Category Archives: Amana

Grab your apocalypse bag — it’s fire season in California

It’s officially fire season in California. Dry winds rush in from the desert to the east, smoke turns midday to twilight, people hurry from place to place in facemasks, and the electricity goes out.

That’s been the story for the last three years. The risk of wildfires has always been high in the fall when the wind that usually carries cooling fog from the ocean into the interior reverses course. But it has never been so consistently bad. There’s plenty of blame to go around, but behind it all is a warming climate that’s killing trees, drying out brush, and turning bad behaviour into disasters.

Meteorologists predicted the dangerously dry weather a few days in advance, and Pacific Gas & Electric, the state’s largest utility, let customers know that it would be turning off power to guard against windblown branches crashing into power lines. I was visiting my parents in Nevada City, a 3-hour drive east of my home in the Bay Area, when the lights went out on Saturday. The kids delighted at the novelty of it We set jugs of water by the sinks and made our way to bed by lamplight. In the morning, despite protests from the children, my father fired up the noisy generator he had hooked up to his propane tank, so we could do the dishes, cool the refrigerator, and check the news.

In Southern California, people grabbed their “apocalypse bags” of pre-packed necessities and made their way through jammed roads out of harm’s way. Former Governor Arnold Schwarzenegger and basketball star LeBron James were among the evacuees. James had to try four hotels before he found one with room for his family.

The search for housing was tougher in Northern California wine country, where evacuations from the Kincade fire have forced some 200,000 people out of their homes. People have been sleeping in churches and fairgrounds. Officials ordered mandatory evacuations from an area stretching from the active fire east of Highway 101 all the way to the Pacific Ocean as 70 mile-per-hour winds whipped the flames to the west. Some of the houses rebuilt since the 2017 fires may burn again. The smoke was dangerously thick in many parts of wine country, but farmworkers were still out picking grapes.

Many of the schools in the Bay Area closed, and those closest to the fire will be shut all week. More than 100,000 students stayed home Monday around Los Angeles. Firefighters worked to contain the Getty Fire in west Los Angeles, in anticipation of the most severe winds so far this year. PG&E expects to cut power to more than half a million customers on Tuesday and Wednesday.

On Sunday, when I surveyed routes for driving home, I found my options were limited. To the west, the Kinkade Fire was swallowing more of wine country. To the east, a handful of small fires were blazing. And in the middle, a wall of fire had engulfed the Carquinez Bridge, closing Interstate 80, our usual path home. We waited for hours. Fortunately, firefighters quickly put out most of the new fires, I-80 reopened, and we slipped home Sunday evening, gawping at smoking black patches on either side of the road.

The winds have calmed here in the Bay Area, but it’s only temporary. The weather is supposed to turn incendiary again by Wednesday. It’s just what Californians have come to expect. After all, it’s fire season.

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Grab your apocalypse bag — it’s fire season in California

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When wildfires sweep through California, who gets left behind?

Over the past several days, 16 different wildfires have forced hundreds of thousands of Californians to evacuate their homes. Millions have gone without power for days, and more will experience planned outages as Pacific Gas and Energy, the state’s bankrupt power utility, scrambles to make sure its power lines don’t spark yet another wildfire.

The wildfire crisis, one that is expected to get worse in the Golden State in the coming years as the full effects of climate change kick in, illuminates a glaring disparity. When fires rip through a community, its most vulnerable members — the old and sick, domestic workers, construction workers, and incarcerated folks — get left behind. Stories emerging from the fires this year shed unflattering light on the way America treats its poor, old, and working class when climate catastrophe comes knocking.

On Monday, as the Getty Fire was tearing through Los Angeles, the L.A. Times reported on a housekeeper named Carmen Solano who showed up to work in Brentwood, one of the wealthiest areas in L.A., to find that the owners of the house had evacuated hours earlier. They failed to notify her that the neighborhood was under mandatory evacuation.

The Times also spoke to a police officer who said that, when he told many of the laborers he saw working in Brentwood that day that they needed to leave, they told him, “I have to finish.” Some who knew about the fire still made the commute because they couldn’t afford to miss a day’s wages. Fifty-year-old gardener Chon Ortiz mowed lawns while people evacuated around him on Monday, even though the owners hadn’t asked him to come to work. “If they say I have to evacuate, I will,” he told the Times’ Brittny Mejia in Spanish. “But I need to work.”

Poor residents in Northern California, where 200,000 people had to evacuate this week and 2 million are still without power, are facing similarly dire straits. When Governor Gavin Newsom traveled to a mobile home park in American Canyon on Saturday, a woman with a pulmonary heart condition told him that she didn’t have the money to stock up on the medication she needed before the power got shut off at her pharmacy. Her insurance wouldn’t cover refills until her current supply ran out, so her only option was to pay out of pocket. “You could get it if you have the money,” Constantine said. “But I can’t afford that right now. It’s a month’s rent.”

Perhaps no one is more marginalized during wildfire season than incarcerated firefighters. These firefighters get the same training and endure the same dangerous conditions as the state’s wildland firefighting department, CAL FIRE. But they only get paid around $1 an hour, and when they’re done fighting fires, they’ll go back to prison.

Since 1983, at least six of these incarcerated firefighters have died on the job. A new bill introduced in the California state legislature last month would allow prisoners to find careers in firefighting after they’re released, but it’s been met with resistance from the state’s biggest firefighters union.

Lest we forget the gaping disparity between those with means and those without in the fiery West right now, a growing number of rich people are hiring private firefighters to protect their property, the New York Times reports. One company near Sacramento offers “on-call” services for homes in Northern California and Eastern Washington. The price? Up to $3,000 per day. Welcome to the pyrocene, where we’ve set everything on fire and only some of us have the means to stay safe.

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When wildfires sweep through California, who gets left behind?

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SUVs are back, and they’re spewing a boggling amount of carbon

How can we end our love affair with sport utility vehicles?

Sure, I get it: They carry more people than sedans, and they look cooler than minivans. But consider the facts. A new analysis from the International Energy Agency shows that there are 35 million more SUVs on the road today than in 2010. The number of electric vehicles increased by just 5 million in the same time period. The result: The business of driving humans around is guzzling more gas. So, while greenhouse gas pollution from regular passenger vehicles actually declined since 2010, emissions from SUVs and trucks have increased enough to wipe out those gains, and then some. SUVs, counted alone, are now warming our planet more than heavy industry.

These gas guzzlers could single-handedly eliminate the possibility that the world achieves the climate goals set in Paris in 2016 by insuring that transportation emissions continue to swell. The new IEA analysis concludes: “If consumers’ appetite for SUVs continues to grow at a similar pace seen in the last decade, SUVs would add nearly 2 million barrels a day in global oil demand by 2040, offsetting the savings from nearly 150 million electric cars.”

