Category: Austerity

Links You Can Use

The Daily Escape:

Santa Rita prickly pear in bloom, AZ – May 2023 photo by Wilson Goodrich

Today Wrongo returns to his “Links you can use” format from several years ago.

First up, Bloomberg reports that Trump’s takeover of the GOP helped him to rewrite the rules on how primary delegates to the GOP presidential convention will be awarded. Since leaving office, Trump has gotten 10 more states to award delegates through winner-take-all primaries, even if the winner receives fewer than a majority of the votes. The number of winner-take-all states has grown from seven to 17.

Needless to say, if it’s crowded field and he gets the most votes, even if it’s only 30%, he’ll win.

Second, Republican governors have discovered that they’re getting significant political mileage out of championing people who have engaged in vigilante violence that dovetails with the GOP’s culture wars. Brian Klaas writes about the Right’s open embrace of political violence. In Texas, Governor Abbott has said that he was “looking forward” to pardoning Daniel Perry, who murdered a Black Lives Matter protester. Perry was sentenced to 25 years in prison. He had previously texted a friend that he “might have to kill” some people on his way to work.

Over the weekend, Florida Governor DeSantis tweeted his support for Daniel Penny (Perry and Penny?) after Penny killed the homeless Black man Jordan Neely, on NYC’s subway. DeSantis didn’t hold back:

Lots of dog whistles right there from the governor. NBC 4New York reported that the legal defense fund had raised more than $2 million after DeSantis tweeted the link to Penny’s donation page. This shows MAGAs have found another way to wealth and fame as Daniel Penny now joins Kyle Rittenhouse as a violent millionaire funded by the Republican Right.

Brian Klaas wrote about a study that shows “Who Supports Political Violence?”, conducted by Miles T. Armaly, Assistant Professor of Political Science at the University of Mississippi and Adam M. Enders, an Assistant Professor of Political Science at the University of Louisville. Their findings show some key traits that predict support for political violence:

Perceived victimhood is highly correlated with support for political violence. This is different from actual victimhood. While previous research found that people who are actually being oppressed are more likely to turn to violence, this study shows that it doesn’t really matter whether someone is actually being oppressed; instead, the feeling of being oppressed is sufficient.

This was the strongest predictor of support for violence.

The next strongest correlate was a sense of “white identity.” And the two interact, as those who buy into the Right-wing narrative that white people are under attack in America (due to their loss of social dominance), are also likely to be the same individuals who feel perceived victimhood.

Also, past military service is correlated with a predisposition for vigilante violence. People who previously served in the American armed forces were more likely to express support for political violence than those who have not. None of this is good news for the US.

Third, the Debt Ceiling negotiations are resuming today in the White House after House, Senate and White House negotiators met for three hours Saturday, and then reconvened on Monday. Benjamin Studebaker worries that Biden may be about to repeat Obama’s errors in negotiations with Republicans in 2011:

“Back in 2011…Obama faced the same problem…Biden now faces. Congressional Republicans refused to raise the debt ceiling unless Obama agreed to budget cuts….Obama….Instead…cut a deal. He signed the Budget Control Act of 2011. It committed the federal government to…enormous cuts. Over the course of 2012, it became clear that these cuts would cause serious damage to the economy. So…Obama negotiated another deal that would save most of the cuts for 2013. Over the course of 2013, the same arguments were made again, but this time Obama was unable to secure another delay, and the cuts took effect.”

Sounds like what we’re going through right now. In 2013, we escaped the economic disaster, but at the price of the Fed adding several rounds of Quantitative Easing leading to our current economic situation. If Biden agrees to cut spending, the economy will again be damaged.

And the Federal Reserve will be pressured to limit the damage via lower rates or flooding the market with more dollars.

Republicans will, of course, oppose tax increases. That means the Biden administration won’t be able to raise taxes to help offset the growing deficit or pay for future expenses. Therefore it has to rely on the Federal Reserve’s monetary policies. The weaker economy created by rate hikes is an economy where the current tax rates will generate less tax revenue. That creates more political pressure to cut spending.

All of these stories look like rinse, lather, repeat. And not to the nation’s benefit.

Facebooklinkedinrss

Deferred Maintenance is America’s Exceptionalism

The Daily Escape:

West Cornwall Covered Bridge, West Cornwall, CT – photo by Juergen Roth Photography. The 172’ bridge spans the Housatonic River.

America runs on deferred maintenance. We won’t do a thing today that can be put off for another day, another year, or several years. The ongoing disaster of the collapsed condo at Champlain Towers South in Florida is a perfect metaphor for America. A quick look at some details is instructive.

