Scientists offered cash to dispute climate study

Ian Sample, science correspondent
Friday February 2, 2007
The Guardian

Scientists and economists have been offered $10,000 each by a lobby group funded by one of the world’s largest oil companies to undermine a major climate change report due to be published today.

Letters sent by the American Enterprise Institute (AEI), an ExxonMobil-funded thinktank with close links to the Bush administration, offered the payments for articles that emphasise the shortcomings of a report from the UN’s Intergovernmental Panel on Climate Change (IPCC).

Travel expenses and additional payments were also offered.

The UN report was written by international experts and is widely regarded as the most comprehensive review yet of climate change science. It will underpin international negotiations on new emissions targets to succeed the Kyoto agreement, the first phase of which expires in 2012. World governments were given a draft last year and invited to comment.

The AEI has received more than $1.6m from ExxonMobil and more than 20 of its staff have worked as consultants to the Bush administration. Lee Raymond, a former head of ExxonMobil, is the vice-chairman of AEI’s board of trustees.

The letters, sent to scientists in Britain, the US and elsewhere, attack the UN’s panel as “resistant to reasonable criticism and dissent and prone to summary conclusions that are poorly supported by the analytical work” and ask for essays that “thoughtfully explore the limitations of climate model outputs”.

Climate scientists described the move yesterday as an attempt to cast doubt over the “overwhelming scientific evidence” on global warming. “It’s a desperate attempt by an organisation who wants to distort science for their own political aims,” said David Viner of the Climatic Research Unit at the University of East Anglia.

“The IPCC process is probably the most thorough and open review undertaken in any discipline. This undermines the confidence of the public in the scientific community and the ability of governments to take on sound scientific advice,” he said.

The letters were sent by Kenneth Green, a visiting scholar at AEI, who confirmed that the organisation had approached scientists, economists and policy analysts to write articles for an independent review that would highlight the strengths and weaknesses of the IPCC report.

“Right now, the whole debate is polarised,” he said. “One group says that anyone with any doubts whatsoever are deniers and the other group is saying that anyone who wants to take action is alarmist. We don’t think that approach has a lot of utility for intelligent policy.”

One American scientist turned down the offer, citing fears that the report could easily be misused for political gain. “You wouldn’t know if some of the other authors might say nothing’s going to happen, that we should ignore it, or that it’s not our fault,” said Steve Schroeder, a professor at Texas A&M university.

The contents of the IPCC report have been an open secret since the Bush administration posted its draft copy on the internet in April. It says there is a 90% chance that human activity is warming the planet, and that global average temperatures will rise by another 1.5 to 5.8C this century, depending on emissions.

Lord Rees of Ludlow, the president of the Royal Society, Britain’s most prestigious scientific institute, said: “The IPCC is the world’s leading authority on climate change and its latest report will provide a comprehensive picture of the latest scientific understanding on the issue. It is expected to stress, more convincingly than ever before, that our planet is already warming due to human actions, and that ‘business as usual’ would lead to unacceptable risks, underscoring the urgent need for concerted international action to reduce the worst impacts of climate change. However, yet again, there will be a vocal minority with their own agendas who will try to suggest otherwise.”

Ben Stewart of Greenpeace said: “The AEI is more than just a thinktank, it functions as the Bush administration’s intellectual Cosa Nostra. They are White House surrogates in the last throes of their campaign of climate change denial. They lost on the science; they lost on the moral case for action. All they’ve got left is a suitcase full of cash.”

On Monday, another Exxon-funded organisation based in Canada will launch a review in London which casts doubt on the IPCC report. Among its authors are Tad Murty, a former scientist who believes human activity makes no contribution to global warming. Confirmed VIPs attending include Nigel Lawson and David Bellamy, who believes there is no link between burning fossil fuels and global warming.

Debit cards fuel overdraft outrages – The Red Tape Chronicles

from MSNBC.com

Posted: Tuesday, January 30 at 01:03 am CT by Bob Sullivan

Forty dollars for a Big Mac? That might sound over the top, but it barely tips the outrage meter when you compare it to the 20,000-percent-interest loanU.S. consumers regularly take out to pay for such $40 burgers. How could this be?

Well, bounced checks just aren’t what they used to be.

A new study says that most of the time consumers overdraw their accounts now, bounced checks aren’t the culprit. Instead, debit card purchases are chief cause of overdrafts.

Many people don’t realize that a carefree swipe of their debit card at a point-of-sale terminal to buy a Big Mac could result in “courtesy overdraft” fee of $30 or more. But such fees are becoming increasingly common. When faced with a transaction that would send a consumers’ account into negative territory, banks now regularly approve such transactions, cover the expense, and charge hefty fees.

Financial institutions collected some $10 billion in 2005 through what’s sometimes called automatic overdraft protection, according to the new study conducted by the Center for Responsible Lending. The agency reviewed full transaction histories for 5,000 typical American households to determine the cause of bounced check fees.

In its report, called “Debit Card Danger,” the Center for Responsible Lending said that 38 percent of overdrafts were caused by debit card, point-of-sale transactions, while paper checks triggered an overdraft only 27 percent of the time. Online bill payments accounted for another 27 percent of overdrafts.