If you aren’t motivated by the long-term threat of climate change, perhaps you may learn to dislike SUVs if they threaten to kill you. As Kate Yoder pointed out, every one of these vehicles that goes on the road makes the world more dangerous for everyone but the people in them. Pedestrian deaths have reached the highest levels in decades, thanks largely to the influx of bigger vehicles packing heavier punches.

So more deaths and more emissions. We got a preview of this trend in recent numbers coming out of California, where SUVs are also threatening to leave state climate goals broken and bleeding into the gutter.

The fact that beefy vehicles make their drivers a little safer, while endangering everyone around them is a hint as to why it’s been so hard to end our toxic relationship with SUVs. The people making the choice reap the benefits, while everyone else bears the cost. That’s the larger problem popping up here, in the form of surging SUV sales. It’s the problem that runs, and ruins, the world.

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SUVs are back, and they’re spewing a boggling amount of carbon

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New study pinpoints the places most at risk on a warming planet

As many as five billion people will face hunger and a lack of clean water by 2050 as the warming climate disrupts pollination, freshwater, and coastal habitats, according to new research published last week in Science. People living in South Asia and Africa will bear the worst of it.

Climate activists have been telling us for a while now that global warming isn’t just about the polar bears, so it’s hardly breaking news that humans are going to suffer because nature is suffering. But what is new about this model is the degree of geographic specificity. It pinpoints the places where projected environmental losses overlap with human populations who depend on those resources and maps them with a nifty interactive viewer.

This model identifies not just the general ways climate change harms the environment and how people will feel those changes, but also where these changes will likely occur, and how significant they’ll be. It’s an unprecedented degree of detail for a global biodiversity model.

Patricia Balvanera, a professor of biodiversity at National University of Mexico who wasn’t involved in the study, said the new model “provides an extremely important tool to inform policy decisions and shape responses.”

The model looks at three specific natural systems that humans benefit from: pollination (which enables crops to grow), freshwater systems (which provide drinking water), and coastal ecosystems (which provide a buffer from storm surges and prevent erosion). Using fine-scale satellite imagery, the team of scientists mapped predicted losses to these natural systems onto human population maps. The resulting map allows you to see how many people could be impacted by environmental changes, and where.

“We were specifically trying to look at how nature is changing in delivering [a] benefit, and then where it overlaps with people’s needs,” said Rebecca Chaplin-Kramer, the lead scientist at the Natural Capital Project, a Stanford University-based research group that produced the study.

To understand why the Natural Capital Project’s model is groundbreaking, you need to understand a little bit about past attempts to gauge how the environmental effects of climate change will impact people. It’s a pretty hard thing to do — natural processes are interconnected systems, and many of the ways that humans benefit from these natural processes (what scientists call “ecosystem services” or “nature’s contributions to humanity”) aren’t obvious.

“The real challenge, with nature’s contributions to people, is that it benefits us in so many ways that it’s sort of mind-boggling,” Chaplin-Kramer said. “It’s just so abstract that it tends to be disregarded.”

The Natural Capital Project’s model was initially intended to support the massive U.N. biodiversity report released this spring. That report coalesced 15,000 scientific studies into the most comprehensive survey ever done of how climate change threatens global biodiversity — science-speak for “every living thing.” Even if you didn’t read the whole thing, you probably saw headlines like “One million species at risk of extinction, UN report warns.” The IPBES report included a 200-odd page chapter that laid out how all the different things we could see happen to nature will affect people — depending on how humanity reacts in the next few decades to the climate crisis.

But the IPBES report bumped up against one of the biggest challenges when it comes to quantifying nature’s contributions to humankind: Most occur on a local scale. “Spatial context really matters,” said Chaplin-Kramer. “It’s not just the total amount of nature we have, but where we have it, and if it’s in the place where it can deliver the most benefits to people.”

Bee pollinator habitats, for example, only provide benefits to people if they’re within a few miles of the farms that grow our food. Plants that filter nitrogen out of a stream are only “useful” for humans if they’re downstream of the pollution source and upstream of the population. So while the IPBES was able to offer lots of predictions about the aggregate consequences of biodiversity loss — e.g., food supplies will suffer as we lose habitats for bees — they weren’t able to say specifically where they’d occur.

The new model does more than illustrate a problem with great detail — the framework behind it also has the potential to be a powerful tool for avoiding the worst effects of climate change. It could help people prepare for the catastrophes it forecasts.

Unai Pascual, a lead author of the IPBES report and co-author of the Science article, sees this model as taking the IPBES report’s findings a step further, translating a conceptual framework “into something that really can be applied.”

Scientists and non-scientists alike are interested in understanding how to maximize the benefits provided by nature. Just this week a study published in Science Advances found that biologically diverse fields yielded more crops than farms practicing monoculture. Iowan farmers are finding that planting strips of land that mimic native prairies has a range of benefits. In China, a national “Ecological Redline Policy” takes ecosystem services into account in zoning decisions.

These sorts of programs will be more necessary as climate change continues to threaten ecosystems around the world, and policymakers and businesses are increasingly looking to scientists for information about how to protect the natural resources humans need most.

Chaplin-Kramer’s team is working with the World Bank to develop a “Natural Capital” index so that countries can track the condition of their natural resources. They’re also working on an optimization framework to figure out which interventions will have the greatest impact. That will help policymakers use this information to implement conservation policies in the places where, as Chaplin-Kramer put it, “you can get the most bang for your buck.”

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New study pinpoints the places most at risk on a warming planet

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Sea-level rise threatens 13 million Americans. Can FEMA help?

Entrepreneur and presidential hopeful Andrew Yang caught flak at the second Democratic debate in July for saying that the time has come to move Americans living in the path of sea-level rise to higher ground. “You can run but you can’t hide” doesn’t make a particularly good presidential slogan. After all, admitting defeat and letting nature take its course isn’t exactly our first instinct as human beings.

Managed retreat — abandoning areas that become so threatened by sea-level rise that they are, for whatever reason, considered not worth saving — has been a far less popular idea than adaptation strategies like flood gates, levees, and pumps. (Just look at Miami.)

But in many respects Yang’s realism is spot on. If the world keeps burning fossil fuels as usual, between four and 13 million Americans will see their homes inundated by sea-level rise this century. In the future, managed retreat will become unavoidable.

