September 2011

The California Blackout And The Failure of Fail-Safe Energy

Thursday night my Twitter feed lit up with posts about a sudden blackout in San Diego. Apparently an error regarding a repair job by an electrical worker in Arizona led to a series of shutdowns that affected somewhere around four or six million people across California and Arizona. Many people were wondering how a single error in one place could lead to power problems of such a magnitude. Most intriguing to me were statements in news articles such as, “the safeguards that typically prevent an outage from spreading didn’t work.”

This eerily reminded me of coverage of last year’s BP oil spill with its “sequence of failures,” and this spring’s Fukushima nuclear disaster and its “failure of multiple back-up electrical systems.” The good news in this case is that, unlike the other incidents, the situation is not deteriorating and it looks like power is being restored. But all three incidents involved the failures of multiple systems that led to large negative outcomes which were supposed to be impossible. All three incidents also had to do with energy sources – from the private sector – and the failures spanned private energy companies in Britain, Japan, and the United States.

It’s a disturbing trend, to be sure. I’m sure progressive technocrats would say these energy companies need to be more heavily regulated (indeed, “Federal regulators” are going to “investigate” this latest incident), and I’m sure small-government types would respond that government is already heavily involved in the energy sector and that more involvement would only drive up energy costs without preventing any more disasters than they are preventing now. This may be true, but it’s also clear that any built-in incentives on the part of companies to prevent such disasters are failing as well.

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The Solyndra Scandal And The Dangers of Government Lending

More information is coming to light about Solyndra, the much-hyped solar-energy company that got a loan of half a billion dollars from the federal government before declaring bankruptcy. The feds, hot off a raid of Gibson Guitar Company, have raided Solyndra’s offices. Megan McArdle highlights a few facts that suggest the possibility of scandal. At worst, the Obama administration loaned bad money at a suspiciously low rate to a politically-connected company so it could tout the creation of “green jobs” without any evidence that the company was at all sustainable. At best, the U.S. Department of Treasury’s Federal Financing Bank got unlucky on an investment decision.

Ugh. I didn’t even know we had a “Federal Financing Bank.” (I’m still unsurprisingly surprised every time I find something new that our government does or has done.) This sounds like a classic case of the negative consequences of government doing something it shouldn’t be doing. It’s one thing to spend money on research that will hopefully lead to public discoveries and benefits. It’s quite another to loan money to specific for-profit companies. I don’t know how this works on the budget, but I’m assuming the government was assuming they’d get their $535 million back, and now they won’t. If private banks didn’t see fit to loan them that much money at that rate, what makes the government smart enough to think it’s OK?

It’s bad enough that government just isn’t smart enough to do things like pick the best companies to loan money to. But when you allow that kind of power to elected officials, it inevitably invites corruption. Now we’re getting suspicious facts about the political connections of an investor, or the number of times somebody from Solyndra visited the White House. For now I’m willing to give them the benefit of the doubt. There’s not enough information yet to prove that there was corruption involved in the decision to give a giant low-interest government loan to Solyndra instead of, say, some other less lucky company. But I can say that similar situations involving the power of government officials in the past have led to decisions where corruption was involved. That’s just part of the way these things work, and the cost of corruption has to be considered in any discussion about the potential benefits of giving power to government officials to favor some people or businesses over others.

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Thank Government For Something: National Parks

Previously on Thank Government For Something, I considered the value of the National Weather Service. Here is another edition in that series…

Earlier this week we watched a DVD about some of America’s National Parks, highlighting the variety and beauty of the protected lands across the United States. I thought this made a great candidate for another T.G.I.F, I mean, T.G.F.S. (Thank Government For Something.)

The National Park system of the United States has an interesting history. In 1832, “Andrew Jackson signed legislation” to partially protect what later became Hot Springs National Park. In 1864, Lincoln signed legislation that gave the future site of Yosemite National Park to the state of California. Yellowstone was the first true National Park created in 1872, partially as a chance consequence of local political structure; unlike California with Yosemite in the previous decade, the land of Yellowstone was not yet part of a state but was still a federal territory, “so the federal government took on direct responsibility for the park.” Yellowstone is apparently considered the first national park in the world, and it inspired many other countries to do the same in the following decades. (What? You mean back in the day the American conservation movement was a trend-setter for Europe? Yep. But the difference between conservationism and environmentalism is a whole ‘nother topic.) Today the United States has 58 national parks covering mountains, deserts, forests, lakes, and other varieties of gorgeous natural phenomena.

