Friday, November 30, 2012


If you think endless speaking in legislative chambers to prevent a matter from being brought before the entire body for a vote is an American invention, think again. For example, back in 60 BC, Cato the Younger was prone to make interminable speeches before the Roman Senate, which had a rule that all matters for the day had to be determined by dusk, to oppose legislation. He did it twice to matters pressed by no less than Julius Caesar. The filibuster has been a fixture in England, Canada, Australia, etc. And it very much a part of how the United States Senate has functioned under this rule, and most recently, very badly. The House played with the concept, but as that body grew massive, the practice was eliminated.
Here’s the short take on what how the Senate rule works from Wikipedia: “Senate rules permit a senator, or a series of senators, to speak for as long as they wish and on any topic they choose, unless ‘three-fifths of the Senators duly chosen and sworn’ (usually 60 out of 100 senators) brings debate to a close by invoking cloture under Senate Rule XXII. According to the Supreme Court ruling in United States v. Ballin (1892), changes to Senate rules could be achieved by a simple majority, but only on the 1st day of the session in January or March. Nevertheless, under current Senate rules, a rule change itself could be filibustered, with two-thirds of those senators present and voting (as opposed to the normal three-fifths of those sworn) needing to vote to break the filibuster. Despite this written requirement, the possibility exists that the filibuster could be changed by majority vote, but only on the 1st day of the session in January or March, using the so-called nuclear option, also sometimes called the constitutional option by proponents. Even if a filibuster attempt is unsuccessful, the process takes floor time.”
The first day of the new legislative session approaches, and the big question is whether this log-jamming practice, effectively giving a minority party with at least 41 Senators the ability to force the majority into positions that they might find unacceptable. And since majorities swing one way or another, a vote today by a majority party… could find that party as a minority in future years. With a 53 to 45 split (2 independent) in the U.S. Senate favoring Democrats, the new Congress (the 113th) is set for filibuster hell unless there is some “force of compromise” that will end that current impasse-prone body. In the current Congress, the Republican minority opposed arenas where it is considered bad form to tread, mostly involving political appointments to high-level executive branch or judicial positions. Will that be the story against next year?
Indeed, the anti-gridlock showdown is approaching: “With his majority enhanced and a crop of frustrated young Democrats pushing him hard, Senator Harry Reid of Nevada, the Democratic leader, says he will move on the first day of the 113th Congress to diminish the power of Republicans to obstruct legislation. ‘We need to change the way we do business in the Senate,’ said Senator Tom Udall, Democrat of New Mexico. ‘Right now, we have gridlock. We have delay. We have obstruction, and we don’t have any accountability.’” New York Times, November 24th. And this measure has to be introduced on the first day of the new session (January looms) for the reasons noted above.
With the approval ratings for Congress falling through the floor, die-hard conservatives are willing to incur the wrath of their electorate by staying the course. What’s the argument for the filibuster anyway? To some historians, the process keeps legislation from swaying back and forth, creating destabilizing inconsistency, as party control at the Senate level changes. Today, Senators no longer have to talk for hours to stall a bill; the procedural rules simply allow bills without at least 60 willing Senators to bring it to a vote (cloture) to fail. As a counter measure, the Dems have used “a parliamentary trick known to Senate insiders as ‘filling the tree’… [a] convoluted procedure allows the majority leader to claim all opportunity for offering changes to a bill, effectively preventing any other senator from proposing an amendment intended to slow down legislation or force a politically embarrassing vote.” NY Times.
Both parties are to blame for the current stalemates: “[T]he current Republican minority has taken the [filibuster] practice to a new level. During the past three sessions of Congress, the majority leader has resorted to an average of 129 cloture motions [trying to force a vote against Republican opposition], a near doubling from the level when Democrats were in the minority from 2003 to 2007… The current Democratic majority has contributed to the parliamentary tit-for-tat, by filling the tree more than in any previous Congress. It has done so over 20 times in each of the last three sessions of Congress. The previous high had been 11, under Republican leadership in 2005 and 2006.” NY Times. OK America, remembering that this process will apply to any minority party… including the Democrats someday… what are your feelings?
I’m Peter Dekom, and a strong filibuster could push us off the fiscal cliff!

