Richard Eskow

13 Questions: About Greece, Europe, Austerity – and Us

Every day brings more headlines in the European debt drama: “Greece elects anti-austerity government.” “Greek Finance Minister says he won’t negotiate with the ‘Troika.’” “Anti-austerity movements gain ground across Europe.” What’s behind these stories? What does the future hold? What, if anything, are the implications for the United States?

Capital & Main Takes On Inequality

California news site Capital & Main launches month-long series on “how economic inequality is transforming California, and what can be done to rebuild our vanishing middle class.”

Greece v. Europe

Europe squeezes Greece. NYT:“The central bank decided that it would no longer accept Greek government bonds as collateral for loans, saying that it was not confident the country could meet its bailout requirements. The move raises the stakes for Greece, indicating that the European Central Bank, at least, is not prepared to bend its rules to accommodate the country’s newly elected government.”

Greece doesn’t budge. Bloomberg:“The government ‘remains unwavering in the goals of its social salvation program, approved by the vote of the Greek people,’ according to a Finance Ministry statement issued overnight.”

House GOP v. Senate GOP

Party split over immigration and funding Homeland Security. Politico:“What has caused the most consternation among top Republicans is a palpable fear that their party could incur a political backlash if the impasse causes a shutdown of an agency so essential to national security if no deal is reached before the Feb. 27 deadline … [But a]nything less than a full-fledged battle would spark a revolt from the right.”

“Democrats feel they have political leverage and have shown no sign of backing down,”reports The Hill.

Can Republicans even agree on a budget? WSJ:“Rep. Tom Price (R., Ga.), who heads the House Budget Committee, has promisedto offer a proposal that balances the budget in 10 years, which would require much deeper spending cuts than what many Democrats—and possibly those Republican senators who face re-election next year—will agree to…”

Trio of Republicans propose actual replacement for Obamacare. NYT:“[The bill] would halt the expansion of Medicaid and scale back subsidies for middle-income people to buy private insurance … [It would] reduce federal regulation of insurance policies [and] no longer require insurance policies to include coverage for maternity care … Their plan includes a potentially explosive proposal: Workers would have to pay federal income tax on the value of employer-provided health benefits that exceed certain annual thresholds — $12,000 for individuals and $30,000 for families.”

Nothing new from Jeb. W. Post’s Jim Tankersley:“…Jeb Bush’s speech on Wednesday before the Detroit Economic Club … was the highest-profile example to date of a Republican presidential hopeful embracing economic inequality and middle-class stagnation as problems that define America. What it was not — at least on its face — was a break with orthodox conservative thinking about the economy.”

Conservatives In States Target Workers

IL Gov. Bruce Rauner aims to weaken labor. NYT:“[Gov. Rauner] said on Wednesday that the state should ban some political contributions by public employee unions and allow local ‘right to work’ laws … reporters tried repeatedly, and unsuccessfully, to get the longtime Assembly speaker, Michael J. Madigan, to voice a firm opinion about the governor’s suggestions on right-to-work laws.”

TN legislature rebuffs GOP governor who wanted to expand Medicaid. The Hill:“[Gov. Bill] Haslam, a Republican, failed to garner enough support among members of his own party. Only three of the 10 Republicans on the [Senate] Health panel voted for the plan; the final vote was 7 to 4 against expansion.”

By CAP Action War Room

Appalachian Coal Communities Need Investment. Here’s a New Idea For How To Fund It.

Despite the fact that many conservatives like to argue a war on coal has been waged through clean air rules, the coal industry has been in decline for decades. In fact, several factors like mechanization, resource depletion, and competition from other energy industries — none of which include EPA rules — have contributed to the decline in Appalachian coal.

But no matter the reason, these communities that have helped power America for decades need and deserve investment. Today, the Center for American Progress issued a proposal aimed at revitalizing Appalachian coal communities. The report outlines how the federal coal-leasing program artificially props up the Western coal industry at the expense of Appalachian coal and recommends actions congress can take to correct this distortion.

The problem begins with a federal program for leasing coal on publicly owned lands which fails to ensure that mining companies pay royalties on the true market price of the coal that they extract. Because the federal coal program is fundamentally noncompetitive, the Department of the Interior is providing billions of dollars of de facto subsidies to western coal and artificially driving down prices. The distortion is particularly extreme in the Powder River Basin in Montana and Wyoming where coal sells for less than one-third the price of Appalachian coal. This price gives coal from the region a near monopoly on the U.S. coal market, according to some analysts.

This unfair system exacerbates the challenges faced by coal communities across Pennsylvania, Ohio, Kentucky and West Virginia. Here are just a few examples of the barriers facing Appalachian coal communities:

• The number of coal-mining jobs in the region fell from 122,000 in 1985 to less than 58,000 in 2012.
• Between 2011 and 2014, Kentucky alone lost 6,000 coal jobs—close to half of its coal employment.
• West Virginia’s mining wages fell between 2012 and 2013 at the same time that the state lost 1,830 mining jobs.
• In addition to a decrease in coal jobs, Pennsylvania faces a $1.9 billion deficit.

By ensuring that coal companies mining on federal lands pay their fair share, the federal government could generate millions of dollars for taxpayers that could be used to reinvigorate Appalachian communities that have been hurt by this unfair system. CAP offers two policy proposals that could correct this distortion and help Appalachia get back on its feet:

• Option 1: Increase the long-stagnant royalty rate, minimum bid price and rental rate for federal coal sales. These standards have not changed in decades, and the royalty rate for federal coal remains out of line with royalty rates for other publicly owned resources, such as oil and gas, on the Outer Continental Shelf.
• Option 2: Assess royalties based on the true market value of federal coal. Currently, the government assesses royalties at the first point of sale, which undervalues the coal by not taking into account the final price paid by coal consumers like coal-fired power plants. This proposal would ensure royalty payments align with the true market value of coal.

BOTTOM LINE: Appalachian coal communities are struggling in part because of an unfair and outdated federal policy that benefits the Western coal industry. Congress needs to act to fix this ineffective coal-leasing program and help Appalachia adjust to the changing energy economy.