There is a lot of talk about Main Street USA these days. President Obama says he wants to help Main Street USA through his efforts to recover the American economy and Main Streets all across the USA are challenged like never before.
The struggles faced by Main Street USA are not new. Main Street businesses feel like they are under siege and the attacks come from many fronts. Certainly, federal issues such as tax policies, free trade agreements, minimum wage, banking regulations, health care, energy policies have had their impact; some would say mostly negative. But, there are also a host of free market changes that have impacted Main Street USA from Wal Mart and the big-box revolution to suburbia and the proliferation of shopping malls and strip centers. A less loyal set of consumers coupled with a high degree of mobility as well as the phenomenal growth in internet trade have also contributed to Main Street woes. Add to all that what the pundits now call the Great Recession and it is not hard to see why Main Street USA is suffering.
On the other hand, there are a number of things that bode well for Main Street USA. Entrepreneurship is still alive and well, although some would say many new policies coming out of Washington, DC, these days are driving entrepreneurs out of the marketplace. Nonetheless, high unemployment rates always cause a number of people to pursue that business dream they have always had. And, while high vacancy rates on Main Streets don’t do much for business right now, they do represent opportunity and more affordable places to locate new businesses.
Fortunately for Main Street USA, Americans are a nostalgic lot and they are longing for the hometown feel that takes them back to a more idyllic time. We love our history and nothing conveys that like a thriving historic downtown area. The United States has a robust federal policy to preserve our history in the National Historic Preservation Act. In the United States, we use the free market system to preserve history by granting very generous tax credits to real estate owners who preserve and redevelop historic commercial properties to rigorous historic standards. Called “adaptive reuse,” downtowns across the USA are seeing historic buildings converted to indoor shopping malls, micro-breweries, restaurants, retail outlets, office space, and even apartment complexes.
In conjunction with historic preservation, there is a national Main Street Program that seeks to facilitate the preservation and re-invigoration of historic downtown areas across the country. In addition to physical improvements to store fronts and thematic preservation of history, the Main Street Program gives downtown associations and chambers of commerce the tools to create a thriving retail atmosphere. Store hours are adjusted to meet the needs of today’s two-income families, pedestrian friendly streetscapes enhance the visitor experience, events make downtown more than a shopping destination, return policies are changed to match the big-box competition, the business mix has changed so as to not compete directly with the chain-discount stores, and excellence in personal service and product expertise helps downtown compete with the internet.
What makes Main Street USA work is not a federal stimulus program, not another pork-barrel project brought to you by your local Congressperson, and not more government interference in the free enterprise economy. No, what makes Main Street USA work is less government, streamlined regulations, lower taxes, especially the capital gains tax rate. And, Main Street needs a National Historic Preservation program that recognizes the requirements of today’s developers and new businesses and more cooperation that allows historic preservation to be profitable. Most of all, what Main Street USA needs is government at all levels to see that what is good for business is good for all, that government/private-sector cooperation is what causes the economic tide to come in and float all the ships, big and small, a little higher.
Farmville, Virginia, is a text book example of how Main Street USA and the United States economy will grow strong once again. It will not be through government programs, but by Americans pulling ourselves up by the boot straps. There has been a lot of talk in Farmville in recent months about the high vacancy rates, declining condition of the store fronts, and lack of downtown visitors.
At first the discussion seemed to focus on the Town of Farmville and their parking meter policies. This local issue is a lot like a microcosm of our national economy. While it is true that the parking policies are not the cause of downtown Farmville’s woes, the parking meters are not helping the historic area recover. At the national level, while President Obama did not cause the Great Recession, his proposed policies such as nationalized health care, carbon emissions cap and trade, and higher taxes on the Americans who invest in Main Street USA have severely impaired the ability of America to pull itself out of this economic slump.
In Farmville, the Town Council immediately took to heart the notion that their parking policies may be hurting the historic downtown, but they were not willing to shoulder the whole burden. They wisely engaged the downtown business owners, the chamber of commerce, the two local college communities, and other interested parties. The Town Council appointed two council members to be part of a newly formed, non-governmental committee to address the revitalization of downtown. At a recent inaugural meeting of the new downtown group, ideas were thrown out faster than lightning bolts in a late summer thunderstorm. The excitement was contagious and the enthusiasm to undertake a thorough and comprehensive assessment of all of the possible actions has caused some long-time downtown observers to conclude that this effort will be successful.
In my varied career as a bank loan officer, a congressional staffer, and the director of a chamber of commerce, I have seen time and time again what can happen when a vibrant, highly motivated, unfettered-by-government group can do if the rest of us just step back and get out of the way.
For much of my life, I had a plaque that my mother gave me that read, “Lead, Follow, or Get Out of the Way!” I actually resented that plaque for years because I thought my mother was trying to push me to lead; something I was not ready for or inclined to do at the time. Then it hit me like an epiphany. There are three elements to good leadership—being a good leader, being a good follower, and knowing when to get out of the way. Government, at all levels, can learn a lot and do more good for the country if they would sometimes just get out of the way.
Friday, August 27, 2010
Sunday, August 15, 2010
National Parks "For Sale"
The headline on the British news website, http://www.guardian.co.uk/world/2010/aug/06/wyoming-grand-teton-national-park, reads “US national park faces sale.” The story talks about school section land the state of Wyoming owns within the boundaries of Grand Teton National Park and the Wyoming Governor’s threat to sell the land to the highest bidder if the federal government will not swap the land for a minerals estate of equal value or other compensation. Headlines like this are used by some organizations to suggest that our national parks are threatened and not adequately protected or funded.
A little Grant Teton history is warranted here. According to the National Park Service history of the park, “The birth of present-day Grand Teton National Park involved controversy and a struggle that lasted several decades. Animosity toward expanding governmental control and a perceived loss of individual freedoms fueled anti-park sentiments in Jackson Hole that nearly derailed establishment of the park.” A large portion of Grand Teton was carved out of private land that had been bought up by John D. Rockefeller and later donated to the National Park Service. Unlike nearby Yellowstone National Park, the nation’s first, that was 100% federal land when it was established in 1872, Grand Teton to this day continues to have substantial tracts of privately owned land within the park boundaries.
The tension between private land owners and the park system and the animosity generated by carving a park out of privately-held lands are very similar to what occurred in Virginia during the establishment of Shenandoah National Park and in North Carolina and Tennessee when Great Smokey National Park was established.
Back to the fire sale in Grand Teton, because the land in Jackson Hole that became Grand Teton National Park was private property, there are also state school lands in the park that were set aside when Wyoming was granted statehood in 1890. Under the Wyoming Constitution the state is required to manage those school lands to maximize return to the school trust for education in Wyoming.
In Grand Teton, Wyoming owns two full sections (a section is one mile square or 640 acres) of land plus one smaller 85 acre parcel. With land values in Jackson Hole at about $200,000 per acre, it is easy to see why Wyoming may be tempted to sell their land. Especially when you consider that the state currently receives about $3,000 per year in grazing lease revenue on land that may be worth more than $250 million.
Back in 2002, Congress passed a law directing the National Park Service and the Bureau of Land Management to work out an exchange with Wyoming for the state lands inside the park. At the time, Wyoming wanted undeveloped minerals of equal value to the land, but valuation of undeveloped minerals is challenging and other matters of law caused that deal to bog down. Moreover, nobody really wants to have the state land sold into private ownership and that includes the residents of Wyoming who have long since realized that, despite a controversial beginning, Grand Teton is an economic engine that drives millions of dollars into Wyoming’s economy every year in the form of tourism. There is also the recognition in Wyoming that even though $250 million is not chump change, it would be quickly absorbed into the $1.4 billion per year school budget and $1.4 billion per year capital construction for schools.
So the questions are: Will Wyoming really sell their land inside Grand Teton National Park? Is it worth $250 million to a bankrupt federal treasury to make sure Wyoming does not sell the land?
In my opinion, the answer to the first question is “No.” I believe Wyoming’s governor is playing high stakes poker and attempting to leverage the national and international appeal of Grand Teton National Park to extract money from the feds. To answer the second question, let’s first take a look at the National Park Service annual budget and what they should be doing with the funds they are appropriated.
As a general principle the National Park Service has enjoyed increasing budgets when other agencies have been cut. They spend more dollars per acre of land managed than any other federal land management agency. There is the perennial complaint that there is a maintenance backlog that ranges from $4-6 billion. Ironically, no matter how much more money Congress gives the park service, there seems to be no end to the backlog. You may have heard recent radio advertisements featuring actor Sam Waterston decrying the failure of the federal government to address the maintenance backlog and telling us that your national parks are falling into complete disrepair.
