Weekly Roundup 4/18/2011

"When it comes to offshore drilling, still treading in deep water"
Steven Mufson and Joel Achenbach, The Washington Post, April 17, 2011

Synopsis: One year after the explosion of the Deepwater Horizon drilling rig triggered the nation’s worst oil spill, policymakers, experts and the public are debating whether – and how vigorously – to resume deep water drilling. The Obama administration says it’s possible to resume drilling in “a safe and responsible way.” But Republicans in Congress want to mandate shortcuts in approval of drilling permits.

Takeaway: The industry says new safety procedures have been adopted, but a professor who advises the industry voices concern. “The scare is we’ll go off half-cocked, half-prepared, have another significant loss of well control, and that’s going to be an industry stopper.”

For an earlier report, see Tom Billitteri, “Offshore Drilling,” [subscription required] June 25, 2010.

--Kenneth Jost, Associate Editor

*******************

"Revolver"
Gabriel Sherman, New York Magazine, April 10, 2011

Synopsis: Young economics hotshot Peter Orszag served as White House advisor to President Bill Clinton, director of the Congressional Budget Office in the mid-2000s, and chief of President Barack Obama’s Office of Management and Budget. So when the then-41-year-old left OMB last July to become head of global banking at troubled Citigroup, one of the financial-sector giants that benefited from the government bank bailout and whose risky practices still raise eyebrows among regulatory-minded lawmakers, the move renewed concern about the “revolving door” between government service and wealthy industries.

Takeaway: “To the layperson, the most surprising thing might be the degree to which people like Peter Orszag see the government and Wall Street as, essentially, parts of the same industry,” writes Sherman. “Aside from some bad publicity, going from one to the other is not a leap at all, not any kind of sellout, but a natural progression for a member in good standing of the super¬meritocracy…. In this sense, the last two years have been confusing for these people, because you need public servants who understand capital markets, and who understands markets better than Wall Street? ... But another way of looking at this is that Wall Street has Washington over a barrel — and the values of one can’t help but be the values of the other. Even in Democratic administrations like the current one, once and future Wall Streeters are in position to pull the teeth out of regulations — for what they see as perfectly sensible, perfectly ordinary reasons. … To change the system, you have to change the people; but the people are the only ones who know how the system works.”

For an earlier report, see Marcia Clemmitt, “Financial Industry Overhaul,” [subscription required] July 30, 2010.


--Marcia Clemmitt, Staff Writer

*******************

“Of the 1%, by the 1%, for the 1%”
Joseph Stiglitz, Vanity Fair, May, 2011

Synopsis: Nobel laureate economist Joseph Stiglitz delivers a chilling judgment about the state of U.S. democracy. In a piece that’s attracting favorable comment across the left side of the blogosphere, Stiglitz (interviewed in CQ Researcher in 2008 Cost of the Iraq War,” [subscription required] CQ Researcher, April 25, 2008> about his calculations on the real costs of the Iraq war) argues that growing economic inequality is turning the United States into a close relative of the Middle Eastern systems now under attack by their own citizens. Americans at the top 1 percent of the wealth bracket now control 40 percent of the nation’s assets, he writes, and receive nearly 25 percent of the country’s income.

Takeaway: The growing economic power of the wealthiest 1 percent of Americans allows them to shape laws to their benefit and live on a separate track from their fellow citizens, he says, a state of affairs that Stiglitz says is unsustainable.

For an earlier report, see Marcia Clemmitt, “Income Inequality,” [subscription required] CQ Researcher, Dec. 3, 2010.

--Peter Katel, Staff Writer