Thursday, November 29, 2012

The Internet of Things

People are linked to each other on the worldwide Web through old world email and websites, new world social networking and mobile connectivity, in groups, as individuals… as consumers and political activists. But what about machines – that industrial might that has defined great industrial societies? What if powerful machines could talk to each other in their own language, without having to be wired and linked on a case-by-case basis? So when a new machine is brought to the assembly line, instantly the other processing equipment knows how to relate to the “new kid,” what its place will be in the manufacturing process and how to integrate the additional or replacement capacity into the industrial chain. Without prior programming, a malfunction or a potential malfunction identifies itself to the mechanized workforce, and repairs or rerouting occurs seamlessly.
Okay, it’s beginning to sound a bit like the Terminator series of films, robots on steroids programming themselves to take over the world. But the industrial workforce, even with state-of-the-art robotics, is a creature of customized and highly sophisticated programming with fairly elaborate command and control software. What if machines had their own version of search and social networking and could find linkage without excessive specialized programming? They could collect data and share information where relevant with their fellow machines. Sounds a bit like “learning” and “self-programming.” Scary or the competitive advantage the United States needs to recapture the manufacturing that cheap foreign labor claimed as their own?
General Electric is making a huge bet that this is going to be the next level of interconnectivity. It just added “more than 250 engineers recruited in the last year and a half to G.E.’s new software center [in San Ramon, California] in the East Bay of San Francisco. The company plans to increase that work force of computer scientists and software developers to 400, and to invest $1 billion in the center by 2015. The buildup is part of G.E’s big bet on what it calls the ‘industrial Internet,’ bringing digital intelligence to the physical world of industry as never before…
G.E. resides in a different world from the consumer Internet. But the major technologies that animate Google and Facebook are also vital ingredients in the industrial Internet — tools from artificial intelligence, like machine-learning software, and vast streams of new data. In industry, the data flood comes mainly from smaller, more powerful and cheaper sensors on the equipment… Smarter machines, for example, can alert their human handlers when they will need maintenance, before a breakdown. It is the equivalent of preventive and personalized care for equipment, with less downtime and more output.” New York Times, November 24th.
As a manufacturing giant – from electrical power generators to aircraft engines – G.E. has already been building sensors into just about every facet of its complex machines. The data generated by these sensors has helped G.E. improve their products, but they have also generated a self-enhancing capacity that makes the machines run more efficiently.
But it’s not just machines but overall processes. With electronically coded (and communicating) wristbands on patients and sensors in just about everything a patient might use – from the bed to the IV unit administering drugs in a hospital – old world hospitals can manage costs while upgrading their levels of patient care. “For the last few years, G.E. and Mount Sinai Medical Center have been working on a project to optimize the operations of the 1,100-bed hospital in New York. Hospitals, in a sense, are factories of health care. The challenge for hospitals, especially as cost pressures tighten, is to treat more patients more efficiently, while improving the quality of care. Technology, said Wayne Keathley, president of Mount Sinai, can play a vital role.
“An important advantage, Mr. Keathley said, is to be able to see the daily flow of patients, physical assets and treatment as it unfolds…  But he said the real benefit was how the data could be used to automate and streamline operations and then make better decisions. For example, in a typical hospital, getting a patient who shows up in an emergency room into an assigned bed in a hospital ward can take several hours and phone calls.” NY Times.
It’s a tad unsettling when such processes self-enable, as machines seem to preempt decision-making that was once a matter of some individual’s conscious choice, but as cost pressures mount and this country seeks a path to sustain its economic advantage, this form of automated communication may be just the ticket. Unless the machines think that they don’t really need us anymore. Or maybe they’ll just be nice guys like Commander Data?
I’m Peter Dekom, and this massive change at an industrial level is inevitable and unstoppable… so just get used to it!

Wednesday, November 28, 2012

Dry without a Sense of Humor

Even as flood waters ravaged the eastern seaboard – as Superstorm Sandy sent rainwaters and seawater surges to destroy lives, homes and infrastructure – 60% of the lower-48 part of the United States was experiencing a harsh reality of the opposite kind, one with severe long-term nasties. Drought, bad and getting worse. The National Oceanic and Atmospheric Administration's National Climatic Data Center’s maintains a weekly Drought Monitor Report, what it pages are trending is bad news for farmers and consumer alike.
“The biggest area of exceptional drought, the most severe of the five categories listed by the Drought Monitor, centers over the Great Plains. Virtually all of Nebraska is in a deep drought, with more than three-fourths in the worst stage. But Nebraska, along with the Dakotas to the north, could still see things get worse ‘in the near future,’ the USDA's Eric Luebehusen wrote in [recent Monitor] update.