A scan of annual NPS budgets over the last 10 years is illustrative. In 2000, the year George W. Bush was elected President, the NPS budget was about $2.1 billion. When Bush left office in 2009, the NPS budget was $2.9 billion. On top of those annual appropriations, over the years the Bush Administration spent more than $4 billion in additional money on the maintenance backlog. Soon after Barack Obama took office, the so-called stimulus bill allocated an additional $750 million to the National Park Service presumably to address the backlog. How many of you have seen a nearly 50% increase in your income over the last decade and were given about two years’ worth of salary to improve your home and property to boot? Most likely none of you saw that kind of boost in your personal budget, but nonetheless, I would wager that your home has been maintained and is in as good or better condition than when you bought it.
So why can’t the National Park Service maintain our national parks on an ever increasing appropriation? First and foremost, maintenance is not very exciting, but acquiring land and building new facilities is the stuff that pads a park superintendent’s resume. Secondly, Congress keeps adding new parks to the system. Not only do new parks rarely come with new money, the added units often have ready-made maintenance backlogs as well as future commitments for construction and land acquisition.
We are witness to this latter phenomena right here in Southside Virginia. Congressman Perriello has asked the National Park Service to study the feasibility of adding the National D-Day Memorial in Bedford to the national park system. I have seen dozens of these kinds of studies by the park service during my tenure at the Department of the Interior, and in almost every instance, the NPS will present a wonderful case for why the particular site is of national significance and should be added to the list of national parks. Buried in the conclusion of the study, you will find small and weak argument about why the system cannot afford the new unit. Few Congressmen can resist the lure and glory of adding a new park to their district and they usually ignore the fact that the system cannot afford to take on the burden of new units. But, for the good of the whole national park system, somebody in Congress should stand up and say enough.
And by the way, until the Bush Administration made the NPS develop a system that established and validated an inventory of their assets and each asset’s condition, nobody could ever give an accurate estimate of any maintenance backlog. But that matters little to the groups, like the National Parks Conservation Association who use celebrities like Sam Waterston to bemoan the degradation of our parks, because they are more interested in whipping up a crisis and selling memberships than actually doing anything that would benefit or conserve the national park system.
Be careful which environmental groups you support. Do your homework. Research the fact base around each issue and behind each headline. And most of all, understand the motives and tactics of the group to whom you are giving your hard-earned money. Some organizations are actually doing conservation work on the ground and others are just doing it to you.
A little Grant Teton history is warranted here. According to the National Park Service history of the park, “The birth of present-day Grand Teton National Park involved controversy and a struggle that lasted several decades. Animosity toward expanding governmental control and a perceived loss of individual freedoms fueled anti-park sentiments in Jackson Hole that nearly derailed establishment of the park.” A large portion of Grand Teton was carved out of private land that had been bought up by John D. Rockefeller and later donated to the National Park Service. Unlike nearby Yellowstone National Park, the nation’s first, that was 100% federal land when it was established in 1872, Grand Teton to this day continues to have substantial tracts of privately owned land within the park boundaries.
The tension between private land owners and the park system and the animosity generated by carving a park out of privately-held lands are very similar to what occurred in Virginia during the establishment of Shenandoah National Park and in North Carolina and Tennessee when Great Smokey National Park was established.
Back to the fire sale in Grand Teton, because the land in Jackson Hole that became Grand Teton National Park was private property, there are also state school lands in the park that were set aside when Wyoming was granted statehood in 1890. Under the Wyoming Constitution the state is required to manage those school lands to maximize return to the school trust for education in Wyoming.
In Grand Teton, Wyoming owns two full sections (a section is one mile square or 640 acres) of land plus one smaller 85 acre parcel. With land values in Jackson Hole at about $200,000 per acre, it is easy to see why Wyoming may be tempted to sell their land. Especially when you consider that the state currently receives about $3,000 per year in grazing lease revenue on land that may be worth more than $250 million.
Back in 2002, Congress passed a law directing the National Park Service and the Bureau of Land Management to work out an exchange with Wyoming for the state lands inside the park. At the time, Wyoming wanted undeveloped minerals of equal value to the land, but valuation of undeveloped minerals is challenging and other matters of law caused that deal to bog down. Moreover, nobody really wants to have the state land sold into private ownership and that includes the residents of Wyoming who have long since realized that, despite a controversial beginning, Grand Teton is an economic engine that drives millions of dollars into Wyoming’s economy every year in the form of tourism. There is also the recognition in Wyoming that even though $250 million is not chump change, it would be quickly absorbed into the $1.4 billion per year school budget and $1.4 billion per year capital construction for schools.
So the questions are: Will Wyoming really sell their land inside Grand Teton National Park? Is it worth $250 million to a bankrupt federal treasury to make sure Wyoming does not sell the land?
In my opinion, the answer to the first question is “No.” I believe Wyoming’s governor is playing high stakes poker and attempting to leverage the national and international appeal of Grand Teton National Park to extract money from the feds. To answer the second question, let’s first take a look at the National Park Service annual budget and what they should be doing with the funds they are appropriated.
As a general principle the National Park Service has enjoyed increasing budgets when other agencies have been cut. They spend more dollars per acre of land managed than any other federal land management agency. There is the perennial complaint that there is a maintenance backlog that ranges from $4-6 billion. Ironically, no matter how much more money Congress gives the park service, there seems to be no end to the backlog. You may have heard recent radio advertisements featuring actor Sam Waterston decrying the failure of the federal government to address the maintenance backlog and telling us that your national parks are falling into complete disrepair.
A scan of annual NPS budgets over the last 10 years is illustrative. In 2000, the year George W. Bush was elected President, the NPS budget was about $2.1 billion. When Bush left office in 2009, the NPS budget was $2.9 billion. On top of those annual appropriations, over the years the Bush Administration spent more than $4 billion in additional money on the maintenance backlog. Soon after Barack Obama took office, the so-called stimulus bill allocated an additional $750 million to the National Park Service presumably to address the backlog. How many of you have seen a nearly 50% increase in your income over the last decade and were given about two years’ worth of salary to improve your home and property to boot? Most likely none of you saw that kind of boost in your personal budget, but nonetheless, I would wager that your home has been maintained and is in as good or better condition than when you bought it.
So why can’t the National Park Service maintain our national parks on an ever increasing appropriation? First and foremost, maintenance is not very exciting, but acquiring land and building new facilities is the stuff that pads a park superintendent’s resume. Secondly, Congress keeps adding new parks to the system. Not only do new parks rarely come with new money, the added units often have ready-made maintenance backlogs as well as future commitments for construction and land acquisition.
We are witness to this latter phenomena right here in Southside Virginia. Congressman Perriello has asked the National Park Service to study the feasibility of adding the National D-Day Memorial in Bedford to the national park system. I have seen dozens of these kinds of studies by the park service during my tenure at the Department of the Interior, and in almost every instance, the NPS will present a wonderful case for why the particular site is of national significance and should be added to the list of national parks. Buried in the conclusion of the study, you will find small and weak argument about why the system cannot afford the new unit. Few Congressmen can resist the lure and glory of adding a new park to their district and they usually ignore the fact that the system cannot afford to take on the burden of new units. But, for the good of the whole national park system, somebody in Congress should stand up and say enough.
And by the way, until the Bush Administration made the NPS develop a system that established and validated an inventory of their assets and each asset’s condition, nobody could ever give an accurate estimate of any maintenance backlog. But that matters little to the groups, like the National Parks Conservation Association who use celebrities like Sam Waterston to bemoan the degradation of our parks, because they are more interested in whipping up a crisis and selling memberships than actually doing anything that would benefit or conserve the national park system.
Be careful which environmental groups you support. Do your homework. Research the fact base around each issue and behind each headline. And most of all, understand the motives and tactics of the group to whom you are giving your hard-earned money. Some organizations are actually doing conservation work on the ground and others are just doing it to you.
Saturday, July 31, 2010
The Peoples' Tax Cuts
Americans “…will not see their taxes increase by a single dime…” if they make less than $250,000 is the promise Barack Obama repeated to the American people all throughout the campaign in 2008. Although, the income threshold below which no one would see a tax increase seemed to vary from speech to speech, what is abundantly clear is that candidate Obama pledged not to increase income taxes on those who are not “wealthy.”
In 2001 and 2003, George W. Bush worked with a Republican Congress to lower taxes for nearly all Americans. The lower tax rates are set to automatically expire January 1, 2011, unless Congress acts to extend or make them permanent. And do not be fooled by the rhetoric, failure to extend these tax cuts is the equivalent of raising your taxes.
The premise of cutting tax rates is a simple one and is supported by the economic history of tax policy in the United States. If you lower tax rates, people will use the money they keep to create jobs, invest in America, purchase goods and services, and otherwise stimulate the economy. Moreover, that increased private sector activity actually results in an increase in tax revenues to the federal treasury.