The NYT had a story about the conflicts among residents and the Champlain Towers South condo board. A report indicated that major repairs were needed to maintain the structural integrity of the building. But the repairs weren’t popular with the residents: (brackets by Wrongo)

“Steve Rosenthal, 72, a restaurant advertising executive, went to the gym in the building nearly every day. Afterward, he would stop at the pool, where he could see a crack on a third-floor balcony that he described as ‘atrocious.’ But he called the $135,000 assessment [to fix the problems] on his condo, a corner unit with double balconies, a ‘second mortgage’.

‘It’s an upscale building, but it’s not the Ritz or the Four Seasons….The people that live [here]…aren’t Rockefellers or Rothschilds. We’re upper middle class, I guess, and a lot of us are retired’….When a neighbor knocked on his door, 705, with a petition against the assessment, Mr. Rosenthal signed it. The first payment was due on July 1.”

BTW, Rosenthal survived the condo collapse. He was rescued from the intact part of the collapsed building, and he’s staying in a Residence Inn a few blocks away. Worse, Rosenthal has filed a lawsuit against the condo board for negligence and against the property for shoddy construction!

America is filled with assholes like Rosenthal. They’ve taken over – they dominate our politics (I’m talking to you Mitch). They dole out promotions to other assholes. They punish anyone who tries to do the right thing. They tell us how to vote, and who to love. (Hat tip: Jessica Wildfire)

Their attitude that “This seems bad, but if I have to pay to fix it, count me out” is the position of many, many Americans, regardless of what kind of deferred maintenance is being considered. Fixing our roads? Sorry, no gas tax increases. Better school buildings? Property taxes are too damn high. Better Internet? Why? Better health insurance? Socialism!

DC politics is infested with a “we can’t afford this” knee-jerk reaction whenever the subject of dealing with America’s deferred maintenance is on the table. And of course, that’s the thinking that deferred the maintenance in the first place.

It’s particularly bad when the subject is how to deal with climate change. What incentives are there to alter behavior to prevent change that will have most of its effects after 2050? The answer is none, except for an intangible feeling that you’ve done the right thing for posterity.

Current stakeholders (regardless of whether they have a stake in a property, a city, or the entire country), willingly defer maintenance to the next generation of stakeholders, when it will be much, much more expensive. Eventually, the problem can’t be remedied. Like In the Florida condo, that’s when things start collapsing, and people start dying.

Perhaps someone should have said to the condo residents: “You can probably play Russian roulette without dying, but do you really like your odds?”

There was a 1981 ad by Fram Oil Filters  that had the tag line: “pay me now or, pay me later.” Imagine, accountability and wisdom brought to you by Madison Avenue! When we move from car maintenance to the country, the answer is you’ll pay WAY more later. We’ve been blowing off serious repair and replacement of our infrastructure for decades.

We’ve blown off making sure that all Americans have safe bridges and roads.

We’ve blown off making sure that all Americans have basic health insurance.

We’ve blown off immigration reform.

We’ve blown off gun sanity.

We’re blowing off moving from fossil fuels to renewables.

Do you see the parallel in how we respond to these issues? First, there’s a warning, then there’s evidence, followed by denial, delay, and ultimately, disaster. There’s no problem, if there is a problem, it’s too expensive to fix. Maybe we can fix it in a few years, eventually followed by incalculable cost and misery.

We’re the only rich country that kicks the can down the road on anything that’s politically difficult. You know that’s true if you’ve been to an airport in China or Europe. If you’ve taken public transit in Europe or Hong Kong. If you’ve seen the ports in Rotterdam or in Asia.

Time to kill all the assholes.

Facebooklinkedinrss

Tax Revenue Has Never Been More Important

The Daily Escape:

Harris & Ewing “Less taxes, more jobs”, US Chamber of Commerce campaign in 1939. Photo via Shorpy. Maybe the sign should have said “lower taxes”. It was the first of 25,000 such signs put up all over the nation as part of a drive for a reduction in corporate taxes. And it worked. An alliance between the Chamber, Henry Morgenthau, Treasury Secretary, and Sen. Pat Harrison, (D-MS) conservative chair of the Senate Finance Committee, prevailed over the New Dealers. He blocked further tax hikes, and helped to create new corporate tax loopholes. Roosevelt went along, expecting that business would support him. The following year, the Chamber simply demanded more tax breaks, while backing Wendell Willkie. It’s all so familiar. Trickle down is an old idea, and everything old is new again!

 Here’s an interesting chart from End Coronavirus.org showing the progress of states toward beating the current COVID-19 pandemic. The numbers are through May 5. Those in green are winning the fight, those in yellow are nearly there, and the red ones still need more action:

There are four states in the green: Alaska, Hawaii, Montana and Vermont. Ten are nearly there, including Maine, Louisiana, New York and South Dakota. The remaining 37 still need work, some more than others. And many of the “needs more work” states are exiting their lockdowns this week.

