Blowing leaves, blowing $1.5 trillion with a lousy tax plan

A rich guy blowing leaves turns out to be an apt metaphor for a lousy tax-reform plan.

I was driving the carpool home down east Sixth Avenue in Denver yesterday. This is million-dollar territory, grand old houses, big lawns. Huge trees with lots of leaves, both on the properties themselves and in the boulevard’s grassy medium, which is a solid 30 yards wide and a joggers’- and dog-walkers’ favorite. A guy stood at the edge of a lawn, probably in his early sixties, clearly a homeowner and not a landscape company employee. He had a leaf blower. And he was blowing the leaves from his lawn into the street.

I’m like, what the hell are you doing?

I apparently said this out loud. My younger daughter, 12, in the passenger seat, looks up from her phone. “What?”

“Oh,” I said. “That guy’s blowing leaves from his lawn into the street.”

She turned to me. “So?”

“It clogs the sewers,” I said. The light turned green and we rolled forward again. “And think about it. What if everybody did that? Just blew their leaves into the street. What if the guys who deal with the median did that? We’d be neck deep in leaves right now.”

We were witnessing a thoughtless, selfish act, if a trivial one. It struck me that it was exactly the sort of thing that the Republicans in U.S. Congress are doing at the moment, on an extreme scale. For their own good and that of their wealthy donors, they’re blowing $1.5 trillion dollars in borrowed green into the street for masses of less-fortunate travelers to sweep up at some point in the future.

Paul Ryan and colleagues are lying when they say they’re looking out for us with this tax reform plan (“us” in this case being the people they nominally — though not actually — represent). This tax cut benefits the wealthy. Yes, there are some middle-class breaks, maybe, for some short period of time. But cutting the corporate tax rate to 20 percent without closing loopholes (much less introducing new ones that could be even more costly) that many corporations use to bring their real tax rate well below 20 percent anyway – thereby increasing profits and raising stock prices… who do you suppose wins there?

The people who own the companies.

Who owns the companies? Shareholders.

But lots of people own stock, right?

Yes. But only about half of Americans. Guess which half? (Hint: it’s not the poorer half.)

The argument for tax cuts as economic stimulus, which Paul Ryan keeps parroting, is as laughable as the Laffer Curve. It failed under Reagan in the 1980s. It failed worse in Kansas in the 2010s. It won’t work now. Ryan knows this, of course. He just doesn’t care, because the people who gain are the people who pay his bills. Nor do most of his Republican colleagues in the House and Senate, apparently, never mind the White House itself.

Among the reasons trickle-down economics doesn’t work: the rich are piling troves of cash offshore, where it not only avoids taxes, but it also keeps  massive hoards from fueling any sort of useful economic activity, besides paying tax-haven lawyers at the likes of Mossack Fonseca, Appleby and so many others. Economist Gabriel Zucman told the Süddeutsche Zeitung that the global elite have parked an estimated $9.1 trillion in offshore tax havens, the USA Today reports. (That the Panama Papers and Paradise Papers stories appear to have no legs in Washington D.C. is a testament to the role of money in American politics. But when one percent of the human population controls 51 percent of the world’s resources, I suppose these things happen.)

In addition, the plan now is to wipe out the estate tax, which touches only the very richest families in the country (the tax doesn’t apply to estates worth less than about $5.5 million, so only about one tenth of one percent of estates are subject to it). It double taxation? No question. A “Death Tax?” Sure, whatever you want to call it. But can these families afford it? Is the perpetuation of a dynastic elite built on the toil and smarts of the dead a good thing? Does the Death Tax motivate the very-rich to give to causes beyond the gates of their communities before they die, rather than have the federal government do with it what the federal government will?

The great irony here is that the Republican leadership is willing to go $1.5 trillion further into debt to pay for it all, which will disproportionately burden future generations of the non-rich masses. If they could drag us further into debt to enrich their wealth puppet masters without requiring a single Democratic vote to do so, they no doubt would have.

Dems are derided as tax-and-spend. This is at least rational. Republicans, supposedly the fiscal hawks, now seem happy to spend without the tax part – spending money we don’t have, to benefit people who don’t need it, at the expense of the children of those who do. This is an upside-down, twisted world, where facts no longer seem to matter, just so long as you stay on message. The fact that it actually works – that we elect and reelect the sorts of people capable of such behavior and the policy monstrosities that emerge from it – is our own fault.

