On the President's Speech

© 2010 Joshua Stark

Sometimes, a person just has to step back and explain a concept that may be basic to a particular field of study, but which is not generally understood by the general public, mostly because they don't need/want to take a moment to think about it. That's alright, and my barking up this tree probably further explains the lack of regular commentary here at Ethics & the Environment. Perhaps I should, instead, use Field & Stream's latest attempt to drum up internet readership (NorCal Cazadora explains).
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Last night, I listened to the President's State of the Union speech, and he uttered the one phrase that drives the economist in me so completely batty that it usually leaves me sputtering, gesturing at the medium (the radio in this case), and getting all crazy-eyed, lip-pursed, and white-knuckled.

He said that the federal government needs to rein in spending during these tough economic times because, because, that's what a family does.

It drives me batty; so batty, in fact, that I'm taking a bit of space out of my blog to explain just how ridiculous that claim is.

The short version: Is a family's spending responsible for the safety of our Nation? Is it responsible for the Nation's financial stability? Can it move literally hundreds of billions of dollars in just a few weeks or months? Can it make trade agreements? Can it order the printing of additional money, or determine the interest rates it is going to pay? I could go on and on.

The longer version (but still short): This oversimplification of our Nation's responsibilities dumbs down the conversation about government to a simple, and overly economic, look at our country. It pretends that the Nation just goes out and buys Tide with Bleach normally, but should settle for the generic brand right now. You know, just in case it loses its job.

Meanwhile, many people are investing. Because, in addition to it being a stupid analogy, it isn't even necessarily good advice for families to behave that way during bad economic times. Individual decisions need to be based on microeconomic factors. For example, should gun stores have been stocking up on ammunition and guns in late 2007 & early 2008? Yes, because they sold a lot of guns and ammunition in 2008-2009. Safe manufacturers, seeing the slide in the economy, should have put in more orders early on, too. More generally, what happened to the adage: Buy low, sell high?

Which brings me to my last point: If a family had as much spending power and clout as the US Government, it sure as heck wouldn't be tightening its belt right now; it would be buying up all kinds of businesses, and proudly crowing about it at the golf course. In a few years, it would rake in even more money.

Does this mean I believe the feds should buy up every company? No, it means I think the analogy is stupid. It caters to a feeling rather than an understanding, and it leads to bad decisions.

I would also like to point out two things: We are at War, and the President needs to speak to this issue first and foremost, until we are out of War. It always disgusts me when the President (and the current one and the previous one were both very, very bad at this) talks about the economy first. The economy is tough, yes (believe me, I know it), but it is not tougher than ordering young men and women to kill and die for you. Even if you pretend it is.

Second, I only caught one little blip about the environment, and it was only about climate change. Nothing on other protections, nothing about ag., nothing about water or air quality. Just a little blip on climate change, that he wants something done.

I always worry when an administration says that they want just something done, because from the efforts of our current governor, who knows what that will be?

So please, Mr. President, do some serious economic re-thinking. And make the War first every time, before every speech, because every day, your young soldiers kill and die for you, by your orders.

Economics and the Environment (from December, 2008, & with update)

© 2010 Joshua Stark

(I wrote the first half of this piece a little over a year ago, but I think it's important to consider now. I've added more at the bottom)
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WARNING: Contains economics talk.

I titled my blog with a little bit of wiggle room because I enjoy thinking about economics, and also because it's kind of a default thought-process for me, so I knew it would out itself, eventually.

My Bachelor's degree says, "Social Science", which is a misnomer because it ain't science, and most of us with this title have little social lives, but the degree did encompass some economics (or, like the head of the department said, the degree is like the Platte River: A mile wide and an inch deep). Teaching experience sparked additional interest in me around macroeconomics (as my wife will attest), and, to paraphrase a great mind, I now remember just enough economics to screw me up for the rest of my life. The great mind was Steve Martin, and he was talking about philosophy, but never mind.

This brings me to my post.

I won't go into the specifics for how close our economy looms over the edge; that's everywhere nowdays. I want to look ahead, and mention some problems in the near-future, and use a look at the past to inform our decisions.

