December 19, 2017

Chinese View of US Tax Cut

Certainly the tax bill, which is now close to becoming law, is far from perfect. Just as certainly it has some things in it that needed to be done like lowering the industrialized world’s highest corporate tax rate, doubling the standard deduction for individuals, and wiping out many (but not enough) loopholes. It will increase the deficit if there is not enough growth stimulated to offset the lower rates.

So is the bill as whole a good thing for the US economy?

In China they are asking, of course, what is the effect on China. Here’s some answers from China’s Global Times.

“…some Chinese companies may consider moving to the US, where the corporate tax rate will be 20 percent [nb. Since raised to 21%]…while China may inhibit the momentum of capital and manufacturing outflow through policy adjustments, such changes could have an impact on the domestic economy and taxation system….

“Second, as a result of the US tax cuts and the anticipated interest rate hikes by the Federal Reserve, global capital will be attracted to the US, pushing up the value of the US dollar….

“Third, the US tax plan also involves individual income tax. When the tax cut is combined with US immigration reform, the country may be able to attract high-technology talent from other countries. China should guard against the possibility of a brain drain…. [nb. I’m not sure what they mean by immigration reform]

“Last but not least, tax cuts in the world's largest economy will have a global spillover effect. While stimulating the US' economic growth and attracting capital inflows, the tax reduction plan may set off a wave of similar cuts across the world, intensifying economic competition and prompting countries to move toward a taxation and legal environment that is favorable for the most dynamic companies.

“The UK, France and other European countries are reportedly working on tax-cut programs. If other developing countries also cut their corporate tax rates, China's manufacturing cost advantages will be eroded and the nation may experience outflows of high-technology talent and intellectual property. The Chinese government needs to be prepared and have comprehensive plans for all potential scenarios.”

Note that the tightly-controlled Chinese press are not fans of President Trump. Nevertheless he would probably be pleased to read Chinese fears that the tax changes will MAGA.

December 15, 2017

The Bicycles of Lanzhou

Lanzhou is a Chinese city , which you’ve probably never heard of , with a population of 3.6 million. It has a history: it’s here that the Silk Road crosses the Yellow River (on chained barges way back when). The Japanese never captured Lanzhou during WW2. It’s a major industrial city and a center of the Chinese nuclear industry as well as home to Institute of Modern Physics, Chinese Academy of Science. Lanzhou was once one of the most polluted cities in the world but in 2015 it won China’s climate progress title.

The climate progress wasn’t because of the bikes; they’ve only become significant again in the last year. At the end of the 20th century, traffic in Chinese cities was mostly bikes. Thy turned into scooters and motorcycle then into Audis and Mercedes as prosperity spread. At least twice a day the new cars froze into fuming gridlock.

Like many cities with a pollution and congestion problem, Lanzhou deployed municipal bike rental racks. They didn’t get much use, often looked like the picture below. IMG_20171208_214213766

People had the usual complaints. The racks weren’t conveniently located at either end of a trip. At your destination you might find a full rack and not be able to return the bike without going somewhere else. With so few bikes on the road, drivers didn’t expect them; and, even though some bicycle lanes had been designated, riding was extremely dangerous.

But private enterprises, which flourishes in the nominally communist country, had an answer. A new breed of rental bike quickly sprawled over the sidewalks. The innovation is that these are rackless bikes. There are no fixed bike racks. Each bike has a GPS, a cellular data connection of some kind (cell coverage is excellent in Lanzhou), and a locking clamp  on the rear wheel. IMG_20171208_213407611_LL

Since bikes are sprawled almost everywhere in the city, there is usually one very near the beginning of your trip. If you don’t immediately see one, the bike app on your phone will tell you where the nearest ones are. Remember, bikes transmit their location. You use the app to unlock the nearest bike and you’re off. When you finish a trip, you leave the bike outside the door of your destination and engage its rear wheel lock. Engaging the lock ends your rental.

