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Swarms at the trough

The once-in-a-generation opportunity to repair and rebuild infrastructure across the country is also a once-in-a-not-soon-enough siren call to private equity to interrupt, disrupt and corrupt:

Legislation with the size and scope of the $4 trillion “Build Back Better” agenda is like a Bat-Signal for lobbyists, urging them to swarm Capitol Hill without delay. Literally thousands of companies, organizations, and trade groups have lobbied on one or more of the bills in this package. But one industry’s representatives keep showing up over and over again, whether in formal lobbying sessions in Congress or more informal meetings: private equity.

“At every point, private equity lines up at the trough,” said one observer close to the discussions. “There’s just somebody in every fucking meeting.”

Private equity lobbyists have multiple interests in the bills being discussed. They obviously want to keep any tax increases away from their industries, and successfully fought to keep tax hikes out of the $550 billion bipartisan infrastructure bill, which is slated for a House vote on September 27. Those tax hikes got shifted to the reconciliation package known in Washington as the Build Back Better Act, and private equity has kept up the pressure there.

But the industry has another reason to be involved in the reconciliation bill. The blueprint includes hundreds of billions of dollars in investments to expand home and community-based services for elderly and disabled people under Medicaid (initially set at $400 billion over ten years), and to provide subsidies for high-quality child care programs (set at $225 billion). Private equity happens to be deeply invested in both of these industries, with dozens of home care and child care companies in their portfolios.

So, people should just be aware. Like accounting gimmicks from the political opposition and in the media that will make $3.5T over ten years sound like too much in an +$20T per year country (narrator: it’s Not), also be advised about all the beaks dipping toward the puddle as it gets sliced and diced. Let’s not get distracted about who is doing what – or why they might be whining about it.

Like we say, a country that can drop a small SUV on Mars from a helicopter and watch it drive around in real time can afford to fix any problem – except where stupidity and corruption won’t allow it.

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Fixing it

Notwithstanding the [late] reckoning with our very own special coup, the one we think we dodged and the very one over which Our Media is fascinated by exactly all the wrong details; the battle between Chicago and lake Michigan; and the new Gilded Age space flights for plutocrat tourists, the economy seems to have magically withstood a pandemic (Narrator: It’s not magic):

Initial unemployment claims came in at 360,000 for the week ending July 10, below the previous week’s revised read of 386,000. That reading matched the consensus forecast among economists, according to Bloomberg.

The decline in the seasonally adjusted number resumes the overall downward trend of the volatile data series after an unexpected rise in initial claims last week. The Labor Department noted that this marks a new pandemic-era low.

While the number of Americans newly filing for unemployment benefits tends to bounce around from week to week, it’s been on a general downward trend after spiking to record-shattering numbers amid the early days of the pandemic last spring. The return to that downward trend matches other data suggesting a steadily recovering labor market.

360K is still a very many lot of people, and yet you ask: after years of making sure our billionaires had enough nest eggs to color-coordinate their space suits, how was it possible to get through a year of very limited economic activity and still be able browse and sniff at the want ads and generally avoid most of the fascist tendencies on offer? Give. People. Money.

CARES and PPP run themselves out by design, which is helping people stay afloat. This is why we’re longing for vacations instead of standing in breadlines. And the infrastructure bill will bring more of this – not gifts and not luxuries – but investments in people and how we live, with recommendations for new arrangements for different needs that WE have made absolutely necessary (see Chicago example above and read the history). Move the monuments. Buy the trains. Pay the carpenters, or become one. As legend has it, the profession has a storied past.

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Self-driving boats

Since he began scamming promising people – buyers and not just buyers, but BUYERS – that full self-driving would be available in six months (2016), Elon Musk has played a vital role in one of our great national pursuits. Yes, separating people from their money. But normalizing electric cars, even with the side auto-taxi fraud, is to be lauded. Tesla definitely got the other car makers to get some skin in the game.

There are and long have been many obvious reasons behind the difficulty of self-driving cars that Musk is now copping to, but again the Overton window has been effectively shifted. Quiet electric vehicles are turning up all over the place – on land, on sea, even in the fjords:

But they’ve already made Norway the most electrified shipping nation in the world, thanks to an aggressive government push to cut maritime emissions. The country is home to almost three-quarters of the 274 vessels globally that run at least partly on batteries, according to a state advisory body. Its fleet of 31 fully-electric car ferries is expected to nearly double by the end of the year, says the Green Shipping Programme, a public-private partnership that supports the transition. Even the sightseeing ferries that cruise Norway’s famous fjords are transitioning to battery power.