Art Laffer successfully argued when Ronald Reagan was President that there is a point of diminishing marginal returns if tax rates are too high. Any economist will tell you that raising tax rates has a depressing effect on the economy, and as the Laffer Curve illustrated, if you increase tax rates beyond the point of diminishing marginal returns, tax revenues will decline.
The 2001 and 2003 tax cuts are commonly called the “Bush Tax Cuts.” I am continually amazed at the Constitutional illiteracy of the American media. Then-President Bush may have proposed the tax cuts, but as the Constitution says, all legislation regarding federal taxes must originate in the House of Representatives. It must then be passed by the Senate before the President signs it into law. So, why don’t we call it “Congress’ Tax Cuts” or better yet the “People’s Tax Cuts?” My guess is that even two years after George W. Bush left office, it is still vogue to blame anything and everything you don’t like on George W. Bush.
The strategic error in blaming this on Bush is that everybody likes a tax cut, and in the case of the Bush Tax Cuts, virtually everybody got one—not just the wealthy. Let’s take a look at what happens to the tax rates that apply to all Americans today, if the Bush Tax Cuts are allowed to expire next January.
• Taxpayers currently in the 10% bracket will pay 15%
• Taxpayers currently in the 15% bracket will pay 15%
• Taxpayers currently in the 25% bracket will pay 28%
• Taxpayers currently in the 28% bracket will pay 31%
• Taxpayers currently in the 33% bracket will pay 36%
• Taxpayers currently in the 35% bracket will pay 39.6%
First of all, look at who gets the biggest tax rate increase. It is the same people who got the biggest tax rate break under the Bush Tax Cuts. If allowed to expire, the lowest income bracket (well under $250,000) will see a 50% increase in their tax rate. The people in the highest, or wealthiest, tax bracket will only see a little over a 13% increase in their tax rate. This is where the rhetoric gets scary. The liberal policymakers think the higher income bracket should have their tax rates increased more than the lower income folks. And all you seem to hear from some Democrats is that the Bush Tax Cuts were only for the rich. Wait a doggone minute. Lowering the tax rate for the lowest income earners by 50% and reducing the rate paid by the richest Americans by 13% does not constitute a tax break only for the wealthy?
Besides, the “rich” are already paying the lion’s share of the taxes collected by the income tax. In 2007, the top 10% of income earners in America—the “rich” who don’t pay their “fair” share—paid more than 71% of the total income taxes collected. Moreover, it is the “rich” who invest in America and create more jobs and provide more growth opportunities than any Stimulus Plan ever has done. Tax the “rich” more and what do you think will happen to job creation and the unemployment rate?
Also, if the Bush Tax Cuts are allowed to expire, the estate tax rates, which have been reduced over time, will resume in 2011 at a 55% rate on estates above about $1.2 million. What do you think will happen to the average family farm when the parents die with a death tax rate of 55%? Do you like having a variety of food products available at prices that have been stable? Do you appreciate the values and beneficial impact on the economy that comes from having a viable family farm agricultural economy? Do you like having the pastoral scenes and do you want to protect open space and wildlife habitat? Do you think paying taxes all your life is enough and paying them when you die is not fair? If you answered “Yes” to any of these questions, then you should support the abolition of the estate tax once and for all.
There is a lot of talk in America today about traditional family values. People are starting to recognize that the traditional family unit means children are much more likely to be socially well-adjusted, productive citizens and much less likely to end up living in poverty or on welfare. But, if we allow the Bush Tax Cuts to expire, the so-called Marriage Tax Penalty comes back. If not extended, the standard deduction for a married couple will be one-third less than the standard deductions for two single people. Oh, yes, and if you have children, the deduction for dependents will be cut in half if the Bush Tax Cuts expire this January.
Do you hope to retire some day? Have you been putting away a little money in an IRA or a 401-K through your employer? You don’t have to be rich to want to retire and save some money for your future golden years. Or, maybe like most Americans, your home is your single largest investment. If the Bush Tax Cuts expire, the long-term capital gains tax rate on your retirement account growth goes from 15% to 20% and the tax rate on the dividends your retirement account will eventually pay to you will surge to 39.6%.
If President Obama wants to keep his promise to the American people, he should encourage Congress to extend the Bush Tax Cuts. He could even call them the Obama Tax Cuts. If the President and the Congress are serious about stimulating the economy, seeing future tax revenues increase, and preserving the family farm and family values, then they should support making the Bush Tax Cuts permanent. It is after all the people’s money; let’s support the People’s Tax Cuts.
In 2001 and 2003, George W. Bush worked with a Republican Congress to lower taxes for nearly all Americans. The lower tax rates are set to automatically expire January 1, 2011, unless Congress acts to extend or make them permanent. And do not be fooled by the rhetoric, failure to extend these tax cuts is the equivalent of raising your taxes.
The premise of cutting tax rates is a simple one and is supported by the economic history of tax policy in the United States. If you lower tax rates, people will use the money they keep to create jobs, invest in America, purchase goods and services, and otherwise stimulate the economy. Moreover, that increased private sector activity actually results in an increase in tax revenues to the federal treasury.
Art Laffer successfully argued when Ronald Reagan was President that there is a point of diminishing marginal returns if tax rates are too high. Any economist will tell you that raising tax rates has a depressing effect on the economy, and as the Laffer Curve illustrated, if you increase tax rates beyond the point of diminishing marginal returns, tax revenues will decline.
The 2001 and 2003 tax cuts are commonly called the “Bush Tax Cuts.” I am continually amazed at the Constitutional illiteracy of the American media. Then-President Bush may have proposed the tax cuts, but as the Constitution says, all legislation regarding federal taxes must originate in the House of Representatives. It must then be passed by the Senate before the President signs it into law. So, why don’t we call it “Congress’ Tax Cuts” or better yet the “People’s Tax Cuts?” My guess is that even two years after George W. Bush left office, it is still vogue to blame anything and everything you don’t like on George W. Bush.
The strategic error in blaming this on Bush is that everybody likes a tax cut, and in the case of the Bush Tax Cuts, virtually everybody got one—not just the wealthy. Let’s take a look at what happens to the tax rates that apply to all Americans today, if the Bush Tax Cuts are allowed to expire next January.
• Taxpayers currently in the 10% bracket will pay 15%
• Taxpayers currently in the 15% bracket will pay 15%
• Taxpayers currently in the 25% bracket will pay 28%
• Taxpayers currently in the 28% bracket will pay 31%
• Taxpayers currently in the 33% bracket will pay 36%
• Taxpayers currently in the 35% bracket will pay 39.6%
First of all, look at who gets the biggest tax rate increase. It is the same people who got the biggest tax rate break under the Bush Tax Cuts. If allowed to expire, the lowest income bracket (well under $250,000) will see a 50% increase in their tax rate. The people in the highest, or wealthiest, tax bracket will only see a little over a 13% increase in their tax rate. This is where the rhetoric gets scary. The liberal policymakers think the higher income bracket should have their tax rates increased more than the lower income folks. And all you seem to hear from some Democrats is that the Bush Tax Cuts were only for the rich. Wait a doggone minute. Lowering the tax rate for the lowest income earners by 50% and reducing the rate paid by the richest Americans by 13% does not constitute a tax break only for the wealthy?
Besides, the “rich” are already paying the lion’s share of the taxes collected by the income tax. In 2007, the top 10% of income earners in America—the “rich” who don’t pay their “fair” share—paid more than 71% of the total income taxes collected. Moreover, it is the “rich” who invest in America and create more jobs and provide more growth opportunities than any Stimulus Plan ever has done. Tax the “rich” more and what do you think will happen to job creation and the unemployment rate?
Also, if the Bush Tax Cuts are allowed to expire, the estate tax rates, which have been reduced over time, will resume in 2011 at a 55% rate on estates above about $1.2 million. What do you think will happen to the average family farm when the parents die with a death tax rate of 55%? Do you like having a variety of food products available at prices that have been stable? Do you appreciate the values and beneficial impact on the economy that comes from having a viable family farm agricultural economy? Do you like having the pastoral scenes and do you want to protect open space and wildlife habitat? Do you think paying taxes all your life is enough and paying them when you die is not fair? If you answered “Yes” to any of these questions, then you should support the abolition of the estate tax once and for all.
There is a lot of talk in America today about traditional family values. People are starting to recognize that the traditional family unit means children are much more likely to be socially well-adjusted, productive citizens and much less likely to end up living in poverty or on welfare. But, if we allow the Bush Tax Cuts to expire, the so-called Marriage Tax Penalty comes back. If not extended, the standard deduction for a married couple will be one-third less than the standard deductions for two single people. Oh, yes, and if you have children, the deduction for dependents will be cut in half if the Bush Tax Cuts expire this January.