“The drought also has been intensifying in Kansas, the top U.S. producer of winter wheat. It also is entirely covered by drought, and the area in the worst stage rose nearly 4 percentage points to 34.5 percent as of [November 20th]. Much of that increase was in southern Kansas, where rainfall has been 25 percent of normal over the past half year… After a summer in which farmers watched helpless as their corn dried up in the heat and their soybeans became stunted, many are now worrying about their winter wheat.”, November 22nd. With the groundwater in regional aquifers (particularly the massive Ogallala Aquifer) drying out at record rates, the future of this vital grain belt seems exceptionally bleak.
It’s not time to hit the panic button just yet, because the winter snows have yet to make their season’s fall. It takes about 20 inches of snowfall to generate an inch of water, and there is hope. And of course, not all of the Western regions are feeling the pain, but those that have experienced the worst in drought in recent years continue to be those hardest hit by the current inadequacy of desperately-needed water.
“‘The places that are getting precipitation, like the Pacific Northwest, are not in drought, while areas that need the rainfall to end the drought aren't getting it,’ added Richard Heim, a meteorologist with the National Oceanic and Atmospheric Administration's National Climatic Data Center. ‘I would expect the drought area to expand again’ [in the near term] since little rain is forecast in the Midwest in coming days.”
Is this global warming? Is it transitory? Farmland is still generating record prices, so speculators seem to believe that the croplands will return to full capacity in the foreseeable future. With rising incomes in developing countries – all upgrading the amount and quality of the food they eat – demand for agricultural products has no place to go but higher. And the efficient American farm machine has been pumping out foodstuffs for decades, one of this nation’s greatest exports. Is it (and hence our balance of payments) in further jeopardy?
The far west, outside of the coastal Pacific Northwest, is also riding a drought, and with thirsty mega-cities slorping away, experiencing water shortages at every level. Are the oceans rising? Are all of our low-lying coastal communities facing destruction over time? Is our agricultural heartland equally vulnerable, but to countervailing drought? Such disasters are hugely expensive to a deficit-plagued nation, desperately in need of economic stability and exportable products.
Who pays if it all happens at the same time? Can a nation – already polarized to the hilt economically and politically – hold together as massive regions of the country all demand federal resources to handle these natural disasters… at virtually the same time? Hey, anybody want to keep that big military budget large and perhaps even growing? Might need it to quell civil unrest and secession movements that are already germinating across this great land of ours.
I’m Peter Dekom, and dry has its limits!

Tuesday, November 27, 2012

Hitting Below the Border

With 17 (and rising) European Union states in formal recession, with even France getting a credit rating downgrade, violent street protests and work stoppages in protest against the German-pressured austerity programs that got them there and a debt crisis that defies near-term solution, Europe’s economic prospects are not looking so hot. As China reins in its growing economy to focus on internal growth, moving more to their centrally-dictated economic policy that is pressuring middle-level companies into larger governmentally-controlled formats, and as a new leadership drills down on spreading the wealth to those provinces that have not enjoyed the growth of the coastal regions and defeating epidemic corruption, China is even less concerned with leveling the playing field to accommodate American demands. Russia… well… they really don’t like us very much and laugh every time we trip or stumble. And Japan seems to define economic contraction; their last good economic year was 1991.
Meanwhile, back in this hemisphere, bleak prospects are brightening fast. Canada seemed almost immune to the foibles of the big downturn, with conservative banks, no real housing collapse and a continued strong development of natural resources and cutting edge technology. They can vaguely remember the time when their dollar, now on parity with the U.S. dollar, was once a fraction of what it is worth today. Nice to have a friendly neighbor like that. But the real shining beacon of economic growth seems to be just about everywhere else in our side of the world.
As Hispanics flexed their voting muscle in the recent election, literally becoming the deciders in the presidential race, they are helping to refine who we are in the 21st century. Not counting the almost 4 million residents of Puerto Rico, there are well over 50 million persons of Hispanic ethnicity (almost 17% of the total population) in the United States. While border states used to be associated with that Latin bent, Hispanics have large and successful communities all over America, with particularly large representation in places like Chicago. Did President Obama’s executive order allowing a more flexible immigration policy represent a “gift/bribe” to such voters, or was there a profoundly selfish aspect to this policy shift… one that would make Scrooge McDuck rub his hands in monetary glee?
Mexico and Brazil are huge economies with major populations. Both are major players in the petroleum world, along with Venezuela that has some of the largest known oil reserves on earth. Hugo Chavez isn’t forever! Brazil’s massive recent off-shore oil discoveries have created the B in BRICS (the super-economic powers of Brazil, Russia, India, China & South Africa, some of which are having “difficulties” of their own… but definitelynot Brazil) and in CARBS (the resource-rich nations with working markets: Canada, Australia, Russia, Brazil and South Africa). Cuba’s universal education has created a future potential for educated labor, valuable as the United States nears the time when diplomatic relations can be normalized.
While polarized wealth disbursement (sounds like where the U.S. is headed) and chronic corruption have taken their toll on these nations’ growth, as struggles with the narco-trade has put the damper on several of these states, the reality remains that Latin America, to the extent not already developed, may be the next China, in terms of cheap labor and vast resources that will slowly build some of these states into superpowers. New educational standards and their natural resources, found and unfound, will make many of these nations rich. Middle classes will continue to expand as Portuguese and Spanish-speaking nations rise to take their rightful place among the world’s success stories. It won’t be an easy path for many, but the potential is clearly there (if not already on an explosive growth path).
The U.S. seems to have placed Latin America on a back burner in recent years, focusing on turmoil in the Middle East, the growth of the Asian tigers and our old world ties to Europe. But as America’s ethnic complexion changes, it may be high time to use our new ethnic face to embrace our own pool of golden sunshine to the south. We need to mend fences, open doors and take Latin America seriously… perhaps moving our relations with that part of the world to a new heightened priority. It is most certainly in their best interest… and ours. Not through our traditional domineering and arrogant methods… but treating them like true partners in what could be staggeringly solid economic growth for our entire hemisphere.
I’m Peter Dekom, and there is gold in them thar hills… and some long-term joy in helping make our hemisphere a better place for those who live in it.

