What Is the “Business Community” Anyway?

In Virginia, it is always surprising that the talking heads, lobbyists, politicians and others always regard the “Business Community” as a monolith that thinks and speaks with one voice and must be protected because of the Old Dominion’s coveted status as being “business friendly.”

Gubernatorial candidate Bob McDonnell, for instance, is running a campaign that espouses this unilateral view. If it’s not “Drill Baby Drill” for oil and gas off the coast it’s nip carbon dioxide cap and trade in the bud because it will cost jobs, such as the few remaining in the state’s dwindling coal industry and threaten paper company MeadWestvaco’s huge, 100-year-old paper mill in Covington. Opponent Creigh Deeds takes a more moderate stance.
But what is the “Business Community,” anyway?
A few weeks ago, for reasons that are unclear, I was asked to participate in a background briefing hosted by a powerful Richmond law and advocacy firm on behalf of the U.S. Chamber of Commerce. That’s a body I know well from previous journalism work.
Headquartered in a grand old building steps from the White House with imposing marble hallways, the U.S. Chamber revels as being THE most prominent spokesman for U.S. business. I have interviewed the chamber’s combative president Thomas J. Donohue who is never afraid of taking his Irish temper out on anyone who goes against what he considers America’s, and the Chamber’s, business interests.
Somehow, I got mixed in for a phone chat with a bunch of bloggers who are conservative and reliable, which I am neither. Their mistake. The point of the meeting was to marshal blogger support for an attack on the Obama Administration’s efforts to create a new agency to protect consumers. The Chamber hates the idea. I kind of like it.
But the Chamber is getting itself into deep trouble as it takes a monolithic position against cap and trade and greenhouse gases and global warming. Like many right wingers, Donohue seems to doubt the veracity of the threat and says that any efforts to stem carbon dioxide are exorbitantly expensive and pointless.
As dying BusinessWeek magazine, my old employer, points out, Donohue has the gumption to lecture Apple’s Steve Jobs on the issue and even on technology. Jobs and Apple, by the way, back cap and trade and are fearful of climate change.
Donohue’s feisty views are costing him and his organization. Apple has since toned down its support of the Chamber. Electric utilities PG&E, Exelon and PNM Resources have quit the chamber since they back cap and trade. Duke down in Charlotte, backs cap and trade even though it has a fair number of coal-fired generating plants as does Richmond-based Dominion whose position isn’t clear. Most of these utilities have something in common, they have nuclear power stations which don’t affect global warming.
True, lots of companies back the U.S. Chamber. But as the media, notably the Richmond Times-Dispatch, continue to dumb themselves down as they lay off experienced reporters, we’re served up a bunch of simplistic slop that business always speaks with one voice.
Doing so isn’t new. Thirty plus years ago when I was a cub reporter on The Virginian’Pilot covering efforts to build an oil refinery in Portsmouth. Proponents such as the late Portsmouth major Richard J. Davis pretended that all of business backed the refinery, when in fact, the state’s entire seafood industry, also a business, fought it tooth and nail.
The refinery was never built, which makes McDonnell’s cheerleading for offshore drilling so curious. If there really were lots of profitable oil and gas off the Virginia coast, why hasn’t it been drilled by now? How come the Portsmouth refinery was never built? In the late 1970s, Texas leviathan Brown & Root bought hundreds of acres of land near Cape Charles at the tip of the Eastern Shore as a potential staging area for offshore rigs. The facility was never built and is now an upscale residential community with two expensive golf courses. Should we blame government intrusion. Or could it be that global market forces make drilling in other countries the way to go. Maybe similar market forces are telling us there’s more profit in pricey condos for seniors on the Eastern Shore than steelworks for rigs.
And who would you rather have provide leadership for Virginia’s economic future? Some coal company executive? Or someone such as Steve Jobs whose phenomenal success has changed the world?
Peter Galuszka
There are currently no comments highlighted.

107 responses to “What Is the “Business Community” Anyway?

  1. I'm sure glad you are a contributor.

    I don't think Bacon would, on his deathbed, consider writing a piece like this…

    that's a tweak -Bacon.. smile

  2. Thanks, Larry.

    By the way, Bacon was one of those select conservative and reliable bloggers, although I don't think he ever posted anything on the issue.

    And I think he owes me a latte so I am going to trash him until he pays up.

    Peter Galuszka

  3. It's quite an excellent piece Peter – and very timely.

    Having the Chamber's own eat it on the Climate Change issue is the rich irony.

    I'd love to see a new group called Chamber of RESPONSIBLE and Accountable Commerce formed.

  4. Putting aside the merits of global warming a/k/a climate change, cap and trade will be abused by Wall Street unless speculation is prohibited or taxed out of existence.

    Ray, just to save you the time, I realize that my proposals would make things much less liquid. That's my purpose. I believe that, if cap & trade is instituted, credits should be tradeable only between carbon producers and not by any investors.