On a Saturday morning in Stavanger, along Norway’s west coast, a new ferry, the Rygerelektra, is in the harbor preparing for a tour of some nearby fjords. Measuring 42 meters long with seating capacity of nearly 300, the ferry, is owned and operated by Rødne Fjord Cruises. It is among a group of vessels from several of Norway’s leading maritime companies that are driving a shift towards zero-emissions fleet and supporting Norway’s ambitious economic reinvention away from oil and gas to alternative energy source.

They acknowledge the challenges of large-scale fleet charging, though promising technology already exists. And then, they can’t resist the temptation:

“In Norway, we need to transition from oil exports to sustainable products and services, while still utilizing the competence we have gained from the oil industry, says Pia Meling, vice president of sales and marketing at Massterly, the autonomous shipping company. “We would like to compete on the renewables and in clean shipping in particular.” Massterly’s vision is one of zero-emission, autonomous vessels moving everything from passengers around Norway to containers across oceans.

Emphasis added because I guess they can’t help it. But really, who knows where the over-promise of auto-taxis might lead? Self-driving boats are certainly more possible, if not theoretically easier – at least until you get to a crowded harbor. But hey, in the open water? Sure. In six months, we’ll be…

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Clean up on Line 3

Because Line 3 is a crude oil pipeline, and pipelines leak because that’s what they do. McKibben, via LGM:

It’s easy to forget now how unlikely the Keystone fight really was. Indigenous activists and Midwest ranchers along the pipeline route kicked off the opposition. When it went national, 10 years ago this summer, with mass arrests outside the White House, pundits scoffed. More than 90 percent of Capitol Hill “insiders” polled by The National Journal said the company would get its permit.

But the more than 1,200 people who were arrested in that protest helped galvanize a nationwide — even worldwide — movement that placed President Barack Obama under unrelenting pressure. Within a few months he’d paused the approval process, and in 2015 he killed the pipeline, deciding that it didn’t meet his climate test.

“America’s now a global leader when it comes to taking serious action to fight climate change,” Mr. Obama said. “And frankly, approving this project would have undercut that global leadership. And that’s the biggest risk we face — not acting.”

And that’s what puts the Biden administration in an impossible place now. Enbridge wants to replace Line 3, which runs from Canada’s tar sands deposits in Alberta across Minnesota to Superior, Wis., with a pipeline that follows a new route and would carry twice as much crude. It would carry almost as much of the same heavy crude oil as planned for the Keystone XL pipeline — crude that is among the most carbon-heavy petroleum on the planet.

An environmental cause that is really an economic question. The slim chance of recouping the cost of building the pipeline before crude oil usage decline makes it no longer viable builds a strong case against pipeline, maybe even stronger than it leaking – which it WILL do, because…
Not easy, but becoming more clear as the science gets tangled with economics, in a good way!

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Price v. Tax

Interesting quibble over terminology, or linguistic obfuscation designed to soothe child-like sensibilities? Why not both?

Nordhaus: We have set the bar for our aspirations so high. Aiming for net-zero carbon emissions by the middle of the century is a very ambitious target.
In my own mind there is a twin set of policies. One is carbon pricing and one is strong support for low-carbon technologies. Both are necessary if we’re going to reach our goals. Carbon pricing by itself is not sufficient. By itself, it won’t bring forth the necessary technologies. Carbon pricing needs the helping hand of government support of new low-carbon technologies.
The analogue here is the covid vaccines. The private sector has incentives of the patent system to make vaccines profitable for pharmaceutical companies. But we went beyond that with the pre-purchase agreements to make sure a strong market was there and guaranteed in advance; this backstop would help these companies make back their investment. It is an unusual way to structure incentives, but it worked amazingly well.

So good so far, to acknowledge ambition alongside calculation, expediency, and urgency risks encouraging cynicism about solutions, aka bedtime stories in a land right here, right now. But great point about vaccines, and of course one of the tools is framing, whether we like having to tell ourselves certain fictions or not. See also, vaccines.