Don’t take Yang’s word for it. That’s one of the conclusions of a new study in Science Advances — the first to evaluate how managed retreat is functioning in the United States on a national scale. The study’s authors analyzed the Federal Emergency Management Administration’s voluntary buyout program — an initiative that allows owners of flood-prone properties to sell their homes and land to local governments, usually in the aftermath of a disaster. The aim of the program is to get vulnerable people and assets out of flood plains and to ensure that at-risk property doesn’t go back on the market so some other unfortunate soul ends up buying a house that floods once a year. So far, a little more than 40,000 people in 49 states have taken advantage of the program. That’s not a lot of households, and the study found that the number of buyouts overseen by FEMA has actually gone down over the past three decades.

By looking at buyouts that occurred between 1989 and 2017, the study’s authors were able to evaluate the way communities are utilizing (or not utilizing) FEMA’s buyout program, what demographics are benefiting from the program, and how retreat fits into a wider climate strategy.

The study took FEMA’s publicly available buyout data, compared it to other data sets, and found that the counties that take advantage of the program on average have higher income and population density than those that don’t. Within those counties, however, the neighborhoods where the buyouts took place were actually lower-income, denser, and more racially diverse. To the authors of the study, these trends signal that not all local governments have equal access to the program. For example, in Harris County, which includes Houston, there have been more than 2,000 buyouts since 1989. But Louisiana, Florida, and Mississippi — the three states that have had the highest levels of property damage from flooding — rank lowest in the nation in state-wide property buyouts.

The study also found that counties are, for the most part, buying up a few properties at a time with FEMA funds, instead of entire swaths — a predictable outcome when buyouts are voluntary. That’s a missed opportunity to restore flood plains and reduce overall risk to the community. To compound the complexity of the issue, FEMA hasn’t done a good job of documenting its own progress — when logging buyouts in its system, the administration neglected to fill out nearly half of the entries. That means that in many cases researchers don’t know what type of residence was bought out, including whether it was a rental or mobile home.

Millions of Americans may have to contend with managed retreat; why have so few taken advantage of FEMA’s program? Part of the reason may be due to the fact that retreating to higher ground hasn’t really been a central part of states’ flood risk mitigation plans thus far. Local governments have long prioritized approaches like disaster assistance and improved engineering. That could change, though, thanks to a perfect storm of factors. “Even places that have not done buyouts to date are increasingly thinking about the combination of hazards,” Katherine Mach, the lead author of the study, said in a conference call with reporters. “In Louisiana, for example, it’s the combination of oil extraction plus reduced sediment supply plus sea-level rise in normal circumstances versus disaster circumstances.” Buyouts will likely be part of the state’s “full suite of responses,” Mach said.

So what happens if Yang’s prediction of devastating sea-level rise comes true? There are 49 million housing units on the U.S. coast and over $1 trillion worth of infrastructure within 700 feet of the coast, says study author A.R. Sider. “If even one-tenth of that needed to relocate, we’d be talking about orders of magnitude larger than we’ve ever done before with buyouts,” she said.

The study’s authors hope their work lays the groundwork for more research on this topic. “One of the questions we’re trying to answer is what the impacts of buyouts are for the households that participate in them,” said Caroline Kraan, another of the study’s authors. “Where do these households move to? Are they better or worse off in the long term?” We know at least one presidential candidate who’s probably very interested in the answer.


Sea-level rise threatens 13 million Americans. Can FEMA help?

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These Professors Make More Than a Thousand Bucks an Hour Peddling Mega-Mergers

Mother Jones

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This story originally appeared on ProPublica.

If the government ends up approving the $85 billion AT&T-Time Warner merger, credit won’t necessarily belong to the executives, bankers, lawyers, and lobbyists pushing for the deal. More likely, it will be due to the professors.

A serial acquirer, AT&T must persuade the government to allow every major deal. Again and again, the company has relied on economists from America’s top universities to make its case before the Justice Department or the Federal Trade Commission. Moonlighting for a consulting firm named Compass Lexecon, they represented AT&T when it bought Centennial, DirecTV, and Leap Wireless; and when it tried unsuccessfully to absorb T-Mobile. And now AT&T and Time Warner have hired three top Compass Lexecon economists to counter criticism that the giant deal would harm consumers and concentrate too much media power in one company.

Today, “in front of the government, in many cases the most important advocate is the economist and lawyers come second,” said James Denvir, an antitrust lawyer at Boies, Schiller.

Economists who specialize in antitrust—affiliated with Chicago, Harvard, Princeton, the University of California, Berkeley, and other prestigious universities—reshaped their field through scholarly work showing that mergers create efficiencies of scale that benefit consumers. But they reap their most lucrative paydays by lending their academic authority to mergers their corporate clients propose. Corporate lawyers hire them from Compass Lexecon and half a dozen other firms to sway the government by documenting that a merger won’t be “anti-competitive”: in other words, that it won’t raise retail prices, stifle innovation, or restrict product offerings. Their optimistic forecasts, though, often turn out to be wrong, and the mergers they champion may be hurting the economy.

Some of the professors earn more than top partners at major law firms. Dennis Carlton, a self-effacing economist at the University of Chicago’s Booth School of Business and one of Compass Lexecon’s experts on the AT&T-Time Warner merger, charges at least $1,350 an hour. In his career, he has made about $100 million, including equity stakes and non-compete payments, ProPublica estimates. Carlton has written reports or testified in favor of dozens of mergers, including those between AT&T-SBC Communications and Comcast-Time Warner, and three airline deals: United-Continental, Southwest-Airtran, and American-US Airways.

American industry is more highly concentrated than at any time since the gilded age. Need a pharmacy? Americans have two main choices. A plane ticket? Four major airlines. They have four choices to buy cell phone service. Soon one company will sell more than a quarter of the quaffs of beer around the world.

Mergers peaked last year at $2 trillion in the US The top 50 companies in a majority of American industries gained share between 1997 and 2012, and “competition may be decreasing in many economic sectors,” President Obama’s Council of Economic Advisers warned in April.

While the impact of this wave of mergers is much debated, prominent economists such as Lawrence Summers and Joseph Stiglitz suggest that it is one important reason why, even as corporate profits hit records, economic growth is slow, wages are stagnant, business formation is halting, and productivity is lagging. “Only the monopoly-power story can convincingly account” for high business profits and low corporate investment, Summers wrote earlier this year.

In addition, politicians such as US Senator Elizabeth Warren have criticized big mergers for giving a handful of companies too much clout. President-elect Trump said in October that his administration would not approve the AT&T-Time Warner merger “because it’s too much concentration of power in the hands of too few.”

During the campaign, Trump didn’t signal what his broader approach to mergers would be. But the early signs are that his administration will weaken antitrust enforcement and strengthen the hand of economists. He selected Joshua Wright, an economist and professor at George Mason’s Antonin Scalia Law School, to lead his transition on antitrust matters. Wright, himself a former consultant for Boston-based Charles River Associates, regularly celebrates mergers in speeches and articles and has supported increasing the influence of economists in assessing monopoly power. “Mergers between competitors do not often lead to market power but do often generate significant benefits for consumers,” he wrote in The New York Times this week.

