Bury the Trans-Texas Corridor

By David Van Os, May 23, 2009
For all of you Texas patriots who have upraised your voices for the last three years against Slick Rick Perry's plans to sell off our public highway system to private interests so they can stuff their bloated pocketbooks with billions of dollars in predatory toll fees while devastating hundreds of thousands of acres of good Texas earth in massive land grabs - IT HAS COME DOWN TO THE NEXT FOUR DAYS.

The 2009 legislative session is nearing its end. The Texas Department of Transportation is facing legislative sunset this year. Various bills have passed one or the other of the two Texas legislative chambers, the Senate and the House, to reauthorize TXDOT's existence under different competing sets of values. Which will it be - democracy of the people, or despotism of the greedy?
In some of the pending versions of transportation legislation, the public will would finally be honored with the long-sought elimination of the Trans-Texas Corridor and the democratization of the Texas Transportation Commission. I want to take this opportunity to express special commendation for Rep. David Leibowitz, whose labors against the toll-building robber barons and the anti-democratic TXDOT bureaucrats are on the verge of success with the potential final enactment of his bills into law.

In other versions of transportation legislation, the use of private contracts to build and operate massive toll roads, particularly TTC-69 through the heart of East Texas, would be re-authorized. In one particularly ugly bit of backroom chicanery, a deal is already made to grant the building and operation of TTC-69 to a private company from Spain. We have been fighting the same spectre for years now, but as we know, the greedy don't give up easy.

It appears probable that the competing value systems will face off in House-Senate conference committee action on Tuesday, May 26. Long hours, days, and years of hard work for many thousands of grassroots Texans who have been fighting for democracy in Texas transportation planning may come down to making sure the legislators hear the voice of the people loudly and clearly over the next four days.

The TXDOT reauthorization bill is HB 300. The bad bills that the people have to defeat to nail the coffin shut on the Trans-Texas Corridor are SB 17 and SB 404. The latter bills would re-authorize CDAs (comprehensive development agreements); in other words, sell-out deals to put billions of dollars in toll fees into private pockets for operating toll roads that the people of Texas do not want.

If you want to do your part to make sure the people are finally rewarded with victory in this fight, CALL your Texas House Representative and your Texas Senator today through the Capitol switchboard at (512) 463-4630 between 8 a.m. and 5 p.m. Tell your Representative and your Senator, or their staffs, you are against SB 17 and SB 404 and anything else that allows comprehensive development agreements in highway construction. Tell them you expect them to GET RID of the Trans-Texas Corridor for good and to GET RID of private toll road development for good. Tell them you want a democratically elected Texas Transportation Commission.

We the People have been speaking for a long time. We want democracy, not corporate-governmental oligarchy. Now let's bear down. Two years ago some of the legislators who had pledged to support the people's will wavered at the finish line. This time we can't let them waver. Let them hear our voices in this moment of truth. NO private contracts for toll roads, NO Trans-Texas Corridor, NO comprehensive development agreements, and YES to a democratically elected Texas Transportation Commission.
Thank you for your attention.
Sincerely,
David Van Os

Are Wall Street speculators driving up gasoline prices?

By Kevin G. Hall - McClatchy Newspapers - May 22, 2009
WASHINGTON — Oil and gasoline prices are rising fast as Memorial Day weekend approaches, but not because supplies are tight or demand is high.

U.S. crude-oil inventories are at their highest levels in almost two decades, and demand has fallen to a 10-year low, but crude oil prices have climbed more than 70 percent since mid-January to a six-month high of $62.04 on Wednesday.

Meanwhile, although refiners are operating at less than 85 percent of capacity, which leaves them plenty of room to churn out more gasoline if demand rises during the summer driving season, the price of gasoline at the pump has climbed 28 cents a gallon from a month earlier to $2.33.

This time, Wall Street speculators — some of them recipients of billions of dollars in taxpayers' bailout money — may be to blame.

Big Wall Street banks such as Goldman Sachs & Co., Morgan Stanley and others are able to sidestep the regulations that limit investments in commodities such as oil, and they're investing on behalf of pension funds, endowments, hedge funds and other big institutional investors, in part as a hedge against rising inflation.

These investors now far outnumber big fuel consumers such as airlines and trucking companies, which try to protect themselves against price swings, and they're betting that the economy eventually will rebound, that the Obama administration's spending policies and Federal Reserve actions will trigger inflation — or both — and that oil prices will rise.

"They're buying because they think it will diversify their portfolio, and they think it will diversify their portfolio against inflation, and maybe they think the economy will turn around," said Michael Masters, a hedge-fund manager who testified before Congress last year about the consequences of what are called exchange-traded funds.

Oil contracts are traded mostly in U.S. dollars, and inflation would erode the value of oil earnings, stocks or any other asset denominated in U.S. currency. Many investors are pouring money into oil futures — contracts for future deliveries of oil at specified prices — in the belief that oil prices will rise as inflation erodes the dollar's value.

This turns oil futures contracts into a way for investors to hedge against inflation at the expense of American consumers, who have to pay more to fill their gas tanks as oil and gasoline prices rise.