Bikes are faster than cars during rush hours. Last year when I was in Lanzhou there were almost no bikes on the streets. This year there are so many bikes that they have become a new hazard to pedestrians but car traffic does seems to have thinned out. A bike is a normal way to get to a business appointment. People complain about the unsightly sprawl of bicycles everywhere; but the bikes are being used. American riders, however, would be shocked to see absolutely no bicycle helmets.

I understand that the same two companies whose bikes are now ubiquitous in Lanzhou are in other Chinese cities as well. My friend Fred Wilson, who is a Citibike fan in NYC, noticed that Shanghai has solved the rack problem which devils him at home. China has successfully gone back to the future and made progress against both congestion and pollution.

November 30, 2017

Vermont Shouldn't Let the Perfect be the Enemy of the Good

State of Vermont

In my last post I blogged that the world’s CO2 output is still rising despite various treaty commitments and huge expenditures on renewables. However, the US stands alone in having exceeded the emission reduction it would have been obligated to had we signed the Kyoto treaty. This accomplishment owes something to deployment of renewables but is largely the result of substituting natural gas for coal in our power plants.  Even though natural gas is also a fossil fuel, it emits less than half as much CO2 per Megawatt-hour of electricity generated than coal.

According to the Federal Energy Information Agency, in 2014 Vermont had the lowest output of CO2 in the country per electrical Megawatt hour (Mwh) generated: 19lbs/Mwh; the national average is 1123lbs/Mwh. However, at that time, 72 per cent of our electricity was generated at a nuclear power plant which has now shut down. 4.4% of our production was from wind and .2% from solar.

Now we generate less than 35% of the 5.5 million Megawatt-hours we use annually. The rest is carbon-free power from Hydro Quebec and “traditional” power from the New England Grid.  As a whole, New England in 2014 emitted 571lbs/Mwh of generation. Net net we are responsible for a lot more CO2 emissions than we were when Vermont Yankee was still producing.

Our wind generation rose rapidly a few years ago but has since plateaued. It was 293,000 Megawatt-hours in 2016.

As with the nation, natural gas is a bright spot in Vermont. The electricity we’re now importing from the rest of New England would be far more expensive if the price of the natural gas used to produce it weren’t historically low.

Very close to home Vermont Gas (VGS) and NG Advantage (NGA), a company I am chair of (please note I do have a pony in this race) deliver natural gas to significantly reduce CO2 emissions. Vermont Gas sells pipeline gas to residential, commercial, and industrial customers in Vermont. NG Advantage (NGA) trucks gas to large users including factories, asphalt plants, and hospitals located beyond the reach of pipelines; NGA buys the majority of its gas from VGS.

All NGA customers once used oil as a fuel. Because natural gas had become much cheaper than oil on a per BTU basis, they were at a disadvantage compared to competitors located on pipelines. They spent millions of their own dollars (no grants available) to upgrade their boilers to natural gas once they knew we could deliver it to them. Some might well have gone out of business without the savings we could help them achieve.

But they save more than dollars. The smoke that comes out of their stacks isn’t black anymore. They no longer emit SO2 and have virtually eliminated NOx.. Their neighbors like the change; first responders appreciate that natural gas is safer than oil or propane because it is lighter than air and can’t cause a sea of flame in an accident or pollute ground water. Replacing oil with natural gas reduces CO2 emissions by 26%, about 5 lbs. per gallon. Last year alone NGA customers reduced CO2 by at least 160,000,000 lbs.

What does that mean?

It’s the equivalent of taking 15,000 cars off the road.

It also stacks up favorably against CO2 savings from wind turbines. Let’s assume that the 293,000 of Megawatt-hours (Mwh) of electricity generated by wind in Vermont last year reduced CO2 by the full amount of the New England average, 571lbs/Mwh; that’s a total savings 168,768,000 lbs. In other words, NGA’s natural gas was responsible for about the same amount of CO2 reduction as all the wind turbines in Vermont. I’m proud of that. Next year NGA will do better.