So it goes in America. States and cities are going broke, primarily because of the sharp drop in tax revenues since the shutdown. They all face increased costs, from unemployment claims to spending on additional hospital capacity, and overspending on new purchases of PPE because of federal government inaction.

New York City says it will need $7.4 billion in federal aid, while NY state faces a $13 billion shortfall; Alaska’s budget gap might top $1 billion; Colorado’s at $3 billion. California? Its shortfall may be $54 billion. Red ink will be true for nearly every state, county, city, town and village in the country. States can’t deficit spend. They and their local governments must balance their budgets somehow, with some combination of federal aid, budget cuts, or tax increases.

In addition, the WSJ reports that some manufacturers that furloughed employees during lockdowns say their plants definitely won’t reopen.  Manufacturing output last year finally surpassed the 2007 previous peak, but factory employment has not returned to levels reached before the great financial crisis. It appears that in 2020, it will again fall below 2007 levels. And the more that job losses turn from temporary to permanent, the bigger the hit to unemployment insurance, to consumer spending, and to every company that relies on it—including manufacturers.

Wrongo spoke by phone with the mayor of his little town this morning. We are still not sure how we will balance the town’s 2020-2021 budget. In most years, the budget has been approved by the voters in May, but that will not happen this spring. The consequence is that, regardless of how the budget gets balanced, the town’s recovery will likely take several years.

So, states and cities think they have little choice but to reopen. They need the tax revenue, while they face even higher costs if they start an aggressive test and trace program. And they can’t expect the federal government to fund that new testing and tracing.

So most states are moving toward opening, regardless of whether they are red, or blue.

But, states may not all be EQUALLY reckless in what they choose to open, some are planning a phased reopen, followed by a re-evaluation before moving forward to the next step. Some are opening up just about as fast as they closed businesses six – eight weeks ago.

We are living in a federal system with a broken central government. The federal government has handled the pandemic badly, and shows no interest in trying to do better now. Even a robust federalism will fail if there is no federal financial help for the states.

It is a hell of thing to be shown clearly and in no uncertain terms that your federal government doesn’t give a shit if your citizens live or die.

Or if your state suffers a debilitating blow to its finances and future.

Wrongo can’t be sure, but this is probably how black people have felt forever. Now it applies to the rest of us.

Facebooklinkedinrss

Monday Wake Up Call – November 4, 2019

The Daily Escape:

Lake Sabrina, CA – November 2019 photo by Wild_NDN

All of a sudden, there are ongoing protests throughout the world. This seems to be an enormous story, maybe the biggest story of October, despite America’s focus on impeachment. And there’s some, but not a lot of media coverage. Here’s a map of the locations, and primary causes, of recent unrest around the world:

When you see the map, it’s clear that something’s happening. In some places, protesters are mainly demanding more political freedom, like what we’ve seen in Hong Kong. In others, like Iraq and Lebanon, people are sick and tired of corruption and unemployment. They want to throw out the old guard.

The map shows 14 countries, but others report as many as 22 countries experiencing protests in 2019. Can we find common threads to these protests?

They don’t show ideological consistency, although they do show similar tactics. Unlike Occupy in the US, these protesters have demands, which vary with each protest. In some places, they involve millions of people. They do not seem to be internationally driven, although the local powers that be often say that they are.

A Chinese friend of the Wrongologist who lives in Hong Kong provides lots of coverage on local violence. For our media, violence is always “breaking out,” or protests always are “descending into” it, but we rarely hear deep explanations for why it occurs.

Let’s look at a few reasons that transcend individual countries:

Economic Slump

This argument is true for Chile, Ecuador, Venezuela and Haiti in Latin America. It is also true in Iraq in the Middle East. Despite their differences, each country saw commodity-driven economic growth, followed by a slump or stall. Haiti, despite its own economy largely being stagnant, saw billions in aid from oil-rich Venezuela come in, then disappear when Venezuela had its economic issues.

Income Inequality

Jeffrey Sachs frames income inequality as social unhappiness and distrust, in Why Rich Cities Rebel: (brackets by Wrongo)

“Three of the world’s more affluent cities have erupted in protests and unrest this year. Paris has faced waves of protests and rioting since November 2018…after…President Macron raised fuel taxes. Hong Kong has been in upheaval since March, after Chief Executive Carrie Lam proposed a law to allow extradition to the Chinese mainland. And Santiago [Chile] exploded in rioting this month after President Sebastian Piñera ordered an increase in metro [subway] prices….taken together, they tell a larger story of what can happen when a sense of unfairness combines with a widespread perception of low social mobility.”

