to by patients as “the living death” disease. The disease also is known by its old name — and the one favored by many patients — myalgic encephalomyelitis.

The program is called “M.E./CFS Alert” and can be accessed on the You Tube Channel ME CFSAlert. The program will soon be accessible at www.whchronicle.com, the Web site of the weekly news and public affairs television program “White House Chronicle.”

The program was conceived by Llewellyn King, a Washington columnist and executive producer and host of “White House Chronicle” and Deborah Waroff, a New York writer and security analyst, who has suffered from the disease for 22 years.

“This is a terrible, debilitating and essentially lifelong disease which, like AIDS, suppresses the immune system. Our program has three objectives: to comfort the suffering; to change attitudes among physicians and medical institutions, and to implore the government to provide critically needed research funds,” Waroff said.

An estimated 1 million Americans are so severely impacted by the disease that for months and years they are house-bound. Worldwide some 17 million have lost the ability to lead normal lives and work.

Often those who have suffered total physical collapse are ostracized because of bigotry and ignorance. Institutions, like Britain's National Health Service, treat M.E./CFS as a psychiatric disease, even though patients are in great physical pain.

The disease knows no economic, geographic or social boundaries. Author Laura Hillenbrand is the best-known American victim.

“In more than 50 years of reporting, I've never experienced so many people so misunderstood and abandoned by society and many doctors. I've worked on three continents and reported from around the world, but never have I had a response like the one I've had from writing about M.E./CFS,” King said.

The first program is an interview with pioneering M.E./CFS doctor Derek Enlander.

What Ails the Press? It Ails Itself

by 2 Comments

It was Thomas Carlyle who told us that Edmund Burke, in a parliamentary debate in 1787 on the opening of press coverage of the House of Commons, declared, “there were Three Estates in Parliament; but, in the Reporters' Gallery yonder, there sat a Fourth Estate more important far than they all.”

In the context of Parliament, the other three estates would have been the Lords Spiritual, the Lords Temporal and the Commons.

Burke's phrase stuck. More than two centuries later, the Fourth Estate is preserved, but is it powerful?

Here in Washington, it is losing respect rapidly. Today Burke, who was praising the independence of the reporters in ushering over two centuries of media standing up to authority, might wonder if he had overstated their zeal. Three and a Half Estates he might have decided.

The crisis in the media, as some of us believe, is not in the decline of newspapers, the shrinking of viewership for traditional television news, or the growth of partisan cable news, but rather in two other unrelated but dangerously coincidental trends.

The first of these is that the establishment in Washington now believes it doesn't need the media in the way that the media was believed to be needed traditionally. No longer do those hoping to influence Congress begin by selling their point of view to the media by lunching reporters, persuading editorial boards and courting columnists. Instead lobbyists go straight to Congress, where the game is to buy the votes they need with campaign contributions. Who needs the media to stir up popular support when the deed can be done with silver?

Gerald Cassidy, maybe the most successful K Street lobbyist of them all, lamented this change to me at lunch about 10 years ago. It has simply gotten worse.

Cassidy worried about the lack of public support for major legislation passed under lobby pressure. He also lamented how little time a lobbyist got with a member — how little time to dwell on the merits of a course of action.

Cassidy became a very wealthy man lobbying, but he yearned for a fair fight. The old-fashioned way, if you will.

This new state of affairs can be felt in the decline of interest in the general media by public relations firms who used to court every reporter in Washington. Now they “counsel” their clients; offer “strategic planning” and — oddly, as they take little notice of the media — a strange hybrid called “media training.” What media? Their other big new product is to keep reporters away from influential people: the people reporters need to talk to.

In case you think this is peculiarly a Washington phenomenon, it is not. At a recent meeting of the Association of European journalists in Maastricht, the Netherlands, speaker after speaker from country after country complained about those who allegedly are paid to facilitate press access in business and in government and instead wall off their masters.

The second downward trend is a pervasive pusillanimity that has gripped the media in the last several years. We allow ourselves to be segregated, corralled and de facto licensed.

