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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

Category: Environment
May 24, 2013 at 10:45 AM

Vote: Are you an ethical customer?

These are challenging days for customers who are paying attention. I am uncomfortable with the ubiquitous term “consumer,” as it denigrates our responsibilities as citizens and participants in the marketplace. Anyway, in April a garment factory in Bangladesh collapsed, killing more than 1,100 souls. Much of the clothes produced there were for Western retailers. Some reform efforts are being attempted, but not much is expected to change the wretched conditions in most sweat shops. It’s a vicious cycle of globalization, as we have become accustomed to cheaper clothes even as our garment jobs have disappeared. As late as the 1990s, about 50 percent of the apparel Americans bought were made domestically; now it’s about 2 percent. As with so many other sectors, “cheap” in garments has been a “tradeoff” for people losing decent jobs in sectors that went offshore.

This week, Apple was in the spotlight for its tax avoidance, although it’s hardly alone, especially among technology companies. CEO Tim Cook won over some senators, but, as Tim Fernholz writes in Quartz, the hearings showed just how pervasive the problem is in the United States as a post-industrial economy. As the biggest companies pay little in taxes, especially as opposed to the past, smaller firms pay more and the American commons — from schools to infrastructure — suffers from chronic under-investment. The tech outfits’ posture is particularly twisted considering how much they have benefited from taxpayer funded research. But citizens who patronize these firms “vote” to support their behavior with every purchase.

We’re hit with these kinds of stories nearly every day. Wal-Mart is its own category of problems for an ethical buyer; Amazon.com, like Wal-Mart, is killing local retailers. Every time we fill up the gas tank, we do our part to degrade the environment and add to the costs of the military need to keep the oil-supply lanes open. But will this knowledge really change our behavior when it comes time to buy?

Read on for the best links of the week and the haiku.

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Comments | More in Consumer spending, Environment

November 21, 2011 at 9:26 AM

At Washington Trade Conference, a push for new deals

“Washington’s Global Competitiveness in the 21st Century” is the theme of the Washington Trade Conference at the Westin in downtown Seattle today. The market fall seems far removed from this ballroom, for better or worse. The first panel included Lou Ventino of Microsoft, Richard Wynne of Boeing, Michael Collins of REI and Steve Appel of the Washington State Farm Bureau. One big focus is the Trans-Pacific Partnership regional trade agreement. Support is strong, even though the U.S. has bi-lateral trade agreements with many of the TPP members.

A few highlights so far: Rep. Jay Inslee talked of improving freight infrastructure, developing clean tech industries and strengthening education in opening remarks. On the panel above, we hear that 97 percent of Washington’s produce is sold overseas. Getting Russia in the TPP and WTO could provide Boeing with another big supplier with titanium, especially important for composite planes such as the 787. Russia has the 10th largest economy but is America’s 37th largest trading partner.

Reading between the lines: TPP is a manifestation of the failure of the Doha round and the WTO in general. Would it really mean more jobs for most of America? That’s a different conversation. This is a pro-trade crowd. Right now a Canadian minister is cautioning against “protectionist” measures such as buy American policies. He’s also pushing the tar sands pipeline.

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Comments | More in Debt ceiling debate, Environment, Housing, Trade

November 14, 2011 at 9:40 AM

The pipeline, Canada and the energy future

The United States’ decision to delay the Keystone Pipeline, which would have brought Canadian oil to U.S. refineries, is making us few friends in the north. The Globe and Mail reported on how Canada’s energy industry is now in an urgent hunt to get its product to Asia. And Prime Minister Stephen Harper says the delay shows why Canada needs to diversity its trade beyond the U.S.

President Obama and Harper met privately during the weekend’s APEC summit in Hawaii:

Strains in the Canada-U.S. relationship and efforts to mend fences were at the top of the agenda as Mr. Harper and Mr. Obama met. They talked about a pending Canada-U.S. trade and security pact as well as the consequences of the State Department’s decision to put off until 2013 approval of the $7-billion Keystone KL pipeline that would carry oil sands crude to refineries in Texas.

