Minor Trims on Major Issues: The Triviality of Current U.S. Debt Ceiling Negotiations.

Sunset, Yosemite Valley.

© 2013 Dliff.

CC BY-SA 3.0.

via Wikimedia Commons.

In an article today in the New York Times, Jim Tankersley discusses the ongoing negotiations between President Biden and House Republicans concerning the U.S. debt ceiling. The primary focus of these talks has been to curtail nondefense discretionary spending, which encompasses areas such as education, environmental protection, and national parks. However, this sector represents less than 15% of the government's anticipated spending of $6.3 trillion for the year. Meanwhile, the negotiations have precluded any substantial changes to Social Security and Medicare, which account for the majority of future projected spending growth, and military spending, which rivals nondefense discretionary expenditure in size.

The proposed budget cuts chiefly target areas that are not primary sources of spending growth in the upcoming years, such as education and environmental protection. The reductions could lead to a 30% decrease in many popular government programs, according to White House officials and independent analysts. Additionally, the negotiations are unfolding in the wake of a substantial spike in federal spending during the Covid-19 pandemic under both President Trump and President Biden's administrations. Despite this increase, the Congressional Budget Office expects a modest drop in total government spending for this fiscal year, followed by a rise later in the decade.

The projected increase in federal spending over the coming decades is attributed primarily to major federal health programs and Social Security. These trends were apparent even before President Biden took office. The current negotiations, with their focus on trimming relatively small parts of the budget, have been criticized from both ends of the political spectrum. The stalemate over addressing mandatory spending programs and the nation's tax system continues with no immediate solution in sight. The trajectory suggests that an agreement capable of significantly altering federal spending in the future is unlikely under the current approach.

Balancing Equity and Efficiency: The Case for Congestion Pricing on Highway 37.

 "Road Pricing in Singapore."

© 2007 VK35.

CC BY-SA 3.0.

via Wikimedia Commons.

Highway 37 is once again making headlines. A recent article by Susan Wood for The North Bay Business Journal announced that the California Transportation Commission has endorsed a Metropolitan Transportation Commission proposal to institute a toll on State Route 37. The exact toll figure is yet to be established, but it's expected to reflect the $7 charge for San Francisco Bay Area bridges, projected to rise to $8 by 2025. The toll approval includes two amendments, namely regional income-based discounts and revised guidelines for toll hearings. The projected toll's purpose is to help fund the $430 million expansion of the highway, currently carrying over 35,000 vehicles per day, predominantly from Solano County and the City of Vallejo.

The toll implementation on Highway 37 should consider the integration of a congestion pricing system, where fees vary based on traffic volume. This approach addresses several critical policy principles. Higher charges during busy hours promote vertical equity, as those choosing to drive at such times are often more financially able. It might also enhance efficiency by discouraging traffic during peak times, facilitating more effective highway use. Despite being more intricate than a single flat toll, current technology can simplify comprehension and compliance with variable pricing. Revenue sufficiency might be amplified by earning more during peak periods, contributing to highway upgrades. Congestion pricing might spur economic growth by reducing traffic and rendering the highway more attractive to businesses and commuters. It may also be more politically acceptable than a flat toll, as it provides drivers the option to evade higher costs by traveling during quieter periods. This approach's potential improvements in efficiency and equity might enhance the overall effectiveness of the toll policy. Hence, the adoption of congestion pricing for Highway 37 could better align with the tenets of an effective and fair policy, optimize the highway's efficiency, and secure the required revenue for its upgrades.

In contrast, a flat toll without supplemental congestion pricing has inherent shortcomings. While it exhibits horizontal equity by holding all drivers equally responsible, it lacks vertical equity as it is uniformly applied regardless of income. Public acceptability varies, with some considering it essential and others protesting the increased commuting cost. The toll is intended to cover a substantial portion of the $430 million needed for road enhancements, but a $250 million funding shortfall suggests potential insufficiency. Without price signals to enhance roadway efficiency or encouragement for better usage, a flat toll may prove deficient in areas like vertical equity and revenue sufficiency. Consequently, it could be less politically viable.

Potpourri for Friday, May 19, 2023.

"CA-37 at Sears Point."

© 2007 Aztecrosales.

CC BY-SA 3.0.

via Wikimedia Commons.

The Thursday edition of the Press Democrat headlined three stories, each focusing on local roadway issues. The first, by Susan Wood, reported that the Metropolitan Transportation Commission had unanimously agreed to impose a toll on California's State Route 37. The toll aims to generate funding for upcoming enhancements to the highway. These include adding a lane and raising the entire route to combat flooding. The widening project, costing $430 million, and a $6 billion flood prevention initiative are due to start in 2025 and will span multiple years until completion. However, it's important to note that no plans have been formulated to manage potential increased traffic on the Napa River Bridge, a possible alternative route for those wishing to avoid the toll.

Madison Smalstig wrote about commencement of a $29 million repair program targeting nearly 50 miles of Sonoma County roads. The project, planned for this summer, involves paving, sealing cracks, and removing vegetation to address the poor conditions of these roads. Despite over $203 million invested in the past, the overall condition of the county's extensive 1,368-mile road network has only marginally improved. To elevate the roads to a "good" to "very good" standard, the county estimates a necessary investment of $954 million over two decades, amounting to about $47.7 million annually. The topic of road financing issues and the subpar condition of Sonoma County's roads has been a recurring theme on this blog.

Lastly, Amelia Parreira describes a new development in Petaluma. The City Council gave a green light to proceed with the proposed Caulfield crosstown connector bridge. Estimated to cost $48.5 million, the project involves the construction of a 300-foot movable bridge over the Petaluma River. Expected to be operational by 2026, the bridge will improve citywide connectivity and reduce traffic congestion. It will not only serve drivers but also provide a more accessible route for pedestrians and cyclists. Given the longstanding bottleneck at D Street and the peculiar layout near the 101/116 interchange in Southern Petaluma, the construction of this bridge, first proposed in 2006, seems like a logical solution. This highlights the prolonged timelines all too often required to implement meaningful transportation projects in Sonoma County.

