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Thursday, December 11, 2008

While Detroit Slept

As I think about our bailing out Detroit, I can’t help but reflect on what, in my view, is the most important rule of business in today’s integrated and digitized global market, where knowledge and innovation tools are so widely distributed. It’s this: Whatever can be done, will be done. The only question is will it be done by you or to you. Just don’t think it won’t be done. If you have an idea in Detroit or Tennessee, promise me that you’ll pursue it, because someone in Denmark or Tel Aviv will do so a second later.

Fred R. Conrad/The New York Times

Thomas L. Friedman

Why do I bring this up? Because someone in the mobility business in Denmark and Tel Aviv is already developing a real-world alternative to Detroit’s business model. I don’t know if this alternative to gasoline-powered cars will work, but I do know that it can be done — and Detroit isn’t doing it. And therefore it will be done, and eventually, I bet, it will be done profitably.

And when it is, our bailout of Detroit will be remembered as the equivalent of pouring billions of dollars of taxpayer money into the mail-order-catalogue business on the eve of the birth of eBay. It will be remembered as pouring billions of dollars into the CD music business on the eve of the birth of the iPod and iTunes. It will be remembered as pouring billions of dollars into a book-store chain on the eve of the birth of Amazon.com and the Kindle. It will be remembered as pouring billions of dollars into improving typewriters on the eve of the birth of the PC and the Internet.

What business model am I talking about? It is Shai Agassi’s electric car network company, called Better Place. Just last week, the company, based in Palo Alto, Calif., announced a partnership with the state of Hawaii to road test its business plan there after already inking similar deals with Israel, Australia, the San Francisco Bay area and, yes, Denmark.

The Better Place electric car charging system involves generating electrons from as much renewable energy — such as wind and solar — as possible and then feeding those clean electrons into a national electric car charging infrastructure. This consists of electricity charging spots with plug-in outlets — the first pilots were opened in Israel this week — plus battery-exchange stations all over the respective country. The whole system is then coordinated by a service control center that integrates and does the billing.

Under the Better Place model, consumers can either buy or lease an electric car from the French automaker Renault or Japanese companies like Nissan (General Motors snubbed Agassi) and then buy miles on their electric car batteries from Better Place the way you now buy an Apple cellphone and the minutes from AT&T. That way Better Place, or any car company that partners with it, benefits from each mile you drive. G.M. sells cars. Better Place is selling mobility miles.

The first Renault and Nissan electric cars are scheduled to hit Denmark and Israel in 2011, when the whole system should be up and running. On Tuesday, Japan’s Ministry of Environment invited Better Place to join the first government-led electric car project along with Honda, Mitsubishi and Subaru. Better Place was the only foreign company invited to participate, working with Japan’s leading auto companies, to build a battery swap station for electric cars in Yokohama, the Detroit of Japan.

What I find exciting about Better Place is that it is building a car company off the new industrial platform of the 21st century, not the one from the 20th — the exact same way that Steve Jobs did to overturn the music business. What did Apple understand first? One, that today’s technology platform would allow anyone with a computer to record music. Two, that the Internet and MP3 players would allow anyone to transfer music in digital form to anyone else. You wouldn’t need CDs or record companies anymore. Apple simply took all those innovations and integrated them into a single music-generating, purchasing and listening system that completely disrupted the music business.

What Agassi, the founder of Better Place, is saying is that there is a new way to generate mobility, not just music, using the same platform. It just takes the right kind of auto battery — the iPod in this story — and the right kind of national plug-in network — the iTunes store — to make the business model work for electric cars at six cents a mile. The average American is paying today around 12 cents a mile for gasoline transportation, which also adds to global warming and strengthens petro-dictators.

Do not expect this innovation to come out of Detroit. Remember, in 1908, the Ford Model-T got better mileage — 25 miles per gallon — than many Ford, G.M. and Chrysler models made in 2008. But don’t be surprised when it comes out of somewhere else. It can be done. It will be done. If we miss the chance to win the race for Car 2.0 because we keep mindlessly bailing out Car 1.0, there will be no one to blame more than Detroit’s new shareholders: we the taxpayers.

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Obama Blagojevich Connection Attempted And Failed On "Hannity And Colmes"

Media Matters' Jamison Foser makes note of an emerging press conceit to be on the lookout for -- Blagojevich stories that seem to raise the specter of President-Elect Barack Obama being "implicated in the scandal, followed by concessions that he, you know...isn't."*

Ironically, on last night's Hannity & Colmes, the opposite occurred. On four separate occasions, it was mentioned that the raft of legal documents contained material that was "exculpatory" to Obama. Sean Hannity made mention of it, early in the show:

HANNITY: But for all of the Obama supporters out there that say Sean Hannity never gives the President-elect a break, there is exculpatory information in here that I think helps Barack Obama a ton. And let me tell you what it is. When the Governor Blagojevich says they're not willing to give me, and he was talking specifically about Obama, anything except appreciation [for giving his preferred Senate candidate the vacated seat], I would think that that works very favorably for the President-elect. The thing that works against him is what Blagojevich said the day before where, quote, "he would work with the Service Employees International Union," they'd work out a deal that would benefit Blagojevich, and that, quote, something favorable would go to the union from the President-elect in the future.

