Thursday, April 22, 2010

Five Surprising Things to Do for Earth Day

Well, it's been 40 years since Gaylord Nelson and his band of earth warriors launched the modern environmental movement.

What have we learned since? Global warming is a threat. We're still polluting the planet. More people means more loss of species, deforestation, desertification, groundwater loss and a host of other environmental maladies.

While the developed world has improved on these issues, emerging economies are really struggling. Yet I don't live in Asia. I live in America, the home of overconsumption and bad environmental stewardship. What can we do? Here are five surprising steps:

Stop Drinking Soft Drinks

You've probably seen the ads promoting how environmentally responsible Coca-Cola the company and product have become. They are promoting recycling, using more hybrid vehicles and using less aluminum in their cans. Yet Coke (and every other soft drink) is not green. It's still brown. Very brown.

One way Coke is green washing is through a collaboration with Ecoist that seeks to reuse misprinted bottles and cans. The new cans use 5% less aluminum, saving 15,000 metric tons of aluminum every year. That's welcome, since the mining, smelting and transportation of aluminum is energy-intensive and creates a lot of pollution. The truth of this breakthrough: the new cans are being used in the UK only.

What about their new “eco-friendly” bottle made in part from molasses and sugar, which they plan to test in their Dasani water line? Bottled water is one of the biggest wastes of resources in the 21st century. Most municipal water supplies in the US are perfectly safe. When you calculate all of the energy needed to make the bottles, package them, transport them and dispose of them, it's never a good deal for the environment.

While we're on the subject of water, let's get back to the process of making soft drinks in general. Making the sugary, carbonated liquid is highly water intensive. It takes 2.47 liters of water to make one liter of Coca-Cola. This depletes local water supplies and pollutes local rivers.

Coke claims to have reduced water consumption by 9% since 2004. Reducing 9% of water usage in only 6 years saved them plenty of money, but it still obscures the fact that they are one of the biggest industrial consumers of water on the planet.

And that doesn't include the fact that it takes billions of gallons to grow the sugar for their beverages. Keep in mind that more than a billion people on the planet don't have access to clean water. Soft drink makers are consuming it to make something that contributes to obesity and diabetes.

In Atlanta, where Coke makes its headquarters, the area has perennial water shortages. The city and state are fighting neighboring states over the rapidly diminishing watersheds that feed the sprawling metropolis.

It's well known that most ground water aquifers are not being replenished. According to the US Geological Survey, more than 30 states have serious drinking water shortages.

It's clear that Coca-Cola and its many competitors are taking myriad steps to clean up their operations, reduce their pollution output and energy use. Yet it will be a long time before they can claim their product is green. Their true colors are unlikely to change anytime soon. If you stop your consumption of these products, it will also be good for your health.

Produce Your Own Food and Soil. Buy Locally!

Even if you live in a city apartment, you can grow some food in a window. Consider a hydroponic system. Most food travels a 1,000 miles or more to get to your table. By supporting locally grown food, you become a "locavore" and support local farming and healthier consumption of food.

Why buy local? You cut down on the tremendous amounts of energy it takes to transport your fruits and vegetables. Ships burn highly polluting bunker fuel. Trucks burn diesel. And fresh food is healthier food.

Making your own soil -- by composting kitchen waste -- gives you fertile compost for your garden. That way you can avoid synthetic fertilizers, many of which come from petrochemicals or natural gas. With the huge amounts of topsoil being lost across the world, you'll be making a difference.

Don't Just Plant a Tree, Plant Edible Landscaping.

Trees are great. They soak up carbon dioxide, anchor the soil and give us oxygen and timeless beauty in return. Yet why not grow trees that produce fruit or nuts? They will reduce your grocery bill and give you fresh fruit that you're able to can or freeze. That's what we did on our small lot.

The same goes with open areas that you want to landscape. Consider native bushes that produce berries. There are many varieties. Pick something suitable for your climatic zone.

