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The Wrongologist

Geopolitics, Power and Political Economy

Can We Have an Honest Discussion About The GOP Tax Plan?

The Daily Escape:

When the dog lies about his previous sheep-herding experience

A new set of tax policies have been proposed by the White House and the GOP. They involve both tax cuts, and some tax reforms. Here are the bullet points of the GOP’s sales pitch:

  • The tax cut won’t help the rich, and won’t help Donald Trump personally
  • The tax cut will generate enough growth to pay for itself
  • Most of the benefits of the tax cut will go to the middle class

Here are the NYT’s calculations on Trump not gaining anything:

Trump could save more than $1 billion under his new tax plan

And here is the Tax Policy Center’s take on the benefits to the wealthy:

  • The top 1 percent of households (those with incomes above $730,000) would get about 53% of the framework’s net tax cuts, or roughly $130,000 a year on average.
  • The top 0.1 percent of households (those with incomes above $3.4 million) would get roughly 30% of the framework’s net tax cuts, or about $720,000 a year, on average.

Turning to the statement that “tax cuts will pay for themselves”, Trump claimed in a talk with House Ways and Means Committee a few days ago, that his tax plan will produce more than 6% growth.

An economist once said that you don’t need to look at the details of a Republican tax plan. The higher the Republican growth forecast, the worse the actual deficit in their plan. That’s because they need greater revenue growth to cover the deficit hole they are creating. Given Trump’s 6% growth forecast, you just know the tax plan is going to be a budget buster.

We have learned from past GOP tax cuts that they won’t reduce deficits or balance budgets. Want proof?

  • The George W. Bush tax cuts made the deficit larger, while doing little or nothing to stimulate the economy
  • The income-tax cuts in Kansas caused the state’s deficit to accelerate significantly, while economic growth lagged the contiguous states
  • Even Ronald Reagan’s tax analysts, David Stockman and Bruce Bartlett, have acknowledged that unfunded tax cuts don’t create growth, they make for bigger deficits.

Regarding the point that most of the cuts will go to the middle class, it won’t happen. Since 83% of the plan’s cuts are going to the top brackets, there’s not much left for the middle class.

What they don’t talk about is their plan to get rid of personal exemptions, which is a key deduction for middle class families, especially those who itemize deductions. To determine whether middle-class families get a cut or an increase under the new plan, you need to calculate if the higher standard deduction, plus the proposed expansion in the child tax credit, (no details about that yet), is greater than the loss of personal exemptions.

Josh Barro at Business Insider crunched the numbers, and his conclusion is: (emphasis by the Wrongologist)

While there are still a lot of details to be filled in, the information we have available suggests the new Republican tax proposal would raise income taxes on many families who make just a bit more than the national average.

They are promising to eliminate the “alternative minimum tax”, (AMT) a tax provision designed to ensure that wealthy taxpayers (who can have accountants find deductions) would pay some modicum of taxes rather than get off scott-free. In fact, the GOP has it backwards: People who owe the AMT should be paying more tax than they would pay with the AMT. It serves its intended purpose. Elimination of the AMT is another tax break for the wealthy:  For example, Trump has had to pay the AMT, as have most real estate developers.

Now, ask yourself why should personal tax rates be less progressive in 2017 than they were in 1963? Shouldn’t progress towards a more equal society mean our rates would be MORE progressive, not less? It’s not as if we have less inequality, we have more.

The reason we should want to tax the rich (till it hurts) is to reduce their power and overwhelming choke hold on policy.

When will the GOP engage in an honest discussion about their tax plan?

Not soon. Maybe not ever.

Here’s First Aid Kit doing a cover of Simon & Garfunkel’s “America”, from 2014:

We all need to look for America, its getting very hard to find.

Those who read the Wrongologist in email can view the video here.

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Saturday Soother – September 30, 2017

The Daily Escape:

Reflection Canyon, in the Glen Canyon National Recreation Area, Utah. This spot became popular with hikers after Apple used it to promote its Mac Book Pro high resolution with retina display. People first learned about the location after this photograph was taken by Michael Melford in 2006.

Texas has a $10 billion rainy day fund. Now, you would think that when the rains came to Houston, Gov. Greg Abbott would say “It’s a rainy day fund, let’s send some to Houston”.

