Category: Regulation

The Oakland Warehouse Fire

Three big lessons from this catastrophe.

First, think before you wish for ‘job-killing, economy-crushing regulations’ to be swept away. Fire and housing codes would have saved 33 36 young lives here if they had been enforced; an enormous fire in Cambridge the same day killed no-one, partly because there weren’t as many people crammed into one space, partly because the eleven old buildings involved met codes, or close, and had many ways out, partly because they weren’t full of paint thinner and the kind of flammables artists use at work.

Second, primary responsibility obviously rests with the owner and the building manager. But this was an implementation/management failure, not a policy failure: Oakland’s codes are entirely adequate to prevent this kind of thing, but they weren’t effectively used, whether because California has crippled its local governments financially by Proposition 13 and other short-sighted tax choices, or because the enforcement function in Oakland was incompetent or feckless.

The inspector who visited this deathtrap on Nov. 18 was “unable to gain access” and apparently the matter dropped there. It’s possible California needs some new legislation. For example, I have no trouble with the idea that the owner of anything larger than a single-family house has a duty to make himself  (or a subordinate or attorney with the keys) reachable for purposes of inspection access within 48 hours of any safety-related complaint the city chooses to act on. If he doesn’t open the building for the inspector, the inspector can admit himself, by force if necessary, during business hours.

Berkeley had a similar episode a decade ago, which unfolded quite differently because the city kept after the landlord. No fire, no deaths, no tragedy…

…but a bunch of artists out on the street. Third, the housing/workspace crisis for artists in happening cities is real (not to mention for teachers, students, civil servants, and every kind of poor person). The resistance to cleaning up the Drayage building came from the tenants whose safety was the point of the enforcement action, and they correctly understood that they had no workable options; things are worse for artists now.  Running around rousting artists from improvised housing and homeless from tent camps won’t fix this. Unless we make it easier to build, confront NIMBYism, and shovel out more housing supply-yes, including subsidized live-work spaces-we will have nightmares like the Ghost Ship and homeless camps under freeway ramps. People who can’t afford housing, whose price (in the Bay Area, and other places) has sailed into a completely unattainable stratosphere, will live somewhere, and that somewhere will be inhumane, intolerable, and dangerous in so many ways.

 

The end of big trade deals

In their current form, large international trade negotiations are politically illegitimate.

The last global trade deal was the Uruguay round, finally agreed in 1994 after seven years of negotiations. The deal included the setting up of the WTO, a stronger organization than GATT, which it replaced. But no further global trade deal has been agreed. The WTO launched the Doha round  in 2001, but it has fittingly run into the sand.

Trade negotiators are nothing if not obstinate, and tried a new tack. If a global deal is too difficult, why not try regional ones? So TTIP,  the transatlantic deal, and TPP,  the Pacific one, were born. Well, conceived.

Both are moribund. Hollande has declared France’s opposition to TTIP in its current form, which is also under sustained attack in the European Parliament, especially over ISDS.  [Update 30/8: the French trade minister has called for the talks to be suspended. If this is a negotiating tactic, it’s reckless hardball - it would be very hard to walk back.] TPP is opposed by both Clinton and Trump. Obama still officially hopes to get TPP through the Senate in the lame duck session. (See supportive comment from Harold Pollack.) Do you credit this? McConnell has not shifted from his policy of Adullamite obstruction of every Obama proposal. Even if he allowed a vote, would senators really vote against the platforms of their parties, which accurately reflect a hostile public opinion?

This widespread failure of the trade liberalisation agenda is usually put down to a widespread turn in public opinion against free trade, now seen by many on both left and the populist right as a callous neoliberal plot to enrich capitalists at the expense of workers. (It is true that the compensatory support for workers who lost their jobs as a result of past agreements like NAFTA somehow failed to materialise.) Some trade advocates resort to the absurd argument that the failure of TTIP and TPP would put existing trade at risk. But there is very little support for proposals to roll back existing trade agreements, from NAFTA to Uruguay to the European single market. There is something in the trade negotiation process of these new deals that gets voters’ goat.