Don't Buy a Car, Even a Green One. Walk, Bike and Hike More!

Even if you have a fuel-stingy car, the greenest car is that one that's not driven. Try getting on your bike if you have local errands. That's what I did last summer. I discovered that taking quick trips to the grocery, hardware store, library and ice cream parlor are all much more ennervating by bike.

Our second car has 140,000 miles on it. I'd love to replace it with an electric -- coming on the market later this year. But I'm in no hurry. Rather than consume more resources -- even the electricity used to recharge the car creates pollution -- I will consume more calories. I'll get on my bike more. As for now, I just got that old car an oil/air filter change and pumped up the tires. It will last longer, get better mileage and produce less carbon dioxide.

Stop Getting Suckered into Green Consumption.

Everything from paper towels to gas stations have some green labeling on them. There's so much "greenwashing" that it's impossible to tell which is green and which is not.

You have to consider the life cycle of a product. For example, take the spate of bamboo products on the market now. Are they any greener than other fibers?

There's a lot to admire about bamboo.It grows fast, isn't hard on the environment, is incredibly durable and can be used for hundreds of purposes. Have you ever seen that great Alec Guinness World War II movie "The Bridge over the River Kwai?" British army prisoners build a railroad bridge with the stuff. Lately you've probably seen a lot of bamboo products on the market. The versatile plant has been used in everything from flooring to clothing. I recently bought a bamboo cutting board for my kitchen.

When it comes to clothing, though, a lot of what's advertised in clothing as bamboo isn't. It's rayon. Like most green products, it's not that simple to say that the source material is "natural." After all, petroleum is a natural product and look what it does to the environment after it's processed and burned.

The same shallow thinking can be applied to rayon, which is a generic term for nearly any natural cellulose fiber that's processed to make fabrics.
Rayon undergoes some nasty chemical treatments before it becomes that sweater or jacket. (Think caustic lye in hair-care products). The substances used to break down cellulose are environmentally toxic and are released into the air.
Naturally, manufacturers and retailers don't count on you asking questions about the life-cycle of the product.

Since bamboo has attained a certain cachet among green consumers in recent years, a flood of products claiming to be bamboo have emerged on the market. They go by brand-names such as "eco-Kashmere," "Pure Bamboo" and "Bamboo Baby."

Although green products undergo less scrutiny than food or animal treatment, when advertising claims are misleading blatantly false, it can catch the attention of the newly active Federal Trade Commission.

The FTC recently sent warning letters to 78 retailers to stop the labeling of rayon products as bamboo-based. The merchants included Wal-Mart, Target, Kmart, Costco and Nordstrom's. The agency also sued several companies last year for selling mis-labeled rayon products. Four companies have settled with the FTC and have changed their labeling thus far.

In the interim, if you see a product with a bamboo label, how do you tell if it's the real thing? Actual bamboo should be labeled as "mechanically processed," as opposed to chemically processed rayon. It's also helpful to see if a third-party has certified the claim such as the Forest Stewardship Council. A third party can run tests, inspect the manufacturing and run life cycle analyses to determine how much pollution is created in the processing of the fabric.

In the meantime, not only should you be wary about any green claims without seeing a life-cycle analysis of the product, the best green product is one not consumed. Reuse what you can. Rescue what you need from a thrift store, flea market or garage sale. Recycle profusely.

If we're doing the green lifestyle right, ultimately we become "prosumers" instead of consumers. We are producing our own energy, food and soil and wasting less.

Thursday, April 8, 2010

Greenspan Knew Everything, Did Nothing

By John F. Wasik

Just for the record: Alan Greenspan knew about the housing/debt bubble and did nothing to prevent it from bursting.

Not only did he know how the bubble was inflating, but how Wall Street and Americans took advantage of it to buy real estate in a mass frenzy.

On top of that knowledge, he had documented how homeowners were looting their false wealth through home-equity loans – tapping whatever illusory dollars they could after two stock-market crashes in a decade.

