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The Sane Case for Auditing the Fed

The Federal Reserve, which was just caught paying footsie with Goldman Sachs, is as shadowy as it is powerful. So why can’t Congress bring itself to actually audit the damn thing?

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Every Local Pol Is Running Against Obama

Just because you’re a small-time local politician doesn’t mean you can’t hit the President in your ads.

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Bill Clinton’s Arkansas Obsession

The former president will headline four home-state events next week. Think keeping a little blue in this deep-red state matters to him just a little?

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Anti-Gay Marriage Group’s Big Target

Sen. Rob Portman is a rising star in the GOP. But since he’s switched his stance on gay marriage, a group of social conservatives wants to take him down.

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Secret Service Chief Shown the Door

The Obama team had full confidence in Julia Pierson—until it didn’t. How the mounting scandals, from the White House intruder to the armed felon in Obama’s elevator, took her down.

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Here are 4 problems that GMO labeling won’t solve

This election season, there are initiatives on the ballot in Colorado and Oregon to label foods made with the help of genetic engineering, and there are legislative efforts to do the same in dozens of other states. I like the idea of GMO labeling, though for unorthodox reasons. But I do mourn all of the money, more money, effort, and political bandwidth that this issue is sponging up. Most people I know who would like to label GMOs aren’t fixated on the biotechnology. The things they really care about are the amounts of pesticides we’re spraying, or the role of agribusiness in American farming, or some other larger issue that’s not limited to genetic engineering. The problem is that labeling GMOs is an ineffectual way of getting at most of these problems, and could make some of them worse. Issue 1: Too much technology in my food Labeling would make it easier for people to opt out of buying GMOs (remember, you can already do that by buying organic), but we’d still be eating all sorts of newfangled stuff. All of the debate over GMOs has led seed corporations to turn back to the older technology of mutagenesis — creating new varieties by altering seeds with radiation or mutagenic chemicals — which is more likely to cause unintended effects than genetic engineering. And that’s just the handiest example. There are lots of other technological innovations going into food. If you’d like more testing, or a more precautionary attitude, a direct and holistic approach would work better. For instance, we could expand the FDA and have it do the testing — rather than letting businesses run their own tests. Focusing exclusively on GE gives riskier technologies a pass. Issue 2: Pesticides Herbicide-resistant GMO seeds are responsible for a massive increase in the use of the herbicide glyphosate — and other herbicides may follow suit. GMO plants engineered to ward off insects, however, have had the opposite effect: They’ve led to a big reduction in insecticides sprayed. Now some farmers are spraying more again because corn worms have evolved resistance to the GMOs, but we are still way below the insecticide use of the bad-old days before genetic engineering. If we really want to do something about pesticides, a better approach might be to tax them depending on their toxicity and potential for environmental damage. We could use that money to push good integrated pest management systems. And we could help farmers set up positive incentives, or self-policing organizations, so that they’re not all racing to use up the cheapest chemical before it goes obsolete. Issue 3: Corporate control A lot of people who vote for GMO labels will really be trying to vote against Big Ag. It won’t work. Sure, prices will go up a little bit, as agribusiness revamps to create separate supply chains, but they won’t go up as high as the prices the small Jeffersonian farmer needs to charge to stay competitive — not even close. Even if we completely rejected GMOs, the agribusiness conglomerates would remain intact. And agriculture isn’t the biggest problem out there — the oil industry, for example, is much more consolidated. Exxon is 10 times bigger than Monsanto. If corporate consolidation is the problem, a solution might be beefing up our anti-trust rules. Issue 4: Patents You can patent GMOs. You can also patent plant varieties developed through traditional breeding. You can also patent rectangles with rounded corners, as Apple has done. Clearly the patent law is deeply in need of reform. But refusing to buy GMOs will do about as much to achieve that goal as refusing to buy iPhones. * * * I just worry that we are being suckered. I don’t buy the idea that if we throw lots of information — in the form of labels — on our products, we’ll be able to shop our way out of our problems. Rather than banking on this tenuous market solution, we could be addressing these issues directly.Filed under: Article, Business & Technology, Food, Politics

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Politico: Obama’s Assassination Would Help Reform the Secret Service