Do you hope to retire some day? Have you been putting away a little money in an IRA or a 401-K through your employer? You don’t have to be rich to want to retire and save some money for your future golden years. Or, maybe like most Americans, your home is your single largest investment. If the Bush Tax Cuts expire, the long-term capital gains tax rate on your retirement account growth goes from 15% to 20% and the tax rate on the dividends your retirement account will eventually pay to you will surge to 39.6%.
If President Obama wants to keep his promise to the American people, he should encourage Congress to extend the Bush Tax Cuts. He could even call them the Obama Tax Cuts. If the President and the Congress are serious about stimulating the economy, seeing future tax revenues increase, and preserving the family farm and family values, then they should support making the Bush Tax Cuts permanent. It is after all the people’s money; let’s support the People’s Tax Cuts.
Saturday, July 17, 2010
From Sibling Rivalry to Socialism
Ever notice how the partisan squabbles in Washington, DC, and even the political divisions within our country, have many of the same characteristics as a sibling rivalry. There are struggles for control, a deep desire to be appreciated, attempts to make sure everyone is treated fairly, disparate perceptions of the same event, distrust of others, and distinct people with different ideas and motivations. Sibling rivalries are considered unhealthy and most parental units spend an inordinate amount of time trying to eliminate, or at least, mitigate the rivalry between siblings.
The Bible says, “Blessed are the peace makers,” but does that mean everyone must come to agreement, or can we sometimes just agree to disagree? And does the peace maker necessarily have to take a side to fulfill their responsibility? Is peace possible in every circumstance? Doesn’t the Bible also say that, “Steel sharpens steel.” Could it be that some level of disagreement is actually healthy for siblings and a nation?
In most cases when a sibling rivalry has gone bad, one can usually find a parent or parents who went out of their way to try to treat both siblings equally. The parents wrongly believe that equality will lead to peace. This approach almost always fails because of parental failure to recognize the individual and unique strengths and weaknesses of each child and to appreciate their diversity. The best approach parents can take with competing siblings is to ensure that each child has the opportunity and environment in which they can maximize the benefits of their unique strengths.
Viva la difference! At a dining table in Paris several years ago, one of the French guests commented to my wife that “America has no culture.” The French are intensely proud of their culture and indeed much of the world enjoys the benefits of French architecture, art, cooking, and wine. Over the past few decades, the government of France has gone to great lengths to protect that culture by outlawing the use of non-French words—how do you say iPod in French?—and more recently by banning the wearing of head dresses and veils worn mostly by Muslims.
My wife bristled at first, but then calmly stated, “That America has a very strong culture and that culture is deeply rooted in our diversity.” And it is true. Diversity is our greatest strength and Americans can be uniquely proud of how our diversity has helped this nation to become the economic and social powerhouse of the world.
Owing to its liberal immigration policies and low birth rates among the native French, France is now a much more culturally diverse country. But, unlike America, which was founded on the principle of accepting and embracing diversity, the French are fighting it all the way.
During the first 200 years, the United States of America was known as the melting pot of the world. People emigrated from every continent, religious freedom and tolerance was the norm, and in that environment, people were assimilated. Nobody needed Affirmative Action, income redistribution was not necessary, and social welfare programs did not exist. There were, however, expectations. You learned English, your loyalty was to America, and you became an active participant in our citizen-led form of government. Notice the difference? No laws outlawing the use of your native language. Nothing prohibiting you from sharing your homeland’s culture thus American cuisine includes Chinese, Italian, and Mexican, even French cooking, to name a few. Our government did not take it upon itself to equalize the different people groups; we just provided them a place to flourish and maximize their individual strengths.
America grew to be the envy of the world in it first 200 years because we stuck to the principles outlined in the Declaration of Independence. The first among these is that we cherished liberty over life itself as when Patrick Henry said, “Give me liberty or give me death!” But, then there is that principle of equality wherein the Declaration says, “…that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”
So, where did we go wrong? Why shouldn’t our parents and our government work to make sure we are all treated equally—that the playing field is leveled, so to speak? The difference is that the Declaration of Independence says we are all “created equal.” It does not say we will all become equal or are all to be equalized. What the Founding Fathers were trying to say is that we all enjoy the same inalienable rights, that we all start with the same opportunities, and that we are free—enjoying the freedom to succeed and to fail. To believe that we are all born with the same strength, mind, and heart, and therefore, we should all end up equal is the utopian delusion of egalitarianism and it just does not exist in the real world. Europeans have fixated for decades on egalitarian principles and this has led them down the path of socialism. We are now witnessing the end result of these unsustainable economic policies as European governments collapse under the burden of their national debts. How long will it be before we will wake up here in the United States?
Family dynamics are like a microcosm of our society. As parents, we would do well to recognize that trying to level the playing field for our children and micromanaging their lives to try to achieve an egalitarian outcome exacerbates sibling rivalry and often results in the break down of the family. On the macro level, forcing equality where it does not exist and manipulating the economy to achieve an egalitarian society will lead to our economic failure and the break down of our society.
Let us instead return to the principles articulated by our Founding Fathers. We should recognize that we are all created equal, share the same inalienable rights, of which the chief among them are life, liberty, and the pursuit of happiness. Let us return to a government that protects our individual rights and liberties and fosters opportunity, but does not try to micromanage the outcome.
The Bible says, “Blessed are the peace makers,” but does that mean everyone must come to agreement, or can we sometimes just agree to disagree? And does the peace maker necessarily have to take a side to fulfill their responsibility? Is peace possible in every circumstance? Doesn’t the Bible also say that, “Steel sharpens steel.” Could it be that some level of disagreement is actually healthy for siblings and a nation?
In most cases when a sibling rivalry has gone bad, one can usually find a parent or parents who went out of their way to try to treat both siblings equally. The parents wrongly believe that equality will lead to peace. This approach almost always fails because of parental failure to recognize the individual and unique strengths and weaknesses of each child and to appreciate their diversity. The best approach parents can take with competing siblings is to ensure that each child has the opportunity and environment in which they can maximize the benefits of their unique strengths.
Viva la difference! At a dining table in Paris several years ago, one of the French guests commented to my wife that “America has no culture.” The French are intensely proud of their culture and indeed much of the world enjoys the benefits of French architecture, art, cooking, and wine. Over the past few decades, the government of France has gone to great lengths to protect that culture by outlawing the use of non-French words—how do you say iPod in French?—and more recently by banning the wearing of head dresses and veils worn mostly by Muslims.
My wife bristled at first, but then calmly stated, “That America has a very strong culture and that culture is deeply rooted in our diversity.” And it is true. Diversity is our greatest strength and Americans can be uniquely proud of how our diversity has helped this nation to become the economic and social powerhouse of the world.
Owing to its liberal immigration policies and low birth rates among the native French, France is now a much more culturally diverse country. But, unlike America, which was founded on the principle of accepting and embracing diversity, the French are fighting it all the way.
During the first 200 years, the United States of America was known as the melting pot of the world. People emigrated from every continent, religious freedom and tolerance was the norm, and in that environment, people were assimilated. Nobody needed Affirmative Action, income redistribution was not necessary, and social welfare programs did not exist. There were, however, expectations. You learned English, your loyalty was to America, and you became an active participant in our citizen-led form of government. Notice the difference? No laws outlawing the use of your native language. Nothing prohibiting you from sharing your homeland’s culture thus American cuisine includes Chinese, Italian, and Mexican, even French cooking, to name a few. Our government did not take it upon itself to equalize the different people groups; we just provided them a place to flourish and maximize their individual strengths.
America grew to be the envy of the world in it first 200 years because we stuck to the principles outlined in the Declaration of Independence. The first among these is that we cherished liberty over life itself as when Patrick Henry said, “Give me liberty or give me death!” But, then there is that principle of equality wherein the Declaration says, “…that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”
So, where did we go wrong? Why shouldn’t our parents and our government work to make sure we are all treated equally—that the playing field is leveled, so to speak? The difference is that the Declaration of Independence says we are all “created equal.” It does not say we will all become equal or are all to be equalized. What the Founding Fathers were trying to say is that we all enjoy the same inalienable rights, that we all start with the same opportunities, and that we are free—enjoying the freedom to succeed and to fail. To believe that we are all born with the same strength, mind, and heart, and therefore, we should all end up equal is the utopian delusion of egalitarianism and it just does not exist in the real world. Europeans have fixated for decades on egalitarian principles and this has led them down the path of socialism. We are now witnessing the end result of these unsustainable economic policies as European governments collapse under the burden of their national debts. How long will it be before we will wake up here in the United States?