Nope. The Texas Observer reports: (brackets and emphasis by the Wrongologist)

On Tuesday, after Turner [Houston’s Democratic mayor, Sylvester Turner] made a public request for money from the rainy day fund, Governor Greg Abbott joined in, telling reporters that the fund wouldn’t be touched until the 2019 legislative session. Turner “has all the money that he needs,” Abbott said. “In times like these, it’s important to have fiscal responsibility as opposed to financial panic.” The governor went on to accuse the mayor of using Harvey recovery efforts as a “hostage to raise taxes.”

This is an epic statement of Evil. The Texas rainy day fund has $10 billion. The bill for Harvey is estimated at $180 billion, but Houston has all the money needed.

The Observer also quoted Lt. Governor Dan Patrick from early August, less than a month before Hurricane Harvey made landfall:

Where do we have all our problems in America?…Not at the state level run by Republicans, but in our cities that are mostly controlled by Democrat mayors and Democrat city council men and women. That’s where you see liberal policies. That’s where you see high taxes. That’s where you see street crime.

Ideology always comes first in Texas. You would think that these ultra-conservative chimps would be looking for ways to help Houston, if not its mayor. But, it’s business as usual: Everything good in Texas is to the credit of the brave GOP legislators in Austin, and everything bad is the fault of county commissioners, mayors, city councils and school boards.

Oh, and the immigrants.

Six of the nation’s 20 largest cities are in Texas. And those six have half of the state’s population, and they generate most of its economic activity. But, Republicans consider them a threat, either because of their “liberal” values or the demographic, and thus, the political threat they represent to the Texas Republican Party.

This could be a real problem for the entire country in the future. Increasingly, we are seeing the GOP in red states using their control of the political system to make war on the blue cities in their states. Think about Flint, MI where local interference by the governor and state-level Republicans partly brought about the lead-in-the-water crisis that remains unresolved, and which the state won’t pay for.

Maybe this is a good time to remember that Greg Abbott received a multi-million dollar settlement for an accident that paralyzed him, and put him in a wheelchair. He is also the guy that subsequently proposed, sponsored and shepherded tort reform in the Texas legislature.

He’s the guy that acts as if tort reform doesn’t keep present day accident victims from getting the kind of compensation that he received. He closed the door after he got his millions in a settlement.

Texas is dominated by right-wing extremists determined to turn everything to advance their ideological agenda. Forget that Texas already has massive disparities between whites and non-whites in terms of social services, policing, and most other government functions.

Turning their back on Houston just makes the ideology more visible.

In Texas, they just do everything bigger and badder.

Time to relax and think about summer being over. Fall is officially here, the leaves are turning and falling onto the fields of Wrong. Time to brew up a Vente-sized cup of Durango Coffee Company’s Costa Rica Las Lajas Perla Negra ($16.95/lb.), put on the Bluetooth headphones, and watch the leaves fall.

While you do, listen to “Woods”, the second cut on the 1980 album “Autumn” by George Winston. It was his second solo piano album. Wrongo chose this because of the great fall-inspired video that accompanies the music:

Those who read the Wrongologist in email can view the video here.

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Our Military Needs to Take Charge in Puerto Rico

The Daily Escape:

Floating lanterns in Motoyasugawa River, Hiroshima Japan. The lanterns mark the anniversary of the Hiroshima bombing. There is one lantern for each person who died in the bombing – photo by the Asahi Shimbun

Why hasn’t Trump mobilized America’s military to help rescue Puerto Rico from the disaster that grows worse every day? Why the Band-Aid of repealing the Jones Act?

After eight days of delay, the Trump Administration has issued a Jones Act waiver. The Jones Act prohibits the transportation of cargo between points in the US, on any vessel owned or operated by a foreigner. The Trump administration issued a Jones Act wavier earlier this month, for petroleum products to be delivered for relief assistance in anticipation of the effects of Hurricane Irma.

Similar to many things that happen in Washington, the Puerto Rican Jones Act waiver is a sham. Why? Because it is a 10-day waiver. This, from the DHS announcement: (emphasis by the Wrongologist)

This waiver will ensure that over the next ten days, all options are available to move and distribute goods to the people of Puerto Rico. It is intended to ensure we have enough fuel and commodities to support lifesaving efforts, respond to the storm, and restore critical services and critical infrastructure operations in the wake of these devastating storms…

And the clock has already started. Wrongo used to handle shipping finance in Europe for a top-three bank. It will take a few days to get foreign ships loaded with the appropriate goods. Then it will take many days, possibly a week or more, for them to travel to Puerto Rico.

