We Need A Green Infrastructure Plan

 Popular Economics Weekly

Washington Post

The Biden administration’s $3 trillion infrastructure plan is next on their agenda to boost economic growth. And it will need a tax raise to pay for it.

“I think a package that consists of investments in people, investments in infrastructure, will help to create good jobs in the American economy,” testified Treasury Secretary Janet Yellen in congressional hearings this week, “and changes in the tax structure will help to pay for those programs.”

Yellen and Fed Chair Jerome Powell said there was no problem with any inflationary bulges that might occur with so much spending because it was spending that would boost productivity as well as employment, generating even more growth.

“Our best view is that the effect on inflations will be neither particularly large nor persistent,” said Powell during the same hearings.

The circa $3 trillion infrastructure bill President Biden is proposing should really be treated as if we are fighting another world war, as we treated spending during world War Two. This war to overcome the coronavirus pandemic has killed more people than all prior world wars.

So why even worry about inflation or budget deficits? In fact, rising inflation during WWII created negative real interest rates at the time because the Fed kept rates low to finance the war, just as it is doing now, which really means it is interest-free money (That is, real interest rates less than zero as it was during WWII).

And the infrastructure bill must be a green, environmentally friendly bill because much of it has to mitigate the damage to infrastructure from global warming. Need we be reminded of the recent breakdowns in power grids that can leave millions without water and electricity for days, as demonstrated by the Texas power crisis this year?

The National Resources Defense Council (NRDC) in a 2008 report said, “New research shows that if present trends continue, the total cost of global warming will be as high as 3.6 percent of gross domestic product (GDP). Four global warming impacts alone—hurricane damage, real estate losses, energy costs, and water costs—will come with a price tag of 1.8 percent of U.S. GDP, or almost $1.9 trillion annually (in today’s dollars) by 2100.”

This means an 80 percent reduction in U.S. greenhouse gases alone to meet Paris Accord goals, phasing out most uses of fossil fuels and replacing them with electric energy sources such as wind and solar power.

“Mr. Biden’s infrastructure plan will deal with the meat-and-potato issues that Republicans and Democrats agree are an urgent need,” say NYTimes reporters Jim Tankersley and Anni Karney. “It seeks to rebuild roads, bridges, transit, rail and ports, while also improving power grids and increasing the number of electric vehicle charging stations.”

The plan also requires the development of universal broadband, such as 5G networks that China is already building on a grand scale, a major issue in rural communities. Documents suggest it will include nearly $1 trillion in spending on the construction of roads, bridges, rail lines, ports, electric vehicle charging stations, and improvements to the electric grid and other parts of the power sector, according to Tankersley

There is much more to Biden’s infrastructure plan that will be detailed as we get more particulars. Any delays in passing it will only increase the costs from damage caused by the increasing frequency of hurricanes, tornadoes, wildfires, power failures; so much so that even the U.S. Pentagon says climate change has become a national security threat.

Over the past decade, the Pentagon has consistently, repeatedly cited climate change as a serious threat to America’s national security in official public documents.

“Climate change is a threat in their eyes because it’s going to degrade their ability to deal with conventional military problems, said Michael Klare in an Vox interview about his new book about the Pentagon’s role in combatting global warming, titled All Hell Breaking Loose: The Pentagon’s Perspective on Climate Change. “It’s going to create chaos, violence, mass migrations, pandemics, and state collapse around the world, particularly in vulnerable areas like Africa and the Middle East.”

“It is difficult to put a price tag on many of the costs of climate change: loss of human lives and health, species extinction, loss of unique ecosystems, increased social conflict, and other impacts extend far beyond any monetary measure, says the NRDC report. “But by measuring the economic damage of global warming in the United States, we can begin to understand the magnitude of the challenges we will face if we continue to do nothing to push back against climate change.”

If we can protect ourselves from COVID-19, then we surely can protect ourselves from a warming planet.

Harlan Green © 2021

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Do We Want to Save the Planet?

Answering the Kennedys’ Call

SF Chronicle

President Trump just announced the U.S. will withdraw in one year from the Paris Accord of almost 200 countries that have agreed to significantly limit Greenhouse Gas (GHG) Emissions.