Politico Magazine, a glossy version of Politico, seeks to deliver “really big takes on big subjects holding leaders in Washington and beyond accountable.” Their latest really big take: President Obama’s assassination might be the only way to reform the incompetent U.S. Secret Service.Read more…

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Yoga could be an answer to climate change, says India’s prime minister

It seemed like a bad sign that India’s new prime minister, Narendra Modi, skipped the U.N. Climate Summit last week. What with India being the world’s second most populous country, the fourth-largest greenhouse gas emitter after China, the U.S., and the European Union, and a fast-growing economy, it would be worrying if its government were more concerned about short-term economic growth than a safe and stable climate, right? Plus, maybe you were a little unsure about Modi’s humanitarian impulses. He does hail from the BJP, the Hindu nationalist party, and he was chief minister of Gujarat province when, in 2002, anti-Muslim riots there killed 1,000 people. That incident led to him being banned from entering the U.S. for a decade. Narendra ModiWell, you can rest easy, because Modi spoke to the U.N. General Assembly on Saturday, and he revealed a brilliant plan for combating climate change. The only strange thing is that he didn’t want to come to the Climate Summit to share it. We can achieve the same level of development, prosperity and well-being without necessarily going down the path of reckless consumption. It doesn’t mean that economies will suffer; it will mean that our economies will take on a different character. For us in India, respect for nature is an integral part of spiritualism. We treat nature’s bounties as sacred. Yoga is an invaluable gift of our ancient tradition. Yoga embodies unity of mind and body; thought and action; restraint and fulfillment; harmony between man and nature; a holistic approach to health and well-being. It is not about exercise but to discover the sense of oneness with yourself, the world and the nature. By changing our lifestyle and creating consciousness, it can help us deal with climate change. Let us work towards adopting an International Yoga Day. Whether you’re looking for unity of mind and body or just worried about how greenhouse gas emissions from industrial activities are warming the planet, Prime Minister Modi has got an answer for you. Unfortunately, the rest of his comments on climate change were less encouraging. Like many of the heads of state from developing countries who spoke at the U.N. Climate Summit last Monday, Modi emphasized that his citizens have material needs that cannot be ignored. He placed poverty alleviation above other possible development goals like sustainability, without acknowledging that climate change can also exacerbate poverty: When we think of the scale of want in the world — 2.5 billion people without access to basic sanitation; 1.3 billion people without access to electricity; or 1.1 billion people without access to drinking water — we need a more comprehensive and concerted direct international action. In India, the most important aspects of my development agenda are precisely to focus on these issues. The eradication of poverty must remain at the core of the development agenda and command our fullest attention. Those of us who live in First World luxury cannot begrudge anyone the desire to access electricity. But, of course, 1.3 billion new electricity consumers, 400 million of them in India, could mean a lot more emissions if that power is coming from dirty sources. Modi did not discuss limiting India’s emissions. Last week, when his environment minister was asked about emission cuts, the minster said, “What cuts?” Again, this is understandable: The U.S. and Europe were under no such obligation when they industrialized, and their aggregate historical emissions still far outstrip India’s. The U.S.’s cumulative emissions are nine times that of India’s, and most our energy portfolio is still dirty. But escalating emissions will mean more extreme weather and sea-level rise for everyone, including India. That, in turn, will mean disasters resulting in failed crops, property damage, displacement, and death for some of India’s poorest citizens. Modi did briefly nod toward reducing emissions through energy efficiency, saying, “We need to change our lifestyles. Energy not consumed is the cleanest energy.” Modi is also making a big push to ramp up India’s solar energy capacity. So, much like Modi’s comments on yoga, the future of India’s energy and climate policy is inscrutable for now. Modi’s cooperation, though, will be essential to reaching a climate accord at U.N. negotiations in Paris next year. Hopefully he will come up with some other ideas by then, just in case the yoga approach to climate mitigation doesn’t pan out.Filed under: Climate & Energy, Living, Politics

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New GOP Video Is So Dumb the Words Don’t Even Make Sense

Voting is tricky—how are you supposed to know who to vote for? The College Republican National Committee is tapping into this anxiety with an insulting new “parody” campaign ad that imagines the different candidates as dresses (?) for women to wear.Read more…

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The First Political Sex Scandal Casualty

In a new book on the 1987 episode that wrecked Gary Hart’s presidential chances, Matt Bai argues that it marks the moment when political reporting went tabloid.

