An Open Letter to President Obama and Energy Secretary Moniz

Dear President Obama and Secretary Moniz:

I implore you to advocate for and cajole Congress — specifically the Democratic members of both Houses — to eliminate the obsolete and now-mindless prohibition on the export of domestic crude oil.  Surely American roughnecks, America fracking crews, and American petroleum engineers deserve treatment equal to that of Iranian oilfield workers, engineers and mullahs.

It is well-known that approximately 150,000 domestic energy jobs have been lost in the past nine months, since oil prices began their freefall.  Many of those layoffs have been drillsite roughnecks and fracking crews.  Not surprisingly, working people are suffering much more than executives.  Soon the layoffs will extend further, to engineers and scientists.  We should seek to avoid excessive unemployment, and certainly try to avoid losing technical knowledge and expertise that has seen this industry outperform almost all others in job creation in the U.S.  As of now, the domestic price of oil lags well below where it should be.  West Texas Intermediate is priced at $5 to $7 below Brent, and that differential is clearly rooted in the prohibition on the export of crude.  Our refineries are not uniformly set up to accommodate light domestic crude.  Free trade will not only fairly compensate domestic producers, but it will also help restore competitive balance to the United States.  Once upon a time, there might have been a justification, or a plausible explanation, for keeping domestic crude in the U.S., as a way of insulating our economy from price shocks.  In view of the technological advances wrought entirely by U.S.-based energy concerns, that explanation no longer passes the “straight-face” test.

The technological revolution wrought by the U.S. energy industry (and the partial leakage of petroleum products overseas through exports of refined products) had a role in forcing Iran to the table, but Washington has given the back of its hand to this industry. As a result of various unfriendly initiatives and market distortions written into law, including the export ban, we are hollowing out our employment base.  There will come a day of reckoning if this is not reversed.  More immediately, the staggering layoffs described above (with more to come) hit roughnecks and other ordinary working people much worse than executives.  At the very least, we should allow a free market, including exports. It is absolute insanity to treat Iranian oil more favorably than domestic oil.  If the United States Government can justify spending tens of billions of dollars to bail out inefficient auto manufacturers to save jobs in the Midwest, why can’t it at least allow an efficient industry the opportunity to compete worldwide?  That’s not corporate welfare; it is common sense.  Any other path, including the one we now travel, punishes working people for no good reason.

Surprise me.  Please.

Sincerely,

Lee Kaplan

*Not to mention insulating General Motors from liability for concealed ignition defects that killed American consumers.

How Not to Attract Business to Texas

I read not long ago that Governor Abbott said he will “go anywhere, anytime to continue keeping Texas No. 1 in the nation for attracting jobs and attracting businesses.”  After Abbott’s first six months as Governor, I think we’ll do better attracting business to Texas if he just stays home and acts sensibly [read:  keeps his mouth shut].  My advice to the Guv is, “Don’t do anything [else] stupid!”

When CEO’s of companies as large as GE, or as small as a five-person startup, think about where to locate, they consider not only the tax and regulatory burden –what we Texans call “the bidness climate” —  but also the health, welfare, morale and anticipated productivity of their employees.  Almost everything emanating from the state capital during the first six months of the Abbott Era tilts the scales the other way, and virtually guarantees that companies whose CEO’s would otherwise consider relocating here to take advantage of low taxes, less regulation, and nonunion workers will not do so.

Governor Abbott came into office needing to distance himself, if only slightly, from his reputation outside the state.  His oft-quoted signature line about his tenure as Texas Attorney General, when speaking to a tea party group two years ago [“I go into the office, I sue the federal government and I go home”] undoubtedly was red meat to his base, but doesn’t go over in GE’s home state of Connecticut.

Abbott’s first immense misstep came after just a few months in office as Governor when he pandered to a small group of loonies who were worried about routine military exercises that were to be carried out in central Texas – the Jade Helm exercises.   The U.S. military might have been forgiven for thinking that Texans would welcome them with open arms.  But there are always fringe elements and, unfortunately, the Governor heard them.   In response to some worried letters and emails from people who apparently expected black helicopters to spearhead an invasion of sacred Texas soil, on April 15, Abbott made the State a laughingstock when he directed the Texas State Guard to “monitor” U.S. military training exercises in central Texas so that Texans would “know that their safety, constitutional rights, private property rights and civil liberties will not be infringed.”

