White-collar crime is quite an incredible industry – millions of dollars disappear each year to offshore bank accounts, hookers, drugs, and yachts because rich executives (generally rich white guys) aren’t satisfied with their Porsches. White-collar crime finally got some serious attention when corruption single-handedly destroyed the lives of four thousand Enron employees at the start of the economy’s downturn.

These days, criminology theories often blame the economy for the rise in these types of crimes. White-collar workers are losing money in the stock market and finding themselves unemployed. They want to maintain their same standard of living, which leads to Office Space style scenarios.

It generally consists of lying, cheating, and stealing. It’s normally a non-violent crime, but can wipe out the savings of entire families. (See scams such as the one in the movie Boiler Room.)

So what are the biggest all-time white-collar crimes in America, and does the criminology behind it change from case to case?

Top 5 Infamous White-Color Criminals and Their Crimes

5) Insider Trading: Ivan Boesky and Michael Milken

Pilfered: $200 million

In the 1980s, some of the big guys on Wall Street made millions through inside trading. The law was already in effect when Ivan Boesky was sold out by Dennis Levine for large-scale insider trading. Boesky in turn implicated Michael Milken. Milken and Boesky were the face of the largest corporate fraud scandal for a decade. Now insider trading is more commonly associated with our pal Martha Stewart.

Victims: Investors

Dennis Levine purchased a large amount of Nabisco stock just before a merger, then immediately sold them for a large profit. This got the SEC’s attention, and Levine turned in Boesky, who then turned in Milken.

4) Enron Corporation (Kenneth Lay and Jeffrey Skilling)

Pilfered: Over $1 billion

What appeared to be an incredibly successful company in a short period of time was in fact an incredibly complex scam. For fifteen years, executives of Enron fudged reports, used accounting loopholes, bribed foreign governments for contracts, and hid failed deals and projects. All in all, they were able to hide billions of dollars in debt from their investors, while manipulating and damaging the California energy market, and the Texas power market.

Victims: California energy was one of the big victims, but some 4,000 employees went from a cushy salary to unemployment when the company was swiftly brought down.

The Enron stock was trading at 55 times its earnings; analysts and investors did not know how it was making its income, and Bethany McLean shone light on this situation in her article, Is Enron Overpriced? She found strange transactions, erratic cash flow, and huge debt when she viewed the company’s 10-K report. When Enron reported $638 million third-quarter loss that October, the SEC began an inquiry to the company’s accounts, and it was all downhill from there.

3) WorldCom and Bernard Ebbers

Pilfered: $3.8 billion (Some sources state up to $11 billion in fraud took place.)

The second-largest long-distance telecommunications company in the U.S. didn’t get there with honest hard work. Though Bernard Ebbers began growing the company with well-timed acquisitions, a major one left them struggling, and caused their stock to suffer. Ebbers artificially inflated stock prices and cooked the books to hide the losses. He also “borrowed” $400 million from WorldCom to finance his other businesses.

Victims: Investors, and WorldCom, which filed for bankruptcy immediately

A team of internal auditors uncovered the original $3.8 billion fraud, and then discovered billions of losses concealed through false accounting practices. Some of the funds were siphoned off for personal use. They filed bankruptcy in 2002, and it was the largest filing at the time.

2) Adelphia Communications and John Rigas

Pilfered: $60 billion

In the 1950s, Adelphia Communications was founded, and in just a few decades became the fifth largest cable company in the country. It was a rags-to-riches-to- prison story that landed Rigas and his son behind bars. The head honchos hid $2.3 million in liabilities from investors, and failed to record $3.1 million in loans. He inflated Adephia’s subscriber growth and lied about their bottom line. He used company money for personal use, including investing in a golf course, and building luxury condominiums.

Victims: Investors and employees

The SEC actually caught Adelphia after taking a good look at the company’s financial statements and finding a loan for millions of dollars to John Rigas. As soon as the news hit Wall Street, the stock dropped from its peak of $66 a share, to 15 cents a share. Rigas was indicted for securities, bank, and wire fraud in 2002; he and his sons were also charged with tax evasion. John Rigas is currently serving the remainder of his 15-year sentence.

1) Bernard Madoff

Pilfered: $65 billion

Probably the biggest corporate con in history, Madoff created a huge Ponzi scheme by encouraging huge investments from individuals and corporations around the world. Their payoff came from future investments, not legitimate returns on investments, while he kept the payoff.