Meanwhile, the Republicans we as a body politic were foolish enough to put in high office blast their leaves into the streets, hoping nobody notices.

U.S. renewable energy forecasters got it *slightly* wrong, turns out

Solar panel installation

Our (or technically Sunrun’s) solar panels during installation on July 13, 2010. The U.S. Energy Information Administration did not predict this.

The future didn’t look much like we thought it would.

I’m not talking about flying cars or colonies on Mars – although those two are looking promising at the moment.

In 2006, the U.S. Energy Information Administration laid out its predictions for renewable energy installations a decade hence. Its prognosticators extrapolated out the curves of past performance and divined 0.8 gigawatts of U.S. solar capacity by 2016. With wind, they were a bit more bullish, predicting 17 gigawatts of turbines spinning away. (A gigawatt is roughly what a big coal-fired power plant can produce, capacity factors aside.)

They were off by just a touch.

As InsideClimateNews reported yesterday, the United States had an installed solar capacity of about 37 gigawatts last year, about 46 times higher than the EIA had guessed. This country installed 14 gigawatts of solar in 2016 alone.

Solar grew from a tiny base. Wind had a better foothold in 2006, so the projection wasn’t quite as far off: the 82 gigawatts of turbines in the United States was merely five times higher than the EIA had estimated.

The 45 percent plunge in coal-fired generation wasn’t on their radar, either.

This isn’t about assailing the EIA. Who could have predicted the fracking boom, which turned utilities off to coal and on to natural gas? Or the rise of Solar City, Sunrun and other solar-panel leasing programs. The EIA had no more clue than I did that I’d have Sunrun panels on my roof as of 2010, or that Chinese manufacturers would come to produce panels so cheaply.

Perhaps proposed tariffs on those panels with grind the progress to a halt. Or, perhaps, Tesla’s Nevada battery gigafactory and the proliferation of electrified, self-driving cars will put panels on many more rooftops (and high-voltage plugs in many more garages), and stoking the trend further beyond the imaginations of actuarial bureaucrats. With regime change in 2020, national politics could become a tailwind again. Elon Musk, in addition to vastly increasing the odds of a future with humans on Mars, is betting big on batteries, electric cars and, yes, solar panels – Solar City’s 2016 merger with Tesla wasn’t on the EIA radar, either. Of course, Tesla itself didn’t mass-produce a car until 2008.

The lesson isn’t that Elon Musk’s business hunches should necessarily supplant the products of EIA forecasters. It’s that long-term forecasting, especially when it comes to something as complex as energy markets, is fraught. So there’s reason for skepticism – and, as the last decade’s numbers show, for optimism, too.

Robots kill, and they’re just getting started 

Gabriel Hallevy - When Robots Kill

For Gabriel Hallevy, one of the world’s leading legal thinkers in the emerging field of criminal law as it applies to intelligent machines, it started in a movie theater. The professor at Ono Academic College in Israel had already established himself as a prominent legal thinker in areas like criminal law, criminal justice, laws of evidence, and even corporate law when he sat down to watch I, Robot.

While the movie didn’t do much for Will Smith’s career, the seed it planted in Hallevy’s mind helped advance legal theory surrounding future crimes committed by intelligent machines to a point at which it’s now keeping pace with — if not out ahead of — the technologies themselves. [more]

‘Mein Pate’ and the Congress-Bundestag Youth Exchange Program

Helmut Kohl and Congress-Bundestag students in 1986

From left, Jochen Messemer, Caecilia Hanne, West German Chancellor Helmut Kohl, Todd Neff, and Frederic Pflanz on April 9, 1986.

We had been scheduled for 15 minutes, but between Helmut Kohl’s meetings with economic advisors, discussions with coalition partners about what to do about the assumed bombing by Libya of a Berlin discotheque four days before – plus having to squeeze in a meeting with East German Politbüro member Günther Mittag – there was only time for a quick photo op.