Exclusive of sales to NGA, VGS sells almost twice as much gas as NGA. If they weren’t selling that gas, their customers would probably heat with oil or propane as most Vermonters do. If VGS weren’t selling that gas, there’d be another 300 million or so pounds of CO2 discharged annually in Vermont and their customers would be paying more for burning a dirtier fuel. Last year VGS completed an expansion to Middlebury and took over some service NGA used to provide. That’s a good thing; made gas even cheaper for those people and added residential customers whom our equipment isn’t suited to serve. I hope VGS will expand to Rutland where NGA also provides service. If that happy day comes, NGA will use its trucks to serve institutions somewhere else.

But What about the Negatives?

I wrote about fracking safety here and claims that “fugitive emissions” of natural gas outweigh the CO2 reductions in net greenhouse effect here. The facts are that drilling for natural gas is much safer than it’s ever been (but, of course, must be done right).  According to an extensive study by Argonne National Laboratory (done during the Obama administration), the environmental benefit of natural gas use far outweighs the environmental cost of leakage and leakage continues to be reduced while extraction increases rapidly. Moreover, according to the UN International Panel on Climate Change, the bible of climate change, atmospheric methane, the main ingredient of natural gas, is stable to declining despite more drilling than ever.

CO2 levels in the atmosphere, on the other hand, are increasing. That’s one problem natural gas can help with.

And in Conclusion

Renewables alone are not sufficient to reduce atmospheric CO2 as quickly as many people believe it must be reduced to avoid catastrophically rapid climate change. Nuclear power and natural gas both have an important role to play in that reduction. Unless there is massive permitting reform (or massive subsidies), nuclear is very expensive and very slow to deploy. Even where there are massive deployments of solar and wind, natural gas “peaker” plants are needed to fill in for the times when the sun isn’t shining and the wind isn’t blowing.

Thanks to new technology, America has huge new natural gas supplies economically accessible. We are buying American energy because we have product at the best price. We are becoming a supplier of natural gas to the world rather than a dependent on risky foreign oil.

Natural gas is a fossil fuel. Wherever it displaces coal or oil, there is an enormous environmental benefit. Those who oppose natural gas use, no matter how well-meaning, are delaying the day when we can burn less coal and oil. They are imposing the extra economic and environmental cost of dirtier, more expensive fuels on their neighbors, their communities, and the world. We don’t want to make some theoretical perfect fuel the enemy of all the good that increased natural gas substitution can do.

We want to drill (safely, of course), build pipelines where justified, and truck natural gas where pipelines don’t reach and aren’t economic. We don’t need incentives or mandates for this part of our environmental mission; we only need to make sure that our regulatory and permitting processes are reasonable. Natural gas adoption pays for itself. That’s sustainable!

November 28, 2017

Don’t let the Perfect be the Enemy of the Good

Increased use of natural gas has so far been the most effective way to reduce CO2 emissions. Natural gas is an excellent complement to renewables for electricity generation since it can be used effectively at almost any scale to fill in when the sun isn’t shining and the wind isn’t blowing.  Not surprisingly, those who sell competitive sources of energy like nuclear, oil, and coal are not fans of natural gas since it beats them on price, at least in North America. Many, but not all, marketers of renewables object to natural gas because it is a “fossil fuel” and because it is not carbon-free, despite the fact that natural gas is helping to reduce emissions and making renewables more practical.

I’m in the natural gas business so you should assume that I’m affected by self-interest like any businessperson. Nevertheless, this and my next couple of posts will be about why we should be using more natural gas to make the world a better place and why declining to do that means more carbon emissions and makes the perfect (carbon-free fuels) the enemy of the good (less emissions of CO2 and no emission of SO2 and other noxious gasses).