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Eva: The Democrats’ Secret Power Player

From working behind the scenes in the midterms to making a new farm labor documentary, actress Eva Longoria has emerged as a force to be reckoned with in liberal politics.

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The Democrats’ Secret Power Player

From working behind the scenes in the midterms to making a new farm labor documentary, actress Eva Longoria has emerged as a force to be reckoned with in liberal politics.

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Peter Thiel’s Radical Political Vision

The right-leaning tech billionaire offers a look into how Silicon Valley could transform the way we think about politics.

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The People Vs. the Bank of Walmart

The giant retailer is realizing its dream of getting into the banking business, which should terrify populists of all stripes.

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The Independents’ Kansas Prairie Fire

Pat Roberts and Greg Orman bring in the heavy artillery in what has suddenly become America’s hottest—and most heated—Senate race.

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The Fox News Apology Tour

Four apologies in one week over at Fox News! But it’s interesting to observe what they are and aren’t sorry about.

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Here’s one idea for taxing the rich and making housing more affordable

New York’s state capitol in Albany is not known for producing a lot of good ideas. As the Brennan Center for Justice at New York University puts it, “The New York State legislature is nationally notorious for its dysfunction and subservience to special interests.” And yet a creative response to New York City’s astronomical cost of living has just emerged from the cesspool. State Sen. Brad Hoylman (D), who represents part of Manhattan, has announced his intention to introduce a bill that would place a property tax surcharge on the most luxurious homes in New York City owned by nonresidents. (New York City requires the state’s approval to raise taxes.) Modeled on a proposal issued last week by the left-leaning Fiscal Policy Institute, it would apply to properties valued at $5 million or more, adding a tax of 0.5 percent for the first $1 million in value over $5 million, and gradually rising until the rate tops out at 4 percent for the value over $25 million. FPI estimates $665 million could be generated from 1,556 such coops and condos owned by nonresidents. (People’s primary residences would not be affected. Primary residence is presumably determined by where you file and pay your income taxes.) New York City Councilmember Corey Johnson (D) will introduce a companion resolution to demonstrate the city’s support, and Mayor Bill de Blasio (D) said he is considering the proposal. This kind of “pied-à-terre tax” would address a very real problem, and a major flaw in the pro-development arguments of density-celebrating urbanists. When dense cities with surging populations face rising housing prices, environmentalist neoliberal sellouts like me and my friend Matt Yglesias argue that we should let more people squeeze into relatively green, compact neighborhoods — and lower housing prices — by loosening zoning regulations to allow more development. And, in principle, this makes sense. But a problem arises when a significant number of homes are bought by rich out-of-towners looking for a place to stay on occasion, an investment, or a hedge against an unstable currency, economy, or political climate back home. Last year, The Washington Post reports, foreign buyers bought more than $90 billion worth of American homes. Real estate, the Post explained, is “an asset class denominated in U.S. dollars, safe from confiscation and, when necessary, bought anonymously to hide wealth from governments or creditors or ex-partners.” The problem is especially acute in Manhattan. The median apartment in Manhattan currently goes for almost a million dollars, and the average apartment fetches over $1.7 million. It is now spreading beyond Manhattan to the outer boroughs. In May, the largely working-class borough of Queens saw a record-setting $3.35 million apartment sale to a Colombian buyer. This phenomenon goes far beyond New York to cities in the other corners of the country, from Miami to L.A. and San Francisco. As The New York Times recently reported, “Brokers and analysts say 20 to 40 percent of $1 million-plus homes sold on the Eastside — a collective term for eastern suburbs of Seattle — were purchased by Chinese buyers.” Nationally, the Times noted, the median purchase price for Chinese buyers is $523,148, almost twice the U.S. average, and three-quarters of their purchases are in cash. Nor is it unique to the U.S. “Foreign buyers dominate London’s luxury housing market,” the BBC reports. Housing prices in London are up 20 percent just this year, with the average one-bedroom apartment renting for about $2,000 per month. The result: Growing numbers of Londoners are resorting to living in houseboats, causing congestion on the city’s canals. In Sydney and Melbourne, Australia, foreign buyers accounted for 39 percent of new home purchases in 2012-2013. From mid-2013 to 2014, house prices have risen 15.4 percent in Sydney and 9.2 percent in Melbourne. UBS, a global financial services firm, says the “sharp” increase in foreign buyers is “quite material” to the rising prices. The logic of letting the free market balance supply and demand to fix housing prices depends on the demand side being composed of people who actually live in the city. When it is, prices are limited in part by how much money people there make. But when rich people who don’t live there buy up properties, prices can be totally out of sync with the wages of residents, making the cost of living unaffordable. As the San Francisco Business Times reported last year, “With a median home price of $706,300 in San Francisco, someone earning the median income of $74,922 makes 48 percent less money than they need to afford a median-priced home. For the median home price to match