Now, of course, Hannity's second point depends on a Barack Obama who, having spurned a shady quid pro quo in the first place, would be willing to keep a shady promise to someone else at a later date. This does not seem like plausible human behavior to me, but hey, it's not like the White House has been some Temple to Plausible Human Behavior lately. The salient point is this: as far as any ongoing corruption is concerned, what Fitzgerald has put out there more or less indicates that Obama wasn't willing to participate in anything out of bounds.

Like I said, the exculpatory nature of the taped conversations came up numerous times throughout the show. Like, say, during a conversation with Mike Huckabee.

HANNITY: Obama had "Candidate 1" that he wanted, and if anything, the Governor's frustration was that Obama wouldn't give him anything. I think that's fairly exculpatory for him. On the other hand what I was talking about with Karl was that there would be favors in the future by the President-elect. So there's a lot of unanswered questions in my mind.


HUCKABEE: I think the greater issue is that the corruptible person is the Governor, I do not see that Barack Obama would be stupid enough to even worry with it.

You see how "favors" that haven't transpired yet have suddenly become done deals? And how even Mike Huckabee is feeling me, where "plausible human behavior" is concerned? Well, this must have really agitated the poisonous egg yolk inside Hannity's skull, because after a brief fusillade of complaining about Bill Ayers, Hannity returned to the topic at hand with this bit of nonsense:

HANNITY: I wonder if we're starting to see what we suspected of Barack Obama. I think the Tony Rezko issue is going to be a big problem for him. Especially since he's all over this document. The word President-elect is mentioned 44 times.

OH NOES! The word "President-elect" is in the documentation how many times? Well, that's certain damnation, isn't it? My God! What role did VERBS play in this corruption? Precisely how many definite and indefinite articles were involved? Tune in tonight, when Hannity & Colmes hashes it all out with the Fox News Forensic Grammarian!

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In the old days, buying a Senate seat was not unusual

By David G. Savage

Reporting from Washington -- Reforms to end the buying of Senate seats by giving governors the power to fill vacant posts set the stage for the scandal involving Illinois Gov. Rod R. Blagojevich.

The reforms nearly a century ago were sparked by another Illinois scandal and led to a change in the U.S. Constitution.



The "blond boss" of Chicago, William Lorimer, was ousted from the Senate in 1912 after it was found that bribes had been paid to Illinois state legislators to get him the seat.

In the late 19th century, it was commonly said that wealthy men could buy a seat in the Senate by spreading money among the state legislators, who, under the nation's Constitution, had the task of choosing U.S. senators. The idea had been that elected lawmakers, rather than ordinary people, could be trusted to make a wise selection.

The Chicago case played a prominent role in the nation's decision to amend the Constitution and allow the state's voters to elect their senators. It was a solution that seems to have worked for 95 years.

Lorimer, an immigrant from England and a dapper and popular politician, was elected to the House of Representatives in 1895 when he was 33. In 1909, after a long deadlock in the Illinois Legislature, Lorimer was chosen to represent the state in the U.S. Senate.

But a year later, the Chicago Tribune reported on allegations that bribes had been paid to secure Lorimer's seat, including an admission by a state assemblyman that he had received $1,000.

Lorimer vehemently denied the charges and called for a Senate investigation. He was cleared, but a year later the Progressive Movement picked up the cause and the Senate reversed itself. Lorimer was ousted from the Senate by a 55-28 vote.

"The Lorimer case was the poster child for what was wrong with the old system," Donald Ritchie, a Senate historian, said Tuesday. "The senators were bombarded with newspaper editorials, and the feeling at the time was the best solution was to turn this over to the people."

This sentiment had been building for decades. Between 1866 and 1906, six bribery cases were brought before the Senate.

In the Western states, miners who achieved instant wealth sometimes aspired to higher office. In 1899, two rival mining company owners -- W.G. Conrad and William Clark --paid more than $1 million in bribes in hopes of obtaining a U.S. Senate seat representing Montana, according to Wendy Schiller, a political science professor at Brown University.

The contest lasted through 17 ballots before a winner could be decided, and the two candidates had to pay up before each day's ballot to prevent their supporters from switching sides, she said.