Most consumers have no idea
The trend concerns Eric Halpern, who co-authored the report. He believes many consumers still have no idea how expensive that Big Mac can be.

“If you ask people on the street what would happen if they tried to make a debit card purchase and their account was empty, most people assume the bank would deny it,” he said.

Not any more. Beginning several years ago — no one really knows when — banks slowly got into the business of granting short-term, high interest loans to consumers when they attempt to overdraw their accounts. Account holders are automatically enrolled in the programs, which are now standard at nearly all banks.

Why are the programs, which many people have never heard of, so popular? Financial institutions that adopt them can expect a huge spike in overdraft revenue — a spike of 200 to 400 percent, according to the Center for Responsible Lending.

It’s clear these loans confuse consumers. When asked, 61 percent said they wished the bank would simply reject the transaction.

Courtesy overdraft can save consumers money in the world of paper checks. The fee is the same as a standard insufficient funds fee, but consumers who would have bounced checks without it won’t face additional fees from merchants.

But the advantage ends in the electronic transaction world. Consumers who are unaware of courtesy overdraft do not know that the price of their Big Mac can jump from $1.99 to $42 in an instant.

It’s true, as bankers like to say, such fees are avoidable. Consumers can keep tabs on their balances, and as long as they do not live near the edge, dangling their balance near zero, they will never see this fee. And in fact, most consumers never pay overdraft fees. Every consumer who spends money they don’t have bears responsibility for that.

But banks shoulder the blame, too, for making it so easy to overdraw — and for muddying the line between “where the consumers’ balance ends and the overdraft protection begins,” said Greg McBride, a senior financial analyst at Bankrate.com.

Remember the surge of marketing that began a few years ago encouraging consumers to use debit cards instead of credit card for purchases? Debit cards were supposed to be the safer tool, the preferred tool for consumers trying to be responsible about their personal finances. Because debit-card buyers draw instantly from their own money in their checking accounts, they do not run up high-interest, revolving credit card debts. The implication, of course, was that debit cards would not allow you to spend what you don’t have.

Scratch that.

There are other factors that make it easier to fall prey to courtesy overdraft fees. Balancing a checkbook has become a much more complex affair. In an age of Internet banking and multiple automatic payments and deposits, it is easy to lose track of account balances day by day.

Lopsided changes
In addition, the advent of electronic check processing (called Check 21) has meant check deductions are drawn faster from consumers’ accounts — but deposits are still commonly held for three to five days. So consumers need a healthy cushion in their accounts to avoid the near occasion of overdraft sin, and not everyone has such a cushion.

“This hits families who are living paycheck to paycheck,” said Halpern. “It is likely at (any) point in time that the consumer does not know their exact balance. But the bank knows the exact balance.”

Banks could warn consumers that an overdraft is imminent, he said. But instead, they approve the transaction and collect the fee.

“This is a situation where the bank has much more information than the consumer,” he said.

Liz Pulliam-Weston, author of “Deal with Your Debt,” and MSN.com personal finance columnist, says that there are easy ways for consumers to protect themselves from overdraft fees. With a simple phone call or visit to a branch, consumers typically can link their checking accounts to their savings account or credit card. Then, if an overdraft occurs, the money to cover the purchase will be drawn from their other accounts. A small fee will apply, but it will generally be a tiny fraction of the potential courtesy overdraft charge. Consumers can also apply for a bank line of credit and link that to their checking account, Weston said.

Many consumers may be confused by the various names for overdraft protection – bounce protection is costly, courtesy overdraft is costly, traditional overdraft protection is not.

But Weston offers a simple rule of thumb. If you are using your own money to cover an overdraft, that’s inexpensive. “But, if you are borrowing the bank’s money, that’s expensive,” she said. “Everyone should have true overdraft protection.”

Online banking can help also, she said. While bank Web sites don’t always provide an exact,up-to-the-moment balance because transactions may not post immediately, the sites are useful for monitoring balances.

There’s one more warning consumers should have, Weston said. Not only can they unknowingly overdraw by making debit card purchases, but they can overdraw while getting cash from ATMs, too. That might not sound possible — after all, once upon a time, ATMs would simply deny withdrawals that exceed balances.

Scratch that, too.

Banks ignore customer data
Many banks now allow consumers to withdraw money from the kitty included in the automatic overdraft protection. Bank customers hate this idea – only 2 percent said they wanted banks to permit such withdrawals and tack on their overdraft fees. Most said they’d rather the withdrawal was rejected.

Instead, banks seem to be encouraging the use of these short-term loans to get cash, perhaps as a way of competing with the tide-you-over short-term loans offered by various paycheck advance loan retail stores. There are reports that banks even pad the “available balance” displayed on ATMs with amounts from the courtesy overdraft kitty. In other words, a consumer might only have $50 in their account, but an ATM might indicate a $250 “available balance.” Then a $100 withdrawal would incur that $39 overdraft fee.