A late Obama administration push to scrutinize major deals notwithstanding, the government over the past several decades has pulled back on merger enforcement. In part, this shift reflects the influence of Carlton and other economists. Today, lawyers still write the briefs, make the arguments and conduct the trials, but the core arguments are over economists’ models of what will happen if the merger goes ahead.

These complex mathematical formulations carry weight with the government because they purport to be objective. But a ProPublica examination of several marquee deals found that economists sometimes salt away inconvenient data in footnotes and suppress negative findings, stretching the standards of intellectual honesty to promote their clients’ interests.

Earlier this year, a top Justice Department official criticized Compass Lexecon for using “junk science.” ProPublica sent a detailed series of questions to Compass Lexecon for this story. The firm declined to comment on the record.

Even some academic specialists worry that the research companies buy is slanted. “This is not the scientific method,” said Orley Ashenfelter, a Princeton economist known for analyzing the effects of mergers. Referring to one Compass study of an appliance industry deal, he said, “The answer is known in advance, either because you created what the client wanted or the client selected you as the most favorable from whatever group was considered.”

In contrast to their scholarship, the economists’ paid work for corporations rests almost entirely out of the public eye. Even other academics cannot see what they produce on behalf of clients. Their algorithms are shared only with government economists, many of whom have backgrounds in academia and private consulting, and hope to return there. At least seven professors on Compass’s payroll, including Carlton, have served as the top antitrust economist at the Department of Justice. Charles River Associates boasts at least three.

“There are few government functions outside the CIA that are so secretive as the merger review process,” said Seth Bloom, the former general counsel of the Senate Antitrust Subcommittee.

One evening in 1977, University of Chicago law professor Richard Posner hosted a colleague from the economics department and a young law student named Andrew Rosenfield at his apartment in Hyde Park. The leading scholar of the “Law and Economics” movement, Posner wanted to apply rigorous math and economics concepts to the real world. “Why not see if there are some consulting opportunities?” he mused. The three of them agreed to form a firm, throwing in $700 for a third each. They called it “Lexecon,” combining the Latin for law with “econ.”

The trio then shopped their services to a dozen law firms, which all turned them down. “If you had to value the firm at the end of the tour, you’d have to say it was zero,” said Rosenfield.

They went back to their academic work. Not too long after, AT&T called Posner to ask if he could consult on its antitrust defense. The government was trying to break up Ma Bell. Posner agreed. So began a long and mutually beneficial relationship between AT&T and Lexecon.

Soon after its founding, Lexecon hired one of Chicago’s most promising young economists: Dennis Carlton. He had grown up in Brighton, Mass., earning degrees from a trifecta of elite local institutions: Boston Latin High School, Harvard, and MIT, where he would later endow a chair. He played basketball in his spare time. “Backaches have temporarily sidelined me from embarking on my second career as a basketball player in the NBA,” he joked in a 40th reunion report to his Harvard classmates in 2012. (After a short interview with ProPublica, Carlton subsequently declined comment, citing client confidentiality.)

Ronald Reagan appointed Posner to the federal bench in 1981. Posner left Lexecon. “Andy and I were young,” Carlton said. “Gee, we wondered: Is the firm going to survive? Not only did it survive, but it did very well.”

Lexecon capitalized on the Eighties merger explosion. M&A was rising to cultural prominence as the domain of swashbucklers. Corporate raiders enlisted renegade lawyers and brash investment bankers to take on stalwart names of American industry.

Behind the scenes, the less-flamboyant economists gained influence. From the time antitrust laws began to be passed, in the late 19th century, until the 1970s, courts and the government had presumed a merger was bad for customers if it resulted in high concentration, measured at thresholds much lower than the market shares for the dominant companies in many sectors today.

Led by University of Chicago theorists, a new group of scholars argued that this approach was overly simplistic. Even if a company dominated its industry, it might lower prices or create offsetting efficiencies, allowing customers more choice or higher quality products. In 1982, William Baxter, Reagan’s first head of the Justice Department antitrust division, codified the requirement that the government use economic models and principles to forecast the effect of mergers.

Lexecon seized the opportunity. “We were not just going to talk about economic theory but show with data that what we were saying could be justified,” Carlton said. By the late 1980s, the top four Lexecon officers were each making $1.5 million a year, according to a Wall Street Journal article.

Any merger over a certain dollar size—currently, $78 million—requires government approval. The government passes most mergers without question. On rare occasions, it requests more data from the merging parties. Then the companies often hire consulting firms to produce economic analyses supporting the deal. (Sometimes the government hires its own outside academic.) Even less frequently, the government concludes it can’t approve the merger as proposed. In such cases, the government typically settles with the two companies, requiring some concession, such as sale of a division or product line. Just a handful of times a year, the government will sue to block a merger. Recently, the Obama administration has filed several major suits to block mergers, as companies in already concentrated industries propose bigger and bigger deals. According to a tally from the law firm Dechert, the government challenged a record seven mergers last year out of a total of 10,250.

Recent research supports the classic view that large mergers, by reducing competition, hurt consumers. The 2008 merger between Miller and Coors spurred “an abrupt increase” in beer prices, an academic analysis found this year. In the most comprehensive review of the academic literature, Northeastern economist John Kwoka studied the effects of thousands of mergers. Prices on average increased by more than 4 percent. Prices rose on more than 60 percent of the products and those increases averaged almost 9 percent. “Enforcers clear too many harmful mergers,” American University’s Jonathan Baker, a Compass economist who has consulted for both corporations and the government, wrote in 2015.

Once a merger is approved, nobody studies whether the consultants’ predictions were on the mark. The Department of Justice and the Federal Trade Commission do not make available the reports that justify mergers, and those documents cannot be obtained through public records requests. Sometimes the companies file the expert reports with the courts, but judges usually agree to companies’ requests to seal the documents. After a merger is cleared, the government no longer has access to the companies’ proprietary data on their pricing.

The expert reports “are not public so only the government can check,” said Ashenfelter, the Princeton economist who has consulted for both government and private industry. “And the government no longer has the data so they can’t check.” How accurate are the experts? “The answer is no one knows and no one wants to find out.”

Compass Lexecon itself is the product of serial M&A. A Michael Milken-backed company bought Lexecon for $60 million in 1999. Then it sold Lexecon to FTI Consulting, an umbrella group of professional consulting service firms, in 2003 for $130 million. In the deal, Carlton received $15 million through 2008 in non-compete payments, according to a Chicago Crain’s Business story. He also has held an equity stake in the firm. In 2006, FTI bought Competition Policy Associates, another consulting firm that had also built itself through combination, merging it with Lexecon to form Compass Lexecon. FTI Consulting had $1.8 billion in revenue in 2015, of which $447 million came from economic consulting. The economic consulting division has 600 “revenue-producing” professionals who bill at an average hourly rate of $512 an hour, the highest of all the company’s segments. Charles River Associates brought in about $300 million in revenue last year, led by antitrust consulting.

