The American fossil-fuel boom has spawned debates on what to do with this wealth. Ohio finds itself in the middle of one right now. The state’s Republican governor, John Kasich, is proposing to raise oil and gas taxes, to ensure the riches don’t all go to workers and companies based out of state.
“His view is, this is some sort of a rip-off,” says Ohio State economist Mark Partridge. “That these energy resources are transported out of the state of Ohio, used and refined in other places. And all the profit and wealth goes to these other places and it leaves Ohio.”
By most measures, Ohio’s taxes on energy production are low. They’re less than 1 percent, compared to 7 percent in Texas, 11 percent in Wyoming, and 25 percent in Alaska.
Kasich wants to raise state taxes to 2.75 percent or even higher. Drilling companies threaten to leave and go to low-tax states. But that hasn’t happened historically. A study by Headwaters Economics notes “the academic literature generally disagrees that tax competition is important to oil production.”
“The decisions on where to drill are not going to be determined by comparing different states,” says Michael Levi of the Council on Foreign Relations and author of "The Power Surge: Energy, Opportunity, and the Battle for America's Future." “They’re going to be determined on a location-by-location basis, on whether a profit can be made."
Governments that tax oil and gas taxes use the money in different ways. Some, like Norway, store it away for future generations in sovereign wealth funds. Other spend it on roads damaged by drilling, or invest in education.
Governor Kasich of Ohio wants to cut taxes, which spreads the energy wealth. But Mark Haggerty at Headwaters Economics worries that makes the state budget more dependent on taxes from fossil fuels – a boom and bust sector.
“In fact, what you’re doing is actually creating a less stable tax base for the state going forward into the future,” Haggerty says.
And the future is the whole question: how to take today’s riches and plant them in the right place.
An unmanned rocket that was supposed to ferry supplies to the International Space Station exploded just after liftoff Tuesday. That has drawn attention to NASA’s growing reliance on private space companies to do its legwork.
In 2008, NASA was preparing to retire the space shuttle. So it hired two private companies to resupply the space station: Orbital Sciences Corp., whose rocket just exploded, and Space Exploration Technologies (also known as SpaceX).
The initial price tag was $3.5 billion. The idea was to both to achieve the space agency’s goals at a lower cost to taxpayers, and to help foster the growth of the commercial space industry.
To do that, NASA wasn’t buying a new space shuttle.
“What they actually bought was cargo delivery services, just like you would buy services on Fed Ex or something like that,” says Frank Slazer, vice president for space systems at the Aerospace Industries Association.
Tuesday’s explosion may prompt concern over the increasing privatization of space. But industry watchers are quick to remind that NASA has always relied on the private sector.
“NASA’s never built a rocket,” says John Logsdon, who founded the Space Policy Institute at the George Washington University. “Rockets that NASA and the Air Force use have always been built by private companies.”
He doesn’t think the explosion says anything profound about this model of business.
“What it says is launching things into space is hard. And there will be unfortunately failures along the way,” he says.
The stakes are going to rise, though.
NASA recently hired Boeing and SpaceX to ferry astronauts to the space station in a few years. (Of course Boeing, and its heritage units, played an integral role in building the Apollo spacecraft.)
Meanwhile, the commercial space industry has grown globally. It’s now worth about $225 billion, according to Carissa Christensen, managing partner of the Tauri Group. That figure includes commercial satellite launches and operation.
“Putting that in context,” she says, “the total amount that governments spend globally is about $75 billion.”
NASA is getting ready to spend more. It’s now in the process of awarding the next round of cargo contracts.
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If you live in a swing state, chances are you’ve seen a political ad or two in the run-up to this year’s midterm elections. And there’s also a pretty good chance that ad talked about the economy.
Which brings us to this question: If those ads were your only source of information, what would you think about the state of the economy? What kind of picture are the ads painting? It’s not always what you’d expect.
Check out these two ads, for gubernatorial races.
In his ad, the Republican governor of Michigan, Rick Snyder, says we’re on the road to recovery.
And the Democratic candidate for governor of Wisconsin, Mary Burke, talks about bleak job prospects and layoffs.
“We would expect Democratic candidates to trumpet the success of the economy and for Republicans to be on the attack," says Vincent Hutchings, political science professor at the University of Michigan. "But at the state level, especially if we’re talking about gubernatorial contests, that logic gets turned on its head.”
Hutchings says incumbents, whatever their political stripe, have to defend their handling of the local economy. Challengers blame economic problems on the incumbent. But in national, congressional races, political ads focusing on the economy are more predictable.
For Republicans, “it’s all doom and gloom,” says Erika Franklin Fowler, co-director of the Wesleyan Media Project.
Listen to ads from Republican congressional candidates, she says, and you think the economy will never pick up.
“So, a lot of ads will make references to the squeeze on the middle class in particular," she explains. "I’ve seen ads on recent college graduates and frustration over spending a lot of money on a college education and not being able to find a job.”
Franklin Fowler says, for congressional Democrats, it’s morning in America -- or it would be if it weren’t for the Republicans.
“Democrats will often go after Republican incumbents and/or wealthy challengers who own businesses for shipping jobs overseas or for job losses,” she says.
In fact, Franklin Fowler says, about 20 percent of ads for all Senate candidates mention jobs, with very different takes on the jobs picture. So who’s right? I turned to Richard DeKaser, a corporate economist at Wells Fargo.
“I’d give the economy a B-minus,” he says.
DeKaser says we’re creating about 250,000 jobs a month, and GDP is growing at about three percent. That’s pretty good.
But it’s an uneven recovery. Not everyone is benefiting.
So politicians can cherry pick economic data, to make a point.
“You can pick and choose from the data and tell pretty much any story you’d like," DeKaser says. "And more often than not, that’s the case. It’s just a matter of biased presentation rather than dishonest presentation. Though there is some dishonesty as well.”
And when the economic picture is a bit ambiguous like it is now, it’s that much easier to manipulate.
Ten of the 14 Ebola patients evacuated from West Africa have survived. We asked specialists: What made the difference?
The Red Cross claimed to deliver 17 million meals and stacks, 74,000 shelter stays and 7 million blankets and flashlights to victims of Hurricane Sandy. But a joint investigation from ProPublica and NPR not only casts doubt on the organization's own tracking, but shows a pattern of prioritizing public relations over aid after hurricanes Sandy and Issac.
The investigation found the Red Cross was unprepared for the disasters and botched the delivery of meals, supplies and other aid. Response was slow and meals were wasted, and in one case an official reportedly ordered volunteers to drive around empty trucks to give the appearance of relief.
In other news: More earnings are on the way today and there will be an official announcement from the Fed on quantitative easing. For now, here's what we're reading - and the numbers we're watching - Wednesday.$1.7 trillion
That's what the Fed has spent on bonds in just the third round of quantitative easing, or QE3. That's according to the New York Time's Upshot, which has seven charts laying out the program's history and future.74,829
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Michael Sata, a longtime opposition leader who became president in 2011, was a controversial figure in the south African country.
Journalists regularly turn to this social media organization to seek out and verify online material that could bolster traditional reporting.