At the White House, the press briefings are like feeding time for the dolphins at Sea World. We, the correspondents, sit around waiting for the keeper, press secretary Jay Carney, to bring in the dead fish. He throws most of it to the network correspondents, sitting grandly in the first two rows where they engage him in long conversations. Finally, Carney tosses some squid to the print reporters in the back of the room and an occasional minnow to the foreign press.

The problem is not that Carney does that but that we take it.

Likewise we can't walk without an escort to the Eisenhower Executive Office Building, next to the White House, as we used to and a minder sits in on our interviews. And we take it.

The press conferences are rigged. Regular correspondents don't get to ask questions, just a predictable few — yes, those with the fishy breath from the front row.

Some old timers spoke up and lambasted the press at a meeting in Washington this week. Former Washington Post reporter and Pulitzer Prize winner Haynes Johnson said, “It's all very stale, very structured, very pale.” Sid Davis, a former NBC bureau chief, said the press conferences look as though the correspondents are watching a funeral service.

And longtime NBC and ABC correspondent Sander Vanocur said, “You want to know what's wrong with the press? The press is what's wrong with the press.” — For the Hearst-New York Times Syndicate

 

Twitter Rides to the Aid of Britain’s Gossip Press

by Leave a Comment

A mighty battle is shaping up between the British government and the American-controlled social networking sites, primarily Twitter and Facebook.

The government of Prime Minister David Cameron is committed to extending the harsh libel and privacy laws, with which it attempts to control the notorious tabloids, to social networking sites. The sites not only carry salacious gossip, but also provide tools for circumventing laws on the books for newspapers.

This state of hostilities between the government and the social media is a new front in a war that has raged in Britain since the first tabloids appeared in the 1920s.

The appetite for gossip in Britain is at the heart of the government's schemes to discipline the media, or at least hold it accountable, for the violation of the privacy of the famous, infamous and titled. Notwithstanding Lindsay Lohan, Charlie Sheen, Jennifer Aniston and assorted American glitterati adorning the supermarket tabloids, the British passion for the sex lives of the rich and famous dwarfs its American equivalents by orders of magnitude.

In turn the energy, resourcefulness, deceit and intrusion of the British tabloids is appalling. No electronic device, trick or bribe is overlooked in the endless campaigns to shame the famous, embarrass the wayward and, in general, romp around their boudoirs and places of assignation.

The tradition of paying informants – maids, butlers, nurses and old lovers –handsomely for lurid details (or anything that can be made to sound lurid) means that the prominent love at their own risk. Yes, it is sex, far more than money or corruption, that sells the British tabloids; and sales push up the revenues. The ability with modern technology to eavesdrop on private conversations has made things worse.

Despite the toughness of British libel law, the battle rages, led by two of a bunch of tabloids, the daily Sun and the weekly News of the World, both owned by Rupert Murdoch's News Corp, the parent company of Fox and The Wall Street Journal in the United States.

It is not that these two are more amoral than the rest, but rather they are better at the game than their competitors. They pay more to informants and the paparazzi than the rest.

For these scoundrels, the United Kingdom in general and England in particular, are target-rich. It starts at the top with the monarchy. Yes, the tabloids cheered the royal wedding but they are ready – indeed, anxious – for the first hint of an indiscretion, domestic discord or even wardrobe malfunction. Then there are the aristocrats, often ignored, but center stage at the suggestion of sexual impropriety.

On to the rest, the footballers, the television personalities, the movie stars. Know what “bonking” is? It is the word favored by the tabloids for sex, as in footballer Y is bonking actress X.

No detail is too private or sick-making not to be rushed to millions of breakfast tables. To keep things spiced up, The Sun has a young, busty woman, naked to the waist on Page Three most days. Helps the corn flakes go down.

To protect the private lives of public figures, the British courts enjoin newspapers from publishing specific reports, if the victim is forewarned — and the preemptive “gagging” orders are feared and loathed in the media. They are so restrictive that it is illegal even to say that one has been taken out. But these themselves may have rebounded against the government the courts and the celebrities.