First, we are in the midst of what would be a market correction, if that market (housing) hadn't been the rock-turned-to-sand upon which so many financial and personal economic choices were built. With stagnating wages, a shift to the service sector, and past gains based upon efficiency increases, people felt very strong social and market pressures in the past ten years to cash in on their largest investment instead of putting pressure on management to pay higher wages. At the same time, institutions changed the nature of that investment in the larger scheme, asking for self-regulation, and then contriving markets out of re-sale and insurance on what had been the safest long-term investment this side of a T-bill, therefore turning it into a ponzi scheme. It's funny that the term 'hedge fund' is a horrible abomination now, when the original meaning was as a way to minimize loss in other markets. As housing prices shot up and up, quickly out of the range of the typical buyer, we built our market foundation on "easy" credit, started juggling mortgages like hot potatoes, and the music started. When both the buyer and the seller want a higher price, markets get unstable. When the music stopped, millions of homeowners were left without a chair, as were almost all of our largest money-movers.

So, how does this apply to the environment?

The emphasis now is going to be getting people to work as soon as possible. This is a good idea, but brings with it two dangers which can damage habitat and long-term environmental and conservation goals: Downward pressure on wages (which deflation can actually do, too), and shoving aside current environmental protections.

Okay, the second one is easy: If we cut current environmental protections, providing exemptions to NEPA (National Environmental Policy Act), for example, then we set ourselves up for big-ticket, long-term infrastructure projects that are inappropriate for our country today and contrary to what the majority of people want for our children and ourselves. We have done these projects better for decades now, and these regulations did not sink our economy.

But, you may ask, how does downward pressure on wages affect the environment? First, understand that we have spent the last ten years basing our combined wealth on debt created by selling our houses back to ourselves (second mortgages). Our economic power should not come from our houses, but from compensation for productive work, ie., wages and earnings. However, because we were making loans on our houses instead of pushing for higher wages, our wages stagnated. Now, consider stagnant wages in light of double digit inflation in health care, postsecondary education, and you guessed it, housing.

Now that people know their true compensation, they are cutting back in spending. This affects the environment three ways: 1) Lower wages mean fewer trips to the outdoors, which translates into fewer dollars for the outdoors, less care for the outdoors, and fewer people with a strong connection to the outdoors (any talk about less impact to the resource from fewer visitors is hogwash, as I wrote here);
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(alright, that is where I'd finished in December of 2008. Here is my contemporary addition)
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2) lower wages mean fewer tax revenues, which especially affects state and regional governments, because they can't (technically) deficit spend, and because they didn't surplus spend (that is, save) during the good years; 3) lower wages mean fewer donations to environmental causes, and since we've largely turned our (collective) back on the outdoors, opting for indoor entertainment over outdoor adventure, those folks are usually the only ones out there trying to get and maintain protections.

Well, now that it is 2010, and in light of the Governor's current proposal to exempt a ton of private projects from CEQA, I thought I should post this entry, and also revisit the notion. I'll admit (looking at the business real estate bubble and the amount and manner that derivatives markets drove direct investment in housing throughout the country) that the housing crisis was caused in larger degree by gigantic investment engines much more that what you see on HGTV.

Today, jobs is the major concern for most voting folks (MVF's). Not (ashamedly) the war to which we commit tens of thousands of young men and women to kill and die for us. Not education. Not the environment. MVF's are now just thinking about work. Meanwhile, our "fix" for the system allowed some gigantically wealthy financial institutions to claim record profits and "pay back" their loans to the government, in the illusion that they are now sound and healthy, and also to "prove" that they really didn't need the money, anyway (only for as long as they needed it, I suppose).

In the meantime, some people understand that a sound environment and economy are not only not mutually exclusive, but are linked. For example, the Sacramento Bee reports this morning on the success of Continuing Education classes on green business at the California State University.

In addition, by piecemeal eliminating the status quo business climate in California, you create uncertainties in markets, which leads to bad long-term economic conditions.

Economies thrive in transparent, open, clean and consistent climates, whether they be financial, regulatory, or environmental. This is especially true in California, whose greatest asset has always been its location. If we ruin the location, we will ruin our future.

Updates...

© 2010 Joshua Stark

A couple of quick updates from issues I'd mentioned in the past...

First, not so past: The new language for the bright (horrible) idea by our Governor, where he hopes to exempt some special companies from the third and co-equal branch of government, has been changed.
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It's worse.

Instead of 20 companies, it's now at 100, in groups of 25 for four years.