Victims: Mostly wealthy New York Jewish businessmen were targeted, though he also took advantage of charity circuits and country clubs.

Similar to the cause of the Great Depression, when the recession came around about a decade ago, investors tried to pull out around $7 billion from the fund. Obviously that money was no longer available, and Madoff’s scheme was uncovered. The person to finally turn him in? His son.

It seems that the criminology behind these crimes are pretty much the same. Too much power and responsibility, not enough good sense.

A very sobering piece to write, no doubt, but needed nonetheless. Especially when you consider the revised GDP numbers from 2008.

From Frum Forum:

Two years ago, Commerce estimated the decline of the US economy at -0.5% in the third quarter of 2008 and -3.8% in the fourth quarter. It now puts the damage at -3.7% and -8.9%: Great Depression territory.

Those estimates make intuitive sense as we assess the real-world effect of the crisis: the jobs lost, the homes foreclosed, the retirements shattered. When people tell me that I’ve changed my mind too much about too many things over the past four years, I can only point to the devastation wrought by this crisis and wonder: How closed must your thinking be if it isn’t affected by a disaster of such magnitude? And in fact, almost all of our thinking has been somehow affected: hence the drift of so many conservatives away from what used to be the mainstream market-oriented Washington Consensus toward Austrian economics and Ron Paul style hard-money libertarianism. The ground they and I used to occupy stands increasingly empty.

A decline of -8.9%.

Conservatives…let that sink in for a moment.

Anybody now think the stimulus was too big?

This from the Economist:

We can’t know exactly how things would have played out in a world in which key policymakers had better data. If the true scope of the economic disaster in the fourth quarter had been clear, however, it seems certain that Ms Romer’s models would have shown a need for more stimulus, that the White House would have agreed to push for more (and perhaps a lot more), and that Congress would have been much more receptive to a bigger bill. A drop of 8.9% does seem much more terrifying, after all, than a 3.8% decline. Bigger stimulus would have reduced the economic deterioration in subsequent months. The Fed might also have been more aggressive.

Of course, it’s not impossible that knowledge of the dire state of the economy would combine with a bigger stimulus plan to shake faith in American finances. It is unlikely, however. At the end of 2008, America’s net debt-to-GDP ratio was less than 50%. Other large economies were also tanking, and money was flooding into Treasuries. In late December of 2008, yields on 10-year Treasuries fell to near 2%.

America had plenty of room and every reason to borrow and spend heavily. What it didn’t have, unfortunately, was an accurate picture of the economic situation. And that was a crippling limitation indeed.

Frum closes it out with this tribute to Susan Sontag’s famous challenge to her left-wing brethren in 1982:

Imagine, if you will, someone who read only the Wall Street Journal editorial page between 2000 and 2011, and someone in the same period who read only the collected columns of Paul Krugman. Which reader would have been better informed about the realities of the current economic crisis? The answer, I think, should give us pause. Can it be that our enemies were right?

Your thoughts?

You can’t look at today’s news and do anything but wince. 18,000 jobs created and the numbers in April and May were revised downward.

Unpacking the numbers a bit, 57,000 private sector jobs were created, while budget cuts pushed 39,000 folks out of work in the public sector.

So how are businesses doing?

Quite well…

Combined second-quarter earnings for companies in the Standard & Poor’s 500-stock index are expected to be up 13.6% from a year ago, according to an analysis of Wall Street forecasts by Brown Brothers Harriman. “Corporate profits have been much stronger than the economy in general,” says Charles H. Blood Jr., a market strategist at the New York financial-services firm.

Sure there are worries. There are always worries. But that hasn’t stopped corporations from piling up more cash reserves than they ever have and keeping wages low.

In fact, it’s historic…

[...] they say this recovery is unlike any other in more than six decades because of the “absence of any positive share of national income growth due to wages and salaries received by American workers.”

The study’s authors-Andrew Sum, Ishwar Khatiwada, Joseph McLaughlin and Sheila Palma-write that from the start of the recovery through the end of the first quarter of 2011, national income increased by $505 billion. But none of that growth came from a rise in aggregate wages and salaries.

So what accounted for nearly all of the growth? Pretax corporate profits, which rose by $465 billion-or 92 percent of the total.

The researchers compare this recovery to other post-recession periods since 1975. Of the four, only one-2001-03-saw corporate profits account for more than half (53 percent) of national income growth. And in 1991-92, corporate profits’ share was minus 1 percent, while aggregate wages and salaries accounted for 50 percent.