Frustrated journalists and gossip lovers have taken to Twitter and sometimes Facebook to list, often erroneously, which celebrities are hiding behind preemptive injunctions. The implication of such outing is that there are dark goings on.

Now celebrities are taking to the Internet to deny that they have taken out restraining orders or have a need to. So the government is ham-fistedly going after the social networks. It wants them to reveal the names of the Twitter and Facebook account holders.

As with a lot of regulation, the government and courts have made things worse. But if it goes after the American firms that provide Internet services in American courts, they will run into the First Amendment.

Even the European Court has sided in the past with the press. Generally governments are suspected of wanting to curb political speech and investigation, not tales from the bedchamber. Britain rules the sheets, apparently. – For the Hearst-New York Times Syndicate

 

The Joy of Natural Gas, It’s Here Aplenty

by 2 Comments

Tired of high gasoline pump prices? Wondering why, with our fearsome energy hunger, all the energy seems to be in the Middle East?

That was yesterday's story.

Almost overnight — well, in a few short years — the energy picture has been changing. We are not energy beggars anymore. We have energy bounty — and that does not include the energy from wind and sun, or the controversial energy from the atom.

Now we have plenty of the most versatile of the hydrocarbons — more versatile than coal, and oil. It is natural gas; and it is going to change the face of America remarkably quickly, whether it is used to make electricity for electric cars or is burned directly in cars.

Natural gas is the new oil, maybe the new gold, and certainly the most exciting energy development in a long time.

Indeed, it is a Cinderella story: a hopeless orphan who is now the belle of the ball. Originally, natural gas was found in conjunction with oil and was regarded as something of a nuisance. It was mostly cursed and “flared” or burned at the well; and it is still flared when there is no way of moving it to market, either in a pipe or as a liquid. Cities favored a low-grade gas made from coal for lamps and heating because coal could be transported by rail.

But natural gas turned out to be a wonderful feedstock for fertilizers and many other manufactures and chemicals. It also demonstrated its superiority over coal gas for heating and cooking, and a network of pipelines spread across the nation.

Even as the usefulness of natural gas spread, so did the political desire to control it. The Federal Power Commission, the predecessor of today's Federal Energy Regulatory Commission, issued what became known infamously as the Permian Basin decision. It said that natural gas in interstate commerce had to have the price regulated by the federal government.

The result was two classes of gas, interstate and intrastate. It was a disaster, coming as the demand for gas was rising.

Then came the 1973 Arab Oil Embargo, which meant that gas was wanted for things oil had been used for up until then. Growing gas demand coincided with severe shortage not only in the pipelines, but also in proven reserves in the ground — low regulated prices had cut into exploration. The outlook for gas was bleak.

By 1977, the Carter administration had declared natural gas a “depleted resource.” There was panic. Newspapers listed all the good things we got from natural gas. Congress decided it was too useful to be burned, and it passed the Fuel Use Act.

Henceforth, gas was to be husbanded. Pilot lights on domestic cooking stoves were banned, as were all decorative uses of flames. Even the eternal flame at Arlington National Cemetery was nearly extinguished.

In 1987 natural gas was deregulated, and the companies started exploring and drilling again. The gas shortage transformed itself into a “gas bubble.” When I told a meeting of Wall Street analysts in the early-1980s that natural gas would again be used for electric generation they were disbelieving. As I left the building, one analyst said to another, “Very droll, but he doesn't know what he's talking about.”

But it did happen, and in a big way; not only was more natural gas being sought, but technology was set to change the amount of gas available and the way it could be used.

The first technological advance was a very efficient, gas-burning machine for utilities, the aeroderivitive turbine. Then came horizontal drilling, which allows a single gas or oil well to stretch out tentacles for miles in every direction. This drilling technology opened up old gas and oil fields for further exploitation and made new ones very profitable.

The final jewel in the natural gas crown was the ability of drillers to start breaking up rocks in the shale band — between 6,000 and 9,000 feet below the surface — in areas that were not before thought to contain gas. The Marcellus field, extending through Pennsylvania, New York, West Virginia and Ohio, may turn out to be the largest shale field currently being developed.