the median income, workers would have to bring in a median of about $111,000.” There are other reasons for housing unaffordability in San Francisco, like enormous income inequality, the influx of highly paid tech company workers in Silicon Valley who live in San Francisco and reverse-commute to suburbia, and the large number of homes being rented nightly to tourists instead of monthly for housing. But the skyrocketing interest from foreign investors is one factor. This can drive the prices for homes far beyond the reach of middle-class families. Thanks to an influx of wealthy foreign investors, Vancouver has the highest housing prices in all of North America. As James Surowiecki of The New Yorker recently observed, “Nothing about its economy explains why — in a city where the median income is only around seventy grand — single-family houses now sell for close to a million dollars apiece and ordinary condos go for five or six hundred thousand dollars.” The explanation is that nearly half of all luxury home sales last year were to foreign buyers, particularly from China. Among the reasons: Vancouver’s mild weather is a hedge against climate change, and Chinese cities’ air quality is atrocious. It’s one way the global elite are insulating themselves from the problems of their own creation. Since Russian oligarchs and foreign investment funds can pay in cash, it not only drives up the price but makes it impossible for anyone without millions of dollars in the bank to compete. As New York magazine writes, “New Yorkers with garden-variety affluence — the kind of buyers who require mortgages — are facing disheartening price wars as they compete for scarce inventory with investors who may seldom even turn on a light switch.” Out-of-town owners don’t just drive up real estate prices. Absenteeism is also bad for neighborhoods and their sense of vitality. In Vancouver’s Coal Harbour, one-quarter of homes were unoccupied on Census Day. In Manhattan, according to New York, “the Census Bureau estimates that 30 percent of all apartments in the quadrant from 49th to 70th Streets between Fifth and Park are vacant at least ten months a year.” (This covers a prime stretch of Midtown and the Upper East Side, where many rich out-of-towners buy.) Area residents complain of the creepy feeling of living in a zombie neighborhood where no one is ever at home. This isn’t good for New York, or any city. When you want less of something, just like carbon, you tax it. The revenue from a property tax surcharge could be used to build and maintain affordable housing, distributed to low-income New Yorkers in housing vouchers, or put to another purpose that benefits city residents. The only problem with the proposal is that it is applied too narrowly. Why only apartments worth more than $5 million? Lowering the threshold to $2 million would rope in way more apartments, thus bringing in more revenue or scaring off more rich people who don’t even want to actually live in the city anyway. (The bill could, and should, be crafted to exempt properties that are rented out for most of the year, because they aren’t taking an apartment off the housing market.) To state what should be obvious, this is not a matter of xenophobia. Many of the owners of luxury pieds-à-terre in New York or San Francisco are wealthy Americans who live in the suburbs or other regions. The tax would fall on them just the same as foreign buyers. And foreigners who are actually immigrating and buying a new home to live in, no matter how rich, would not be taxed any more than their neighbors. But would the tax turn away potential buyers? New York’s real estate developers, a bunch of selfish crybabies to rival Wall Street, say it would not only do that, but bring mayhem, destruction, and death to our fair city. With the trademark hysteria of any coddled industry facing the prospect of minor regulation, Steven Spinola, president of the Real Estate Board of New York, told The Wall Street Journal: “It’s probably a good way to start the collapse of the residential market.” As if there were a shortage of upper-middle-class New Yorkers ready to buy new apartments in prime locations for slightly less outrageous prices! In Crain’s New York Business’s industry-friendly phrasing, real estate developers are “arguing it would idle the construction of luxury towers — and the union jobs that go with them — as well as hurt property values.” The real estate industry cannot fathom that hurting property values is exactly the point. Property values are too high, and New Yorkers cannot afford them. The idea that attracting rich people is always in a city’s best interest is overly simplistic. So is the belief that the free market solves all ills. Rich people only bring economic activity if they actually bring themselves. Cities need jobs, but they also need affordable housing for the teachers, firefighters, garbage collectors, janitors, store clerks, nurses, bus drivers, and environmental journalists who make the city run. So cities need to use regulation and taxation to help bring housing supply and demand back into balance. Construction jobs are used as the justification for all sorts of real estate development boondoggles like sports stadiums. But a healthy long-term economy cannot be built on short-term construction jobs. Just ask Las Vegas, Phoenix, or South Florida how they fared after the last boom-and-bust cycle. It will be interesting to see how de Blasio, who ran on an economically populist platform but is friendly with the real estate industry, will come down on this. More interesting, and important, will be how it plays up in Albany. Thanks to gerrymandering and a few soulless, self-aggrandizing Democrats who deserted their party to form a coalition with Republicans, the GOP shares in control of the Senate, despite New York state’s overwhelmingly Democratic electorate. It’s hard to imagine any Republican-led chamber allowing such a progressive measure to pass. But New York state senators only make $79,500. If any of those suburban Republicans want to retire to Manhattan, they should think about voting for Hoylman’s bill.Filed under: Business & Technology, Cities, Politics