Let me nail up a thesis to the trade church door. Modern trade negotiations are illegitimate. In their current form they cannot possibly lead to a democratically acceptable result. That is why they are doomed to fail.

The argument has two parts. Continue reading “The end of big trade deals”

How to make more good blue-collar jobs

If you’re looking for a silver lining in the dark cloud of the Trump candidacy, you might notice that it has brought some  attention to the worsening state of white people without a college degree. It’s not that the world is rosy for non-whites without college degrees, of course, but on average they were starting from a lower base; it’s the white part of the working and lower-middle class that seems to be experiencing fairly serious downward social mobility and social dislocation, as demonstrated most dramatically by increasing mortality rates in young adulthood and midlife.

Trump’s success in getting non-college whites riled up about immigration and trade doesn’t answer the question about how much of their plight can actually be traced to those causes, but it has served to remind advocates of the free movement of goods and workers that those policies produce losers as well as winners, and that one function of the political process is to ensure that a rising tide does in fact lift all the boats, rather than lifting the yachts while swamping the dinghies.

Megan McArdle lifts a libertarian voice to join the chorus. And she’s skeptical that income-transfer policies can fix things. (Though in my view we need them just the same.)  What the downwardly-mobile need, McArdle says, is not income per se as much as employment: “good work - by which I mean work that offers opportunity, stability, respect and enough money to raise a family.” And she argues that the answer can’t be turning working-class people into middle-class people by offering higher education to people “who don’t have the ability, preparation or inclination to sit through four years of college,” and that politicians’ other answers to the problem of bringing back good blue-collar jobs are mostly beside the point.

This is way outside my policy wheelhouse,  but from a distance this looks like a problem with a bunch of obvious solutions, though each of them is partial:

Continue reading “How to make more good blue-collar jobs”

The value of solar

The utilities fighting net metering for rooftop solar are biased, but it should still be replaced by a declining value-of-solar tariff.

The pricing of distributed solar energy has become the object of fierce struggles: not only in Arizona and Nevada, but in previously generous Germany and Britain. Utilities in US states claim that solar households enjoying net metering are getting a free ride from their unpaneled neighbours – they will still rely on the grid in the evenings, but no longer pay their fair share of its costs. Several utilities are proposing to replace net metering by a much lower feed-in tariff, generally close to wholesale, plus higher fixed charges. In Nevada they the PUC [corrected, see comments] even initially proposed making the change retroactive, an underhand manoeuvre previously only carried out in Spain, the Czech Republic and a few other jurisdictions indifferent to their reputation with investors.

In Germany, the feed-in tariff (FIT) for solar has been cut to 12.3€c/kwh, under half the retail rate of 29€c. In the UK, the government will cut the residential solar FIT to 4.39p/kwh, under the wholesale price of about 5p/kwh. In both countries, there is a suspicion that the slowdown is a pander to the hurting fossil fuel interests.

Solar advocates are crying foul, and accuse the utilities of trying to stifle competition from an upstart technology that is cutting into their profits. SolarCity has ostentatiously suspended operations in Nevada. What should the non-expert concerned citizen make of the disputes? Continue reading “The value of solar”

Yes, the feds had a plan for Malheur

One dead, one injured, six arrests.
Could have been much, much worse.

One of the occupiers of the Malheur National Wildlife Refuge is dead after a shoot-out with federal and state authorities. Eight of the crew, including ringleader Ammon Bundy and his brother, were pulled over while driving to a meeting in a neighboring county. Five of the survivors, including the Bundys, have been arrested, and a sixth man was arrested in a nearby town. The officers had arrest warrants charging several of the occupants of the car with “conspiracy to impede or injure an officer,” a less serious charge than “seditious conspiracy” but still good for up to six years.