So few top consulting firms and leading experts dominate the sector today that economists wonder mordantly whether excess concentration plagues their own industry. In 2013, the government granted a waiver to Joshua Wright, the law professor and economist who was a consultant for Charles River. The waiver permitted him to serve as an FTC commissioner and review deals his former consulting firm advised on, as long as he didn’t deliberate on matters that he had directly worked on. Otherwise, the commission’s business might have ground to a halt because Charles River was involved in a third of all merger cases that came before the agency. Wright declined to comment.

Jonathan Orszag, senior managing director of Compass Lexecon, came up with a solution to allow Compass experts to work on more mergers. He is a well-known figure in Washington circles, and the brother of Peter Orszag, the vice chairman of investment bank Lazard and former high level Obama administration official. Jonathan’s social media teems with his globetrotting adventures. Brides magazine featured his destination wedding in the Bahamas. In August 2015, he celebrated on Twitter that he had played on all of the top 100 golf courses in the world. Although he does not have a Ph.D. in economics, he serves as an expert himself and is respected particularly for his expertise on global deals. He declined to comment on the record to ProPublica.

At Orszag’s urging, the firm relaxed its conflict of interest rules, according to multiple people who have worked with or for Compass. Now, Compass Lexecon experts can, and do, advise both sides in disputes. (Under Compass policy, the parties need to consent to such arrangements.) Separate teams of staffers, who cannot communicate with the opposing side, run the cases. The arrangements require on occasion that experts with adjacent offices must stop talking to each other during cases.

Compass economists can reach very different answers to the same question, depending on who is paying them. In 2012, the federal government and a group of states sued Apple for conspiring with several major publishers to fix prices on e-books.

The states hired American University’s Jonathan Baker, the Compass economist, as one of its experts. Baker’s report concluded that e-book prices cost 19 percent more than they should, as a result of the price-fixing. Another government expert arrived at the same 19 percent estimate, and calculated that consumers had been overcharged by $300 million.

Apple later hired Orszag, also of Compass, to do the same calculation. Orszag first came to the conclusion that the effect on prices was lower than the government side’s estimate, around 15 percent. Then he argued there were offsetting benefits to consumers that knocked the number all the way down to 1.9 percent, or just $28 million.

“The actual harms suffered by consumers … are modest,” Orszag concluded.

A federal judge slapped Orszag down for that work. Denise Cote, of the Southern District of New York, threw out part of Orszag’s report in the Apple case. The judge assailed Orszag’s study as “unmoored” from facts and “unsupported by any rigorous analysis,” criticizing a calculation of his as “jerry-rigged.”

Lawyers for the states found out Orszag was working for Apple only when he filed his expert report in the case. The news shocked them, two of the lawyers said, because they felt Orszag had been privy to their legal strategy. Orszag had personally negotiated and signed the contract when the states retained Compass and Baker to do the expert work attacking Apple, now Orszag’s client. The contract prohibited Compass from working on both sides of the case without permission, which had not been obtained.

The states, which had paid Compass and Baker $1.2 million for their work, later sued Compass for breach of contract. They found out that two of its staffers, an administrative assistant and an entry level researcher, had worked for both of the opposing economists. In a deposition, Orszag defended his firm, saying that he believed the Compass contract with the state governments “had been suspended” when he signed on to work for Apple.

Compass settled with the states, paying back some of the money. A person familiar with Compass’ position says that its conflict-of-interest rules didn’t apply to the low-level employees who helped both economists.

The premier economists in the field move back and forth from consulting firms to the top positions at the Justice Department and the Federal Trade Commission. In 2006, Carlton joined the Bush Department of Justice for a 17-month stint as the highest-ranking department economist, before returning to the firm.

Carlton and the other luminaries in the field keep busy. From 2010 to 2014, Carlton consulted on 35 cases, according to his declaration in one case. That total includes his help for companies not only in front of the government but also in private litigation. Mostly he works on the defense side, fending off accusations of price-fixing or anti-competitive behavior. His clients have included Verizon, Honeywell, Fresh Del Monte, and Philip Morris. Because top experts get bonuses based on what the firm generates in billings, their annual incomes can run up to $10 million in a very good year.

Like other top consultants, Carlton devotes hundreds of words in his expert reports to describing his academic credentials, scholarly publications, and journal affiliations. Corporate clients value him not just for his prestige and point of view but for his skill as a witness. Unlike some of his colleagues, he is never bombastic or arrogant. With small eyes, puffy cheeks crowding his soft, wide nose, and hair that sweeps above his brow, Carlton looks as intimidating as a high school guidance counselor. But his calm, unassuming demeanor, even under intense cross-examination, makes him the perfect champion for his corporate clients.

“If you needed one guy for one deal and price didn’t matter, I’d take Dennis,” said a partner at one top New York corporate law firm. “He is the best.”

Carlton also knows just how far he can go. When he speaks, he proceeds deliberately, in a nasal accent, displaying a wariness that comes from decades of being questioned in court. Economists often argue that a merger will produce efficiencies, allowing companies to make more widgets for less money, an overall boon for society. But for an efficiency to count as an argument in a merger’s favor, it must be a result of the merger itself. Carlton sometimes says the cost-savings are “merger related,” according to a former Justice Department economist. “He is very careful about language. He won’t say ‘merger specific.'”

An off-the-cuff comment at a recent conclave illustrated Carlton’s prominence in the hidden world of antitrust proceedings. One evening in April, lawyers, government officials, and economists gathered in Washington for the spring meeting of the American Bar Association’s Antitrust Section. Held at the JW Marriott on Pennsylvania Avenue, the gathering is the prime marketing event of the year for the economic consulting industry.

After a mind-numbing day of panels on issues like “Clarifying Liability in Hub-and-Spoke Conspiracies,” the consultancies hosted competing cocktail receptions. The Charles River Associates event featured a generous spread of Peking Duck. Berkeley Research Group hired a live jazz band. Justice Department staffers sipped drinks with once-and-future colleagues now at white-shoe law firms, and Ivy League economists.

Earlier in the day, during a discussion of new theories about the damage caused by concentration in the airline industry and the overall economy, antitrust attorney John Harkrider shrugged at his fellow panelists. “I’m sure if you paid Dennis Carlton a million bucks, he’d blow up all these things,” he remarked.

