Friday, December 31, 2010

The Failure of the Free Market

The Deepwater Horizon oil spill in the Gulf of Mexico has long been gone from the front pages. It isn't mentioned in the crawl at the bottom of the television screen during whatever monotonous cable news programming you watch. Given our collective attention spans, this is by no means a surprising outcome. Even the Obama administration has moved on, set to resume drilling in the Gulf of Mexico in short order. But there is one outcome of the Deepwater Horizon spill that bears remembering that I do not think I've heard put precisely into words, namely that the free market failed all of us in the Gulf.

Now many will say that the former Minerals Management Service (MMS) at the Department of Interior had regulatory responsibility over BP's Gulf exploration program. This in theory is accurate, but as has been proven time and again, MMS was at best an absentee landowner, and at worst a willing conspirator with the oil companies. In Alaska, the former Director of the MMS had to issue a formal apology for ordering a cake for an office party adorned with the catchphrase Drill Baby Drill. Needless to say, effective oversight wasn't a priority for MMS in Alaska, in the Gulf, or anyplace else.

In the Gulf, after the Horizon spill, we learned that BP's oil spill response plan was a house of cards, prioritizing of all things the protection of the Gulf walrus population. If MMS was doing it's job they could have pointed out that a plan to protect a species that does not occur within a thousand miles of the Gulf of Mexico isn't bound to meet with much success. And while each individual oil company is required by law to submit an oil spill response plan to MMS for approval, it has now become clear that the plans were all the same baloney, only the corporate logos had been changed. Alas, the Gulf walrus, much like the unicorn and the abominable snowman, has nothing to fear.

So the Gulf of Mexico was turned into a libertarian play ground. A perfect workshop for testing one of the main tenets of free market economic theory, namely that the corporate disincentive for making mistakes negates the need for government oversight and that word that keeps Libertarians up at night: regulation. The logic being that mistakes cost money, and that is incentive enough to avoid them.

But the Gulf spill proves that the pull of profit is a much stronger force than avoiding costly mistakes. Profits are easily quantifiable, and they are the indisputable yardstick for corporate success; on the other hand, an avoided mistake is something almost theoretical, and certainly intangible, a deadly combination for the profit driven corporate decision making model.

BP was left by the federal Minerals Management Service to police itself in the Gulf of Mexico. Free market advocates would have us believe that this was an ideal situation, that the assumed costs of a spill like Deepwater Horizon would assure that the unregulated corporations would do everything they could to avoid a disasterous oil spill. But the the free market model failed us in the Gulf. Corners were cut, laws were ignored, mistakes were made, all in the name of profit. Mistakes were little more than an accepted risk.

Every free market anti-regulator that you can shake a stick at will spout endlessly about the high cost of government regulation, like horses adorned with blinders, they fail to see the high cost of no regulation. Now, BP, the Gulf fishing and tourism industries, and human and environmental health are left to pay the piper. The free market failed the Gulf of Mexico, and proved once again that an ounce of prevention is worth a pound of the cure.