Struggling for Equality: The Battle Over Same-Sex Marriage in Japan.

"Tokyo Rainbow Pride in 2016"

© 2016 Nesnad.

CC BY-SA 4.0

via Wikimedia Commons.

Motoko Rich and Hikari Hida from The New York Times delve into the escalating tension in Japan over the legalization of same-sex unions. Japan stands alone as the only G7 country where same-sex marriage is not legal, despite public opinion being largely in favor. However, conservative entities, notably the Shinto Association of Spiritual Leadership and affiliates of the Unification Church, propagate an opposing viewpoint, likening homosexuality to an "addiction" that can be "cured." As international pressure mounts for Japan to champion equality, lawmakers have offered a tepid response, drafting a bill calling for no unfair discrimination against LGBTQIA+ individuals, although critics argue it falls short compared to a previous failed proposal.

These religiously associated organizations exert significant influence within the conservative political sphere, even though they may not echo the sentiments of their followers or the broader public. The national Shinto association, deeply interwoven with Japan's culture and traditions, uses its ideological drive to sway lawmakers on various social matters. Concurrently, Prime Minister Fumio Kishida, acknowledging the distinct circumstances of each country, stresses the need for a comprehensive dialogue on same-sex marriage. Yet, the political sway of the religious right, demonstrated through the assassination of Shinzo Abe and the implication of the Unification Church, overshadows these discussions.

Despite these challenges, the LGBTQIA+ community in Japan perseveres in their struggle for equal rights, with an increasing number of municipalities offering same-sex partnerships and legal challenges to the constitutionality of the non-recognition of same-sex marriages. Amidst these efforts, foreign diplomats led by U.S. envoy Rahm Emanuel continue to advocate for LGBTQIA+ rights, drawing attention to the strong public endorsement for same-sex marriage. As Japan contends with demographic changes, the call for embracing diversity and immigration reform grows stronger. Corporations such as Suntory and Coca-Cola Japan signal a shift towards inclusivity, underscoring the resilience and diversity of Japan's LGBTQIA+ culture.

Banking on Trouble: The SVB Collapse and its Impact on Financial Stability.

Gregory Becker.

2015 US Department of Labor.

Public Domain.

via Wikimedia Commons.

In a New York Times article by Rob Copeland, Gregory Becker, former Silicon Valley Bank (SVB) CEO, defended his actions before a Senate Banking Committee hearing regarding the bank's failure. Becker deflected blame onto regulators, the media, and inflation-induced interest rate hikes. SVB's downfall, fueled by large investments in low-yielding government bonds and a high proportion of uninsured accounts, has triggered a debate around banking regulations. Becker, who earned nearly $10 million in 2022, faced questions about his compensation and potential return of bonuses. Senators critiqued his failure to accept personal responsibility.

An Economist article, "The prop-up job", provides an in-depth analysis of SVB's collapse. The authors posit the bank's rapid downfall exposed signs of instability in the U.S. banking system, despite post-financial-crisis regulations. The article highlights the implications of abandoning the "Lombard Street" rule of central banking, leading to potential instability. It also draws parallels to the banking crises of the 1980s under then-Fed chairman, Paul Volcker. According to historian Peter Conti-Brown, rising rates subtly affect interest-rate and credit risk, and can strain borrowers. The authors suggest that the banking system is more vulnerable than previously thought and smaller banks, especially those with uninsured deposits, may need to increase capital soon.

The "Lombard Street rule" or Bagehot's dictum, articulated in Walter Bagehot's "Lombard Street: A Description of the Money Market", argues for the Bank of England's role as a lender of last resort during financial crises to maintain stability. Bagehot proposes that in times of panic, the bank should offer high-rate loans to solvent firms against good collateral, ensuring sufficient reserves to meet demands and deter non-serious borrowers. This approach has significantly influenced modern central banking policy.

The breakdown of Bagehot's dictum has a predictable result, illustrated in Bagehot's other great work, "The English Constitution." There, he details the vital role the House of Commons plays in the British political system. Bagehot positions the Commons, including the Cabinet formed from it, as the power center reflecting the electorate's will, controlling fiscal matters, and determining legislation. Additionally, the Commons facilitates communication between the government and its people, conveying public opinions, desires, and grievances to the state and justifying state actions and decisions to the public.

Becker's congressional hearing underscores the significant role of Congress, the American equivalent of the Commons (Senate and House both being subject to popular elections) in addressing banking sector instability. This step opens a much-needed debate on banking regulations. Although the hearing was marked by partisan disagreements, it offered an opportunity to question actions leading to SVB's failure and to assess executive accountability. As Bagehot stressed, the banking system, along with regulatory bodies like the Federal Reserve and the U.S. Treasury, must ensure financial stability. Therefore, this incident should alert CEOs across the industry to the need for coordinated efforts to strengthen the banking system's integrity, even if Bagehot's dictum, as a practical matter, may apply no longer to any but the smallest of U.S. banks. 

America's Debt Dilemma: Hitting the Ceiling.

"The Republican Elephant."

Thomas Nast, 1874.

Public Domain.

via Wikimedia Commons.

The Economist this week writes about America's continued struggle with the debt ceiling. As Congress and the White House continue to negotiate, America is in danger of defaulting on its debt in a few weeks, with neither Republicans nor Democrats willing to compromise. The Treasury could bypass the debt ceiling by minting a colossal commemorative coin and depositing it into the government's account at the Federal Reserve, which would allow for the payment of government expenses without borrowing from public markets. The Biden administration has a few options including invoking the 14th Amendment and issuing high-coupon low face-value bonds, to bypass the debt ceiling and resume borrowing. 

Despite the risk of litigation and the potential for market disruption, the possibility of brutal austerity as a workaround for Treasury debt payments has pushed policymakers to consider unconventional, yet ingenious plans. Treasury officials are uncertain of their ability to implement prioritization of payments and regularly sell bonds in order to pay off their debt, and if dealers decline to participate, the whole plan could be thrown into jeopardy. Faced with the risk of default, prioritizing payments to bondholders may be necessary to get both sides to reach a deal, but could have big costs. However, as almost every observer has noted, the world's biggest economy should not be managed in this manner. 