It’s possible that they’re in much worse legal trouble than that: the death of their co-conspirator might well be covered by the felony murder rule.  The fact that the person killed was one of them has no legal significance; in general, if a group of people agrees to commit a felony which could reasonably be expected to put lives at risk, and someone dies, all are liable to the charge of first-degree murder.

The feds have announced that the remaining occupiers are free to leave the refuge: as long as they do so at once.

In the aftermath of the takeover, there was considerable grumbling that the Administration had not moved with sufficient force to retake federal property, especially after having been forced to back down in the Bundy Ranch confrontation.  But it looks as if slow-walking the process worked well, giving the occupiers time to become a national laughingstock.

A recent story focused on the activities of the Hammonds, whose five-prison sentences this crew was protesting, made it appear that the Hammonds got no more than they deserved after a long career of not only ignoring the law but threatening violence against those who were trying to carry it out. In polite company, one does not threaten to wrap a man’s son in barbed wire and throw him down a well. So far as I know, none of the pundits and politicians who expressed sympathy for the Hammonds - all, for some reason, on the Red Team - have expressed any sympathy for the federal officials they terrorized for years.

In this case, both the local sheriff and the governor of the state were on the side of sanity. Unfortunately, that was not the case in the Bundy Ranch confrontation. Of course I hope that the feds have a plan in their back pocket to collect the judgment against Cliven Bundy, and even perhaps a plan to indict, arrest, and try some of the people who pointed loaded weapons at federal law enforcement agents two years ago. But I’m not sorry that a bloodbath was avoided, even at some damage to the majesty of the law. And while I can’t imagine that Barack Obama or Attorney General Loretta Lynch will ever claim - or get - the credit for how deftly the current confrontation was managed, they amply deserve it.

 

 

 

 

 

 

Film recommendation: Linda’s fiduciary cake

Regulatory standards regarding information and advice provided by financial professionals are incredibly important. These issues are also incredibly complicated and boring. ”

Fiduciary vs. Suitability standard….” The phrase induces narcolepsy just hearing it, unless you happen to be really into this issue or you have a financial stake in the accompanying government regulations. That’s a real challenge in addressing key personal and policy concerns.

I financed this short video, which debuted at Huffington Post, to help address this challenge. (See the site I created at fiduciarystandard.info for more information. I’ve drawn from there in this post.) Continue reading “Film recommendation: Linda’s fiduciary cake”

Highs and Lows - Cannabis Policy This Week

Washington State – The federal prosecution of a medical marijuana dispensary owner threatens to disturb the precarious balance of legality in Washington. But is that a bad thing? An article on the libertarian Reason Foundation’s blog suggests that Lance Gloor, the entrepreneur in question, was an innocent victim of selective prosecution. Perhaps he is; that’s a matter for the courts to decide. More importantly, his prosecution creates a precedent of sorts for federal regulation of state cannabis markets. This could be a powerful tool for making those markets work, and it should be approached in a thoughtful manner, not a paranoid one. Hopefully federal prosecutors can be trusted to work constructively with local law enforcement to protect public safety in an equitable way. Meanwhile, the City of Seattle is reducing the buffer zones required around cannabis shops, and in the process allowing them to operate a little more like the real commercial enterprises they are meant to be. But detractors urge the city council to “slow down” and consider the backlash wanton deregulation could create. Read more: http://www.kirotv.com/news/news/seattle-shrinks-buffer-zones-around-marijuana-busi/np3WX/

