Underneath a few headlines

We get so consumed with the person who shall not be named, we lose sight of other stories. Here are a few on this Father’s Day.

– Hong Kong citizens reminded the financial city leaders they are promised a different path forward by their owner. One million people equal to 1/7 of the city’s population protested the proposed law to extradite people to mainland China. The law was postponed, as a result. It should be noted some big money investors threatened to move money to Singapore to aid their cause. I applaud their protest and shows the power of people. China can ill-afford the notoriety or flight of capital away from Hong Kong.

– An issue that needs attention today, is a subset of our US debt issue. Social Security will soon pay out more than its revenues. This will draw down the trust fund in a way to require automatic 20% cuts in sixteen years. Of course, we could act now and make less onerous changes, but politicians are not even talking about this issue, which is par for the course, in my view. Why plan ahead they ask by their failure to act? I have seen exercises where a group of locals solve the Social Security funding dilemma. It should not be that hard for our representatives to act like such.

– Another shooting at Costco in the Los Angeles area occurred this weekend. Public shootings are now so commonplace in the US, it made page four of my newspaper. And, that shows how derelict our so-called leaders are in failing to do anything of substance. We have become too inured to gun deaths in the US. This makes me sad and angry that our representatives are failing to address a huge problem that is killing people. If Sandy Hook and Parkland school shootings can’t bring greater change, I truly do not know what will.

– Both Brazil and the US need more doctors, especially in rural areas. Brazil is seeing visiting Cuban doctors bail on them, as they are not getting paid what they are owed. Why is a good question? In the US, medical students are going more into specialty areas. With student debt, it is hard to practice in low income areas and in lower margin general services. There are good ideas with telemedicine, but doctors need to see their patients up close to assess risk, physical and environmental.

If you have not heard of these issues, it reveals how little we pay attention to news and news not related to a someone who commands so much attention. I am hard pressed to ever remember an occupant in the White House consume so much attention.

I could use a heavy dose of boring competence in a leader who need not be the center of attention. Maybe then, we could address some of these issues. So, let’s celebrate Hong Kong’s successful protest and speak to issues like these and others. Again, I hope fathers are having a wonderful day.

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Just to be clear

Cutting through a lot of noise in the news, just to be clear:

– Getting dirt on a campaign opponent from a foreign entity is something of value – it is illegal to do this no matter how much it is rationalized by sycophants in your party. The message lost on the man in the White House is you don’t want to be beholden to a foreign government – that is why the law exists. The key question for me is the man speaking only of the future?

Watching the US Open at Pebble Beach on Monterrey Peninsula, my wife and I recall playing this course in 1992 about two months before the US Open at the same course. It is as beautiful as it looks on TV. The pros make this hard course look easy. Yet, one thing they don’t tell you on TV is guard your valuables and food as the seagulls swoop down and take them from unattended golf carts.

– When the Special Counsel in the Justice department, who the president appointed, says someone on the president’s staff is in violation of the Hatch Act (politicking on the taxpayer’s dime) after multiple warnings to cease and desist, action is required. Yet, unless she resigns, the “law does not apply to me” president won’t take action.

On the same trip we played Pebble Beach, my friend (we traveled with another couple) and I played Spyglass Hill as well. Pebble was hard, but Spyglass was painful. The first hole is over 600 yards – I thought I would never get to the green. We also played a course named Spanish Bay where the marshes are protected by law. You could see the result of an errant golf shot, but could not reclaim it due to the postings.

– Senator Mitch McConnell is the key blocker in passing a bill to further protect our election process. I have heard a security expert and a conservative pundit be critical of McConnell’s weak-kneed response. Both of these commenters said it us because McConnell did not want to hurt the president’s feelings as he gets volatile thinking people are questioning his legitimacy. Note the major take away from the Mueller report is the Russians influenced our elections. And, just today, there is an article that the EU thinks the Russians impacted their recent vote through social media.This is an indicting criticism of McConnell. Please ask him why.

The golf trip in 1992 led us to wine country for two days of tours. Too many tastes of wine will get you snockered. An interesting memory is the owner of one winery was out mowing the grass as we visited. Our final two days were in San Francisco, my favorite American city. We took the advice of our B&B chef and enjoyed some neat restaurants, one of which the wait staff sang opera and Broadway songs while serving.