Let’s make sure we all see that number clearly…92 percent of the total national income has been gained via corporate profits.

What to make of this? Well, I have my opinions, and I’ve shared them before. Frankly, it’s pretty ridiculous, but nobody can force corporations to hire anybody or pay their workers more. But isn’t it a shame that the mood in this country in many C-suites seems to be so stingy? I mean, I get tightening belts, etc, if it’s needed. But it’s clearly not. The big time private sector is flourishing.

And where does that flourish go?

As if you really had to guess…

The final figures show that the median pay for top executives at 200 big companies last year was $10.8 million. That works out to a 23 percent gain from 2009. The earlier study had put the median pay at a none-too-shabby $9.6 million, up 12 percent.

Good times.

The move will save nearly 2,500 jobs.

From The Street:

Hard-hit Kokomo, Ind., got a big boost from Chrysler on Tuesday when the automaker announced it plans to pump another $843 million into three factories to build a new front-wheel-drive transmission.

General Motors, meanwhile, will announce Wednesday that it will invest $163 million in two Michigan plants and an Ohio foundry to make small-car engines, according to a person familiar with GM’s plans. The person was not authorized to talk about the plans ahead of the formal announcement and asked not to be identified.

But wait, there’s more from Chrysler…

Chrysler said the new investment, to start early next year and run through the third quarter of 2012, would raise the company’s commitment to the Kokomo plants to $1.1 billion, pushing its total U.S. factory investment to nearly $3 billion since it emerged from government-funded bankruptcy protection in 2009.

And everybody heard that GM IPO’d this week, right? And it was the biggest IPO ever?

More as it develops…

Hey there corporations!

Hope all is well. If the news today is any indication, looks like things are going great! Your profits have gone up seven straight quarters and collectively reached a record high.

Here, just take a look at this graph…

Wow! You must be pumped!

Also note that you’ve had to pay fewer taxes on those profits too. Who did that? Not Republicans.

So, aside from the tax cuts, why is this happening? Two words: productivity growth. Doing more with fewer people. It’s a decent strategy, but there’s also a downside. You tire your workers out by making them think that you own them because you’re hanging the high unemployment over their heads as reasons to not give them a raise or hire more people to help support them.

Seriously all…it’s time you did your part too. You all know you can add more people to your workforce, it’s just a matter of slow growth so you don’t have to fire them in six months. Yes, we’re all skittish after our near collapse, but it’s in all of our best interests to get more people working so they can buy more of YOUR stuff, right?

Glad we had this simplistic, yet accurate chat.

Early in July, we took note of a CNBC panel discussion worrying about a Double Dip and Ron Insana offering an explanation for a stock market rally in the midst of unrelenting bad economic news.

On that day the Dow closed up 276 points at just over 10,000, and since then added another 10%+ (trading at 11,126 as I write this). As I have said before, I do not believe there is any case to be made for a statistical correlation between market direction and political parties in power that will stand up to rigorous mathematical scrutiny over the long term.

However, in the short term, if investors believe that divided government is good for markets, then that expectation can be a self-fulfilling prophecy. That may be what we are seeing in the market now in anticipation of the November results. This expectation of divided government is gaining momentum and the meme is getting traction in the MSM. Two recent examples:

USA TODAY: Voters may sway stocks with possible policy changes

“Forget price-to-earnings ratios. Buy-and-sell decisions on Wall Street are increasingly being driven by power and politics and what voters will do at the polls…

Even though Obama and Democrats swept the polls in the 2008 election, investors would prefer a split Congress, as a balance of power on Capitol Hill makes it less likely that the Democrats will be successful in passing what Wall Street perceives as an investor-unfriendly, growth-challenged agenda.

“A dramatic change in the composition of the House and Senate could significantly alter the legislative strategy for all political leaders, including President Obama,” says Jason Pride, director of investment strategy at Glenmede.

Historically, divided government has been bullish for stocks because it results in what Wall Street refers to as legislative gridlock. And in the words of many Wall Street analysts and economists: Gridlock is good.“

Heh. Where have I heard that before?

