Celebration from the leadership of the House Energy and Commerce Committee on committee passage of Waxman-Markey, i.e., H.R. 2454, The American Clean Energy and Security Act.

The Energy and Commerce Committee approved H.R. 2454, “The American Clean Energy and Security Act,” by a vote of 33 to 25.  This legislation is a comprehensive approach to America’s energy policy that charts a new course towards a clean energy economy.

“Today the Committee took decisive and historic action to promote America’s energy security and to create millions of clean energy jobs that will drive our economic recovery and long-term growth,” said Chairman Waxman.  ”This bill, when enacted into law this year, will break our dependence on foreign oil, make our nation the world leader in clean energy jobs and technology, and cut global warming pollution.  I am grateful to my colleagues who supported this legislation and to President Obama for his outstanding leadership on these critical issues.” 

“With this plan, we will shape a new energy destiny for our country, where we innovate more and pollute less,” said Subcommittee Chairman Markey.  ”Today we have chosen bold action to preserve good paying jobs here in America and preserve our planet.   In just eight weeks, Chairman Waxman and I, working with our entire committee, have moved us farther down the path toward energy independence than our country had moved in the past eight years.”

Ambitious claims.

The commitee website has the bill and markups. The House Republican caucus liveblogged the markup sessions with good detail on the amendments submitted and rejected, but not on exclusively partyline votes. Water vapor will still be subject to Clean Air Act regulation, we see. Well, it is, after all, the No. 1 greenhouse gas by far.

Looking for something beyond the predicted views from the expected sides, we see today’s column by Steven Pearlstein, the Washington Post’s business columnist, whose opining is reliably critical of corporate America, mostly from a liberal perspective. From “Climate-Change Bill Hits Some of the Right Notes but Botches the Refrain“:

The other thing to say about it is that it is a badly flawed piece of public policy. It is so broad in its reach and complex in its details that it would be difficult to implement even in Sweden, let alone in a diverse and contentious country like the United States. It would create dozens of new government agencies with broad powers to set standards, dole out rebates and tax subsidies, and pick winning and losing technologies, even as it relies on newly created markets with newly created regulators to set prices and allocate resources. Its elaborate allocation of pollution allowances and offsets reads like a parody of industrial policy authored by the editorial page writers of the Wall Street Journal. The opportunities for waste, fraud and regulatory screwup look enormous.

But let’s end on a more optimistic note from someone who really understands the market and the power of individual freedom and choice, Frances Beinecke, President of the Natural Resources Defense Council, and her statement, “Committee Passage Clears Path for Historic Energy and Climate Bill“:

While some in Congress have tried to block this bill, they are only keeping America tied to the failed policies of the past. As the bill moves to the House floor, we need to build on the progress made in the Energy and Commerce Committee and enact this important legislation.

By making investments in clean energy, we will create whole new industries, millions of good-paying American jobs, and generate hundreds of billions of dollars in energy savings and benefits to low-income families.

Call it the energy eschaton.

Alas. This item is not on the website, so for historical purposes, we’ll post it.

The Post also solicits input:

We welcome reader feedback on these changes. Please call 202-334-7320, e-mail businesscomments@washpost.com or write to: Business Section, The Washington Post, 1150 15th Street, NW, Washington, D.C. 20071.

Continued thoughts….(8:45 a.m.):

Don’t worry. We’ll always have Steven Pearlstein. His column today, “California’s Wipeout Economy,” addresses a favorite topic around here, which we cast as California’s hostility to business as evidenced by high taxes, ever-increasing regulations, rampacious unions, environmental utopians and the apotheosis of these all, Jerry Brown.

Following  a trip to California, Pearlstein identifies the macroeconomic trends that have laid the state low:

It is hard to overstate how reliant the Southern California economy has always been on population growth to drive its economic growth — in oversimplified terms, building houses for the next wave of home builders. In the beginning, the early developers could be pretty confident that if they built it, they would come — from the Northeast and Midwest, and then from all corners of the globe. But in recent years, this perpetual growth machine has pretty much run out of steam as residents old and new confronted the realities of two-hour commutes, bad air, a shortage of water and a backlash against illegal immigration.

Moreover, without the steady growth in tax revenue that came with population growth, the Ponzi scheme that passes for public finance in California was suddenly and painfully revealed. Much of the blame lies with public employee unions and a handful of other special-interest groups that have essentially hijacked political control of state and local governments. Now, despite decades of high taxes and rapid growth, state and local governments find that they not only don’t have the revenue to provide even basic services, but are saddled with hundreds of billions of dollars in unfunded pension liabilities and infrastructure needs.

