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December 17, 2011


Top: Mining trucks carry loads of oil-laden sand at the Albian Sands project in Ft. McMurray, Alberta, Canada, in August 2005. Photo: AP/Jeff McIntosh; Bottom:



Decision Deferred: President Obama did the right thing by putting off a decision on the controversial Keystone pipeline that will carry tar sands oil from Central Canada through the Central U.S. down to refineries in Louisiana. The Administration’s action requires a full environmental review – a move that puts off the pipeline decision until 2013, following the Presidential election. Credit to the thousands of environmentalists led by Bill McKibben willing to go to jail in DC to bring the issue directly to the White House. However, see update links above. The issue is unfolding as I write.

Back Door Attack: However, Republicans in the House have added a rider to the bill that would prevent a tax hike on the middle class. If the Senate includes the rider, it would require the President to make a “yes” or “no” decision on Keystone within 60 days. This politically motivated move will pressure Democrats, highly reluctant to raise taxes on the middle class, to support the bill with the Keystone rider. To turn up the heat, Keystone proponents claim that the pipeline will create hundreds of thousands of jobs. Ergo, if the Democrats and Obama scrap the plan, they are against jobs. Interesting that many of the same members of Congress at every turn opposed government investments to fix the nation’s deteriorating infrastructure that can provide jobs everywhere while making the nation more energy efficient and less dependent on environmentally devastating fossil fuel development.

Ecological destruction on a massive scale: Under the Keystone XL plan, pristine boreal forests in Canada will be clear-cut and strip-mined for tar sand. The habitats for millions caribou and other northern birds and mammals are being destroyed. To get the oil, tar sand is melted causing significant greenhouse gas emissions, then transported from Montana to the Gulf of Mexico. According to House member Ed Markey (D-MA), this oil will not reduce prices by adding to domestic supplies but would be sold by oil companies to foreign markets in order to boost their profits. In a letter to Secretary of State Clinton, Markey and other House Democrats said, “We do not believe that turning the United States into a middleman for exports of Canadian tar sands oil in order to increase the profits of a few oil companies is in the national interest of the United States, particularly given the project’s likely adverse environmental impacts, threats to water supplies for farmers, and potential impacts to Indian lands,”

For an excellent video with scenes of tar sands mining and refining as well as beautiful but threatened boreal forest go to ForestEthics. 

Processing of the sands -- major source of pollution and greenhouse emissions. Photo: NRDC

Boreal forests, the lungs of the earth, threatened by tar sands oil development. Photo by Garth Lenz

TAKE ACTION NOWEkos-Square urges you to take a minute and add your name to the Wilderness Society petition asking your Senators to say NO. It’s easy click here:


Students walk out of Professor's EC 10 Class at Harvard, Photo: Adam Ragusea/WBUR


On November 2nd nearly 70 students walked out of an introductory economics class (EC 10), a course taught by N. Gregory Mankiw, former Chairman of the Council of Economic Advisers under George W. Bush and regular New York Times columnist and author of the world’s best selling economics textbook, Principles of Economics.

 The letter to the professor states, “Today we are walking out of your class, Economics 10, in order to express our discontent with the bias inherent in this introductory economics class,” which “espouses a specific—and limited—view of economics that we believe which perpetuates problematic and inefficient systems of economic inequality in our society today.” The course is a prerequisite for social studies and economics majors.

 The students’ then joined an “Occupy” march to protest the prevailing corporate oriented economic theories which leave families and communities out in the cold. You can read the full text of the letter in the Harvard Political Review.  . And a video of the walkout here:

You can also see Professor Mankiw’s NY Times column in response.

For vintage Mankiw we give you the Professor’s explanation as to why janitors don’t deserve a living wage while Wall Street executives deserve to be multimillionaires:

“Under a standard set of assumptions, a competitive economy leads to an efficient allocation of resources…it is also a standard result that in a competitive equilibrium, the factors of production are paid the value of their marginal product. That is, each person’s income reflects the value of what he contributed to society’s production of goods and services. One might easily conclude that, under these idealized conditions, each person receives his just deserts.”[1] 

Wow. In my recollection it wasn’t the grammar school janitor that caused the economic collapse of 2008. According to Mankiw’s theory, the Wall Street guys that caused the crisis should give all of their earnings back to society.