Let’s Start with the State of the World

Despite various climate accords, worldwide emissions of CO2 have continued to climb:

image from naturalgasnow.org

Germany, which has invested very heavily in renewables and has some of the highest electric rates in the developed world, has actually had a small increase in emissions for each of the last two years and has announced that it will miss the emission reduction goals it set for itself. Part of Germany’s problem is that it decided to shut down its nuclear plants after Fukushima. Germany also made a political decision against fracking so natural gas is expensive there (and comes in a dangerous degree from Russia). Renewable can’t replace the baseline power; Germany is burning more coal. The results are blowing in the wind.

And Now the State of the US

Our CO2 emissions continue to go down:

image from naturalgasnow.org

 

The United States is the only nation to meet the climate control goals set for it in the Kyoto Treaty – even though the US Senate never ratified it.   According to the EPA, almost all the US reduction in CO2 is result of a massive switch from coal to natural gas for electrical generation. This switch was driven by simple economics: the invention of horizontal drilling and the development of hydraulic fracturing made natural gas cheaper than coal. Fifty percent less greenhouse gasses are released per unit of energy when natural gas rather than coal is the source of that energy.

The US switched from coal to natural gas largely because natural gas is less expensive. Government didn’t drive this switch. Certainly, the Kyoto treaty had nothing to do with it.  Nevertheless, the switch and the consequent environmental benefits are “sustainable”. They are not dependent on either regulation or subsidy. The US leads the world in carbon reduction because we have allowed new technologies to reduce the cost of cleaner energy. We haven’t insisted on perfection; we have achieved good.

Next post, the state of the State of Vermont

November 16, 2017

I want Judge Moore to be Guilty – That’s a Problem

Roy Moore shouldn’t be a US senator IMO; but he’s running for the senate from Alabama where I’m not a voter so my opinion doesn’t count. Until last week it looked like Alabama voters would elect him easily despite (or because of) the fact that he lost his job as chief justice of that state’s supreme court twice, once for disobeying orders to take the ten commandments down in the court house and a second time for refusing to recognize gay marriage. Public officials are not entitled to substitute their own opinions for law (although it is certainly honorable to resign rather than enforce a law you don’t agree with).

Now there are specific and credible (but not proven) allegations by five women that Moore abused them when he was in his thirties and they were in their teens. I was happy to hear the allegations and hope they are true so that he won’t become a senator.

I’m wrong to feel this way.

I want people to believe that he is guilty of the women’s charges so he won’t be elected senator; but I already didn’t want him to be elected because of both his fundamentalism and his previous disregard for the law. The women’s charges may well not be proven by election day; but I want him to be considered guilty anyway , not innocent until proven guilty. I want it to be impossible for Alabamans to make a decision I don’t want them to make.

Similarly many people I know and like want Trump to be guilty of colluding with the Russians so they can undo the choice the electorate made.

Other people would like Hillary Clinton to be guilty of various crimes, at least partly to prove that they were right not to vote for her. (Times change: Bill Clinton probably would’ve been removed from office for the Monica Lewinsky affair had it happened today. At least those allegations were true.)

Obviously, if Trump did collude with the Russians, he should be impeached; but I hope that he didn’t. If there was a real quid-pro-quo in contributions to the Clinton Foundation and Hillary Clinton’s acts as Secretary of State, she should be prosecuted; but I hope there wasn’t.

It adds to the danger of the times when we consider people guilty just on the basis of accusations because we want to criminalize our opponents.

But I still hope Roy Moore is defeated.

November 13, 2017

Google Now a Target for Regulation

Headline in the Washington Post:

Tech companies pushed for net neutrality. Now Sen. Al Franken wants to turn it on them.

The time was – way back around the turn of the century – when all Internet companies believed that the Internet should be free from government regulation. I lobbied along with Google and Amazon to that end (there were no twitter and Facebook then); we were successful over the objection of traditional telcos who wanted the protection of regulation. The Federal Communications Commission (FCC) under both Democrats and Republicans agreed to forbear from regulating the Internet the way they regulate the telephone network; the Internet flourished, to put it mildly.