Family dynamics are like a microcosm of our society. As parents, we would do well to recognize that trying to level the playing field for our children and micromanaging their lives to try to achieve an egalitarian outcome exacerbates sibling rivalry and often results in the break down of the family. On the macro level, forcing equality where it does not exist and manipulating the economy to achieve an egalitarian society will lead to our economic failure and the break down of our society.
Let us instead return to the principles articulated by our Founding Fathers. We should recognize that we are all created equal, share the same inalienable rights, of which the chief among them are life, liberty, and the pursuit of happiness. Let us return to a government that protects our individual rights and liberties and fosters opportunity, but does not try to micromanage the outcome.
Thursday, July 1, 2010
Chicken Little the Sky is Falling
Chicken Little is a children’s story that chronicles the tendency of humans to blow out of proportion the effect of events, or in the worst case, completely invent a disaster where none exists.
For decades now we have been told by environmentalists that we are killing the earth and each ecological disaster is described in cataclysmic terms of doom and despair. But, the historical record tells a different story and there is mounting scientific evidence of the earth’s incredible capacity for recuperation and the restoration of its ecosystems after even the most violently destructive events. Moreover, natural disasters of many varieties have demonstrated destructive powers that eclipse human-caused ecological disasters.
Take, for example, the eruption of Mt. St. Helens in Washington State on May 18, 1980. Within a three minute time span, one cubic mile of earth was blown off the side of the mountain in a pyroclastic explosion that leveled 230 square miles of old growth forest. 300 mph winds with temperatures approaching 1200 degrees melted glaciers creating volcanic debris flows called lahars that dumped as much as 400 feet of hot mud over the landscape for miles. Spirit Lake rose 200 feet in a matter of minutes and the heat depleted the entire lake of oxygen and all life in the lake died. This catastrophic event literally destroyed an entire ecosystem in a matter of minutes. Immediately, we were inundated with the reports from scientists who said the area would never be the same again and that biological recovery was unlikely within our life times.
Now, 30 years later, our scientific understanding of ecological recovery has been turned upside down. Scientist documented elk, bears, and other critters returning to Mt. St. Helens within days of the blast. On the newly formed Pumice Plain that was covered with 250 feet of 1200 degree sterile volcanic pumice, prairie lupine was found growing within weeks. This was soon followed by insects, then other plants, and soon after that, other animals. Frogs thought to only be able to live in the shade of old growth forests thrived because the tadpoles flourished in the sun-drenched ponds and lakes. Virtually, every prevailing pre-1980 theory about ecological disaster recovery was debunked by the events that took place in the Mt. St. Helens ecosystem within the first ten years following the eruption.
There are countless places in the United States that were once considered to be permanently scarred by human activities such as market hunting, grazing, mining, and timbering. Many of these places assumed to be ruined forever now actually qualify to be Congressionally designated wilderness areas “…where the earth and its community of life are untrammeled by man, where man himself is a visitor who does not remain.” (Wilderness Act of 1964)
As the Deepwater Horizon oil spill continues unabated in the Gulf of Mexico, let us consider the historic impact of oil spills on similar ecosystems. And let us also consider the fact that oil seeps naturally into the ocean and often times at amounts much greater than man-made spills. A 2009 study by the University of California at Santa Barbara concludes that natural oil seepage off the coast of Santa Barbara alone has been occurring at a rate of 20-25 tons per day for hundreds of thousands of years. There is abundant evidence that natural oil seepage into the oceans worldwide each day exceeds all the oil spilled by man.
But somehow society has been trained to think that natural disasters are okay; it is only man-caused disasters that harm the environment. The fact is that ecosystem damage or alteration is independent of the cause of the change.
I happened across a story the other day in the Washington Post (In gulf oil spill’s long reach, ecological damage could last decades, June 6, 2010) about an oil spill in Gulf of Mexico and what scientists had learned from it. What amazed me the most is that the Ixtoc 1 oil spill is the largest oil spill on record and it happened in 1979. I had never heard of it, have you? The Ixtoc 1 well was in Mexican waters in the southern Gulf of Mexico and was the result of a blowout in 150 feet of water. The Mexican national oil company, Pemex, tried to plug the well with drilling mud and then steel and lead balls. They then tried to contain the spill with a cap dubbed “The Sombrero.” Only, after 290 days of spillage, were they able to complete the drilling of a relief hole and cement in the well to stop the spill, but not until 138 million gallons of oil flowed into the gulf. According to InfoPlease.com, “Although it is one of the largest known oil spills, it had a low environmental impact.”
The Washington Post story went on to say, “Ecosystems can survive and eventually recover from very large oil spills, even ones that are Ixtoc-sized. In most spills, the volatile compounds evaporate. The sun breaks down others. Some compounds are dissolved in water. Microbes consume the simpler, "straight chain" hydrocarbons -- and the warmer it is, the more they eat. The gulf spill has climate in its favor. Scientists agree: Horrible as the spill may be, it's not going to turn the Gulf of Mexico into another Dead Sea.”
Clearly, the Deepwater Horizon spill will significantly alter the ecosystem and damage some life forms and life styles for decades to come. Other critters will only be impacted for the short term. More importantly, we have learned from historical spills and clean up efforts. We know that the marshes of Louisiana are much more sensitive to damage from oil than beaches. We also know that after the Cadiz spill off the coast of France in 1978, it was a mistake to scrape off the oil infested top of the marches. They never recovered. As the Post article says of the Louisiana marshes, “Although many scientists and officials have warned that the marshes are in danger, one scientist who has studied oil spills in Louisiana marshes said that these wetlands are generally able to recover if human intervention doesn't make the situation worse.”
Americans are not a patient lot and we tend to worry most about only those things that affect us directly. The Ixtoc 1 disaster did not affect us; the Deepwater Horizon spill does impact us. The similarities between the two events from a technological and ecological stand point are striking. And, there is much to be learned from that experience and others. If we take a longer view of the event, maybe we can all agree that much work remains to be done, but the sky is not falling.
For decades now we have been told by environmentalists that we are killing the earth and each ecological disaster is described in cataclysmic terms of doom and despair. But, the historical record tells a different story and there is mounting scientific evidence of the earth’s incredible capacity for recuperation and the restoration of its ecosystems after even the most violently destructive events. Moreover, natural disasters of many varieties have demonstrated destructive powers that eclipse human-caused ecological disasters.
Take, for example, the eruption of Mt. St. Helens in Washington State on May 18, 1980. Within a three minute time span, one cubic mile of earth was blown off the side of the mountain in a pyroclastic explosion that leveled 230 square miles of old growth forest. 300 mph winds with temperatures approaching 1200 degrees melted glaciers creating volcanic debris flows called lahars that dumped as much as 400 feet of hot mud over the landscape for miles. Spirit Lake rose 200 feet in a matter of minutes and the heat depleted the entire lake of oxygen and all life in the lake died. This catastrophic event literally destroyed an entire ecosystem in a matter of minutes. Immediately, we were inundated with the reports from scientists who said the area would never be the same again and that biological recovery was unlikely within our life times.
Now, 30 years later, our scientific understanding of ecological recovery has been turned upside down. Scientist documented elk, bears, and other critters returning to Mt. St. Helens within days of the blast. On the newly formed Pumice Plain that was covered with 250 feet of 1200 degree sterile volcanic pumice, prairie lupine was found growing within weeks. This was soon followed by insects, then other plants, and soon after that, other animals. Frogs thought to only be able to live in the shade of old growth forests thrived because the tadpoles flourished in the sun-drenched ponds and lakes. Virtually, every prevailing pre-1980 theory about ecological disaster recovery was debunked by the events that took place in the Mt. St. Helens ecosystem within the first ten years following the eruption.
There are countless places in the United States that were once considered to be permanently scarred by human activities such as market hunting, grazing, mining, and timbering. Many of these places assumed to be ruined forever now actually qualify to be Congressionally designated wilderness areas “…where the earth and its community of life are untrammeled by man, where man himself is a visitor who does not remain.” (Wilderness Act of 1964)
As the Deepwater Horizon oil spill continues unabated in the Gulf of Mexico, let us consider the historic impact of oil spills on similar ecosystems. And let us also consider the fact that oil seeps naturally into the ocean and often times at amounts much greater than man-made spills. A 2009 study by the University of California at Santa Barbara concludes that natural oil seepage off the coast of Santa Barbara alone has been occurring at a rate of 20-25 tons per day for hundreds of thousands of years. There is abundant evidence that natural oil seepage into the oceans worldwide each day exceeds all the oil spilled by man.
But somehow society has been trained to think that natural disasters are okay; it is only man-caused disasters that harm the environment. The fact is that ecosystem damage or alteration is independent of the cause of the change.