I've written previously on this, noting that the Biden administration's exploration of using the 14th Amendment to challenge the current federal borrowing limit has prompted heated debate among economic and legal advisors. Meanwhile, Kevin McCarthy is facing his first major test in leading the House of Representatives in Congress' negotiations to lift the debt ceiling, a controversial issue that requires bipartisan compromise while weighing both fiscal responsibility and the need for austerity. The ripple effects of the rise of the far-right within the Republican Party have left lasting damage to both faith in the political system and the party's overall stability. The rising tensions within the Republican Party over the debt ceiling are making it increasingly difficult to present a unified stance. To move ahead successfully, the Republican Party must find ways to address the factors contributing to its internal divisions and disarray.

The Battle for Democracy: Turkish Elections, Deepfakes, and the Threat to Press Freedom.

"The Demagogue"

 José Clemente Orozco, 1946.

Public Domain.

via Wikimedia Commons.

In an article today by Ben Hubbard and Gulsin Harman from The New York Times, the recent Turkish presidential elections are reported to be heading into a runoff. After failing to secure a majority, the incumbent president Recep Tayyip Erdoğan will face opposition candidate Kemal Kılıçdaroğlu in a two-week battle that could redefine Turkey's political landscape. Erdoğan, having served as Turkey's dominant political figure for 20 years, has seen a decline in his standing due to economic issues and his consolidation of power. Meanwhile, Kılıçdaroğlu represents a coalition of six opposition parties, campaigning as the antithesis of Erdoğan.

Meanwhile, David Klepper and Ali Swenson of The Associated Press this morning discuss the potential political risks posed by advanced artificial intelligence (AI) tools leading up to the 2024 elections. The availability of inexpensive and increasingly sophisticated AI technology has heightened concerns about the creation of convincing deepfakes, including fake images, videos, and audio. These deepfakes, in conjunction with social media algorithms, have the potential to spread misinformation quickly and target specific audiences, possibly leading to new levels of election manipulation. Experts like A.J. Nash from the cybersecurity firm ZeroFox warn that society is unprepared for the impact of these AI-driven media manipulations, which could be used to confuse voters, slander candidates, or even incite violence. As we approach the 2024 elections, there are increasing calls for legislative measures to combat the potential misuse of AI in political campaigns. 

That may very well be a move too far. Daren Butler of Reuters, in an October 13, 2022 article, noted Erdoğan's use of misinformation and its impact on Turkey's democracy. The article refers to a controversial law enacted by the Turkish parliament, proposed by Erdoğan, which can jail journalists and social media users for up to three years if found guilty of spreading "disinformation". Lawmakers from Erdoğan's ruling AK Party and its nationalist allies MHP, who collectively had a majority in the parliament, approved the bill despite strong opposition from both national and international critics. These critics argue that the law's vague definition of "false or misleading information" could be exploited to suppress dissent.

Engin Altay, a member of the main opposition Republican People's Party, expressed concerns that the law will further limit press freedom in a country already lagging behind in this area. The AK Party, without shame, claims that the legislation is necessary to combat misinformation and false accusations on social media, asserting it will not be used to suppress opposition voices. The fairly clear intent of the legislation is to control narratives and limit critical voices, thereby influencing public opinion. Reuters' investigation highlighted the state of media freedom in Turkey, describing mainstream media as adhering to government-approved headlines while independent and opposition media face penalties. The Venice Commission, an advisory body to the Council of Europe, expressed concerns that this law could induce a "chilling effect and increased self-censorship" ahead of the elections.

The proliferation of misinformation, further magnified by artificial intelligence, presents a considerable challenge to democratic values, underlining the indispensable role of press freedom. Drawing parallels with Kléōn's emotional manipulation in the Mytilenean Debate, contemporary misinformation leverages public sentiment, especially anger, to influence portions of the electorate. However, Aristotélēs maintained that the robustness of democracy resides in the collective wisdom of its populace. This collective wisdom, cultivated from a variety of perspectives and experiences, tends to yield clear choices, exemplifying the tenacity of democratic systems. There's an expectation that the probabilities underpinning the Condorcet Jury Theorem have remained (mostly) unaffected by misinformation. However, it's almost certain that augmenting governmental control over information could lead to a detrimental shift. Other than ongoing voter education, few options exist to ensure that clear choices will still surface in the aggregate. The freedom of the press remains a key factor in assuring that the electorate is well-informed and capable of exercising its collective wisdom, thereby reinforcing the effective functioning of democratic systems, despite the emergence of AI-powered misinformation or even more worryingly, justifications for state control of the press based on such grounds.

Questions from the Press, Friday, May 12, 2023.

Miles Trachtenberg

Heather Kelly Trachtenberg

I received questions today from Dan Johnson of the Sonoma Index-Tribune regarding last night's decision by the trustees of the Sonoma Valley Unified School District to proceed with construction of the Science Building at Sonoma Valley High School. Per my past practice, I post the questions and my answers below. 

I have attached a picture of my nephew, Miles, and my sister, Heather. Miles is graduating in a few weeks from his high school, the Houston Academy for International Studies, and at the same time has earned an associates in arts (AA) degree from Houston Community College, as he completed the work for both at the same time. He was also, incidentally, the prom king. Well done Miles!

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1. Did the board approve the original agenda item—to approve the lease-lease back agreement—or did it simply vote to move forward with constructing the new science wing?

My understanding of the item is that it was approved as agendized. A lease-leaseback arrangement covers both the design and construction of a building, which allows collaboration with the builder throughout the process, an innovation that has resulted in lowered construction costs, and closer adherence to the agreed-to designs in school projects across California. The lease-leaseback approach aims to involve both the contractor and architect early in the project to, hopefully, minimize expensive changes after construction starts, ensuring the project stays within the initially established price. The method normally encourages close collaboration between the architect and builder from the beginning and throughout the project. In contrast, the traditional design-bid-build process often lacks this level of coordination, as design documents are completed before the contractor's involvement.

