A “Man-Made” Disaster

by lizard

Last year, in March, an earthquake and tsunami shook and flooded the Fukushima Daiichi nuclear plant, starting a chain reaction of events that still poses a serious threat to us (allegedly sentient) earth-bound organisms.

When I wondered if this was a 21st Century Chernobyl I wasn’t trying to be alarmist. There were explosions, talk of meltdowns and spent fuel rods, and very valid reasons for serious concern. The ensuing discussion was interesting, especially the comment that mocked the “hand wringing” in the US regarding nuclear power:

…the insane hand wringing being done by people in this country over nuclear power is driving me batshit crazy. NONE of our reactors are even remotely in the same situation as the ones in Japan and the odds of a 9.0 earthquake followed by a tsunami taking out one of our reactors is ludicrus.

The first thing I said in response to that comment was this:

one thing this country sucks at is regulating industry…

The implication being made with the first comment is that the “situation” was a direct result of the massive earthquake and subsequent tsunami. My comment implies regulatory corruption is a factor to consider with nuclear power in the states.

Well, according to recent reports that the Fukushima disaster was man-made (Bloomberg) it looks like I was right to be concerned about regulation:

The Fukushima nuclear disaster was the result of “man-made” failures before and after last year’s earthquake, according to a report from an independent parliamentary investigation.

The breakdowns involved regulators working with the plant operator Tokyo Electric Power Co. to avoid implementing safety measures as well as a government lacking commitment to protect the public, the Fukushima Nuclear Accident Independent Investigation Commission said in the report.

The March 11 accident, which set off a wave of reactor safety investigations around the world, “cannot be regarded as a natural disaster,” the commission’s chairman, Tokyo University professor emeritus Kiyoshi Kurokawa, wrote in the report released yesterday in Tokyo. It “could and should have been foreseen and prevented. And its effects could have been mitigated by a more effective human response.”

The report dealt the harshest critique yet to Tokyo Electric (9501) and the government. The findings couldn’t rule out the possibility that the magnitude-9 earthquake damaged the Fukushima Dai-Ichi No. 1 reactor and safety equipment. This is a departure from other reports that concluded the reactors withstood the earthquake, only to be disabled when the ensuing tsunami slammed into the plant.

*

Here at 4&20, there’s been some good recent discussion about local and state regulations, off Wall Street banks, and NIMBY zoning battles.

While I’ve been learning about the scaled down mechanisms of state and city operation, I continue to watch the national spectacle unfold, and it’s insane.

Barclays and the LIBOR scandal is just the tip of the iceberg, and the Trans Pacific Partnership is a corporate coup in the making.

Regarding LIBOR, one trail of corruption leads directly to the Obama Administration, and its name is Timothy Geithner:

“In testimony last week before the British Parliament, former Barclays chief executive Robert E. Diamond said the bank had repeatedly brought to the attention of U.S. regulators — as well as U.K. regulators — the problems that the bank was experiencing in the Libor market.

“He said the bank’s warnings to regulators that Libor was artificially low did not lead to action. Barclays’ regulator in the United States is the Federal Reserve Bank of New York, which was run at the time by current Treasury Secretary Timothy F. Geithner.”

Regarding the TPP, Mark Engler’s piece at truth-out says it blatantly with his lead-in:

With recent revelations about the Trans-Pacific Partnership (TPP) trade agreement, it is now safe to say that President Obama has surpassed George W. Bush as a champion of the flawed and offensive ideology of corporate globalization.

Yep. And we’ll get four more years of Obama’s corrosive neoliberalism because Mitt is a political amoeba, glomming on to whatever stock message the gullible right demands to hear.


  1. Dave Budge

    Just a couple of things about LIBOR that I think are worth pointing out. Just so you know.

    LIBOR is and always has been an “artificial” rate vis a vis market mechanism. Here’s how it works: Twelve select banks (as in – not the market) bid against each other like a U.S Treasury auction. Then, the average bid of the eight banks in the middle is taken as the LIBOR rate. As a market mechanism it has always failed because it excludes the effects weight of the size of the bids of the excluded banks. The reason that this doesn’t result in a rate more reflective of the market is rather technical and I won’t bore you with it but I think you can get a sense of the artificial nature of the beast.