Monday, November 26, 2012

Wealth: the Grand Divide

When it comes to reducing a deficit, increasing revenues is a damned good idea… along with reducing expenses. Taxing those with the capacity to pay more is not an immoral choice. But it isn’t the 47% that’s causing the problems that plague the American Dream in this country… or even the tax rate being charged to high earners; it’s the 42% of wealth that is concentrated in the hands of 1% of the nation, the greatest economic polarization in the modern developed world. Our allocation of wealth makes us look more like a banana republic than a modern-day superpower. And it isn’t about making being a millionaire or billionaire a dirty word. Where truly valuable new social and economic values are generated, rewards to the risk-takers, the visionary entrepreneurs are most certainly in order. This wealth polarization has taken place in a relatively short span of time, even as the IMF tells us that such polarization can take a very nasty toll on longer-term real growth.
A common statistical measure of inequality is the Gini coefficient, a number between 0 and 100 that rises with greater disparities. From the late 1970s through the early 1990s, the Census Bureau recorded Gini coefficients for income in the low 40s. Yet by 1992, the Gini coefficient for wealth had risen into the mid-70s, according to data from the Federal Reserve…  Since then, it has risen steadily, to about 80 as of 2010. In 1992, the top tenth of the population controlled 20 times the wealth controlled by the bottom half. By 2010, it was 65 times. Our graduated income-tax system redistributes a small amount of money every year but does little to slow the polarization of wealth…
The global financial crisis did make a dent in the assets of the wealthiest American families, but its effects for the bottom half were utterly destructive; the number of owner-occupied homes has fallen by more than a million since 2007. People in different socioeconomic strata are living ever more different lives, with dangerous results for society: erosion of empathy, widening of rifts and undermining of meritocracy.” NYU Economist Daniel Altman writing for the November 18th New York Times.
It’s a vicious cycle where the rich mostly can only get richer, while the rest of us struggle to make ends meet. The issues that make this country rather slant in favor of well-heeled incumbents revolve more around (i) how so much of that wealth was created and (ii) how wealth is preserved with the lowest potential for dilution or reduction.
Too much of what has made the most recent spate of American mega-rich players has been in the financial markets, where packaging complex derivatives and bundling diverse assets and financial instruments, have generated trillions of dollars without much in the way of increasing the underlying economic value of what we manufacture or process. We’ve made billionaires off of the wrapping paper with little thought to what’s actually inside the box. Repackaging with complex mathematical calculations hasn’t really added real economic value to the United States. We’ve just moved money around, leveraged it and manage to delude many into thinking that we have unleashed previously hidden values that only financial geniuses could have found… not exactly finding a cure for cancer or inventing the next energy-efficient car.
We have much lower tax rates (over rates applicable to wage earners) for money earned by: investors in any form of asset, people who earn money from certain financial professions (fund managers) and heirs (minimal if any tax). We have deductions from income generally available only for the wealthiest segments of society, and if they are generating money overseas from corporations they own there are no U.S. taxes on that foreign revenue until that money is repatriated to the U.S. (which probably will never happen). While we have one of the highest stated corporate tax rates, given the deductions and exclusions from income, our biggest corporations pay the lowest effective actual tax rate in the Western world.
In countries like France or Italy, where tax evasion is a national sport, taxing authorities have the right to impose a “lifestyle tax” to the extent that reported taxable income appears to be inconsistent with the lifestyle (possessions, property and observable trappings of wealth) of the relevant subject. Some states have property tax, but the federal government – the biggest taxing authority – doesn’t play in this yard.
And once you have wealth, given how much the law allows wealth to grow with minimal dilution, the excess capital embodied in that wealth can be reinvested in new assets and new opportunities (like buying up houses from foreclosed middle class members at vastly reduced rates) to increase the underlying nest egg… even as the middle class – which have experienced a real reduction in the value of what they make – are struggling to stay alive. So what, Mr. Altman, would our system of taxation look like if we went to a property tax-based collection?
“American household wealth totaled more than $58 trillion in 2010. A flat wealth tax of just 1.5 percent on financial assets and other wealth like housing, cars and business ownership would have been more than enough to replace all the revenue of the income, estate and gift taxes, which amounted to about $833 billion after refunds. Brackets of, say, zero percent up to $500,000 in wealth, 1 percent for wealth between $500,000 and $1 million, and 2 percent for wealth above $1 million would probably have done the trick as well.
“These tax rates would garner a small portion of the extra wealth America’s richest families could expect to accrue simply by investing what they already had. The rates would also be enough to slow — if not reverse — the increase in inequality. To see how the wealth tax would work, consider a family with $500,000 in wealth and $200,000 in annual income. Right now, they might pay $50,000 in federal income tax. With the wealth tax brackets described above, they would pay nothing. On the other hand, a family with $4 million in wealth and $200,000 in annual income would owe $65,000. Most families that depend on their wealth for their income would pay more, and most that depend on their earnings would pay less.” NY Times. But then, you’d have to care about being fair.
I’m Peter Dekom, and if you do not adjust inequality, you are begging for those with little or nothing to lose to adjust it for you… and maybe in some very unpleasant ways.