This particular lease-leaseback arrangement was entered into several years ago, but commencing construction under the terms of the lease-leaseback itself requires approval from the board. Again, my understanding of the agenda item was that we were approving construction pursuant to the original lease-leaseback arrangement.

2. So, does this mean that the school district has not arranged yet for a construction company to build the science wing? I thought that a construction company had been determined. If so, what is the name of the construction company and what is the significance of the lease-lease back agreement?

The relationship with the contractor, GCCI, was formed at the time of the inception of the lease-leaseback relationship, which is normal and routine. We are continuing with the agreed-to contractor, which is what I would expect if the District did indeed intend to follow through and make the bond expenditure. However, we are not required to do so -- as a District we have the discretion to decline to proceed. Especially given the greatly modified scope of this particular project, which has been transformed from a mere remodel to a complete demolition and reconstruction, it would not have been unexpected for this project not to have gone forward.

3. I see that the modernization is estimated to cost $15,484,390, quite a bit higher than the original estimate of $8,684,390. Why has the cost increased so much?

We are now demolishing the existing building and commencing construction on an entirely new one, a very different proposition from the original proposal. Further, the costs of remodeling included many accommodations to the existing design, making it essentially no different from, and perhaps even more expensive than, simply knocking down the building and starting over. However, the remodel was initially conceived as a cost-saving measure to avoid having to construct a completely new building. Had the District known that remodeling would essentially involve a decision to demolish, I feel the decision probably would have gone a different way.

4. The new science wing was scheduled to be built by summer 2024. Will this still be the case? When will construction begin?

My belief is that demolition will begin shortly after the conclusion of classes in June. I defer to staff and the contractor regarding the expected completion date. 

5. Will the district be able to pay for the new science wing strictly through Measure E funds?

It is the belief of the District that it will be able to do so. Several of our bond projects have run over cost significantly. We have little room left for error at this point.

6. It seemed that most of the concerns about approving this agenda item centered around costs to improve facilities at Altimira Middle School. What work needs to be done at Altimira?

Seven Altimira buildings were constructed via "tilt-up," and they constitute the bulk of the Altimira campus. Tilt-Up construction features series of concrete panels tilted up into place to form a building's exterior wall. These panels are created at the work site using wood forms, rebar and concrete. The forms are shaped and rebar cut to match the final designs. Next, concrete is poured into the forms and finished. 

While the technique was popular in the middle of the 20th century due to the perceived lower cost associated with the method, in the longer term the price associated with maintaining adherence with seismic safety standards ultimately makes it no less, and perhaps more expensive that competing methods of construction. During the preparation of the facilities master plan by Perkins Eastman, the consultants brought to light the SB 300 status of Altimira’s buildings. These buildings do not meet current seismic safety standards and SVUSD will be required to conduct a retrofit (at best) and perhaps will have to demolish and reconstruct these buildings in the near future, as the structures simply do not meet contemporary seismic safety standards -- a fact only brought to light in January of 2023. 

7. Why wasn’t the work at Altimira included in the list of bond projects?

The process of choosing projects on which to expend bond dollars was supposed to be guided by the principle of "safe, warm and dry." Safety was, at all times, intended to be the guiding principle in project prioritization. I have had disappointment over and over again at how the politicization of construction in the District has led to very different priorities being advanced. Ultimately, the bond expenditure program ended up being a series of compromises between competing groups all with legitimate claims to the expenditure of resources. My belief is that we as a District cannot allow that to occur again, and we must make sure to constrain, in the drafting of the bond measure language, the projects the trustees are allowed to expend funds regarding. 

8. How much do you expect the work at Altimira will cost?

I don't know. I have asked repeatedly for an estimate. Perkins Eastman represented to me they would have an estimate several times, including at our March and April meetings, but no information has been forthcoming. 

My expectation, at this point, is that the buildings will all need to be demolished and reconstructed, and I expect each will cost in the range of $10-$15 million. In aggregate, I would not be surprised if the total figure is between $70-$100 million as a consequence. 

While our business officials have expressed hope that remediation may be an order of magnitude less than this, more in the range of $5-$7 million, their reticence in committing to that figure is the "tell," so to speak, regarding the confidence anyone can have in that back-of-the-envelope calculation. 

9. Do you anticipate that another bond measure will need to be passed to do the work at Altimira, or can it be paid for in another way?

There was a lot of general language shared in the meeting regarding alternative funding mechanisms. Among the suggestions was the sale of District property, a complete nonstarter as far as I am concerned. CDOs, or collateralized debt obligations, are of course available, but because those are backstopped by the District's general fund, they should not be used in my opinion unless the project to which they are dedicated is revenue-generating. While there is some state money, and redevelopment agency funds anticipated to be received in future years that could potentially be securitized, none of these are appropriate for the construction of ordinary school facilities that were and are the top-line priority for past and future bond campaigns. Simply put, if we're not using bond monies for seismic safety, what are we using them for in the first place? Is there any higher priority than student safety in an earthquake, particularly for a school that serves our most disadvantaged student population? 

10. Do you think that it is likely that a bond measure could pass, and would other district needs be included in it?

This is too contingent of a question to answer at this time. SVUSD's record of bond expenditures makes clear that any language in a future bond will have to be carefully scrutinized before it is allowed to go to the voters. Having witnessed the gap between the reality of how bond funds have been spent, and how they were represented to the public in the first place, I would be very uncomfortable ever bringing such general language to the voters again. The legitimacy and accuracy of the bond offering is critical to ensuring that the funds are expended as the voters intended, and that just didn't happen in the past. 

11. You indicated that you felt there were strong arguments both for and against moving ahead with building the science wing. Please summarize your thoughts. 