A couple weeks ago, in the face of yet another bad jobs report, the market rally continued, prompting an interesting segment on the Larry Kudlow Report. A panel including Steve Moore (who worked for Dick Armey in ’95) and David Goodfriend (who worked for Bill Clinton in ’95) discussed whether the market’s continuing strength was attributable to an anticipation of the return of Divided Government:

The most interesting exchange is between Goodfriend and Moore (around the 5:30 mark) arguing whether Republicans or Democrats could take credit for the prosperity and relative financial sanity that prevailed during the Clinton/Gingrich divided government. I am happy to give credit to both, and to the benefits that accrue when divided government keeps the worst impulses of both parties at bay.

Lest anyone think that Republican Kudlow is being disingenuous and flogging self-serving Republican spin when he asserts that the investor class prefers divided government – let me reprise one of my first YouTube efforts. This from from four years ago, shortly before the 2006 mid-terms. Here we see the selfsame Kudlow noting a rally, wondering if the markets are anticipating the Democrats taking the majority and restoring divided government, prompting what he then called the Pelosi Bull Market:

In any case, If you have been fully invested since the Insana piece ran in July – so far, so good (Past performance is not a guarantee of future results).

x-posted from “Divided We Stand United We Fall”

The title says it all, but here’s a bit more detail…

From NY Times:

Goldman Sachs has agreed to pay $550 million to the Securities and Exchange Commission, one of the largest penalties ever paid by a Wall Street firm, to settle charges of securities fraud linked to mortgage investments.

The S.E.C. filed a lawsuit against Goldman in April, accusing the bank of securities fraud. The settlement came just days before Goldman is scheduled to report its second-quarter earnings.

Under the terms of the deal, Goldman will pay $300 million in fines to the Treasury Department, with the rest serving as restitution to investors in the mortgage-linked security. Goldman will not admit wrongdoing, though it will admit that its marketing materials for the investment “contained incomplete information.”

Haha, yeah, it contained incomplete information. Like, “this investment’s goal is to turn you upside down and watch the money fall out of your pockets and into our hands.”

And here’s more from the S.E.C.’s director of enforcement, Robert Khuzami…

“Half a billion dollars is the largest penalty ever assessed against a financial services firm in the history of the S.E.C.,” Mr. Khuzami said in a statement. “This settlement is a stark lesson to Wall Street firms that no product is too complex, and no investor too sophisticated, to avoid a heavy price if a firm violates the fundamental principles of honest treatment and fair dealing.”

Is it bad that this has me smiling ear to ear?

I mean, with the financial regulations bill being passed today and this decision coming day, there’s obviously a new sheriff in town who’s trying to make sure that what went down in 2008 (and the years leading up to the meltdown) will never happen again.

And yes, businesses are crying foul, but meanwhile they’re sitting on record cash hordes, so their complaints ring pretty hollow to me.

Long story short, Goldman Sachs got what they deserved.

Listen, if a public or private company makes money and wants to keep it close to their chest, that’s their right. But those same businesses can’t then go and collectively fault the White House’s policies for preventing them from hiring more people. And that’s exactly what they’re doing through the U.S. Chamber of Commerce and other business groups.

First, the Chamber story…

the U.S. Chamber of Commerce, which held a jobs summit Wednesday and accused the Obama administration of dumping onerous regulations on businesses. That has created an environment of “uncertainty,” which is causing firms to hold back on hiring as the unemployment rate has hovered near 10 percent, the Chamber said.

Onerous regulations? What they mean are ANY new regulations that make sure workers and consumers are protected from corporate mistakes.

So what did the White House say?

The White House countered that companies are wary of hiring not because of new regulations but because they’re still waiting for consumer demand to return. The administration also claimed credit for 3.5 million jobs created by the stimulus bill from last year.

Then, a little bit more on the money these companies are sitting on:

Nonfinancial companies are sitting on $1.8 trillion in cash, roughly one-quarter more than at the beginning of the recession. And as several major firms report impressive earnings this week, the money continues to flow into firms’ coffers. [...]

A survey last month of more than 1,000 chief financial officers by Duke University and CFO magazine showed that nearly 60 percent of those executives don’t expect to bring their employment back to pre-recession levels until 2012 or later — even though they’re projecting a 12 percent rise in earnings and a 9 percent boost in capital spending over the next year.

When asked why companies are holding back so much, many economists cite broader uncertainty that goes well beyond anything happening in Washington. Firms aren’t sure whether the economy can sustain a strong recovery. And as long as consumer spending remains low, there’s not much incentive for companies to ramp up.

