Tag Archives: regulation

Texas

Early in my academic career, I really came to appreciate Texas. I taught Law and Public Policy, and on those rare occasions when Indiana failed to provide a “teachable moment”– an example of truly awful policy– I could always count on Texas.

I still remember Molly Ivins’ wonderful explanation of the logic of the Texas “lege.” She noted that when gun deaths exceeded highway deaths, Texas lawmakers sprang into action–and raised the speed limit.

Ted Cruz (known around Twitter and Facebook these days as “Fled” Cruz) is a perfect example of the sort of Republican Texas routinely elects–arrogant, bigoted, and thoroughly full of himself. While he took off for Cancun, Beto O’Roark was setting up telephone outreach to elderly citizens who’d lost their power and access to clean drinking water, and AOC, the much-hated “socialist” who doesn’t live anywhere near Texas was raising two million dollars for relief efforts. (I note that, as of yesterday, it was up to five million…)

To be sure, Cruz has lots of company. Former Governor and Energy Secretary Rick Perry (who was Governor in 2011 and ignored experts who recommended winterizing the power grid) insists that Texans prefer an occasional apocalypse to the indignity of federal regulation, and a “compassionate” Republican mayor had to resign after telling freezing people who’d lost power and water to stop whining and get off their lazy asses and take care of themselves.

I don’t think it is at all unfair to claim that these buffoons are perfect representatives of today’s GOP–a party that exhibits absolutely no interest in actual governing. I agree entirely with Ryan Cooper, who wrote in The Week that  the blizzard nightmare is “Republican governance in a nutshell.”

After describing Cruz’s attempted getaway, Cooper wrote that

what Cruz did is emblematic of the Republican Party’s mode of governance. The reason Cruz felt comfortable leaving Texans to freeze solid on the sidewalks of Houston is the same reason the Texas power grid crumpled under the winter storm. Theirs is a party in which catering to the welfare of one’s constituents, or indeed any kind of substantive political agenda, has been supplanted by propaganda, culture war grievance, and media theatrics. Neither he nor anybody else in a leadership position in the party knows or cares about how to build a reliable power grid. They just want to get rich owning the libs….

People have known for decades how to winterize electrical infrastructure — after all, there is still power in Canada and Finland. The reason those investments haven’t been made in Texas is because it would have cost a lot of money, and nobody wanted to pay for it — especially because the deregulated Texas energy grid makes it hard to pay for upgrades or extra capacity.

The reason the Texas grid isn’t connected to the national system is pure GOP ideology; the grid was purposely kept within the state in order to avoid federal regulation. (It’s notable that a couple of small parts of the state that aren’t connected to the Texas-only grid–places that were subject to those hated regulations– have mostly been fine.)

Unfortunately for Texas politicians, it’s hard to blame the “libs” for this debacle, although they’ve tried; after all, Republicans have run the state since 1994–and they’ve pretty much been owned by the state’s fossil fuel companies–especially Governor Abbott.

When the Texas power grid buckled under the strain of worse-than-expected winter cold, Texas Gov. Greg Abbott (R) went on Fox News and blamed frozen wind turbines for what was mostly a problem with natural gas–fueled power supply. Then he savaged the Electric Reliability Council of Texas (ERCOT), which manages the Texas-only power grid. But he has notably “gone easier on another culprit: an oil and gas industry that is the state’s dominant business and his biggest political contributor,” The Associated Press reports.

Abbott, in office since 2015, has raised more than $150 million in campaign contributions — the most of any governor in U.S. history — and “more than $26 million of his contributions have come from the oil and gas industry, more than any other economic sector,” AP reports. In a news conference Thursday, Abbott mostly blamed ERCOT for assuring state leaders Texas could handle the storm.

ERCOT, of course, is managed by people appointed by Abbott…

Today’s Republicans may not be good at–or interested in– governing, but they are absolute masters of shamelessly lying and blaming others when they are threatened with the consequences of an ideology that translates into “let them eat cake.”  

 

Now It’s Coal Ash

The Trump administration has announced its intention to roll back an Obama-era regulation that limited the leaching of heavy metals like arsenic, lead and mercury into water supplies–heavy metals that are produced and leach into groundwater from the ash residue produced by coal-fired power plants.

I wrote about the dangers of coal ash back in 2015, quoting the Hoosier Environmental Council when they were bringing in a coal ash expert to speak at their annual “Greening the Statehouse” event.