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No, economic growth and climate stability do not go hand-in-hand

Much has been made of last week’s report from the Global Commission on the Economy and Climate, led by former Mexican President Felipe Calderón and famous climate economist Lord Nicholas Stern. The report’s conclusion that we can have our cake and eat it too — that is, that we can “create lasting economic growth while also tackling the immense risks of climate change” — quickly became a popular talking point for mainstream economists and politicians. But to think that it has anything to do with actually avoiding catastrophic climate havoc is to misinterpret the entire premise of this New Climate Economy (NCE) project. The study, called “Better Growth, Better Climate,” is mostly about economic growth. In the short summary that makes up the homepage of the report’s sleek-scrolling website, the word “growth” appears 62 times, five more than “climate.” But this growth-oriented thinking doesn’t actually create a road map for saving the climate, and even the New Climate Economy writers acknowledge it: The question the project has sought to explore is not “how can greenhouse gas emissions be reduced?” … but “how can economic decision-makers achieve their principal goals while also reducing their impact on the climate? So, basically, the report is about how green investment and policy can stimulate economic growth, not stop global warming: On their own, these measures would not be sufficient to achieve the full range of emissions reductions likely to be needed by 2030 to prevent dangerous climate change. But now, thanks to the misunderstanding of a few wishful thinkers (notably New York Times columnist Paul Krugman), seemingly everyone at the recent U.N. Climate Summit took for granted that growth and climate action necessarily go hand-in-hand. Even the usually sane Guardian bought into the irrational exuberance, broadcasting, “The world can still act in time to stave off the worst effects of climate change, and enjoy the fruits of continued economic growth.” One pundit goes so far as to credit Wall Street for enabling the transition to a green economy and climate-stable future, telling “hippies” to back off and let the oligarchs handle the business of saving humanity. But growth-glorifying free-marketism has a dreadful track record for reducing emissions. Never mind that Elon Musk’s low-carbon brainchildren are crushing it on the stock exchange, gross domestic product — the thing that’s getting bigger when we talk about growth — is a terrible barometer of prosperity. So, yes, pouring a ton of money into solar and wind and other clean energy would create economic growth in the short term. But even so-called “green growth” comes at a cost, notes Richard Heinberg of the (aggravatingly hyphenless) Post Carbon Institute: The rapid build-out of renewables constitutes an enormous infrastructure project that will itself consume significant amounts of fossil-fuel energy. … The faster we push the transition, the more fossil fuels we’ll use for that purpose, and this could lead to the extraction of more tar sands, fracked tight oil and shale gas, deepwater oil, and Arctic oil. It’s not underinvestment in cleantech that’s changing the climate; it’s carbon emissions. Duh. So, the bigger question — the one that the NCE report strategically skirts — is this: Can we grow economically while we achieve climate stability? This question has been the focus of researchers experimenting with ways to stay within the global carbon budget, defined as the total fossil fuels we can burn and still maintain a 50-50 chance of limiting warming to 2 degrees Celsius. Kevin Anderson of the Tyndall Center for Climate Change Research at the U.K.’s University of East Anglia estimates that staying under the arbitrarily agreed-upon 2-degree ceiling in a way that allots poor countries their fair share of the carbon budget (a big share, since their historical emissions are relatively tiny) would require rich countries to reduce emissions by 10 percent per year. No countries are even setting targets consistent with such steep reductions, much less