This happened within a day of a report from the Alliance of World Scientists endorsed by more than 11,000 scientists that says the world is facing a climate emergency.

“Scientists have a moral obligation to clearly warn humanity of any catastrophic threat and to “tell it like it is.” On the basis of this obligation and the graphical indicators presented below, we declare, with more than 11,000 scientist signatories from around the world, clearly and unequivocally that planet Earth is facing a climate emergency.”

Is it a coincidence Trump announced the withdrawal from the Paris Accord on the same day satellite data shows that last month was the warmest October on record ?

I think not. Trump’s announcement took the headlines, thereby preempting the far more important climate news to back pages. The withdrawal is to take effect one day after the 2020 Presidential election.

His administration is full of lobbyists and former executives of the fossil fuel industry in what will ultimately prove to be a vain attempt to further enrich themselves in the face of looming environmental disasters.

The total of 11,253 scientists from 153 countries affirm that” if we do not act or respond to the impacts of climate change by reducing our carbon emissions, reducing our livestock production, reducing our land clearing and fossil fuel consumption, the impacts will likely be more severe than we've experienced to date," said lead author Dr Thomas Newsome, from the University of Sydney.

In fact, "That could mean there are areas on Earth that are not inhabitable by people," said the report.

How so? Because it is already happening. We know great swaths of North Africa and the Middle East have experienced mass population exoduses from an increasing frequency of droughts that are causing outright civil wars (Syria), and anti-immigrant xenophobia in many countries.

BBC News summarized the report’s recommendations:

• · Energy: Politicians should impose carbon fees high enough to discourage the use of fossil fuels, they should end subsidies to fossil fuel companies and implement massive conservation practices while also replacing oil and gas with renewables.
• · Short-lived pollutants: These include methane, hydrofluorocarbons and soot - the researchers say that limiting these has the potential to cut the short-term warming trend by 50% over the next few decades.
• · Nature: Stop land clearing, restore forests, grasslands and mangroves which would all help to sequester CO2.
• · Food: A big dietary shift is needed say researchers so that people eat mostly plants and consumer fewer animal products. Reducing food waste is also seen as critical.
• · Economy: Convert the economy's reliance on carbon fuels - and change away from growing the world's gross domestic product and pursuing affluence.
• · Population: The world needs to stabilise the global population which is growing by around 200,000 a day.

But there’s more. It can cause irreparable economic damage that results in geopolitical unrest; even wars, as countries compete for limited resources. The U.S. Pentagon has been warning of this outcome for years, because it has labeled climate change a direct threat to our national security.

A summary of its latest January, 2018 report to congress showed that it was also harming military preparedness in future conflicts, so much so, that a US News & World Report in a 2017 report said,

 “During his confirmation process for the post as secretary of defense this spring, Gen. James Mattis wrote in the question/response period: "Climate change can be a driver of instability and the Department of Defense must pay attention to potential adverse impacts generated by this phenomenon."

From shifting temperatures to desertification, environmental changes have the potential to significantly affect the movement of populations, the availability of resources and the stability of governments. The results can be famine, drought, disease and a rise in global conflict.

Then the question must be asked: Why on earth is the Trump administration denying climate change and withdrawing from the Paris Accord when we now know it is causing  the suffering of millions, and is a threat to our national security?

Harlan Green © 2019

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Answering the Kennedys’ Call

Noozhawk.com

I recently attended the 10^th anniversary of the Goleta Dam Dinner held at Lake Los Carneros, on a dam built long before the City of Goleta, California was formed.

Here in this relatively new and still small city, founded in 2002 and nestled beside its famous neighbor, Santa Barbara, were families of all ages and stages happily celebrating not only their sense of community spirit, but the natural beauty of its surroundings that is a unique blend of mountains and ocean located on the central California coast.

This made me realize how successful was the formation of this new, very livable, California city, where I had been privileged to live and help establish, in spite of the many obstacles to the formation of new governmental entities in recent years.

It was a successful community because of the attention paid to both the environment and safety concerns of its citizens—especially the children.