It was April 9, 1986. My host brother Frederic and I had woken at 6 a.m. in the Ludwigshafen suburb of Oggersheim, West Germany, a bit earlier than for a normal Wednesday school day at Carl-Bosch Gymnasium. We were going a bit further than downtown LU, instead taking the train to Bonn, the capital, to meet Helmut Kohl, the country’s chancellor.

I had turned 17 a few months earlier; Frederic would turn 18 in a few days. I was an exchange student; he had been an exchange student the previous year. Both of us were part of the Congress-Bundestag Youth Exchange Program. It had launched a couple of years earlier. The program, jointly funded by the U.S. and West German governments, sent an American high school student to each Bundestag district in Germany and a German high school student to each U.S. Congressional district. The idea was to deepen U.S.-German ties in a Cold War era during which the threat of Soviet tanks rumbling through the Fulda Gap was quite real. Frederic, from Oggersheim, had spent a year in Kankakee, Illinois. I, from Dearborn, Michigan, was now in Oggersheim, the temporary third son of a family named Pflanz.

Oggersheim happened to be where Helmut Kohl was from. In the West German parliamentary system, the chancellor is also a member of the Bundestag. I had landed in Helmut Kohl’s district. And so, three-quarters of the way through my exchange year, Helmut Kohl’s staffers arranged for us to meet – actually, they had arranged for quite a bit more. This was an overnight trip, one that included a stop by the equivalent of the FBI headquarters in Wiesbaden, where we watched an anti-terror exercise, and also by the German Space Agency. All because, by random chance, I had ended up in the big guy’s district.

The moment crystallized in my memory is that of entering the enormous office and seeing the man at his desk, hurriedly checking something on a short stack of paper. He stood, confirming his famous size – six-foot-four, though at that point he was far short of the 300 pounds his obituaries last month cited. He wore a silvery suit that seemed to glow.

He shook all our hands, his grip soft, as if to offer comfort in the presence of such mass and gravitas. As we lined up for the photo we chit-chatted – he was surprised at my German: “Er spricht doch schon gut Deutsch.” I’d been immersed in a German family for nine months, so my German was in fact getting there, the fruits of countless hours of cramming and smile-nodding at things I scarcely understood. But Kohl’s infamous lack of foreign-language skills lent an irony to the comment that even a 17-year-old could grasp.

Within a minute or two we were hustled back out, to a conference room where an old reporter named Klaus Hoffman soon arrived. As a journalist now, I recognize this visit by teenagers as something between a very soft story and a nonstory. Hoffman was the equivalent of a White House reporter, though, and Die Rheinfalz was a big regional paper. Hoffman was a verygood writer, which I might have recognized at the time had I been able to read his product without consulting a dictionary. The headline: “Todd Neff Proud of His Godfather in the Chancellor’s Office.”

The real story would unfold much later, and it has to do with the Congress-Bundestag program itself. I can’t find the above article. A friend of mine WhatsApped it to me (notice the “Ü” on the keyboard above the headline, and the “€”, and the “Z” where the “Y” should be). That friend, Christian Volz, was a classmate of mine in 1985-1986. He and his family are visiting my family in Denver – tomorrow, in fact.

Last summer, his sister and her family visited, as did Frederic and his family. The summer before that, my family met that of Andreas Macha, another classmate, in San Diego. The summer before that, Andreas rented a big van and drove the two families around Southern Germany, and Christian hosted a “Welcome Neffs” party for about 50 folks.  I’m a godfather myself now – to Frederic’s son Phileas. If you include the kids, there are several dozen people in Germany whom I count as close friends, and my kids are friends with their kids now, too.

This all has political implications. Particularly in our current environment, there are dozens of Germans who know that not all Americans agree with what’s being currently purveyed as public and foreign policy. They have a personal connection to the United States they wouldn’t otherwise have. The real story is that the Congress-Bundestag program, as relates to this kid from Dearborn, worked in ways neither its creators nor its participants could have imagined.

Maps matter way beyond finding the nearest coffee shop

a vintage map of the world

A Skype conversation skips across continents with no perceptible lag. The manufacturing economy cranks forth like a containerized, globally integrated, seamless, just-in-time wonder. Hollywood films are released simultaneously in Boston, Berlin and Beijing, often finding larger audiences in China than anywhere else.

It’s enough to make the world seem flat. Not so fast, says Robert Kaplan. [more]