I happened across a story the other day in the Washington Post (In gulf oil spill’s long reach, ecological damage could last decades, June 6, 2010) about an oil spill in Gulf of Mexico and what scientists had learned from it. What amazed me the most is that the Ixtoc 1 oil spill is the largest oil spill on record and it happened in 1979. I had never heard of it, have you? The Ixtoc 1 well was in Mexican waters in the southern Gulf of Mexico and was the result of a blowout in 150 feet of water. The Mexican national oil company, Pemex, tried to plug the well with drilling mud and then steel and lead balls. They then tried to contain the spill with a cap dubbed “The Sombrero.” Only, after 290 days of spillage, were they able to complete the drilling of a relief hole and cement in the well to stop the spill, but not until 138 million gallons of oil flowed into the gulf. According to InfoPlease.com, “Although it is one of the largest known oil spills, it had a low environmental impact.”
The Washington Post story went on to say, “Ecosystems can survive and eventually recover from very large oil spills, even ones that are Ixtoc-sized. In most spills, the volatile compounds evaporate. The sun breaks down others. Some compounds are dissolved in water. Microbes consume the simpler, "straight chain" hydrocarbons -- and the warmer it is, the more they eat. The gulf spill has climate in its favor. Scientists agree: Horrible as the spill may be, it's not going to turn the Gulf of Mexico into another Dead Sea.”
Clearly, the Deepwater Horizon spill will significantly alter the ecosystem and damage some life forms and life styles for decades to come. Other critters will only be impacted for the short term. More importantly, we have learned from historical spills and clean up efforts. We know that the marshes of Louisiana are much more sensitive to damage from oil than beaches. We also know that after the Cadiz spill off the coast of France in 1978, it was a mistake to scrape off the oil infested top of the marches. They never recovered. As the Post article says of the Louisiana marshes, “Although many scientists and officials have warned that the marshes are in danger, one scientist who has studied oil spills in Louisiana marshes said that these wetlands are generally able to recover if human intervention doesn't make the situation worse.”
Americans are not a patient lot and we tend to worry most about only those things that affect us directly. The Ixtoc 1 disaster did not affect us; the Deepwater Horizon spill does impact us. The similarities between the two events from a technological and ecological stand point are striking. And, there is much to be learned from that experience and others. If we take a longer view of the event, maybe we can all agree that much work remains to be done, but the sky is not falling.
Saturday, June 19, 2010
It's Just a Horrible Accident
It is about day 60 since the horrific explosion of the Deepwater Horizon Drilling Rig that killed 11 people and will probably result in the largest oil spill in the history of man’s exploration and production of oil and gas. It is a tragic and horrible accident. The loss of human life, the survivor’s remorse, those who will forever be reliving that accident and wondering what went wrong and how they could have prevented it, and the impact on the environment that will be played out over the ensuing decades—these are all the horrific outcomes of a tragic accident.
But all of that will most likely be eclipsed by the self flagellation that America will put itself through in the form of investigations, special commissions, second guessing, prosecutions, new laws and rulemaking, and lost opportunity that comes from overreacting to what in the final analysis is just a horrible accident. We have a history of doing this to ourselves in the wake of accidents. It can be described in six distinct phases of almost any given project: 1) Enthusiasm, 2) Disillusionment, 3) Panic, 4) Search for the Guilty, 5) Punish the Innocent, and 6) Praise for the Uninvolved.
Prior to the explosion that occurred on April 20, President Obama showed enthusiasm as he announced plans to expand offshore oil and gas leasing for a number of good and sound reasons. There is tremendous potential to develop domestic oil and gas supplies offshore as improved technology has proven the existence of huge oil and gas reserves under the ocean floor and our offshore oil and gas exploration and development industry has a sterling record of safety and environmental responsibility. Consider that when Hurricane Katrina went right through the heart of the Gulf of Mexico’s offshore drilling region in 2005, all the drilling rigs and production platforms were successfully shut down. Even though some platforms were wrecked beyond belief and blown ashore, nobody was hurt, the spillage was nominal, and full production was back online in a matter of months. Secretary of the Interior Ken Salazar testified before Congress a few weeks ago that the United States had successfully drilled and developed more than 36,000 offshore wells without a serious incident or spill up until the Deepwater Horizon accident.
Then came the disillusionment. A huge explosion rocked the rig. Lives were lost. The ensuing fire and efforts to put it out in an attempt to save the lives of those men who were missing at the time resulted in the floating rig sinking which collapsed the drill stem and broke it near the bottom of the ocean 5,000 feet below the surface. The blowout preventer—a device used on all drilling rigs to prevent accidental spills after the 1969 Santa Barbara oil spill—failed either as a result of human error or the shear magnitude of the pressure produced by this gusher.
We are still in the panic phase. How do you cap a blowout that is 5,000 feet under water when the rig that can handle the equipment is lying on the ocean bottom nearby? In typical American fashion we oversimplify or ignore the physics and engineering challenges. We argue about how much oil is actually flowing out of the hole as though that really matters. And even though the oil industry standard for volume measurement has always been the Barrel, we estimate the spill in gallons which makes the number much bigger and adds to level public panic and media hyperbole. Tourism in the Gulf Coast region is almost none existent this year because the public believes the oil is ankle deep from Texas to Florida, even though most of the oil is still offshore at this time.
Of course, since a quick and easy fix did not present itself and this disaster now has the potential to play out all the way into September, political expediency requires us to jump right to the search-for-the-guilty and punishment-of-the-innocent phases.
There is and should be culpability and accountability for this accident. The measured and appropriate punishment is the means by which society corrects wrong or inappropriate behaviors that may lead to accidents. This is the natural course of action for us to follow. Personally, I believe BP to be that guilty party and they have already owned up to this by their unflinching commitment to stop the leak, clean up the mess, and keep whole those impacted by this disaster. However, it is not lost on me that British Petroleum has for about a decade tried to market themselves as Beyond Petroleum. Despite the fact that oil and gas exploration, development, refining, and retail sales makes up the vast majority of their business portfolio, they have been spending millions of dollars trying to convince us all that they are “green.” If you look into their history, I suspect you will find that BP does not have the best track record of safety and maintenance practices and a higher than industry average of accidents and spills.
In the world of government we always rush to punish the innocent. In Washington, DC, this usually takes the form of “throwing someone under the bus.” The President is the Chief Executive, but the spill is not his fault. The Secretary of the Interior is in charge of the Minerals Management Service (MMS) which is the office responsible for selling oil and gas leases, collecting the royalties, and enforcing safety on offshore rigs. But, Ken Salazar is not to blame. In an ah-hah moment, Salazar visits the Director of the MMS, and like a good loyal political appointee, she throws herself under the bus. But, it does not stop there. An old Inspector General Report that reveled that sex and drugs were corrupting a few MMS employees in the Lakewood, CO, office suddenly becomes news again. I do not support corrupt behavior, but corruption by sex and drugs is hardly a novelty in America today. I dare say, and the annual reports of Inspector Generals across government support this, that you can find a corrupt employee in every single federal agency. It is true of the private sector, too. However, to suggest that the people cited in the report somehow were the cause of this accident is ludicrous.
I happen to have worked with many of the top managers at the Minerals Management Service and I personally know them to be honest, hard working, smart, and highly motivated to do the best possible job they can. This is one of the smallest of federal agencies, yet through their work selling oil and gas leases and collecting federal mineral royalties, they are responsible for the second largest source of revenue to the United States Treasury. In recent years they have collected as much as $16 billion a year, second only to the Income Tax in total revenue. There are, as in any organization, a few bad apples and they should be and have been punished. But, let us not, in our zeal to punish the innocent, throw the whole agency under the bus.
Many people who have no direct association with this accident or its mitigation will soon rush to try to fix the problem which will lead to praise for the uninvolved. Let me again suggest that this oil spill is the result of a horrible accident. Horrible accidents happen every day. In excess of 40,000 people die as a result of car crashes every year, but automobiles have not been outlawed and automobile use and safety has increased. From time to time an airplane crashes sometimes killing hundreds of innocent people, but we still fly in record numbers every year and flying on a commercial airline is one of the safest modes of travel we can use. People die daily in hospitals sometimes due to human error, but we don’t close down the hospitals or imprison the doctor who makes an unfortunate, but honest mistake. Let us learn from this tragic accident in the Gulf of Mexico, let us work together to mitigate this environmental disaster, let us hold accountable those responsible, but please, please, let us not stop exploring for and developing domestic supplies of oil and gas. We are the most environmentally responsible nation in the world and our track record, even with this accident, is excellent. And like it or not, we need reliable domestic supplies of oil and gas to sustain our economy, quality of life, and to get us through to the next generation of energy sources.
