Month: June 2007

The Democratic controlled Congress is considering an energy bill.

The likely outputs are pretty grim. Coal state members of Congress are pushing for coal-to-liquid projects that might help move in the direction of “energy independence” for the United States, but will make global warming worse. Senators from Michigan are set to gut efforts to increase auto fuel efficiency standards.

It is completely reasonable and critically important to denounce these maneuvers, which suggest that the Democratic controlled Congress is on course to do little or no more to alleviate global warming than its Republican predecessors.

It is also hard to avoid complaining about the spinelessness of the Democrats, or feel, as Lee Iacocca says, “Where Have All the Leaders Gone?” And there’s some justification for that, as well.

But there is another, more important way to look at the present energy bill mess. And that is to acknowledge that members of Congress are responding to powerful constituencies — most importantly the polluters’ lobby, but not just big corporations. The unions in these sectors are supporting retrograde positions, which is reflective of their short-term and misguided calculations about jobs and members’ well-being.

We may pine for enlightened leadership, but it is not likely to be bestowed as a gift.

To face up to the challenge posed by climate change — and it is, literally, apocalyptic — is to acknowledge that forestalling global warming must become the organizing principle of society.

We’re a long way from that recognition and orientation. The only way we are going to get there is for those willing to look honestly at the situation to build a powerful movement. It must be broad, and it must very aggressively demand change. There is a role in this for celebrities and concerts. But there is a crying need too for people who insist on shaking things up.

That movement has been slow in coming, but it is just possible to see the beginning signs that it may be starting to crystallize. (Yes, all those qualifiers are necessary.) A very important early manifestation of what may be a new movement is the call for a No War, No Warming mobilization in Washington, DC, from October 21 to 23.

Details of the protest activity are just starting to be worked out, so stay tuned for more. But while all efforts have to made to block the lunacy now on display in the Congress and to achieve some incremental gains for renewable energy and efficiency (getting started sooner will make the hard work to come much easier), the real leadership on this issue will not be found on Capitol Hill. The leadership is going to come from the streets.

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Disclosure: Essential Action, a project I direct, is an endorser of No War, No Warming.

It has become a source of some amusement in the media that the burgeoning hedge funds have become a core source of funds for the leading Democratic presidential contenders (while also pouring money on the top Republican candidates).

Prominent locals in Greenwich, Connecticut, where many hedge fund managers reside, now brag about candidate scuff marks on their basketball courts, according to the New York Times.

Hedge fund money is gushing into Hillary Clinton’s coffers; Chelsea Clinton has taken up employment at one major Democratic-leaning firm.

John Edwards cashed in and made connections while working briefly as a hedge fund adviser until announcing his bid for president.

And Barack Obama appears to have taken in more bucks from the hedge fund industry than any of his Democratic competitors.

It’s time to tamp down the hilarity, however, and give this phenomenon a bit more scrutiny.

Consider this: The lead story in last Friday’s Financial Times was titled not so subtly: “Hedge funds attack US banks for aiding subprime borrowers.”

The story reported on a letter by 25 hedge funds complaining about bank practices to enable mortgage borrowers to avoid foreclosure. The hedge funds have invested in various derivative instruments that pay off when borrowers default and get thrown out of their homes.

With the housing sector in crisis and unsustainable subprime loans crashing, the lending banks are actually working with borrowers to help them keep up with payments. This is what the hedge funds object to.

Of course, the hedge funds have larger political and economic interests as well, which are antithetical to national and global well-being. At the top of their list, they seek to avoid any kind of regulation — even though their exotic investments and high-stakes gambling pose enormous systemic risks that they cannot possibly absorb, even if they were to go bankrupt. So too hedge fund managers making more than a billion dollars a year may resist efforts to crack down on tax manipulation that enables them to avoid paying regular income tax rates — let alone calls for an effective raising of the top marginal rate for the super-rich.

The United States has been down this road once before. Goldman Sachs’s Robert Rubin directed the Clinton administration to prioritize Wall Street over the general interest — ensuring Democratic assistance with what Jeff Faux rightfully calls The Global Class War of big business and allied elites against workers everywhere.

Hedge funds are representative of a new world of finance even more disconnected from regular people’s well-being than the traditional Wall Street firms. There’s no doubt that these funds and their managers have tremendous amounts of money to bandy about, but it is political folly — and a policy nightmare in waiting — for the leading forces in the Democratic Party to be cozying up to the hedge fund elite.