Category: Infrastructure

Saturday Soother – February 17, 2018

The Daily Escape:

Sigiriya, Sri Lanka – photo by jcourtial for dronestagram. Sigiriya is an ancient rock fortress. The site was the palace for King Kasyapa (477 – 495 BC). It is a UNESCO World Heritage Site.

We live in a seemingly endless loop of outrage. Nothing ever changes, because we waste energy on the “what-about?” arguments from both sides, each attempting to reframe the issue to their side’s advantage. These discussions yield nothing, and solutions are never agreed. This adds to a generalized feeling of powerlessness: The view that everything that is important is out of our hands, and insoluble.

So it is with school shootings, with protecting the DACA kids. And with whatever Russiagate is.

At least the Mueller investigation will run its course. We have to hope that the results will be made public. But if they are released, it will only lead to more debate and disagreement. Until then, we’ll continue to gleefully argue our respective Russiagate viewpoints in a fact-free vacuum.

We have experienced hysterical political times before, but they tended to be single issue events. Has there ever been a time when so many people in both political parties have been so single-mindedly determined to whip up anger?

When we’re looking at just a single issue, one side or the other often simply runs out of steam. Then the issue can be resolved both in Washington and in the mind of the public.

When we experience multiple issues simultaneously, the available energy is expended across the entire spectrum of problems. Thus, there isn’t enough energy to direct successfully at a single issue. So nothing is resolved.

This is where we are in February 2018, in a kind of nervous exhaustion: Too many issues and too few resolutions.

Can something, or someone unite us? Will a big event allow a majority to coalesce around a point of view, or a leader?

History shows that when we are in the grip of anxiety, it can be a relief if something we fear actually happens. Think about when Japan bombed Pearl Harbor. It was widely reported that the response of the public, including anti-war activists, was relief. There was a feeling that at last a course had been set, a key decision made. FDR united the disparate groups behind a war.

While the same situation doesn’t quite apply today, we crave some sort of decisions, perhaps some sort of decisive act. What would that be? It isn’t possible to see from where we are today.

As John Edwards said, there are two Americas. The one that sends their children to private schools, and the second one that sends their children to public schools. The second group has the kids who get shot by the gunmen. And politicians get away with platitudes about their thoughts and prayers.

Unfortunately, they then decide that fixing the problem is not worth their time.

We may have reached a breaking point. Shitty jobs, shitty pay, shitty hours, and little hope of advancement. No easy access to medical care, an uneven social safety net. Wrongo lived through the chaotic 1960’s. He endured Reagan’s show-no-mercy 1980’s. Those were bad times.

But, in a lot of ways, 2018 is worse. Today, there is an immense lack of mutual respect. And there is a ubiquitous atmosphere of a powerless people.

Wow, who said all that??

We desperately need a weekend where we can unplug from the media and focus on other things. In other words, we need a Saturday soother. Start by brewing up a big cuppa Stumptown Coffee’s Holler Mountain Blend, ($16/12oz.) The Stumptown people promise flavors of blackberry, citrus and toffee in a creamy, full body. Your mileage may vary.

Now, get in your favorite chair and listen to some, or all of the musical score from the film “Dunkirk”. Both the score and the film are Oscar-nominated. The film’s director Christopher Nolan suggested to the musical director Hans Zimmer, that they use Elgar’s “Nimrod” from the 1898-99 “Enigma Variations” as part of the theme. They decided that the movie’s music should be about time, and how for the men on the beaches, time was running out. They picked the “Enigma Variations” because it’s part of English culture, less a national anthem than an emotional anthem for the nation. Along the way, consistent with using time, they slowed it down to 6 beats per minute. Listen to their version from the movie:

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

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

Places That Don’t Matter

The Daily Escape:

Maroon Bells, CO in winter – photo by Glenn Randall

America’s forgotten masses used the ballot box in 2016 to ram home a message to their betters. The message was that we shouldn’t ignore the places that don’t matter, those places that once had middle class jobs, and now have few options. The Trump election was one way to signal all was not well in the America’s decaying small towns.

We long ago retreated from the idea that the central government has a responsibility to look after the lagging places. It isn’t an invisible, unstoppable force that directs all the wealth generation to cities: It’s a system of deliberate centralization, by individuals who control capital, to concentrate productive efficiency and thus, wealth. The left-behinds are on their own.

The reality is that regional or town regeneration is very hard, once the original reason for the town’s existence is lost. Places that don’t matter have to find ways to build wealth locally, and then keep that money local. Locally produced goods and services keep regions alive.

Most solutions are based on the usual arm waving that says: “let them have training” or, “they really need to move where the jobs are”. These ideas have largely failed. Figuring out how to revive these communities requires better policies.

The revenge of the places that don’t matter is the rise of local populism, the increasing opioid use, and declining longevity. The stakes are high, but maximizing the development potential of each town has got to be the answer.