I know Goleta won’t make the list of The Economist Intelligence Unit’s annual Global Liveability Index that really only pays attention to larger cities, where we don’t see this community spirit and camaraderie.

Vienna was the top city on The Economists’ list, with Australia and Canada each having three cities in its top 10 listing of the better-known cities that made The Economists’ Liveability Index. .

1. 1. Vienna, Austria
2. 2. Melbourne, Australia
3. 3. Sydney, Australia
4. 4. Osaka, Japan
5. 5. Calgary, Canada
6. 6. Vancouver, Canada
7. 7. Toronto, Canada
8. 8. Tokyo, Japan
9. 9. Copenhagen, Denmark
10. 10. Adelaide, Australia

No U.S. city was in the top 20, with Honolulu ranking highest at No. 22. Atlanta came in 33rd place; Pittsburgh, 34th; and Seattle, 36th. New York was all the way down in the 58th spot, in part because of low scores for infrastructure, stability and possible crime issues.

That could be because it’s easier for the residents of smaller cities to confront city councils with their concerns—at least in the U.S. of A. It has to be why the City of Goleta became one of the 50 safest American cities in 2017, fifteen years after its formation, according to a survey by Safewise, a security firm.

What then does “liveability” mean? The Economist is a UK Magazine, which might serve as a bias for a more European civic viewpoint, perhaps. But the issue of safety is certainly at the forefront of making any community livable—especially for children.

And the rising tide of violence in American cities—so much so that in 1992 U.S. Surgeon General Everett Koop declared violence a public health emergency—means the situation in American cities hasn’t improved.
 
And now even more so when U.S. Surgeon General Vivek Murthy was fired by President Trump in 2017 after he spoke against gun violence, calling it a public health issue that needs public investment, and stood in support of the victims in Orlando, Florida, where one of the worst mass shootings in American history had just occurred.

It also has much to do with so-called Smart Urban Planning. Architect Suzanne Lennard, and Psychiatrist Henry L. Lennard have written extensively on what makes communities livable in books such as The Forgotten Child (2000, Gondolier Press, Carmel, CA).


Children are safest where there are neighborhood adults with ‘eyes on the streets’ that watch over them, as in many densely-packed European cities with their public squares. Children are also safer where streets are designed and neighborhoods zoned to allow children to roam and explore, rather than be dependent on the auto to transport them to school, for instance, as is the case in many poorly-planned American suburbs.

Such concerns were incorporated into the City of Goleta—that made it such a close-knit, ‘liveable’ community, in my opinion. It was also why attending the Goleta Dam Dinner’s 10^th anniversary was such a special event.

Harlan Green © 2019

 Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Republicans Are About to 'Make America Last'

Popular Economics Weekly

President Trump’s withdrawal from the Paris Accord on climate change is symbolic in more ways than one. In bringing back the white nationalist call to make America great again, he could set us back decades in bringing cleaner air and reducing global warming, not to speak of what would happen to economic growth.

In fact, he wants to Make America Last in the developed nations in caring for not only our environment, but economic growth as well. The agenda of Trump and his Tea Party supporters seem to want is to knock out the main pillars that grow the economy—a better social safety net (fewer workers lose work time), restriction of immigration and the importation of new workers needed for higher growth, as well as cutting huge chunks out of the budget for education and R&D, which are needed for a more educated workforce and the development of new products, the seed corn for future productivity and prosperity.

We currently have the second highest carbon emissions per capita after China, but could become the highest emitter if Republicans succeed in rolling back 30 years of environmental protection, becoming the country with the least amount of environmental protections.

Why leave the Paris Accord, when it is a voluntary accord to reduce carbon emissions? It was to help the coal industry, where Commerce Secretary Wilbur Ross is heavily invested in coal and has already made $millions with the 50 percent bumpup in coal stocks since Trump took office.

And the Koch Brothers $millions that were spent to elect Tea Party candidates is paying off as Trump initiated an immediate review of President Obama’s Clean Power Plan, which restricts greenhouse gas emissions at coal-fired power plants, the main vehicle for reduction of U.S. emissions that was promised in the Paris Accord.