Fast forward to 2015. Google and other Internet giants and their trade group, the Internet Association, were successful in convincing the Obama FCC to reverse that policy and regulate Internet Service Providers (ISPs) under the same regulation which helped to stifle innovation in telephony for decades. The intent, according to the Internet Association, was to protect Net Neutrality (a very good name) and assure that ISPs didn’t either censor or prefer their own content over the content of others – Google, for example. The regulation was acknowledged to be preemptive - ISPs weren’t discriminating but they might.

This spring Trump’s FCC Chair, Ajit Pai, announced the beginning of an effort to repeal the 2015 regulations and return the Internet to its former lightly regulated state. The Internet Association and its allies mounted a massive online campaign against deregulation in order, they said, to protect Net Neutrality. One of their allies was the Open Market Initiative, which was then part of The New America Foundation. More about them below.

I blogged to Google:

“You run a fantastically successful business. You deliver search results so valuable that we willingly trade the history of our search requests for free access. Your private network of data centers, content caches and Internet connections assure that Google data pops quickly off our screen. Your free Chrome browser, Android operating system, and gmail see our communication before it gets to the Internet and gets a last look at what comes back from the Internet before passing it on to us. You make billions by monetizing this information with at least our implied consent. I mean all this as genuine praise.

“But I think you’ve made a mistake by inviting the regulatory genie on to the Internet. Have you considered that Google is likely to be the next regulatory target?”

It didn’t take long.

In August the European Union declared a penalty against Google. Barry Lynn of the Open Market Initiative posted praise for the EU decision on the New America website. According to the NY Times:

“The New America Foundation has received more than $21 million from Google; its parent company’s executive chairman, Eric Schmidt; and his family’s foundation since the think tank’s founding in 1999. That money helped to establish New America as an elite voice in policy debates on the American left and helped Google shape those debates…

“Hours after this article was published online Wednesday morning, Ms. Slaughter announced that the think tank had fired Mr. Lynn on Wednesday for ‘his repeated refusal to adhere to New America’s standards of openness and institutional collegiality.’”

Mr. Lynn and his colleagues immediately founded The Open Market Institute. The front page of their websites says:

“Amazon, Google and other online super-monopolists, armed with massive dossiers of data on every American, are tightening their grip on the most vital arteries of commerce, and their control over the media we use to share news and information with one another.”

Sen. Al Franken and the Open Market Institute held an event which led to the WaPo headline and the article which begins:

“For years, tech companies have insisted that they're different from everything else. Take Facebook, which has long claimed that it's a simple tech platform, not a media entity. ‘Don't be evil,’ Google once said to its employees, as though it were setting itself apart from the world's other massive corporations.

“But now, some policymakers are increasingly insisting that firms such as Google, Facebook and Twitter really aren't that special after all — and that perhaps it's time they were held to the same standard that many Americans expect of electricity companies or Internet providers.

“Sen. Al Franken (D-Minn.) became the latest and most vocal of these critics Wednesday when, at a Washington conference, he called for tech companies to follow the same net neutrality principles that the federal government has applied to broadband companies such as Verizon, AT&T and Comcast.”

I’m not happy to have been right; on the contrary, I’m appalled. The last thing we should want is the government regulating Internet content, especially at a time when both the political right and the political left are anti free speech. But there is no principled argument that Google’s potential competitors, the ISPs, should be constrained by regulatory oversight while Google, much bigger than any of these competitors and much more dominant worldwide, can exert its dominance freely. Google truly opened a Pandora’s box and let out a regulatory genie.

As much as I am against regulatory oversight of content, I do believe that the government has a very proper role both in antitrust and in truth in advertising. These are some of the tools which do need to be used to keep new or old oligarchs from ruling the world.

November 01, 2017

The Zen of Bicycle Tire Changing

Mary and I just spent a wonderful five days biking down the coast of Portugal from Porto (from whence Port Wine gets its name) to Praia de Sao Pedro de Moel. Much of the ancient forest we cycled through had burned to a crisp in the last few months (more in a future post). The beaches were wonderful; the weather atypically beatific for this time of year.