Sunday, November 25, 2012

Surrogates on Patrol

Surrogate biggies battling through secondary conflicts is nothing new. Such wars shelter the homeland from a direct strike but still allow the participants to strut their stuff and show their rippling muscles. In today’s world, these secondary conflicts define combat just as the great wars – World Wars I and II – defined the first half of the twentieth century. We got our butts kicked by the Soviets who backed Vietnam, and they got decimated in Afghanistan with CIA supplies to the Mujahedeen back in the latter half of that century. The Cuban missile crisis had little to do with Cuba and a whole lot more to do with the Soviet Union that was attempting to layer in its longer range missiles into this Caribbean nation.
But there are new military-power-wannabees in this modern era, and high on the list is the growing nemesis of Iran. And they are having the best time causing trouble. Yet Tehran also has to be noting that other regional powers are beginning to interfere with their plans. As Iran has embraced its near-Shiite (Alawite) regional affiliate, Syria, it has seen push-back from NATO Islamic power Turkey (mostly Sunni) and now the growing power of the Sunni resistance, now seemingly well-represented by Egypt’s President Mohammed Mursi – a member of the radical Muslim Brotherhood, who has himself moved to seized even more power in his tumultuous nation. Turkey has even requested NATO Patriot anti-missile missiles for its border region with Syria.
Remember, Sunnis (the 85% majority of Islam who believe in a literal reading of the Qur’an) generally despise and distrust Shiites (the 15% minority of Islam who believe that the Qur’an is a mystical book that only the most supreme religious leaders can interpret). Iran is 90% Shiite (Iraq about 60%, and Lebanon 40%). Syria is mostly Sunni, but the Assad regime is a part of a Shiite-affiliated sect. So Iran’s aspiration to be the dominant political force in the region is tempered by the fact that she is a Shiite power seeking recognition in a Sunni region. Tough goal, but Tehran seems to be willing to prove itself by taking on the most powerful regional military – Israel by far – and the most militarily-equipped superpower on earth – the United States – through surrogate wars.
Lebanon’s Shiite population has exploded as wealthier Christians and Sunnis emigrated because local conflicts decimated that country for decades. With close ties to Syria (but what happens when the Assad regime falls?) and even closer ties to Iran, the Lebanese Shiites now dominate the government; their Hezbollah Party seems to be effectively a well-funded branch of the Iranian government and viewed by the U.S. as a terrorist organization. But even here, the Iranian Shiites have flashed an olive branch to the local Sunnis by allowing party leadership to include Harvard-educated Sunni telecom billionaire, Prime Minister Najib Mikati.
Indeed, Iran’s powerful support of Sunni Hamas in Gaza, supplying cash and state-of-the-art missiles and rockets (including the Shahab-3 which someday could carry a nuclear payload) to wreak havoc against Israel, has become the cornerstone of their attempt to placate Sunnis, who have traditionally abhorred them. This in turn has provoked a complex balancing act among other regional powers, committed to Palestinian independence, which have effectively turned a blind eye to Iranian munitions being smuggled into Gaza over the last few years. Even among Sunnis in the region, anything that pushes against Israel and moves Palestine closer to being an autonomous state is considered a blessing… even if the support comes from a Shiite source. It seems that Iran’s strategy may be working.
For Egypt and Turkey, countries with substantial military forces, this rise of Iranian acceptance among Sunni nations is troubling. These Sunni powers, with backing from oil rich Saudi Arabia, cannot apply too much force to stop Hamas, even though the arms have come from Iran, for fear of alienating the huge support in the Islamic world for Palestine. But they also cannot allow Iran to continue growing in forceful regional recognition, and should Tehran go nuclear, the race for a Sunni bomb would accelerate to dangerous proportions.
Mursi’s work in effecting an Israeli-Gaza cease-fire with U.S. Secretary of State Hilary Clinton may have in part motivated his timing in consolidating his power and clamping down on those who oppose him – stopping arms flowing from Egypt into Gaza as a part of the agreement was not particularly popular locally. But he sent a powerful message to Iran: you are messing in my yard! And he made his regional power absolutely clear in effecting the truce for however long it may hold.
For Hamas in Gaza, the cease-fire was a triumph in recognition, creating an unprecedented unity with the West Bank Fatah Party that represents the rest of Palestine. Israel (which would only deal with Fatah on Palestinian matters) had to recognize Hamas, however indirectly, to have a cease-fire with them. And Gaza “was awash in flags, not only the signature green of the ruling Hamas party but also the yellow, black and red of rivals Fatah, Islamic Jihad and the Popular Front for the Liberation of Palestine, a rainbow not visible here in years…  Despite the death and destruction, Hamas emerged emboldened, analysts said, not only because its rockets had landed near Tel Aviv and Jerusalem, but also from the visits and support by Arab and Muslim leaders, potentially resetting the balance of power and tone in Palestinian politics, as leaders from various factions declared the peace process dead.” New York Times, November 22nd.
No one expects the truce to linger permanently. What the future holds is anything but clear. Hamas may be more willing to confront Israel in the future and may even start playing Egypt against Iran to maximize its efforts. The seething hatred against Israel and the latter’s willingness to deploy its military strength to teach a lesson augur badly for regional peace. If time heals all wounds, then definitely, there hasn’t been enough time.
I’m Peter Dekom, and it seems that the one thing we can count on is that this powder keg will be ignited repeatedly in the coming years.