As an example the US Navy hospital ship USNS Comfort, leaving from Norfolk Virginia will take at least five days to reach Puerto Rico. And the Comfort travels at about the average speed of a container vessel, or a tanker, 17 knots. Even if a foreign tanker or container ship was already loaded and ready to go this morning, it is clear that few, if any, could arrive and unload in less than 5-7 days.

So, Trump’s “waiver” is a sham. OTOH, the situation in Puerto Rico is already far beyond needing a waiver of the Jones Act. Bloomberg reports that:

Thousands of cargo containers bearing millions of emergency meals and other relief supplies have been piling up on San Juan’s docks since Saturday. The mountains of materiel may not reach storm survivors for days.

Distributors for big-box companies and smaller retailers are unloading 4,000 20-foot containers full of necessities like food, water and soap this week at a dock in San Juan operated by Crowley Maritime Corp. In the past few days, Tote Maritime’s terminal has also taken the equivalent of almost 3,000 containers. The two facilities have become choke points in the effort to aid survivors of Hurricane Maria.

Mark Miller, a spokesman for Crowley, said:

…that’s where the supply chain breaks down — getting the goods from the port to the people on the island who need them…Trucks are ready to be loaded with the goods and precious diesel for backup generators, but workers aren’t around to drive. Instead, they’re caring for families and cleaning up flood damage — and contending with the curfew.

The buildings that would hold the supplies are either destroyed, or have no power. The over-the-road transport companies that have staff available and diesel on hand encounter downed poles and power lines while attempting to navigate on washed-out roads.

Planning for something of this scale should have started once we knew that Maria was a CAT 5 storm making a direct hit on Puerto Rico. But that didn’t happen, and now, the number of people who are out of money, food, water, fuel and critical medical supplies grows every day.

We should be sending vast amounts of equipment and manpower to help clear roads, and get things in a condition to where people can begin to rebuild. We should be sending mobile medical teams that can move in and out of remote areas and evacuate those who may die without medical intervention.

Our military has divisions of logistics experts that can supply an army even under very difficult conditions. They have units that can build bridges in a day, or rapidly repair roads for supply convoys.

Our military has the mobile medical teams that can handle wartime injuries. They need to be on the ground. We need a military-style operation to stem the tide of this disaster.

Why hasn’t General Little Hands ordered them into action?

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Distressed Communities: Another Divide In America

The Daily Escape:

“Impressions of Lijiang” Show, Yunnan Province China. Lijiang Impressions is a cultural show about the traditions and lifestyles of the minorities in Lijiang. The open-air stage is at 10,000 ft. above sea level. The Dragon Snow Mountains behind the stage are higher than 16,000 ft.

The Economic Innovation Group (EIG) has an interesting report on Distressed Communities in the US. They have surveyed changes in counties in distress, from 2000-2015, using census data. The study notes:

America’s elite zip codes are home to a spectacular degree of growth and prosperity. However, millions of Americans are stuck in places where what little economic stability exists, is quickly eroding beneath their feet.

The study found that the majority of new jobs created as the recovery began came in the 20% of American ZIP codes that were already the most prosperous. The 20% of ZIP codes in the least prosperous areas generated just 1% of jobs created between 2011 and 2015.

This isn’t a Republican or Democratic problem. Both parties represent distressed areas. But the economic fortunes of the haves and have-nots have widened the political chasm between them, and it has yet to be addressed by substantial policy proposals on either side of the aisle.

The EIG study captured 99% of the US population. It covers 26,000+ US zip codes that have a population of at least 500 people, the more than 3,000 counties with at least 500 people, and the nearly 800 cities with at least 50,000 people.

Here is a map from the study showing areas of economic advance and retreat:

Our most significant modern recession and the subsequent deeply uneven recovery has exacerbated the gap between wealthy communities and poorer areas, creating a patchwork map of economic haves and have-nots around the country.

Here is another map from the study, showing the most disadvantaged small and mid-sized cities:

 

In Hartford, CT; Newark, NJ; Stockton, CA; and Trenton, NJ, more than one in five residents are now foreign-born. In general, cities with smaller foreign-born populations are more likely to be distressed: In the average distressed city, 15% of the population is foreign-born; in all other quintiles, the average is between 18 and 19%.