    I just returned from Dallas where I heard a very excellent, data-based, discussion of the current financial crisis. The speaker tied our crash to the housing bubble, but also showed data indicating that the speculator-induced run-up in oil and gasoline prices was the factor that pushed the economy over the cliff and made the losses, most especially job losses, much larger.

    Wall Street needs a lot more regulation and higher taxes on gains on investments held less than six months.

    Wall Street has abused the average American enough, don't give it carbon credits too.

    TMT

  5. " I realize that my proposals would make things much less liquid."

    I wonder though – if part of the risk issue has to do with moral hazard.

    In other words, just how much speculation would we have if there was no govt-influenced safety net for those scum.

    you heard me right – scum.

    to them.. this is what America is all about.. figure out – for any law – how to use money to influence in a way as to provide for govt-influenced scams and safety nets.

    I doubt very, very seriously that anyone in their right mind would have bought into the concept of Credit Default Swaps unless there was an implied govt safety net.

    and the bad thing is – that in the end – they were right.

    The American taxpayer is like some poor sucker sharecropper who can only buy from the company store and will never climb out from under the fact that they are little more than slaves to the scum on Wall Street.

    We basically have two classes here – the makers of Soylent Green and the corporate owners and shareholders of the makers of Soylent Green.

    just watching the companies that were bailed out – continuing to pay 400K bonuses to the very people that wrecked the financial system makes me want to gag…

    Everytime I hear one of these "Capitalism is Gods Gift to Mankind" champions I want to smack them around…

    Capitalism – as practiced in this country – is the scourge of civilization – a throw-back to the days of Teapot Dome and before that to Royalty.

    I'm in favor of the maximum number of whip lashes allowed on the entire lot of them…

    whack whack whack

    smack smack smack

    go to the dunce corner and stay

  6. oops! I badly mangled this:

    We basically have two classes here – the CONSUMERS (poor suckers) of Soylent Green and the corporate owners and shareholders THAT PROFIT FROM MAKING AND SELL Soylent Green (the royalty).

    it's not quite that bad but after watching the economy of this country crater.. and bailing out the miscreants who caused it – and then watching them give bonuses to the scum that were behind the meltdown is like having to swallow fleet suppositories.

  7. Here's what center-left Senator Byron Dorgan (D.-ND) said about cap & trade:

    "Such a system is ripe for the biggest investment banks and the biggest hedge funds in the country to sink their teeth into these marketplaces and make massive amounts of money. I have very little interest in consigning our low-carbon future to a trading system of carbon securities that will be controlled by the biggest trading companies in the world. And it would not be very long before these entities will have created derivatives, swaps, synthetic [collateralized debt obligations] and more. It will be a field day for speculation, which I think is not in the interest of this country.”

    If we have cap & trade, make it impossible for Wall Street to be involved.

    TMT

  8. we're totally tracking the same here TMT.

    does that mean you are pro-govt and anti-business on cap and trade?

    😉

    interesting – the parallels on how the "business community" views the health care of citizens – and the health of the planet also.

    Peter is on to something here.

    The COC has taken an inflexible and dogmatic approach to these problems and the cracks are starting to show.

    all this talk about what is best for American citizens – unbridled and unregulated capitalism – and what have we got – your basic "oh we screwed the pooch" OOPS moment.

  9. Larry, You're right, if there were a million Jim Bacons banging chimp-like away on typewriters for a million years, they never would have come up with a piece like this.

    But that's OK. In fact, that's kind of the point. Peter brings perspectives to the blog that I never would. As you well know, we actually engage in an exchange of ideas here and perspetives here. We don't often end up agreeing, but I think we do at least gain a grudging respect for those with whom we disagree — enough respect at least that we don't think they they are evil morons, or Nazis, or commies, or racists… which puts our dialogue on a plane superior to that of the rest of the United States.

    I will agree with Peter on one major point of his post: The business community is extremely diverse.

    Here's where we probably disagre: What we're now witnessing at the U.S. Chamber is the exodus of rent-seeking enterprises who believe that embracing the Global Warming movement will gain them new business opportunities. They are not leaving the Chamber for idealistic reasons. (I'm fairly confident that Jobs and Apple are totally sincere in their beliefs, and they don't have an axe to grind, global-warming wise, so I'm not talking about them. I'm talking about companies like Excelon.)

    It is interesting to me that the U.S. movement toward cap and trade is taking place just as the "consensus" of human-caused global warming is falling apart. If there ever was a "consensus," there isn't one any longer. The science is not settled. The climate models used by the IPCC failed to predict the 12-year (and counting) plateau in global temperatures. And GW skeptics have built a strong case that the 80/90s-era run-up in global temperatures was driven mainly by solar effects.

    I still remain agnostic on the question of human-caused global warming. But even the most dogged of the GWs are acknowledging that climate change is a much more complex process than acknowledged, say, a decade ago, and that much remains to be learned.