For Whom the Toll Bells

Beaches, sun, Muscle Beach, movie stars, Lakers and freeways. Guess the city! Not too tough, but with that last category beginning to bite the dust in this deficit-impaired state, the stereotypical toll-unencumbered open highway – the freeway – is not always free anymore. Los Angelenos have chortled at San Franciscans and their bridge tolls like Texas who boast “things are jes’ bigger here.” A few sun-soaked migrants from east coast – tolls everywhere all the time (the land of EZ-pass) – have long reveled in what is the normal expected: LA roads are free! Now, deficit induced congestion tolls are rolling into some of the most heavily trafficked freeways during peak travel periods as part of a new Federal experiment on LA Interstates. Hated it!
The tolls are over relatively short stretches of highway on some of the most-traveled freeways… all leading to the dreaded downtown amalgamation we call the cloverleaf. “Life in the fast lane through the heart of Los Angeles [just got a bit more] expensive. Carpool lanes on 25 miles of Interstate 10 and state Highway 110 are being converted to toll lanes. Solo drivers can use the lane; depending on traffic, it will cost between 25 cents and $1.40 per mile. Carpools will still be allowed for free, but during peak hours, it will take three people instead of two to qualify as a carpool.” Seems outrageous, but there she is… in bumper-to-bumper land.
At precisely 10 p.m. [on November 10th], motorists faced a toll of up to $15.40 for the privilege of driving an 11-mile stretch of express lanes [on the I-110] between Gardena and downtown Los Angeles… [A] another 14-mile stretch on Interstate 10 to open toll lanes next year. It is a one-year pilot program, financed by the federal government.” New York Times, November 16th. OK, they’re express lanes, and adjacent Orange County (which Angelenos have long used as the butt of their jokes) has had such elite access lanes with pricey tolls since 1995. Get over it, LA, they seem to be jeering. But hey, freeways are deeply embedded in LA’s psyche… seeming to be a fundamental right – not a privilege – that should be just below First Amendment free speech in the minds of many locals. 
Sure we have mass transit – sort of – and a nascent subway line, occasional dedicated busways and surface commuter rail transport, but for anyone who has actually spent serious time in Los Angeles, not that many people actually live near a relevant mass-transit terminal and the run-of-the-mill bus system redefines snail’s-pace during rush hour… the city is just too spread out for too many commuters to access mass transit easily.
“‘We Angelenos are the last of the Mohicans on this issue,’ The San Gabriel Valley Tribune wrote in an editorial. ‘Our neighbors in Orange and Riverside Counties have long had the ‘choice’ of paying for free-flowing freeway access. And the East Coast and Chicago grew up on toll roads… To us, it’s still passing strange… And we’ll likely rebel against the very idea of paying to drive on public highways.’ … The tolls are the latest manifestation of a campaign by Los Angeles officials to challenge the primacy of the automobile to deal with congestion that has long been a threat to the city’s vitality. Mayor Antonio R. Villaraigosa has advocated a sharp expansion of the region’s subway system and encouraged bicycle use.” NY Times.
Some have pragmatically accepted this evil-blowing wind: Richard Galvaz, who lives in El Monte, said the toll was a fair price to escape what can be a 45-minute drive. ‘It’s worth it if you’re in a hurry to get home,’ he said. ‘You got to pay the price. If not, get stuck in traffic. If you can’t afford it, take the bus.’” NY Times. This pilot program is expected to generate an extra $20 million a year – not much by big city standards – which will be used to build-out the areas bus system.
I’m Peter Dekom, and I actually remember a couple of years in Los Angeles when I actually walked to work… oh well!