Coal ash has special significance for Indiana, since the state leads the nation in the number of coal ash waste lagoons. There is arguably no person better in America to speak to this issue than Lisa Evans. As a coal ash expert with twenty-five years of experience in hazardous waste law, Lisa has testified before the U.S. Congress and the National Academies of Science about the risks of coal ash and federal & state policy solutions.

The Obama Administration addressed those very real risks by passing new regulations in 2015; now, a series of newer rules expected from  the Environmental Protection Agency (courtesy of the former lobbyists now running the agency) will substantially weaken  regulations meant to strengthen inspection and monitoring at coal plants, and requiring plants to install new technology to protect water supplies from contaminated coal ash.

The E.P.A. will even exempt a significant number of power plants from any of the remaining requirements, according to quotations from people familiar with the Trump administration plan.

According to one report, 

Coal ash, the residue from burning coal, is stored at more than 1,100 locations around the nation, with about 130 million tons being added each year. Unlike emissions of carbon dioxide, which many climate science deniers consider a good thing, nobody doubts the dangers of the chemicals in coal ash—including arsenic, lead, mercury, and selenium, among others. All are associated with birth defects and stunted brain growth in children. But the list of damages they can cause is far longer and includes cancer, heart damage, lung disease, respiratory distress, kidney disease, reproductive problems, gastrointestinal illness, and behavioral problems.

Hundreds of ash storage pits don’t even have a simple liner to help prevent toxins from leaching into waterways. According to a 2010 EPA assessment, people who live within a mile of unlined coal ash ponds have a 1 in 50 risk of cancer. That’s more than 2,000 times higher than what the EPA considers acceptable. Tainting of the water mostly happens in a trickle. But, occasionally, as in the 2008 Kingston Fossil Plant’s sudden release of 1.1 billion gallons of coal slurry in Tennessee, or the leakage of 82,000 tons of coal ash into North Carolina’s Dan River, the contamination comes in a catastrophic rush.

Environmental activists criticized the 2015 rule, arguing that it fell short of what is needed to effectively deal with coal ash, and failed to classify the ash as a hazardous waste, which it obviously is. It was a step forward, however.

For every forward step taken by the Obama Administration, however, Trump’s “best people” take two steps back.

Like so many efforts being made daily by the Trump Administration, this move prioritizes the bottom line of industry over the health and welfare of citizens. In this case, that preference is especially galling, because it is intended to help an industry that is dying–and dying  thanks to market forces, not excessive regulations. Nor should its death be lamented: coal is a contributor to climate change, and the relatively few remaining jobs in coal mining are unacceptably dangerous.

Once again we are reminded that nothing this administration does–nothing–advances the common good, or makes environmental or even business sense.

Maybe Government Shouldn’t Just “Get Out Of The Way”

A number of years ago, I read a book by a well-regarded libertarian academic, arguing against most government regulation. I don’t remember a great deal of it, but I do vividly recall his argument against the FAA’s assignment of air lanes (and actually, the agency’s very existence): he argued that the choice of airplane paths should be left to the airlines. Once a couple of planes collided midair and they got sued for big bucks, airline CEOs would get together to work out routes and ensure that it didn’t happen again.

Maybe I’m just a weenie, but I’d prefer not to be on one of those planes that collided.

I thought about that argument when I read the Sunday New York Times article attributing the two Boeing disasters to lax government regulation. Evidently, the officials charged with oversight allowed Boeing to “self-certify” the safety of many of its components and processes–as a result, regulators had never independently assessed the risks of the software known as MCAS when they approved the plane in 2017.

When you put the fox in charge of the henhouse…..

It has been an article of faith of the GOP that there is just too much government regulation–their default position is that most state intrusion into the marketplace is illegitimate and unnecessary. They seem unable to comprehend why government regulations were ever created.

Not long after the events that triggered the Great Recession, the New York Times ran a column by Edward Glaeser, in which he discussed the importance of both the public and private sectors in sustaining a workable market economy. Among his points:

Markets are built on both private entrepreneurs and public law enforcement. For centuries, investors have relied on courts to enforce contracts. Who would buy a company’s shares if the law didn’t impose a fiduciary duty on their issuer? Every person with a bank account in the United States relies on the government to protect his or her assets. Taxpayers also trust that the government can make the costs of overseeing the banking system reasonable.