Gallup finds that while Hong Kong ranks ninth globally in GDP per capita, it ranks 66th in terms of the public’s perception of personal freedom to choose a life course. The same is true in France (25th in GDP per capita, but 69th in freedom to choose) and in Chile (48th and 98th, respectively).

It appears that traditional economic measures of well-being are insufficient to gauge the public’s real sentiments. The protesters perceive the politics behind the prices, and that’s what they are moving against.

Income inequality also shows up as withdrawal or repricing of government services. From the NYT:

“In Chile, the spark was an increase in subway fares. In Lebanon, it was a tax on WhatsApp calls. The government of Saudi Arabia moved against hookah pipes. In India, it was about onions.”

In Ecuador, the focal point of the protests was a demand for restoration of fuel subsidies. From The Financial Times (paywalled):

“The mass protests that have broken out during the past year in Asia, Europe, Africa, Latin America and the Middle East…are usually leaderless rebellions, whose organization and principles are not set out in a little red book or thrashed out in party meetings, but instead emerge on social media.”

Social media is the enabler for leaderless movements. When the Hong Kong demonstrations broke out in June, Joshua Wong, the most high-profile democracy activist in the territory, was in jail. In Moscow, Russia arrested leader Alexander Navalny, but demonstrations continued without him. In Lebanon, France and Chile, authorities have searched in vain for ringleaders. In Iraq, Muqtada al-Sadr, has emerged as the leader of the movement to replace Prime Minister Mahdi.

Underneath it all, whether we’re talking about people wanting political freedom or economic security, these riots are about class, wealth, and income. They are about the fact that all of these countries have very rich people who make the rules.

And their rules never favor the non-rich.

It is unclear if any of these protests will effect change. History rarely favors the man in the street.

Pro tip: If you are going to riot, take the time to head over to the part of town where the rich live, and riot there.

Facebooklinkedinrss

Random Tuesday Thoughts

(Wrongo and Ms. Right are away until July 9th visiting our CA family. Expect the next column to be posted then.)

The Daily Escape:

White Sands National Monument, NM – 2019 photo by Bernard-F

#1: Wrongo watched the video of Trump walking across the Korean DMZ. While most foreign policy professionals will have a cranky reaction to the event, it represents progress. Both sides had stopped negotiations and in fact, were not even talking, after Trump walked out of the Hanoi meeting.

Whether it is a breakthrough that leads to a deal remains to be seen. OTOH, Trump took his daughter Ivanka and Tucker Carlson to the DMZ, while sending John Bolton (who he called “Mike”), and Mike Pompeo on to other tasks. Anything that drives the GOP neocons crazy can’t be all bad.

The incoherence of Trump’s global strategy shows itself in extending himself to North Korea, a country that has nuclear weapons, and the means to deliver them. The US has no agreement with NorKo to contain its weapons of mass destruction. We don’t even have a peace agreement after the War that ended in 1953, but we’re talking.

Contrast that with Trump’s walking away from the signed Iranian nuclear deal, which was negotiated to prevent an exact North Korea-type situation from happening. Inexplicable.

#2: Forbes has a very interesting article on new solar power capacity in California:

“Los Angeles Power and Water officials have struck a deal on the largest and cheapest solar + battery-storage project in the world, with a prestige solar battery supplier, at prices that leave fossil fuels in the dust and may relegate nuclear power to the dustbin.”

Cheaper than fossil fuels, the new plant will be built north of LA, in Kern County. LA officials said that it will be the largest and lowest-cost solar and high-capacity battery storage project in the US. When up and running, it will operate at half the estimated cost of power from a new natural gas plant. The plant is expected to deliver its first megawatt by April 2023.

#3: Reuters reports that Trump’s “deal” with China may not be a deal at all. In their article, China warns of long road ahead for deal with US after ice-breaking talks, Reuters quotes the official China Daily, an English-language daily often used by Beijing to put its message out to the rest of the world. It warned there was no guarantee there would ever be a deal: (emphasis by Wrongo)

“Agreement on 90 percent of the issues has proved not to be enough, and with the remaining 10 percent where their fundamental differences reside, it is not going to be easy to reach a 100-percent consensus, since at this point, they remain widely apart even on the conceptual level.”

#4: Next, it’s that time of year again where Americans camp out for days in order to visit with a pop-up rural clinic nurse. Why? Because we have the most expensive “health care” on earth, and a system absolutely designed to keep it that way:

“They were told to arrive early if they wanted to see a doctor, so Lisa and Stevie Crider left their apartment in rural Tennessee almost 24 hours before the temporary medical clinic was scheduled to open. They packed a plastic bag with what had become their daily essentials after 21 years of marriage: An ice pack for his recurring chest pain. Tylenol for her swollen feet. Peroxide for the abscess in his mouth. Gatorade for her low blood sugar and chronic dehydration.”