That was not his first error, either.  Previously the Governor had already added his voice to the “anti-vaxxers,” supporting the right of parents to opt out of vaccinations for their children not just for medical reasons but for religious or personal objections.  Ummmm hmmmh.  Just what we need: more sick children.  Here are the unpleasant facts.  There are contagious illnesses out there, and schoolchildren are vulnerable. Measles are highly contagious, particularly in schools.  In 1958 Texas had over 85,000 cases; since then the total has dropped to almost none.  Do we want it to increase again?  In Texas in the 2013-2014 school year, more than 38,000 students making up roughly 0.75 percent of the state’s school-age population used exemptions to avoid vaccinations, according to a Houston Chronicle analysis of data from the Department of State Health Services. That was far higher than a decade earlier, when exemptions were granted to just 3,000 students making up about 0.1 percent of the population, according to the Chronicle.  So the percentage of unvaccinated children has increased more than sevenfold in a decade.  And this took place with the backdrop of the measles outbreak in California.  This kind of loopy failure to protect one’s children, based on no science, and in fact, flying in the face of science and rational thought, is not limited to rural counties.  Travis County (Austin) and Collin and Denton counties (suburban Dallas) are among the leaders in the percentage of the unvaccinated.  What is the Governor thinking?  Shall we risk a few extra cases of polio as well?

Add to this the recent enactment of a more robust “open carry” law, that is, the inalienable right of citizens to carry firearms wherever they wish, including Wal-marts, university campuses, and even churches.  Governor Abbott was proud to sign the open carry law at Red’s Indoor Range, a popular gun store and shooting range in Pflugerville. Bottom line — the Republican ruling class in Austin has certainly sent the wrong message to mild-mannered CEO’s who might have thought about leaving high-tax states for Texas.

Finally, recent developments on the “social issues” front have not cast Texas in the light best suited for gaining relocations, and for this Governor Abbott shares the blame, but again takes the lead.  Most Americans have a laissez faire attitude about abortion and gay marriage.   Governor Abbott is well known as a pro-life [read: “anti-abortion”]  enthusiast.  Texas has for years defended strict limits on abortion, and as Attorney General he was bound to defend such legislation.  Texas has a well-earned reputation of caring far more about restricting Texans’ personal lives (and specifically, their activities in the bedroom or on the couch) than about regulating their commercial activities.  Outside Texas, these views carry little weight.  A slight majority of Americans think abortion should be legal under some circumstances, while nearly 30% of Americans think it should be legal under all circumstances.  Only 19% think it should be prohibited under all circumstances.  The ham-handed efforts of the solidly Republican Texas Legislature to evade and restrict Roe v. Wade have attracted unfavorable attention, too, perhaps even from the United States Supreme Court.  Governor Abbott has embraced those efforts and is strongly identified with them.

Or, as wickedly satirical Andy Borowitz has said, “In Texas currently your personal safety pretty much peaks when you’re a fetus and it’s all downhill from there.”

More to the point, this Governor’s views on same-sex marriage are well out of step with the views of the workers he would like to attract to Texas.  The last straw was Abbott’s tacit invitation (and the not-so-tacit invitation by Texas’s Attorney General Ken Paxton) to state officials to ignore the United States Supreme Court’s Obergefell v. Hodges decision.  In fact, Abbott’s and Paxton’s views are even out of step with a majority of the very conservative Texas Supreme Court.  On June 19, just one week before Obergefell, by a 5-3 ruling (ardent conservatives prevailing over last-ditch conservatives), the Texas Supreme Court denied the State’s effort to intervene belatedly in the case of a gay couple who had been granted a divorce here after marrying elsewhere.  The Texas court decided only that the attorney general (who at the time was Greg Abbott) had intervened too late.  Abbott’s statement as Governor reflected his pique at the court on which he had once been a member:  “The [C]ourt mistakenly relied on a technicality to allow this divorce to proceed…[it] did not address the Texas Constitution’s definition of marriage – and marriage in Texas remains an institution between one man and one woman.”

Not so fast, Guv(!)