In the Northeast, more than two-thirds of the population living in distressed zip codes reside in high density neighborhoods, so distress in the Northeast is predominantly an urban phenomenon. In the South, nearly 60% of the distressed population resides in low density, mainly rural zip codes.  But, all types of distressed communities can be found in all regions.

A full two-thirds of distressed zip codes contained fewer jobs in 2015 than they did in 2000, while 72% saw more businesses close than open over that same time span. In total, 55% suffered net losses in both categories

Fifty-two million Americans live in the most distressed ZIP codes across the nation. Those people are more likely not to have graduated from high school. The poverty rate in those communities is 11 points higher than the national average. And adults in those communities are twice as likely to be out of work as in the wealthiest counties.

They are also far more likely to live near sites polluted or contaminated enough that the Environmental Protection Agency is working to clean them up. There are nearly 13,000 of these brownfield sites in distressed ZIP codes, compared to 3,700 in the most prosperous ZIP codes.

Those who live in distressed areas have a life expectancy almost five years shorter than those who live in prosperous areas. Rates of cancer, suicide and violence are all markedly higher in the poorest areas, and substance abuse disorders are 64% percent more likely, the report found.

The report concludes by saying:

It is fair to wonder whether a recovery that excludes tens of millions of Americans and thousands of communities deserves to be called a recovery at all.

The days of “pull yourself up by your bootstraps” are gone forever. You can’t use trickle-down economics arguments to fool all of the people all of the time, and you can’t even fool a majority of them for very long.

And now, time’s up.

Capitalism hasn’t worked for all of the people since well, never.

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Saturday Soother – September 23, 2017

The Daily Escape:

Sunndalsøra, Norway, best known for its aluminum factory, one of the largest in Europe – photo by Brotherside

WaPo reports that estimates say it will take about four months for electric power to be restored on Puerto Rico. You would hope that we could beat the estimate by quite a bit. What is the Congress’s plan to help out our Commonwealth?

Can you imagine living somewhere without power for several months? We had to do it once at the Mansion of Wrong, at the height of winter for 7 days. It got to 37°F one night inside the house. We now have a whole house generator.

What happens to the Puerto Rican economy if there is no power for multiple months? Can average people make a living? How will they pay the rent, or the mortgage?

Our first concern should be providing them with supplementary power. Generators and the fuel to power them must be among the first things we deliver to the island. They are the cheapest, fastest way to deliver temporary power while the basic infrastructure of power lines and cell towers are rebuilt. Fuel (mostly diesel) will need to be brought in via ship. Health care facilities need power to operate, and the basic elements of government requires it as well. With power, they can begin to restore normalcy, communications and water for citizens.

People will need some form of temporary housing. Businesses will need to sell products and services, and help keep people employed. It’s also not clear how law and civil order will stand up to months without power, or to a situation where people can’t get their basic needs met.

Anyone with resources, or family connections on the US mainland is going to move away, many will come here. Will Puerto Rican immigrants be seen by the GOP base as simply more illegals coming to use our welfare system?

Will the GOP remind their base that Puerto Ricans are US citizens? It isn’t certain that Republicans all will say that. Think about what that says about the America we live in today.

The scale of this disaster would be unfathomable and unacceptable on the US mainland. Will we step up as a country and help our brothers back to their feet? Or, will we do something half-hearted because they are the “other“?

Before you answer, remember that Flint Michigan still doesn’t have safe drinking water. Maybe getting the help you need is mostly about whether you (and your town) are the correct color.

Time to get soothed after another really tough week. Try to find a bag of Beanstock’s Shucker’s Roast coffee (only available at retail during the Wellfleet Cape Cod Oysterfest) but otherwise available at great Cape Cod restaurants like C-Shore Wellfleet. Then, brew up a hot, strong cuppa. Settle back, put on the Bluetooth headphones, and listen to Tchaikovsky’s Trio in A minor, Op. 50. This will take about an hour, but you will be greatly rewarded.

Tchaikovsky wrote this between December 1881 and late January 1882. It is the only work Tchaikovsky ever wrote for piano, violin, and cello. Here it is performed live at the New England Conservatory’s Jordan Hall in February 2013, with Livan on piano, Zenas Hsu on violin and Yina Tong on cello:

Those who read the Wrongologist in email can view the video here.

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Where Can The Working Class Afford To Live

The Daily Escape:

Quilotoa Crater Lake, Ecuador. You get there by bus, and it takes six hours to walk around it. 