New England – Echoing the call to decelerate aspects of legalization, a Colorado police chief urged the Massachusetts legislative delegation sent to study the pot market in his state to do just that, “Slow it down.” But, as the voters of the Commonwealth of Massachusetts are likely legalize cannabis in the upcoming elections, the delegation’s real task was not to set a tempo but to learn how to deal with their new paradigm. “It is not the purpose of this committee to determine whether or not MA should legalize marijuana–but rather, to really prepare ourselves for that possibility,” said State Senator Jason Lewis, chair of MA’s Senate’s subcommittee on marijuana, in a CBS Boston interview. Other legislators, such as Senator John F. Keenan, seemed less hearty, asking dispensary workers, “If I were to buy this, what would I do with it? Do I…roll it?” Keenan’s blanching is understandable. The big worry in MA seems to be the potential corporatization of weed, especially marketing toward children – heading “down the Joe Camel path,” as MA governor Charlie Baker put it. This is not, seemingly, off-putting to former Vermont Attorney General Kimberley Cheney, who has recently endorsed the legalization effort in his state. Read more: https://www.bostonglobe.com/metro/2016/01/12/roll-senators-learn-about-marijuana/3TFl8EFDaZOCw8gf7dIaCK/story.html

California – Even with the most money and no opposition, the passage of the “Adult Use of Marijuana Act” is not guaranteed, or so opines SF Weekly columnist Chris Roberts in a recent article. “For true believers, AUMA does not go far enough — and it’s viewed with suspicion solely because of its deep-pocketed backers, who the die-hards accused of wanting to take over the industry.” And those “die-hards” are not wrong. In every state considering legalization at this point (Ohio is a notable example), there are people who realize that, for a time at least, marijuana can be an extremely profitable business. Is fear of corporatization enough to make the purists rise up and quash the law? Probably not, especially if a proposed plan goes through to offer small-scale grow operations “terroir” label protections. But for now, supporters of AUMA are finding it prudent to heap on the endorsements. Recently the California NAACP has seen fit to throw their weight behind legalization (despite unnamed concerns), and former U.S. Surgeon General Joycelyn Elders is set to headline the ICBC in February. And still the anti-legalization side continues to be voiceless. Do they even exist anymore? The do in Arizona, where Governor Doug Ducey vows to fight the “common culprit of drug abuse and addiction.” But for now, despite polls that show only a bare majority of support for legalization in California among likely voters, the smart money is on legal pot in 2016.

Meanwhile in Canada officials are also feeling the influence of the Centennial State (CO), and Justin Trudeau, Kathleen Wynne, and former Toronto police chief Bill Blair are all hunky-dory over weed.

 

And those are the highs and lows.

Build in wood in 2016

Building in wood as a carbon-reducing strategy.

 Special New Year post by James Wimberley and Michael O’Hare

wood skyscraper2The Finnish wood products company Metsä have commissioned a concept design from Canadian architect Michael Green for a clone of the Empire State Building in their proprietary engineered wood.  He has also done designs for the Reichstag and the Colosseum, and filed a more serious proposal for a 35-storey wooden complex in Paris. His TED talk.

These flashy thought experiments are reminiscent of the concept cars unveiled at motor shows. A wood skyscraper would need absurdly massive columns at ground level. But it is certain that large, long-lived and elegant structures can be built in wood. Continue reading “Build in wood in 2016”

Don’t just stand there, do something! (Provided there’s something useful to do.)

On violent deaths caused by guns and alcohol, Eugene Volokh says there’s nothing to do; we just have to suck it up.
Wrong!

Of course my brilliant old friend and longtime UCLA colleague Eugene Volokh is right (and Jeb Bush was also right, though tin-eared and hard-hearted).  The impulse do “do something” in the face of a bad situation, and especially after a disaster, can lead to policies that make things worse instead of better (for example, invading Iraq), and it is wiser to resist that impulse than to do something foolish. The “Yes, Minister” syllogism - “We must do something; this is something; therefore we must do this” - is not a form of reasoning that leads to good results.

That’s especially true for gun policy, because the debate heats up after a mass shooting, and mass shootings are completely atypical of gun deaths overall. The question “What would have prevented this particular disaster?” is inevitably the wrong question.

And Eugene is also right - being right in the service of really bad policy choices is one of his annoying habits - to compare guns to alcohol as two commodities whose consumption in the United States leads to the deaths of tens of thousands of people other than consumers, in addition to deaths among the consumers themselves.