So who failed? Certainly, the shenanigans on Wall Street remind us that capitalists are not angels, and that unchecked, their mischief can do much harm. But the point of financial market regulation was to ensure that misbehavior would not imperil the entire system.

Are some regulations onerous? Stupid? Unneeded? Sure. But even bigger problems emerge from inadequate regulation and/or enforcement.

Glaeser was writing about the importance of government’s role in financial oversight, an issue that Elizabeth Warren has consistently raised. It takes only a short walk down memory lane to remind us of numerous others.

The BP oil spill in the Gulf has been attributed to inadequate inspections of drilling machinery; the collapse of the I35W bridge was attributed to deficient government infrastructure inspections; the mine collapse in West Virginia occurred because regulators failed to cite and punish the owner for refusing to install required safety equipment; the Enron, Worldcon and Madoff scandals were enabled by a lax SEC.

As a consequences of such inadequate oversight, thousands of people were harmed. Hundreds died.

We rely upon the Food and Drug Administration to ensure that our medications are safe and effective, our chickens free of e coli. (As I tell my students when we discuss regulatory processes, I’d just as soon not have to test the chicken I buy in the supermarket myself when I get it home.)

We rely on the Consumer Product Safety Commission to ensure that the toys we buy our children are free from toxic paint and dangerous parts.

We rely on the FAA to independently inspect the aircraft we fly in, and to regulate those flight paths so that we don’t meet midair.

Caveat emptor is no substitute for competent government oversight–and right now, Americans do not have a competent government.

 

 

A Broken Record: Socialism and Capitalism

As I often tell my students, we Americans tend to be bipolar in our approach to the world. Events, policies and people are either all good or all bad, other nations are either “evil-doers” (in George W. Bush’s awkward formulation) or “good guys,” regulation is either killing jobs or protecting children.

Everything is either/or.

Unfortunately for our ability to communicate with each other,  life and reality aren’t so neatly divided.

The recurrent hysteria (on the Right) over “socialism” and the ferocious attacks (from the Left) on capitalism are part and parcel of that unrealistic (albeit comfortingly simple) dichotomy. In the messy real world, the pertinent questions are very different–even when the people making the arguments actually are able to define their terms, which they so often can’t.

Much of the current hostility to capitalism, for example, mistakes America’s current economic reality for capitalism. In some localities, it still may be, but nationally– thanks to money in politics, lobbying by powerful interests, outright corruption and a number of other unfortunate systemic fails– what we have is mostly corporatismor crony capitalism, not the idealized market system to which conservatives and ad agencies genuflect.

Genuine market competition has considerable merits: it encourages innovation and tends to keep consumer prices affordable. If I make a better mousetrap for a better price, my business grows, I hire more workers, and consumers catch more mice for the same money.

Similarly, “socialism” isn’t a dirty word, nor does it imply totalitarian communism. It is simply the communal delivery of services. We socialize police and fire protection, public schools, parks and highways and garbage collection, among other things, because it makes practical and economic sense to provide those things communally.

The question isn’t “should we have socialism or capitalism?” The question is: what sorts of things should a society provide communally–i.e., what services should be socialized–and what goods and services should be provided by the private market?

The question also isn’t: regulation versus no regulation. The question is: what regulations?

We want rules that ensure a level playing field–that prevent a manufacturer from dumping his waste in our rivers in order to keep his costs below those of his competitors, or that prevent a group of businesses from colluding to keep prices artificially high. We don’t want rules that are poorly conceived or unnecessarily onerous–but determining which rules are appropriate and which ones aren’t requires knowing something about the activities being regulated, and making informed judgments.

It requires the sort of expertise that Trump types sneer at as “elitist.”

Too many Americans want bumper-sticker solutions to complicated problems that don’t lend themselves to simplistic approaches. They want black-and-white answers to issues that require recognizing and working within several shades of gray. Too many of America’s loudest voices use terms they can’t define (or often, spell) and fling them as epithets rather than employing them to communicate.

We may disagree about the proper way to deliver certain services–whether we should “socialize” this or that economic or social activity or leave a particular service or function to a properly and deliberately regulated market. Those debates can be productive.

Labelling everything that offends us as “socialism” or “capitalism”–depending upon which intemperate and uninformed end of the political fringe you inhabit– gets us exactly nowhere. It may make the labeler feel superior and self-satisfied, but it doesn’t help solve our complicated problems, and it pisses off the folks at the other end of the ideological spectrum.