Only the most trivial of arguments are easily disproved, and as trustees we know we are grappling with our essential duties when strong arguments can be deployed both pro and con. Here, support for science education is amongst the top priorities of our trustees. Remodeling our buildings that serve that important program will help equip our students for success in a future yet to be imagined, let alone fully described. I can understand the inclinations of my fellow trustees to proceed with the project given that important priority. Further, the fact that it has taken this long to reach this important project is again a further testament to how other projects, of less import to our constituents, were nonetheless advanced on the District's construction calendar. 

Change is difficult. It is scary to confront the costs that we may be facing at Altimira. As our business officials noted, the costs at Altimira may be so high that the remaining bond funds would be inadequate to address the issue, and the science building project is ready to commence. However, our voters expect us to prioritize given the facts that this board confronts, not the ones faced by another board in another time. The clear problems at Altimira, and the lack of any guidance given to the trustees on those costs, while the trustees were urged to approve this science building project that is now nearly double its initial estimates, justified caution in proceeding and the trustees should have obtained more information before approving the science building. Thus, the source of disagreement I think did not turn on the merits of the science building itself, but whether the appropriate amount of information had been provided to the trustees to weigh the competing interests. A special meeting could have been scheduled in a week or ten days to review estimates of Altimira and make a fully informed decision; the fact that the trustees did not wait to obtain that before proceeding was thus the ultimate source of disagreement at the meeting last night. 

12. How will building a new science wing enhance education for Sonoma Valley High School students?

New facilities are amongst the clearest ways we, as a District, can show our commitment to a particular program, and science education lies at the core of our current understanding of how to prepare our graduates for college and career. Existing facilities do not meet the needs of our program, as articulated by our educators. I trust their evaluation of this, and the science building is indeed a priority. 

There are alternatives to new construction, including the fact that as our enrollment and attendance decline, we have a surfeit of classrooms and structures available for repurposing. There was not a detailed discussion of those alternatives, and I would have liked to have seen if there were other options before proceeding. There were discussions about whether that information could be provided quickly, and I think it would have been appropriate for the trustees to consider this before proceeding.

13. Would you like to say anything else?

I believe that my fellow trustees are acting to resolve competing claims to resources, which is a classic function of a school board. It is right and proper that they should do this. However, I believe prudence here would have guided us to conserve bond funds, in an effort to demonstrate this board is aware of the issues with prior bond expenditures and knows the public is observing how well our governance team matches professed values with those practiced and applied over time. We as a District should be doing all we can to conserve resources to address those most critical of issues, and it is hard to find any more important in the context of facilities than seismic safety. While I realize those who serve as trustees with me now were not those who made earlier decisions regarding the expenditure of bond funds, we have collective responsibility for the operations of the District and we must recognize that the public will not distinguish us from one another when evaluating whether to support future bond expenditures, which will inevitably be necessary to maintain the quality of instruction our community wants and deserves. I remain committed to working with my fellow trustees to navigate these difficult questions in the future, despite our disagreement at times over priorities, such as we had last night over this construction decision.

Boxed Wines: When It's Hip to Be Square.

"Coravin Model Two Wine Preservation Opener."

© 2017 JGuzman.

CC BY-SA 4.0.

via Wikimedia Commons.

In a recent article published by The New York Times, Eric Asimov discusses the growing popularity and quality of boxed wines, primarily driven by environmental concerns. While boxed wines have faced resistance in the past due to perceptions of lower quality, this is changing as more producers and merchants choose bag-in-box packaging for wines not intended for cellaring. This shift is driven by the fact that wine bottles are a significant environmental problem, contributing to the wine industry's carbon footprint, and a low percentage of glass is recycled in the United States. Bag-in-box packaging offers several advantages, including preserving the wine's freshness for longer periods and reducing waste, making it a suitable option for wines not meant for aging.

Asimov, however, briefly mentions an important factor that contributes to the stigma around boxed wine: its unsuitability for wines intended to age more than a year. More expensive wines often require cellaring to reach their full potential, which necessitates the use of glass bottles -- meaning the highest quality wines will be linked with glass. This is a significant obstacle to boxed wine's acceptance, even if a marketing team on par with Apple were to make the "unboxing" experience more attractive. The perception (and indeed fact) of wine in a glass bottle as a higher-end product may thus hinder the progress of environmentally friendly alternatives.

Moreover, it's important to recognize two separate innovations in this space: the use of cardboard as a container and the vacuum-sealed bag that extends the wine's shelf life after opening. The latter, in the context of higher-end wines, is typically where Coravin technology is utilized. A vacuum-sealed bag is a far better solution than needles through corks and argon containers. A system that could combine the best of the two, allowing decanting into a vacuum-sealed enclosure that provides some of the time extension advantages, would avoid the unwieldy elements of Coravin. A competitor that streamlines the process while maintaining a high-quality image may be better poised to meet the needs of consumers, if not specifically addressing the carbon footprint and environmental impact of the industry.

Potpourri for Tuesday, May 9, 2023.

Mission San Francisco Solano.

(Namesake of Sonoma Mission Inn.)

© 2018 Fred Hsu.

CC BY-SA 3.0.

via Wikimedia Commons.

In a recent article by Chase Hunter and Susan Wood of the Sonoma Index-Tribune, an investigation by the National Labor Relations Board (NLRB) found sufficient evidence to prosecute 43 labor law violations at the Fairmont Sonoma Mission Inn. Workers at the luxury Boyes Hot Springs hotel have been trying to unionize since fall, but the hotel has attempted to intimidate, threaten, and bribe employees, according to Carlos Castillo, a housekeeping houseman at the hotel for 13 years. The three-month investigation revealed violations such as illegal threats of reprisals against employees for engaging in union activities, interrogation of employees about their union activities, and promising a promotion to an employee if they refrained from union activities.

Ted Waechter, a union spokesman, confirmed that the timeline surrounding a union vote remains undetermined. The NLRB has required the hotel management to post information about employees' right to organize in order to rectify the labor violations. According to a press release, the Fairmont Sonoma has agreed to multiple concessions, including instructing employees about their rights at work, granting the union equal time should the hotel conduct further meetings about unionization, and refraining from further violations of the National Labor Relations Act.