The Senate is trying to pass their worst possible health care idea. They have already passed a $700 billion military budget, more than even Trump wanted. And they are trying to pass a $1 trillion tax cut for their buddies. Will any of that help you? No.

They should be focused on improving the lives of working class people, but they can’t be bothered with that, because they have no desire to accomplish it. Things are just fine the way they are for Senators.

Wrongo has been remiss by not turning you on to howmuch, a site that creates visualizations about money, and in-depth tools about what things cost in the US. You should spend time checking them out. They created this very interesting chart about where working class people can afford to live in the US:

Source: howmuch

Each bubble represents a city. The color corresponds to the amount of money a typical working-class family would have left over at the end of the year after paying for their living costs, such as housing, food and transportation.

The darker the shade of red, the worse off you are. The darker the shade of green, the better off you are. The size of the bubble has meaning — large and dark red means the city is totally unaffordable. Bigger dark green bubbles indicate a city where the working class can get by. So, where are the best places from a financial perspective for a working-class family to live? These are the top five cities with the net surplus remaining after living expenses:

  1. Fort Worth, TX ($10,447)
  2. Newark, NJ (($10,154)
  3. Glendale, AZ ($10,120)
  4. Gilbert, AZ ($9,760)
  5. Mesa, AZ ($7,780)

The worst five cities are:

  1. New York, NY (-$91,184)
  2. San Francisco, CA (-$83,272)
  3. Boston, MA (-$61,900)
  4. Washington, DC (-$50,535)
  5. Philadelphia, PA (-$37,850)

Yes, a typical working-class family would need to make an additional $91K+ per year in NYC just to break even on a reasonable standard of living. And most job creation is taking place in cities, so the challenge for anyone, working class or higher, is how to afford living in one of them. There are exactly zero affordable cities on the West Coast. More from howmuch:

Of the ten most populous cities in the country, the only place where you can enjoy a decent standard of living without taking on debt is San Antonio. Out of the top 50 largest cities, only 12 are considered affordable. Low-wage workers are better off in smaller cities.

Kevin Erdmann, who blogs at Idiosyncratic Whisk, says the problem is that most coastal cities have closed access to housing, while inland cities have open access. Open access cities have relatively liberal housing and zoning codes that allow for new building, including relatively low-cost housing. Houston is the most prominent example. Closed access cities artificially reduce supply of housing, driving prices up. NYC is the most prominent example. From Erdmann:

You can tell what type of city it is just by looking through the newspaper. In open access cities, people complain that poor people are moving in and taking away jobs, pushing down wages. In closed access cities, people complain that rich people are moving in and bidding up rents.

People in red states have experienced high in-migration of low income people, both natives and immigrants. Poor people are leaving the closed access cities.  So, to someone living in a closed access city, it seems racist for people to focus their ire on Mexican immigrants.

And think about what happens if folks in a bad neighborhood manage to do the hard community work to make it somewhat livable. In New York or Los Angeles, the minute that a neighborhood becomes safe, the plots that hold those $100,000 duplexes will be worth $500,000, and the neighborhood will gentrify.

Rinse, lather and repeat, and the cycle starts again.

Can a working-class family live comfortably in your town? If so, can they find work?

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Saturday Soother – September 16, 2017

The Daily Escape:

Old Prison, Annecy, France. This 12th century prison sits in the middle of the river Thiou. Because of the canals in the town, Annecy is called the Venice of the Alps.

Yesterday, Wrongo said that we needed a special tax to be used solely to rebuild the economies and infrastructure of states hit by Irma and Harvey. It didn’t take long to hear that millionaires already pay enough taxes. In one way, that is correct. From the Atlantic:

Forty years ago, the richest 1% paid about 18% of the country’s federal income taxes. Today, they pay about 40%.

While 40% seems high, we need to look harder at the arithmetic: The number of million-dollar-earners in the US has grown rapidly since Y2K. According to the IRS, the number of households with an adjusted gross income greater than $1 million more than doubled between 2001 and 2014, the last year with complete data. And no group has grown faster than the super-rich; the number of households earning more than $10 million grew by 144%.

Between 2001 and 2014, income earned by millionaires grew twice as fast as income earned by the rest of us. In 2001, million-dollar earners and above collectively reported income of about $600 billion. In 2014, they reported $1.4 trillion, more than double the amount in just 14 years. And the top 10% of wealthiest families in this country control 76% of our country’s total wealth.

So, we shouldn’t feel guilty about taxing them for a specific need, for a time-limited period.