Tuesday, December 21, 2010

Today's Generosity: Tomorrow's Unfunded Mandate

Not too long ago, the American people were asked to bail out a bevy of large financial institutions whose names we all recognize. Shortly after that, our wallets were raided once again, this time in the name of large American automotive manufacturers General Motors and Chrysler. We were told by talking heads that these giants of the global economy were simply too big to fail, and that if they did fail, large scale economic ruin would surely follow. Many people now think the 'too big to fail' moniker was spurious; that there is no business deserving an eternal guarantee of solvency pledged on the back of American taxpayers.
These days, another heir to the too big to fail throne has appeared, with a much more legitimate claim to that dubious honor. It has become clear that state and local governments across the country are dangerously in the red. We have become accustomed to hearing elected officials bemoan tight government budgets, all the while increasing government expenditures with a devil may care attitude. These budgets, however, aren't just tight; they are downright frightening. The very financial future of state and local jurisdictions is in serious doubt, and business as usual is a surefire recipe for fiscal failure.
One of the major culprits for this impending financial disaster is the extravagant benefit packages offered to many public sector employees, such as teachers and agency bureaucrats. The company-funded pension system is well nigh extinct in the private sector. Companies long ago determined that funding pensions was far too costly over the long run, and instead opted for making much smaller contributions to retirement investment accounts such as a 401k or a 403b, that are mostly employee funded. The critical hang up of pension systems if of course that companies remain responsible for pension payments long after, sometimes decades after, that employee was last engaged in gainful work on behalf of the company.
Many American manufacturers, such as Bethlehem Steel, and the aforementioned GM and Chrysler, were led nearly to financial ruin thanks in large part to benefits package that seemed like a good idea at the time, but that proved utterly unsustinable over the long term.
It is safe to say that the retirement paradigm has shifted. Individuals now bear the responsibility for saving enough money for their own retirement. The options for acheiving this are seemingly endless. While you can certainly bemoan the fact that pension benefits have evaporated, you better be saving for retirement while you whine; it's just a fact of life.
A fact of life for everyone except public sector employees, it seems. The state of Maryland currently has $33 billion in unfunded liabilities related to it's pension system for state employees. To put that in perspective, the entire operating budget for the state in 2011 totals $32.1 billion.
Unlike businesses, those who hold the purse strings of taxpayer funds don't have to worry about profitable bottom lines or even fret much about accountability, because while today's generosity is tomorrow's unfunded mandate, the challenges of the future will fall to someone else. And generally speaking, a local government jurisdiction probably isn't going to go out of business or go bankrupt; but as the bills for these extravagant pension plans come due, the likelihood of that unthinkable scenario, namely massive government defaults, increases dramatically.
Now in Maryland, there is a movement afoot to transfer responsibility for these pension benefits to local county school boards; a wildly irresponsible passing of the fiscal buck. If this were to happen in already cash strapped Queen Anne's County, it would more than likely put the county out of business.
Public employee unions like AFSCME, SEIU, and the NEA have made these benefit packages an untouchable 'third rail' issue for elected officials. This simply cannot continue to be the case, politicians must stand up to public sector employee unions and take back control of state budgets.

Monday, November 15, 2010

The Nixon Dilemma

The summer and fall of 2010 have been, in terms of my literary tendencies, devoted to the life of Richard Milhous Nixon. The 37th President of the United States, of course, and a man unfortunately but unavoidably known best for his resignation under intense fire for a host of scandals and cover-ups commonly lumped together under the term Watergate.

The grade school history we all know doesn't tell the story of Richard Nixon. For a full four decades historians, scholars, politicians and the general public have approached the presidency of Richard Nixon, and the man himself, as utterly devoid of principle or accomplishment. "Corrupt" is as much of a fundamental descriptor of Nixon as saying he is a Duke Law graduate, or a Californian. The words Nixon and unethical have become virtually synoynmous. This is a grossly naive oversimplification of a complicated man serving his country in complicated times.

We judge the entirety of Nixon's body of work in the harsh light of Watergate. I am not prepared to argue that this is avoidable, or even unfair, but rather that it limits our perspective and paints a woefully incomplete picture of a man who was a intregral part of American political thought for half a century.

Most of Nixon's public life occured long before Watergate became front page news in the Washington Post. Of course, nearly the entirety of the scholarship dealing with the Nixon life and presidency was done after Watergate. As a result his life before Watergate is judged using an ethical standard guaranteed to fit the scholars' idea of Nixon as completely corrupt and without moral compass or core beliefs.