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Why I Don’t Like Unions

My dislike of unions begins with personal experience. In my third semester of college, I got a job at a local Schnuck’s grocery store. Along with signing all the regular new-job paperwork, I had to join the union, and dues were automatically deducted from each paycheck. Now I thought that unions were supposed to exist to save the common working man from the greed of the evil business owner, and give me a better working environment than I would have otherwise. As it turned out, there was a minimum flat union fee that I was forced to pay even if I only worked one day in a week. If I worked two days a week, my wages were flirting with minimum wage, and on one occasion where I worked one day of a week, my wages after union dues were the equivalent of less than $5 an hour, far less than the $6/hour with which I had begun my first job at McDonald’s three years prior when minimum wage was still $5.75. Somehow I doubted that without the union “supporting” me I would have been doing worse, and it surprised me that such a supposedly progressive institution would have such a regressive structure for collecting its dues. As it was, those with the lowest income ended up paying the largest percentage of their income to the union.

Now one of the liberal responses to complaints about unions is that there is nothing illegal about them – that workers have a right to assemble and organize and engage in voluntary contracts with their employers and so forth, and that if I didn’t like the union I was free to work somewhere else. Indeed, I did – I got a job at the Apple Retail Store less than three months later, a horrid union-less company that started me at a raw rate of a couple dollars an hour more than Schnuck’s and also had the audacity to give me options for stocks and retirement contributions. I still find it striking that out of the four companies I have now worked for over the course of my life’s employment, the one that offered me the lowest take-home wages, before or after inflation, was the one with the union. The general working conditions of all the jobs have been equivalent, and the only advantage the grocer’s union offered me over the others was a weekly instead of bi-weekly paycheck, which may have been an advantage for a poor full-time father with bills to pay but for me just served to highlight the huge portion of my low wages that were being sucked away to benefit a mysterious organization.

So, big deal, I had a bad experience with unions at a period of my life when good working conditions weren’t very important to me. Somebody else may like unions because of a positive experience with years of great wages and a good pensions. Neither experience is inherently more valid than the other. But the things that I have learned of present-day unions since my experience have done nothing to improve their image to my eyes.

There was the automaker bailout where the unions got a better deal than anyone else. There’s the Post Office teetering on bankruptcy partly because labor makes up 80% of its costs and there’s no easy way to bring that down. There are the cities going bankrupt due to generous public pensions. There are the complaints about the difficulties of firing bad teachers. At every turn, there is the image of the greedy parasitic union, gobbling up more benefits for its members regardless of how much they deserve it, regardless of how much it threatens to destroy their host business, regardless of how much their protection of incompetent long-standing members hides jobs from competent newcomers and reduces the effectiveness of whatever organization they claim to represent. Whether it’s a story in the news about a union boss raising an unholy ruckus about a slight proposal in reduced benefits that might make their company a little more solvent, or a story from a friend who can’t join a local orchestra because the union protects its members until they quit or die regardless of their talent trajectory, I find little evidence that I should like unions or view them as anything other than primitively tribal organizations that protect their oldest members simply because they’re the oldest members, while seeking maximum benefits for its members with no regard of the cost to anyone who’s not a member, or the costs to the health of the business or to the health of society at large (Metaphorically violent rhetoric against the Tea Party doesn’t help, either).

Recently I have been made aware of claims that historical unions were instrumental in creating much of the standard work environment we take for granted today: 40-hour work weeks, overtime pay, and the like. Working conditions of the past were notoriously detriment and dangerous, and even if you’re not in a union at your job, without the unions of the past your job wouldn’t be as nice as it is now. I think I’m OK with admitting that this could be true. (There are some libertarians, of course, who argue that working conditions would have improved anyway without unions, but of course your theory can always beat someone else’s reality.) Yet I think it is perfectly intellectually consistent to concede the valuable results of historical unions while severely disliking the excesses of unions today.