The Sonoma Valley has experienced a significant shift towards a tourism-based economy in recent years, but little has been done to protect the workers who keep this industry thriving. These employees face a myriad of challenges, including long commute times, poor working conditions, unaffordable housing, underfunded schools, and inadequate healthcare. The local economy relies on the hard work and dedication of these individuals, and they deserve a better deal. The interference with organizing efforts at a flagship institution like the Fairmont Sonoma Mission Inn is particularly disconcerting, as it sets a precedent for other businesses in the region. Workers in the Sonoma Valley should have the opportunity to advocate for their rights and secure better working conditions without disruption to ensure a sustainable and equitable tourism industry for all.

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The Berkeley Library, Trinity College Dublin.

 © 2014 Smirkybec.

CC0.

via Wikimedia Commons.

Trinity College Dublin has decided to rename its central library, formerly known as the Berkeley Library, after discovering that the 18th-century philosopher George Berkeley, whom the library was named after, owned slaves in colonial Rhode Island and wrote pamphlets supportive of slavery. Despite being regarded as one of the most influential thinkers of the early modern period, Trinity's governing board voted to "dename" the library following months of research and consultation. According to the article by Ed O'Loughlin from The New York Times, Trinity College's provost, Linda Doyle, stated that while Berkeley's intellectual legacy remains intact, his involvement in slavery and racial discrimination conflicts with the college's core values.

The decision to rename the library came after students at the college began lobbying and protesting for a re-examination of Berkeley's legacy. Although his name will be removed from the library, George Berkeley's philosophical and scientific theories will continue to be taught at the college. Meanwhile, the University of California, Berkeley, founded in 1868, was also named after the philosopher, along with the adjacent city (founded in 1878). In recent years, there have been efforts to address problematic legacies within the University of California system. The Berkeley campus' law school, generally known as Boalt Hall, was renamed following recognition of John H. Boalt's authorship of the infamous Chinese Exclusion Act. Similarly, the University of California College of the Law, San Francisco was renamed after discussions surrounding Serranus Hastings' involvement in Native American genocide. 

As the University of California system continues to confront and address these historical issues, it seems increasingly likely that the system will also have to reckon with George Berkeley's record as a slave owner and advocate of slavery. In light of these revelations, a potential renaming of the UC Berkeley campus to simply the "University of California" might be an inevitable step toward distancing the institution from its controversial namesake.

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Dedicated parking lot for EVs in Oslo, Norway.

© 2018 Mario Roberto Durán Ortiz.

CC BY-SA 4.0.

via Wikimedia Commons.

As reported today by Jack Ewing in The New York Times, Norway now serves as a prime example of how prioritizing electric vehicle (EV) infrastructure can lead to significant benefits, both environmentally and economically. 80% of new-car sales in Norway were electric in 2022, with the government planning to phase out internal combustion engine cars by 2025. This transition has not only led to cleaner air, quieter streets, and a 30% reduction in greenhouse gas emissions since 2009, but it has also avoided mass unemployment among gas station workers and the collapse of the electrical grid. Tesla has emerged as the best-selling brand in the country, while traditional automakers like Renault and Fiat struggle to keep up.

The Norwegian government's proactive approach, dating back to the 1990s, has been key to the successful adoption of EVs. By exempting battery-powered vehicles from value-added and import taxes and highway tolls, as well as subsidizing the construction of fast charging stations, Norway has made EVs an attractive option for its citizens. The country's power grid has remained stable, with a modest increase in electricity demand from EVs and ample supply from hydropower. However, Norway faces the challenge of balancing its ambitious climate goals, such as reducing carbon dioxide emissions to nearly zero by 2030, with its continued reliance on oil and gas production, which generated $180 billion in revenue in 2022.

Addressing the lack of EV infrastructure is crucial for governments worldwide, as it presents a classic case of coordinated action to solve a collective problem—emissions contributing to climate change. This infrastructure deficit is a legacy of the long-standing economic dominance of the fossil fuel industry. As nations strive to reduce their carbon footprints and combat climate change, it is reasonable to expect governments to follow Norway's lead in ensuring the necessary infrastructure is in place. By enacting policies and incentives to encourage EV adoption and the development of a comprehensive charging network, governments can facilitate the transition to cleaner transportation and address the challenges posed by our dependence on fossil fuels.

The Overlooked Impact of Highway 37 Improvements on the Napa River Bridge.

Roadways Impacted by Proposed Toll.

CC BY-SA 3.0.

via Wikimapia.

Susan Wood's article last Friday in The North Bay Business Journal describes how Highway 37, on the northern edge of San Francisco (San Pablo) Bay, is planned for improvements to address traffic congestion and flooding issues. A proposed $7 toll aims to fund the $430 million project for widening the 21-mile road between Marin and Solano counties. However, the added toll has sparked some complaints from commuters.

Introducing a toll on Highway 37 will potentially lead to increased use of Highway 12 to Highway 29, particularly the untolled Napa River Bridge (George F. Butler Memorial Bridge). While imposing a toll on Highway 37 would help address congestion issues and generate revenue for road maintenance, what will prevent traffic from shifting to the alternate route, creating new challenges, as discussed previously?

If the use of the Napa River Bridge rises significantly due to the Highway 37 toll, the straightforward answer would be to consider implementing a similar toll system on the untolled alternative. Yet, local traffic in Napa Valley is far less likely to accept pricing for the Napa River Bridge compared to Highway 37 commuters crossing a 10-mile causeway. There seems to be a lack of recognition of how these routes together affect North Bay transportation planning in general.

The initial Highway 37 project is scheduled from 2025 to 2027, so work could begin in as little as 18 months. This phase will include adding an electronic toll station, a bus service, and a low-income discount program. However, it is important to note that the proposed traffic mitigation, bus transport, does not address issues in either Sonoma Valley or Napa Valley for traffic between the two regions. If the project is to prove successful, it is likely that at a minimum, installation of toll infrastructure at the Napa River Bridge should be included, even if it is not activated at the same time as tolls on Highway 37 -- and which leads, via an oblique angle, to the general issue of congestion pricing in the North Bay ...