With Nixon we assume the worst, always. If he compromised on a policy issue, it was because he lacked a principled positon on the issue. If he took some action that Democratic politicians supported, it was a callous attempt at preemption and stealing votes from the opposition. Reading the collected library of Nixon biographies, one quickly determines that Nixon was not devoid of fundamental core beliefs. He believed strongly that the United States could be a tremendous force for good in the world. He gets little credit for his robust commitment to civil rights, including school desegregation. He rejected the conventional wisdom of the Republican "China lobby" by forging ahead with relationship building with communist Peking. Civil Rights and normalized relations with communist China weren't exactly vote-getters in the early Seventies. Nixon did these things because he thought they needed doing.

But moreover, historians judge Nixon's entire career using a rubric that no politician could ever meet. Because of the stain of Watergate, every other accomplishment of his long public career must be proven beyond reproach; an impossibly high bar even for those politicians we tend to deify. Nixon's biographers are some of the most unapologetically biased scholars one can study, mostly because they believe themselves to simply be reinterpreting a well-established part of the Nixon story, as fundamental as his birth and death. No Nixon biography should ignore Watergate, but none should ignore Nixon, either.

Saturday, October 23, 2010

The Harsh Glare of the Voting Machine

The "final ballot review" screen on the Electronic Voting Machine gave me an interesting moment of pause yesterday. As anyone who knows me well knows, it isn't very often that technology does anything but frustrate me. But in the voting booth at the Centreville Free Library, the better part of a decade involved in politics came sweeping back to me.

I went door to door in St. Mary's County for George W. Bush in 2000. Was a proud member of the College Republicans when it seemed liked me and my roommate were the only GOPhers on campus. I was selected by my peers both Democrat and Republican to defend the War in Iraq at a well attended campus forum.

I went door to door in St. Mary's County for Bob Ehrlich in 2002, and again in 2006. In 2004 I was heavily involved in Sportsmen for George Bush and Young Professionals for Bush. And the coup de grace? I served as an environmental advisor to John McCain's presidential campaign of 2008, and went to St. Paul, MN as an elected delegate to the Republican National Convention.

After the Convention, I became an alternate member of the Baltimore County Republican Central Committee, and President of the East Baltimore County Republican Club. I was an unofficial candidate for Maryland's House of a Republican.

To say the least, my GOP bona fides were in good order.

Until yesterday.

I looked at a completed ballot that was overwhelmingly Democratic. For the first time in my life I had voted for a Democrat for Governor, Congress, and Comptroller. For County Commissioner, my ballot was 3-2 in favor of Democrats. For State Senate, Democrat. Two out of three votes for the House of Delegates went to Democrats (and the other was more than likely wasted on a write-in).

When someone used to ask me, "Who are you going to vote for?" The answer was always easy: Republicans. This time around, it is easier to list the Republicans I voted for individually, because the list is so short. Eric Wargotz for US Senate, David Dunmyer and Bob Simmons for QA County Commissioners, a write-in for Dick Sossi for House of Delegates, and a vote for Gary Hofmann for Queen Anne's Sheriff. That's the long and (rather) short of it.

I found myself becoming increasingly uncomfortable with not only the Republican talking points, but with the way they were being delivered. It seemed that anyone who disagreed was looked at with a tinge of hatred. As if 235 years of American democracy had come to this: we couldn't disagree with one another in a civilized way. Which is pretty scary, since it is the fundamental basis of the American system of government. We do not run into the streets (with a few exceptions) with pipes and torches. We instead run into the voting booth.

One ballot does not a Democrat make. But certainly now more than ever, I sit at the crossroads of politics with no clear direction.

Thursday, July 15, 2010

Comprehensive (?) Plan

Queen Anne's County boasts one of the lowest tax structures in the state of Maryland. Many wrongly believe that without large-scale new residential and commercial growth, our favorable tax structure is in danger. History, experience and economics indicate otherwise. To infer as many do, that the County has been exclusively anti-growth, or that economic activity has suffered a real contraction as a result of an anti-growth mentality, is misleading at best, and downright fraudulent, at worst.