Carlton’s rosy forecasts about the impact of proposed mergers haven’t always proven accurate. In the summer of 2005, Whirlpool, the appliance giant, decided to take over Maytag, a storied name that had gradually faded. The combination would leave three companies—the other two being GE and Electrolux—in control of more than 85 percent of the market for clothes washers and dryers. They would have 88 percent of the dishwasher market and 86 percent for refrigerators. In addition to the namesake brands, the newly enlarged Whirlpool would own Amana, KitchenAid and Jenn-Air, and manufacture many Kenmore appliances. The companies hired top law firms to persuade the Bush administration Justice Department to allow the deal. And the firms brought in Carlton.

Despite the combined entity’s powerful position, Carlton argued in his report that it still faced a threat from foreign competition. The possibility that a big box retailer might switch to LG or Samsung would prevent the newly combined company from raising prices, he asserted.

The companies did not persuade Justice Department officials, who proposed blocking the merger. An outside economic expert of their own, University of California at Berkeley’s Carl Shapiro, backed the staff’s analysis. The Bush appointee who headed the antitrust division, Assistant Attorney General Tom Barnett, resisted the staff’s conclusions. Right after Shapiro provided his analysis, Barnett wrote to the companies’ law firms, outlining the arguments that Shapiro and the staff made against the merger. Barnett, who declined comment, provided a roadmap to how to respond to the government’s claims, a person familiar with the letter said.

After months of deliberation, in March 2006, Barnett overruled the staff recommendation, allowing the merger to go through with no conditions. Shapiro and American University’s Baker later called it a “highly visible instance of under enforcement.”

Carlton’s predictions did not pan out. Whirlpool raised prices. Five years after the deal, Princeton’s Ashenfelter and an economist with the Federal Trade Commission found that, contrary to the Compass Lexecon pre-merger forecasts, the takeover resulted in “large price increases for clothes dryers” and price increases for dishwashers. In addition, the companies reduced their offerings, giving consumers fewer choices. By 2012, LG and Samsung had grabbed some market share mostly from second-tier players. Whirlpool and Maytag’s combined shares dropped just over two percentage points in washers and dryers, according to Traqline. But the competition had not brought down prices. Antitrust experts say that a scenario in which companies raise prices despite losing market share to competitors can be evidence that a merger hurt consumers.

The Whirlpool-Maytag merger was revisited in 2014 when GE tried to sell its appliance division to Electrolux, a Swedish manufacturer. Electrolux hired Jonathan Orszag. In December 2015, government officials questioned Orszag’s expert report on the possible effects of the GE-Electrolux merger. Contradicting Ashenfelter, Orszag had submitted a study asserting that the Whirlpool-Maytag merger had not raised prices, conclusions he based mainly on the washer and dryer market.

Justice Department staff economists studied backup material to his analysis and they found something troubling. Buried there was an acknowledgment that the Whirlpool-Maytag merger had resulted in price increases in cooking appliances, the very sector of the market that government officials worried might be affected by the GE-Electrolux combination. The Justice Department filed suit to stop the deal and GE pulled out during the trial.

In a speech in June, outgoing deputy attorney general David Gelfand warned about gamesmanship by economic consultants. While much economic work is good, “we do see junk science from time to time,” he said. As an example, Gelfand pointed to the GE-Electrolux case, though he did not name the company or Orszag. He said the inconvenient data “should have been disclosed and presented with candor” in the expert report supporting the merger.

Orszag did allude in a footnote to the other data, and provided backup materials that disclosed the higher prices in cooking appliances. He contended in his testimony that these price increases were due not to the merger itself but to other factors such as rising costs of raw materials. He said that Ashenfelter’s conclusions were wrong because, unlike Orszag, the Princeton economist did not have access to Whirlpool’s costs for making appliances.

Ashenfelter stands by his study. “My concern with Orszag’s deposition as evidence is that all this is done behind a curtain of secrecy. None of us know just what he did, how the cost data were constructed,” he wrote in an email to ProPublica. “Orszag’s results would only have been presented if they favored his client. Our paper had no clients and we would have been happy to find no price effect.”

In a bright conference room at Fordham Law School on a warm day this past September, an economist realized she had made a mistake in a deposition.

A WilmerHale partner seized on the error. A group of people, seated at blond wood tables in sleek, ergonomic black chairs, took notes as light streamed into the room, reflecting off the columns of Lincoln Center across the street. The economist, Michelle Burtis of Charles River Associates, turned to the audience and, letting out a laugh, broke character.

“And at this point, I would definitely start obfuscating,” she said, smiling.

Burtis was presenting a mock deposition to train lawyers and economists on the pivotal role economists can play in antitrust matters. Charles River and another consulting firm, Cornerstone Research, sponsored the conference.

Burtis, who has short, chin-length brown hair, oversized glasses, a friendly demeanor, and a doctorate in economics from the University of Texas at Austin, continued to guide the attendees toward “what is helpful in a situation like this,” where the economists had erred but still needed to push the client’s line. “You’re never going to get me to admit this is a mistake,” she explained.

The government’s reliance on economic models rests on the notion that they’re more scientific than human judgment. Yet merger economics has little objectivity. Like many areas of social science, it is dependent on assumptions, some explicit and some unseen and unexamined. That leaves room for economists to follow their preconceptions, and their wallets.

Economists have an “incentive to get a reputation as someone who will make a certain type of argument. People will hire you because they know what testimony you will give,” said Robert Porter, an economist from Northwestern who has never testified on behalf of a corporation in an antitrust matter.

In a 2007 interview, Carlton maintained an expert witness shouldn’t be biased. “It is the job of the economic consultant to reach an expert opinion in light of all the evidence, both the good and bad. I think it destroys an expert’s credibility to present only the supportive evidence,” he said.

Economists who do a lot of consulting on antitrust cases say it is not in their long-term interest to shill for a corporate client. Carlton says consulting is tougher than writing for peer-reviewed journals. For scholarship, “it’s not required for the editor to re-run your numbers. In litigation, the expert on the other side has reviewed to make sure I haven’t made errors. The scrutiny is good and leads to a higher quality of report,” he told Global Competition Review, an antitrust trade publication in 2014.

While the data is hidden from outsiders, what matters to Carlton is that there are no secrets between the companies and the government. “When economists are speaking to each other, it’s transparent. They are discussing the economics. The data is turned over to the other side. It’s your model vs. theirs,” Carlton told ProPublica.

Several former employees of consulting firms describe their jobs differently. They say they understood that clients wanted them to reach favorable conclusions. The job was “to go through analyses of market data and try to suggest that this merger doesn’t raise antitrust concerns,” said David Foster, who left Compass Lexecon in 2014, after working as a young analyst there for a year and a half.