One week later, when the U.S. Supreme Court issued Obergefell, Governor Abbott was predictably even more outraged.  Notwithstanding his law school training, the one-time judge and former highest legal officer of the State had this to say, in an outburst reminiscent of segregationist governors during the ‘50’s and ‘60’s:

“The Supreme Court has abandoned its role as an impartial judicial arbiter and has become an unelected nine-member legislature. Five Justices on the Supreme Court have imposed on the entire country their personal views on an issue that the Constitution and the Court’s previous decisions reserve to the people of the States.

“Despite the Supreme Court’s rulings, Texans’ fundamental right to religious liberty remains protected. No Texan is required by the Supreme Court’s decision to act contrary to his or her religious beliefs regarding marriage.”

Governor Abbott undoubtedly knew exactly what he was saying.  The elected county clerks in Texas’s 254 counties are responsible for issuing marriage licenses.  Governor Abbott invited these elected representatives, who take oaths to uphold the law and perform their statutory duties, to refuse to issue marriage license to gays if their “conscience” forbids it.

These incidents, all occurring within the first 180 days of the Abbott Era, lead dispassionate observers to wonder if there are there any adults in the Governor’s inner circle.  Is there no one willing to say, “Boss, this is ridiculous.”?  No matter how this kind of nonsense is dressed up, it is viewed with laughter or contempt – or both — by business people throughout the country.  The vast majority of people who run businesses just want productive workers.  They don’t care what their employees do at home, so long as they come to work and do their jobs.  CEO’s know they have gay workers, open or closeted.  Prudent CEO’s are unlikely to relocate their business to a State whose top officials are unremittingly hostile to their employees’ lifestyle choices.

Greg Abbott was once a respected state court judge.  Over the years he has dissipated his credibility by moving ever farther to the right, but he has accelerated the process during his first six months as Governor.  His views on vaccinations, guns, military invasion (by our own military), abortion rights and gay marriage show that he is primarily interested in pandering to kooks rather than insuring the well-being of the State.  And we’re going to pay for it.

Bipartisan stupidity on trade

If there were ever a no-brainer, the promotion of free trade with Asia and the Pacific Rim – and particularly “fast track” authority for the President (any President) is it.  The imminent defeat of the President’s Pacific Rim trade initiative was the result of labor union intransigence, rightwing irredentism, leftwing lunacy and pure cowardice – not necessarily in that order.   It is hard to imagine a more perfect storm leading to a more absurd, damaging result.

It took some inside baseball in the House to make that happen.  Since Big Labor is predictably against free trade (preferring to preserve the status quo against fuller employment and productivity in the U.S.), Democrats have long sought ways to appease the beast.  The keystone of that effort is “trade adjustment assistance,”, by which the Government has the ability to offer training and other benefits to workers displaced by competition from imports.  Although Republicans have long been contemptuous of that program as a pork barrel sop to labor (which it is), it has been in existence for decades, and everyone knows it is critical to passing the fast track effort.  Unfortunately, even as President Obama was making herculean efforts to get House Democrats to vote for the packages, Nancy Pelosi turned on him.  She ultimately decided to join many in her caucus in opposing trade assistance for domestic workers, something they have supported since time immemorial, knowing that its defeat would doom the overall package.  And many ideologically pure Republicans joined the left wing Democrats.  The result was a lopsided loss for trade assistance and a win for wingnuts everywhere.  Which means fast-track Trade Promotion Authority is definitely in peril, if not dead.

This is a disheartening, wounding result.  It hurts all workers who are employed in making and delivering our products for export .  Just look at Ms. Pelosi’s California, which sent over $174 billion worth of goods overseas – including aircraft engines and aviation parts, telecom equipment, data processing machinery, integrated circuits,  not to mention wine and almonds and scrap metal.  Why don’t those workers get any consideration?  Six of California’s top 7 trading partners–Mexico, Canada, Japan, South Korea, Hong Kong and Taiwan–were part of this proposal.    Or what about Texas?  Texas exported $289 billion worth of goods last year, with almost half of that going to Mexico, Canada, and South Korea.  Do unionized workers at the Port of Houston count?  Does the OCAW care? But Texas’ 36-member delegation couldn’t see it.  Only 3 of 11 Democrats voted for the President’s proposal, and only 3 out of 25 Republicans supported the trade assistance proposal.  The other 30 were less interested in free trade with friends such as Australia, Canada, Mexico, New Zealand, Japan, South Korea and Taiwan (among other) than  in maintaining ideological or partisan purity.  We expect this kind of nonsense from D’s such as Lloyd Doggett, Gene Green or Sheila Jackson Lee, but from supposedly more forward-looking Joaquin Castro?  And on the GOP side, we would expect ideology to trump common sense in the person of Louie Gohmert (who even voted against fast track authority itself), but when did Pete Olson, Pete Sessions, and Michael McCaul leave the room?  Only six Texans should be cited for common sense:  Johnson, Cuellar and O’Rourke (Democrats) and  Barton, Brady and Thornberry (Republicans).