It’s “the backlash against illegal immigration” that people are reacting to? The backlash? What a strange comment.

Investor’s Business Daily also examines California’s woes today in its editorial, “California’s Hefty Union Dues“: “Organized Labor: The state that led the way in giving labor push-button power to organize against private-sector taxpayers now stands — if you can call it standing — as a cautionary tale.”

Ah…to end on at least one positive note about California, here’s John Doe singing “Golden State” from last year’s South by Southwest festival.

As documented in posts here and here yesterday, The Washington Post has called the Administration’s decision to invest $250 billion in banks “nationalization” and said the act represented a move “to partly nationlize.”

It’s an inaccurate and inflammatory terminology. Here in the United States, nationalization means a government takeover, control, ownership.

In today’s Post,  Dana Milbank uses the term, but he’s a columnist who specializes in political mockery, so who cares?  A front of the business section story also mentions nationalization, but only to describe Secretary Paulson’s objections to the appearances of nationalization. Harold Meyerson, a left-wing, anti-business Post columnist writes that “the most right-wing administration in modern American history [is] scurrying to nationalize the banks.” But Meyerson is a predictable scold and Bush detractor, so again, who cares?

Meanwhile, the editorialists and business writer Steven Pearlstein eschewed the term. All in all, seems like editors are doing their job. Except on Page A6, written early in the day by political reporter Dan Eggen, “Signaling a Shift to Europe’s Path“:

In announcing plans to partly nationalize nine major banks yesterday, President Bush found himself in the unusual position of having to reassure Americans that he was not, in fact, opposed to capitalism.

That’s just flat-out WRONG.

Treasury describes the capital purchase program here.

Under the program, Treasury will purchase up to $250 billion of senior preferred shares on standardized terms as described in the program’s term sheet. The program will be available to qualifying U.S. controlled banks, savings associations, and certain bank and savings and loan holding companies engaged only in financial activities that elect to participate before 5:00 pm (EDT) on November 14, 2008. Treasury will determine eligibility and allocations for interested parties after consultation with the appropriate federal banking agency.

The minimum subscription amount available to a participating institution is 1 percent of risk-weighted assets. The maximum subscription amount is the lesser of $25 billion or 3 percent of risk-weighted assets.

That’s not nationalizing. It’s not partly nationalizing. It’s the government buying shares in a bank in order to boost their capital, a major and even history-making policy and regulatory step, to be sure. But calling it partial nationalization does the reader a disservice.

Are we being too cranky? Too paranoid? Too distracted by trivia? Too amused by emulating a Soviet-era Kreminologist poring over the lines of Izvetsia?

Don’t think so. As Meyerson’s column demonstrates, the use of the term “nationalization” to describe the Administration’s actions is an element of a political attack.  A mulitprong attack, perhaps:

• “Lousy plutocrats. They don’t believe in capitalism, just in lining their own pockets. We ought to really stick it to them. The caps on executive compensation are good, but next ….”
• “Hey, we’ve already nationalized the banks. Why stop there?”

Ultimately, the most important reason the term should be dropped from the lexicon of serious, fair-minded journalists is because it misleads and misinforms the reader about an important matter during a time when markets and public confidence are fraying. Accuracy is essential.

That’s the front page of the Washington Post’s Business Section, updated at noon.

Not to get cranky or anything, but isn’t it really strange that media outfits would misrepresent an admittedly major expansion of government involvement in the U.S. banking system as “nationalization?” This are times in which accuracy and discretion are critical, especially given the public’s shaken confidence. (See earlier post.)

Nationalization evokes all sorts of unnecessary and inflammatory allusions: Bank holidays, expropriation, etc. You could just as well write, “Feds Seize Banks, Bush Says Necessary.”

BTW, we posed a question about terminology to the Washington Post’s business columnist Steven Pearlstein in an online chat today, but did not get a response. (No problem, there were many good questions asked). Pearlstein did answer one semi-related question thusly:

Campbell, Mo.: Is the government rescue plan the beginnings of the dreaded “S” word in American politics, socialism?

Steven Pearlstein: It is a socialistic step. A temporary step, but there’s no getting around it. But let’s be careful not to think of socialism as some sort of dirty word. It is a way of organizing economic activity that has some advantages and, when combined with a basically capitalist economy, has provided a very high standard of living to many European countries. It’s often confused with communism, but it is not that.