If you’re a millionaire, it’s not just because you worked hard. It’s because you worked hard, and you live in a country where the government provides a well-developed infrastructure, stable institutions and markets governed by a strong commercial code.

Rich people need to stop griping and pull their weight, just like the rest of America’s tax-payers.

So Wrongo says again, we all need to pay extra taxes into a special fund for redevelopment of Florida and Texas. As the libertarian Joseph Tainter asserts in his book “The Collapse of Complex Societies” (don’t read it), when a society no longer has the reserves to help offset what might otherwise be a recoverable disaster, collapse can’t be far off.

Increased revenues will absolutely increase our reserves. And they will help us recover from this current disaster.

It’s Saturday, and we need to relax. Today Dr. Wrong prescribes a double Hayes Valley Espresso (whole bean is $ 17/lb.) from Oakland, CA’s Blue Bottle Coffee. Get it now, Blue Bottle has just agreed to be acquired by Nestle.

Brew it up, put on the Bluetooth headphones, and listen to the Flute Quartet No.1 in D major by J. J. Quantz, flute maker and Baroque composer. Quantz was extremely prolific. He wrote six flute quartets that were discovered in 2001 by American flutist Mary Ann Oleskiewicz in archives of the Sing-Akademie zu Berlin. Here is Quantz’s Flute Quartet No. 1:

Those who read the Wrongologist in email can view the video here.

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Houston’s Petrochemical Industry Fails to Protect City

The Daily Escape:

Ranwu Lake Campsite, Tibet photo by Arch-exist Photography. Ranwu Lake is a tourist attraction in SE Tibet, and is called the “Tibetan Switzerland”.

Life in the age of corporatism resembles life in the food chain. In a potentially disastrous outcome from the Harvey flooding, a chemical plant in Crosby, Texas belonging to French industrial giant Arkema, has had several explosions of peroxide and other volatile chemicals. From the NYT:

The company had already ordered all workers to leave the damaged plant, and Harris County ordered the evacuation of residents within a 1.5-mile radius.

These chemicals have to be refrigerated. When the plant’s warehouses lost power, they transferred the product to diesel-powered refrigerated containers. But later, the backup generators were swamped by flood waters, so cooling was lost, and the explosions began. On Tuesday, the company released a statement:

Refrigeration on some of our back-up product storage containers has been compromised due to extremely high water, which is unprecedented in the Crosby area. We are monitoring the temperature of each refrigeration container remotely….while we do not believe there is any imminent danger, the potential for a chemical reaction leading to a fire and/or explosion within the site confines is real.

The rains are over, but the chemical fires linger. Richard Rowe, the CEO of Arkema’s American operations said:

The company has no way of preventing chemicals from catching fire or exploding at its heavily flooded plant…the company has no way to prevent…this worst case outcome.

The CEO says, “No way to prevent explosion“. Back in the olden days, that would be known as a “major design flaw”. Most engineers would have recommended placing the generator sets above at least the 100-year high water mark, just to prevent this kind of fun event. They would also put the diesel tanks above that water line.

Maybe next time. The Houston Chronicle had this amazing map of chemical plants in the Houston area:

In case it is hard to read the map legend, the yellow markers are for petrochemical plants that have a “medium” potential for harm based on their location within the 100-year flood plain. The red markers have a ”high” risk for harm. Houston’s ship channel and the surrounding area along the Gulf coast represent about 40% of U.S. petrochemical manufacturing. At least 25 Houston-area plants have either shut down, or experienced production issues due to Hurricane Harvey’s flooding.

Any guesses that the concentration of plants in the Houston flood zone will cause our corporate overlords to think about relocation of a few of these sites? Or, how they best secure them from the next 500-year flood, which looks like it will happen in say, the next five years? From Forbes:

Harvey was a wake-up call, reminding us that it is time to take a more serious look to ensure the safety of the petrochemical industry and the public at large, just as the nuclear power industry has done in reaction to the Fukushima disaster.

But Arkema has worked hard to change EPA rules in their favor. David Sirota reports that the new rules, which were set to go into effect this year, were halted by the Trump administration after a lobbying campaign by Crosby plant owner Arkema and its affiliated trade association, the American Chemistry Council:

Those rules — which would have taken effect on March 14 — were blocked by EPA administrator Scott Pruitt. The move was a big win for the chemical industry that has spent more than $100 million supporting federal lawmakers since 2008.