    Secondly, here’s why the manipulation is a problem and how it affects who. The goal of the manipulation, as your citation shows, was to lower the rate. Now, and this is also hard to understand, but it did not have very much impact on bank profits directly. In fact, if the manipulation was intended to increase interest income they would have manipulated the rate higher, not lower, since banks make more money from interest income on LIBOR than its associate interest expense. The reason it was manipulated was so the banks could increase their liquidity when the credit markets were extremely tight as the world worked through the credit crises. I’m sure I can’t adequately explain this here. But leave it to say that the motivations for manipulation are complicated and a bit counter-intuitive. So who benefited and who got hurt?

    The banks benefited because they could meet regulatory thresholds more easily. People that borrowed using under variable LIBOR indexed loans benefited. This is a substantial group such as most people who have variable rate mortgages and lots of both small and large business borrowers. The groups that got hurt were large too of which the biggest groups were states, municipalities and corporate treasuries who invest in short term LIBOR related money market instruments in the management of short term excess cash reserves.

    Having said all that, the summary affects is that the manipulation largely helped individuals and hurt “corporations” (used in the collective sense including governments) on net while it artificially showed banks stronger in the face of stress than they actually were. So this issue is not “greed” per se but fairness. You got helped as a person but you got screwed as a taxpayer of stockholder.

    Yes, it’s still a big deal and banks deserve to be punished for manipulation. Better yet, is to get rid of the rate basing all together and find a rate mechanism that actually reflects supply/demand driven rates.

    But let me also remind you that the manipulation of rates by LIBOR participants is insignificant relative to the market manipulations that are performed every day by large central banks the most manipulative being the Federal Reserve. In the current environment, the Fed is screwing savers – who are mostly senior citizens – and rewarding big finance – who are protected to enable government to borrow. Makes the LIBOR mess look like a distraction.

    I’ll be gone all day and will gladly answer and question you have later tonight.

    • lizard19

      I realize the deceit and manipulation was to strengthen the perceived fiscal standing of some banks, not necessarily to directly monetarily benefit.

      one of my questions is how much exposure do the banks have to litigation? Baltimore seems to have kicked things off:

      The City of Baltimore and New Britain Firefighters’ Benefit Fund filed a consolidated and amended complaint against Citigroup Inc. (C), Credit Suisse AG (CSGN), Bank of America Corp. and more than a dozen other banks, alleging they artificially “suppressed” the London interbank offered rate.

      “This case arises from a global conspiracy to manipulate Libor — the reference point for determining interest rates for trillions of dollars in financial instruments worldwide — by a cadre of prominent financial institutions,” the fund said in the amended complaint filed in Manhattan federal court.

      and if the big banks get the crap sued out of them, are they going to go begging the Fed for more zero-interest liquidity? are we the taxpayers going to have to bail them out again because the big banks have corrupted the whole financial system?

  2. evdebs

    I opposed Clinton’s nomination in 1992 because of his backward criminal justice policy and his globalization agenda. I opposed CAFTA as well, and if memory serves, it passed, thanks to “Blue Dog” support, by only a single vote.

    What is remarkable about TPP is the little amount of press its gathered. I had Democracy Now on this week and think they may have been speaking about it, but I confess I was distracted with work and not paying attention.

    We’re stuck between supporting Obama again because of what Romney would do to further unleash Wall Street and the certainty that he would put even more extremist judges on the Supreme Court. Kagan, for all her faults, couldn’t possibly match the creeps that Mitt would dig out from under their Federalist Society rocks.

    Bader Ginsburg can’t have than many miles left on her. We’re already being crushed under the Gang of Five.

    What do we do now?

    • lizard19

      start planning for 2016?

      honestly, I don’t know. I remember when Obama first started picking his financial team, how incredibly disappointed I was. for me, that’s when hope and change officially died.

      I can’t imagine a scenario outside of Diebold voting machine rigging that puts Mitt in the White House, but I could be wrong about that. given what’s been coming out this week about Mitt’s deceit, I really don’t get how anyone could vote for that smug schmuck.

      I guess the right’s hatred of Obama is just that strong.

      • Big Johansson

        I feel your pain.

        Obama’s top ten. http://www.breitbart.com/Big-Government/2012/07/13/Top-Ten-Felons-In-Obamas%20Life

  3. here’s a little kiss for ya, liz:

    http://www.tnr.com/article/politics/magazine/104913/smoggy-bottom-hillary-clinton-bill-mckibben-environmental-mess?page=0,1




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