The truth is that this proposal offered one of the best ways to use our “soft power” to combat the ever-growing influence of China.  It is also the cheapest form of foreign aid that one can imagine, especially with respect to Mexico, where any aid to its economy helps to stem illegal immigration into the U.S.  The resounding defeat of this bill lays bare the dysfunction and stupidity of both parties.

As a side note, but one that may assume growing significance as we look forward to the next presidency, another disheartening (but not surpsing) facet of this controversy was Hillary Clinton’s craven silence while the proposals were being debated.  Candidate Clinton consistently dodged reporters and refused to take questions on many critical topics.  Her silence on the trade assistance bill leading up to the vote was cowardly.  After trade assistance authority went down to defeat, she said:  “The President should listen to and work with his allies in Congress starting with Nancy Pelosi, who have expressed their concerns about the impact that a weak agreement would have on our workers to make sure we get the best strongest deal possible,” she said. “And if we don’t get it, there should be no deal.”   Wow, talk about straddling barbed wire.  Here’s a personage who has been involved in national politics and policy for at least 25 years, including as a U.S. Senator and Secretary of State, and she bit her tongue until after the vote?  I’ll bet the man who appointed her Secretary of State really appreciated her post-vote advice. To observers who suggest it’s a good strategy for a Presidential frontrunner to avoid taking controversial positions, I say:  Yeah – and Nixon had an undisclosed plan to get us out of Vietnam.  If she’s like this as a candidate, we can only guess what she will be like as President.  We can’t say we weren’t warned.

Another warning from the mineshaft canary

Sooooo…

We cannot send our own astronauts to the International Space Station, let alone bring them home, and we’re at the mercy of the Russians for transportation, but we’re on the outs with the Russians over their meddling in Ukraine, and these KGB graduates just managed to blow up another of their (unmanned) Proton-M rockets.  You wanna entrust your fellow-citizen astronauts to them?    

The only silver lining in this farce is the glaring light focused on the multiple failures of a feckless Administration and dysfunctional Congress.  We have “pressed the reset button” with a Third World autocrat who cannot and will not guarantee us reliable space transportation, let alone work with us for international peace and freedom.  We have starved our space program and other intelligent discretionary spending initiatives, such as infrastructure, air traffic control, and our national parks, as “too expensive” while failing to address the entitlements metastasis.   We have rearranged the deck chairs in the healthcare industry with a grandiose “reform” program, but simultaneously demonized risk-taking innovators.  We are more worried about abortion, gays, and immigrants “taking jobs” than we are about actually encouraging job creators. When are we going to get mad enough to force our elected officials to shed ideology in favor of things that work?

What matters in Texas?

Has Texas really sunk that low?  Is vaccinating the Lone Star State against the scourge of Sharia law really more important than addressing our education, transportation, and water needs?  Apparently so.  I didn’t know this until recently, but the Texas Legislature failed to pass a law last session prohibiting the application of Sharia law in this great State.  Our current Lieutenant Governor David Dewhurst, trailing in the polls against red-meat conservative state Senator Dan Patrick, felt the need to defend himself in their recent debate face-off for failing to shepherd through the Texas Senate a bill to prohibit the application of Sharia law in the Texas courts.  The Lite Guv contended he supported this measure “101 percent” and promised to appoint a new Committee chair next session in order to guarantee that Texans are not threatened with Sharia law anytime soon.