Second, a bit farther back: Last year, I referred to an effort by PG&E to raise the burden the public must meet if it is to have its own, public utility. Right now, it's a majority vote, but PG&E wants it raised to 2/3rds. The reason I'd learned about this effort is because I'd been accosted by a signature-gatherer in front of a store the previous week. Normally, I love signature-gatherers, and the whole public-participation-in-government idea. However, this man came up to me and offered me the chance to sign some kind of Voters' Rights Initiative to protect the Public, or something like that. I read the idea, and told him no thanks. He pushed again, and I again said no. He pushed again, as I was walking away, and I said that, not only would I not sign it, but it was a lie, and he should be ashamed. I asked him if he understood what he wanted me to sign. His last push? He just needed 70 signatures for the bonus, so cut him a break.

How's that for public participation?

Well, those pushy money-grubbers got what they wanted, and the initiative made it to the ballot. It's baloney.

I'm all for protecting the rights of minority views (Lord knows I hold some, myself), and in requiring near-unanimity when it comes to war. Deciding whether your community should get to own its power company is neither.

Unfortunately not the best updates. However, I'll add a positive note... my ducks gave me three eggs yesterday. Yeah, they do that every day (probably today, too, but I haven't checked yet), but it's still good news.

Cap & Squander Strikes Back! (or, the economic mantra: incentives matter)

© 2010 Joshua Stark

The Economic and Allocation Advisory Committee (EAAC), organized to provide an economic study of California's cap & trade carbon regulation, has come back with a recommendation: Rebates!
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Let me step back a year and explain both my title and the concepts and controversy. Last year, I attended a session, organized by a coalition of environmental groups, on cap & trade at the federal level. One member of a national enviro. group, who will remain nameless (hint: we have a subscription to their kids magazine) described the various ideas surrounding the revenues from a cap-&-trade regulation. He first started with the one he thought the least of: a cap & rebate, where the funds from the carbon price are returned directly to individuals in the form of checks. He derisively labeled it, "cap & squander", and pointed out the obvious (to him) problem of people blowing their money on big-screen televisions. Then he moved on to describe all the great things that would happen with the money if it were used by the federal government to protect wild lands and clean our air and water.

I was dumbfounded. I understand people wanting control over the gigantic sums of money that will be generated through a carbon regulation, but again, I had to sit in stunned silence while an "expert" was allowed to railroad basic economics. The words "paternalistic", "regressive taxation", and "really?!?", repeatedly flashed through my mind.

So to quickly debunk the gentleman's concern, let me ask you, dear reader, this (rhetorical) question: Where will all this money come from?

This money will come from our economy, and in our economy, most markets are oligopolies (markets with very few producers). Now, it is not true that all new costs to businesses are automatically shuffled off to consumers; where the final cost winds up depends on a number of factors. But, it is true that one of the biggest factors in determining where that cost will settle is the number of competitors in a market. The fewer the competitors, the more the costs can be given to consumers. In monopolies and oligopolies, then, the vast majority of that additional cost is paid by consumers.

So when a carbon price hits, the prices of televisions and electricity will depend on the ability of the producers to limit their carbon emissions. "Dirtier" TV's and electricity will be more expensive, cleaner ones will be cheaper. The consumer will get a check from the carbon price, but this consumer will be playing in vastly different marketplaces, and will have many new incentives in her purchase decisions.

Now, a nationally recognized group of economists who are far more intelligent than I am (or that feller I saw last year) have suggested the same thing. They don't recommend a rebate of everything, (nor do I), but they do recommend a big rebate (me, too).

With the remaining amount, I recommend funding the parts that can't play in our market system: Wild lands, wildlife, etc. But, that's for another post. Also, I must iterate that a carbon price must be expensive (or a cap tight - same difference), or else it will not be effective. The only way to alleviate the disproportionate burden on poor folks, then, is to issue a rebate of equal amount to everybody.

Go cap & squander, everybody!

Quick update on the Delta

© 2010 Joshua Stark

It's always difficult for me to write about Delta issues, because I'm so close to it, emotionally and physically. However, it's important, as our treatment of the Delta has a huge impact on our view of nature and natural processes, and learning just how and where we fit in.

So, some quick notes:
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About 60 land owners are banding together in the Delta, refusing to let the Ca. Dept. of Water Resources onto their property. They are gearing up for a legal fight, and good luck to 'em. Personal note: We bought some potatoes and kettle corn from Zuckerman's farmers market stand last Sunday in Sacramento. Good stuff.

Meanwhile, a deal that was agreed to by a number of environmental groups up in Tejon Ranch goes ahead with its development, even though the water it would need may not be available when they are done. That's because it's Delta water. Now, Tejon says it could get water from somewhere else, and I'd like that.