Surrounded by coal miners, the president described that plan as a “crushing attack” on workers and vowed to nix “job-killing regulations. We’re going to have safety, we’re going to have clean water, we’re going to have clean air, but so many [regulations] are unnecessary, so many are job-killing,” he said.

The withdrawal process takes a total of 4 years, beginning in 2020 after the next congressional elections. It is totally voluntary, with all but 3 countries now on board, except the US, Nicaragua, and Syria.

But it’s symbolic in another way, as well. Trump and his Republican supporters seem to want to be left out of collective agreements of any kind, and this will hurt us economically as well as isolate US from future attempts to lower carbon emissions.

America will also be last in health care if Republicans succeed in repealing Obamacare, because Repubs want to slash spending on Medicaid and social security disability coverage, needed predominately by the poorer states that supported Trump. Why? So they can use the $1.11 billion is savings to pay for the repeal of the Obamacare taxes that benefit the wealthiest.

Need we say more of why the Trump Team wants to Make America Last? So their own wealthy supporters gain even more wealth, and Trump’s supporters—most of whom reside in the poorest states—will continue to suffer from his sleight of hand.

Harlan Green © 2017

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Consumer Spending Down, Recession Looms?

Popular Economics Weekly

Wow! First-quarter GDP was paltry enough at 0.7 percent but consumer spending was even more paltry, at only 0.3 percent for the most embarrassing annualized pace since 2009, said Econoday. Unemployment is unusually low and consumer confidence unusually high making the results difficult to explain.

Graph: Econoday

Could it be that nothing is happening in Congress and the White House on all those promised initiatives? The 5-month budget agreement left all spending priorities in place for the rest of this fiscal year (i..e., until September). That meant no money for a border wall, no defunding of Obamacare (as promised), or Planned Parenthood, or cuts in the EPA budget that protects our environment.

All the post-election euphoria for change hasn’t translated into actions, in other words. So, consumers may be keeping their powder dry, as their savings rate rose 0.2 percent to 5.6 percent.

Another worrisome indicator is almost no inflation, as core Personal Consumption Expenditure prices had the weakest showing in 16-1/2 years, according to Econoday. Core PCE prices fell 0.1 percent to take down the year-on-year rate by a sizable 2 tenths to 1.6 percent.

And if there’s no inflation, or falling inflation, it means there’s falling demand, which means falling profits. And that’s when a business cycle ends. So unless Congress and the Trump White House decide to stop playing with people’s minds on repealing Obamacare, or trying to pass a budget that cuts taxes for the wealthiest while cutting benefits to seniors and the sickest, we could see a looming recession.

The ineptitude of government is at the moment startling. The budget agreement leaves everything in place, which includes, thanks to the Washington Post’s Daily 202:

1. There are explicit restrictions to block the border wall, but final agreement goes further, putting strict limitations on how Trump can use new money for border security (e.g. to invest in new technology and repair existing fencing). Administration officials have insisted they already have the statutory authority to start building the wall under a 2006 law. This prevents such an end run.

2. Non-defense domestic spending will go up, despite the Trump team’s insistence he wouldn’t let that happen. The president called for $18 billion in cuts. Instead, he’s going to sign a budget with lots of sweeteners that grow the size of government. Mitch McConnell made sure $4.6 billion got put aside to permanently extend health benefits to 22,000 retired Appalachian coal miners and their families.

Nancy Pelosi made sure $295 million was included to shore up Medicaid in Puerto Rico. Chuck Schumer got $61 million to reimburse local law enforcement agencies for the cost of protecting Trump when he travels to his residences in Florida and New York. There is also another $2 billion in disaster relief money for states, which bought a couple votes. (Kelsey Snell, our lead budget reporter, has more examples.)

3. The administration asked to slash spending at the National Institutes of Health by $1.2 billion for the rest of this fiscal year. Instead, the NIH will get a $2 billion boost – on top of the huge increase it got last year. Republican appropriators who care about biomedical research, including Rep. Tom Cole (R-Okla.) and Sen. Roy Blunt (R-Mo.), delivered.Trump also failed in his efforts to cut money for other kinds of scientific inquiry. For example, he proposed defunding the Advanced Research Projects Agency–Energy. Instead, it is getting a $15 million increase.