Clark eventually won, but the U.S. Senate refused to seat him and the spot was vacant for two years.

Lorimer, however, was the last senator removed for corruption involving a state legislature. In 1913, the 17th Amendment to the Constitution was ratified, saying that the two senators from each state shall "be elected by the people."

This power-to-the-people amendment was a triumph for the Progressives, but its second clause said, "When vacancies happen in the representation of any state in the Senate, the executive authority of such state shall issue writs of election to fill such vacancies."

Since then, governors have filled Senate seats "when vacancies happen" by making appointments or by calling for special elections. Legal experts said Tuesday that they were not aware of previous allegations that governors had sought bribes in exchange for such an appointment.

"We are not aware of anything that resembles this," Ritchie said.

In recent decades, there have been occasional allegations that money and promised favors may have prompted some candidates for the Senate to drop out of the race. In 1986, Rep. Bobbi Fiedler (R-Calif.) and an aide were accused of trying to lure state Sen. Ed Davis to drop his bid for the Senate by offering to help pay off his campaign debts. Those charges were dismissed before the matter went to trial.

A Boston College expert who studies public corruption said it is not unusual for public officials to choose friends or associates when making appointments. "We expect our public officials to appoint people who are close to them. We expect people to give them campaign contributions," said George Brown, a law professor. "It is normally a gray area.

"The two things that are unusual about this case," he said, referring to Blagojevich, "are one, the high level of the official, and two, the apparent brazenness and openness of the alleged incident."

Schiller of Brown University recalled the Montana mining operator who paid lavish bribes to win a Senate seat. "If William Clark woke this morning and saw the newspaper, he would have said, 'Of course, that's how it works'," she said.

David Savage is a writer in our Washington bureau. david.savage@latimes.com

Contributing to this article were Laura E. Olson and Cynthia Dizikes, reporting from Washington.

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Nobel Winner Chu To Land Top Energy Post

Steven Chu, director of the Lawrence Berkeley National Laboratory, photographed in 2005.
Ben Margot

Steven Chu, director of the Lawrence Berkeley National Laboratory, photographed in 2005 at a conference in San Francisco. AP

Carol Browner at a 2007 conference.
Chip Somodevilla

In November 2007, Carol Browner played the role of energy secretary in a discussion between former military and political leaders during a mock global energy crisis. Getty Images

Steven Chu, a renowned physicist and green-energy advocate, has reportedly been tapped by President-elect Barack Obama to run the federal Department of Energy. Chu runs the DOE's Lawrence Berkeley National Laboratory in California, and he has made climate change the new centerpiece of his career.

Chu's resume contains an item never before seen on a DOE director's CV: a Nobel Prize in physics. Chu, who comes from an immigrant family of scientists, shared the prize with two other physicists in 1997.

His contribution was an ingenious set of experiments that captured atoms in different kinds of "atom traps." He created the traps by firing lasers at right angles to each other. The laser light functioned as a sort of "optical molasses," according to the Nobel committee. Individual atoms slowed down within the laser beams, enough so that scientists could study their inner structure.

Chu did most of that work at AT&T Bell Laboratories in New Jersey. He went from there to a research position at Stanford University, then took over the Lawrence Berkeley lab in 2004. He is also a professor at the University of California, Berkeley.

Lab staff declined to comment on the choice of Chu for DOE. News agencies have cited sources at the Obama transition team as confirming his selection.

A Democratic aide also said Obama has settled on former Environmental Protection Agency Administrator Carol Browner for a new position coordinating White House policy on energy, climate and environmental issues.

A Rising Star

Scientists in the energy field have watched Chu's star rise over the past few years as he turned the lab toward research in new forms of low-carbon energy.

"Steve has given the lab clear and innovative direction. He has taken the lab's strength in energy efficiency ... and pushed it along the whole spectrum, from basic to applied science," says Dan Kammen, a physicist and energy analyst at UC, Berkeley.

And having a Nobel laureate running DOE, Kammen adds, "is a neat sign for science."

Chu has turned his attention in the past few years to building financial support for alternative energy research. He helped win half a billion dollars from British Petroleum to fund an Energy Biosciences Institute, which focuses research at several institutions, including his lab, on producing biofuels from plant materials. In fact, some of Chu's earlier work in physics applied techniques similar to atom-trapping to biological materials such as DNA.

Urging Action On Global Warming

Chu has used his reputation to urge action to slow global warming. In a PBS news program last year, he said it was his obligation.

"In the last five or six years," he said, "I was following this as an interested citizen. And it became more and more apparent to me that the dangers, the potential risks of climate change were looking like they were more and more likely, and that ... as a scientist, a responsible scientist, you really have to think of what you can do to help with this problem."