As Ekos-Squared has pointed out in previous posts, classical economics has several failings: (1) fails to give any real economic value to the free services and resources offered by the biosphere (2) places it is emphasis on free market corporatism without looking at its growing failure to provide for human needs (3) hasn’t figured why the dominant global economies increasingly create systemic instability (i.e. vulnerability to collapse) rather than resilience (4) overly preoccupied with  exponential “economic growth” (GDP) rather than appropriate growth (5) doesn’t much care what happens at the local level — top down, trickle-down approach. To name a few.

We suggest that all students (and professors) be required to take the following courses: physics, chemistry, ecology, thermodynamics, complex systems and resilience theory, and climatology before discussing economics.

Weigh in on this one; comment below!!

New York City Food Pantry. When the food runs out, many are turned away.

Half of Americans now below poverty line: If mainstream economists such as Mankiw have a lock on economic wisdom, then why do half of Americans live below the poverty line or are struggling to go there? We’re not making this up. According to a Census Bureau report nearly 1 in 2 Americans are living either below the poverty level or just above it. The new figures are based not just on income but on living expenses including medical and commuting costs. According to the new report, 49.1 million Americans are below the poverty line, and another 97.3 million are considered low-income, which is usually defined as having income between 100% and 199% of the poverty level.[2]

[1] A quote excerpted from good article on Mankiw and the walkout by David Morris, Institute for Local Self Reliance. Mankiw gave this quote in his Presidential Address to the American Economics Association (AEA)

7 Comments leave one →
  1. December 19, 2011 9:37 pm

    The Proposed Keystone XL Pipeline to Move Canadian Oil to Texas:
    Much of this oil would be exported. It would add little to the supply of gasoline and diesel fuel in the U. S. and not reduce prices. It would be very profitable for the Big Oil Companies.
    Environmental effects:
    • Much fossil fuel would be required to produce the oil from the oil sands in northern Canada and to move it to the Texas coast. It would cause great atmospheric contamination.
    • It would promote the world wide use of fossil fuel.
    • There would be risk of contamination of the water supply in aquifers along the route of the pipeline.
    • It would slow the development of renewable sources of energy which would help the U.S. to become energy independent.
    • “It would kill more jobs than it would create.” Ref.
    • “And this pipeline will be essentially ‘game over’ for the climate.” Ref.

    There is excessive refinery capacity on the Texas coast and more refineries are being built in preparation to export this fuel. Many Republicans favor it so strongly that they are attaching it to important Bills which would help in the recovery of our economy. They receive large donations for reelection from Big Oil Companies.

    • Henry S. Cole, Ph.D. permalink*
      December 20, 2011 10:30 am

      Thanks for the comment. No matter the fossil fuel coal, oil, natural gas .. the story is much the same; big money occupies every seat at the Capital table. Despite this it’s a miracle that renewable energy is doing as well as it does. The fight goes on.

  2. Henry S. Cole, Ph.D. permalink*
    December 19, 2011 6:47 pm

    See more information on the trackback below; it’s an interesting summary of the political situation for Obama and Dems. The website is known as

    Quite interesting check it out.

  3. Debbie Tenenbaum permalink
    December 19, 2011 3:09 am

    I love your commentaries, Hank. Thanks.

  4. Henry S. Cole, Ph.D. permalink*
    December 18, 2011 10:39 am

    The Keystone story may not be over yet. Administration officials appear to be finding a way out, since the environmental review process is not complete. See Sunday’s NYT piece.


  1. Tax Bill Throws Obama into a Catch 22 Situation Over Keystone XL and Jobs | StigmaBot
  2. Tax Bill Throws Obama into a Catch 22 Situation Over Keystone XL and Jobs

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