John D. Rockefeller built a vast fortune on oil. Now his heirs are abandoning fossil fuels.
The family whose legendary wealth flowed from Standard Oil is planning to announce on Monday that its $860 million philanthropic organization, the Rockefeller Brothers Fund, is joining the divestment movement that began a couple years ago on college campuses.
The announcement, timed to precede Tuesdays opening of the United Nations climate change summit meeting in New York City, is part of a broader and accelerating initiative.
In recent years, 180 institutions including philanthropies, religious organizations, pension funds and local governments as well as hundreds of wealthy individual investors have pledged to sell assets tied to fossil fuel companies from their portfolios and to invest in cleaner alternatives. In all, the groups have pledged to divest assets worth more than $50 billion from portfolios, and the individuals more than $1 billion, according to Arabella Advisors, a firm that consults with philanthropists and investors to use their resources to achieve social goals.
The Fact Checker frequently warns readers to be wary of claims by politicians that various policy initiatives will yield tens of thousands of jobs. Such claims are often based on studies that rely on a variety of assumptions, any of which can be called into question. So we were interested when we received a call from a reader who wondered how the administration calculated that a proposed international trade agreement, known as the Trans-Pacific Partnership, would support some 650,000 jobs...
The Fact Checker of course takes no position on whether the proposed trade deal is good or bad. But we were curious about how this number was calculated. Notice that Vilsack referred to the Peterson Institute for International Economics, which is a well-regarded centrist think tank that focuses on international economic policy. (NOTE: Run and funded by PETE PETERSON, the rich guy who wants to cut SOCIAL SECURITY & MEDICARE)
Asked about the statistic on 650,000 jobs, the White House referred us to the Office of the U.S. Trade Representative. USTR spokesman Matthew McAlvanah directed us to page 58 of the book. They do not provide an estimate on jobs, he acknowledged. However they do provide a methodology that one could use...
The Commerce Department estimates that about 5,500 jobs are supported by every $1 billion in exports, so in theory that also would yield about 650,000 jobs. But that calculation would ignore the fact that the Petri book found that imports would increase by virtually the same amount as exports, meaning the net number of new jobs is zero...
There is, of course, a long history of presidential administrations touting imaginary job gains from trade deals. I believe that NAFTA will create 200,000 American jobs in the first two years of its effect, then-President Bill Clinton said in 1993... I believe that NAFTA will create a million jobs in the first 5 years of its impact. Clinton was relying in part on analyses generated by the Peterson Institute. Two years later, after a financial meltdown in Mexico and collapse of the peso evaporated any job gains from NAFTA...
Bad news already started to flow this week: Halliburton (HAL) affirmed that it plans to cut 1,000 positions due to the depressed oil market, and BP (BP) announced an unspecified number of layoffs as part of a $1 billion restructuring plan. More cuts are almost certainly on their way.
On Monday, ConocoPhillips (COP) became the first major U.S. oil company to reveal that it is slashing spending for 2015, a decision the CEO asserted was "prudent given the current environment."
It's true the job losses aren't widespread yet. Oil would have to fall a lot further for many energy companies to become unprofitable. And economists say cheap gas is akin to a $60 billion gas cut to consumers.
But there are reasons to worry. The U.S. shale oil boom has become such a key driver of the economy in recent years, creating well-paying jobs at a time when other industries were scaling back. According to Fatima Iqbal of Azzad Asset Management, over 15% of total employment gains since the beginning of 2008 have come from the energy industry, even though it is less than 1% of the country's job base.
"A prolonged slump in energy may endanger these jobs," she said.
When up to a dozen world leaders and roughly 1.5 million people gathered in Paris on Sunday to mourn the murder of 10 editors and cartoonists of the satirical newspaper Charlie Hebdo and seven other people by three French-born Islamic radicals, they wanted to demonstrate that Europe will always embrace liberal and tolerant values.
But the more telling event may turn out to be a counter-rally that took place at a 17th-century town hall in Beaucaire, France, that was led by Marine Le Pen, the leader of the far-right National Front. In Beaucaire, the crowd ended Le Pens rally by singing the French national anthem and chanting, This is our home.