Yes, it’s true—S.B. 1639 was actually sponsored by Sen. John Carona, the chair of the Texas Senate Business and Commerce Committee, but it died in committee.  It died because, among other things, some of our legislators woke up long enough to realize that never, ever in Texas’s history had Texas courts deferred to Sharia law, and the need for this extra ounce of prevention seemed remote.  Ironically, Sen. Carona’s 100 percent true-to-Texas hostility to Islamic jihadist influence was apparently at least 1 percent short.  Carona lost his re-election bid in the Republican primary to an allegedly more-conservative candidate.  Now, regardless of whether Dewhurst or Patrick (or, heavens, the Democratic nominee Leticia Van de Putte) wins, the Business and Commerce Committee will have a new chair in the next session.

The wonder is not that there are one-off loonies in Texas who promote such legislation; the wonder is that people who know better are forced to pretend to support looniness or risk losing.  Witness Dewhurst, who will probably lose the runoff election anyway.  What if he had just said, “This is asinine.  We have better things to do than worry about Sharia law suddenly infecting our courts.  This is all of a part of my opponent’s general wackiness, including his concern that illegal immigants are introducing leprosy into Texas.  We need to focus on keeping the ‘Texas Miracle’ in place – which means meeting our education, water and and transportation needs for the next 10, 20 or 50 years.  Anyone who doesn’t focus on the important issues is hurting Texas.  Badly.”

I guess I’ll never be hired as a speechwriter, at least not by a Texas Republican.  Because I cannot find a single Texas GOP officeholder or candidate who talks that way.  That includes Dewhurst, whose nod to education in late January was to opine that, when one takes into account the cost of living, “we are paying our teachers a very fair salary.”  Not true.  Texas teachers are paid, on average, about 87% of the national average.  Even taking into account Texas’ lower overall cost of living, we would have to give every teacher in the state a 10% pay raise just to hit the national average.  Even more shocking, and even after the Legislature partially restored funding cuts from two years earlier, a widely-publicized study by the National Education Agency reckons that Texas spends $8998 per student, a 5 percent decrease from per-student funding of $9,462 in 2010-11. Yes, we all know that throwing more money at something doesn’t necessarily solve it.  But we’re spending less, not more. And that’s in a state which is flush economically.  We are raising a whole generation of children – not just in the Rio Grande Valley, but in the cities and towns throughout the State —   who are less literate than their peers in other states.  Burger flippers, yes.  Rocket scientists, not so much.

The same dearth of leadership is evident with respect to our critical water problems.  One statewide officeholder who touched on our water problems in a serious way is retiring from public office.  Susan Combs wisely decided that even a West Texas rancher was not conservative enough to win again, but in January she pointed out that Texas is facing a long-term water emergency.  (Yes, “emergency” is the word we normally apply to short-term problems, but here, it applies to both.)  Too bad the candidates for Governor and Lieutenant Governor haven’t taken note.  Abortion is much more important.  For example, in an interview on WOAI 1200 a few months ago, our current Attorney General (and still heavy favorite to be our next Governor) Greg Abbott spent more airtime on abortion and voter ID than these important issues.  Even though his friendly interviewer tried to ask him about water issues, Abbott’s spiel was focused on pointing out that we shouldn’t use the Rainy Day fund to solve our water problems.  OK, then, but what did he propose?  Nothing.

Perhaps we’re being unfair, and Attorney General Abbott really is interested in education, transportation and water, but that interview was just too short to get to the important stuff?  Nope.   Check out http://www.gregabbott.com/issues/, where the candidate for Texas’s highest office lists key issues.  None of these three make the top 10.  They’re not even listed!  What’s the No. 1 issue?  You guessed it – ObamaCare.  What’s No. 2? – the Second Amendment.  You cannot find anything on education, water, or transportation.  (I guess we should be grateful that stopping human trafficking made it to tenth place.)

As for Sen. Patrick, who is widely anticipated to beat Dewhurst in the GOP primary runoff for Lieutenant Governor, his contribution on education seems to be an effort to re-work something called CSCOPE.  The details of this are fairly arcane, but Sen. Patrick seems to think that CSCOPE was a thinly-veiled effort to indoctrinate children into a left-wing, fifth-column agenda right under the noses of God-fearing Texas parents.  OK, once again, we know what he’s against, but what is Sen. Patrick for?  When asked by the Collin County Conservative Republicans “what do you want to accomplish?”, this is what he said:

“There are many conservative issues that I will take action on that have not passed in the last decade. I will pass legislation to secure the border, end magnets that draw illegals to cross our border, pass school choice, lower property taxes, repeal or reform the franchise tax, pass campus carry, protect life and marriage, reduce transportation debt, end the diversions from dedicated taxes and fees to other areas of spending, reduce the 21 vote rule to 19 and not appoint half the Democrats to be Chairs of Committees as has been the long practice.”