IOLERO Audit Uncovers Incomplete Investigations in Sonoma County Sheriff's Office.

"21st Century Policing Task Force Report."

Pete Souza, March 2, 2015.

Public Domain.

via Wikimedia Commons.

In a recent Press Democrat article, Emma Murphy and Colin Atagi discuss an audit conducted by Sonoma County's Independent Office of Law Enforcement Review and Outreach (IOLERO). The audit revealed that out of 36 internal investigations into disciplinary cases within the Sheriff's Office over the past six years, half were incomplete. Four cases specifically involved policy violations that received inadequate punishments. As a civilian-led oversight agency, IOLERO's role is to audit the Sheriff's Office's internal investigations and recommend policy changes and disciplinary actions when necessary.

The report highlighted cases involving excessive use of force by deputies, inappropriate relationships with confidential informants, and inaccurate information transmitted by dispatchers. The most severe case concerned a deputy's excessive use of force in 2020, which IOLERO concluded should have resulted in termination. Other cases involved a deputy with an inappropriate relationship with a confidential informant, a county jail correctional deputy's excessive use of force against an inmate, and a dispatcher who created an entry implying a husband involved in a domestic violence incident was violent without factual basis.

Sonoma County Sheriff Eddie Engram attributed the high number of incomplete investigations to differing definitions of "complete investigations" between the Sheriff's Office and IOLERO. He expressed confidence that the ratio of incomplete reports would decrease in the next annual report, as he and IOLERO Director John Alden have begun discussing how to define a complete investigation.

The report coincides with Alden and Engram's pledge to improve their shared work, marking a major step forward for IOLERO and the Sheriff's Office, following a historically combative relationship between the two organizations. IOLERO's report also marked a significant milestone, as the agency has cleared its backlog of investigations, allowing the six-member office to carry out its key responsibility of auditing the Sheriff's Office internal investigations more quickly.

From the perspective of school board trustees, I feel that these recent findings could be concerning when evaluating proposals for school resource officers (SROs) in Sonoma County. As trustees are responsible for ensuring the safety and well-being of students, staff, and the school community, the quality and effectiveness of any potential program must be carefully assessed in light of these revelations. The report highlights the need for improved transparency, communication, and accountability within the Sheriff's Office, which directly impacts the SRO program and the level of trust that school board members and the community at large can place in it for those jurisdictions that contract with the Sheriff's Office for services.

To make informed decisions, school board trustees should closely monitor the progress made by the Sheriff's Office and IOLERO in defining and implementing complete investigations and addressing policy violations. It is essential that the collaboration between law enforcement agencies and IOLERO results in proper training, guidance, and oversight, while also addressing concerns raised by parents, students, and the broader community. Additionally, trustees should continue to consider alternative methods of providing safety and support to schools, such as implementing mental health programs, restorative justice practices, or peer mediation initiatives. By actively engaging in discussions and decision-making processes, school board trustees can better evaluate the overall safety and well-being of Sonoma County schools.

Protecting Communities: Addressing Toxic Chemical Releases.

ExxonMobil's Baytown, Texas Refinery.

© 2008 Baytownbert.

CC BY-SA 3.0

via Wikimedia Commons.

In an article by Eric Lipton in today's New York Times, the Biden administration's efforts to curb health threats caused by toxic chemicals from petrochemical plants are discussed. As the debate surrounding these health threats intensifies, families living near petrochemical plants, like the López family in Deer Park, Texas, are directly affected. The Biden administration is aiming to impose restrictions on toxic air releases and ban or restrict some of the most hazardous chemicals. However, companies are pressuring the administration to loosen some of the rules, fearing economic repercussions.

Toxic chemical releases are happening regularly in the Deer Park area, sometimes without notification to residents. The Environmental Protection Agency (EPA) is cracking down on carcinogens released by plants such as the OxyVinyls plastics manufacturing plant across the highway from the López family. Over the past two years, records show the release of numerous toxic chemicals in the area, including some the Biden administration is preparing to impose new restrictions on.

As I reviewed this article, I recalled the German legal principle of "Vorsorgeprinzip," or the precautionary principle, that analytically should play a significant role in addressing the issues surrounding toxic chemical releases. This doctrine emphasizes the importance of taking preventive measures when an action or policy has the potential to cause harm to the public or the environment, even when scientific evidence is incomplete or inconclusive. If the Vorsorgeprinzip were applied to these chemical plants, it would require proactive action to minimize potential health risks and environmental damage.

In light of the precautionary principle, the EPA's proposed policies, that aim to remove a loophole that allows toxic chemical discharges during bad storms, plant malfunctions, or start-ups and shutdowns, are clearly warranted. The EPA also plans to require many chemical plants to monitor air at their fence lines for six key toxics to ensure compliance with the rules. By taking a more preventive approach, these policies aim to protect residents like those in Deer Park from potential harm.

Recent studies have shown that about 100,000 people living within six miles of chemical plants, mostly in Texas and Louisiana, have an elevated risk of cancer. In Houston, a separate study found elevated levels of formaldehyde, which can increase the risk of developing cancer if the levels persist. Another study found a 56% increased risk of acute lymphocytic leukemia among children living within two miles of the Houston Ship Channel compared to those living at least 10 miles away. Under the Vorsorgeprinzip, these findings warrant immediate and decisive action to reduce the risks posed by these plants.

Implementing the precautionary principle in addressing the issues surrounding petrochemical plants would lead to more stringent regulations and proactive measures to protect public health and the environment. While this approach may result in higher costs for the industry, it prioritizes the well-being of communities like the López family and others living near these facilities.

The New Geography of US Clean Energy Manufacturing.

"Solar Panels at Topaz Solar 1."
2014 Sarah Swenty/USFWS.
Public Domain.
via Wikimedia Commons.