The companies and lawyers that rely on economists as witnesses aren’t looking for neutrality. At the Fordham conference, a panel moderator asked Katrina Robson, a lawyer at O’Melveny & Myers, what she sought in an expert. “To be able to be an advocate without seeming to be an advocate,” she replied.

Companies and their lawyers shop around for amenable economists, looking for the reports that provide the answers they are looking for. Karen Kazmerzak, a partner at Sidley Austin, told attendees that she likes to hire two economists if the client can afford it. “It often comes out that one economist is not prepared to deliver the conclusions you need them to deliver,” she said. In those cases, the law firm can fire one economist and go forward with the other, more malleable consultant.

When an expert concludes that a merger won’t pass muster with the government, the corporate client typically either backs out of the proposed deal, figures out concessions to offer the government, finds a more supportive economist at the same consulting firm, or switches firms. Sometimes, according to a prominent antitrust lawyer, unwelcome predictions are locked in a drawer, protected by attorney-client privilege, never to be seen by the government or the public.

On occasion, Carlton has told companies that their deals are unlikely to be approved. He’s walked away from at least one merger: H&R Block’s 2011 takeover of TaxAct, a software firm. The government challenged it, and Carlton pulled out a few months before the trial. The companies hired a new expert from a competing firm, who defended the merger in court. The Justice Department used Carlton’s departure to cast doubt on the credibility of the new consultant and won the case.

In 2011, when AT&T sought to take over the cell phone company T-Mobile, the government balked. T-Mobile, a smaller and scrappier rival, often tried out new and innovative offerings to keep cell service costs low. Carlton represented AT&T. Based on data the company provided, he predicted that the cost of cell phone service would explode if AT&T couldn’t take over T-Mobile and use its network to meet rising demand. Without the acquisition, Carlton and his Compass colleagues concluded, AT&T would be forced to charge higher prices.

When government officials looked closely at Carlton’s model, they realized that it was implying that prices would rise so high without the merger, the cell phone market would shrink by 90% within a few years. Justice Department officials viewed this as wildly implausible. “We find that the applicants’ economic model is deficient,” the government wrote of the work by Carlton and other Compass Lexecon consultants. Soon after the companies announced their deal, the Department of Justice sued to block the transaction and after several months of wrangling, the companies dropped the transaction in late 2011.

Even though AT&T was not able to complete its takeover, cell phone usage in the US has not collapsed by 90%.

Shortly after AT&T withdrew its offer for T-Mobile, the top economist at the Justice Department, Fiona Scott Morton, held a dinner at the Caucus Room, a Washington eatery, for several economists who worked on the deal. The restaurant provided an intimate and comfortable setting for a post-mortem. “Everyone is friends,” recalls one attendee. “It was fun.”

They debated who had the better case. Carlton conceded that AT&T and T-Mobile would have found it hard to win at trial, according to an attendee. But he wished it had gone to court. He was eager to try out a new and provocative argument for mergers: That even though prices would have risen for customers, the companies would have achieved large cost savings. The gain for AT&T shareholders, he contended, would have justified the merger, even if cell phone customers lost out.

Carlton’s expert report predicted that T-Mobile was doomed to failure without the merger. “Our review indicates that T-Mobile USA’s competitive significance is likely to decline in the absence of the proposed transaction,” he and two other Compass Lexecon economists wrote.

Five years later, T-Mobile’s stock price and market share are up and its colorful CEO, John Legere, has been credited by the business press for “singlehandedly dragging the industry into a new era” with innovations such as abolishing cellular contracts. In 2014, Bill Baer, then the head of the antitrust division at the Justice Department, claimed victory: “T-Mobile went back to competing to win your business,” he said in a speech. “And T-Mobile’s competitors were compelled to respond.”

Today, AT&T’s much grander takeover of Time Warner will be an early test case for president-elect Trump, who feuded during the campaign with CNN, a Time Warner property. It will also be a boon for Compass and the small army of academic economists mobilizing for the multi-front battle waged by the government, competitors and the merging companies.

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These Professors Make More Than a Thousand Bucks an Hour Peddling Mega-Mergers

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Greens won’t let Obama get away with bragging about his public lands record

line of lease resistance

Greens won’t let Obama get away with bragging about his public lands record

By on Aug 25, 2016Share

President Obama may have protected more land and water than any other U.S. president — 265 million acres of it — but he’s also responsible for leasing more than 10 million acres of federal lands for oil and gas development.

WildEarth Guardians and Physicians for Social Responsibility plan to push his environmental limits even further. On Thursday, the groups filed a lawsuit against the Department of the Interior and the Bureau of Land Management, in the hope that his (or the next) administration will halt oil and gas federal leases while reviewing systemwide reform. Interior’s coal leasing program is undergoing a similar review.

The latest in a string of lawsuits to curtail federal oil and gas leasing, the groups are looking to block 397 lease sales across 380,000 acres. They claim the federal government is violating the 1970 National Environmental Policy Act, which requires federal agencies to consider environmental impacts.

2016 analysis from the Stockholm Environment Institute found that cutting off future lease sales and declining to renew existing ones for coal, oil, and gas would reduce global carbon pollution by 100 million metric tons annually by 2030.

In other words, fossil fuel development on federal lands isn’t an insignificant portion of U.S. climate emissions. The 10 million acres leased to fossil fuels under Obama’s watch adds up to an area bigger than Olympic, Smoky Mountains, Everglades, Yellowstone, Grand Canyon, and Yosemite, combined.

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Greens won’t let Obama get away with bragging about his public lands record

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Even Sanders’ plan to curb fossil fuel production isn’t ambitious enough

Even Sanders’ plan to curb fossil fuel production isn’t ambitious enough

By on May 4, 2016Share

About 25 percent of all fossil fuels extracted in the United States come from federal lands. That’s a whole lot of coal, oil, and gas that presidential candidates Bernie Sanders and Hillary Clinton are talking about when they debate ending fossil fuel production on public lands.

In a new report, the Stockholm Environment Institute (SEI) forecasts the kinds of cuts in fossil fuel production the country would need to make to be consistent with a 2 degrees Celsius warming scenario:

Stockholm Environment Institute

The first thing that’s clear from this chart is ending fossil fuel development on federal lands still isn’t enough to stop climate change at 2 degrees. Even the dream scenario, in which we stop drilling and mining on all public lands tomorrow, doesn’t cut it.

And nobody’s even really proposing the dream scenario. Sanders’ proposed Keep It in the Ground Act to ban fossil fuel development on public lands only ends new federal leases — the blue chunk in the chart above. It says nothing about the land already leased and under production.

Even with the Obama administration’s Clean Power Plan in place, SEI expects fossil fuel production to rise by 11 percent by 2040 — unless we get serious about passing new climate legislation. To line up with a 2-degree goal, the country would need to slice its production by 40–60 percent.