So the border is No. 1 and No. 2.  What refreshing candor.  Also, we can at least credit Sen. Patrick for being aware that education and transportation are issues, although it’s hard to tell what he is proposing to improve education, a labor-intensive industry where recruiting and retaining good teachers is critical, and even harder to tell just what more “school choice” will do for students if all the schools are underfunded.  It is also hard to tell just how lowering property taxes and reducing transportation debt will do anything about fixing our roads.  As for what Sen. Patrick “hopes to accomplish” in dealing with our water crisis, he offers – nothing.

The bottom line is that we Texans are enjoying good times, right here, right now, but if we don’t spend some money while we’re flush on upgrading our education system, providing for our water needs, and building and maintaining roads, that miracle will become a mirage in the rearview mirror.  Ronald Reagan (who by today’s standards would be condemned as a backsliding liberal) spent more money on California’s system of higher education than anyone, and California is reaping the benefits even now, all under a Governor once called “Moonbeam.”   Laugh all you want about those kooks in Cali, but they are better positioned for the 21st century than we are, by a long shot.

Ronald Reagan and Jerry Brown qualify as hardheaded realists; Greg Abbott and Dan Patrick are hardheaded ideologues.   We are about to digest the bitter fruits of their willful ignorance.  But at least it won’t be under Sharia law.

Cheating the poor

I am sure that Treasury Secretary Lew and President Obama are serious about raiding retirement plans that are “too big”, and discouraging “the wealthy” from avoiding taxes by saving. (Nevermind that the contributions and any accumulated increases will be taxed eventually anyway when withdrawn.) This latest initiative to discourage large savings means that many “average hard-working Americans” allegedly so beloved by the Citicorp alum and the President will be significantly harmed by these purported guardian angels. Many firms have plans that include significant matching contributions into the employees’ retirement plans. Some or all of that match is required in order for the bosses – a/k/a “the wealthy” a/k/a “the 1%” — to max out their contributions. Many firms match dollar-for-dollar the first 4% of contributions by the employees. So a $40,000 per year employee who puts $1,600 into a retirement plan doubles his or her retirement plan balance overnight.
Once the existing rules are thrown out and all promises are retracted, the bosses will stop contributing for themselves, and the matching contributions to their average hard-working employees will disappear.
Am I wrong?

Simpson-Bowles, you fools!

The sequester is an issue only because the President has consciously refused, throughout his four years in office, to propose any entitlement reforms.  Can anyone name a single entitlement reform that President Obama has specifically advocated, in public, and made even a token effort to implement?  (Please, don’t count the phantom savings that we will never see from purported healthcare reforms.  Even the most ardent apologists concede that the short-term truth is clearly the opposite.)

Since nearly 60% of the budget is off limits, the sequester hits even harder.  And the President has compounded the folly by making no effort to direct these cuts at non-essential services, instead preferring that they fall on the most useful ones, thereby wreaking maximum inconvenience on ordinary citizens.  Can it really be that the cuts at the TSA need to be at the airport scanning personnel level?  We couldn’t make a few cuts at the handbook-writing, convention-planning level?

Can it really be true that the President and Congress cannot find 6 percent savings in all discretionary spending by a Government that expands nearly that much year after year?  Or, to be more rational about it, that we cannot find 2.5% savings across the entire budget, or just half of the annual increase?

What we have seen, and is still playing out now, is politics, not responsible public policy.  The sad thing about this is that it’s not even good politics.  Had the President gone to the American people in late 2009 and, to steal a quote, asked everyone to “eat our peas” — by adopting Simpson-Bowles or something very close to it – the country would have begun a real economic recovery, and he would have been easily re-elected in 2012, with a higher percentage of the popular vote, not to mention avoiding the disastrous 2010 Tea Party takeover of the House.

It’s still not too late.