We were on an unescorted tour which meant that our bags magically got from hotel to hotel but that we were responsible for getting ourselves and our bikes from place to place. There was a GPS with a track on my handlebar and we had fairly detailed maps so navigation was simple except when you needed it most – getting in and out of cities, especially over a bridge which required instant decisions on whether there was a bike path on the outside of the guardrail, a wide shoulder on the inside, or just ride in traffic and pray. We did some of each but not always the right choice for the bridge we were on. Portuguese drivers, however, are understanding and forgiving.

Besides a GPS and a burn phone to call for help, the tour company provided us with a repair kit. I paid little attention during the briefing since I haven’t had a flat in five years of riding in Vermont. I do have a tire repair kit at home which daughter Kate gave me and I had leafed through the instructions once.

Day two. Mary stops fairly suddenly. “Bear, I think I have a flat.” Yup, the rim of her rear tire is on the gravel bike path (actually, as we saw, gravel and glass). Front wheels are easy to takeoff. On these bikes removing the back wheel means disentangling the gears from the chain, big opportunity to get covered with grease. But what you really need to be paying attention to is the relationship between the sprockets, the chain, and the derailleur (the thing that keeps tension on the chain). I didn’t.

Next step is to use three handy shims that were in the kit to get one side of the tire out of the rim. At this point Mary had found instructions and was reading to me as I worked. We did have spare tubes so I didn’t need the patch kit. Mary, as instructed, felt around the inside of the tire and did find and remove a piece of glass which was waiting to puncture the new tube.

“This #### tube is too big for the rim,” I growled.

“Partially inflate the tube to make it easier to handle,” Mary read from the instructions. I did; now it more or less fit. For no good reason I had removed both sides of the tire from the rim but finally figured out one needed to be replaced, then the tube put on, finally the other side tucked back in. Easier said than done. I had 300 degrees of tire in the rim.

“You are now at the hardest part of your task,” Mary read. “It is preferable that you tuck the tire in with your fingers rather than use a tool which may puncture the tube. Most important is patience.” Yeah, sure. But finally the whole tire was back on the wheel. I inflated it with the hand pump, screwed the cap down tight on the stem, and got the hub hopelessly entangled with the chain because, of course, I hadn’t paid attention to how I removed it. Fortunately, we had my intact bike to use as a model of what the reassembled rig was supposed to look like so, lots more grease stains later, it was all put back together.

Just as I was ready to triumphantly turn the bike right side up, I noticed that the new tire was completely flat!

More in despair than hope, I pumped it up again. This time I heard the air hissing out from the valve as I screwed the cap on. I backed off from tightening the cap and the hissing stopped. Put some more air in, put the cap halfway on, and were back on the road. Total time 1 hour, 15 minutes. Had to skip lunch.

Next day my back tire went flat. Couldn’t inflate the first new tube I tried; pump just wouldn’t move. We had asked to have extra tubes dropped with our luggage so had another which did inflate. Total time of repair 20 minutes. I’m educable.

But I also like to think of myself as an engineer by inclination if not by training. Thought a lot about the tires the next night. The valves were different than what we’re used to in the US: Presta instead of Shrader.

Screenshot-2017-10-30 bicycle tube valves - Google Search

Maybe, I thought, the little valve on the top needs to be turned to open and then turned again to close BEFORE the cap is put on. That would explain both problems. I tried partially unscrewing the cap on the tube I hadn’t been able to inflate and then pumping. It worked.

“I’m going to fix the valves on both the tubes I replaced,“ I told Mary before we started off on the next leg. Managed to deflate both. Theory was right but practice more difficult. Total time lost 35 minutes. In Vermont they say “if it ain’t broke, don’t fix it.” But you know engineers.

October 23, 2017

The Vermont Legislature MUST Understand the EB-5 Disaster

If we don’t know what went wrong within state government, how do we know it won’t happen again?