A view from the volunteers:

“…a clinic volunteer….patrolled the parking lot late at night and handed out numbers to signify each patient’s place in the line. No. 48 went to a woman having panic attacks from adjacent Meigs County, where the last remaining mental-health provider had just moved away to Nashville. No. 207 went to a man with unmanaged heart disease from Polk County, where the only hospital had gone bankrupt and closed in 2017.”

With Republicans doing everything they can to break the Affordable Care Act, and then refusing to fix it, this is what their actions have caused. Rural hospitals are closing, people in rural counties have no health care. And the GOP tells them to blame Democrats. The reality is that Republicans in these states have cut funding for the programs that kept red state rural clinics and hospitals operating.

#5: Columbia University reported that scientists have discovered a gigantic aquifer of relatively fresh water trapped below the Atlantic Ocean. This undersea aquifer stretches from Massachusetts to New Jersey, extending more or less continuously out about 50 miles to the edge of the continental shelf.

The water was trapped in mile-deep ice 15,000 to 20,000 years ago. When the ice melted, sediments formed huge river deltas on top of the shelf, and fresh water got trapped there. It would have to be desalinated for most uses, but the cost would be much less than processing seawater.

See you next week!

Facebooklinkedinrss

Monday Wake Up Call – August 13, 2018

(Wrongo will be taking the next few days off. He has blog fatigue, and also needs to work on some deferred maintenance here on the fields of Wrong. He’ll be back later this week, unless events require him to jump back in sooner.)

The Daily Escape:

Abandoned house, Wasco, OR – 2018 photo by Shaun Peterson.

We wake up today to Yanis Varoufakis, the former finance minister of Greece’s, review of “Crashed: How a Decade of Financial Crisis Changed the World” by Adam Tooze posted in The Guardian. Tooze is an economic historian at Columbia University in NYC.

This isn’t a review of Tooze’s book, which sounds fascinating. Rather, it’s a meditation on one of Varoufakis’s ideas in his review of the book. Varoufakis says: (emphasis by Wrongo)

Every so often, humanity manages genuinely to surprise itself. Events to which we had previously assigned zero probability push us into what the ancient Greeks referred to as aporia: intense bafflement urgently demanding a new model of the world we live in. The financial crash of 2008 was such a moment. Suddenly the world ceased to make sense in terms of what, a few weeks before, passed as conventional wisdom – even McDonald’s, for goodness sake, could not secure an overdraft from Bank of America!

Tooze focuses on the causes of the Great Recession in 2008, and the implications for our 10-year long economic recovery. He observes that neoliberalism’s mantra about markets had to be shelved to save the US economy: (emphasis by Wrongo)

Whereas since the 1970s the incessant mantra of the spokespeople of the financial industry had been free markets and light touch regulation, what they were now demanding was the mobilization of all of the resources of the state to save society’s financial infrastructure from a threat of systemic implosion, a threat they likened to a military emergency.

We have no idea where the current aporia will take us, particularly since this “moment” has already lasted 10 years, and the hard-won economic progress may be easily reversed. Varoufakis continues:

Moments of aporia produce collective efforts to respond to our bewilderment. In the late 18th century, the pains of the Industrial Revolution begat free-market economics. The crisis of 1848 brought us the Marxist tradition. The great depression produced both Keynes’s General Theory and Friedman’s monetarism.

We are clearly at a point of intense bewilderment. What direction is correct for our economy and our society? The concept of aporia may explain why no real solutions have emerged in the past 10 years.

Tooze thinks that the world economy today is at a similar point to where it was in 1914. That is, we’re headed to a global war based on the competition of the advanced economies for resources (this time, it’s markets, water and energy), while the Middle East is at war, competing to determine which variant of Islam will be transcendent.

Varoufakis thinks we are more likely to be where we were in 1930, just after the crash. Since 2008, like back then, income inequality has continued to grow, and we have a potential fascist movement in the wings. Varoufakis asks if today’s politicians have the vision, or the ability, to corral corporatist power on one side, and the emerging nationalist movement on the other.

We’re into the post-2008 world, one in which the owners of society, the largest corporations along with the international capitalists, portray austerity as our only answer. They stress the need for continued globalization and the upward transfer of wealth via tax cuts as the best chance to survive and prosper after the 2008 crash.

This is global capitalism at work: Continuing to extract all the wealth that it can in every economy with a compliant government.

People are getting near a breaking point. They want a better life, and they want to regain political control. The challenge for capitalists and their politicians is: Can they continue to distract the base, keeping them compliant with corporatism and the financialization of our capital markets?