We are, along with the rest of the nation, suffering from a general economic downswing, caused in some measure, by exactly the kind of spastic development that some are currently seeking to jumpstart again in Queen Anne's County. As the cliche goes, those who fail to remember history, are doomed to repeat it; and this history doesn't require one to look back too far. Of course many who advocate for a policy of unfettered growth and development do so for political or personal pecuniary reasons that should not have a role in the development of planning policy.

There is absolutely no more short-sighted public policy than to attempt to meet the challenges associated with past growth (and they are manifold) with more growth. This is akin to the proverbial dog chasing his tail. All this ensures is that our quality of life will suffer, our favorable tax structure will erode as new demands on County services become unavoidable, and our County will slowly but surely come to mimic the Western Shore and much of the Eastern Seaboard, with the problems inherent in those locales. Problems that each Queen Anne's County citizen is attempting to avoid, on some level, by choosing to live in the County.

The Citizens Advisory Committee on the Comprehensive Plan made five recommendations that I believe speak to the desires of our County's populace to direct growth to where it is most appopriate, and protect the rural character and the quality of life of Queen Anne's County. I believe that it would be unwise to trump those citizen recommendations at this juncture, and would encourage the planning commission to include those recommendations (pasted below) in the Comprehensive Plan.

1. No more major subdivision development on Kent Island until transportation issues are resolved and until affects of rising water levels are understood.2. No more major subdivision development permitted in AG zoned land. (The visioning report identified "loss of farmland" and "rural sprawl" as a primary county threat or weakness.)3. Direct Growth to Existing Population Centers / Towns, where there is infrastructure to support growth.4. No New Business Parks or Commercial Centers until existing commercial areas are built out.5. Establish policies that protect streams, waterways, forests and sensitive areas from development by establishing a county wide Priority Preservation Area.

Thursday, April 01, 2010

Save a raptor, hold on to your wrapper.

My wonderful wife Kim, who works as a veterinary technician in Easton came home from work with a disheartening story for anyone who enjoys wildlife.

Someone came rushing through the doors of the animal hospital in quite a state of panic, holding a Great Horned Owl, wrapped in a blanket. Now this is not a bird that one is likely to encounter on the average daily commute. Yet here is one, barely alive, in the patient waiting area of an animal hospital that gets most of its business from Labrador Retrievers and horses. Turns out this particular owl had been hit by a car.

Now you might be thinking, an owl? Getting hit by a car? I've never even seen an owl in the wild, how could I hit one with my car?

Well, owls aren't particularly rare; it is just rare to actually see them, which is sort of the whole M.O. with owls in the first place, I suppose.

The kind folks at the hospital told this good Samaritan that she should take the Great Horned Owl to a nearby wildlife recovery and rehabilitation facility, although there has been no word on whether the owl survived it's incredibly unfortunate collision.

But the larger story here is one that goes far beyond a single beautiful owl and an automobile. That is but one embodiment of the often destructive crossroads of human activity and the natural world. We humans like to think that our everyday actions do not have a direct impact on other species that are forced to try and exist in the sometimes minimal spaces we leave for them. This is unfortunately rarely the case.

Owls and other raptors are attracted to roads. More specifically, they are attracted to median strips and the grassy areas just beyond the shoulder that are often littered with trash. It is on the side of the road that so many burger wrappers and cups sticky with soda find themselves at the end of the line. The roadside seems like a convenient place to toss apple cores, banana peels, and even chewing gum remains; things that appear harmless and hardly qualify as litter.

But not so fast.

It is this very road trip refuse that leads to dead falcons, hawks, eagles, owls and ospreys. You toss the crust from your tuna sandwich out the window, and it lands just the other side of the rumble strip. It quickly becomes the next item on a veritable buffet for small rodents like mice and rats that get all they need in the way of food from side of the road trash that originates in the driver's seat. It is the feasting rodents that attract the birds. These epic raptors swoop in from telephone pole perches for their own idea of lunch amidst the wastebasket that is the roadside and they instead wind up in the grill of a semi truck, or on the windshield of a minivan. In a fight between a ten pound bird and a two thousand pound car, the owl rarely wins.