Le Pen is at the forefront of a European-wide nationalist resurgence one that wants to evict from their homelands people they view as Muslim subversives...The vitality of all these parties is a direct result of the failure of mainstream political elites. Exhibit A is the self-destructive austerity policy that Germany under Chancellor Angela Merkel has espoused. Haunted by the memory of the soaring inflation that helped destroy Germanys post-World War One democratic Weimar Republic leading to Hitlers rise Berlin has demanded budget cuts and opposed stimulus programs that could help revive the struggling economies of southern Europe.
This is perverse. It has had the effect of miring the eurozone in unemployment and deflation thereby helping create conditions reminiscent of the 1930s, when economic misery helped radicalize the middle and working classes...The underlying sentiment the demonization of an out group recalls the wave of anti-Semitism that helped propel fascist political parties to triumphs during the 1930s.
The U.S. Bureau of Labor Statistics has released its annual report on unionization data in the United States, and the numbers continue to be on the decline for unions as a whole. Membership in unions nationally dropped from 11.3 percent in 2013 to 11.1 percent in 2014. Other interesting data points in the report include:
Public-sector workers had a union membership rate of 35.7 percent, more than five times higher than that of private-sector workers (6.6 percent).
Workers in education, training, and library occupations and in protective service occupations had the highest unionization rate at 35.3 percent for each occupation group...
As discussed previously on the BT Labor Relations Blog, however, union election rule changes recently issued by the NLRB will make it significantly easier for unions to organize employers in the coming years, so we could see an upswing in these numbers, at least in the private sector, in future editions of this report.
A link to the full report can be found here. http://www.bls.gov/news.release/union2.nr0.htm
or the fourth time in 12 years, the world is facing a deflation scare. And as with any good horror movie, no one is sure what lurks in the shadows..
Since summer, slowing growth in China and severe weakness in Europe and Japan have deepened fears that the global economy could tip into deflation a sustained period of falling prices for goods and services. Those concerns mushroomed in October as crude oil prices collapsed and nervous investors poured into the relative safety of government bonds, driving yields on some bonds to record lows.
The new year kicked off with another dive in oil prices and bond yields and a slump in stock prices...But if deflation takes hold, it would mean different things good and bad to different consumers, workers and investors. Japan, after all, had been stuck in a deflationary rut since the late 1990s...
But policymakers blanch at the thought of broad, sustained deflation in times of economic weakness because of memories of the Great Depression.
The worst-case scenario: A financial crash causes demand for goods and services to fall as worried consumers and businesses cut spending. As demand dries up, prices drop. That slashes businesses' sales and earnings, triggering widespread job and pay cuts. Demand for goods and services weakens further, prices fall again and a vicious spiral ensues.
seems like we're already experiencing the "widespread job and pay cuts."
I thought this was interesting in light of the Administration's new plans for Medicare:
I had a vivid glimpse of this trend in my own family this past winter. In late February, my mother, age 99, had a bad fall. She was taken by ambulance to the closest hospital, Mass. General...My mother ended up staying four days. A couple of days in, we got an unpleasant financial surprise. Even though she was placed in the MGHs maxillofacial inpatient unit, where she got excellent care, my mother was classified as being there for observation meaning that she was considered an outpatient for billing purposes. This meant that the bill over $20,000 was coded under the Medicare outpatient category (Part B) with a 20 percent patient co-pay. Being classed as an outpatient also disqualified my mother from any Medicare benefits in a rehab facility or skilled nursing home after she was discharged.
In order to cut costs actually shift them, partly to hospitals and partly to patients Medicare applies extreme financial pressure on hospitals to book admissions as outpatients whenever possible. This shifts them from Medicare Part A (the hospital program) to Medicare Part B, which is designed to cover only doctor bills. The hospital gets paid a lot less and the patient gets stuck for a lot more.
"While the big players spend a small fortune to game the system, patients remain in the dark."
Medicare does this through outside, for-profit vendors known as recovery audit contractors, who are paid based on how much they save Medicare. They achieve savings by punishing hospitals after the fact if a patient who might have been booked as an outpatient is classified by the admitting doctor as an inpatient. The contractor only gets paid when it overturns a medical decision which sure seems like a gross conflict of interest.
When the New York City banker James Brown tallied his wealth in 1842, he had to look far below Wall Street to trace its origins. His investments in the American South exceeded $1.5 million, a quarter of which was directly bound up in the ownership of slave plantations. Brown was among the world's most powerful dealers in raw cotton, and his familys firm, Brown Brothers & Co., served as one of the most important sources of capital and foreign exchange to the U.S. economy. Still, no small amount of his time was devoted to managing slaves from the study of his Leonard Street brownstone in Lower Manhattan.