Here is one solution. The WaPo has a long read about how a liberal DC entrepreneur set out to help West Virginians. And for a very long time, Joe Kapp’s help was refused. He was the object of a vicious online campaign, targeted by homophobia, and maligned as a carpetbagger.

When Kapp, 47, an entrepreneur decamped to a West Virginia cabin in 2012 with his partner, he’d come to take a sabbatical. The town is Wardensville, pop. 256. From WaPo:

Those who do work locally gravitate toward poultry processing, furniture manufacturing and agriculture, but the numbers aren’t good. In 2015, the unemployment rate…was 7.5%, compared with 6.7% statewide and 5.3% nationally. The per capita income…was just under $28,000 a year, compared with about $37,000 for the state, and $48,000 nationwide.

The basics are lacking. The area doesn’t have Internet. Kapp says:

You’ve got kids doing their homework in McDonald’s parking lots. People in most of the country just have no idea.

And even community college enrollments suffer. Only 10% of West Virginia high school students enroll in community college, compared to 50% nationwide.

Kapp soon befriended the president at the local community college. From there, it wasn’t long before he was helping the college launch an innovative project, the Institute for Rural Entrepreneurship and Economic Development (IREED), aimed at helping to diversify the regional economy.

Kapp initially failed to gain traction, but things have gradually turned around. He thinks this demographic has more potential than the coastal elites give them credit for. He is certain that by harnessing local knowledge, like agriculture, they can start businesses, and put their own people back to work.

Every town wants its own Amazon, but in rural communities, that’s not an option. They need to create an ecosystem that promotes a small-business culture and entrepreneurship. So Kapp’s assistance in establishing the IREED with the community college got the idea off the ground. No community college in the state had anything of the kind.

The goal of the IREED is to help the local agricultural community think of itself as entrepreneurial.

He is developing a program that will allow community colleges to offer low- or no-interest micro-loans, around $5,000, to aspiring entrepreneurs. These individuals would then take entrepreneurship and business-development courses at the lending college. Kapp:

A bank might say, ‘This guy’s too risky,’ But a community college can say, ‘I know this guy. We work with him. I am vetting and validating his ability to be able to pay back the loan.’

In other words, it’s development banking on a community level. Today, most community banks mainly fund real estate, and they still follow the model where the borrower needs to pledge collateral to get the loan. In a world where services are the business’s primary asset, collateral has no meaning.

So the micro-loans by schools may be a perfect first step to bootstrapping these persistently poor towns.

This is a tentative step. It may not be scalable, but if we are looking for the greatest “social impact indicators”, it is the degree to which people feel secure economically, and safe in their community.

Always has been, always will be.

(The concept of this column, although not the solutions, is taken from “Revenge of the Places That Don’t Matter” by AndrĂ©s RodrĂ­guez-Pose, Professor of Economic Geography, London School of Economics. Originally published at VoxEU)

Facebooklinkedinrss

The GOP’s Message and the Democrat’s Response

The Daily Escape:

Lake Blanche, UT – 2017 photo by exomniac

We watched the State of the Union (SOTU) speech at the Mansion of Wrong. Outside, it was 15° and very windy. That also appeared to be the climate in the House chamber during Trump’s speech, which Wrongo saw as largely a basket of glittering generalities; rhetoric without action; lies instead of facts; and marching band patriotism. Chants of “USA, USA” in the House chamber should be beneath our politicians, but sadly, some want us to appear to be a banana republic to the rest of the world.

Americans don’t ask their politicians for much, and apparently, willingly accept even less than that without a whimper.

Wrongo wants to focus on the Democratic response to the Trump speech. Roll Call says that there were at least five responses, of which two were “official”, in that they were authorized by the Democratic Party. Rep. Joseph P. Kennedy III (D-MA), grandson of Bobby Kennedy, delivered the English-language Democratic response. Virginia Guzman, the newly elected, and first Latina to be elected to the Virginia House of Delegates, gave an official Spanish-language response.

Democratic Rep. Maxine Waters of California offered an unofficial response to the presidential speech, as did former Rep. Donna Edwards of Maryland.

But the most notable response came from a sitting senator who isn’t a Democrat, Sen. Bernie Sanders (I-VT). He rebutted Trump’s remarks, and in some ways, rebuked Trump and his administration. This is the second year in a row that Sanders has delivered his own speech after the State of the Union. Bernie’s speech was shown on social media, and not on any mainstream TV outlet. You can read the text of his speech here.

Post-SOTU, the Dems are about to get worked over, largely because of their support of the Dreamers. If Chuck Schumer has his way, Democrats are about to charge up DACA hill once again. The outcome is likely to be the same. Wrongo thinks the Dreamers’ cause is just, but it isn’t a good idea to try to ransom them from Trump and the GOP as part of the immigration deal Trump has placed on the table.