Capitalism ought to fear nationalism, because a nationalist movement could easily rally the poor and the middle class against Wall Street and corporate America. But, for the moment, capitalism seems to be stirring the nationalist pot. To what end?

Whether a fight against Wall Street and Corporatism will emerge, whether it will evolve into a fascist-style rallying cry remains to be seen.

We’re too early in this iteration of aporia to know or to see where we are going clearly. We need an alternative to today’s global capitalism because the track we’re on could easily turn the world into a gigantic Easter Island-like landscape.

What alternative to today’s capitalism (if any) will develop? Will ordinary people have some say in the alternative?

Stay tuned.

Facebooklinkedinrss

Rural Towns Have Polluted Water. Will Trump’s Plan Fix It?

The Daily Escape:

Valley of Desolation, Eastern Cape, South Africa – 2018 photo by Ottho Heldring

The Trump infrastructure plan asks states and cities to partner with private equity to build their roads, bridges and water treatment plants. As the WSJ explains, private equity says they are not interested. Apparently, they don’t want to build things; they prefer to purchase existing assets: (emphasis by Wrongo)

Fund managers say they are mainly looking for assets that are already privately owned—such as renewable energy, railroads, utilities and pipelines—and not the deteriorating government-owned infrastructure like roads and bridges that helped attract the capital in the first place. To the extent they are interested in public assets, the focus is more likely to be on privatizing existing infrastructure than on new development—the heart of Mr. Trump’s push.

One area where private equity may think they have a role to play is with America’s threatened water systems, which are existing assets. When people think of water crises, they think of places like Flint, Michigan, because a failed urban water system affects huge numbers of people. If you’re worried about the quality of your drinking water, take a look at https://waterfilterway.com/.

But most health-based violations of drinking-water standards occur in small towns. Of the 5,000 US drinking-water systems that racked up health-based violations in 2015, more than 50% were systems that served 500 people or fewer.

But when we add up the total number of people affected, rural America’s drinking-water situation is an order of magnitude greater than Flint’s. Millions of rural Americans are subject to unhealthy levels of contaminants in their drinking water, largely from agriculture and coal mining.

And as the rural/urban economic gap grows, this basic inequality won’t get fixed unless something radical is done to improve water quality in rural America.

Agriculture is the culprit in many rural towns, and unhealthy levels of nitrates is the primary cause. Nitrogen-based fertilizer runs off of farmlands and into the nation’s fresh water. The health impact of ingesting nitrates is serious:

  • Two-thirds of communities with nitrate levels at or above 5 ppm are in 10 states where agriculture is big business.
  • Almost three-fourths of communities whose drinking water is at or above the legal limit are found in just five states – Arizona, California, Kansas, Oklahoma and Texas.

Remediation costs vary, but a 2012 report from the Center for Watershed Sciences at UC Davis gives a yardstick. They say that a community of just under 5,000 people could incur annual costs ranging from $195,000 to $1.1 million to build and operate an ion exchange system, while a reverse osmosis system would cost from $1.1 million to $4 million a year. A $4 million system would cost $800 per citizen.

These costs may be far beyond the ability of small towns to finance. What is really going on here is another case of “socializing losses”. Farms are polluting the water, and the town is left to pay for remediation. And the big agriculture lobbies are making sure that their members avoid any liability for poisoning their towns.

We know that we haven’t been able to fund Flint’s water remediation with public funds. How will we deal with the rest of America’s polluted drinking water? It isn’t likely that towns and cities can do much more. Some cities have debt capacity, the capital markets may be willing to lend to them. However, hostility to new taxes on the local level means that issuing new debt is difficult politically for mayors and town councils.

Trump’s infrastructure plan opens up the Clean Water State Revolving Fund (CWSRF). This federal financial assistance program for water infrastructure projects would allow private firms to both manage and repair water infrastructure at taxpayer’s expense. Previously, only states and municipalities could access the fund.

Funneling CWSRF funds to private water system providers means our most vulnerable towns will have to turn over basic infrastructure to for-profit companies. And those companies will charge for the privilege. On average, private for-profit water utilities charge households 59% more than local governments charge for drinking water, an extra $185 a year.

When your water is poisoning you, should you agree to raise water rates to fix it, or do you expect to get pure water for the money you are already paying?

What if you are unable to move to a place where the water is safe?

If your water system will cost $ millions for a town of 500, how can it possibly be paid for, except by public funding?

Facebooklinkedinrss

Thinking About Trump’s Infrastructure Plan

The Daily Escape:

Lincoln Highway – photo by Andrew Smith. The Lincoln Highway was the first highway to connect the east and west coasts of the USA in 1916. It was a combination of newer and older roads of varying quality.