I’m sure you’re spotting the inherent paradox here. Consumer spending won’t go up as long as firms aren’t hiring. It’s not secret that jobs stimulate far more consumer demand and spending, not the other way around. So what these businesses are essentially asking the American people is to spend money they don’t have so they might start hiring again.

Yeah, that’s a smart plan…

So, basically, there’s literally nothing anybody can do to make these companies hire, even though they’re starting to see record profits again.

Good times.

The correlation (or not) of stock markets, political parties, election expectations and investor psychology has been a recurring topic of interest to this blogger (see 2006, 2007, 2008 , 2009).

Along these lines, we are beginning to see articles speculating about the potential impact on markets and investors should voters usher in a new divided government in the fall.

Richard Lehman, writing at Forbes recommends“Sell Into Rallies And Thank Politicians”:,

Joseph Lazzaro at the Daily Finance – “Job Creation: Democrats Have Run Out of Time WithVoters.”:

There is no doubt that should the GOP regain a majority in either house of Congress, we will certainly get episodes of gridlock. But if the legislation is needed, if there is real public demand for gridlocked legislation, the gridlock will eventually end as it always does. Out of that gridlock we will get better, more fiscally responsible legislation than we are seeing now under One Party Democratic rule. And that is a good thing.

The advantage of divided government is that both parties have a seat at the table of power. When both parties have real power, the bickering must be resolved by compromise. In contrast, the impotent bickering of the Republicans during the stimulus and healthcare debates was mostly ignored by the Democrats, resulting in fiscally irresponsible, one party legislative hairballs.

As far as stock market reactions, I am reluctant to link market behavior to any policy or partisan mix in Washington. I’ve not seen any studies that show a believable, statistically significant correlation between long term market direction and Republican, Democratic, or divided governments. That said – in the short term it is less important whether there really is a statistical correlation so much as whether investors believe there is a correlation. My sense is that most investors believe, as does Richard Lehman, that the stock market will benefit from Republicans taking control of either the House or Senate in the fall. With that expectation, a rising market could very well be a self-fulfilling prophecy. If the GOP begins to look like it has a realistic chance of taking control of one house, the opportunities alluded to by Lehman may come along sooner rather than later.

Climbing a wall of worry the markets posted big gains last week, including a dramatic 274 Dow points on Wednesday. This left many analysts scratching their heads after the unrelenting doom and gloom of recent weeks. CNBC broadcast a one hour special analyzing Wednesday’s market action. In this excerpt Ron Insana expresses caution, but finishes by insinuating that changing investor expectations for the mid-terms may have contributed to the rise:

Money quote:

Indeed it might. And like in the 2006 mid-terms – perhaps happy days will be here again (at least as far as the market is concerned).

Postscript:
In case you were wondering why the picture of CNBC financial correspondent Amanda Drury introduces this post, I simply though it would help illustrate the question she asked the panel in the above clip. Nothing more.

^{Cross-posted from “Divided We Stand United We Fall”}

The doomsayers are out in full force today…which I find puzzling.

After all, the jobs report today, while not overtly positive, was still nearly 200,000 better than the previous month and one would think it could be seen as either neutral or slightly positive.

Yes, many of the jobs added were seasonal and created by the government…but that’s still money going back into the economy and job experience that folks didn’t have before. And, trust me, that’s a good thing for those workers.

And now we get a sign that states, who were seriously suffering the last two years, are actually bringing in more than they were spending.

From USA Today:

The fortunes of many governments could improve dramatically this year if the national economic recovery continues, a USA TODAY analysis found. A flood of federal stimulus money and a modest upturn in tax receipts have improved the health of states after two years of financial havoc.

Revenue has grown faster than spending for three straight quarters, reports the Bureau of Economic Analysis. Tax collections are up, too, although they remain below the peak of 2008.

“The turnaround is here, thankfully,” says North Carolina budget director Charlie Perusse.

Most states, cities and school districts are still struggling to balance budgets whacked in a recession that began in December 2007. But most signs provide rays of hope.

And here’s a look at the states’ spending over the past decade…

Long story short…we’re headed in the right direction. And don’t let anybody tell you differently.

Previous worst case scenarios estimated the spill to be pumping 2M gallons of oil a day into the gulf, but new numbers paint a much darker picture.

Here’s how the two leaks shake out…

Leak A: 70,000 barrels a day +
Leak B: 25,000 barrels a day =
95,000 barrels a day

One barrel of oil is roughly 42 gallons of oil…so 95,000 x 42 = 3,990,000 gallons of oil…PER DAY!