Getting to 2 degrees doesn’t just depend on what the president can do; it requires the entire U.S. economy to shift toward clean energy — along with the rest of the world.

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Even Sanders’ plan to curb fossil fuel production isn’t ambitious enough

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Here Are Your Chances of Getting an Antibiotic-Resistant Infection After Surgery

Mother Jones

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An eye-opening study published today in The Lancet Infectious Diseases medical journal shows just how many people acquire antibiotic-resistant infections after common procedures: Up to half of infections after surgery and a quarter of infections after chemotherapy are caused by resistant bacteria—meaning that they are significantly more difficult, if not impossible, to treat.

“A lot of common surgical procedures and cancer chemotherapy will be virtually impossible if antibiotic resistance is not tackled urgently,” said Dr. Ramanan Laxminarayan, a study co-author and director of the Center for Disease Dynamics, Economics, and Policy. “All of us at some point have to get a surgery or a root canal or a transplant, or perhaps go through chemo at some point in our lives. But how well these turn out depends on how well the antibiotics used to keep infections away during surgery work.”

Infections during and after surgeries and chemotherapy are common, so it is standard practice to give these patients antibiotics. But as the drugs are overused or misused, antibiotic resistance rates have risen. The Lancet authors conducted a meta-analysis of literature reviews on the efficacy of antibiotics after 10 of the most common surgeries in the United States. They found antibiotic-resistant bacteria to be causing 39 percent of infections after cesarean sections, 51 percent of infections after pacemaker implants, and 27 percent of infections after blood cancer chemotherapy.

If the efficacy of antibiotics drops 30 percent—a rate that the authors see as realistic given the current overuse of antibiotics—then infections from surgeries and chemotherapies could result in 120,000 more infections and 6,300 more infection-related deaths each year in the United States.

Dr. Laxminarayan suggests a multipronged solution to the problem: Doctors need to be trained on when (and when not) to prescribe antibiotics and how to minimize infections after common surgeries. Americans need to stay up to date on vaccines in order to reduce the need for antibiotics in the first place. If you’re getting surgery, he says, choose hospitals and surgeons with low infection rates—hospitals are required to publicly report these numbers in many states. (More from the Centers for Disease Control and Prevention, here).

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Here Are Your Chances of Getting an Antibiotic-Resistant Infection After Surgery

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Antibiotics Are Spreading Like Crazy—and a Lot of Them Are About to Stop Working

Mother Jones

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In 1945, Sir Alexander Fleming won a Nobel Prize for his discovery of penicillin, which transformed modern medicine. Later that year, the bacteriologist issued a prescient warning: The miracle medicine could one day come with dangerous side effects. If antibiotics were overused, he told the New York Times, bacteria would develop resistance and spur a new generation of bugs impervious to the drugs’ power.

In the last 60 years, Fleming’s advice has gone largely unheeded. Antibiotic consumption continues to grow even as health officials around the world sound the alarm over rising numbers of resistant bacteria. Now, a new report from the Center for Disease Dynamics, Economics and Policy (CDDEP), a multidisciplinary research organization, paints a harrowing picture of where we stand in the arms race against antibiotic resistance. The main finding is grim: Antibiotic consumption rose by 30 percent between 2000 and 2010 and is expected to swell further as demand for drugs and mass-produced meat products grow around the world.

“Antibiotic resistance is now clearly a problem in both the developed world and developing countries,” coauthor Ramanan Laxminarayan told National Geographic. “Things are about to get a lot worse before they get better.”

With the report, CDDEP also launched an interactive data visualization that shows antibiotic use from 69 countries. Additional charts also show antibiotic resistance rates of 12 different types of bacteria. For example:

One reason for the rising rates of resistance: Many developing countries that now have access to affordable antibiotics do not yet have the infrastructure to regulate them. The report highlights that 80 percent of antibiotics are consumed in communities and not in hospitals, and are often not prescribed by doctors. Many of the drugs being used are intended only for emergency cases. As Maryn McKenna reported in National Geographic:

Troublingly, that rising consumption worldwide takes in the most precious last-ditch drugs. Carbapenem use rose by 40 percent between 2000 and 2010, and the use of the very last-resort drug class polymixins rose by 13 percent. Sales of those drugs are rising fastest in India, Pakistan and Egypt, and many of those sales are retail, outside countries’ healthcare systems.

According to the Centers for Disease Control and Prevention, of the roughly 2 million people in the United States afflicted every year with illnesses caused by antibiotic-resistant bacteria, 23,000 of them will die. These illnesses cost around $20 billion each year, and lead to an additional $35 billion in productivity losses.

In response to the imminent and growing threat of antibiotic resistance, this year, the White House launched the National Action Plan for Combating Antibiotic-Resistant Bacteria, which aims to cut down on overuse in the next five years. While it does offer a promising framework for better practices in health care, as my colleague Tom Phillpot reports, regulations fall short in one of the key areas of antibiotic overuse: agriculture. The meat industry consumes an unbelievable 80 percent of all antibiotics sold in the United States.

The Food and Drug Administration’s voluntary guidelines advise against the use of antibiotics for animal growth—but the industry continues to exploit regulatory loopholes and administer growing amounts of antibiotics to the animals we eat.

Worldwide, according to the report, more than 63,000 tons of antibiotics were given to livestock in 2010, and this number is only expected to grow. Over the next 15 years, as demand for meat grows around the world and small scale farms switch to mass production to keep up, animal consumption of antibiotics is projected to increase by 67 percent.

While the outlook on growing antibiotic use and the likelihood of increased resistance seems grim, the authors of the report offer six strategies that could help curb the issues before they get worse:

Reduce the need for antibiotics through improved water, sanitation, and immunization
Improve hospital infection control and antibiotic stewardship
Change incentives that encourage antibiotic overuse and misuse to incentives that encourage antibiotic stewardship
Reduce and eventually phase out subtherapuetic antibiotic use in agriculture
Educate and inform health professionals, policymakers, and the public on sustainable antibiotic use
Ensure political commitment to meet the threat of antibiotic resistance

Earlier this year, the World Health Organizations’ governing body, the World Health Assembly, called for its member countries to adopt policies that will curb antibiotic use by 2017. The report’s authors hope their findings will lead to stronger stewardship around the world.

“With support from WHO and the international community, this resolution could catalyze change—or, like similar resolutions over the past decade, it may be ignored,” they write. “The evidence in this report, documenting the seriousness of the problem and offering a successful approach to country level action, supports both the urgency and the feasibility of making progress in conserving antibiotic effectiveness.”

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Antibiotics Are Spreading Like Crazy—and a Lot of Them Are About to Stop Working

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