In today's New York Times, Jim Tankersley and Brad Plumer review the impact of President Biden's climate law, finding it is driving more investment in American clean energy manufacturing than initially expected. This surge in investments in battery factories, wind and solar farms, and electric vehicle plants could lead to a significant reduction in fossil fuel emissions. However, the increased economic activity centered around green technology is also driving up costs for taxpayers who are subsidizing these investments.

The article prompted me to think about Paul Krugman's theory of New Economic Geography, and how the investments driven by Biden's climate law are reshaping the spatial distribution of economic activities in the United States. Companies are flocking to areas with abundant land, lower costs, and non-unionized labor, potentially turning these regions into new hubs of clean energy manufacturing. These emerging hubs could experience agglomeration effects, with firms and workers in the same industry clustering together, benefiting from localized knowledge spillovers, specialized suppliers, and a larger labor pool. Interestingly, the growth of clean energy projects in red states also highlights the potential for the law to bridge the gap between traditionally fossil fuel-dependent regions and the emerging green economy, fostering more balanced and sustainable regional development.

Moreover, the article brought to mind Brad DeLong's theory of communities of engineering expertise, and the importance of government investment in creating such communities that drive technological progress and economic growth. By providing substantial tax breaks and incentives for clean energy projects, the Biden administration is fostering an environment that attracts both domestic and international companies to invest in the United States. These investments can lead to the development of localized clusters of expertise in clean energy technologies, which, according to DeLong, are essential for driving innovation and maintaining a competitive edge in the global market.

As more companies, such as South Korean solar company Hanwha Qcells, establish factories and research centers in the United States, the spillover effects can create a virtuous cycle of innovation, job creation, and economic growth. This cycle ultimately reinforces the country's position as a leader in the clean energy sector. While the rising cost estimates have caused some controversy among lawmakers, the long-term benefits of fostering a clean energy economy should not be overlooked.

The increased investments in clean energy manufacturing as a result of Biden's climate law have significant implications for the United States' economic landscape and its fight against climate change. Krugman and DeLong emphasize the role of government intervention in shaping regional development and fostering communities of expertise that drive innovation and growth in the clean energy sector. The economic and geographical implications of these investments may thus be essential to continuing the United States' transition toward a greener economy, as the community of stakeholders continues to expand.

Restoring Trust: The Urgent Need for Ethics Reform in the Supreme Court.

Judge J. Michael Luttig, 2005.
Work of Dept. of Labor, Public Domain.
via Wikimedia Commons. 

The New York Times' Abbie VanSickle reports on the recent Senate Judiciary Committee hearing, where retired conservative Judge J. Michael Luttig joined legal experts in urging Congress to establish new ethical standards for Supreme Court justices. This call to action comes in light of recent revelations about undisclosed gifts, luxury travel, and property deals involving justices. Judge Luttig contends that Congress has the constitutional power to enact laws prescribing ethical standards for the nonjudicial conduct of Supreme Court justices.

The hearing saw heated debates between Republicans and Democrats on the necessity of such ethical standards. Democrats argued an ethical code is essential to prevent misconduct and conflicts within the Supreme Court. Meanwhile, Judge Luttig and other legal experts emphasized the importance of upholding the highest ethical standards to maintain the public's trust in the institution.

Regrettably, recent revelations involving justices such as Clarence Thomas and Neil M. Gorsuch have highlighted the lack of reporting requirements and the self-policing nature of the justices, sparking increased calls for the establishment of an ethics code. Although all nine justices signed a "statement of ethics principles and practices" outlining their general ethical standards, many argue that this is insufficient and advocate for more stringent measures.

A Marist poll from last week reveals that 62% of Americans lack confidence in the Supreme Court, with only 37% expressing a great deal or quite a lot of confidence in the institution. This marks the lowest level of confidence in the Court since 2018, when 59% reported having faith in the institution. The ongoing debate on ethics reform within the Supreme Court highlights the need to restore public trust in this vital institution.

In light of the most recent series of revelations about undisclosed gifts, luxury travel, and property deals, it is clear that the time has come to establish and enforce ethical guidelines that will preserve the integrity of the Supreme Court. The Republican-dominated court has significantly undermined confidence and eroded the public's respect for the institution, which has come to define Americans' belief in their judicial system. An ethics code is not only necessary but also a step towards safeguarding the rule of law in America.

Presidential Limits in the Debt Ceiling Showdown.

14th Amendment of the United States Constitution, page 2.

(Section 4, shown above, concerns public debts.)

Work of NARA, Public Domain. 

via Wikimedia Commons.

As the standoff between House Republicans and President Biden over raising the nation's borrowing limit continues, the administration is reported by the New York Times today to be considering a constitutional challenge to the debt limit based on the 14th Amendment. The 14th Amendment states that the validity of the public debt of the United States shall not be questioned, which presents an apparent conflict with the current $31.4 trillion statutory borrowing limit. Jim Tankersley, the author of the article, writes that this has led to an intense debate among top economic and legal officials.

President Biden is set to meet with Speaker Kevin McCarthy on May 9 to discuss fiscal policy, but it remains unlikely a compromise can be reached in time to avoid a default. The president has consistently maintained that it is the job of Congress to raise the limit in order to avoid economically catastrophic consequences. Once again, gimmicks meant to circumvent Congress on the debt limit, such as minting a $1 trillion coin to deposit with the Federal Reserve, have surfaced.

It is clear that the federal government is barred from defaulting on the debt, while at same time, only Congress has the power to borrow. Tankersley reports that inside the administration there is an open question about what the Treasury would do if Congress does not raise the limit in time. Officials who support invoking the 14th Amendment and continuing to issue new debt apparently argue that the government would be exposed to lawsuits either way, which I think is correct. However, the right answer here is that the statutory borrowing limit is binding and that an attempt to ignore it would result in an immediate legal challenge that would likely traverse the Supreme Court's shadow docket and result in an affirmation that Congress has the exclusive power to borrow. There are no shortcuts out of this situation; the political branches, the Congress and the Executive, will have to resolve this issue between them.