Trump wants to alter our immigration system in a very unfair way in exchange for Dreamer amnesty. The question for Democrats is: Should they make the trade? Do they really think that the GOP will start deporting Dreamers in March? Do they think the videos of Dreamers in custody and on their way to homelands they never knew will help Republicans politically?

Take the Dreamers off the table. Proceed with other pressing issues, like funding the government.

And when the DACA protections lapse, there will be a price that Dreamers will have to pay, right along with both Democrats and Republicans, neither of whom would make a deal to extend DACA.

And when Trump wants an infrastructure deal, then Dems should bring up the Dreamers. Change the strategy. Let the “public-private” partnerships he touts for infrastructure be the way he gets his wall, and how Dreamers get amnesty.

It’s important that Dems are right on both the politics and on the merits. Compromise must come on big issues like immigration and infrastructure, and Dems shouldn’t take the first deals offered on either issue.

But to win in 2018 and beyond requires Democrats to offer a strong and compelling platform of their own, one based upon principles. Like health care being a right of citizenship. Like investing in education and infrastructure instead of spending on wars and weapons. Young Kennedy got close to identifying a compelling platform, but he isn’t the messenger for 2018.

There are many people in America who are hurting. Many are under-employed, and not getting the support they need. Simply pointing the finger at Trump is not going to inspire many to go to the polls. Democrats tried this in 2016, and it didn’t work.

People need a positive vision for the USA, and their place in it.

On Tuesday night, Trump would only speak of his plans in very general terms, because he doesn’t have the support in both Houses of Congress to get the job done. While MAGA is a successful campaign slogan, it isn’t a plan for a future that includes all Americans.

Democrats can be a part of the solution, if they find a way to prevent the GOP from taking and holding liberal issues hostage.

Facebooklinkedinrss

Funding Infrastructure: America’s Great Challenge

The Daily Escape:

Skye Peak, Killington VT – December 2017 photo by wsquared1

Wrongo is Vice-Chair of his town’s roads committee. Just like America, our small town has an infrastructure problem; we have let our roads deteriorate through years of underfunding. It’s a small town, and most of our roads are paved, but today, like most of America, our roads grade out at “D”. That compares to the American Society of Civil Engineers’ grade of “D+” for all of America’s infrastructure. Using foam composites on these roads would be a great way to improve the infrastructure.

The federal expenditure to make things right is on the order of $4 Trillion, or 100% of the 2018 federal budget of $4.095 Trillion. About $2 Trillion of that is currently unfunded. Our town is in a smaller boat. We just received a consultant’s report saying that to bring our roads up to an “A” grade would take a one-time expense equal to roughly 45% of the town’s annual budget.

Today we started preparation for the January town council meeting that will address funding of our roads. The fundamental challenge is that we will have to double our spending on roads just to maintain our current “D” rating.

This deferred maintenance is the result of years of underfunding, years of making decisions that directed money to the most obvious projects and programs. Politicians get elected on fiscal responsibility, and then take the shortest-term possible view of what to fund in the budget process.

Accountability is elusive, even when the same pols are on the scene year after year.

The town council’s first question will be: What will this investment get us? Will more people choose to buy/build a home in our town? Will businesses think we are a better location for their next store, shop or factory? And will those decisions add to our tax revenues? Will our roads be safer?

Assuming the answer to question one is positive and persuasive, the council’s second question will be: What parts of our existing budget do we cut in order to fund this need?

This is the crux of America’s problem today.

Government at all levels refuses to raise taxes or other forms of revenue. On the town level, we have little desire to cut expenses for our schools, or our town management. In fact, the pressure is always to increase those budgets.

Turning the desirable into the possible is politically challenging, even though at the Federal level, deficit spending is the rule, not the exception. At the local level, it is always the exception. Our town has a credit rating of AA+, so we have the ability to use bond financing in this historically low rate environment, just like the federal government can and does.

The challenge is how to get the town’s people on the same page, how to convince them that it is smart to finance a long-term asset (like a reconstructed road) with a long-term liability (like a bond).

We call assets like our roads part of the commons: Assets that are not owned by an individual, but by the group, such as the town. The roads are a community resource belonging to all of us, which must be actively maintained and managed for the good of all.

A prime principle is that infrastructure investment be directed to the projects where the return for the economy is the greatest. We should rebuild roads and bridges where we will see a boost to the economy, or as required to maintain citizen safety.

Nobody wins if the commons are allowed to erode. Nobody wins if the commons are appropriated by private ownership.

Funding the commons is one of the greatest challenges facing America. Beware the “public-private partnerships” that the GOP currently has on offer for us.

They lead to absentee ownership, and to skimming part of our tax revenues for a corporation far from home.

Absentee ownership leads to poorer maintenance, and fewer repairs.

And to a lower quality of life for the rest of us.

Facebooklinkedinrss