Mr. Harper played down that and other setbacks, saying politics is temporarily clouding what’s best for the two economies. “This is simply the political season in the United States, and decisions are being made for domestic political reasons,” he told reporters.

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Comments | More in Canadian economy, Energy, Environment

April 8, 2011 at 10:00 AM

Clean energy: The next big cluster for Seattle. Plus, Howard bares his soul, no foam

Whether the government shuts down or not, a major event will happen in D.C. on Monday. The Brookings Institution will roll out its “metropolitan business planning” concept for three pilot areas: Northeast Ohio, the Twin Cities and Seattle. According to Brookings’ Mark Muro, “metro business planning is all about local regions taking the lead in deciding how they want to grow, and what investments they need to make it happen. In short, the plans reflect a new era of more assertive ‘bottom up’ economic development practice.”

The Prosperity Partnership, the region’s coalition of 350 business, government and labor groups, has taken the lead here. The “Puget Sound Prospectus” focuses on building the next major business cluster in clean technology and energy efficiency. The energy efficiency market alone is projected to be worth $700 billion by 2030 and will be a major export market (China is already trying to corner this lucrative niche). It proposes a Building Energy Efficiency and Testing Integration Center where entrepreneurs can test, evaluate and integrate promising products and services before bringing them to market.

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Comments | More in Energy, Entrepreneurship, Environment, Starbucks

June 18, 2010 at 10:00 AM

America and big oil: We wish we knew how to quit you

On Tuesday, President Obama told the nation, “the tragedy unfolding on our coast is the most painful and powerful reminder yet that the time to embrace a clean energy future is now. Now is the moment for this generation to embark on a national mission to unleash America’s innovation and seize control of our own destiny.” Today he’s in Columbus touting federal stimulus money going to…a road project.

Last year alone, the stim put more than $100 billion into highways and the auto industry. This as transit systems around the nation were suffering and cutting service, Amtrak remained a hostage to politics, and high-speed rail continued to be a dream to study — even as our competitors already have it and are building more. It’s been shown that road projects don’t ease unemployment. It’s not even true that “roads pay for themselves,” even without factoring in the unfunded externalities such as the cost of sprawl, pollution and environmental damage.

Most of all, the massive new highway projects planned around the country continue our dependence on fossil fuels — with major changes in ways to power most cars years away if ever — and deprive Americans of transportation choices.

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Comments | More in Environment, Sustainability, Transportation, Urban issues

June 1, 2010 at 9:50 AM

Top kill nails BP shares, if not the gusher in the Gulf

You know I’m reluctant, outside of a major shock, to ascribe stock movements to a single event — too many individual decisions are being made on information and passions we may or may not be party to. So today it’s easy to blame the failure of the so-called top kill operation for the sell-off in BP shares.

Maybe. Who knows? The more information that comes out, especially thanks to the investigative work of the Wall Street Journal and New York Times, the worse BP comes off. The greater its potential liability grows. Offsetting that is the huge political power BP and the other oil giants have in Washington. If they can’t capture this worst oil leak ever, they certainly have captured regulators and politicians.

The stock should be falling because BP, with an abysmal environmental and safety record, has been shown to also be incompetent, with the gusher a running sore reminder for months/years to come. Because in a more balanced world the environmental and safety claims would empty BP’s treasury. Because, along with the shares of the other majors, BP is caught in the vortex of peak oil, where the easy and cheap days are rapidly diminishing.

But the reason is as likely that the shadow boyz shorting BP for profit. And the danger of a double-dip recession causing oil to fall, hence hurting profit growth, and BP is the ugly duckling, already. If that fear abates, our hunger for oil will restart the gusher of green.

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Comments | More in BP Gulf spill oilpocalypse, Energy, Environment

May 27, 2010 at 10:00 AM

BP: Not ‘Beyond Petroleum’ but just beyond peak; Market cap blues

The Gulf oil spill is now larger than the Exxon Vadez disaster, becoming the worst spill in U.S. history. No doubt to keep its lawyers happy, BP has been consistently under-reporting the extent of the leak.