Chu also established the Helios Center within the Berkeley lab, aimed at research on new fuels for transportation. These include making biofuels from biomass, using algae in fermentation tanks to make fuel, and applying solar energy to convert water and carbon dioxide to fuels.

The Coal Question

The Department of Energy is the leading supporter of energy research within the federal government. As director, Chu will have to grapple with powerful supporters of coal, who have backed new DOE research on turning coal into liquid fuel. The department has also dedicated tens of millions of dollars to designing new power plants that capture carbon dioxide from coal before turning it into a gas to make electricity.

Much of coal's future — it currently is used to make about half the country's electricity — depends on research funded by DOE on how to bury that captured carbon dioxide so it won't rise into the atmosphere and contribute to global warming.

A major part of DOE's budget is dedicated to nuclear weapons research and maintaining the military's nuclear arsenal. Among the biggest tasks facing the agency is disposing of nuclear waste from civilian power plants and government weapons labs around the country.

The leading candidate for a dump site, Yucca Mountain in Nevada, has been mired in technical and legal debate for years and is decades behind schedule.

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Kennedy Is Said to Be Politicking for His Niece

By DAVID M. HALBFINGER

While Caroline Kennedy is maintaining her public silence about whether she wishes to succeed Senator Hillary Clinton, her uncle, Senator Edward M. Kennedy of Massachusetts, has been working behind the scenes on her behalf, according to Democratic aides.

In recent days the Massachusetts senator has called Senator Charles E. Schumer, as well as Senator Robert Menendez of New Jersey, who took over last month as head of the Democratic Senatorial Campaign Committee when Mr. Schumer stepped down.

Mr. Kennedy’s message, according to Democratic aides who were not authorized to discuss the conversations, is that Ms. Kennedy — backed by the Kennedy family’s extensive fund-raising network — would have the wherewithal to run back-to-back costly statewide races without having to seek help from Mr. Paterson or Mr. Schumer.

The ability to raise significant money is a key concern for Mr. Paterson, who has been deluged from every direction by politicians interested in the seat, which the governor is expected to fill early next year. Whoever is chosen will have to run in 2010 and again two years later.

Efforts to reach Ms. Kennedy on Monday were unsuccessful. A spokesman for Senator Kennedy declined to comment.

The governor has sought to downplay the frenzy over Ms. Kennedy’s potential interest in the Senate seat. The mere suggestion that she might be Mrs. Clinton’s replacement has made headlines around the world.

On Sunday night, Governor Paterson met with senior advisers, Mr. Schumer and Representatives Charles B. Rangel, Nita M. Lowey, and Gregory W. Meeks to discuss the process for making the appointment. Those gathered urged the governor to go slowly, Mr. Meeks said.

Asked about Ms. Kennedy, Mr. Meeks acknowledged her appeal.

“Does she know politics?” he said. “Absolutely. Could she be a great senator? I don’t see why not.”

Mr. Meeks also noted that Ms. Kennedy was an intensely private person.

“That’s the biggest decision she’s got to make,” he said. “Whether she’d want to leave her private life behind.”

An aide to another official at the meeting said that those present also weighed the pros and cons of other contenders, including Attorney General Andrew M. Cuomo and Representative Kirsten Gillibrand from upstate New York.

But some influential Democrats have privately suggested that given the buzz set off by Ms. Kennedy’s emergence, the governor would have little choice but to appoint her if she decided she truly wanted the job.

Some people close to Mr. Paterson, however, are trying to quash that notion.

“Governor Paterson is in charge; he is going to make the decision,” Mr. Meeks said, adding that he would not be swayed by “pressure from the press or anyone else.”

Also on Monday, Kerry Kennedy, a daughter of Robert F. Kennedy, who once held the New York Senate seat, went on MSNBC to say that her cousin would be a great choice.

Meanwhile, Representative Carolyn Maloney announced she had hired the political consulting firm of Bill Lynch, a sometime adviser to the governor, to promote her for the seat.

In what could be read as a dig at the waiting game for Ms. Kennedy, Ms. Maloney said in a statement: “This is no time for people to be coy about whether or not they are up to the job of stepping into Senator Clinton’s big shoes.”

Nicholas Confessore, Danny Hakim and Carl Hulse contributed reporting.

Editors' Note: December 10, 2008
An article on Tuesday about politicking on behalf of Caroline Kennedy as a possible candidate for the Senate seat being vacated by Hillary Rodham Clinton reported that Senator Edward M. Kennedy, Ms. Kennedy’s uncle, had called Gov. David A. Paterson to advocate for his niece. The information was attributed to Democratic aides, speaking anonymously.

On Tuesday, both Mr. Kennedy and Mr. Paterson said no such conversation had taken place. The Times should have sought their comment before publication. A corrective article is on Page A38.

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