It’s not clear how common the practice is — the matter is being examined now by a federal agency in a major overdraft fee study that’s due late this year. But McBride said it is indeed happening.

“It’s elusive to pinpoint how prevalent this is … but I know anecdotally that it’s happening,” he said.

The problem doesn’t appear to be extensive. In the Center for Responsible Lending study, only 2 percent said they’d been forced into overdraft protection by an ATM withdrawal.

Still, the only real defense against an ATM that might lie to you about your balance is to keep your own cushion in the account.

Labor Union, Redefined, for Freelance Workers

By STEVEN GREENHOUSE
Published: January 27, 2007
New York Times

Herding freelancers is a bit like herding cats. Both are notoriously independent.

Nonetheless, Sara Horowitz has figured out a way to bring together tens of thousands of freelancers — Web designers, video editors, writers, dancers and graphic artists — into a thriving organization.

Ms. Horowitz has founded the Freelancers Union, offering members lower-cost health coverage and other benefits that many freelancers often have a hard time getting.

A former labor lawyer, Ms. Horowitz intends to form a forceful advocacy group for freelancers and independent contractors, the most mobile members of an increasingly mobile work force. In addition, she is trying to adapt unions to a world far different from yesteryear, when workers often remained with one employer for two or three decades.

“This really is about a new unionism,” she said, “and what it means is to bring people together to solve their problems.”

Having signed up 40,000 freelancers from the New York area, she is now planting her group’s flag across the nation, hoping to herd far more of the nation’s 20 million freelancers and independent contractors into her union.

“These workers are the backbone for so many industries vital to our nation’s economy — I.T., financial services, the arts, advertising and publishing,” she said. “Yet these same workers are not afforded simple job protections or a social safety net.”

By creating a new type of union for nontraditional workers, Ms. Horowitz hopes to help revive the labor movement. Its membership has slipped to just 7.4 percent of the private-sector work force, down from one-third in 1960.

Unlike traditional unions, the Freelancers Union has no intention of bargaining with employers. Still, Ms. Horowitz says her group’s main goal is identical to that of all unions — providing mutual aid, in this case health benefits, to their members.

“More and more people are not going to get their benefits from an employer,” Ms. Horowitz said. “Our ultimate goal is to update the New Deal. It is to create a new safety net that’s connected to the individual as they move from job to job.”

Jennifer Lebin joined the Freelancers Union while living in Manhattan after seeing one of its subway ads that say, “Welcome to Middle-Class Poverty.” Ms. Lebin, a political consultant, bought the group’s health coverage and paid $20 to attend a union-sponsored seminar offering tax advice to consultants and independent contractors.

Ms. Lebin, who has moved to Chicago, expressed disappointment that she could no longer use the union’s health plan — doctors in Illinois are not part of the network. “If there is a way that the Freelancers Union could offer the same benefits to members outside the New York area, I’d sign up in a heartbeat,” she said.

The Freelancers Union, which sells benefits à la carte, hopes to offer health benefits in 10 states by the end of this year. It is already offering its discounted disability and life insurance nationwide.

More than 14,000 freelancers in the New York area have bought its health insurance, generally for about $300 a month, some 40 percent below what they would normally pay elsewhere. The organization has also used its group purchasing power to help freelancers obtain discounted dental, disability and life insurance.

Membership in the Freelancers Union is free. To finance itself, the group uses an entrepreneurial model: it earns modest commissions on the benefits that its members buy.

Robert Bruno, a professor of labor relations at the University of Illinois at Chicago, praised the group’s innovative approach, although he said it could not replace traditional unions.

“This needs to be part of labor’s repertoire,” Professor Bruno said. “To the degree it helps to reshape what we’ve come to understand what a labor organization is, it’s all to the good.”

Ms. Horowitz, 44, won a MacArthur genius award in 1999 after she established Working Today, a group based in Brooklyn that focused on providing benefits to New Yorkers in flexible work arrangements. She founded the Freelancers Union in 2003, with a more ambitious vision.

The group intends to do advocacy work just like a labor union. In New York, it is backing legislation to let freelancers obtain unemployment insurance. Even if freelancers are laid off after working for an employer for two years, they cannot receive unemployment benefits because they are considered independent contractors.

Some members do not expect the group to play the role of a traditional union.

“Unions represent members in negotiating wages and benefits,” said Barbara Scott, an artist in Berlin Center, Ohio. “I don’t see the Freelancers Union functioning that way. I see it as a networking tool.”

Bobby Ambrose, a graphic designer in Chicago, disagreed.

“I was hoping that they would be like a labor union,” Mr. Ambrose said. “There are a lot of situations that freelancers face regarding pay rates and job hours, like when you’re doing full-time work when you’re only hired to be part time. It would be nice if they could push to make things better.”

Several traditional unions are studying the freelance union’s progress, perhaps to borrow some ideas on organizing nonunion workers and offering benefits.

“The labor movement,” Ms. Horowitz said, “went from guilds through mutual aid societies through craft unions and through industrial unionism. You’re not going to persuade me that there is not going to be a new form of unionism. The story’s not over on what we’re creating.”