The home-equity story is rarely told. Yet it was Greenspan who actually wrote a paper for the Fed in 2006 at the height of the bubble quantifying how much Americans were taking out of their homes to buy boats, cars, vacations and yes, more real estate. I profiled this free-for-all in my book on the housing crash The Cul-de-Sac Syndrome: Turning Around the Unsustainable American Dream.

Greenspan also documented that Americans were becoming dangerously overleveraged – it was a long-term trend -- and were heading over the cliff during the bubble years.

In a paper he co-authored with Fed economist James Kennedy, they noted “since the mid-1980s, mortgage debt has grown more rapidly than home values, resulting in a decline in housing wealth as a share of the value of homes.”

The home price mania convinced millions of homeowners that the bubble years were the prime time to borrow against the over-inflated values of their homes. Home-equity loans accounted for four-fifths of the rise of home mortgage debt since 1990, Greenspan’s paper stated.

It’s often easy to blame consumers in this whole mess. After all, why did they get in over their heads? Nobody was forcing them to leverage up. With the onus of the American Dream and “maestro” Greenspan’s cheerleading to take advantage of cheap credit, Americans were following a script. “You can have that dream home and everything else now – just sign on the dotted line!” Real estate agents, bankers, builders and mortgage brokers all read from the same cue cards. “Get as much house as you can afford! You won’t have to pay it off for a long time. Why wait?”

The massive borrowing, unfortunately, meant Americans were becoming poorer in a real sense. If another recession came, which it did after the bubble exploded, they’d be in no shape to revive the consumer-dominated economy. Hence our anemic economic recovery, allegedly underway.

That’s why Greenspan’s testimony on April 7 before the Financial Crisis Inquiry Commission sounds like a snake-oil salesman insisting that his products and sales pitches were always legit.
Greenspan’s flaccid response to a question on why he didn’t do anything to stop the financial carnage?

"When you've been in government for 21 years, as I have been, the issue of retrospective and figuring out what you should have done differently is a really futile activity," Greenspan said, "because you can't, in fact, in the real world, do it.”

How about at least admitting that predatory mortgage lending was a huge problem, which the Fed knew for years? How about saying that it was the Fed’s job to police debt securitization and they dropped the ball? And why didn’t the Fed just raise interest rates when it was clear that cheap money was blowing up another bubble?

As for his recent amnesia as to how big the bubble was at the height of the mass delusion, here’s Greenspan from a May 21, 2005, New York Times piece:

"Without calling the overall national issue a bubble, it's pretty clear that it's an unsustainable underlying pattern," Mr. Greenspan told the Economic Club of New York at the Hilton New York hotel in Midtown.

In his typical argot, the Fed chairman would only admit that he saw some “froth” in the mortgage markets, while completely missing the blitzkrieg that would nearly take out the global financial system in 2008 and leave some of the major players like Goldman Sachs, Citi and Bank of America virtual wards of the state while taxpayers bailed them out.

"Even if there are declines in prices," Greenspan said in 2005, "the significant run-up to date has so increased equity in homes that only those who have purchased very recently, purchased before prices actually literally go down, are going to have problems."

As Greenspan morphs into the Neville Chamberlin of finance, let’s move on. Break up the biggest banks and deep-six the “too big to fail” doctrine. Create transparent, regulated markets for derivatives and toxic debt. Let homeowners who were damaged by the bubble write off their mortgages in bankruptcy to equalize the $12 trillion in help from American taxpayers.

What Greenspan knew for certain is that the financial monsters who benefited from his bubble would have his back when he retired to the lecture circuit and write his memoir.

Let history record that when Greenspan fully exits public life, he should be recognized for what he neglected to do and his misdeeds go far beyond sins of omission. Just ask the millions who are trying to claw back into the middle class.

John F. Wasik is an author, columnist and speaker. His Cul-de-Sac Syndrome profiled the housing bust.