But that’s where Eugene stops being right and becomes ridiculously and disastrously wrong. He assumes, falsely, that just because we’re not currently doing much to stop the violence involving guns and alcohol it must be the case that nothing useful can be done.  In the case of guns, the cross-national statistics offer a strong hint that there’s something very wrong with policy in the United States, since no other developed country has anything like our rate of gun deaths. Our rate is three times that of Finland or Switzerland - our closest competitors among developed nations - four times that of Canada, and ten times that of Australia. That suggests we might have something to learn from their policies.

John Donohue’s recent work showing that adopting a “shall-issue” concealed-carry law correlates with future increases in homicide rates  suggests that state-level gun policies matter, though it’s hard to tell whether the results are due specifically “shall-issue” as opposed to “stand-your-ground” and other elements of the NRA policy agenda; states that loosen their gun laws are likely to do so along more than one dimension.  But even if there’s nothing positive to do, reining in the desire of Eugene’s gun-crazed allies to increase the prevalence of gun ownership and gun-carrying would be a good place to start.

One obvious positive thing to do about guns would be to tighten the rules about background checks. Right now, registered gun dealers (Federal Firearms Licensees, or FFLs) must verify that gun buyers are eligible to purchase; that’s the Brady Law background check. But about a third of all gun transfers don’t involve an FFL: they’re private sales, including sales at gun shows, or they’re gifts.

There’s no good reason not to require a check for every transfer; no doubt the gun stores would be happy to provide the service at a competitive price.  That simple change, supported by the vast majority of voters and proposed by the Obama Administration, fits perfectly the NRA slogan that what we need is better enforcement of the laws already on the books. But in fact the NRA opposes it, and if Eugene supports it he’s keeping that support a secret.  No one can estimate how many lives it would save, but surely that number isn’t zero.

If Eugene wants to say - as apparently Jeb wants to say - that protecting the convenience of gun owners and gun merchants is more important than saving lives, that’s his right. But to say that there are no lives to be saved,  at reasonable cost to other goals, is simply false.

That’s even more obviously true with respect to Eugene’s comparison case, alcohol. He writes as if the only alternative to our current insanely loose alcohol policies would be a return to Prohibition, and that what we can do  about controlling alcohol-related deaths is “not much, other than trying to catch and punish alcohol abuse.”

Nonsense. There are at least two options out there that would substantially reduce the number of people who die as a result of other people’s drinking (while also reducing the number who die, suddenly or slowly, as a result of their own drinking).

The first and most obvious (except to a libertarian) is raising alcohol taxes. When something costs more, people use less of it, especially people who use enough of it so its price matters in their personal budgets. Most of the damage from alcohol-related violence comes from heavy drinkers, not casual ones.  So higher alcohol prices will lead to less drinking by heavy drinkers and therefore fewer drunk-driving deaths and fewer drunken homicides.

Philip J. Cook’s Paying the Tab estimates that a 10% increase in the price of drink (which could be achieved by doubling the current federal alcohol tax) would reduce all violent crime - not just alcohol-related crime, but of course including a lot of gun crime - by about 3%.  The effects on traffic fatalities are of about the same magnitude. The effects seem to be roughly linear.

So tripling the alcohol tax - which would cost the median drinker less than 20 cents a day, and which wouldn’t be nearly high enough to create a black market - would eliminate about 6% of the 13,000 murders we suffer each year, saving about 800 lives. It would also eliminate about the same proportion of 32,000 traffic fatalities, saving something more than 2000 additional lives.  In other words, a simple change in the tax code could eliminate about one 9/11’s worth of sudden death per year.

The other straightforward approach to shrinking alcohol-related damage, including homicide, is to deter drinking by people who commit crimes under the influence. That’s the approach of South Dakota’s Sobriety 24/7, which requires people with prior DUI convictions arrested for a fresh DUI to come in twice a day for an alcohol-breath test, under the threat of a night in jail if the result isn’t 0.0.