Now…let’s remember that this has been going on a month now. That means that nearly 120,000,000 gallons of oil has contaminated the Gulf since this all began.

Let me repeat that…120 MILLION GALLONS OF OIL!

You know how much the Exxon Valdez spilled? 11 million.

So this spill is already 10 times worse than the worst oil spill in our nation’s history.

And next week…hurricane season starts.

More as it develops…

The gap has shrunk a bit, but the economy is turning around so in a year’s time it’s unlikely we’ll have the problems we’re having today. Basically, the question will then be… “Who is responsible for the economic growth in this country?”

Gallup has more on that…

Obama has stated that he “inherited the most profound economic emergency since the Great Depression.” And while some of his critics dispute the extent of the crisis, there is little debate that he arrived in Washington amid rising unemployment, struggling equity and housing markets, distressed banking and auto industries, and a rapid retreat in consumer spending. Americans in July 2009 clearly recognized that the nation’s economic problems preceded Obama’s term; at that time, close to half of Republicans (43%) — in addition to most independents (63%) and nearly all Democrats (92%) — believed Obama bore little or no responsibility for them.

And here are the numbers…

Sidenote…currently Obama’s approval rating is averaging about 48%. If this is as low as he goes as we’re pulling out of the recession…wonder what it’ll be this time next year.

Care to make any guesses?

Paul Krugman offers “Tidings of Comfort” in the New York Times:

“…Tiny Tim, is sick. And his treatment will cost far more than his parents can pay out of pocket. Fortunately, our story is set in 2014, and the Cratchits have health insurance… reform legislation enacted in 2010 banned insurance discrimination on the basis of medical history and also created a system of subsidies to help families pay for coverage.”

Fortunate indeed that Tiny Tim did not get sick in 2010-13 before the benefits kick in. Also fortunate – Krugman did not choose to use as an example the children of those who will lose their jobs as a consequence of the massive additional tax burden thrown on the back of the economy to pay for this bill. A tax burden that kicks in years before benefits are seen by Tiny Tim or his family.

Paul also joins the chorus for changing the rules in the Senate:

“But given the way the Senate rules work, it takes 60 votes to do almost anything. And that fact, combined with total Republican opposition, has placed sharp limits on what can be enacted. If progressives want more, they’ll have to make changing those Senate rules a priority.”

Like Rachel Maddow and Ezra Klein, Krugman is hell bent on making it much easier for the probable Republican majority in 2013-2016 to undo this bill than it was for the Democratic majority in 2009-10 to pass it. Ho Ho Ho.

While Krugman is brimming with good tidings and bubbling over with holiday cheer, from the other side of the political spectrum Peter Schiff is offering a dour double dose of “Bah Humbug.”:

but…

If you want to be the Senator from Connecticut, you are going to have to come across as something other than a humorless prophet of doom. You need to find a way to temper your message with at least a hint of optimism and – dare I say it? – “Hope”. As an example – Ron Paul’s media friendly phrase – “Freedom is popular.” Just saying…

You can’t get elected if all your supporters are suicidal.

^{Cross posted from “Divided We Stand United We Fall”}

Looks like the world’s largest retailer is getting serious about green.

From The Register:

The five latest stores in Walmart’s pilot program, which now totals 20 stores, Sam’s Clubs, and distribution centers in Hawaii and California, will all be located in sunny Puerto Rico. Their solar installations will be provided by SunEdison, described by Walmart as being “North America’s largest solar energy services provider.”

Walmart, however, won’t be buying the solar systems from SunEdison. Instead, that panel punter will finance, own, build, and operate them itself, and sell the generated juice to Walmart. The systems will provide the stores with 25 to 35 per cent of their electrical needs, and are projected to produce 90 million kWh of power over the 15-year life of the project.

Walmart is dead serious about solar power, stating in their most recent Solar Power Fact Sheet that “our goal [is] 100 percent renewable energy.”

Obviously this is encouraging because, if it works and Wal-Mart can create a compelling enough business case, it’ll force other retailers to follow suit.

More as it develops…

That’s the plan, but color me skeptical. These corporations have too much influence on Capitol Hill. Still, the fact that we’re even talking about it is encouraging.

CNN explains why this issue has reignited…

Two weeks ago, Goldman Sachs (GS, Fortune 500) was roundly panned amid speculation that it was considering paying its employees some of the largest bonuses on record, despite having accepted $10 billion from the Treasury Department’s Troubled Asset Relief Program, or TARP, last fall. (The investment bank has paid the government back, however.)