We can use this to think about climate change policies. We can use similar tools to improve our low-carbon technologies.
Mufson: And one of those tools is the carbon tax?
Nordhaus: I think we should use the word “price” rather than “tax.”
Mufson: That sounds better.
Nordhaus: This is not just a matter of rhetoric. It is fundamental. What we really want to do is raise the price of carbon emissions. If you can get it up to $100 a ton, you’re doing a good job. It doesn’t matter whether you do that through a tax or a cap-and-trade system. Canada has a carbon tax. Europe uses cap-and-trade. Others have mixed regimes. Different ones will work better in different environments.
I think it’s true that the U.S. is sort of stuck somewhere in the 18th century, maybe 19th century, on taxes. The rest of the world is moving ahead and we’re sitting here on an island of fiscal denial. One of these days people will wake up and say, “A carbon tax is a good way to reach our goal effectively.”
It is one of the most effective tools. It raises revenues, lowers carbon emissions and reduces mortality from air pollution. Hundreds of thousands of people a year die from the burning of fossil fuels. We’re just so blindered on this that we can’t see what is good for both public health and fiscal health.

In the land of truthfully dispiriting summations, the one-eyed optimist takes a peek. Saddled with the most resources and the least wisdom in using them, the price of dawdling IS the widely-feared tax. See also, vaccines.

Image: … forest… trees.

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Calls coming from inside the House

May 26 – already an annual celebration chez Green – got another star on its sidewalk this year when a Dutch court case and corporate board meeting became a dessert topping that’s also a floor polish:

It started in the morning, when news came in from the Netherlands that a Dutch court ruled in a case against Shell, ordering the oil giant to cut emissions 45% by 2030 in line with the goals of the Paris Climate Agreement. The case had been brought by activists, led by Milieudefensie, the Dutch branch of Friends of the Earth. Organizers ultimately signed up 17,000 co-plaintiffs to the case and mobilized hundreds of thousands more to support the effort.

While the ruling will surely be appealed, and doesn’t go nearly far enough to address Shell’s decades of human rights and climate abuses, it’s a monumental win. It will also help validate what many have dismissed as a long shot legal strategy to hold polluters accountable for their climate crimes. I remember back in Paris in 2015 when we hosted a mock tribunal for ExxonMobil in a warehouse far from the official UN Climate Talks. To see an actual court hold Shell accountable today felt like watching our fantasies play out in real time.

The same could be said for what happened this afternoon at the ExxonMobil shareholder meeting, where an outside effort succeeded in replacing at least two of Exxon’s board of directors with candidates dedicated to decarbonizing the company. I’m honestly skeptical that a few new board members can radically reform a corporation that has long been one of the greatest barriers to climate action, but it’s still a stunning rebuke. The vote was effectively a referendum on Exxon’s business model of “drill, baby, drill,” to which investors said, “thanks, but no thanks.”

A similar thing happened (same day) with a shareholder revolt at Chevron – not overturning any policies just yet but worried about the optics of the dirty work. Some media, cough NPR cough, puzzle over this with a ‘what does it mean?’ contrariness, looking for a way to defend even the energy companies’ rights and status quo. And not to get too Cassandra about this but the dust is settling a bit differently. When the most intractable, no one to blame, just-business energy providers can be re-directed from inside, a lot more becomes possible. Money does have uses. Keep up the pressure.

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Asset Class not in Session

Exotic financial instruments. Linking ‘investors’ and funding to projects to weave profits out of insurance or management strategies designed to ease or hasten climate adaptation… doesn’t actually work:

That’s because of the nature of the underlying “asset.” Sure, in theory, you could securitize the construction of a seawall and capture returns via fees from wealthy coastal dwellers or local councils. But seawalls are not widgets. Each has to be uniquely designed for a specific location and its conditions. There are few economies of scale.

There’s also no established norm about how the costs of climate adaptation projects should be shared among those who are being protected. Will enough residents willingly pay for our theoretical seawall, either directly or via their taxes? Who’s being protected, and at whose expense? Structures that protect one stretch of beach can often create problems further along the coastline.