Brown was hardly unusual among the capitalists of the North...The story we tell about slavery is almost always regional, rather than national. We remember it as a cruel institution of the southern states ... Slavery, in this telling, appears limited in scope, an unfortunate detour on the nation's march to modernity, and certainly not the engine of American economic prosperity.
Yet to understand slavery's centrality to the rise of American capitalism, just consider the history of an antebellum Alabama dry-goods outfit called Lehman Brothers or a Rhode Island textile manufacturer that would become the antecedent firm of Berkshire Hathaway Inc...
America's "take-off" in the 19th century wasn't in spite of slavery; it was largely thanks to it. And recent research in economic history goes further: It highlights the role that commodified human beings played in the emergence of modern capitalism itself...Those best situated to take advantage of these new opportunities -- those who would soon be called "capitalists" -- rarely started from scratch, but instead drew on wealth generated earlier in the robust Atlantic economy of slaves, sugar and tobacco...
I attended a packed reading (Im talking 300+ people) about a year and a half ago. The author was very well-known, a magnificent nonfictionist who has, deservedly, won several big awards. He also happens to be the heir to a mammoth fortune. Mega-millions. In other words hes a man who has never had to work one job, much less two... Yet, when an audience member young, wide-eyed, clearly not clued in rose to ask him how hed managed to spend 10 years writing his current masterpiece What had he done to sustain himself and his family during that time? he told her in a serious tone that it had been tough but hed written a number of magazine articles to get by. I heard a titter pass through the half of the audience that knew the truth...
Example two. A reading in a different city, featuring a 30-ish woman whose debut novel had just appeared on the front page of the New York Times Book Review. I didnt love the book (a coming-of-age story set among wealthy teenagers) but many people I respect thought it was great, so I defer. The author had herself attended one of the big, East Coast prep schools, while her parents were busy growing their careers on the New York literary scene. These were people her parents who traded Christmas cards with William Maxwell and had the Styrons over for dinner. She, the author, was their only beloved child.... Her first book was being heralded by editors and reviewers all over the country, many of whom had watched her grow up...
When (again) an audience member, clearly an undergrad, rose to ask this glamorous writer to what she attributed her success, the woman paused, then said that she had worked very, very hard and shed had some good training, but she thought in looking back it was her decision never to have children that had allowed her to become a true artist. If you have kids, she explained to the group of desperate nubile writers, you have to choose between them and your writing. Keep it pure. Dont let yourself be distracted by a babys cry.
I was dumbfounded. I wanted to leap to my feet and shout. Hello? Alice Munro! Doris Lessing! Joan Didion! Of course, there are thousands of other extraordinary writers who managed to produce art despite motherhood. But the essential point was that, the quality of her book notwithstanding, this authors chief advantage had nothing to do with her reproductive decisions. It was about connections. Straight up. Shed had them since birth...
A NYT article on the dwindling size of the middle class noted that seniors are more likely to be middle class than in the past. It told readers:
"Todays seniors have better retirement benefits than previous generations. Also, older Americans are increasingly working past traditional retirement age."
In fact, seniors on average almost certainly have worse retirement benefits. The increase in the normal retirement age from 65 to 66 is equiavlent to a 6 percent cut in Social Security benefits.
In addition, changes in the methodology used for calculating the consumer price index reduced the size of the annual cost-of-living (COLA) adjustment by 0.3-0.5 percentage points compared to the increases in the early and mid-1990s. (This means that for the same actual rate of inflation, seniors would see a COLA that is 0.3-0.5 percentage points less than what they would have received in the early and mid-1990s.)
In addition, today's seniors are less likely to have a defined benefit pension, as these are dwindling rapidly. Defined contribution pensions have not come close to making up the loss.
Seniors also are far less likely to have retiree health insurance to cover non-Medicare expenses. Medicare has also become less generous in many respects, although the addition of the Medicare drug benefits (Part D) has been a big help to seniors.
The main reason seniors have more income is that they are working later in life. This is a positive insofar as it is the result of the voluntary decision of people in good health who enjoy their work. However in many cases, this is almost certainly not true. Many older workers are staying in the workforce because they have no other way to make ends meet.