Earlier this month, outrage over bonuses paid out by bailed-out insurer AIG (AIG, Fortune 500) bubbled back to the surface after The Washington Post reported that AIG was seeking the government’s consent to make a scheduled performance bonus payment of $2.4 million to 43 of its top-ranking executives.

So is this some sort of plot against capitalism?

Hardly.

In fact, a lot of companies have already adopted similar policies of their own accord…

Twenty three companies have agreed to give shareholders an annual vote on executive compensation, including Aflac (AFL, Fortune 500) and Verizon (VZ, Fortune 500), according to the advisory firm RiskMetrics. And more than 80 others agreed to take the issue under consideration at their annual shareholder meetings this year.

Long story short, this is just good corporate governance, and sometimes legislation needs to force certain people’s hands. Unfortunate, but that’s how it goes.

Thanks to Justin and company for welcoming me on here as a regular contributor. I will be posting on a number of issues, but one area you can expect that I will regularly be tracking is technology related developments and how they interact with the political world and policy. I also live less than ten miles from the Nebraska/Iowa border, so I’ll try to keep an eye on 2012 developments as the contenders test the waters there as well, on top of other interests like election reform, social issues, polling analysis and any number of things that I come across while skimming the hundreds of tweets and RSS feeds I go through every day. I hope you enjoy it, and now… on with the show!

We’ve been hearing about cellulosic ethanol for several years now, generally with the caveat that were at least a few years, and a few scientific breakthroughs, away from it coming to market and helping wean us from foreign oil. Unlike corn, which breaks down into the sugars necessary to be processed into ethanol relatively easily, cellulose is a hardy material that takes time and energy to break down. Its upside is that there happens to be more cellulose present than any other organic molecule on the planet. This is why millions upon millions of dollars has been poured into cellulosic ethanol research, genetically modifying naturally occurring enzymes to break it down faster and looking for ways to bring the price per gallon down closer to the price of gasoline.

Unlike corn, which takes land out of food production, is inefficient as far as how much energy it takes to produce and is a high maintenance crop, finding raw material for a cellulosic plant is easy. Wood chips from sawmills, the kudzu scourge spreading through the hot and humid Southeast, agricultural waste and even up to 80 percent of what ends up in our landfills could be used to make cellulosic ethanol.  Thankfully, the millions of dollars in research and development have begun to bear fruit.

A gas station near Ottawa is the first in the world to begin selling a cellulosic blend, called CE-10, to the public. Iogen, the company behind the demonstration plant that produced the fuel, plans to build its first full scale cellulosic ethanol plant in Saskatchewan. It has reached an agreement with the local government and Royal Dutch Shell to convert an old Mill site to their purposes, with the government even agreeing to purchase any green energy produced at the site. The running demonstration plant only has the capacity to produce about 3 million liters of ethanol each year, using wheat straw agricultural waste, while the new plant will be able to pump out about 75 million liters. It will make use of a more diverse feed stock, including agricultural waste from other crops, grasses native to nearby areas and even wood chips from area mills.

The march of progress continues, with a number of large companies making big investments into these technologies. Last year GM purchased a large share of Coskata, a big player in the emerging cellulosic ethanol industry, who claims to have developed a process that simplefies the complex and costly process of breaking down cellulose and brings the cost of production down to being competitive with gasoline. There are as many as two dozen companies with plans to build plants similar to Iogen’s, but the economic downturn is effecting their ability to finance these projects. Coskata is hoping to get some stimulus money, in the form of loan guarantees, to help finance its plant, with an estimated production of 50-100 million gallons a year.

As President Obama often says, if we intend to be a leader in the green energy industry of tomorrow, we need to move boldly in that direction today. Now is not the time to let companies who wish to lead us in there falter because of financing problems. Some are talking about a new stimulus bill, which most people reasonably see as a terrible idea, that would focus on these kinds of projects and job creation. The first should have done so, and I have little confidence that a new one would make it through congress without being similarly unfocused and pork laden.

We don’t get too many of these chances, where we can kill three birds with one stone. Job creation, independence from foreign oil and environmental progress can all be had with some smart funding priorities. Lets hope the administration recognizes this in time.

Most people don’t realize that the insane gas prices last year had nothing to do with increased demand and had everything to do with market speculation and hoarding encouraged by the top investment banks.