Saturday, November 24, 2012

Is Life a Beach?

After the 1953 ocean surges and flood, the Netherlands began a concerted effort to build massive ocean-blocking structures over the years that have literally saved that nation from a watery destruction. Their technology, constantly upgraded, provides some of the most expensive solutions to rising and surging ocean waters. For the Dutch, however, the alternative seemed to be a loss of most of their nation as the oceans sought to reclaim this low-lying landscape. Losing their country was simply not acceptable, no matter the cost. They have prioritized this expenditure over all else, and their military outlay is miniscule by comparison. We have prioritized military spending at the expensive of infrastructure.
The United States is massively bigger, and most of the country isn’t in low-lying coastal communities, although climate change may have introduced different disasters (drought and water shortages for example) to interior regions. While some coastal communities have particularly high-value assets, such as New York City or Boston, vast sections of coastline provide lower-density living, resort living at the edge of a potentially angry ocean or such large stretches of vulnerable land mass that the cost of building the necessary barriers to save our human habitat is economically unattainable.
Will almost a third of Florida be under water sometime in the not-too-distant future? Will New Orleans really survive in the foreseeable future? Are our wonderful beach communities able to fight the surging oceans? Can we really afford to rebuild homes and businesses in areas destined to be flooded again (and again) with government flood insurance money or through FEMA subsidies?
These are huge political issues, destined to drive wedges between those who want to live where they have always lived, notwithstanding the shifting risk profile because of climate change (2012 represented the greatest year for greenhouse gasses released into the atmosphere… ever), and the rest of this deficit-impaired nation who are being asked to share the economic loss. Federal flood insurance is facing renewed deficits as claims progress.
North Carolina resident Orrin Pilkey (and Duke professor) writes these Op-Ed words for the November 14th New York Times: “[T]here is already a push to rebuild homes close to the beach and bring back the shorelines to where they were. The federal government encourages this: there will be billions available to replace roads, pipelines and other infrastructure and to clean up storm debris, provide security and emergency housing. Claims to the National Flood Insurance Program could reach $7 billion. And the Army Corps of Engineers will be ready to mobilize its sand-pumping dredges, dump trucks and bulldozers to rebuild beaches washed away time and again.
“But this ‘let’s come back stronger and better’ attitude, though empowering, is the wrong approach to the increasing hazard of living close to the rising sea. Disaster will strike again. We should not simply replace all lost property and infrastructure. Instead, we need to take account of rising sea levels, intensifying storms and continuing shoreline erosion…
“We should also understand that armoring the shoreline with sea walls will not be successful in holding back major storm surges. As experience in New Jersey and elsewhere has shown, sea walls eventually cause the loss of protective beaches. These beaches can be replaced, but only at enormous cost to taxpayers. The 21-mile stretch of beach between Sandy Hook and Barnegat Inlet in New Jersey was replenished between 1999 and 2001 at a cost of $273 million (in 2011 dollars). Future replenishment will depend on finding suitable sand on the continental shelf, where it is hard to find.”
My in-laws built their lives in and around the Atlantic City area. Joe Williams is a highly respected dentist providing his vital expertise to an under-served community. His home was literally yards from where Sandy breached the shore. His house survived (see above)… but flooding took its toll on the structure and even the possessions that had been moved to higher floors. Our family is devastated, but he feels he must rebuild and continue to serve his community. The big question is when do we just pay folks for the pre-disaster fair market value of their homes and damaged possession… but ban rebuilding in zones where disaster will strike again in the not-too-distant future? Or do we rebuild and do the best we can? What do you think is the right course of action?
I’m Peter Dekom, and I am torn between the pain of moving… and the pain of staying… in disaster-prone areas of the United States.