Today I found a website dedicated to developing the idea of a Delta National Park. I haven't read through it all, but I'm intrigued, especially since I'd done some work in that realm for a bit (and came to a slightly different conclusion).

I recommend, for folks interested in Delta issues, Restore the Delta's website for information from a very biased source.

Editor's note: I accidentally published this with the wrong date, so I've moved it forward into its proper place.

Undue influence in your public education, and then some good news

© 2010 Joshua Stark

The Fresno Bee reports on an issue that won't die, the appearance of improper pressure by Harris Ranch on Cal Poly, San Luis Obispo.

It appears that the managers of Harris Ranch think that their additional funds entitle them to pressure faculty through the administration, and to influence (or decide) who gets to speak at the campus and under what format.
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Last year, the company sent the university a letter in which it threatened to withdraw its $500k grant when it heard that renowned author (and UC professor) Michael Pollan was going to speak. Pollan's attacks on grain-fed CAFO (centralized animal feeding operations) models for agriculture are well-known, as is his support for small, multicrop farms over large, monoculture ranches (and if you haven't read "Omnivore's Dilemma", please do!).

It's no surprise that Harris Ranch would be mad about these topics and perspectives, and so it's no real surprise that they also criticized a Cal Poly faculty member, Prof. Rutherford, for his similar views.

Yeah, none of it is a surprise. But, contrary to what news media might want you to believe, you shouldn't have to be surprised to be outraged or disgusted.

Had this happened to a private university, I'd still be mad, but I wouldn't feel a personal affront. However, my taxes go to pay for this university, and I'm willing to bet that many Californians pay the same percentage of total income as Harris Ranch to our public institutions.

On a related note, and having received no funding from Harris Ranch (or you all, for that matter), I'd like to link to a great article in this month's Mother Earth Magazine (they haven't paid me, either) on the benefits and potential for grass-fed beef. Here's the quotation that stood out to me:

"Churchill says that on properly recovered land, he can finish about two steers per acre. That is almost precisely the acreage it takes to grow the grain to finish those same steers in a feedlot. This whole system makes economic sense, acre by acre."

What?! That's tremendous news, a happy surprise, and flies in the face of what we've been told in recent decades about the efficiencies of feedlots. And, when you add to this concept the idea that grass requires lower feed costs, far fewer antibiotics and vet. care, and much less transportation and processing, plus native habitat restoration, there really is no reason to stay on the grain-fed path.

And you can now add to the costs of feedlots the undue pressure that they put on our universities.

Hello! Hunting organizations, sign up!

© 2010 Joshua Stark

To elaborate on a passing reference I made two blogs earlier, the biggest threat to Southern California's wild lands is development, and more specifically, the development of solar thermal facilities and their subsequent energy corridors.
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In this light, Senator Feinstein has authored a bill, the California Desert Protection Act of 2010, that would set aside more land for protection. You can read a good summary of the bill here at the Senator's website.

Now, the NRA-ILA is fighting hard to maintain hunting in Mojave National Preserve, but where are they in supporting this issue? The reason I ask is because, like the Ca. Desert Protection Act of 1994, it specifically supports hunting as an activity in much of the lands it is attempting to protect.

At the very least, let's see some hunting groups signing on, because I know full-well that the NRA isn't a hunting organization.

Here's a list of supporters:

• The California Wilderness Coalition
• The Wildlands Conservancy
• The Wilderness Society
• The National Parks Conservation Association
• Friends of the River
• Campaign for America's Wilderness
• Cogentrix Energy
• Edison International (parent company of Southern California Edison)
• Friends of Big Morongo Canyon Preserve
• Friends of the Desert Mountains
• Mojave Desert Land Trust
• Desert Protective Council
• Amargosa Conservancy
• Death Valley Conservancy
• Cities of Barstow, Desert Hot Springs, Hesperia, Indio, Palm Springs, San Bernardino and Yucaipa
• Riverside County Supervisor Marion Ashley
• San Bernardino County Supervisor Neil Derry
• Imperial County Supervisor Wally Leimgruber
• Coachella Valley Association of Governments
• SummerTree Institute
• Route 66 Preservation Foundation

Show me one hunting group there...

This bill also straddles the constituent fence, as it were, by both adding wilderness land and including space for OHV use. Neither side in that battle will probably be happy in public, but the long-term effects of having the federal legislation specifically refer to both of them will help both groups.

Come on, hunters, this is something to support!

Special thanks to Defenders of Wildlife for bringing this to my attention.