Opioid Epidemic Investigator Tells Congress: We Need a Marshall Plan
Jan. 21, 2018—Reporter Sam Quinones, author of the widely acclaimed book on the opioid epidemic Dreamland: The True Tale of America’s Opioid Epidemic, was the sole witness at a Senate hearing Jan. 9. In a short opening statement, Quinones was at pains to express his view that there is no short-term fix to this crisis, which he believes is the result of the destruction of community in the United States, and “economic affliction” caused by globalization and free trade.
He concluded his testimony by offering the Senators “two templates” from American history which he believed would address the problem. They were the Marshall Plan, and the space program. Both were long-term programs which brought the government and private sector together, and succeeded in uplifting the populations they addressed, he said. While the Marshall Plan of old was in Europe, today we could apply the approach of regions of “forgotten Americans.” As for the space program, that would give the country the opportunity to reinvest in our country, inspire people, and bridge the current polarization.
A valuable review of Quinones’ book can be found here.
Federal Reserve Preparing to Loosen Leverage Rules; FDIC Official Decries Move
Jan. 21, 2018—The Federal Reserve is preparing to loosen leverage rules for the major U.S. banks, according to a report in Bloomberg Jan. 19. The action, which would reduce the amount of capital the banks would need to hold to back up their investments, is currently being negotiated between the Fed and two regulatory agencies—the Office of the Comptroller of the Currency and the FDIC. Congress would not have to sign off on the plan.
Significant FDIC opposition has held up the implementation of this deregulation so far. One obstacle, FDIC chairman Martin Gruenberg, is expected to be removed soon, as his replacement is about to be approved by Congress. Gruenberg gave a speech last November warning of potential risks of financial blowout. A second one is FDIC vice-chair Thomas Hoenig, who wrote a letter Jan. 9 warning against removing safeguards against excessive risk. While Hoenig’s letter was addressed to Congress, which was considering a new deregulation bill, his opposition would equally extend to the Fed’s pending action.
Hoenig has previously argued cogently for reimplementation of Glass-Steagall banking separation, although he has weakened his approach more recently. Ironically, the Trump Campaign also advocated Glass-Steagall, a promise which now seems to be all but forgotten.
New Book to Expose Wall Street Collusion Leading to a New Crash
Jan. 21, 2018—Financial expert and former Wall Street insider Nomi Prins will soon release her sixth book, according to a Jan. 16th report in the blog Wall Street on Parade. The book will be entitled Collu$ion: How Central Bankers Rigged the World. Wall Street on Parade authors Pam and Russ Martens, who have read a pre-publication copy, report:
”In Collusion, Prins walks us through the critically-important events occurring during the 2007-2009 financial crash, many of which would have been relegated to the dust bin of history if not for this book. Prins makes the case that the U.S. is headed toward another epic financial crash as a result of the unchecked powers of the U.S. central bank (the Federal Reserve) and its global counterparts who are creating dangerous new asset bubbles in an effort to paper over the last ones.”
NASA Advisory Panel Raises Alarm on Safety of Private Space Flight
Jan. 21, 2018–In its annual report, released Jan. 11, the independent Aerospace Safety Advisory Panel (ASAP) evaluates the Loss of Crew (LOC) criteria set by NASA as compared to what the commercial companies are developing, and concludes that NASA’s requirement of a 1 in 270 risk for LOC will not be achieved by either SpaceX or Boeing for their crew vehicles. The panel has in the past identified specific design characteristics they believe increase the risk, and urge NASA not to lower the standards.
The panel members expressed concern about the Continuing Resolution, which keeps NASA’s budget flat, as the agency faces moving into testing of the Space Launch System rocket and Orion crew vehicle. It commends NASA for stretching out the schedule, rather than succumb to schedule pressure and “erode testing content.” (This is one way the safety of the Shuttle was degraded, by reducing testing).
The panel identified other safety threats, and raised concerns about the danger to crew from micro-meteoroids and orbital debris, which it says is a special concern for commercial crew vehicles. It does not think the commercial vehicles will meet NASA requirements to withstand orbital strikes.
Study Underway for Maglev between Baltimore and D.C.
Jan. 21, 2018—The State of Maryland is currently using a Federal grant to evaluate the erection of a magnetically levitated train line between Washington, D.C. and Baltimore, Maryland. The 40 miles corridor is among the most congested in the country. The maglev line would reduce the travel time to 15 minutes and serve as the first leg of a rail link onward to New York City, which would take only an additional 45 minutes.
The two-year study is expected to conclude in 2019. The proposal under consideration is by TNEM, The Northeast Maglev company. Both the Maryland Department of Transportation and the Federal Railways Administration are investigating possible routes. As for funding, TNEM has announced that the Japanese, who have been using this technology for decades, have offered $5 billion in investment.
Problem Solvers Caucus Endorses Capital Budgeting Option for Funding Infrastructure
Jan. 21, 2018—In an interview on CNBC-TV Jan. 19, former Pennsylvania Governor and leaders of the Building America’s Future group Ed Rendell announced that the Congressional Problem Solvers Caucus has endorsed his proposal for capital budgeting. Rendell has recently revived this approach, and he and his colleague Ray LaHood presented it to the Caucus in December.
The latest program issued by the Caucus, which is comprised of an equal number of Democrats and Republicans, contains the following paragraph on the subject:
“Congress should work with Office of Management and Budget (OMB) and the Congressional Budget Office (CBO) to consider making targeted reforms to budget scoring policy by applying capital budgeting principles to modify federal budget scoring policy for federal infrastructure. This may include designing and adopting a federal capital budget for infrastructure that is separate from the federal operating budget and is not subject to PAYGO or other restrictions more appropriate for an operating budget. Furthermore, Congress should reexamine and consider the use of dynamic scoring by CBO on certain infrastructure bills.”
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