Apparently, sacrifices must be made in the name of making America great.

The closures are not just disrupting markets; they’re also causing the release of toxic pollutants that pose a threat to human health. The NYT reports that damaged refineries and oil facilities have already released more than two million pounds of hazardous substances into the air.

The sheer number of facilities around Houston that have to come back online at the same time creates another huge emissions problem. From City Lab:

The real problem is that the plants are allowed to operate so close to residential areas in the first place. Houston’s lack of zoning regulations have been front-and-center in discussions about why Harvey has been so terrible for the city, and that’s no different in the discussion about air pollution.

Not to worry, Houston, your petrochemical corporations will be fine. They have insurance. They will get to write off any damage against their profits. They will get tax incentives to rebuild, or if they choose to move, tax credits from the town down the road.

The people? Most will have no insurance to rebuild their homes or to purchase new furniture.

And the pollution impact? A cost of doing business for the petrochemical industry.

Unfortunately, for the people, pollution’s about their health. And there will be no help forthcoming for the most vulnerable Houstonians.

Have a slice of Texas-themed music: Here is Robert Earl Keen, doing “Corpus Christi Bay” from his 1993 album “A Bigger Piece of Sky”:

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Silicon Valley Will Escape the Revolution

The Daily Escape:

Waterfall Jumping Competition (from 69 feet up), Bosnia, August 5th – photo by Amel Emric

Antonio Garcia Martinez:

Every time I meet someone from outside Silicon Valley – a normy – I can think of 10 companies that are working madly to put that person out of a job…

Well, that makes most of us “normies”. In context, we are the people who do not work in Silicon Valley. We are the people who use technology, rather than invent technology, and many of us ought to see technology as a threat to our jobs and our place in society.

We are not in the beautiful peoples’ club. Our names are not on the list. We’re not software engineers who work just to pay the taxes on their company stock.

And who is this Martinez guy? From Mashable:

He’d sold his online ad company to Twitter for a small fortune, and was working as a senior exec at Facebook (an experience he wrote up in his best-selling book, Chaos Monkeys). But at some point in 2015, he looked into the not-too-distant future and saw a very bleak world, one that was nothing like the polished utopia of connectivity and total information promised by his colleagues.

Martinez pointed out that there are enough guns for every man, woman and child in this country, and they’re in the hands of people who would be hurt most by automation:

You don’t realize it but we’re in a race between technology and politics, and technologists are winning…

Martinez worries about how the combination of automation and artificial intelligence will develop faster than we expect, and that the consequences are lost jobs.

Martinez’s response was to become a tech prepper, another rich guy who buys an escape pod somewhere off the grid, where he thinks he will be safe from the revolution that he helped bring about. More from Mashable: (brackets by the Wrongologist)

So, just passing [after turning] 40, Antonio decided he needed some form of getaway, a place to escape if things turn sour. He now lives most of his life on a small Island called Orcas off the coast of Washington State, on five Walt Whitman acres that are only accessible by 4×4 via a bumpy dirt path that…cuts through densely packed trees.

He’s not alone. Reid Hoffman, co-founder of LinkedIn told The New Yorker earlier this year that around half of Silicon Valley billionaires have some degree of “apocalypse insurance.” Pay-Pal co-founder and venture capitalist Peter Thiel recently bought a 477-acre escape hatch in New Zealand, and became a Kiwi. Other techies are getting together on secret Facebook groups to discuss survivalist tactics.

We’ve got to expect that with AI and automation, our economy will change dramatically. We will see both economic and social disruption until we achieve some form of new equilibrium in 30 years or so.

It will be a world where either you work for the machines, or the machines work for you.

Robert Shiller, of the famous Case-Shiller Index, wrote in the NYT about the changing meaning of the “American Dream” from the 1930s where it meant:

…ideals rather than material goods, [where]…life should be better and richer and fuller for every man, with opportunity for each according to his ability or achievement…It is not a dream of motor cars and high wages merely, but a dream of a social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable…

That dream has left the building, replaced by this:

Forbes Magazine started what it calls the “American Dream Index.” It is based on seven statistical measures of material prosperity: bankruptcies, building permits, entrepreneurship, goods-producing employment, labor participation rate, layoffs and unemployment claims. This kind of characterization is commonplace today, and very different from the original spirit of the American dream.

How will the “Normies” survive in a society that doesn’t care if you have a job? That refuses to provide a safety net precisely when it celebrates the progress of technology that costs jobs?

