Dirt on Clean Coal, Gun Sales Boom, Rent Control Loophole

By Peter Ward     July 8, 2016

Clean Coal’s Dirty Start

The Kemper coal plant in De Kalb, Mississippi was supposed to be a model for the new clean coal. But the over-budget, behind-schedule operation may do more harm than good to clean coal’s reputation, writes Ian Urbina in a deeply reported story in the New York Times. Is ‘clean coal’ a viable alternative power source, or just an oxymoron?

Kemper was built with the intent of producing electricity from coal while emitting less pollution than traditional coal plants, all while still turning a profit. It was even expected to give a boost to the U.S. coal mining industry. The plan was to capture the carbon dioxide emitted by the plant, then compress and sell it to oil fields, where it would be used in a process called enhanced oil recovery.

The Obama administration put the Kemper coal plant at the center of its climate plan, in fact, and hoped it would set the standard for future power plants. It was also hailed as a way to bring jobs to Mississippi, the poorest state in the U.S.

However, the Kemper plant is currently more than two years behind schedule and more than $4 billion over its original budget of $2.4 billion. The plant and its owner Southern Company, a public utilities company, are being investigated by the Securities and Exchange Commission and customers are suing the company for fraud.

Federal energy officials and backers of the plant have defended the work done on the plant. Delays and cost overruns were inevitable with a project of this scale, they say, especially given unforeseen factors such as bad weather, labor shortages and design uncertainties.

To pull together a clearer picture of what went wrong, The New York Times reviewed thousands of pages of public records, internal documents and emails, and 200 hours of recorded conversations among colleagues at the plant, provided by a whistleblower.

The paper’s investigation concluded that the plant’s owners “drastically understated the project’s cost and timetable, and repeatedly tried to conceal problems as they emerged.” Southern Company, and regulators, were eager to qualify for hundreds of millions of dollars in federal subsidies for the plant, which outweighed the checks and balances meant to keep the project on track, according to the article.

Hayley Barbour, Southern’s chief lobbyist before he became governor of Mississippi, signed a law in 2008 that allows much of the cost of building new plants to be passed on to ratepayers before those plants are even built. This meant the fiscal burden of the over-budget power plant was handed off to the people of America’s poorest state.

Gun Sales Soar Following Shootings

As U.S. politicians debated the need for stricter gun controls following Orlando’s tragic mass shooting in June, a familiar pattern was playing out in the firearms industry – the American people were buying more guns.

An interactive article published by Bloomberg News on Thursday shows that the American public routinely rush out to buy more guns after a mass shooting. Although there is no comprehensive data on all firearms sales, the article relies on the number of background checks performed on buyers by the FBI’s National Instant Criminal Background Check System (NICS) at licensed gun shops.

The data shows that after Omar Mateen attacked the Pulse nightclub in Orlando on June 12, killing 49 people and injuring 53, the number of background checks performed in Florida reached an all-time monthly high.

One of the graphics in the article maps the worst mass shootings in the U.S. on a timeline showing the number of background checks. This shows clear spikes in checks every time there is a shooting, the biggest of which came after the Sandy Hook shooting in December 2012, when 20 children and six adults were killed.

The pattern is clear: a mass shooting occurs, politicians suggest tighter gun controls, and the people buy guns. Similar spikes in background checks have occurred after court decisions regarding guns and stricter laws have been passed, such as in Maryland in May 2013.

New York’s Rent Control Slipup

Rent stabilization is a major housing issue in New York, with fierce proponents and opponents. Given the speed with which gentrification happens in the city, market rates can rise astronomically in a matter of years. Rent stabilization-limits for certain apartments on how much a landlord can raise annual rent-is meant to protect lower income families from being forced out of their homes and neighborhoods. Landlords, predictably, tend to dislike it.

But rent stabilization laws may have been violated for certain apartments in the city in recent years, ProPublica reports. An error by state officials 20 years ago meant rent limits on tens of thousands of New York City apartments were improperly removed. Quite worryingly, the state is relying on landlords to fix the problem.

Under a program created by state law, apartment owners benefitting from the taxpayer subsidy known as J-51 must keep annual rent increases to levels set by the city. But in the past two decades, owners of around 50,000 apartments took the tax break while charging market rents.

In a January 1996 ruling, the Division of Housing and Community Renewal, under pressure from the real estate lobby, agreed to remove the J-51 apartments from rent regulation after certain conditions were met. New York’s highest court struck down that ruling 13 years later. But in the six years since that decision, nothing was done to turn the court ruling into reality, and landlords continued to raise rents as they pleased while also collecting the tax benefit.

In January 2016 Governor Andrew Cuomo announced he would fix the problem. “There will be zero tolerance for those who disregard the law and reap these benefits while denying tenants affordable housing they are obligated to provide,” Cuomo said.

But instead of notifying tenants of the issue, the state sent letters to landlords telling them they could continue to charge rent at the current level, but would have to comply with rent control rates in the future. That meant tenants would be saved from huge rent hikes in the future, but did nothing to remedy the overcharging which had occurred over the previous six years.

To help with the issue, ProPublica has also created a guide to figure out whether a building received the J-51 tax break.

An Unequal Recovery Explained

The top 1% in the U.S. are recovering from the 2008 recession at nearly twice the speed of the other 99%, according to research by Emmanuel Saez, an economics professor at the University of California-Berkeley.

Data from the Internal Revenue Service, analyzed by Saez, shows that incomes for families in the top 1% of earners grew by 7.7% in 2015, compared to just 3.9% for the bottom 99% of families. The good news for the 99% is that 3.9% growth was the highest in 17 years.

But Saez said that while the 1% continue to reclaim income lost during the recession, a recovery remains out of reach for the bottom 99%. “Six years after the end of the Great Recession, those families have recovered only about 60% of their income losses due to that severe economic downturn,” he said.

Economic inequality remains a huge issue in the U.S., and for voters. A recent Gallup survey of 1,530 adults revealed that more than 90% of voters said the economy was extremely important to them and 89% also said the same of employment. In June, President Barack Obama said the gap between the rich and the poor is “bigger now than it’s been just about any time since the 1920s.”

This Week’s Top Headlines

Fed held its fire over concern about weak jobs report and Brexit vote – Steven Mufson, Washington Post

Ex-Barclays Traders Get as Long as 6 1/2 Years in Libor Case – Suzie Ring, Bloomberg News

Wendy’s says hackers stole card data in attack disclosed in Jan – Abhijith Ganapavaram, Reuters

JP Morgan ‘to move 4,000 jobs out of UK’ following Brexit decision – Dan Cancian, International Business Times

L&G adds to pain for UK property fund investors – BBC

Dairy King: Danone To Acquire WhiteWave Foods In $10 Billion Milk Merger – Maggie McGrath, Forbes

DOT: Eight airlines awarded flights to Havana – Ben Mutzabaugh, USA Today

PepsiCo profit beats expectations on North American demand; stock rises – Melissa Fares, Sruthi Ramakrishnan, Reuters

The Dolan family buys back Newsday – Kelsey Sutton, Politico

ADP Private Payrolls Rise a More-than-Expected 172,000 in June – Lisa Beilfuss, Wall Street Journal

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