Should The Government Mandate Less Smog?

It is reported that Obama is being praised by Republicans for deciding not to toughen the federal smog regulations because the extra cost to businesses would hurt jobs in a weak economy. Now these reports must be false, because we all know that Republicans automatically oppose everything Obama does (okay, except for when Obama kills Osama). But Obama is taking significant criticism from the left for caving to Republicans, big business, polluters, and other bad guys. Apparently this is so bad that MoveOn.org members are wondering “how they can ever work for President Obama’s re-election.” I’m not going to make vacuous conjectures about whether or not Obama’s move will win him more votes from independents or fewer votes from the left, because vacuous conjecturing irritates me, but I will offer some background information for the uninformed reader and try to summarize the different political and economic arguments at play.

It all starts with the Clean Air Act, “passed in 1963 and significantly amended in 1970, 1977 and 1990.” Among other things, it requires the EPA to set new standards for pollutants every five years. One of those pollutants is “ground-level ozone,” or smog, which is said to be caused by things like power plants and vehicle exhaust. Last review time was 2008. At that time the ozone level was down to 84 parts per billion, but EPA scientists said it needed to go down to 60-70 ppb to properly protect Americans from negative health effects. Stephen Johnson, EPA head under the Bush Administration, didn’t quite agree, and set it at 75 ppb. Next review time isn’t until 2013, but since the last guy apparently didn’t set the recommended amount for good health, Obama’s EPA, led by Lisa Jackson, has been thinking about changing things ahead of time to correct the previous error. But apparently the latest unemployment numbers were too disturbing, because literally a few hours after they were announced we learned that any update to the mandate had been taken off the table until 2013. [Cue praise and dismay from appropriate parties.]

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Ethos vs. Logos

Or, Authority vs. Knowledge in a Complex World

I first remember coming across the terms Ethos and Logos in a college English class, where we were learning about the fundamental tools of discussion and debate. These terms were used by the ancient philosopher Aristotle in discussing means of persuasion. Logos has something to do with trusting an opinion about something based purely on the logic of the argument for that opinion, and Ethos has something to do with trusting an opinion about something due to the integrity of the person making the argument. If a Greek city was arguing about whether or not to go to war, and a young man that nobody knew stood up to make a case about how many people would die or how successful the campaign might be, he would be relying on logos. However, if a wise old leader that everyone trusted simply said what he thought everyone should do without explaining himself, he would be relying on ethos.

I think we begin our lives with ethos. When I was an infant without fully developed capabilities of reasoning, I quickly learned to trust my mother and father and the choices that they made or recommended. As we grow up I think we begin a transition to logos, where we being to reason things out for ourselves, especially when we hit the stereotypical “rebellious teenage” years where we may doubt that mother and father truly know best.

Indeed, at the time that I learned these terms, I thought it was fairly obvious that logos was a superior method for determining one’s worldview. If two people are debating an issue, why should the person with a greater perceived level of status be granted an advantage over the other? The raw arguments and facts should be the only factors that lead one to a conclusion. Logos is a level playing field where truth can rise to the top.

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How Ridiculous Was the Federal Raid on Gibson Guitar Factory?

Last week federal agents from the Department of Justice raided Gibson Guitar factories, on suspicions of using illegally imported wood from Madagascar (Gibson claims it has documentation to prove it is following all laws). The story is spreading across the Internet, and there are a number of serious accusations flying around that make this look like a ridiculous and infuriating raid. In summary:

1. The raid forced Gibson to send workers home and is hurting production, so the Obama administration is essentially destroying jobs at a time when it says it is trying to create them.

2. The charges against Gibson are not that they broke US law but that they broke Indian law, and the “action was taken without the support and consent of the government in India,” making it seem like the Obama administration cares more about following foreign laws than our own.