Regulatory Capture

Those of us who teach classes in public administration routinely include lessons on what is called “regulatory capture.” That’s jargon for the “coziness” that often develops between regulators and those whom they regulate.

The more technical and “exclusive” the area being regulated, the easier it is for employees of the government agency charged with oversight, and the representatives of enterprises they are overseeing to become comfortable with each other, and to develop a trusting relationship.

The concern, of course, is that it gets too trusting, and that the oversight intended to protect the public becomes too lax.

Regulatory capture is generally not intentional–familiarity leads to comfort, and things slip between the cracks. But of course, there are also situations in which lax enforcement is, shall we say, more calculated. The question being asked in the wake of two Boeing aircraft crashes, and reports that the FAA allowed Boeing to “self-certify” the safety of its aircraft, is: which kind are we dealing with?

According to the Washington Post, Boeing and the government have long had a “special relationship.”

As a top economic adviser to President Bill Clinton, Dorothy Robyn was charged with advancing America’s aerospace industry.

Part of the job was not choosing sides between companies. But there was one exception: Boeing.

“It was the one company for which I could be an out-and-out advocate,” Robyn said Thursday. In competitions between American companies, the administration as a rule remained neutral. But Boeing’s commercial airplane division employed tens of thousands of Americans and its prime competition, Airbus, was in Europe.

“In the engines business, you can’t choose between GE and Pratt & Whitney. With Boeing, that’s it. They’re ours. It is the only sector where we have a de facto national champion and you can be an out-and-out advocate for it.”

That “special relationship” has existed for decades. Boeing makes the planes that fly as Air Force One. A former Boeing executive, Patrick M. Shanahan, was tapped by Trump to be acting defense secretary after the resignation of Jim Mattis, despite the fact that he had no prior government experience. Boeing’s business is so dependent on federal government policies that the company spent $15.1 million last year on approximately 100 Washington lobbyists.

Boeing booked a record $101.1 billion in 2018 revenue, up 13 percent from the year before, and analysts say about a quarter of that was from government contracts. In 2017, Boeing received an estimated $23.3 billion in taxpayer-funded contract awards, not including classified military funding. And its joint ventures with Lockheed Martin and Bell Helicopter Textron received $2.2 billion and $2.5 billion, respectively, in federal contract funding in 2017….

Daniel Auble, a senior researcher at the Center for Responsive Politics, called Boeing “an excellent illustration” of the “the undue influence of money in our political system.”

In the wake of the two crashes, Congress has demanded answers about FAA oversight of Boeing, including why the FAA didn’t ground the company’s planes until regulators in Europe, China, Australia and elsewhere had done so.

Some FAA personnel have complained that the agency has given Boeing too much responsibility for its own safety checks.  Concerns about a lack of rigorous oversight–especially as reports have emerged about Boeing’s “rush” to beat a rival and deliver these aircraft–is only the most recent evidence that warnings about the company’s “cozy” relationship with the government are not misplaced.

The close relationship between the Pentagon and Boeing is part of a long-standing revolving-door culture in which senior defense officials move back and forth between jobs in government and with defense contractors.

In 2004, Darleen Druyun, a high-ranking Air Force procurement official, was sentenced to prison after she admitted that she approved a purchase of 100 refueling airplanes from Boeing at an inflated price of about $20 billion to enhance her job prospects with the company. She also leaked proprietary pricing information from a competitor and helped Boeing secure a separate $4 billion as a thank you for hiring her daughter and future son-in-law.

According to Bloomberg (link unavailable)

In one previously unreported case involving a separate aircraft program, a Boeing engineer sued three years ago, claiming he was fired for flagging safety problems that might have slowed development. Boeing has denied the claims.

If the investigations now underway find evidence that regulatory oversight was lax–whether due to an excess of trust or something worse–it will be yet another item on the growing list of reasons other countries no longer feel they can trust us.

As airlines cancel several billion dollars of orders for Boeing airplanes, and the company’s stock tanks, the livelihoods of Boeing’s 153,027 employees are at risk. The economic consequences for the whole country could be very ugly.

America is about to get a lesson that our anti-government Republicans won’t like: effective regulation and oversight are essential to economic stability and growth, and only government can provide it.