The results are spectacular: being on the program (for an average of 90 days) reduces DUI recidivism by 50% over the next two years. Applying the program at a county level reduces auto fatalities by 12% and domestic-violence complaints by 9%. (Beau Kilmer and his colleagues at RAND are about to publish an estimate of the effect on all-cause mortality that will blow the top off everybody’s head, but that work is still under review so I can’t more than hint at the results.)

Here’s a more speculative idea, but one I’d like to see tried. A third activity that leads to lots of sudden deaths on the part of bystanders is driving. One thing we do to reduce the carnage is to forbid people to drive if they’re under the influence. Alcohol effects coordination, but it also influences anger management, impulse control, and judgment. So why do we let someome walk around armed when he’s drunk out of his gourd? The old-fashioned Western saloon had a “hang ’em here” policy; customers were expected to disarm before getting loaded. Why not enact that as law, requiring that anyone possessing a gun in public either (1) remain sober or (2) lock it and unload it? You could think of that as either a modification of gun policy or a modification of alcohol policy.

So Eugene’s comparison case is almost uniquely poorly chosen. There are some things we could do today to reduce gun violence by changing gun policy, but those effects would mostly happen slowly and can’t be estimated with much confidence.  But there are things we could do about alcohol policy today that would reduce violent death, including violent death by firearm, predictably and measurably six months from now.

Yes, the activist impulse to “do something” can and does lead us astray. But so does the libertarian impulse to just sit there and watch people die, all in the name of limited government.

 

 

 

 

 

 

 

 

 

 

The marijuana movement and the marijuana lobby

Reactions to the “Responsible Ohio” cannabis-legalization initiative have a lot to tell us about the changing politics of the marijuana question. No much of what they have to tell us is encouraging.

Cannabis policy change in the United States has been driven, until now, by people whose interest in the matter was primarily non-commercial: pot smokers yearning to toke free, culture warriors of the (cultural) left, libertarians, criminal justice reformers concerned about arrest and incarceration, and people who think that it’s bad policy to criminalize the behavior of tens of millions of people unless there’s a stronger reason to do so than the risks of cannabis create.

Not that economic interests have been entirely absent; Dennis Peron was in the business of selling “medical marijuana” when he spearheaded Proposition 215. But Peron was also a righteous stoner; there’s no reason to doubt the sincerity of his expressed opinion that “all marijuana use is medical.” But the main funders of the recent initiatives, and of the big marijuana-legalization groups, have been ideologically-driven billionaires such as George Soros and the late Peter Lewis.  (How old am I? Why, I’m s-o-o-o-o-o-o old that I remember when billionaires weren’t a branch of government.) And the people doing the work have been, for the most part, true believers rather than hired hacks.

That has begun to change. Americans for Safe Access has morphed from an advocacy group for medical-marijuana patients to, in effect, a trade association of medical-marijuana growers and sellers. The National Cannabis Industries Association has taken things even further, hiring a Washington lobbyist who might have been provided by Central Casting: about as far, culturally, from a typical NORML or MPP activist as it’s possible to imagine.

Inevitably, then, the marijuana movement has begun to give way to the marijuana lobby. To be sure, I’ve had my share of clashes with movement folks, and I haven’t always been impressed with their policy acumen or their standards of argument, but I’ve never seen any reason to doubt that they’re advocating the public interest as they perceive it. The people now being hired by the guys in suits doing cannabis-business stock promotions play by different rules. I expect them to have about the same ethical standards as lobbyists for the alcohol, tobacco, pharmaceutical, food, and fossil-fuels industries: that is, I expect them to be utterly willing to sacrifice human health and welfare on the altar of the operating statement, just like those folks at VW who decided it would be a cute idea to poison the air just a little bit to goose the performance of their diesel-driven cars. Continue reading “The marijuana movement and the marijuana lobby”