So next time you roll the window down to toss something out, remember the chain of events you are initiating, and take your wrapper home to the trashcan in your kitchen.

Wednesday, January 13, 2010

Doublespeak on the Chesapeake

This Letter to the Editor was sent to the Baltimore Sun on January 13, in response to an article in yesterday's paper titled "EPA's new rules to limit development, farm runoff into Bay."

The Chesapeake Bay at its deepest is about 174 feet. The rhetoric about cleaning up the bay runs to much more impressive depths. Every politician, of every partisan stripe, has spun the same campaign tale about saving the Chesapeake. For decades, decades, Maryland politicians have been saying all of the right things about cleaning up the Bay, yet still here we are, with nothing but speeches.

In an Executive Order from the spring of 2009, President Obama fell in at the back of an august line of chattering Chesapeake politicos. The Executive Order cites the many failures of various state policies to make much of a difference in the Bay’s health, as the impetus for the federal government taking a leadership role in restoring this “national treasure.”

Now the EPA has begun creating new rules and regulations for storm water management, a commendable goal to be sure. But out of the public eye, the administration is actively taking steps to undermine its own so-called commitment to the Chesapeake.

In one of Maryland’s few remaining rural counties, near the headwaters of Tuckahoe Creek on the Eastern Shore, the Obama administration has decided to convert 2000 acres of open space into a diplomatic security training facility. At a time when the Bay struggles with pollution and the impacts of development, this facility would add to the already immense burden.

This development undermines on the one hand what the Obama administration seeks to do on the other. The Chesapeake has always taken a back seat as nearly unfettered growth elbowed even the best intentioned protective measures right out of the way. As we’ve seen for years, words will not restore the Bay. If the Obama administration is sincere about cleaning up the Chesapeake, it might start by holding itself accountable, and pull the plug on the Ruthsburg-Centreville training facility.

Thursday, January 07, 2010

The Politics of Ruthsburg

In its infinite wisdom and omnipotence, the federal government has decided to site a tactical security training facility on Maryland’s Eastern Shore. The secure campus would sprawl over more than two thousand acres of land that for a hundred prior summers grew a bounty of grain. At a public hearing on Tuesday, 1/5, it appeared that the overwhelming majority of this facility’s neighbors in the Ruthsburg-Centreville area are concerned over having Big Brother in their backyard, and rightfully so.

According to the federal bureaucrats on the podium Tuesday night, this is an economic no-brainer, a gift of the highest order from the vaunted stimulus bill. After all, what are a few bombs and high-powered rifles, when we come bearing jobs? Yet even the most peripheral review of their job claims finds them over-exaggerated at best, and downright fraudulent, at worst.

Somewhere in the government’s copious files there is a classified list of thirty potential sites for this facility. Our little hamlet of Ruthsburg, tough to find on a county map, somehow rose to the top. It is mere coincidence of course that out of thirty potential sites, only the one in the most vulnerable Democratically-held congressional district became the ‘preferred’ site.

With groundbreaking scheduled to begin right around election time this fall, it strikes some that this is more than just coincidence. A vulnerable member of Congress can boast about bringing federal dollars to his district, and the voters will be eternally thankful at the ballot box just as the golden shovel enters the Ruthsburg soil. This isn’t about keeping embassies safe; it’s about keeping Democrats safe. Where did political considerations fit in the site selection process? Maybe the better question is, was that the only consideration?

Behind closed doors, Frank Kratovil supported this project before it ever became public. He thought that the promise of some pork would help his chances for a second term, but what he failed to realize is that we aren’t willing to sell our community down the river for a few jobs.

The message is abundantly clear. This was never about jobs for the good folks of Queen Anne’s county. It has only ever been about one job: Frank Kratovil’s. Yet it might just prove to be his pink slip right out of Washington.