The EB-5 program promises US green cards to foreign investors who put $500,00 to work to create private sector jobs. In Vermont the state Agency of Commerce was responsible both for promoting and administering the EB-5 program. On the state’s watch hundreds of millions of dollars were apparently diverted by the promoters of various projects. Governor Shumlin assured investors that the state was “auditing” these projects. Vermont’s clean brand was a key part of the sales pitch to investors

 It is by far the largest scandal to surface in the E-5 program nationwide. The investors may lose both their money and the chance of a green card since diverted funds didn’t create jobs. Jay Peak, home to several of the projects, is in receivership. Some Vermont contractors, who have had to wait years for payment, have gone out of business. There’s an empty hole in the ground in downtown Newport, dug in conjunction with a project that was supposed to bring biotech manufacturing to the Northeast Kingdom but, which, accordingtothe feds, was almost a complete fraud.

How could this have happened on the state’s watch? The legislature has not held a single hearing to find out.

Let’s assume that all state officials were completely innocent of any criminal wrongdoing (it may take a special prosecutor to find out if this is true). If that’s the case then something is terribly broken inside state government. The federal government wants to immediately remove the state’s oversight. Well it should since we still haven’t discovered how the oversight was so incredibly deficient. The investors, the contractors, and the state’s brand have been deeply damaged. But the legislature seems incredibly uncurious about how all this could have happened.

Did the conflict between the Commerce Agency’s promotional and supervisory roles make this inevitable? If so, does Commerce have other such conflicts? What about other agencies? Does Agriculture both promote farming and administer various farm programs? Are there conflicts like this in the vast reach of Human Services? How do we know another huge scandal isn’t brewing? Does the Attorney General’s office have an impossibly conflicted role in both defending state government and state employees and enforcing the state’s laws?

Do we need to reorganize parts of state government? Do we need some new laws? These are questions which are best answered through legislative hearings. These hearings should not be a witch hunt. They certainly shouldn’t be partisan. But, before further damage is done by and to the state, these hearings must happen.

See also:

Governor Scott Should Follow his Soul, Not the Advice of the Attorney General

Vermont Should be Investigating Itself

Governor Scott Considering EB-5 Special Prosecutor

October 16, 2017

Governor Scott Should Follow his Soul, Not the Advice of the Attorney General

Last month Governor Phil Scott said that the idea that the state is immune from all litigation “doesn’t give me a good feeling in my soul” and that it undermines trust in government. He said that he would consider appointing a special prosecutor to make sure we understand how Vermont happens to be the locus of the biggest EB-5 scandal in the nation. Last week he said he doesn’t believe now would be the right time for such an action because of the state’s pending lawsuit against the developers. Lawsuits take a long time. “Not now” could well be after unsolved problems which led to the EB-5 scandal further damage the state.

Scott says he is relying on the expertise of Attorney General T.J. Donovan, who’s doing “what he thinks is his best to represent the state of Vermont.” The Attorney General’s office is defending the state against a lawsuit alleging state complicity in the EB-5 fraud and, like any good lawyer would, is trying to have the case dismissed. However, the Attorney General, whose client is the GOVERNMENT of the state of Vermont, not the people of Vermont, is giving very bad advice from a public policy point of view.

Donovan argues that, if the state waived its sovereign immunity, state government would collapse. Without sovereign immunity “you wouldn’t have anybody working in government or anybody willing to make a decision in government exercising their discretion for fear of being sued,” he said. That argument is insulting as well as wrong.

Local governments don’t have sovereign immunity; people still work for them. Those of us in the private sector don’t have sovereign immunity; we make decisions (and get sued) all the time; we still do our jobs. Doctors don’t have sovereign immunity; they make life and death decisions – and put up with being sued. Teachers have no sovereign immunity. State workers won’t resign en masse if the state waives its sovereign immunity in a case which has blemished our reputation and which is, just as Scott feared, undermining trust in government.