– As with the US president, if the Brits end up with Boris Johnson as Prime Minister the two leading English speaking countries will be led by two people who have a very hard time with truth. That makes me sad for democracy. If Johnson wins, it will be interesting to see how Trump and Johnson handle their first disagreement when neither’s word is worth a darn. It is already apparent, Angela Merkel is the leading voice in the western world as she commands respect far more than either person.

I intermixed our trip to the San Francisco area with the current US Open there. I felt just talking only about the real news might be too depressing.  I hope all the fathers out there have a pleasant day tomorrow with their families.

Ice on Fire

I encourage people to watch the excellent HBO documentary called “Ice on Fire” on concerns over climate change and remedial actions underway that should and can be leveraged. The documentary is produced and narrated by Leonardo DiCaprio, but the most impactful voices are the scientists, inventors and trendsetters who are seeing dividends from their actions and investments.

To sum up, we have two major problems facing us – too much carbon in the air along with a growing concern over methane as it is released from beneath melting ice caps and frozen tundra, on top of the venting from natural gas sites. The title comes from researchers lighting methane leaks on fire as it is released from melting ice covered waters. The scientists note with data that it is quite clear man is causing the hastened uptick in temperatures as we leave our carbon fingerprints in the atmosphere.

These are major concerns, but we are not sitting still. Significant efforts are underway. They can be categorized as putting less carbon in the air and capturing more carbon from the air. To avoid a novel, I will touch on some of the ideas, but please do deeper dives and watch the documentary airing now.

Stop putting carbon in the air

We must hasten the move to renewable energy. The costs are more on par and less, in some cases, than fossil fuel energy production. Wind and solar energy are growing at accelerated rates. One CEO noted, the technology is here to make this happen even more than it already is. Here in the US, California gets 25% of its electricity from solar and Texas gets 16% of its electricity from wind energy.

Yet, a very promising start-up off Scotland is tapping tidal energy. There is a company producing electricity today with an offshore platform with two turbines turned by the tides to generate electricity. I have written before about this group as they use existing technologies to harness the sea. Their success is gaining notoriety around the world, as it appears to be replicable.

Two other ideas also help with both recapture and restricting release. The first is reusing depleting biowaste (such as dying trees, plants and compost) in the soils to grow crops and future trees and foliage. The biowaste holds water better, maintains top soil and is straight out of nature’s guidebook.

The other is growing more kelp offshore as it captures carbon like sequoia trees and can also be used as a food source for livestock. Feeding cattle kelp is not a new approach. Feeding cattle is important as it greatly reduces the gases released by animals and preserves more carbon capturing grassland.

Capture more carbon from the air

The documentary spells out several natural ways to capture carbon and a few technological ways. On the former, here are a few ideas:

Maintain forests, especially those with large sequoias, which are huge carbon eaters. There are several places that are nurturing huge forests, but they note we need more of these efforts. We need to be mindful to replace what we cut, but keep some protected forests off limits to cutting.

Another example is to replenish mangroves that offer buffers to oceans. In addition to offering protection against storms, they also are natural born carbon eaters.

Another effort is to grow more urban farms. These farms are usually more organic, but in addition to absorbing carbon in urban areas, they perpetuate a farm to table concept that reduces transportation fumes. Reducing auto fumes is a huge concern of cities around the globe.

The next idea is more compex, but it requires the growing of more shells in the ocean. The dusts off the shells creates “ocean snow” that settles to the bottom and absorbs carbon. The idea is to spread a very small amount of iron in the ocean to cause more shells to grow.

The more technological solutions are designed to pull carbon out of the air. There are two approaches – one is to extract carbon and store it safely underground. The other is to pull it out and reuse it through artificial photosynthesis. Both of these options need more description than I am giving them. I prefer the more natural ways, but all of the above, is a necessary strategy at this late hour.

The scientists have concerns, but they do offer hope. The uncertainty of the ice-covered methane release gives them pause. They did note the methane release from accidental leaks from fossil fuel is visible from space and reduceable with some effort.

Another concern is the well-funded activity behind climate change deniers. A Wyoming rancher scientist standing in front of a visible, leaky methane cap said it plainly – they know this stuffs hurts kids more than adults. If someone came into my home to hurt my kids, it would be over my dead body. So, why is it OK too allow this?