The Silicon Valley survivalists understand that, when this happens, people will look for scapegoats. And we just might decide that the techies are it.

Today’s music is “Guest List” by the Eels from the 1996 album “Beautiful Freak”:

 Takeaway Lyric:

Are you one of the beautiful people
Is my name on the list
Wanna be one of the beautiful people
Wanna feel like I’m missed

Are you one of the beautiful people
Am I on the wrong track
Sometimes it feels like I’m made of eggshell
And it feels like I’m gonna crack

Those who read the Wrongologist in email can view the video here.

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Some Thoughts on L’affaire Comey

The Daily Escape:

Cathedral Cove, New Zealand – photo by Niels Holm

For the past few days, it has been “All Comey, all the time”, both in America and around the world.

You can count Wrongo as one of those who thinks that Comey made some huge mistakes trying to position himself after his take-down of Hillary Clinton, and her self-inflicted email disaster. You can also count Wrongo as thinking that Hillary’s loss was mostly her own fault. That means that you can also count Wrongo as agnostic regarding whether the Russians were behind the hack into the Democratic National Committee, or that their intervention was because they wanted to help Trump win the election.

Democrats argue that Trump and/or members of his administration are “soft on Russia”. Democrats have adopted a neo-con worldview that just a few years ago, they would have hated: That policies are either pro-America or pro-Russia. And, it’s in that pro-Russian box that Democrats are trying to stuff The Donald.

This makes Democrats blind to the possibility that people (even Trump!) could genuinely believe that it’s in America’s interest to be friendlier to Russia. That we could cooperate on certain issues without being agents of Putin. Perhaps you remember that Obama said just that in his first term.

So let’s turn to Comey’s firing. Thursday’s NYT had a complete listing of members of the House and Senate and their reaction(s) to the firing. And yes, if you went back a few years to Republican calls for special prosecutors to examine Democrats, the script was flipped, with most Dems then taking the position that Republicans are taking today.

It’s the kind of game that has become acceptable in today’s Washington swamp.

Wrongo isn’t happy with Comey’s performance as FBI director, but we now stand on the edge of a precipice without him. He ran into trouble because AG Loretta Lynch had to recuse herself during the Clinton email investigation. That led to his free-lancing, and his inexplicable testimony. Then AG Sessions had to recuse himself from any Russia-related investigation. And shortly thereafter, the tempo of the investigation changed, and Comey needed someone to approve additional resources for the Russia investigation. The WSJ reported:

Comey started receiving daily instead of weekly updates on the investigation, beginning at least three weeks ago…Comey was concerned by information showing possible evidence of collusion.

Now, the firing of Comey opens up the FBI and the DOJ, by custom and tradition an agency that is independent from politics, to outside political control, to a new director forcing a reduction in funding or other resources critical to the investigation.

Ostensibly, the issue isn’t the fact that Comey was fired. It’s about the timing. In turn, that is directly linked to the fact that the FBI is investigating Trump. Most think that the FBI Russia operation was breathing down the neck of the Trump campaign and their operatives. They think that the Comey firing is an effort to slow down, or wind down, the investigation prematurely.

The question is, will the new FBI director do either of those things? Wouldn’t the FBI agents involved in the investigation revolt/go public if a new director defunded the effort, and/or reduced the commitment to it? And the FBI is not running the investigation by itself. Their investigation is overseen by prosecutors. We heard this week that there is a grand jury. We hear that they’re issuing subpoenas. That’s not being done by the FBI. It’s being done by prosecutors in the DOJ.

And that’s where the ball sits. The American people have to rely on AG Jeff Sessions, who may be recused, but who guarantees that? Or it rests with Deputy AG Ron Rosenstein, who is in the job for a couple of weeks. Or it rests with a to-be-appointed FBI Director. Bloomberg is reporting that Trump is considering former Congressman and former FBI agent Mike Rogers, who is far too political, or former New York City Police Commissioner Ray Kelly, who is all hat and no cattle.

There are hundreds of thousands of stories and millions of words being written about this. Trump shouldn’t expect this to go away.

In fact, he should publicly support getting to the bottom of it, rather than acting like Richard Nixon. That didn’t end well.

Some music: Here are the Waifs, an Australian blues/rock band formed in 1992, fronted by two sisters, doing “Crazy Train”. It’s the train America is on right now:

Those who read the Wrongologist in email can view the video here.

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