4. Trump fought to cut the Environmental Protection Agency by a third. The final deal trims its budget by just 1 percent, with no staff cuts. As part of a compromise, the EPA gets $80 million less than last year, but the budget is $8 billion.

5. He didn’t defund Planned Parenthood. Despite the best efforts of social conservatives, the group will continue to receive funding at current levels.

6. The president got less than half as much for the military as he said was necessary. Trump repeatedly prodded Congress to increase military spending by $30 billion. He’s getting $12.5 billion, with an additional $2.5 billion if/when he delivers a detailed plan on how to defeat the Islamic State.

7. Democrats say they forced Republicans to withdraw more than 160 riders. These unrelated policy measures, which each could have been a poison pill, would have done things like get rid of the fiduciary rule and water down environmental regulations. On the other side of the ledger, this budget blocks the Justice Department from restricting the dispensing of medical marijuana in states where it has been legalized.

8. To keep negotiations moving, the White House already agreed last week to continue paying Obamacare subsidies. This money, which goes to insurance companies, reduces out-of-pocket expenses for low income people who get coverage under the Affordable Care Act. The Trump administration justifies giving up on this because of the potential to resolve the bigger issue by repealing Obamacare.

Need we say more?  If ideology trumps common sense; such as the promised $1 trillion infrastructure bill, we can see the confidence balloon also lose its air. Then watch out below, as I've said.

Harlan Green © 2017

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

California’s Fracking Controversy

Financial FAQs

Santa Barbara voters have an upcoming ballot measure that bans all forms of enhanced drilling techniques, including steam injection and fracking, and it is getting national attention. Fracking supporters tout the huge boost in national oil and gas production that franking, or hydraulic fracturing of shale oil deposits to make extraction possible, that is making the U.S. more independent of foreign oil and gas..

But it is the well-documented loss of property values for those properties close to fracking sites, due to lax environmental regulations that govern fracking operations, that may be the biggest concern for Santa Barbara County voters in November.  Nearly 7,000 new wells are proposed locally.

The loss of property values comes from the 24/7 operation of fracking sites that generates so much pollution. Twenty-four hour, day-for-night lighting is required on the rigs, as well as noise and truck traffic from the transportation of the chemicals used—some toxic—in the drilling operation. But there are also fears of ground water contamination from toxic chemicals being injected into the wells.

And fracking operations are non-stop, thanks to the “Halliburton Loophole”, a 2005 amendment to the Clean Air and Water Acts that former VP Dick Cheney, former Halliburton CEO, pushed through Congress exempting fracking operations from almost all Environmental Protection Agency regulations.

“Coupled with existing exemptions to a variety of pollution laws like the Clean Air Act, the Resource Conservation and Recovery Act, the Superfund Act, and the Emergency Planning and Community Right to Know Act, the 2005 carve-outs gave the fracking industry seven total exemptions from important environmental regulations,” reported a recent truthout.org article.

And Congress has not as yet been able to close any of those exemptions. Even former congressional allies of Cheney, such as House Majority Leader Dick Armey, are regretting the Halliburton Loophole they supported at the time. Mr. Armey is one of the plaintiffs now suing the drilling companies that are causing loss of property values in his own Texas backyard from fracking operations.

California already has a thriving fracking industry. The majority of the state’s new and active wells are concentrated in Kern and Los Angeles counties, said a National Resource Defense Council report entitled Drilling in California: Who’s at Risk? However, expanded fracking in the large Monterey Formation could bring the oil and gas industry into more communities, especially in Ventura, Monterey, Fresno and Santa Barbara counties.

The NRDC report reveals that 14 percent of the state’s population—5.4 million Californians—already lives within a mile of at least one oil or gas well. Of that group, 69 percent—3.7 million residents—are people of color (45 percent Latino/Hispanic, 13 percent Asian, 8 percent African American and 3 percent other).