3. There are accusations that other companies like Martin import the same kind of wood from the same places but they have not been raided. The suggested motive is that Gibson is a big Republican donor while Martin is a Democratic donor, or that Gibson’s factories are in a right-to-work (anti-union) state, and that the Obama administration is engaged purely in political warfare against conservatives who might oppose his re-election.

4. To top everything off, Gibson was raided in a similar manner two years ago, but they claim no charges have been filed over that raid and the federal government still has the guitars.

That’s all pretty bizarre and infuriating… has our federal government really stooped to bullying its political enemies, even at the cost of destroying jobs? This looks like blatant corruption and a complete disregard for freedom if federal agents can accuse you of breaking a law, raid your business, keep your stuff without ever charging files against you, all because you support an opposing political party and your competitors happen to be on the right side!

Still, I’ve learned over the years that some things seem like ridiculous oversteps by the federal government and reverberate through the conservative blogosphere, but such accusations are later revealed as guilty of containing partial truth. Last year conservatives were freaking out about the EPA classifying spilled milk as oil so they could regulate it, although apparently the regulations only applied to farmers storing milk in giant containers of thousands of gallons and that such milk has been known to leak out and cause damaging externalities to the surrounding environment. (Not saying that this completely justifies the regulation, but having that contextual knowledge moves the regulation from “This is a preposterous power-grab by the government!” to a more civilized “I disagree with this action for such-and-such reasons…”)

So I’ve been looking for some more facts about this guitar raid, possibly by leftist sources, to at least make this raid not seem so much like… I don’t know.. a blatant move by a corrupt third-world government?

As for as the foreign law thing goes, it appears to actually stem from the Lacey Act (yes, one of our laws), and supposedly if the wood was finished in India it would be legal but if they import it to the states before it is finished, then it’s illegal. So supposedly our law means we have to respect India’s law, or something like that. So maybe that makes the law (or its interpretation) seem ridiculous instead of Obama’s Justice Department seeming ridiculous, and apparently we can blame all this on an amendment to the very old law sponsored in 2008 by a Democrat that affects wood products and endangers U.S. manufacturing. (The Economist has a short diatribe arguing about the ridiculousness of being expected to “abide by every plant and wildlife regulation set by any country on Earth.“)

But that still doesn’t explain the lack of charges from the old raid or the political accusations that the similar competitors are getting away with it. There are claims that Gibson doesn’t treat its employees very well, but that doesn’t have to do with the topic. I could find nothing about the raid on Think Progress, or any good answers from various forums.

Then NPR came to the rescue. In their feature yesterday on the Gibson guitar raid, they have a quote from Martin’s CEO claiming that the law is “a wonderful thing” and that they’ve committed to following it. This creates an interesting liberal narrative: The Democratic company has figured out how to follow the law and respect the environment, while the Republican company is breaking the law – and treating its employees poorly! Of course, this requires taking Martin’s statements at face value while accusing Gibson of lying when it says it’s not breaking any laws, either.

Today, the Wall Street Journal has a new piece on the controversy, bringing out some new facts that suggest that there may indeed be some evidence that Gibson broke part of the law – although it also notes that Gibson has worked with Greenpeace and other groups to “promote better forestry practices.”

It sounds like we don’t have enough facts yet to conclude very much yet. If it turns out that Gibson was breaking a law, and Martin uses a completely different importing process, then we could perhaps argue that the raid was justified – although I’m still not sure I like the idea of federal agents swooping into factories and shutting down production because they suspect an imported package was fraudulently labeled. And my bias leads me to wonder if both companies aren’t breaking some minor laws but an arbitrary administration chooses to only enforce them on its opponents. But that’s just one scenario that fits the facts thus far.

For now we could still have healthy discussions about the costs and benefits of the Lacy Act itself, and what the proper balance is between respecting the world’s resources and exploiting them, and what side of that balance the United States currently falls on and whether or not that position is unfair if the Chinese are illegally importing wood, or many other such things. But we can’t yet say whether or not the federal raid on Gibson was justified or unjustified. I think we have enough facts to postulate some reasonable scenarios where the raid was not completely ridiculous, but we can also postulate scenarios where the raid was extremely ridiculous and infuriating. Let your bias choose…