Masters and other critics say this speculative flow of money into commodities markets is a self-fulfilling prophecy that's distorting the usual process by which buyers and sellers set prices and is driving up the prices of oil, gasoline, grains and other essentials.

"There is definitely an inflation premium at work here," said John Kilduff, a senior vice president of MF Global in New York, a brokerage house that helps large investors trade in energy markets.

In a report May 6, CNBC television senior energy correspondent Sharon Epperson said that traders told her that prices were disconnected from supply and demand.

"Nymex traders tell me they're seeing new money coming in from passive funds that are reallocating assets away from precious metals and into energy holdings. It's this money flow — rather than the fundamental supply-demand data — that's driving oil prices higher," she reported

.

Morgan Stanley didn't respond to requests for comment via e-mail and telephone.

"Goldman Sachs declines to comment for your story," spokesman Michael DuVally said.

In a report April 16 on last year's spike in natural gas prices, the Federal Energy Regulatory Commission concluded that similar investment flows drove up the price that consumers paid to heat their homes with natural gas.

"This increase in commodity prices occurred as large pools of capital flowed into various financial instruments that essentially turn commodities like natural gas into investment vehicles," the report says. "Ultimately, we believe that financial fundamentals . . . explains natural gas prices during the year."

During a visit to McClatchy's Washington Bureau, hedge-fund manager Masters also said that big institutional investors were sucking the air out of the fragile economic recovery, in part because their Wall Street partners were exempt from federal limits on how much they could bet on commodity prices.

"What they don't realize is because we don't have position limits, the money they put in is driving up the price" for oil and other commodities, he said.

Contracts for future deliveries of oil and other commodities are traded on the New York Mercantile Exchange, and the futures market for oil has position limits that restrict how much of the market big speculators can control.

However, big Wall Street banks are exempt from these restrictions, and there also are no such limits in derivatives markets. These vast unregulated markets involve private contracts between swaps dealers — usually big Wall Street banks — and large investors. These dark markets, also called over-the-counter markets, are thought to be 10 times larger than the futures market, and they have no position limits and no regulation.

"We were in essence operating with a blindfold on for those over-the-counter markets that we couldn't see," Michael Dunn, the acting chairman of the Commodity Futures Trading Commission, acknowledged last week during a news conference to announce proposed new regulation of derivatives markets.

A stream of financial deregulation under the Clinton administration, culminating in the Commodity Futures Modernization Act of 2000, led to a global race away from regulation.

"The Modernization Act specifically said we were not going to look at those; we weren't going to regulate them. Times have changed, and now we think it is time for us to look at them," Dunn said.

Does Dunn think that Wall Street is partly to blame for the current $27-a-barrel run-up in oil prices or for the 12-month run-up from $70 to last July's record $147, followed by the four-month collapse in prices to $56?

"Everybody has an opinion of what drove the market in the energy crisis. Do I think it was part of the problem? I do," he said. "Do I think it was all of the problem? No.

"I think monetary policies — a weak dollar — had an impact on it. I think speculation by the herd, people saying prices of fuel are going to go up and I want to get in on that" also played a part.

The International Swaps and Derivatives Association, which represents the big players in these markets, said in a statement to McClatchy that fundamentals, not speculation, were driving up prices.
o

"Oil prices are fundamentally driven by macroeconomic factors affecting supply and demand," the group said. "Energy derivatives are a key tool for helping companies manage the resulting fluctuations in prices."

Read more in McClatchydc

Good News Bad News in Reversal of Preemption - which Bush used to give Federal Law peremption over state law

By Faith Chatham - DFWRCC - May 23, 2009
Interstate banks, and their offshore hedge funds protected investors, utilized Federal law and Bush administration policies in the 1990s and 2000's to encroach into states such as Texas with had state laws inhibiting predatory lending policies, protective ursury laws and homestead protections allowing Texans not to lose their homes when bankrupted by unsecured debt. A return to applying Texas State Law would have been a welcome reprieve if Rick Perry were not still in office in Texas. Now, after two decades of Republican control of the Texas House and Senate, giving State Law the preemption over Federal Law, may result in less protections here than other states are reaping under the Obama administration. A review of Texas Law, code by oode, will be required to determine if Texans would benefit more from reversal of Bush era Federal Law and enforcement of Federal Law preemption over state law, or preemption of Texas Law over the Federal.

Obama Curtails Bush's Policy of 'Preemption'
It Let Federal Rules Override State Laws
By Philip Rucker - Washington Post Staff Writer - Friday, May 22, 2009

President Obama continued to reverse his predecessor's policies this week by undoing a controversial Bush administration rule known as "preemption" that used federal regulations to override state laws on the environment, health, public safety and other issues.

Obama, in a memorandum to federal agency heads issued late Wednesday, said his administration should undertake regulations preempting state laws in rare instances and "only with full consideration of the legitimate prerogatives of the states and with a sufficient legal basis for preemption."

The president ordered department heads to review all regulations issued in the past 10 years that are designed to preempt state law and determine whether they are justified under the new policy. If they cannot be justified, Obama said, his administration should consider amending the regulations.