Moreover, Donovan’s statements make clear that, since his office does have a responsibility to defend the state government and the state workers named in a lawsuit, the AG’s office has a conflict in fully investigating what went wrong. “The AG”s office is alleging fraud against Quiros and Stenger, that’s where we should focus,” He said. Certainly the AG’s office should be pursuing the case against Stenger and Quiros – one might even ask what took them so long – but what if government officials were criminally involved with these two (something which certainly has NOT been proven), would the AG’s office have to back off from the prosecution because any such allegation would damage the interests of its client, the government of the state of Vermont?

If the AG’s office can’t investigate possible state malfeasance, then there is the need for an investigation separate from the AG’s office. Moreover, even if the actions of state employees were entirely legal (as they may have been), shouldn’t the Governor, whose watch this did NOT occur on, want to know exactly what went wrong? Shouldn’t he want to know what went wrong now in case there are similar scandals brewing? Scott’s soul was right; public trust in government is extremely low. Now is the time for him to take advice from his soul and not from the AG.

All direct quotes in this piece come from a VT Digger article.

See also:

Vermont Should be Investigating Itself

Governor Scott Considering EB-5 Special Prosecutor

October 13, 2017

Trump’s Attacks on First Amendment Rights Are Appalling

Could the Trump Administration shut down NBC?

First Amendment to the US Constitution:

“Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.”

President Trump tweeted “Network news has become so partisan, distorted and fake that licenses must be challenged and, if appropriate, revoked. Not fair to public!” He was enraged at what he says was a false story on NBC. Later he doubled down on his anti First Amendment sentiment: “It’s frankly disgusting the way the press is able to write whatever they want to write and people should look into it,” I heard him say on CSPAN.

I’m not a member of the “resistance”; I support some of Trump’s policies and some of his actions; but I am appalled by these statements. Even if the NBC story is 100% wrong (it is thinly and anonymously sourced), the press has a right to be wrong. Reporterrs and editors often are. We can’t have a free press if there is some government agency deciding who is telling the truth and who gets to keep reporting. The whole point is that the press IS able and MUST be able to write whatever they want. We can turn off NBC in our houses but the government can’t do that to us. It’s OUR First Amendment right.

OK; we all agree on that. But could an administration which was so inclined actually take away NBC’s license? It’s unfortunately time to think about that.

On a superficial level, there’s no problem. NBC the network does not have a broadcast license because it doesn’t broadcast; it supplies content. Each of its over-the-air affiliates has its own license from the FCC. NBC owns only eleven stations; there are almost 200 separately owned affiliates. There would be a lot of licenses to take away, many held by rich and powerful people.

Moreover, since the demise of the “fairness doctrine” – needed when there were just a few broadcast licenses available in each area – the FCC has only considered technical and bureaucratic conditions in awarding and renewing broadcast licenses. Stations must stay within their allocated frequencies; can’t sell banned drugs; can’t knowingly abet a fraud (but let’s watch that!); have to pay their fees, file for renewal on time, and tell the truth in the paper work they file with the Federal Communications Commission (FCC). In theory a station could be shut down for pornography; that’s why certain words were banned on TV and radio. But that hasn’t even been threatened lately.

But let’s be paranoid. Broadcast licenses are worth hundreds of millions of dollars even now that most content stays on the Internet and isn’t broadcast at all. Suppose that the affiliates of an obstreperous network were suddenly threatened with license revocation for trivial technical violations – they probably exist and could certainly be alleged. Suppose a routine filing to move an antenna or make some other technical change were suddenly delayed almost indefinitely for “procedural” reasons. Might not the owner of the license pressure the network which supplies it with news to stop pissing off the President. All members of the FCC are appointed by the President with the advice and consent of the Senate. FCC Chairman have been known to follow White House “guidance”. Business people have been known to bury their personal scruples to protect their investors.

It appears that the IRS was weaponized to some extent during the Obama administration. Could that happen with the FCC in the Trump administration? Unfortunately it’s the President himself who suggests the answer may be “yes”.

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