But all of that will most likely be eclipsed by the self flagellation that America will put itself through in the form of investigations, special commissions, second guessing, prosecutions, new laws and rulemaking, and lost opportunity that comes from overreacting to what in the final analysis is just a horrible accident. We have a history of doing this to ourselves in the wake of accidents. It can be described in six distinct phases of almost any given project: 1) Enthusiasm, 2) Disillusionment, 3) Panic, 4) Search for the Guilty, 5) Punish the Innocent, and 6) Praise for the Uninvolved.
Prior to the explosion that occurred on April 20, President Obama showed enthusiasm as he announced plans to expand offshore oil and gas leasing for a number of good and sound reasons. There is tremendous potential to develop domestic oil and gas supplies offshore as improved technology has proven the existence of huge oil and gas reserves under the ocean floor and our offshore oil and gas exploration and development industry has a sterling record of safety and environmental responsibility. Consider that when Hurricane Katrina went right through the heart of the Gulf of Mexico’s offshore drilling region in 2005, all the drilling rigs and production platforms were successfully shut down. Even though some platforms were wrecked beyond belief and blown ashore, nobody was hurt, the spillage was nominal, and full production was back online in a matter of months. Secretary of the Interior Ken Salazar testified before Congress a few weeks ago that the United States had successfully drilled and developed more than 36,000 offshore wells without a serious incident or spill up until the Deepwater Horizon accident.
Then came the disillusionment. A huge explosion rocked the rig. Lives were lost. The ensuing fire and efforts to put it out in an attempt to save the lives of those men who were missing at the time resulted in the floating rig sinking which collapsed the drill stem and broke it near the bottom of the ocean 5,000 feet below the surface. The blowout preventer—a device used on all drilling rigs to prevent accidental spills after the 1969 Santa Barbara oil spill—failed either as a result of human error or the shear magnitude of the pressure produced by this gusher.
We are still in the panic phase. How do you cap a blowout that is 5,000 feet under water when the rig that can handle the equipment is lying on the ocean bottom nearby? In typical American fashion we oversimplify or ignore the physics and engineering challenges. We argue about how much oil is actually flowing out of the hole as though that really matters. And even though the oil industry standard for volume measurement has always been the Barrel, we estimate the spill in gallons which makes the number much bigger and adds to level public panic and media hyperbole. Tourism in the Gulf Coast region is almost none existent this year because the public believes the oil is ankle deep from Texas to Florida, even though most of the oil is still offshore at this time.
Of course, since a quick and easy fix did not present itself and this disaster now has the potential to play out all the way into September, political expediency requires us to jump right to the search-for-the-guilty and punishment-of-the-innocent phases.
There is and should be culpability and accountability for this accident. The measured and appropriate punishment is the means by which society corrects wrong or inappropriate behaviors that may lead to accidents. This is the natural course of action for us to follow. Personally, I believe BP to be that guilty party and they have already owned up to this by their unflinching commitment to stop the leak, clean up the mess, and keep whole those impacted by this disaster. However, it is not lost on me that British Petroleum has for about a decade tried to market themselves as Beyond Petroleum. Despite the fact that oil and gas exploration, development, refining, and retail sales makes up the vast majority of their business portfolio, they have been spending millions of dollars trying to convince us all that they are “green.” If you look into their history, I suspect you will find that BP does not have the best track record of safety and maintenance practices and a higher than industry average of accidents and spills.
In the world of government we always rush to punish the innocent. In Washington, DC, this usually takes the form of “throwing someone under the bus.” The President is the Chief Executive, but the spill is not his fault. The Secretary of the Interior is in charge of the Minerals Management Service (MMS) which is the office responsible for selling oil and gas leases, collecting the royalties, and enforcing safety on offshore rigs. But, Ken Salazar is not to blame. In an ah-hah moment, Salazar visits the Director of the MMS, and like a good loyal political appointee, she throws herself under the bus. But, it does not stop there. An old Inspector General Report that reveled that sex and drugs were corrupting a few MMS employees in the Lakewood, CO, office suddenly becomes news again. I do not support corrupt behavior, but corruption by sex and drugs is hardly a novelty in America today. I dare say, and the annual reports of Inspector Generals across government support this, that you can find a corrupt employee in every single federal agency. It is true of the private sector, too. However, to suggest that the people cited in the report somehow were the cause of this accident is ludicrous.
I happen to have worked with many of the top managers at the Minerals Management Service and I personally know them to be honest, hard working, smart, and highly motivated to do the best possible job they can. This is one of the smallest of federal agencies, yet through their work selling oil and gas leases and collecting federal mineral royalties, they are responsible for the second largest source of revenue to the United States Treasury. In recent years they have collected as much as $16 billion a year, second only to the Income Tax in total revenue. There are, as in any organization, a few bad apples and they should be and have been punished. But, let us not, in our zeal to punish the innocent, throw the whole agency under the bus.
Many people who have no direct association with this accident or its mitigation will soon rush to try to fix the problem which will lead to praise for the uninvolved. Let me again suggest that this oil spill is the result of a horrible accident. Horrible accidents happen every day. In excess of 40,000 people die as a result of car crashes every year, but automobiles have not been outlawed and automobile use and safety has increased. From time to time an airplane crashes sometimes killing hundreds of innocent people, but we still fly in record numbers every year and flying on a commercial airline is one of the safest modes of travel we can use. People die daily in hospitals sometimes due to human error, but we don’t close down the hospitals or imprison the doctor who makes an unfortunate, but honest mistake. Let us learn from this tragic accident in the Gulf of Mexico, let us work together to mitigate this environmental disaster, let us hold accountable those responsible, but please, please, let us not stop exploring for and developing domestic supplies of oil and gas. We are the most environmentally responsible nation in the world and our track record, even with this accident, is excellent. And like it or not, we need reliable domestic supplies of oil and gas to sustain our economy, quality of life, and to get us through to the next generation of energy sources.
Friday, June 4, 2010
Let My Species Go
“Let my people go!” uttered Charleton Heston in Cecille B. Demille’s classic, The Ten Commandments. It is one of his most famous lines. Today, the Endangered Species Act—a well-intentioned law hijacked by environmentalists—has many fish and wildlife professionals crying out, “Let my species go!”
Recalling the Biblical account from Genesis and Exodus, the Israelites went to Egypt because a severe drought in the Promised Land threatened the very survival of God’s chosen people. Joseph, the son of Jacob who was sold into slavery in Egypt by his jealous brothers, had interpreted Pharaoh’s dream that foretold the drought and so Egypt had set aside grain for the seven years of famine. Thus, Joseph was able to save his father, brothers, and all the rest of the Israelites from extinction.
But all did not end well for the Israelites who sought refuge in Egypt. Oh, they prospered in the Land of Goshen and in time they numbered in the hundreds of thousands. But, subsequent Pharaohs were not as benevolent as the one for whom Joseph worked. The Israelites were put into slavery making the bricks for Pharaoh’s pyramids and elaborate tombs. God sent Moses to lead the Israelites out of Egypt. Pharaoh was hard hearted, and even after Moses performed nine miracles, he would not release the Israelites until the tenth miracle took the life of Pharaoh’s own first-born son. Finally, the Israelites, who fled to Egypt to prevent their own extinction 400 years earlier, were free to leave.
We have set up a new kind of Egypt right here in the United States which is supposed to prevent the extinction of species that are threatened or endangered. Species that are in peril because of types of drought or famine are sent to a kind of Land of Goshen for recovery only to later find that they are being held captive by Pharaoh-like environmentalists who want to enslave the species to do their bidding.
Passed by Congress in 1973, the Endangered Species Act is supposed to identify species that are faced with extinction in the foreseeable future because of loss of habitat, excessive harvesting, disease or predation, inadequate regulations, or other manmade factors. Species added to one of two possible lists, threatened or endangered, receive federal protection until such time as the species is considered to be recovered and no longer warrants protection.
The goals of the Endangered Species Act are laudable enough. Humans should—indeed we are the only species that can—take steps to ensure that our actions do not unnecessarily or inadvertently cause the extinction of other species. The problem is that we have successfully identified and listed nearly 1,400 species of animals and plants in United States, but we have removed fewer than 50 species from the same list. Only 21 of those species removed from the list are identified as recovered, nine of the species are extinct, and the rest were removed because they were originally listed because of a data error.
Suppose you operate a hospital and 1,400 people have walked through the doors since you started taking patients 37 years ago. During same that time period, about 20 checked out because they were there by mistake, nine died, and 21 were cured and sent home. The rest—a staggering 1,350 people—are still in that hospital. No matter how well they feel, no matter how cured they are, and without regard to the doctors saying they should be released, these 1,350 patients are being held captive in that hospital.
There are a number of reasons why the Endangered Species Act has so struggled in achieving its fundamental purposes of protecting and recovering species.