Bush administration officials inserted preemptive language into dozens of federal regulations, in many cases shielding corporations from restrictive state laws. For instance, federal preemption provisions stopped California from enforcing a law limiting greenhouse gas emissions.

In the past ten years, the Texas Legislature voted to amend, repeal or change more of the Texas Transportation Code than had been written in the past 50 years. Most of the changes allowed privitazion of public highways and bridges, streamlined environmental impact assessments, private toll operator preferences over public transporation authorities, and streamlined eminent domain claims for land claims by private toll, stadium, pipeline and water companies.

"It's environmental law, it's drug law, it's mortgage law, it's a whole host of areas where the Bush administration was really aggressive about using regulatory action to clear state and local laws that businesses and corporations didn't like,"

said Doug Kendall, president of the Constitutional Accountability Center.

George W. Bush and Rick Perry used Texas as an incubator, where they frequently piloted corporate friendly, consumer detrimental policy before it debuted in the national political arena. Once George W. Bush was elected President, and Rick Perry advanced to Texas Governor, they welded their political clubs in unison. Now, Texans, who have hope that a change in the Federal Administration will overturn some of the more entrenched Bush era policies, view the overturn of Federal law pre emption as possibly being a two-edged sword. If corporate lobbyists were diverted from concentrating on changing state laws once they got repressive Federal policies enacted, there may be some bright spots for Texans with this new policy, which allow older policies to again become standard practice. However, with the Perry administration still in power, it is dubious that older, more consumer friendly policies which do not favor the largest donors and international banking/petro/drug kingpins will be dusted off and practiced in the Lone Star State.

The U.S. Chamber of Commerce warned that Obama's move could wreak havoc on businesses that would have to deal with different state laws, causing a flood of lawsuits.

"Removing federal preemption forces employers to navigate a confusing, often contradictory patchwork quilt of 50 sets of laws and regulations," said Lisa Rickard, president of the Chamber's Institute for Legal Reform.

The Obama administration is probably finding that thansforming "Change" into more than a mere political slogan is more difficult than they originally surmised. Although corporations are "forbidden" from making political donations, powerful PACS of corporate employees and individuals, frequently CEOs and stockholders with deep pockets, influence lawmakers and the Executive Branch on state and Federal levels. Lawyers, acting as lobbyists, cloaked under attorney-client privilege, present corporate friendly legislation to legislative counsels without having to report their contacts with Legislators. This is how much of the corporate/industry-friendly special interest legislation gets introduced. A nod or buzz from one legislator or aide to another and word passes among cliques of legislators who shared donors and friends during campaign battles moves the legislation in and out of committee, blocking others from hearing or debate, speeding enactment of protectionism and repeals of oversight regulation legislation.

The White House described the move as another step toward rescinding Bush administration policies and protecting the constitutional rights of states.

"

This memorandum brings clarity and orderliness back to this rule-making process and also ensures that preemption will be done only in cases where it's legally justifiable," said Kenneth Baer, a spokesman for the Office of Management and Budget.

Obama's memo comes nearly three months after the Supreme Court called into question Bush's preemption policy while issuing a major setback to pharmaceutical companies. In Wyeth v. Levine, the court ruled 6 to 3 in favor of a woman who had her arm amputated after an improper injection of an anti-nausea medication. The court said drugmakers could not rely on federal regulation to shield them from lawsuits brought under state consumer-protection laws.

Texas has some of the strongest anti-trust laws in any of the states. Weaker Federal policies and lack of enthusiasm for enforcement of Texas laws gave the energy sector and communication industries an almost free-run on Texas consumers for the past ten-years. In 2006, David Van Os ran for Texas Attorney general on a platform, promising to enforce Texas's Anti-trust laws. Re-elected, Gregg Abbott, has been less zealous in enforcing anti-trust legislation in Texas than some think David Van Os would have been, had he been elected Texas Attorney General. Van Os promised to utilize anti-trust statues to restrict oil and gas from gouging and price-fixing. The largest contingency of lobbyist in Austin last legislative session were employed by parties interested in the TXU acquisition. Legislation was passed tying the price consumers pay for residential electricity to the cost of natural gas, even if produced by less costly methods. This virtually took the benefit out of wind powered sources to the advantage of TXU, keeping electricity cost escalating higher in Texas than in neighboring states.

The American Association for Justice, which represents trial lawyers, cheered Obama's move, saying his memo "makes clear that the rule of law will once again prevail over the rule of politics."

Kendall, of the Constitutional Accountability Center, said that Obama "clearly understands the important role that state and local governments play in our constitutional system and has displayed a very different vision of our Constitution than President Bush displayed in his eight years."

In Texas, until special interest groups which have placed their people on the inside of government, in office and bureaus with industry oversight, are displaced, Obama's attempts to relax Bush era environment detrimental and predatory consumer practices by reviewing Bush's policy of Federal pre-emption will probably not give Texas as much relief as can be seen in other states.

Quotes in this article are from tne Washington Post