Thursday, November 22, 2012

Whining About Wine, Babbling Over Bubbles

As one member of the European Parliament queried, he found that the EU Commission had a wine cellar with 42,789 bottles of red, white and sparkling wines as well as almost 2,000 more of spirits in their cellars. Nothing too fancy – no bottle was bought for more than about $60 – but symbolic about how detached the EU has become from the mass of European constituents who are writhing in a renewed recession, many hopelessly jobless and particularly slammed in those countries subjected to severe austerity measures in exchange for rescue packages. The topic at hand is the EU budget, which is under intense pressure to stop growing if not contract, disposing of valuable programs that, for example, have upgraded healthcare systems in the less affluent member states.
The budget and what to do in order with the debt crisis to stabilize Greece, Spain, etc. are what’s on the table, but what is sweeping under that table is a question on the continued viability of the European Union itself. “Across much of Europe, views of the union and its Brussels administrative apparatus have soured. Eurobarometer, the public opinion monitoring arm of the European Commission, found in a survey conducted in May that ‘Europeans who are attached to the European Union are now in a minority.’ Fifty-two percent of those surveyed said they felt little or no attachment, up seven percentage points since 2010. In Britain, only 27 percent felt attached to the union.” New York Times, November 21st. UK Prime Minister, David Cameron, under pressure from his Conservative Party cohorts, seems even willing to support a UK referendum on whether they should remain as part of the EU at all.
The Brussels-based Commission spends only about six percent of its budget on administration: 55 thousand people, including six thousand translators, which seems huge until you look at staffing even in very small countries. The basic reality is that people identify with their countries long before they prioritize their ties to Europe as a whole, and frankly, the blending of cultural proclivities, profoundly disparate levels of economic accomplishment and substantial differences in national priorities under a single union and mostly under a single currency has been challenging, to put it politely. The tools to adjust such vast differences normally available in global adjustment trends disappear under system that homogenizes solutions for complex and diverse problems.
“In the world,” if one nation has severe economic issues and has overspent and borrow to the extreme – a condition that plagued many countries in South America for decades by way of example – the solution would be a massively inflated currency (with values often changing by the hour) until some form of equilibrium – perhaps triggered by a default in debt repayment – was restored. But with a single currency, you have to go into the delinquent country, stab it in the heart and cut away the flesh of excess even as the state struggles to stay alive. The result is staggering unemployment in those nations, an unprecedented hit to public services, and general misery in the miscreant nation and severe (and deeply resented) sacrifice in the richer nations (like Germany and Austria) who are contributing what they believe to be lifelines to rescue the struggling econo-patient, who doesn’t remotely appreciate the medicine.
The member states are now squabbling amongst themselves over the benefit of being a part of the EU, and their very structure makes the thought of change to the financial program almost impossible. “[At] least seven countries, mostly those that contribute more to Europe’s coffers than they get back in farm subsidies and other payments, have already warned that they may veto a budget that does not give them a better deal. Among these is Austria, where, according to [Martin] Ehrenhauser, who sits on the European Parliament’s budgetary control committee, ‘there is a critical mass building against the European Union.’
“Instead of promoting the union’s overarching goal of ‘ever closer union among the peoples of Europe,’ a goal enshrined in the 1957 Treaty of Rome, the framing of budget priorities has tended to do the opposite, pushing rival national interests to the fore in bruising negotiations that take place every seven years to set a so-called multiannual financial framework… ‘It is not a pretty picture,’ said AndrĂ© Sapir, a former adviser to the European Commission president who led a landmark study of the union in 2003 that proposed a host of changes to raise competitiveness and already sluggish economic growth. Among these was a proposed overhaul of the union’s budget, which the study described as a ‘historical relic’ rooted in the bloc’s early years, when fear of food shortages still haunted a Continent recovering from World War II.
“The rethink, which would have scrapped spending on agricultural subsidies, ran into heavy opposition and stalled. All long-term budget decisions require unanimous approval by the member states, a rule first established when the grouping, then known as the European Economic Community, had just six members, not 27. The power of veto makes any major change to spending all but impossible.” NY Times. Makes you think that no matter how bad we think we have it on this side of the Pond, it is a whole lot better than the morass we call the European Union. It gives us a little something more to be thankful here in the United States on this Thanksgiving.
Well, there are some things the EU leaders can agree on: “[The Commission’s] spending on wine has dropped steadily over the past four years. After splashing out $115,000 in 2009, it will spend only $6,500 to replenish its cellar this year. Average consumption at its social events, the council said in a written response, ‘amounts to about one glass of wine per participant.’” NY Times. Perhaps drinking while you are unraveling helps mitigate the pain.
I’m Peter Dekom, and before Americans gloat in seeming superiority, note how deeply our own economy will be slammed if this European experiment truly unravels. HAPPY THANKSGIVING TO YOU ALL.