El Dorado enow — except for environmental concern about the chemicals used to break the rock, in a process called fracking. Also, groundwater has been affected in many locations; and there is video of tap water burning.

But proponents of natural gas point out that it has half the greenhouse emissions of coal, and few or no nitrous oxides. Natural gas is set to do for the United States what North Sea oil has done for Britain and Norway.  — For the Hearst-New York Times Syndicate

 

 

Danger in the Market: The Sharks Have Computers Now

by Leave a Comment

Jim McTague, Washington bureau chief of Barron's, the stock market newspaper, is as gentle a journalist as pads the halls of Congress or pops into the briefing room of the White House. But he has chosen to poke a tiger with a short stick in his new book, “Crapshoot Investing: How Tech-Savvy Traders and Clueless Regulators Turned the Stock Market into a Casino.”

The book is likely to stir regulators, legislators and traders. It tells a sad and frightening story of inept regulation, congressional good intentions gone wrong, and technological excess.

McTague says a very small number of trading firms, using highly sophisticated computer programs, have upended a once efficient market for the allocation of capital and turned it into a casino operating at electron speed. The losers, he says, are traditional brokers and small investors who

do not stand a chance in a market dominated by trading that moves faster than information can be released to the public. The much-loved New York Stock Exchange “ticker” now lags actual computer trading, McTague says.

Currently, 70 percent of all trades are executed by hugely complex algorithms written in computer code by mathematicians and physicists, who have abandoned their traditional lines of employment for the gigantic rewards of Wall Street.

In a chapter headed “The Road to Ruin,” McTague says, “The history of U.S. investors and their experiences in the equities market has all the earmarks of an abusive relationship, and it will require an eminent psychiatrist several hundred pages to explain why the battered investors return to the market time after time after their previous drubbing, knowing in their hearts that they eventually will be brutalized again.”

The great example of how dysfunctional and dangerous the markets have become is May 6, 2010. It is the day of the “flash crash,” when the so-called high-frequency trading computers lost their electronic minds

There are stories about what triggered that day of disaster; but, in the end, the thing is that it did happen. Computer trading ran away with the market and nearly sank it. In a 10-minute period, many classy blue-chip stocks were nearly wiped out. For example, Accenture, trading at around $42 was reduced to a penny.

When trading was suspended that day, the crafty computers simply moved the trades to other exchanges, such as Frankfurt and London. Eventually most of the lost value was restored, but not the lost confidence.

The computers had outsmarted themselves. Their programs rely not only current trading conditions and knowledge of specific stocks, but also on historical data. “The computers read the newspapers and they have information from historical reporting as well as today's business pages,” McTague says. The problem is they do not have any newspapers from the 1920s; and when the crisis of May 6, 2010 hit, “the computers did not know what to do, so they began liquidating.”

This sad tale begins in the 1970s when Congress, with good intentions, sought to make all stock markets more competitive and the New York Stock Exchange in particular a more open and consumer-accessible place.

In 1975, the reforms were enacted as amendments to the basic securities law of the country. Over the years, the regulatory agencies implemented these reforms. According to McTague, they botched the job.

The reformers also misjudged the impact of computers. Their idea was that they were going to make the markets more egalitarian. Instead, they have favored the greedy few at the expense of the small investor, broker and 401K pensioner.

McTague has no magic solutions, nor does he suggest that people with excess cash stuff it in their mattresses. But he has some tips which he follows himself, including:

  • Do not trade early in the day because that is when most small investors put in their orders, and the sharks are waiting to eat them in the afternoon.

  • Do not leave your research to other people.

  • Be brave and hold on, if you are confident in the stock you have invested in. But do not hesitate to sell it if necessary.

In the short term, computers are making nonsense of the old advice to buy and hold, so investors have to watch their stocks carefully and do their own homework.

Broker-turned-journalist McTague is still trading himself, aware of the dangers. He concludes, “… there is no sure-fire method for a retail investor to beat the market. It has become a shark tank and we are the anchovies. Every time you buy or sell a stock, you are rolling the dice and hoping for a good outcome.” — For the Hearst-New York Times Syndicate