Eisenhower’s National Highway System had its origin in a road trip that he took across the country in 1919, 33 years before he was elected president. From Atlas Obscura:

Lt. Colonel Dwight D. Eisenhower traveled with the military in a motor convoy across the country, from DC to San Francisco… This was one of the first major cross-country road trips, and it planted the idea in Eisenhower’s mind that the federal government could and should make improving US highways a priority…

In 1919, America’s network of roads that Eisenhower traveled on was, for the most part, still rudimentary.

In 1916, the Lincoln Highway had been designated, but it wasn’t a proper highway. The Eisenhower convoy mostly traveled the Lincoln Highway, with some detours. The motorcade included more than 80 vehicles. It left Washington DC on July 7, 1919, and took seven and a half hours to reach its first stop at Frederick, Maryland, a distance of 46 miles. That’s where Eisenhower joined the group.

That 6 miles an hour pace is what the convoy would average in its drive across the country. It took them 62 days to make it to San Francisco.

In 1919, usable roads hardly existed west of Indiana. When it rained, vehicles got stuck in soft spots on the roads, up to their hubs, and had to be pushed out. In Nebraska, they found sand to be the enemy. One day, it took seven hours to pull all the trucks through 200 yards of quicksand.

Elected in 1952, Eisenhower hoped to build the highways that he had talked about for years. The Federal-Aid Highway Act of 1944 had authorized the construction of a 40,000-mile “National System of Interstate Highways”, but hadn’t provided funding to pay for the construction.

Eisenhower’s new Federal-Aid Highway Act passed in June 1956. It authorized the construction of a 41,000-mile network of interstate highways spanning the nation. It also allocated $26 billion to pay for them. The federal government would pay 90% of the costs of construction, using a national fuel tax.

Thereafter, that great American institution, the road trip, could begin. Today, the Interstate Highway System is more than 46,000 miles long.

Flash forward to 2018. We know public spending peaked at 2.2% of inflation-adjusted GDP in 2009 and has fallen ever since. By late last year, it was down to about 1.6%.

President Trump said while introducing his new infrastructure plan:

It is time to give Americans the working, modern infrastructure they deserve.

Reading Trump’s plan, it is clear he thinks we deserve nothing. Disagree? Start by looking at Trump’s budget proposal. Jared Bernstein says:

The budget proposes $200 billion over 10 years, but as budget analyst Bobby Kogan tweeted: “The budget cuts $178 billion in
transportation [not including cuts to] water, broadband
and energy. This means [Trump is] giving $200 billion with his left hand but taking away that much with his right.”

$20 billion a year doesn’t go very far. The plan shifts at least 80% of the investment in infrastructure to private investors, states, and cities. This is problematic, because Trump’s tax plan significantly lowers the amount of federal taxes that state and local taxpayers can deduct from their tax bill. This will make it much harder for states and cities to raise the revenue to support infrastructure spending, or any other public needs.

The LA Time’s Michael Hiltzik says it best: (brackets and emphasis by Wrongo)

The whole package should mostly be seen as [typical of] the Trump administration’s approach to governing: programs with virtually no rationale and without adequate financing, along with a commitment to getting government off the backs of the people so Big Business can saddle up.

This is Right Wing ideology at work. They passed a huge tax cut in order to “starve the beast” that is the US government, while at the same time, they will “feed the beast” via $trillions of deficit financing. Cities and states are not flush with cash for new infrastructure projects, and the private sector won’t do anything that reduces shareholder return, so Trump’s plan is dead on arrival.

As for financing America’s roads, increase fuel taxes. Let drivers amortize the building costs, a system Eisenhower used. Add tolls where we must. Make the traffic move faster and safer.

Trump should be like Ike: Pay for our infrastructure!

Claw back some tax cuts. Cut defense spending. Pay for purer water for our towns and cities. Pay for better schools, a smart electric grid, and better ports and airports.

Pay for them all with federal dollars.

(Wrongo is indebted to the tywkiwdbi blog for covering the Eisenhower road trip on Lincoln’s birthday)

Facebooklinkedinrss

Sunday Cartoon Blogging – Christmas Eve 2017

(The Wrongologist is taking a brief holiday break. Blogging will resume on Wednesday, 12/27. In the meantime, Merry Christmas!)

The Daily Escape:

Jingle Bell Jog – Ft. Lauderdale FL, 2017. Better for ya than SantaCon.

A final Christmas Eve word about the unwanted gifts the Trump tax cut is foisting on us. In the short term, it will stimulate consumer demand. The economy may “grow”, but our tax receipts cannot.