Now True/Slant’s own Matt Taibbi uncovers the truth behind the scam.

Read the rest at True/Slant.

When the world’s largest retailer backs something like this, it’s hard to ignore. Especially since they’ve had such a spotty record when it came to covering their 2 million employees in the past.

From The Hill:

With Wal-Mart’s endorsement of a legal requirement that employers provide health benefits to their workers, the nation’s largest employer has broken from the business community. [...]

Moreover, Wal-Mart declared its support for the employer mandate in a joint letter to Obama with the Service Employees International Union (SEIU) and the liberal Center for American Progress, which is run by John Podesta, a close associate of the White House.

“We are entering a critical time during which all of us who will be asked to pay for health care reform will have to make a choice on whether to support the legislation,” says the letter, signed by Wal-Mart President and CEO Mike Duke, SEIU President Andy Stern and Podesta. “This choice will require employers to consider the trade off of agreeing to a coverage mandate and additional taxes versus the promise of reduced health care cost increases.”

Now, the U.S. Chamber of Commerce is diametrically opposed to the mandate and actually attacked Wal-Mart as a result of this move…

“Some businesses make the decision to use the government as a weapon against their competition,” James Gelfand, the Chamber’s senior manager for health policy, said in a statement. “We do not agree with this method — the government is a blunt instrument and taxes have extreme unintended consequences, negatively affecting the economy as a whole. We also recognize that momentum is moving against an employer mandate. The business community will be stepping up our advocacy as necessary, too.”

First off, “weapon?” Really? Good lord…

Also, note the phrase, “taxes have extreme unintended consequences, negatively affecting the economy as a whole.”

I’m all for robust debate, but making such dire, blanket statements like that will not help the Chamber’s credibility with anybody but the die-hard conservatives/libertarians that think taxation is some evil plot to rob them of their freedoms.

In other words, they better strike a different tone or they may find their voice ignored in the coming months as businesses follow the lead of the most successful retailer in history.

Not too many people are dancing over the news of GM’s bankruptcy, but opinions are decidedly mixed on what the government ownership of the car company will mean.

Lee Cary, of American Thinker sees the era of Government Motors dawning with coercive attempts to force a Green fleet onto American consumers. This, in Cary’s opinion, will be quickly followed by the unintended consequences, namely a falling market share followed by more government infusions of money, followed by tariffs on foreign automobiles, followed by retaliatory tariffs on American-made goods, followed by economic disaster.

How about Robert Reich, who has routinely applauded the Obama economic agenda? Well, he’s not exactly sunny either. Reich says the government part-ownership of GM will do nothing more than slow its inevitable demise. He accuses the administration of trying to have it both ways by appeasing autoworkers (who want as much bailout as possible) and average taxpayers (who generally oppose the government’s intervention).

So the Obama administration is, in effect, paying $60bn to buy off both constituencies. It is telling the first group that jobs and communities dependent on GM will be better preserved because of the bail-out, and the second that taxpayers and creditors will be rewarded by it. But it is not telling anyone the complete truth: GM will disappear, eventually. The bail-out is designed to give the economy time to reduce the social costs of the blow.

Certainly someone must think things could turn out just fine. Oh sure. There’s Michael Moore. He sees this as a great opportunity for the government to seize American industry in the name of fighting a war against global warming and dwindling oil supplies. He wants massive mass transit, he wants it now and he wants it built in GM factories by GM workers who would, of course, be government workers in Moore’s world.

Feel free to leave your own predictions/desires in the comments. As for me, I’m going to take some more antacid in the hopes of quieting a stomach turning circles over the prospect of a government-owned car company.

All the kings horses and all the bond deals couldn’t keep GM from cracking. As feared, the car giant has filed for bankruptcy. Now what?

The plan is for the federal government to take a 60 percent ownership stake in the new GM. The Canadian government would take a 12.5 percent stake, with the United Auto Workers getting a 17.5 percent stake and unsecured bondholders receiving 10 percent. Existing GM shareholders are expected to be wiped out.

Plus, GM could get an additional $30 billion in federal assistance for its reorganization. That’s on top of the $20 billion the company already received in the form of low-interest loans.

More fallout: the Pontiac, Saturn, Hummer and Saab brands will be terminated or sold. And GM will no longer be listed as part of the Dow Jones industrial average.

Oh, and the majority owner of one of America’s most storied companies will now be the U.S. government – at least for awhile.

Good times. More soon.