actually decreasing carbon emissions at that rate (or at all, from a consumption perspective). As for pulling off that sort of emissions downsizing with economic growth intact, look at recent history: These days, we’re not bringing down global carbon emissions at all while the economy’s growing. Since 1995, global energy-related carbon emissions have decreased just one year, 2009, which also happens to mark the only year in that stretch when global GDP decreased. Coincidence? U.S. Energy Information Administration Anderson is not alone in concluding that preventing calamitous climate ruin will require wealthy countries to downsize their economies. Here’s researcher Samuel Alexander, who studies sustainable societies at the University of Melbourne in Australia, from a blog post: The unpalatable truth is that, for developed nations, continued economic growth as conventionally measured is incompatible with climate stability. Indeed, a safe climate requires that we now need a phase of planned economic contraction, or “degrowth.” … This does not simply mean producing and consuming more efficiently and shifting to renewable energy, necessary though these changes are. It also requires that we produce and consume less – a conclusion that few dare to utter. Fortunately, the extent of wasteful overconsumption in the developed nations means that degrowth can actually be in our own interests, if we manage the transition wisely. If that leaves your head spinning, not to worry, I’ll write more about degrowth and what that could look like in the future. But first, back to that pesky NCE study. Why all the confusion? Remember that the NCE report is about climate action not climate protection. That is, the report looks at economic benefits of climate-friendly investments, not at the economic realities of fixing the climate. Lord Stern, the big-name economist on the study’s commission, already knows that the necessary deep emissions cuts can’t be made while growing the economy. In his well-known Stern Review on the Economics of Climate Change from 2006, the limit for carbon reductions in the company of growth was set at 3 to 4 percent a year. He also acknowledges that, historically, emissions decreases of larger than 1 percent per year have coincided with periods of upheaval or recession — when, by definition, there is a negative growth rate. Maybe Stern found some new hopeful evidence to contradict his previous findings. Or maybe the numbers in this latest report have been thoroughly massaged to make them more palatable to politicians and businessfolk. All signs point to the latter. Perhaps the real message of the NCE report is: You can act on climate and still get elected! Looking a little deeper, even the NCE report hints that a green-painted version of business as usual won’t cut it: The Organisation for Economic Co-operation and Development (OECD) has projected that if current trends continue, as the global population grows from 7 billion in 2010 to more than 9 billion in 2050, per capita consumption will more than triple, from about US$6,600 to US$19,700 per year, and global GDP will nearly quadruple, requiring 80% more energy. Sustaining growth at that scale will only be possible with radically new business models, products and means of production. The call for radical change is promising. Now we just need to switch the priority from sustaining growth to sustaining the stable climate. Otherwise, a century from now, our fancy new low-carbon economy will be up to its transit-hub high-rises in simmering acidic seawater. Filed under: Article, Climate & Energy, Politics

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2016’s Clown Car Contenders

No, pervy ex-CEO Dov Charney isn’t running for president. But neither are Jim Webb or Carly Fiorina—or any of the other faded stars floating a potential candidacy to remain relevant.

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Are Black Staffers Fleeing Capitol Hill?

Aides say a number of the high ranking African-American congressional staffers have left for in recent years, leading to a dearth of diversity on the Hill.

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