Another scientist was less colorful, but equally plainspoken. He said fossil fuel executives perpetuating climate change denial should be tried in The Hague for crimes against humanity. Yet, as the costs have declined, the profit of creating carbon is becoming less palatable than the profit of reducing carbon in the air. People need to know these market forces exist today and not stand for future unhealthy energy creation.

Finally, if you cannot convince a climate change denier that we have a problem, ask them a simple question – if costs were not an issue, would you rather your children and grandchildren breathe methane from vented natural gas or drink coal ash polluted water or have carbon and methane neutral solar, wind or tidal energy? Guess what – costs are not much of an issue anymore and, in an increasing number of cases, less for renewables.

Boom, boom, boom, boom – the US deficit and debt continue to explode

In honor of John Lee Hooker’s famous lyric, which is played at the beginning of “NCIS – New Orleans” and in the movie “Blues Brothers,” a good wake-up call for our US deficit and debt is “boom, boom, boom, boom.” Please note, this is not the trade deficit, which is overblown as a problem as we are more of a consumer nation. This is due to our government spending far more than they take in revenue.

Per the following introduction in a Bloomberg News article, “U.S. Budget Gap Balloons to $739 Billion Despite Tariff Revenue,” we have an escalating problem.

“The U.S. budget deficit widened to $738.6 billion in the first eight months of the fiscal year, a $206 billion increase from a year earlier, despite a revenue boost from President Donald Trump’s tariffs on imported merchandise.

The shortfall was 38.8% more than the same period a year ago, the Treasury Department said in its monthly budget review released on Wednesday. So far in the fiscal year that began Oct. 1, a revenue increase of 2.3% hasn’t kept pace with a 9.3% rise in spending.”

Right now, our US debt tallies more than $22 trillion and was expected to increase by $10 trillion over the next ten years, before the tax cuts in December, 2017. Our fiscal year runs October through September, so this is the first fiscal year with full benefit of the tax cuts. The Congressional Budget Office forewarned the tax cuts would increase the debt by $1.5 trillion over the next ten years over the already projected $10 trillion. That will put us closer to $34 trillion at that time.

Yet, Americans were told by the president and favorable politicians that the CBO was wrong and growth would accelerate enough to pay for the debt using the assertion “the tax cuts will pay for themselves.” Per the Committee for a Responsible Federal Budget, tax cuts do not pay for themselves, with the best historical result being in the neighborhood of 30%, but usually much less. That leaves 70% of the revenue reduction adding to the deficit in the best of times.

The reasons for the increase in deficit are increases in military, healthcare and interest cost spending, which have overshadowed the revenue increases due to the longest running economic growth period in the US. Even the worst budgeter amongst us knows, we should be paying down debt when times are good, not increasing it. Sadly, the economy has begun to slow some, so the tax cutter’s rosy projections of 4% and above growth have not materialized (except in an isloated quarter) and economists are expected  lower growth rates than the current 3% per annum the rest of the year.

Per The Concord Coalition, the above Committee for a Responsible Federal Budget and the Simpson-Bowles Deficit Reduction plan from December, 2010, we must solve our deficit and debt problem through spending cuts and revenue increases (tax increases) both. The math will not otherwise work. If any politician, no matter how smugly, tells you otherwise, they are not be honest with you or are misinformed themselves.

To be brutally frank, I said so then, but the tax cuts passed in December, 2017 were malfeasance in my mind. We borrowed from our future to make a pretty good economy a little better. It was also hypocritical. Former Freedom Caucus members got elected saying the previous $5 trillion, then $8 trillion, then $13 trillion debts were abhorrent. Now, when it is just below $22 trillion, they pass a bill that increases it even more.

When I raised this with a Freedom Caucus staff member, he curtly told me the CBO is often wrong and they are wrong on this. My push back was simple. These folks do their homework to try and get it right. And, what I have found in my 40 years of adult life, is politicians hail the CBO when their number agree with their decision and call them on the carpet, when they don’t. Yes, it is a projection, but these folks try to be apolitical.

Folks, we have a problem that is not getting talked about enough. We must cut spending and raise revenue. My GOP friends have ceded their fiscal stewardship mantra – that is highly unfortunate. My Democrat friends need to question every candidate on how they plan to pay for their ideas and what they plan to do about the debt. We cannot have Medicare for all if we cannot pay for it.

So, let’s get real and ask politicians some pointed questions. If we don’t, John Lee Hooker will sing even more loudly. “Boom, boom, boom, boom.”

 

A little bit of this, a little bit of that this Wednesday

Happy hump day. Let’s cruise into the downside half of the work week. With multiple themes percolating in my mind, here are few little bits of this and that to bite into.

Former host of “The Daily Show,” Jon Stewart has been fiercely active in helping gain funding to pay for the medical costs of the 9/11 first responders in NYC. He gave an “out of the pool” criticism to a Congressional Committee in person as the funding has run out. He said in essence the first responders did their jobs, now you do yours. Forceful is an understatement. Let’s hope it sinks in. Congress and this president need to be shamed like that when they fail to do the obvious. In essence, he said I don’t give a crap about your politics, do the right thing. Amen brother.

The greatest talent of the current US president is marketing schtick. He can make a pair of twos look like a full house better than anyone. Like this analogy, most of what he does is untrue or blown way out of proportion. He knows fear sells, so he sells it daily, if not hourly. One of his greatest triumphs is to convince his followers that everyone is against him and that only he speaks the truth. He has his followers parroting his remarks saying “you just don’t like him” or have “Trump derangement syndrome.” In other words, it is your fault he lies far more than he does not.

The best line I read recently in a letter to the editor was an attempt to combat this. The letter writer said it is not the media and not the Democrats who are causing all of this chaos. He noted that the US president does not need any help in causing chaos and defaming his own character. He does a very good job on his own. I have said it differently – the greatest enemy of Donald J. Trump is the person who looks back from the mirror when he shaves. One of the reason why the volume of criticism is so high toward him is to combat the significant number of mistruths and the fact he has so many followers who see his lies on their phones.

Kudos should again go out to Republican Congressman Justin Amash from Michigan and Senator Richard Burr from North Carolina. Amash is an attorney and has read the Mueller report. He is a very lone and lonely voice in saying in writing that there exists grounds for impeachment of the president. It should be noted over 1,000 former federal prosecutors agree with him. Yesterday, he resigned from the Freedom Caucus and the vindictive president said he would “squash” Amash. To me, I see Nikita Khrushev pounding on the table at the UN with his shoe saying “we will bury you.” Fear sells.

Burr is also a lonely man, but he at least got a little air cover from Mitch McConnell. Burr subpoenaed the Junior Trump in to testify to the Senate Foreign Relations Committee. Burr got backlash, but Junior was a “no-show” twice, so Burr asked a judge to get Junior’s fanny in to talk. The issue is Junior may have lied to the Committee about his awareness of the Moscow Trump tower that attorney Michael Cohen briefed him on. Junior said he was only a little aware of the Moscow development issues, but Cohen said he briefed him 10 or 12 times. Like father, like son.

Finally, I have been conversing with our astute British blogger Roger. We are of a like mind (note he is astute even when I don’t agree with him) that the Brits are looking to a very Trump-like prime minister in Boris Johnson. That is not meant to be a compliment. The only poetic justice is if the he wins and the Brits do a hard-Brexit, Johnson will be front and center in the mess he helped create by being untruthful. I understand the rationale, but am not a fan of Brexit – it will dampen the British economy and global clout and that saddens me.  But, if the UK follows through, please, please work out a deal. A hard Brexit, so says business leaders, would be as unwise a decision as the country leaders could make (or fail to make in this case). It should speak volumes that Trump, Johnson and Nigel Farage want a hard Brexit.

That is all for now. Have a great rest of the week.

 

Coal can’t be made great again says conservative economist

Walter Block is a professor of economics at Loyola University in New Orleans and a Libertarian. He recently penned an op-ed piece in The New York Times called “Coal can’t be made great again.”

Block sets the context for free-market thinking using more basic purchases – shoes, clothes, restaurant meals. This “leave it to the market forces” is a mantra for free-market Republicans. Yet, as Block notes “One would think that Republicans would apply that same logic to our fuel industry.”

He adds while government has a “legitimate role” in ensuring the safety of nuclear and other plants, “it should not favor, or oppose, nuclear power, gas, oil, coal, wind, water, solar, or any other source of energy over any other.”

He also notes a couple of observations of data points which reveal “the market is moving away from coal.” First, he writes “In 2016, American reliance on coal had dipped to 30% of total electric energiy expenditure, from about 50% in 2000. In contrast, natural gas and even wind, solar and water power are becoming less expensive, and will likely take on a greater share of the overall energy industry.”

Second, he notes “For the first time, as predicted by the Institute for Energy Economics and Financial Analytsis, in April, renewables generated more electricity than power plants fueled by what was once called ‘King Coal.'”

It is through these lenses, he views the efforts to subsidize coal use and place tariffs on imported solar panels as a political attempt to “pick winners.” We should not be “propping up coal” at the expense of alternative energy sources.

In my view, we are passed the tipping point on coal. New plants are too costly to build and the present value cost of acquiring, transporting, burning, storing the ash, health and environmental degradation and litigation of coal exceeds other sources. Further, the solar energy jobs are 4x the number of coal jobs. And, wind energy is soaring in growth, especially through the plains states.

This is not a US-centric result. Renewables are growing rapidly abroad with Germany now getting more energy from renewables than coal. China has been heavily investing in solar panels. But, my favorite global example is southern Australia is now solar powered using American Elon Musk’s battery storage and a French company’s installation of solar panels. Three continents came together to forge a renewable future.

While I agree with Block for the most part, government can play a role to help move forward cleaner energy initiatives, at least temporarily. So, the temporary 30% tax credit for solar power installation makes sense, especially when our Department of Defense continues to cite climate change as a significant threat to national security, even under the current president.

But, as the renewable costs have become more on par from a production standpoint, they can stand on their own without the tax subsidy. Embracing future technologies that will drive the economy is essential. As an example, yesterday, Toyota announced the movement from 2030 forward to 2025 when 1/2 of their vehicle sales will be electric cars, with batteries being made in China. So, if our leaders look backwards too much, we might get passed by.

 

 

 

 

Credit and blame

UK Prime Minister Theresa May is stepping down today. This imperfect person has received a huge amount of blame for the failure to deliver a Brexit deal. Yet, I believe she had an unenviable task of herding the many and varied egos in Parliament who did not focus on getting the job done.

Living in America, we see this first hand, as posturing is more important than doing. Even before the fear-mongering and storytelling that has replaced civil debate, I have been disappointed in the demise in bipartisanship behavior.

Ironically, the last period of significant legislation occurred when GOP Speaker John Boehner ignored the Freedom Caucus and worked with moderate House Democrats to pass bills the Democrat led Senate would pass into law. He did this enough, that he retired before the Freedom Caucus rebellion ousted him.

Now, only handfuls of significant laws are passed as neither major party wants the other side to get a political win. Actually helping people is secondary to the perception of looking good. We have a president who does the same focusing too much on perception. He even controls his messaging taking credit for things he has little to do with and laying off blame on others when he the finger could be pointed at his efforts.

Blowing a problem out of proportion, making it worse by not addressing the real issues, threatening an action that gets push back from all sides and then coming to agreement on efforts that are already underway, is all a show that is harmful to relationships and commerce. People and companies need more stability in their lives, not less. When applecarts are upset, they have to look at other options.

This month, the US economy will be celebrating ten years (120 months) of economic growth. The president has been sure to pat himself on the back for this and he did provide some short term tailwinds with the tax cut and regulations cuts. Yet, he has only been president for going on 29 months. That means, 91 months of this growth were under Obama and the stock market more than doubled under his watch.

To be frank, presidents get too much credit and blame for the economy, providing at best headwinds and tailwinds. The headwinds this president has caused are more long term – debt, tariffs, immigration focus, pulling out of trade deals, etc. The economy is slowing its growth and more slowing is expected to occur. But, a given is this president will lay blame on others as it slows – he started last fall making the nonpartisan Federal Reserve the bogeyman.

Credit and blame. I have often quoted a leadership consultant I know, who said a great leader deflects credit to others; a bad leader accepts credit even when not due. Think about that as you hear or read tweets from leaders.