For one thing, environmental groups have learned that the Endangered Species Act can be used to stop virtually any kind of project or activity that they do not like. The law has become a de facto form of federal control of land use that can significantly impact the use and development of private land as well as lawful private sector activities and uses of public lands and resources. It works like this. There is a proposed development in your community that a group of people do not like. They hire a biologist to find an existing threatened or endangered species on that land, or absent the presence of a listed species, find a new sub-species that is so unique as to warrant listing, and petition to have that new species listed as threatened or endangered. Suddenly, what was once a private sector decision, regulated only by local city or county land use planning, is elevated and becomes a proverbial federal case.
Another problem is the law is written in such a way that environmental lawyers can easily sue the government and win in court. For instance, a petition to list a species as threatened or endangered must be reviewed and determined whether it warrants further analysis within 90 days. If the agency is one day late, they have violated the law and any judge will likely rule against the government. A final decision on a listing petition is due within 12 months, and again, one-day late is a violation of the law. Another matter of law equally well understood by environmental lawyers is that if you sue the federal government and win, the government must pay all reasonable attorney fees and costs. The end result is many environmental groups are nothing more than environmental law shops that are self funded by taxpayer dollars. The environmentalists flood the pipeline with petitions to list species, the government gets further behind, there are more lawsuits, more money going to environmental groups, and the cycle continues. Most importantly, the agencies are overwhelmed which results in courts and judges making decisions about species recovery instead of science-based management being conducted by fish and wildlife professionals. Another outcome is limited federal resources, which could be used for species conservation and recovery, are wasted on litigation.
Adding to the challenges, certain threatened or endangered species are considered to be charismatic mega-fauna. These are the grizzly bears, wolves, whales, bald eagles, etc. that environmentalists exploit as pawns in their fundraising juggernauts. Who would not want to protect polar bears, or penguins, or sea otters? Especially with Hollywood helping out with movies such as Free Willy, or Happy Feet, or An Arctic Tale. The reality is that the bulk of the protected species are plants and among the animals on these lists are a number of spiders and insects.
The science is not conclusive either. Biologists are nearly equally split into two camps—the lumpers and the splitters. Splitters believe that the slightest morphological difference between a species justifies designating it as a sub-species. These sub-species are immediately classified as rare because they have limited geographic distribution and smaller populations and they, therefore, become instant candidates for listing. If you applied the same standard of morphological differences to human beings, one could easily imagine every single person out there as a distinct sub-species because of observed differences in the size of heads, shapes of noses, colors of skin, differences in ear configurations, hair color, etc. The biologists in the lumpers’ camp would say most humans have two eyes, one nose, one mouth and two ears and are therefore part of the broader human race.
The Endangered Species Act has become a sacred cow. Much like the Social Security system, even though it is broken, no one dares to try to fix it. This is indeed unfortunate because the current law is not achieving the desired outcome and instead results in species being keep in a bureaucratic bondage much like the Israelites were enslaved in Egypt. What we need is Moses-like Senators and Representatives who will emphatically demand that the Pharaoh-like environmental groups, “Let my species go!”
Recalling the Biblical account from Genesis and Exodus, the Israelites went to Egypt because a severe drought in the Promised Land threatened the very survival of God’s chosen people. Joseph, the son of Jacob who was sold into slavery in Egypt by his jealous brothers, had interpreted Pharaoh’s dream that foretold the drought and so Egypt had set aside grain for the seven years of famine. Thus, Joseph was able to save his father, brothers, and all the rest of the Israelites from extinction.
But all did not end well for the Israelites who sought refuge in Egypt. Oh, they prospered in the Land of Goshen and in time they numbered in the hundreds of thousands. But, subsequent Pharaohs were not as benevolent as the one for whom Joseph worked. The Israelites were put into slavery making the bricks for Pharaoh’s pyramids and elaborate tombs. God sent Moses to lead the Israelites out of Egypt. Pharaoh was hard hearted, and even after Moses performed nine miracles, he would not release the Israelites until the tenth miracle took the life of Pharaoh’s own first-born son. Finally, the Israelites, who fled to Egypt to prevent their own extinction 400 years earlier, were free to leave.
We have set up a new kind of Egypt right here in the United States which is supposed to prevent the extinction of species that are threatened or endangered. Species that are in peril because of types of drought or famine are sent to a kind of Land of Goshen for recovery only to later find that they are being held captive by Pharaoh-like environmentalists who want to enslave the species to do their bidding.
Passed by Congress in 1973, the Endangered Species Act is supposed to identify species that are faced with extinction in the foreseeable future because of loss of habitat, excessive harvesting, disease or predation, inadequate regulations, or other manmade factors. Species added to one of two possible lists, threatened or endangered, receive federal protection until such time as the species is considered to be recovered and no longer warrants protection.
The goals of the Endangered Species Act are laudable enough. Humans should—indeed we are the only species that can—take steps to ensure that our actions do not unnecessarily or inadvertently cause the extinction of other species. The problem is that we have successfully identified and listed nearly 1,400 species of animals and plants in United States, but we have removed fewer than 50 species from the same list. Only 21 of those species removed from the list are identified as recovered, nine of the species are extinct, and the rest were removed because they were originally listed because of a data error.
Suppose you operate a hospital and 1,400 people have walked through the doors since you started taking patients 37 years ago. During same that time period, about 20 checked out because they were there by mistake, nine died, and 21 were cured and sent home. The rest—a staggering 1,350 people—are still in that hospital. No matter how well they feel, no matter how cured they are, and without regard to the doctors saying they should be released, these 1,350 patients are being held captive in that hospital.
There are a number of reasons why the Endangered Species Act has so struggled in achieving its fundamental purposes of protecting and recovering species.
For one thing, environmental groups have learned that the Endangered Species Act can be used to stop virtually any kind of project or activity that they do not like. The law has become a de facto form of federal control of land use that can significantly impact the use and development of private land as well as lawful private sector activities and uses of public lands and resources. It works like this. There is a proposed development in your community that a group of people do not like. They hire a biologist to find an existing threatened or endangered species on that land, or absent the presence of a listed species, find a new sub-species that is so unique as to warrant listing, and petition to have that new species listed as threatened or endangered. Suddenly, what was once a private sector decision, regulated only by local city or county land use planning, is elevated and becomes a proverbial federal case.
Another problem is the law is written in such a way that environmental lawyers can easily sue the government and win in court. For instance, a petition to list a species as threatened or endangered must be reviewed and determined whether it warrants further analysis within 90 days. If the agency is one day late, they have violated the law and any judge will likely rule against the government. A final decision on a listing petition is due within 12 months, and again, one-day late is a violation of the law. Another matter of law equally well understood by environmental lawyers is that if you sue the federal government and win, the government must pay all reasonable attorney fees and costs. The end result is many environmental groups are nothing more than environmental law shops that are self funded by taxpayer dollars. The environmentalists flood the pipeline with petitions to list species, the government gets further behind, there are more lawsuits, more money going to environmental groups, and the cycle continues. Most importantly, the agencies are overwhelmed which results in courts and judges making decisions about species recovery instead of science-based management being conducted by fish and wildlife professionals. Another outcome is limited federal resources, which could be used for species conservation and recovery, are wasted on litigation.
Adding to the challenges, certain threatened or endangered species are considered to be charismatic mega-fauna. These are the grizzly bears, wolves, whales, bald eagles, etc. that environmentalists exploit as pawns in their fundraising juggernauts. Who would not want to protect polar bears, or penguins, or sea otters? Especially with Hollywood helping out with movies such as Free Willy, or Happy Feet, or An Arctic Tale. The reality is that the bulk of the protected species are plants and among the animals on these lists are a number of spiders and insects.
The science is not conclusive either. Biologists are nearly equally split into two camps—the lumpers and the splitters. Splitters believe that the slightest morphological difference between a species justifies designating it as a sub-species. These sub-species are immediately classified as rare because they have limited geographic distribution and smaller populations and they, therefore, become instant candidates for listing. If you applied the same standard of morphological differences to human beings, one could easily imagine every single person out there as a distinct sub-species because of observed differences in the size of heads, shapes of noses, colors of skin, differences in ear configurations, hair color, etc. The biologists in the lumpers’ camp would say most humans have two eyes, one nose, one mouth and two ears and are therefore part of the broader human race.
The Endangered Species Act has become a sacred cow. Much like the Social Security system, even though it is broken, no one dares to try to fix it. This is indeed unfortunate because the current law is not achieving the desired outcome and instead results in species being keep in a bureaucratic bondage much like the Israelites were enslaved in Egypt. What we need is Moses-like Senators and Representatives who will emphatically demand that the Pharaoh-like environmental groups, “Let my species go!”
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