Socialize, perhaps, temporarily a step, argued fairly by an opinion columnist, but nationalize? No.

It’s sloppy, misleading, inflammatory, agenda-driven, bad newswriting to use the term “nationalize.”

UPDATE (1:48 p.m.): NPR’s take on the President’s remarks this morning:

Carefully tip-toeing around the word “nationalize,” President Bush and Treasury Secretary Henry Paulson announced a plan that will allow the U.S. government to spend about $250 billion of its freshly minted $700 billion bailout program to buy equity stakes in both large and small banks.

Carefully tip-toeing? Get me rewrite! How about the following: “Not using the term ‘nationalize,’ which would, after all, be the wrong term, President Bush…”

UPDATE (2:12 p.m.): From Thomson Financial:

According to the details of the plan, participating financial institutions must sell stock equal to at least 1 percent of their risk-weighted assets, but not more than $25 bln or 3 percent of their assets.

So 3 percent = partly nationalizing. Yup.

Steven Pearlstein, the Washington Post’s business columnist who doesn’t much like business, makes a case for apology as accountability in today’s column, “The Words Left Unspoken in the Bailout Debate.” Two words have been conspicuously absent in the public and policy debate over the financial crisis, Pearlstein argues.

They are the words that Americans need to hear before they commit $2,300 for every man, woman and child to rescue the financial system.

They are the words we need to hear before taxpayers are put in the position of rescuing arrogant and overpaid financiers from the full consequences of their bad bets and misguided decisions.

Most of all, they are the words that elected senators and representatives need to hear before they entrust the secretary of the Treasury with extraordinary power and discretion to spend public money and actively manage the markets and the economy:

“We’re sorry.”

As in, “We’re sorry that those of us who were supposed to be stewards of the world’s deepest and most trusted capital markets have violated that trust by putting our own interests ahead of those of our customers and the country.”

Etc. Nice idea from a newspaper writer who writes about the world of dreams and wishes and Japan.

In Japan, great ritual accompanies such apologies, which are viewed as the first step in fixing a problem and restoring frayed relations. Here, by contrast, corporate apologies are viewed as unnecessary concessions to business and political adversaries and dangerous ammunition in the hands of prosecutors and plaintiffs lawyers.

Pearlstein could have stopped right there. Yes, it would be wonderful if we lived in a country where corporate executives, major employers, or the owners of small businesses across the land could say, “I’m sorry” and apologize for their errors. Pearlstein suggests that the heads of Citigroup, Goldman Sachs, Bank of America and Morgan Stanley stand before the cameras in the Capitol rotunda, apologize for letting down their investors and promise to forego their compensation packages.

And in the real world, as Pearlstein appears to acknowledge, we know what that would get them.

Lawsuits. Litigation. Class-action suits, state attorneys general subpoenas…in short, a legal hell in which they had already conceded their guilt.

“Your honor, I would like to submit as Plaintiff’s Exhibit A the transcript of a news conference, in which the defendant publicly admits his firm’s 10-year series of reckless decisions that could only lead to the financial disaster that had damaged the class I’m representing.”

Navigant Consulting recently released a study on litigaton related just to the subprime mortgage market. The number of suits has already exceeded the high point of the savings and loan crisis of the 1980s, the firm reports.

According to Navigant Consulting’s most recent report on this topic, of the 607 subprime-related cases filed in federal courts over the 18 monthe ended June 30, 2008, 310 were filed in just the first six months of 2008 — more than the 297 filed during all of2007.

“It is perhaps of little surprise that as the current crisis takes on unprecedented scale, the related litigation would as well,” said Jeff Nielsen, who leads Navigant Consulting’s Financial Services Disputes & Investigations group and is actively advising clients in a number of subprime-related matters. “We are now more than a year into the credit crisis, and he litigation continues to pile up.”

Navigant’s statement was released on September 10th, prior to the next, even more elevated stage of the financial crisis, and the firm’s analysis deals only with subprime-related litigation. The storm of litigation is just beginning.

In the abstract, Pearlstein’s argument is a good one. As a public acknowledgement of error, apologies would promote accountability and perhaps a more civil debate instead of the angry accusations that now dominate.

In the real world, Americans sue one another and apologies invite more and more jackpot-seeking lawsuits. And in the real world, Pearlstein’s argument can’t be taken seriously.