No less than business friendly Forbes Magazine published a study documenting the loss of property values from hydraulic fracturing for those property-owners near fracking sites, with the headline Pollution Fears Crush Home Prices Near Fracking Wells.

“Researchers from the University of Calgary and Duke University studied property sales from 1994 to 2012 in 36 Pennsylvania counties and seven counties in New York,” said Forbes in describing the study. “They mapped sales against the locations of shale-gas wells, and they compared homes connected to public drinking-water systems to homes with private wells.

 

“Properties with private wells suffered a loss in value compared to properties connected to a municipal water system, they found, offsetting gains in value from mineral-rights royalties. The loss varied with distance from the nearest shale-gas well. At 1.5 kilometers, properties with private wells sold for about 10 percent less.”

Properties suffered greater losses when closer to shale-gas wells where hydraulic fracturing had been employed. Within 1 km of shale gas wells, properties with private drinking water wells dropped 22 percent in value. Properties connected to public water suffered no losses, but also showed no net gains.

There are a host of factors that cause this, said the study, from the noise and toxic smells of fracking machinery (methane and sometimes Hydrogen Sulfide gases are released), to growing evidence of pollution of ground water from the toxic chemicals used. Sulfuric acid is one of the chemicals used to dissolve the oil-bearing shale.

And then there’s the real danger of earthquakes from injecting waste water back into the ground, which have been occurring with increasing frequency in some Oklahoma fracking fields, reports NPR Radio in a July 2014 broadcast by Linda Wertheimer.

Denver, Colorado had the same problems with so-called natural gas injection wells back in the 1960s, and played a critical role in discovering the link between forced injection wells and induced earthquakes.

“In the mid-1960s, Denver experienced a series of quakes believed to have been caused by a 12,000-foot deep wastewater disposal well at Rocky Mountain Arsenal, according to a June 2014 report by Denver’s NBC Channel 9. It culminated in a 5.3 magnitude quake on August 9, 1967 that remains the strongest recorded earthquake in Denver's history, after which the well was decommissioned and the Army began to remove the wastewater it had pumped below the surface.

There are currently more than 1.1 million active oil and gas wells in the United States, and more than 15 million Americans now live within a mile of the hundreds of thousands that have been drilled since 2000, according to an analysis by the Wall Street Journal. Made possible by the advent of fracking, drilling is taking place in shale formations from California to New York and from Wyoming to Texas.

And there’s no indication that this “unprecedented industrialization” shows any signs of slowing. Almost 47,000 new oil and natural gas wells were drilled in 2012, and industry analysts project that pace will only continue.

Even Exxon CEO and board chairman Rex Tillerson, is suing to stop construction of a water tower that would supply nearby drilling operations because of the nuisance of, among other things, heavy truck traffic, noise and traffic hazards from the fracking operations the tower would support.

So the CEO of the single largest drilling company in the world acknowledges the “constant and unbearable nuisance” that would come from having “lights on at all hours of the night …traffic at unreasonable hours … noise from mechanical and electrical equipment.” And Tillerson’s lawsuit – filed in 2013 with other plaintiffs, including former House Majority Leader Dick Armey – claims the project would do “irreparable harm” to his property values, in papers filed for the Denton County, Texas lawsuit.

One little noticed side effect is that the secondary mortgage market hasn’t caught up with the risk of loaning on properties affecting by fracking, which means such properties could be harder to finance. Housing Wire has reported on a webinar entitled, “Oil and Gas Exploration for Mortgage Bankers,” in which Daniel McKenna, with the Ballard Spahr’s Mortgage Banking Group said, “The loans are actually low risk. But Fannie, Freddie, the FHA and the VA prohibit gas leases on their loans. There are a ton of different regulations that impact selling these loans on the secondary market.”

The Calgary and Duke University study of property values near shale gas wells has caused a 10 percent drop in values, but with fracking operations, values dropped some 22 percent in value. So it does look like the “Halliburton Loophole” that exempts the fracking industry from almost all environmental regulations will make Californians, a notoriously environmentally-friendly state, wary of allowing it to operate closer to population centers, at the very least.

Harlan Green © 2014

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen