Friday, March 30, 2012

How Do We Know The Patrick Administration WANTS Our Energy To Cost More?

On both the state and national levels of late liberal Democrats in power have been accused of wanting higher energy prices. The reaction is always the same - righteous indignation, anger, mock exasperated disbelief.

Well, here in the Commonwealth this is no longer a debatable proposition. It is self-evidently and indisputably true that the Patrick Administration wants our energy to cost more. How do we know? Here's how:
Boston utility NStar has agreed to pay a starting price for power from Cape Wind project that is substantially higher than the cost of conventional energy and would add about $1 to customers’ monthly bills in the first year the offshore wind farm generates electricity, according to a 15-year contract filed with state regulators Friday.
The price, 18.7 cents per kilowatt hour, is similar to the price National Grid agreed to pay when it signed a contract in 2010 to purchase half the power generated by Cape Wind. NStar will purchase 27.5 percent of the wind farm’s total output.
The Massachusetts Department of Public Utilities must still approve the contract.
The utilities pay about 8 cents per kilowatt hour for electricity and NStar originally balked at becoming a Cape Wind customer, arguing the wind farm’s cost was just too high. That position changed last month when, after nearly a year of negotiations, state energy officials agreed to endorse a proposed merger between NStar and Connecticut-based Northeast Utilities if NStar made several concessions, including buying power from Cape Wind.
“We know that it will take a diversified approach using all available renewable resources to meet the state’s climate change goals,” NStar spokeswoman Caroline Pretyman said. “We recognize that renewable energy has a cost associated with it but we see this is an investment in our state’s clean energy future.”
The agreement left little room for NStar to negotiate the price it would pay for the energy, dictating, according to regulatory filings, that the utility’s purchase price “shall be substantially the same” as the price National Grid agreed to pay. NStar also committed to purchasing a comparable amount of power -- roughly 2 percent of its load -- from another wind project, if Cape Wind hasn’t begun construction by the end of 2015.
“There was a precedent because National Grid had already negotiated a contract so we knew going into it that our contract would be similar to their’s,” Pretyman said.
The price stipulations has left critics questioning the state’s role in bringing about the deal. Customers bills are expected to rise by about $1.08 per month, NStar estimates.
“The ‘negotiation’ around this contract was a complete sham,” said, Robert Rio, a spokesman for the Associated Industries of Massachusetts, a trade group that has long opposed the high price tag for Cape Wind’s power. “We’ll never know what the final [price] number could have been because NStar was hamstrung in the negotiation process.”
Leave aside the merits of the theory on which Governor Patrick and his colleagues are operating here - the expectation that higher prices today will pay off with lower prices some time in the future, when they expect the reality of renewable energy to catch up to their aspirations. All of that can be debated, but the issue at bar is whether there can be any remaining doubt about the Patrick Administration's present and active desire for higher energy prices in Massachusetts.

The irony is that it falls to NSTAR - the utility that was just bludgeoned into complicity in the price-hiking - to tell consumers the "truth" of the matter: “We recognize that renewable energy has a cost associated with it but we see this is an investment in our state’s clean energy future.” That's an "investment" that NSTAR resisted making for as long as it could; one that it ultimately made at the point of a metaphorical regulatory gun. One that its customers will now pay for.

In any event, by their actions the Governor and his allies have established beyond any possible dispute that they want our energy prices to be higher.

If I am wrong, show me how.

Sorry to repeat myself...

Top 10 Reads of the Week - March 30, 2012

Obamacare: An Unconstitutional Misadventure: Richard Epstein [Defining Ideas]
This week, the United States Supreme Court has on its plate the defining legal issue of our time—the constitutionality of the Patient Protection and Affordable Care Act (ACA), which I have already commented on from a doctrinal and historical perspective. In this column, I will show how fatal defects in Obamacare’s structure undermine the constitutional case for key provisions found in Title I of the law (“Quality, Affordable Health Care for All Americans”), which regulates the private insurance market.
For openers, the ACA is subject to the law of unintended consequences. The law may proclaim that it protects patients when it in fact it restricts the health-care options of those it’s intended to protect. The ACA says that it will increase access to affordable care when in fact its endless mandates will drive up the cost of care. The false advertising of the ACA’s title conceals a wealth of difficulties with its internal design, which make its scheme unsustainable in the long run... Read the Rest

The War on Women That Isn't - Jennifer Braceras [Boston Herald]
Let’s be clear: In the year 2012, nobody wants to ban birth control.
And nobody wants to see employers meddling in the personal health care choices of their employees.
The question at the heart of the U.S. Health and Human Services mandate debate is not whether contraception is permissible — it’s who must pay for it... Read the Rest
Obama's Demagoguery - Victor Davis Hanson [National Review Online]
The atrocity at first seemed undeniable: A white vigilante, with a Germanic name no less, hunted down and then executed a tiny black youth — who, from his published grammar-school photos, seemed about twelve — while he was walking innocently and eating candy in an exclusive gated community in northern Florida. The gunman had used a racial slur, as supposedly heard on a 911 tape, and ignored the dispatcher’s urging him to back off.
The apparently racist, or at least insensitive, white police chief and district attorney then covered up the murder. Understandable outrage followed in the black community, but the killing also brought out the usual demagogues. Al Sharpton, Jesse Jackson, Louis Farrakhan, and the New Black Panther Party all alleged that the shooting death of Trayvon Martin was an indictment of a systematically racist white society. They demanded justice, and the Black Panthers announced a $10,000 bounty on the supposed killer. Even Philadelphia mayor Michael Nutter got into the act, dubbing the shooting an “assassination.”...  Read the Rest
The Trayvon Martin Tragedies - Juan Williams [Wall Street Journal]
The shooting death of Trayvon Martin in Florida has sparked national outrage, with civil rights leaders from San Francisco to Baltimore leading protests calling for a new investigation and the arrest of the shooter.
But what about all the other young black murder victims? Nationally, nearly half of all murder victims are black. And the overwhelming majority of those black people are killed by other black people. Where is the march for them?
Where is the march against the drug dealers who prey on young black people? Where is the march against bad schools, with their 50% dropout rate for black teenaged boys? Those failed schools are certainly guilty of creating the shameful 40% unemployment rate for black teens... Read the Rest
Job Killers - John Stossel [Real Clear Politics]
Politicians say they "create jobs." In fact, only the private sector generates the information needed to create real, productive jobs.
Since this current post-recession job recovery is the slowest in 80 years, you'd think that even know-it-all politicians would want to sweep away the labyrinth of government regulations that hinders job creation. Successful job creators like Dallas Mavericks owner Mark Cuban and Staples founder Tom Stemberg tell me there are so many new rules and taxes today that it would be difficult, if not impossible, for them to create the thousands of jobs they once made... Read the Rest

Thursday, March 29, 2012

Meanwhile, in Massachusetts State Government... March 29, 2012

(All blurbs from the State House News Service, unless otherwise specified).

Worst of the Worst

Four people, including a husband and wife from East Boston, were arrested Friday morning and charged with human trafficking in the Boston area, according to Attorney General Martha Coakley. The four were arrested by State Police and charged with one count each of trafficking in persons for sexual service. Coakley said the partnership between state and federal law enforcement agencies was key to aiding the ongoing investigation that focuses on Boston, Lynn, and Chelsea. “The action today came about after an extensive investigation in which we had identified a sophisticated human trafficking organization and operation at those locations,” Coakley said at a Friday afternoon press conference held at her Boston office. “We allege that in this instance these women were sold time and time again in a 24-hour period often 14 to 15 times a day,” Coakley said.” Rafael Henriquez, his wife Ramona Carpio Hernandez of East Boston, as well as Milton Lopez and one defendant identified in a press release as “Bombillo” and later as Diego Suarez are charged with trafficking under a new law that focuses on traffickers with less emphasis on prostitutes. 
Human trafficking is happening all across the United States, and right here under our noses in Massachusetts. People who enslave (in very much the literal sense) women - sometimes children - are among the most odious and reprehensible of criminals. Kudos to Attorney General Coakley for making these terrible crimes a true focus of her office.

Still Living Off His 'Inheritance'

Convinced that lawmakers won’t tackle a long-term plan for the state’s transportation system in 2012 – an election year – Patrick said he’s still brainstorming ideas to infuse the system with more funding in 2013.

“We have a broken transportation system. It was broken when we inherited it five years ago, it was disorganized, mismanaged and inefficient in many respects,” he said during a press conference outside his capitol office, adding, “The system remains underfunded. I think everyone knows that.”
Addressing a reporter’s question about potential proposals to stabilize the state’s transportation finances, Patrick said, “I’ve learned in the last five years not to just breezily talk about what I’m thinking about in front of all of you. I will come and talk to you when I am clear in my own mind what the solution ought to be after talking with a whole bunch of people, and that will start a conversation.”
Five plus years down, two plus to go... is it petty to ask when Governor Patrick thinks he might move past the confidential brain-storming stage of meaningful transportation reform? And does anyone doubt that in year 8 of his administration (if he gets there), Patrick will still be blaming the Commonwealth's problems on his supposed 'inheritance'?

You know. Its Precedent.

The 2014 requirement for all Americans to purchase health insurance – a cornerstone of the federal health care law signed by President Obama in 2010 – will survive legal challenges if the U.S. Supreme Court “follows its precedent,” Gov. Deval Patrick said Wednesday.
But Patrick stopped short of presaging the outcome of high court hearings, which concluded earlier in the day, on whether the so-called individual mandate passes constitutional muster.
Governor Patrick also stopped short of identifying the precedent he had in mind. Probably because there isn't one. Which is why the outcome of this thing is so uncertain.

Try A Little Transparency

An association representing some of the state’s major insurance companies laid out its case Wednesday for clamping down on health care providers and hospitals that command reimbursements based on their market clout rather than health outcomes of patients. The Massachusetts Association of Health Plans – the trade group that represents Tufts Health Plan, Harvard Pilgrim Health Care, Fallon Community Health Plan, CeltiCare and other Massachusetts insurers – issued an annual report Wednesday calling on lawmakers to subject hospitals with operating margins of more than 5 percent to stricter public scrutiny. The report featured testimonials from House Majority Leader Ronald Mariano, Attorney General Martha Coakley and Patrick administration finance chief Jay Gonzalez in favor of government intervention in the health care market to restrict rates that providers may charge. “People want the most expensive treatment, which they think is the best treatment, because the insurer will pick up the cost,” Mariano, a Quincy Democrat, told the association. “We have to help people understand that their treatment decisions are reflected in the cost of insurance.”
One cannot blame the hyper-regulated insurance industry for wanting to share the joys of intense government oversight with their friends at the states major hospitals. They are correct that widely-differing costs at our various hospitals, largely determined by prestige or "market clout rather than health outcomes" is a huge driver of the continuous cost increases for which the public tends to hold insurance companies solely responsible. And Majority Leader Mariano is precisely correct when he says consumers tend to view the most expensive treatment as the "best treatment," and the easiest and most rational choice since, after all, insurance is going to pick up the tab regardless. But when I see the usual suspects lining up to impose cost controls and extend their regulatory reach even further into the health care system it gives me pause. Why not simply open the books to consumers? Let them see and evaluate both cost differences and patient outcomes data for our many competing hospitals, as well as what a decision to seek treatment from a lower-cost provider might do for their insurance rates?

But When We're Way Up Here, It's Crystal Clear...

Halting the tax breaks doled out annually by state government would repair Massachusetts's finances for a generation and could pave the way for reduced or simplified tax rates, Gov. Deval Patrick hypothesized Thursday, while emphasizing he is not making that proposal. "You can conceive of a world - and really this is purely hypothetical - but if you suspended all of that for one year, we could fix the state's fiscal situation for a generation," he said during an appearance on WTKK. "Let me be clear. I'm not proposing that. I'm just saying there are ways to think about how to simplify the code and maybe even reduce rates."
A Whole New World...!
So much here! This is the kind of thing that Governor Patrick dreams about... just imagine! If Massachusetts only "suspended" all of those pesky "tax breaks" that it "doles out" for just one year (just one! promise!), then we could "repair Massachusetts's finances for a generation..." (or at least for a year). Did you know that an awful lot of folks on Beacon Hill - including, one imagines, our Governor - consider the fact that we do not apply the state sales tax to services, or to food,  to be "tax breaks"? So yes, if in some shiny happy world all of those "tax breaks" could be "suspended" for a year, that would create a big, whopping cash infusion into the state's coffers. Based on our track record when it comes to "temporary" changes to the Commonwealth's tax code, though, the citizens from whom that big old infusion would first be extracted would do well to plan for a quick revision to that one-year plan. And as for the second part of the Governor's musing - the part about "maybe even reduc[ing] rates" - it truly is impossible to conceive of a world where Beacon Hill's Democrats would follow through on that. But anyway, don't worry - the Governor isn't actually proposing that. He's just giving us a little glimpse into his fantasy life.

Tuesday, March 27, 2012

MA Cost of Energy: Making the Problem Worse (again)

Posited: by maintaining the fiction that incentives for renewable energy can be a central component of a strategy to get soaring energy costs under control, the people in charge of energy policy in Massachusetts just keep making the cost problem worse.

Latest example: A headline in the Boston Globe business section reads, "Mass. Senate bill would cap electricity rate hikes." Sounds promising. Unfortunately, the article below the headline describes a piece of legislation that will almost certainly further exacerbate our economy-killing energy cost problem.

Oh, the bill is being sold by its backers in the Senate as a cost control measure. The window dressing that allows them to sell that characterization to uncritical observers (like, say, Boston Globe business reporters) is a supposed new cap on electricity rate increases, and "more regular scrutiny from regulators" of rates. Which - again - might sound promising in the abstract...

Except that the new cap on annual rate increases only kicks in at 10%. An increase of 9.95% over last year might hit you pretty hard in the wallet, but it wouldn't trigger the cap. And if a utility wants to increase its rates by more than 10% it will still be able to do it, so long as it spreads the increase over two years.

Oh, and just by the by, "[t]he rate-limit would apply to the utilities’ distribution costs of delivering electricity, not the purchase price of the underlying power." Why is that important? Because as everyone who pays any attention at all to energy policy in Massachusetts knows, the regulatory authority of the state was just used to bruising effect to force a reluctant utility (NSTAR) to purchase "the underlying power" - from Cape Wind - at a much-inflated price (an unfortunate event that might also tend to call into question the practical value of the increased regulatory oversight promised in the Senate bill).

So on closer examination the "rate cap" put front and center in the public argument for the pending Senate energy bill is significantly less than meets the eye. Now let's get to the parts of the bill that will almost certainly make our cost problems worse.

In addition to imposing the ephemeral "cap" on rate increases, the bill would also double the amount of electricity that public utilities in Massachusetts are required to purchase from renewable sources. That's right - double. But don't worry, advocates insist, the bill also requires long-terms purchase contracts for such power to be subject to competitive bidding.

Which would  be great... except that power generated by renewable sources isn't more expensive because of a lack of competition in the marketplace. It is more expensive because it's just generally more expensive. It will be wonderful if/when technology advances to the point that the cost of renewably-generated energy is competitive with traditionally-sourced energy. But we aren't nearly there yet. [Related: Falling Out of Love With Cape Wind?] If passed, this bill will double the amount of higher-priced renewable energy that our utilities are required to purchase, a mandate that cannot fail to result in sharp price increases to consumers (though less than 10% a year!).

But wait, it gets much, much worse still. Here are some more details on the bill from the State House News Service (via the Herald):
In the case of a “significant shortfall of renewable generation,” the bill would also authorize the state to centrally procure renewable energy, and, if necessary, the transmission capacity to deliver the electricity.
That seemingly-innocuous little provision would pre-solve for future Cape Winds the profound marketability problems that the first Cape Wind experienced, and relieve the Department of Public Utilities of the need ever again to go through the kind of overt regulatory skull-cracking exercise by which we just saw the Patrick Administration force Cape Wind power down our throats. If despite the doubled procurement mandate no healthy market for expensive renewable power exists, why, the state will just step in and manufacture one.

There's more (same State House News article):
Environment Massachusetts said tripling the net metering cap to 3 percent for private energy consumers and 6 percent for government agencies will allow more residents, municipalities and businesses to install small-scale solar and other technologies by shortening the time frame to earn back the initial investment through savings and rebates.
Essentially, homeowners and businesses that embrace renewables will be able to sell three times the amount of excess power generated on-site to the grid at retail, rather than wholesale prices. Supporters say net metering has contributed to installed solar electricity in Massachusetts increasing by 24 times the amount that existed in 2008.
Let that sink in. "Homeowners and businesses that embrace renewables" will be able to sell power "to the grid" (meaning back into the system) "at retail rather than wholesale prices." Pop quiz: who is more likely to install a solar array on his roof: a well-heeled professional out in a tony suburb, or a workaday Joe toiling to make ends meet? Question 2: who do you think will ultimately bear the cost of that "retail priced" energy bought back by utilities (who buy all of their other power at lower wholesale prices) from those well-heeled suburban dwellers? The answer to both questions is that workaday Joe toiling to make ends meet. This provision would create incentives for private installation of solar facilities by allowing the owners of those facilities to profit from the increased energy costs imposed on the rest of the market.

Which, it goes without saying, will have the inevitable net effect of - surprise! - increasing the overall cost of energy in Massachusetts.

Unfortunately, it is clear from the statements emanating from Beacon Hill in support of the Senate legislation that the people pushing it are not only aware of its likely impact on costs, they are fine with it. They are playing the long game. Final excerpt from that SHNS article:
State Sen. Benjamin Downing on Monday said the state can’t afford to sacrifice its long-term renewable energy goals for immediate cost reductions, calling for a “right balance” even as some questions remain about how increased renewable energy requirements will affect electricity prices.
“I don’t think we can choose between renewables and low cost. I think there’s a way to do cost effective renewables and if we delay the transition to clean energy it will only cost more in the long run, so it’s not a matter of if we’re going to promote clean energy in the Commonwealth. It’s a matter of how,” Downing told reporters at a press conference.
That's pretty clear stuff. Despite widespread recognition of (and copious lip-service paid to) the very immediate problem of the Commonwealth's high energy costs, we "can't afford to sacrifice [our] long-term renewable energy goals for immediate cost reductions."  Certain cost increases now are just the price to be paid for speculative cost reductions somewhere down the line.

That is a perfectly fine policy position to take, much as I might disagree with it. But one cannot start from that proposition and then argue with a straight face that the legislation being pushed through the state Senate this week is primarily about cost reduction. Like every single energy initiative that has come out of Beacon Hill in the past six years, it is all about the mythical "transition to clean energy" that our policy makers see shining out there on the distant horizon.

Meanwhile here in the economically-challenged present we continue to lose jobs due to our high and increasing cost of energy, and public officials loudly bemoan the problem... while struggling mightily to make it worse.

Friday, March 23, 2012

Top 10 Reads of the Week - March 23, 2012

Why Economics Can't Explain Our Cultural Divide - Charles Murray [AEI]
Some reviewers of "Coming Apart," my new book about the growing cultural divide between America's upper and lower classes, have faulted me for ignoring the role of the labor market in undermining once widely shared values involving marriage and hard work.
As these critics see it, the loss of our common culture is a result not of cultural changes but of shifts in policy and the economy. Over the past four decades, they argue, the U.S. has shipped high-paying manufacturing jobs overseas and undermined the labor unions that could protect workers' pay and benefits. Working-class earnings fell more than 20% from their high point in 1973, men were no longer able to support families, and marriage eroded accordingly. Demoralized workers fell out of the labor force. The problems of the new lower class would fade away, they suggest, if only we would use public policy to generate working-class jobs at good wages.
There are two problems with this line of argument: The purported causes don't explain the effects, and whether they really were the causes doesn't make much difference anyway... Read the Rest

The GOP Budget and America's Future - Paul Ryan [Wall Street Journal]
Less than a year ago, the House of Representatives passed a budget that took on our generation's greatest domestic challenge: reforming and modernizing government to prevent an explosion of debt from crippling our nation and robbing our children of their future.
Absent reform, government programs designed in the middle of the 20th century cannot fulfill their promises in the 21st century. It is a mathematical and demographic impossibility. And we said so.
We assumed there would be some who would distort for political gain our efforts to preserve programs like Medicare. Having been featured in an attack ad literally throwing an elderly woman off a cliff, I can confirm that those assumptions were on the mark... Read the Rest 
Obama Still Lying About Mother's Health Insurance Problems - Jonathan Tobin [Commentary]
Last summer, a brief stir was caused when a book published by New York Times Janny Scott uncovered an uncomfortable fact about President Obama: He had been lying about his mother’s health insurance problems. During the 2008 campaign and throughout the subsequent debate over his signature health care legislation, the president used his mother’s experience as a cancer patient fighting to get coverage to pay for treatment for what her insurer said was a pre-existing condition as an emotional argument to sway skeptics. But as Scott discovered during the course of writing her biography of Anne Dunham, A Singular Woman: The Untold Story of Barack Obama’s Mother, it turned out that her correspondence showed that “the 1995 dispute concerned a Cigna disability insurance policy and that her actual health insurer had apparently reimbursed most of her medical expenses without argument.”
At the time the White House chose not to dispute Ms. Scott’s findings. But apparently the Obama campaign thinks the public’s memory is mighty short. As Glenn Kessler writes today in the Washington Post’s Fact Checker column, the president’s much ballyhooed campaign biography film “The Road We’ve Traveled,” narrated by Tom Hanks repeats the same line that Scott debunked. Though the film’s script tries to avoid repeating the president’s false claims from 2008, as Kessler says, any reasonable person would infer from the movie that the president’s mother died because her insurance was denied... Read the Rest
The Federalist Solution - Jonah Goldberg [Real Clear Politics]
The bleating about broken government and partisanship continues: “Why can’t those boobs in Washington agree on anything?” We’re constantly told that the way to fix the country is to dethrone the Left and the Right and empower the middle. Americans Elect, No Labels, the Gangs of Six and Fourteen, conservative Democrats, and liberal Republicans — handing things over to these middling mincers and half-a-loafers is supposed to be the answer to all of our problems. It’s as if we should just put Nelson Rockefeller’s mug on the dollar bill and be done with it.
But what if the real compromise isn’t in forcing the Left and the Right to heel? What if instead the solution is to disempower the national elites who think they’ve got the answers to everything?... Read the Rest
Please Stop Apologizing - Bill Maher [New York Times]

(Ed Note: This is the first and maybe the last time I'll say one of the best things I read this week was written by Bill Maher - but I cannot agree with him more here (except for the final shot at Mitt, of course). I hate that Republicans have of late decided to join in the obnoxious practice of trying to turn every off-color joke or awkward quip into a national scandal...)
THIS week, Robert De Niro made a joke about first ladies, and Newt Gingrich said it was “inexcusable and the president should apologize for him.” Of course, if something is “inexcusable,” an apology doesn’t make any difference, but then again, neither does Newt Gingrich.
Mr. De Niro was speaking at a fund-raiser with the first lady, Michelle Obama. Here’s the joke: “Callista Gingrich. Karen Santorum. Ann Romney. Now do you really think our country is ready for a white first lady?”
The first lady’s press secretary declared the joke “inappropriate,” and Mr. De Niro said his remarks were “not meant to offend.” So, as these things go, even if the terrible damage can never be undone, at least the healing can begin. And we can move on to the next time we choose sides and pretend to be outraged about nothing... Read the Rest

Thursday, March 22, 2012

Meanwhile, In Massachusetts State Government... March 22, 2012

So I am thinking of introducing another semi-regular feature. Quite frequently I see a little blurb about something going on in State govt that might prompt a Tweet or a Facebook post, but isn't worth a whole blog entry. I am thinking I might start collecting those for aggregated publication once a week (more or less). So here it is, the inaugural edition of "Meanwhile, In Massachusetts State Government..." (all blurbs are from the invaluable State House News Service unless otherwise noted):

We're Number One!

A bill raising the minimum wage to $10 an hour unanimously cleared a legislative committee this week, creating the possibility of a vote in the Senate on the first minimum wage hike in four years that would give Massachusetts the highest rate in the country...
Business groups warn that raising the minimum wage at this time would cripple efforts to stimulate job growth, hurting the prospects of adding jobs for teenagers this summer and putting small businesses at an even greater disadvantage to other states and online businesses.
"It's too aggressive and at the wrong time. Right now we need to be focusing on growing jobs and growing payroll not encouraging employers to reduce payroll by hiring less people and reducing hours," said Jon Hurst, president of the Retailers Association of Massachusetts.
Hey, we're already falling behind our competitor states. Why not pick up the pace? Today, number one in minimum wage. Tomorrow, number one in job losses? The cellar is the limit.

Too big not to fail.

The commission reviewing the state's $26 billion tax expenditure budget is unlikely to recommend the elimination of specific tax breaks when it issues its final report in April, instead hinting at a longer process for reforming a menu of tax credits, breaks and deductions that the panel has concluded is "too complicated, too big." 
"I think it's unlikely," Secretary of Administration and Finance Jay Gonzalez said, commenting on the likelihood that the commission will render judgments on individual tax exemptions, credits, rebates and other tax code carve-outs added to the state's statutes over the years.
"What we did discuss is making a recommendation around the fact that the tax expenditure budget is probably too big and should be reduced both in size and amount, and maybe some recommendations around approaches or criteria or areas that the Legislature and governor should consider for the purposes of going about that," Gonzalez told the News Service....
The commission, which has been meeting since October, has five more meetings scheduled before it is scheduled to vote to approve a final report on April 23. A draft report will be distributed to commission members on Friday, April 13 for review...
The commission spent much of its meeting Tuesday debating how best to organize the long list of tax expenditures into categories that would allow policy makers and the public to easily understand how the state is using its tax code.
"The work we talked about today to better articulate what the purpose of each one is and what the metrics for measuring effectiveness are is a helpful component to assessing and evaluating whether we should keep them or not, and the level of work involved in that is beyond the scope of this commission. This commission can't do that, so there's a little bit of a chicken and an egg," Gonzalez said.
I don't know why that last bit makes me giggle, but it makes me giggle. This commission has been meeting since October, and so far it has managed... to categorize existing tax breaks and decide that specific recommendations pertaining to individual breaks is just too big a task to be undertaken. Classic government efficiency at work.

What could possibly go wrong?

Sixteen- and 17-year-olds would be allowed to “pre-register” to vote under a package of election law changes that a Beacon Hill committee is preparing to advance Wednesday, according to a person briefed on the proposal’s contents.

By all means, let's register people to vote who aren't actually legally eligible to vote! What could possibly go wrong? Just another step in the long effort to make voting as effortless as possible - devaluing the franchise a little bit more every year.

Who speaks for the trees?

"Ticket please!"
A legislative committee voted Tuesday to delay consideration of bills to restrict paperless ticketing – a strategy employed by the Red Sox to preserve low-cost tickets for families but one critics say limits consumer freedom. The Committee on Consumer Protection and Professional Licensure voted Tuesday for an indefinite extension to consider the bill (H 1893), sponsored by Rep. Michael Moran (D-Brighton).
What-the-huh now? We need to protect consumers' freedom to... have paper tickets?

One step forward, 4 steps back.

In the wake of criticism over the cost to ratepayers of long-term energy contracts signed by National Grid and NStar to purchase power from Cape Wind, a panel of lawmakers on Tuesday endorsed a bill that would introduce competitive bidding to the renewable energy marketplace while more than doubling the amount of renewably energy utilities must purchase.
Honest to God. With all of the bad press piling up to the front, back, left and right of the so-called "green initiatives" that already exist (at both the state and federal levels), these folks think now is the time to double-down. These people aren't legislating in the real world - they are on a vision quest.

Getting a taste of the un-real world.

Gov. Deval Patrick called on local businesses Monday to ramp up internship offerings, saying such programs can help retain young workers in the state. "We need to retain more of the talent who come here for school and we can do it by exposing people to internships," Patrick said to a crowd of business executives at a speech sponsored by the Boston Chamber of Commerce and held at the Federal Reserve Bank of Boston. Just back from his vacation in the U.S. Virgin Islands, Patrick said one of the ways government is encouraging businesses to help retain students and graduates in the state is through internships in state-funded areas like life sciences and the green sector. "Everybody wins. Students get a practical opportunity to apply their skills and get a taste of what the real job market is like. [Businesses] have an opportunity to build your talent pipeline and we all of us together have an opportunity to make the Commonwealth stronger," Patrick said.
 Hey, I'm all for the value of internships, though I'd imagine the interns who are needed get a better experience than those who are, you know, mandated. But the Governor's choice of example is amusing. State-mandated internships in "state-funded areas like life sciences and the green sector" may get many things (including a subsequent state-funded job), but they most certainly do not get "a taste of what the real job market is like."

But we were doing great when I left for vacation!

Speaking of the real job market...
Patrick repeated his frequent talking points about the state's job growth climate ranking highly compared to other states, not addressing new federal labor data showing Massachusetts tied for 40th in job creation in 2011.
Clearly the Gov hadn't yet received his post-vacation briefing.

Nearly $80 million* in savings!

More than 125 cities, towns and school districts in Massachusetts have taken steps to adopt municipal health insurance reform options made available under a 2011 law or recently used collective bargaining to shave health care costs, according to an update on the law, which estimates savings to date have reached $80 million.

The two-page update from the Massachusetts Taxpayers Foundation predicts savings are "certain" to exceed the $100 million per year estimate frequently mentioned by proponents of the law prior to its passage last year.

Only four communities - Brockton, Easton, Kingston and West Springfield - have voted against adopting the reform law, while 94 municipalities and school districts have voted to adopt it.

The law was approved last year after tense deliberations over its impact on collective bargaining. The final law, intended to secure savings in part by shifting new costs to employees, included provisions that allow employees to share in any savings. The update estimates employees in communities where health plan changes are being made will save $35 million of the roughly $80 million in savings through premium reductions or "mitigation plans."

The report says 50 municipalities and school districts have reached agreements to make health plan changes, saving $50 million, without needing to turn to an outside review panel authorized under the reform law.

The estimated savings include $30 million not directly linked to the law but achieved by a dozen communities through collective bargaining changes made between January 2011 and July 2011, when the law was signed.
That sounds awesome. And if any significant amount of money is being saved by operation of the watered-down muni reforms passed last year, all to the good. But what the MTF is doing here is purporting to substantiate predictions in a way that cannot stand up to even a little bit of skeptical examination:  $80M in savings have supposedly already been realized as a result of the ballyhooed muni health insurance reforms. Of that $80M, $35M is accounted for by the "sharing" provision, which was tacked on at the tail end of legislative negotiations as a way to transfer "savings" away from cities and town to the unions. So from the perspective of the cities and towns (and their taxpayers), $80M pretty quickly becomes $45M. Then there's this: "The estimated savings include $30 million not directly linked to the law but achieved by a dozen communities through collective bargaining changes made between January 2011 and July 2011, when the law was signed." So $30M in "savings" are credited to the law... but were achieved before the law was even signed. And now $80M has dropped to $15M. Despite that rather radical reduction, the Massachusetts Taxpayers Foundation (which everyone knows is a non-partisan business-advocacy group and not at all a decidedly left-leaning group of active Democratic donors that just happens to be the media's favorite "watchdog") concludes that savings are "certain" to exceed the $100M per year estimate that bill supporters trumpeted during debate. Passing strange.

So this is just funny

From the State House News:
Members of the T Riders Union and other transit groups plan a rally outside the State House to call on Gov. Deval Patrick to step in and prevent MBTA service cuts and fare hikes. According to an advisory, costumed "superheroes" at the 2:30 p.m. event will call on the MBTA to approve several ideas that agency officials have been weighing to mitigate the impact of fare hikes, including shifting ferry service operations to Massport and using unspent snow and ice removal funds to plug the T's budget gap. In their advisory, the groups dub Patrick "Debt Smash Deval" and urge him to work with them "to summon sustainable funding for a first-class transportation system state-wide."
"Debt Smash Deval." Awesome. But someone should tell these good folk that relying on a clearly fictional character isn't going to get them very far toward solving their problem.

MA Jobs: Feelings... Nothing more than feelings...

There it is on, right now as I type, making it's monthly appearance: the "BREAKING NEWS" jobs numbers banner. "Mass jobless rate held steady in February at 6.9%."

The irony of the "breaking news banner" isn't made clear until the last paragraph of the linked article, which reads:
When the revisions for 2011 were disclosed earlier this month, a new picture emerged. It was initially thought that the Massachusetts economy was recovering faster than the national economy. But when the new information was taken into account, it suggested that the Massachusetts recovery is progressing at a far slower pace than first believed. readers interested in putting a little meat on those bones have to do some digging. The most determined among them might eventually find this piece published yesterday in the "Political Intelligence" blog section (there's a variation on the piece in today's dead-tree Globe - buried in the Business section).
Governor Deval Patrick has made federal employment statistics into a powerful political tool over the last few months, touting the state’s dramatic job growth during his administration as he speaks locally and nationally on behalf of President Obama’s reelection campaign.
It is especially effective when contrasting the state’s current performance under his governance with that of Mitt Romney, the Republican presidential candidate who was his predecessor.
But the numbers used by the administration -- that Massachusetts is fifth in the nation in job growth -- were revised last week and no longer show the state performing as well as previously thought.
New data from the U.S. Department of Labor’s Bureau of Labor Statistics show that the state has now dropped to number 41 in job creation for 2011.
Despite the new numbers, the Patrick administration continued Wednesday to stand by its previous claims that the state is ranked fifth, made as recently Monday, several days after the federal government revised its numbers.
“The old number feels like the better description of what’s really happening in the Massachusetts economy,” based on other economic indicators, including gross domestic product growth, export growth, tourism, and payroll withholding tax growth, said Gregory Bialecki, secretary of housing and economic development.
The figures the Patrick administration uses as the basis for the governor’s jobs claims overestimate the number of jobs created over the last two years by 34,000, newly revised data from the federal Labor Department show. Bialecki provided no other basis to back up the claim that the state ranks fifth in job creation, aside from the old numbers.
It is hard to adequately describe the awesomeness of Secretary Bialecki's position here. The "old number" (by which he means "the discredited number") feels like the better description...! Six plus years in, we finally have the perfect distillation of the Patrick Administration's approach to government.

Who you gonna believe? Me or your lyin' statistics?

Read a little deeper into the article and you get this from the Governor's spokesman:
“That’s why the governor uses a whole bunch of trends and data,” Ryan said. “Massachusetts is coming out of the recession faster and stronger than the rest of the country, and there is still more work to do.”
Someone give the poor kid a gentle whack upside the head. His record has been skipping since 2010.

Yesterday evening I was discussing the blog post with a few like-minded friends. "Can you believe they actually printed that???" was the general reaction. Some were optimistic that perhaps finally, at long last, we'd turned the corner on this jobs numbers nonsense. Every single month - EVERY. SINGLE. MONTH. - these "estimates" come out and are plastered all over the papers, TV and radio. And every single month - E.S.M. - they are subsequently revised, often by orders of magnitude.

That is how we somehow "lost" 34,000 jobs for which the Governor took credit for two years but which never actually existed.

That is how Massachusetts fell from 5th in the nation in job creation* to 41st in the nation.** The delta between rhetoric (feelings!!!) and reality, it turns out, is pretty flippin' significant.

Maybe finally the scales would fall from the eyes of our sycophantic press corps and they'd start to call out the Governor and his minions on their always-implausible and now thoroughly-discredited bragging.

Ah, but no. This morning we woke up, still living in Massachusetts, to the bitter realization that overnight the unseen hands of the Patrick fanboys in the press had been at work. The Globe's story on the major revisions in the aggregate jobs numbers is safely tucked away in the business section, unavailable online except to paid subscribers. The February jobs numbers - which will doubtless be quietly revised next month - are all over the landing pages and featured prominently in the side-bar to whatever article you might choose to read.

And somewhere in the State House, Secretary Bialecki is sipping his morning coffee and letting out a contented sigh. "What a feeling!" Meanwhile, in the secret subterranean headquarters of the Red Mass Group, Rob Eno's head just exploded.

(* estimated)
(** actual)

Wednesday, March 21, 2012

Romney Derangement Syndrome?

It is time to break out the moniker? Don't we need some pseudo-clinical term to shorthand the media's extraordinary antipathy toward the man who is marching steadily toward the GOP nomination for president? Can anyone come up with something better than the tired and used "derangement syndrome?"
I'm put in mind of this clear and growing need by the fact that this morning I read no fewer than five mainstream press accounts of yesterday's Illinois primary, and not a single one provided the actual numbers to quantify the magnitude of Mitt's trouncing of his competition - usually the stuff of the lede paragraph in any post-hoc coverage of an election.

Oh, I learned from every one that Mitt "vastly out-spent" his competitors. And that turnout was low - real low compared to 2008 (when I seem to recall a really popular fellow from Chicago was on the ballot... But never mind). And I was repeatedly reminded that Mitt has "nowhere near" the number of delegates needed to secure the nomination. None of the articles failed to conclude that the relatively low turnout was "yet another indication" of a "lack of passion" for Mitt. But no numbers.  This excellent pre-parody published yesterday by Buzzfeed was remarkably prescient.

None of the articles I saw explained why Ohio (54 delegates at stake) was a "must-win" for Mitt, while Illinois (53 delegates) was apparently a big yawn. I can only assume that one additional delegate in Ohio is really, really important. Maybe it is one of those "Super-Delegates" we heard so much about last time? Remember them?

I finally found the numbers on, not in the article but in an accompanying chart. Mitt beat Santorum by 12 points, 47 to 35, with the other two guys in single digits.
Nothing to see here. Move along.

Tuesday, March 20, 2012

...when ambitious people once again flock to places where money is made...

Check out this article from Forbes, the latest in a series of observations/analyses of the increasing consolidation of this nation's wealth in and around the seat of Federal government. A taste:
Throughout the brutal and agonizingly long recession, only one large metropolitan area escaped largely unscathed: Washington, D.C. The city that wreaked economic disasters under two administrations last year grew faster in populationthan any major region in the country, up a remarkable 2.7 percent. The continued steady growth of the Texas cities, which dominated the growth charts over the past decade, pales by comparison.
Boom times in the capital — particularly amid a weak recovery elsewhere — are driving this growth. Since 2007, notes Stephen Fuller at George Mason University, the D.C. region’s economy has expanded 14 percent compared with a mere 3 percent for the rest of the country. Washington’s unemployment never scaled over 7 percent, well below the national average, and is now down to around 5.5 percent, about the lowest of any major metropolitan area. Unemployment of course is much higher, reaching 25 percent, in some of the district’s poorer neighborhoods.
This prosperity is rooted largely in the steady growth of the federal workforce, as federal spending accounts for one-third of the region’s economy. Over the past decade 50,000 bureaucratic jobs have been added in the area while local federal spending grew 166 percent. The D.C. region, with 5 percent of the nation’s population, garners more than three times that percentage in payroll and more than four times that percentage in procurement dollars.
 Although nobody should begrudge the good folk of Washington, DC their prosperity, the skewed comparison with the rest of the country does bring to mind this clip from The Wire (the best, best, absolute best television show ever aired, by the way). With apologies for the small amount of dock language...

The Forbes piece also calls to mind this blurb from the "The Week" section of the March 19 issue of National Review:
America will start getting back on its feet when ambitious people once again flock to places where money is made — not where it is collected (or borrowed), shuffled around, wrangled over, and disbursed.
Hard to argue with that.

Sunday, March 18, 2012

MA Job Creation - "Human Capital" ain't what it used to be

First, if you aren't tracking the excellent back-and-forth that Rob Eno is having at Red Mass Group (and elsewhere) with Patrick Administration Secretary of Economic Development Greg Bialecki about the validity (not) of the Administration's job-creation (not) figures, check it out. It was fascinating even before the release last week of this statistic-and-chart-filled report by Mass Inc., sub-titled "Meeting The Challenges of the Bay State's Lost Decade." Since then it's been a decidedly one-sided affair, as Rob merrily deploys the heavy ordnance of Mass Inc's data against the pop-gun of Bialecki's stale Patrick Administration rhetoric.

Give the Secretary credit. It takes a certain kind of gumption to stick with "on the mend and on the move" against stuff like this and this and this. He ought to ask his boss for a raise.

I'm not going to reproduce Rob's analysis here - follow those links and read it for yourself. The upshot, though, is that in the past week new figures from the Board of Labor Statistics and now the Mass Inc. report have completely and thoroughly debunked Deval Patrick's frequent claim that Massachusetts is a national leader in job creation. The truth is that for most of the past decade, we've been in the middle or the back of the pack. The fact that those conclusions jibe so thoroughly to what on-the-ground personal experience has been telling us for years only makes the credibility impact worse for whoever ends up carrying the Patrick legacy standard into 2014.

The Administration's best and most effective rejoinder to such an observation, of course, is to accuse its critics of "rooting for failure," or "playing to our fears instead of our hopes," etc. But it isn't fear-mongering to ask our elected officials to stop spinning fictions against the very serious and readily-observable reality reflected in Mass Inc.'s meticulously-researched conclusions. Eventually one must ask such officials, respectfully, to cut the sanctimony and rejoin us in the real world.

***(Economic Analysis By the Patrick Administration)

Anyhow, one particular part of Mass Inc.'s conclusions caught my eye in particular (you read the report, right? It's only 207 pages!). 

A couple of weeks ago, the Beacon Hill Institute released it's own annual "competitiveness index," which ranked Massachusetts number one - numero uno! - in the nation. Among the infinitesimally-small community of folks who watch this stuff closely this was no big surprise. The BHI index is notorious for placing a heavy thumb on the scale for the Bay State's so-called "human capital," as indeed was made clear in BHI's own press release:
"During the past decade, Massachusetts has solidified its standing as a competitive state." said Jonathan Haughton, Professor of Economics at Suffolk University and one of the principal authors of the report. "One cannot over-emphasize the importance of a highly skilled workforce that can deploy technology and export value-added goods and services. The index does a good job of balancing cost factors such long commuting times and high electricity prices against resource strengths such as education and technology."
With apologies for the lengthy self-quotation, here is the comment I registered under Red Mass Group's post about the BHI report:
First, let me say that it's great that Massachusetts has such wonderful "human capital," and it is equally great that our access to "human capital" affords us so important and valuable an advantage in the national and global marketplace. We have real strengths - and in any list of those strengths for the past three decades plus you'll see this same recitation: "human resources, technology, business incubation..." institutions of higher education, teaching hospitals, etc. All of these are real and valid and valuable.
And it is not surprising that in a competitiveness survey that generously weighs those factors, Massachusetts comes up aces. Wonderful. We should be proud to live here.
Of course none of those things - none - have a thing to do with state government. That won't stop the Governor & Co from happily taking a measure of credit, but it's a fairly obvious fact.
"Human Capital" -  shouldering the load
... Professor Haughton says, "One cannot over-emphasize the importance of a highly skilled workforce that can deploy technology and export value-added goods and services." But of course one CAN over-emphasize that importance. The Governor routinely does, counting on our "human capital" to out weigh the myriad decisions he and his legislative allies have made that drive up the ever-increasing cost of doing business in Massachusetts. Businesses will come for our human capital, goes the thinking. But human capital - valuable as it is - is but one consideration of many, placed on the scale and weight against others. Professor Haughton concedes the point in his very next sentence: "The index does a good job of balancing cost factors such long commuting times and high electricity prices against resource strengths such as education and technology." It IS a "balance." And we cannot go on making it ever more expensive to locate and grow here, and expect our wonderful "human capital" forever to outweigh those other factors.
Now here's that excerpt I mentioned from the Mass Inc. report (page 195):
A shift-share analysis of payroll employment changes in Massachusetts revealed that the state had negative national share effects in several of its leading industries. The reduced national share of jobs in these industries exacerbated the state’s job losses over the decade. Despite having the best-educated workforce in the nation, as measured by the share of its workers with a college degree in 2000, Massachusetts lost competitive advantage in some key industry sectors such as health care, professional, scientific, and technical industries, and finance and insurance. The Commonwealth’s performance was not an anomaly. In fact, the best-educated states across the nation were overwhelmingly mediocre performers in job creation and were more likely to rank near the bottom among the 50 states on payroll job growth than to rank near the top. These findings indicate that having a highly educated workforce alone is not sufficient for generating strong job growth. New public and private policies must be sought to boost the competitive advantage of Massachusetts industries and their job generating capacities. 
In other words, that "balancing" that BHI hopes for, and that the Patrick Administration routinely counts on to justify its anti-growth policies, is no longer happening.  Our "human capital" - and that of states with similarly-educated demographics - is no longer sufficient to compensate for our high cost of living, our high energy costs, our heavy tax burden, and our stifling regulatory regime.

In the past employers of the past might have looked at all of those things (which, by the way, weren't nearly so bad back in the day) and say, 'well, Massachusetts has all of those highly-skilled workers; having them will give us the edge to compensate for all of that other stuff.' Now, as Mass Inc. makes abundantly clear, those same employers say, 'Hey Massachusetts grads, why don't  you pack up your stuff and come join us in Tennessee?'

The sooner we elect ourselves some leader who understand that we cannot keep spending against "human capital" that has lost so much of its value, the sooner we'll reverse the middle class decline and economic stagnation that Mass Inc.'s valuable report illustrate so starkly.

Saturday, March 17, 2012

Tim Cahill: The Opposite of Self-Aware, Redux

[I know. I know. I promised. He makes it impossible.]

Maybe this is just me, but you know that fuzzy-brained feeling you get when you try to think seriously about a subject that is truly incomprehensible? Something like mortality, or the size of the universe?

The Opposite of Self-Aware
I get that same feeling when I try to imagine a way to quantify the utter lack of self-awareness evidenced in the blurb below, written  recently by former Treasurer / gubernatorial candidate Tim Cahill as part of his periodic "MINDSETTER" (!!!) column in a publication called "GoLocalWorcester". Under the title 'Things That Made Me Angry' it appears, with no outward indication of the unfathomable irony imbued in the words:
WHEN NEWT GINGRICH SPEAKS: Just stop whining, Newt. You are running for President and you have won in two out of twenty states so far. One of them was your home state and the other bordering your home state. Come on! You can throw a punch but you have a glass chin. Can we stop already with the talk of how brilliant this man is. Staying in the race only guarantees that the candidate you so obviously despise, Mitt Romney, wins. How brilliant is that?
I can barely read the paragraph, much less think about it hard enough to offer any particular observations. I'm afraid I might stroke out. There's already blood oozing from my ears.

By the way, here's how Cahill starts the column:
Have you ever had one of those weeks where it seems like everything you read makes your blood boil. Every experience just kind of "pisses you off". And everything that you see and hear on television or the radio just "grinds your gears".
I know just what he means. For a good part of 2010 I called that feeling "Tim Cahill."

Friday, March 16, 2012

Top 10 Reads of the Week - March 16, 2012

Labor Leaders Plan To Apply New Clout In Effort For Obama - Steven Greenhouse [New York Times]
As the A.F.L.-C.I.O. prepares to endorse President Obama on Tuesday, labor leaders say they will mount their biggest campaign effort, with far more union members than ever before — at least 400,000, they say — knocking on voters’ doors to counter the well-endowed “super PACs” backing Republicans.
The same Supreme Court ruling in 2010 that set the stage for these political action committees to accept unlimited donations also allowed unions to send their foot soldiers to visit not just union members at home, but also voters who do not belong to unions — a move expected to increase labor’s political clout significantly in this year’s elections... Read the Rest

Obama Could Use A Lesson In Humility - Jennifer Braceras [Boston Herald]
Not so long ago, school children were taught that, in America, government is “of the people, by the people and for the people.”
Today, it is easy to see why most kids think that our government is “of Barack, by Barack and for Barack.”.. Read the Rest
The Real Entitlement Mentality - Roger Kimball [PJ Media]
...Mitt’s biggest challenge, apart from what George Will identified as his inveterate “Romneyness,” is countering Obama’s sly, Alinskyite mastery of the levers of power. In 2008, Obama campaigned as a political outsider, someone who would challenge the system and shake up an entrenched bureaucracy. What was not sufficiently understood was the extent to which that whole narrative was a deliberate ruse, promulgated by a politically radical machine in order to usurp power. That, in fact, is Obama’s one real area of mastery: the “long march through the institutions” in which the democratic dispersal of power is replaced with a top-down, commissar-style of governing. What he has managed to accomplish in this regard in a mere three years is remarkable.
And that brings me to the title of this column. I take it from an essay by the pollster Scott Rasmussen, linked on the page reporting Romney’s surge in the polls... Read the Rest
Must-Watch Video of the Month (tell your friends) ************
Holder's Identity Problem - Rich Lowry [Real Clear Politics]
Wherever he goes, people are required to show identification. When cashing a check. When signing up for a library card. When boarding a plane. When entering certain office buildings. When checking into hotels. When (in the case of the youthful-looking) buying a beer or cigarettes, or entering a bar. The tyranny of the photo ID is so all-encompassing that people can’t enter Holder’s own Justice Department without showing one.
Holder is outraged that in a nation where requests for photo ID are ubiquitous, more and more states are requiring that people show them when they vote. In a speech last year, Holder characterized these voter-ID laws as an assault on the voting rights that Congressman John Lewis — the hero of Edmund Pettus Bridge — fought for in the mid-1960s. Back then, blacks in the South had to fear for their safety if they showed up at the courthouse to try to register to vote. Now, states are merely asking everyone, regardless of race, to show identification that is readily available to all, regardless of race... Read the Rest
Obama's "War On Women" Backfires - Dana Loesch [Big Government]
The newest Washington Post/ABC poll shows that the majority of Americans strongly disapprove of the way in which the President is handling a number of issues, chief among them the economy and gas prices. According to the March 10th, 2012 poll released yesterday a net 50% of those surveyed disapprove of how Obama is handling the job of president with 39% "strongly disapproving" and only 28% "strongly approving." This is up from the net 46% taken on February 4th of the same year.
On the economy, 50% "strongly disapprove" whereas only 20% "strongly approve" of the President's management. His negatives greatly outweigh his positives on everything from his handling of Iran, the budget deficit, Afghanistan, and on "the situation with gas prices" where 52% "strongly disapprove" of his job performance. It represents an increasing trend... Read the Rest
Movie Poster Parody of the Week

Thursday, March 15, 2012

On Casinos, Our Timing Was Impeccable

Foxwoods Casino Is Fighting For Its Life.  That's the headline on a New York Times article with huge - if predictable and obvious - implications for the Commonwealth's recent decision to stake part of our own financial future on the dubious proposition that there exists an infinite market in this country for casino gaming.  Here are just a few choice excerpts from the lengthy article:
Nearly everything about the Foxwoods Resort Casino is improbable, beginning with its scale. It is the largest casino in the Western Hemisphere — a gigantic, labyrinthine wonderland set down in a cedar forest and swamp in an otherwise sleepy corner of southeastern Connecticut. Forty thousand patrons pack into Foxwoods on weekend days. The place has 6,300 slot machines. Ten thousand employees. If you include everything — hotel space, bars and restaurants, theaters and ballrooms, spa, bowling alley — Foxwoods measures about 6.7 million square feet, more than the Pentagon...
These days the tribe is dealing with the latest improbability in its turbulent history: financial havoc. The casino is underwater, like a five-bedroom Spanish colonial in a Nevada subdivision. The Pequots misjudged the market, borrowed too much and expanded unwisely. Foxwoods’s debt is on a scale befitting the size of the property — $2.3 billion.
It would be easy to look at what has occurred at Foxwoods and think, Here are people who fell into money and didn’t know how to handle it. Which happens to be true. But how the casino reached this point, and the challenges its owners and operators now confront, is part of a much larger story — one involving the gradual relaxation of moral prohibitions against gambling, a desperate search for new revenue by state governments and the proliferation of new casinos across America. Casino gambling has become a commodity, available within a day’s drive to the vast majority of U.S. residents. Some in the industry talk of there being an oversupply, as if their product were lumber or soybeans.
Foxwoods has had its own in-state competition since 1996 from the Mohegan Sun, which lies just west, across the Thames River. Owned by the Mohegan Tribe, it is a more modest property, though only by comparison — Mohegan is the second-largest casino in the hemisphere. In October, a casino opened at the Aqueduct racetrack in Queens with 4,500 slot machines, and Gov. Andrew Cuomo is pushing an expansion plan for the site that includes a hotel and what would be the nation’s largest convention center. And lawmakers in Massachusetts recently voted to issue licenses for a slots parlor and three full resort casinos — an especially ominous development for the Connecticut casinos, which draw about 30 percent of their clientele from Massachusetts, because many gamblers are ruled by what is known in the business as the law of gravity. They stop where the pull is the strongest, which is usually the nearest casino....
You can still hear echoes of a time when gambling was widely considered wicked. When Rodney Butler raised the prospect of dropping the gambling age in Connecticut from 21 to 18 and allowing liquor sales until 4 a.m., The Hartford Courant’s editorial page objected, writing, “Why not just open a brothel?”
Resistance to gambling, however, has been overwhelmed by the need for new sources of public revenue in an era when it has become nearly impossible, at any level of government, to raise taxes or even to let temporary tax cuts expire. A kind of self-perpetuating momentum fuels gambling’s growth: the more states that legalize it, the more politicians in states that haven’t done so argue that if their citizens are going to throw money into slot machines, they might as well do it at home. “Those people would lose that money anyway,” Ed Rendell, the voluble former governor of Pennsylvania, said in a tense appearance on “60 Minutes” last year. Teeth clenched, he continued, “You’re simpletons, you’re idiots if you don’t get that.”
Butera reacts to the debates over gambling with a sense of amusement. “Few governors or senators or House members want to say, ‘I absolutely love having casinos in my market,’ ” he said. “It’s more like: ‘We can manage this. And here’s what we’ll do. We’ll put it in the right place, it won’t impact our society too much and we’ll make some money.’ ”...
The big buzzword in the business right now is “cannibalization.” It refers, in this context, to casinos’ gobbling up one anothers’ customers, which for some of them may be the only route to survival. Fahrenkopf, the A.G.A. president, said he was not worried. “What about Starbucks?” he said as I sat in his Washington office. “A block east of here, a block west, a block north is a Starbucks. How much is too much? The market will decide.”
Las Vegas, still the anchor of the gambling industry in the U.S., was battered by the recession, and its revenues from gambling still lag far behind 2007 levels. The city’s recovery could be hurt by a building boom in big Indian casinos in California — and, over time, by new properties in New York, Massachusetts and other Northeast states. The biggest winner in Las Vegas in recent years has been Sheldon Adelson, chairman of the company that owns the Venetian, but what has made him one of the wealthiest men in the world is not his U.S. holdings but his ownership of hugely profitable casinos in the Chinese territory of Macao. (Adelson has been in the news recently because he and his wife have contributed more than $10 million to support Newt Gingrich’s presidential campaign.)
Farhrenkopf acknowledged that when the market does decide, it can have adverse consequences — in Atlantic City, for example, where casino revenue is down 37 percent since 2006 and the city’s future as a gambling mecca is very much in doubt. Rooms at hotel casinos have been going for as little as $19 a night. At least four casinos have been in bankruptcy, and people are no longer crowding onto buses to head south down the Atlantic City Expressway. “The Pennsylvania casinos are killing Atlantic City,” he said. “That’s where the Philadelphia market used to go, but now they can stay home.”
It’s that specter — once-loyal players who disappear — that Foxwoods must worry about. At the Las Vegas conference, Meczka said that when people in the industry tell him they want new customers, his response is: “There aren’t any new customers out there. Gaming is an aged community. . . . Anyone who has ever wanted to try a casino has tried a casino.” In other words, the market is not expanding — only the venues meant to cater to a finite number of gamblers.
Who would have thunk it? There are a limited number of casino gamblers out there, and an ever-increasing number of casinos scrambling for their business - and the ever-diminishing returns that come with them. If only someone had thought of that before Massachusetts decided to jump on the gaming train just as it rounds the last corner before the end of the line. Oh... yeah (see Argument #1, here).

You Say You Want a Revolution? Well, you know, we'd all love to see the plan.

A piece of advice: Don't read this article from the State House News Service (via WickedLocal) with your eyes too widely opened. They just might roll right out of your head.
Gov. Deval Patrick’s top energy and environment adviser called Tuesday for a “revolution” in the state’s green energy sector, urging more than 100 energy company executives to “take the clean energy discussion out to every city or town in the commonwealth of Massachusetts.
“It is now time to turn from reform to energy revolution,” said Richard Sullivan, secretary of energy and environmental affairs, adding, “As we start to move this revolution forward, we need all of you more than ever.”
Sullivan highlighted clean energy laws passed in the 2007-2008 legislative session, including the Green Communities Act – a bill spearheaded by former Speaker Salvatore DiMasi to encourage the expansion of renewable energy, incentivize cities and towns to support local clean energy projects and require utilities to transmit a small percentage of their energy from renewable sources. Although critics have maligned the law as overly prescriptive and a driver of high energy costs, Sullivan hailed the law as “genius” for bringing municipalities into the discussion.
Sullivan addressed company executives at a capitol event hosted by the state Clean Energy Center and the New England Clean Energy Council, a coalition of hundreds of local energy company executives hoping to win support for their sector from lawmakers.
So where to start? How about here: It isn't a private sector energy company executive's job to "take the clean energy discussion out to every city or town in the commonwealth" to push a policy "revolution." His job is to manage his company and make money. Unless, that is, his company happens to depend on government largess in order to make money - which is too often the case when it comes to so-called "green companies" in Massachusetts and elsewhere these days. [Related: Evergreen No More] In that context it makes perfect sense for "100 energy company executives" to jam a room and sign on as Patrick Administration lobbyists in exchange for a chance to "win support for their sector from lawmakers."

"Support for their sector," of course, is Beacon Hill-speak for 'more taxpayer money poured into the insatiable green maw.'

Green: And Still Hungry
Notice Secretary Sullivan's casual brush-off of the astronomical cost of implementing the Green Communities Act - recently pegged by Attorney General Martha Coakley at $4 billion over four years. "Although critics have maligned the law as overly prescriptive and a driver of high energy costs, Sullivan hailed the law as 'genius' for bringing municipalities into the discussion." No doubt Sullivan is right - I'm sure $4 billion can buy an awful lot of "discussion," as Lt. Governor Tim Murray doubtless knows (but don't ask to see his cell phone bill!).

 Here's some more:
[Sullivan's] comments came in a packed hearing room alongside the two lawmakers – Sen. Benjamin Downing (D-Pittsfield) and Rep. John Keenan (D-Salem), co-chairs of the telecommunications, utilities and energy committee – charged by legislative leadership with crafting a bill to reduce energy costs and expand the clean technology sector. Downing and Keenan have been tight-lipped about potential components of that proposal, although Downing said after the event that he hoped to have a bill out next week.
There it is, folks. Right there. A perfectly distilled explanation for why energy costs in Massachusetts continue to climb. A legislative committee has been "charged by legislative leadership with crafting a bill to reduce energy costs and expand the clean technology sector."

I've typed it before, but this bears repeating: Right now, in the reality where most of us live, "reducing energy costs" and "expanding the clean technology sector" are contradictory mandates. The two imperatives work against each other. It's like saying a committee has been charged with starting a fire to freeze water.

The single greatest impediment to Secretary Sullivan's desired "clean energy revolution" is the cold, hard, immutable fact that renewable energy is more expensive than conventional energy. An equally immutable corollary to that inconvenient truth is this one: Government policies that push reliance on more expensive sources of energy will drive up the cost of energy.

Every time I hear a state official pay lip service to the high cost of energy in Massachusetts I ask the same question - "what ideas do you have to deal with that other than 'expand the clean energy sector'?" And every time - Every. Single. Time. - I get back the same non-response. Nobody argues that so-called "clean energy" is not in fact more expensive than energy from conventional sources (including suddenly plentiful natural gas, which is orders of magnitude cleaner than coal). But no Democratic official yet of the more than half dozen to whom I've put that same question has offered even a single proposal to actually bring down the increasing cost of our energy.

Worse, they keep doing things to exacerbate the problem. See Exhibit A: Cape Wind. See also Exhibit B: Secretary Sullivan's call for a "clean energy revolution."

Lieutenant Governor Murray also appeared at yesterday's lobbyist recruitment event, claiming that the Massachusetts clean energy sector has "added 65,000 jobs" during the recession. Obviously he has not yet received the memo about the thorough debunking of the jobs numbers that the Patrick Administration has been crowing about for the past year-plus. No matter. The LG's real contribution to the event was his unintended acknowledgement of the the Administration's continued elevation of rhetoric over substance.
Speaking with reporters after the event, Murray struggled to name any specific policy that state officials could employ to further grow the sector.
“That’s what a day like today is about, to learn whether there are opportunities to grow,” he said. “It’s a winner and we want to continue to grow …
Ah, the invaluable "discussion" again. If the economy could run on political hot air, does anyone doubt Massachusetts truly would lead the nation out of this stubbornly persistent downturn?

I realize that my rants could easily earn me the label "anti-clean energy." But that isn't accurate. Oh, I am anti-green fetishism for sure. And I'm very much anti- spraying government money willy-nilly at anything bearing a self-applied "green" label, which is a pretty fair characterization of both state and federal government policy over the past half decade or so.

But I am very much in favor of "clean energy." Total reliance on a finite asset is a bad idea, whether or not one believes that we are currently anywhere close to the end of the planet's supply of fossil fuels. Reliance on a finite asset largely in the control of hostile nations is worse. Nurturing and developing renewable energy technologies is a fine policy goal - but it has nothing to do with reducing energy costs in the short or even the medium-to-long term.

So long as policy makers continue to pretend that "reducing energy costs" and "expanding the clean energy sector" are not conflicting imperatives, we will continue to see taxpayer money squandered on companies that are popular politically but unsound economically - as energy costs march ever higher.

UPDATE: By coincidence, the President is "hammering" Republicans on this issue today. From Politico:
“Lately, we’ve heard a lot of professional politicians — a lot of the folks who, you know, are running for a certain office, who shall go unnamed — they’ve been talking down new sources of energy. They dismiss wind power. They dismiss solar power. They make jokes about biofuels,” Obama said. “They were against raising fuel standards because apparently they like gas guzzling cars better. We’re trying to move towards the future, and they want to be stuck in the past.”
Those same people, Obama said, would’ve thought the Earth was flat, that television wouldn’t last, that the automobile was only a passing fad.
Such arrogance. Such condescension.

Those "folks" the President is sneering at - most of them, anyhow - do not "dismiss wind power" and make "jokes about biofuels" because they don't think it would be swell if someone would invent a windmill-fueled car or a way to power New York City with horse manure. They (we!) criticize the President's energy policy because its every element is focused on the far-distant future, based on 'ifs' and 'mights' and 'coulds,' while in the here and now soaring energy prices are sucking the strength right out of a sputtering economic recovery. Voters want their President to do something about energy costs right now, not fifty years from now.

"For close to a month," notes Politico, "Obama has been making at least one speech a week on his energy policy... [b]ut public opinion hasn't turned in his favor."

Maybe that is because the public isn't so stupid as the President thinks we are. And because while we all enjoy dreaming of the future, we are obliged to live in the present.