Adaptation doesn’t fall into a neat category. It can mean investing in infrastructure or designing programs to protect nature. It can involve constructing big sea walls, but it can also be about retaining trees on city streets, or ensuring access to clean drinking water. Right now these measures are too small to interest big pension funds and asset managers. A report by UNEP and others found only about two dozen projects larger than $25 million over the last few years.

Important to separate the reality that climate measures are necessary, and will necessarily save money down the road, from the notion that they represent just another opportunity to build a new revenue stream. The article wisely links climate to justice, and as much as it pains many Americans, there is no way around that. It has been true for even longer than it’s been evident – and it’s been evident for a very long time: people cannot live without justice. Racial. Climate. Economic. These are non-negotiable bonds, in the common parlance. We will do it for its own sake, because it benefits people. THAT’s the return. Clean up the rentier class soiling the revenue stream, the water will run clearly.

Image: Photograph: Emory Kristof/National Geographic/Getty Images

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The Land of Recurring Contributions

All those sayings, aphorisms, cute quotables about giving back, making a contribution… That’s not what they meant:

I clicked on the link so you don’t have to, and discovered that my $75 contribution will keep happening every month automatically unless I unclick an already helpfully checked box that makes my contribution recurring.

As the kids say, it’s all over the internets, but no one has as much contempt for Republican voters as Republican politicians and right-wing media. Unsurpassed.

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Be Moved

If you build it, will they take them? Trains, that is, super, high-speed and just regular intra-city transit. And Buses. Buses! But before even the lowest-frills fancy stuff, fix the bridges:

Most, if not all, Americans support the idea that bridges shouldn’t collapse as you drive over them, yet there are 44,741 bridges in the United States that are rated “poor” by the Federal Highway Administration. Nearly 45,000! That’s out of about 616,000, meaning that about 1 in 14 bridges indexed in the United States receive the government’s lowest rating.
But wait! It gets worse. The three ratings used — good, fair, poor — are simply reflections of the lowest rating a bridge gets on the condition of its deck, superstructure or substructure. (If you think of a standard highway bridge, the deck is what you drive on, the superstructure is what supports the deck and the substructure is what holds up the rest of it.) Those values are assessed on a zero-to-nine scale, with the average score for all three components being about 6.5 nationally.

There’s handy searchable map at that link where you can see the bridges in your area that need maintenance. Yikes! There‘s a are multiple tons of them.

It’s also important that the Biden Infrastructure bill includes, among many other things, no money for expanding roads. Stop expanding already uncross-able roads and intersections. The BIKE is the answer, not the ambulance. This is one of the subtle keys to the shift in transit. And I’ve written previously about taking Amtrak below Richmond, VA. The trains themselves are very dated, but it’s the rickety tracks beneath them that feel like such a hazard. It’s a disgrace, and like the state of the postal system, it’s decline by design. It’s been left in purposeful, deliberate disrepair.

So there’s plenty to fix, and feel good about while we’re doing it. Not feel triumphant – it’s not necessary. Just responsible for taking care of our sh*t and making it useful. Buy yourself a nice pen with what’s left over and write someone a letter. You might get one back. Write the next one on the train. Feel romantic, be moved.

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Front Foot

Stay on it.

White House officials are preparing to present President Biden with a roughly $3 trillion infrastructure and jobs package that includes high-profile domestic policy priorities such as free community college and universal prekindergarten, according to three people familiar with internal discussions.
After completing the $1.9 trillion coronavirus relief package this month, Biden administration officials are piecing together the next major legislative priority. Although no final announcement has been made, the White House is expected to push a multitrillion-dollar jobs and infrastructure plan as the centerpiece of the president’s “Build Back Better” agenda.

This will do multiple things, with hundreds of billions of dollars to repair roads, bridges, sewers, waterways and railways, as well retrofitting thousands of schools and other buildings, the bill also includes $400 billion to combat climate change, with $$$ for transit, and importantly, R & D. And this isn’t pouring money into nowhere – people will have to do that building, digging, measuring, research. So… jobs. Yes, boring and crucial.

And Republicans will fight it because of reasons. Let them. Make them. Remember: no tax cuts, especially the most recent ones, have ever been paid for. And the bugaboo of inflation will be what they betting on to argue against infrastructure investment. Let them explain. From the back foot.