The calamity bears striking parallels with the financial collapse: the spawn of an era of “free market” ideology that weakened regulation and encouraged self-policing by industry; “innovations,” in this case very deep-water drilling technologies whose risks most people only now realize; cozy relationships and conflicts of interest between regulators and regulated; members of Congress owned by the industry; the Bush administration’s dominant oil men vs. the Clinton administration’s dominant investment bankers, and a highly consolidated industry. Oh, and the playerz will likely get off easy, just as has happened from the financial collapse.

There’s one more parallel: Our appetites. For all its blunders, greed and abysmal safety and environment record, BP isn’t solely to blame. That’s akin blaming illegal aliens for being in Arizona. They are there and elsewhere because of our insatiable appetite for cheap labor. The financial mess: the “American dream and endless, debt-based consumption. And how many of those angry with BP will be willing to give up their long, single-occupancy auto commute.

This is what peak oil looks like: Not merely higher costs to find and refine the largely inferior petroleum remaining, nor the national security implications of the worldwide chase for remaining oil supplies. It means riskier and riskier means of production. Welcome to the future. What author James Howard Kunstler calls the “era of happy motoring” is over.

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Comments | More in Energy, Environment, Microsoft

April 22, 2010 at 10:15 AM

Earth Day economics — reality gets bagged; Mr. Obama goes to Wall Street

Earth Day at 40 is rather pitiful. In 1970, President Nixon and Congress responded to the growing environmental movement by passing numerous laws and energizing the EPA, efforts to clean up the air and water from which we still benefit. Somehow the economy kept growing. Today, even though the environmental challenges have become more serious, including climate change, water shortages and overpopulation in many areas, the movement itself is marginalized.

Earth Day is a great marketing moment for companies, however green they actually are. Or we can read about “green” technology and industries, no matter how many fossil fuel inputs they require. But the heavy lifting to deal with climate change, which would require a movement away from an economy so dependent on emitting fossil fuels, is too much.

The popular Freakonomics is among the so-called climate change skeptics, despite the overwhelming consensus of climate scientists. The energy industry has spent billions of dollars on misinformation campaigns. The cost of action on climate change is prominently autopsied, while the cost of doing nothing and the benefit from action get short shrift. The status quo is powerful and most Americans probably can’t imagine different ways of living. Internationally, developing nations want their shot at creating greenhouse gases.

Today might be a good one to take stock of the near-death experience we had two years ago with the many chickens of unsustainability coming home to roost, from high oil prices and and the leading edge of global peak oil, to Ponzi scheme sprawl and an economy increasingly based on swindles and casino capitalism. The many unsustainable aspects of our highly complex society won’t go away. They’ve just taken a breather during the Great Recession. Sadly, we’ll soon get more painful object lessons.

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Comments | More in Banking, Environment

March 30, 2010 at 10:10 AM

The unbearable lightness of explaining daily market moves

Who knows what moves the Dow? In the instant news environment, causes are assigned that may or may not be so. When the Dow was up earlier this morning it was supposedly because of a “stable” report on housing prices and improved consumer sentiment. When the market wobbled and fell back, it was “despite” this data.

The market is anything but rational. And considering it’s based on millions of decisions by a universe of actors with varying degrees of information, it’s often difficult to know what influences the market in real time. There are exceptions obviously, such as when the Fed acts, a big merger happens or war begins, etc. But usually, market timing is for chumps.

So today? Traders could as easily be concerned that oil prices are rising or the fallout from greater economic tension between Washington or Beijing. Or second-quarter portfolio rebalancing continues. Or not as much hot money is available as the Euro is on a better footing. The fundamentals remain iffy: high unemployment, a troubled banking sector, a Fed weighed down with toxic “assets,” a slow recovery, continued high levels of leverage. Stay tuned.

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Comments | More in Environment, Stock market