Soon, these tax cuts will place our government on a fiscally precarious footing. Expect the credit rating agencies (Moody’s, Standard & Poors) to start wagging their tongues, warning of their concerns about the country’s overall debt levels. It is possible that the repatriation of some of the massive off-shore profits that American firms have hoarded may come home. To the extent that they return, and some taxes are paid on them, this (one time) tax receipt will likely make the 2018 and 2019 annual budget deficits somewhat smaller than the colossal ones to follow.

After that, the government’s income will fall, and we will hear bi-partisan calls for deficit reduction, and lower spending targets will be the norm. The effects of tax legislation can take a long time to shake out, and there often are unintended effects.

But make no mistake, the GOP will start talking about the Coming Debt Apocalypse next month.

On to a few cartoons. Here is the difference between the parties:

 

Trump’s year in review:

War is the answer to any question:

Trump’s touting of something terrific slides downhill:

Congress flies home for Christmas:

Congress gives empty present to our kids:

Facebooklinkedinrss

What Will Dems Do When The GOP Says: “The Deficit Matters”?

The Daily Escape:

Big Ben being cleaned. In order to clean the four clock faces, every 5-7 years, skilled climbers hang down from the belfry on ropes, and they clean the front of each clock face. There is one removable panel of glass on each face, which is removed during the cleaning so that the clock maintenance staff can talk to the cleaners while they’re working. (“you missed a spot?”) Hat tip to Wrongo’s friends at the Goodspeed Opera House!

Yesterday we pointed out that there is a very large program that the country needs to fund if we are to maintain our position in the global superpower competition. The issue at hand is the stunning thought that we might lose up to 75 million jobs to automation in the next 13 years, and that we need to train the out-of-work unfortunates for new jobs in a different economy.

It’s highly unlikely that we would need to train that many, but it could be 25 million Americans. And we have no idea where the money would come from to accomplish that. After all, the Republicans now plan to reduce tax receipts bigly, thus adding to the deficit and thereby, to the total debt of the country.

We know that as soon as the new tax cuts begin accruing to their patrons, the GOP will start talking about reducing the budget deficit by cutting non-military expenses. Ron Brownstein conceives the Republican tax plan correctly:

Gaius Publius observes: (brackets and editing by the Wrongologist)

As they did in the 1980s, Republicans are laying a “deficit trap” for Democrats. As they did before, they’re blowing up the budget, then using deficit [fear] to force Democrats to “be responsible” about cutting social programs — “because deficits matter.”

In the 1980s Republicans ran up the deficit, then insisted that Democrats work with them to raise taxes on the middle class to over-fund the Social Security (SS) Trust Fund. This converted SS from a pay-as-you-go system that increased revenues as needed via adjustments to the salary cap, to a pay-in-advance system. That allowed any excess SS money to be loaned back to the government, partially concealing the large deficits that Reagan was running up.

Today, Republicans are expanding the deficit again, and are already starting to talk about deficits to argue for cuts in what they call “entitlements” — Medicare, Medicaid, and eventually Social Security, even though Social Security can be self-funding.

Fear of deficits is the go-to Republican ploy to try to maim or kill the FDR and LBJ-created social safety net. To the extent that Democrats are willing to accept the GOP’s argument that both parties need to be responsible to decrease the deficits, they will support cuts in social services. Even Obama was willing to consider doing just that in the name of “bipartisanship”. More from Gaius:

The reality — Deficits aren’t dangerous at all until there’s a big spike in inflation, which is nowhere near happening and won’t be near happening for a generation…

Do we want the US government to shrink the money supply year after year after year, by running budget surpluses, or do we want to grow the amount of money in the private sector, making more available for use by the middle class?  The trillions spent on the current GOP giveaway to the already-rich could have been given to college students in debt, or people still underwater in their mortgages since the Wall Street-created crash of 2008. It could have been used to build better roads, airports, seaports or a national high speed internet backbone.

What would be the effect of that re-allocation of money?

Back to Gaius Publius for the final words. Which of these three options would you rather the government choose:

  • Spend money on the already-rich?
  • Spend money on you and the country’s needs, ignoring the pleas of the already-rich?
  • Hoard as much money as possible in a vault and spend the least possible?

The first is the GOP’s current tax plan. The second is a plan for the many, an FDR-style economic policy. The third is the GOP’s wet dream, one that they will ask Democrats to help them accomplish once the already-rich have banked their share of our tax money.

Wrongo’s fear is that at some point down the road, a compromise will be offered up: Cuts to social programs in exchange for a repeal of some of the more onerous tax cuts. The only issue will be the extent of the cuts to social programs.

It will be celebrated as bipartisan sanity returning to Washington.

Our system is revolting. Why aren’t we?

Facebooklinkedinrss