  10. I much appreciate that the idea of dialog can and does eventually lead to what we CAN agree on .. which moves us forward.

    but Jim, global warming is not the only issue that the COC displays their inflexible approach to:

    here's the COC's "contribution" to the health care debate:

    http://www.uschamber.com/NR/rdonlyres/ep6oqogt7f47junojrwaxwepr23ufatxz5nzf7wyu4rpxrscjocneit7jm57db3uximsywhvy3yi7lgkk44cw2bhskc/CurrentandBaucus.pdf

    http://tinyurl.com/COChealth

    now – they do have a list of reforms that they support – but very significantly – they neglect to say who should get "in the loop" to implement said reforms nor do they venture to produce the same flow chart AFTER their reforms are enacted.

    look under their bullet for how they would go about providing access to affordable health care:

    http://www.uschamber.com/issues/index/health/healthcov.htm

    it deserves a look because unlike the wingnuts – it actually have a fairly comprehensive approach.

    again.. no flowchart to compare to the Dems proposals flowchart

    nor.. significantly any list of legislators who have submitted legislation to reflect the COC proposals.

    which means…. that the COC approach is your basic.. slap some stuff on your website then make sure the lights are off in the office when you leave.

    take a look at their talking point:

    * Eliminating the use of pre-existing conditions or health status

    hey.. this sounds suspiciously like what the Dems are saying..

    yes…it is

    but the COC is hammering the Dems approach to accomplish this

    while the COC never says one word about how they would actually eliminate pre-existing conditions – especially without the govt involvement.

    the obvious simple solution would be to say that no insurance company could deny anyone for pre-existing conditions.

    what it does not say is how the insurance companies would protect themselves from an huge influx of people previously uninsured.

    the insurance companies, since they are denied the ability to reject – will accomplish this same outcome by simply pricing policies for those with pre-existing conditions so high that they cannot afford it.

    but the COC – the business community never talks about this.

    they just put down on their website that there ought to be a rule that outlaws people being turned down for pre-existing conditions – when they know full well that doing that without other reforms won't provide health care for those without it.

    this is the standard rope-a-dope strategy being employed by the anti-reform folks… to essentially attempt to stave off meaningful reforms that actually will result in less people without health insurance.

    non-responsive to the actual issues – like global warming…

    more and more "businesses" are going to see the COC position(s) as one of inflexible dogma rather than engaging the issues and will leave that organization because they simply do not want to be perceived as aloof and non-responsive issues that affect people and civilization.

    business is nothing more than a function of a healthy civilization and if a business group thinks that business is a separate independent activity – they've really lost their way.

    there will be no healthy business community if the productivity gains are sucked into non-productive costs – like healthcare and like futile efforts to deal with the potentially massive impacts of climate change.

  11. Bacon,

    (1) "if there were a million Jim Bacons banging chimp-like away on typewriters for a million years, they never would have come up with a piece like this."

    So you are saying that my piece is sub-monkey level?

    (2) So some firms leaving the Chamber are "rent seekers" wanting to make a buck on Global Warming. And the other firms opposing the idea that there is anything like global warming are not "rent seekers" too? They don't want to have to have to estructure their business plans and change their ways. That's not rent seeking?

    Hand me a banana.

    Peter Galuszka

  12. "Ray, just to save you the time, I realize that my proposals would make things much less liquid."

    Point taken.

    Now, what about spculating downwrd, as in selling short, you want to regulate that, too, or just one direction?

    RH

  13. I'm fine with speculation but I'm not fine with the government providing protection for those that speculate – no matter the direction.

    If you want to throw your money away on some highly questionable venture – that's fine – go for it.

    the problem that almost took us into a depression – was that the gambling was essentially guaranteed by the govt.

    Take ALL of the govt incentives – ALL of them away from any/all speculation.

    Our tax policy right now – incentivizes speculation – as TMT has pointed out.

    there is no useful govt function in taxpayers providing incentives for speculation.

    I'd not provide ANY tax breaks or incentives for any speculative activity – including allow you to write it off as a loss.

  14. "Our tax policy right now – incentivizes speculation – as TMT has pointed out."

    Aside from the mortgage interest deduction, how is that?

    For starters, some kinds of compensation are not taxed as regular income.

    Losses on investments are deductible, just as income is taxable. Seems fair enough to me. Kind of like chrging for upzoning and paying for downzoning.

    Was there any law written in advance that guaranteed credit default swaps? I don't think so. the governments action in bailing firms out was a matter of keeping things from being even worse.

    Look at it thei way, the government was not bailing out reprehensible firms as much as it was bailing out ITSELF for its own reprehensible behavior in not policing the firms sooner.

    There should have been more oversight and control, but I don't translate taht into the idea that we should regulate short term profits. I think that is a mistake.

    A better approach might be to regulate excessive concentration of assets in one category. If lehmen had only 15% in one category of investments, would it have failed? Would it have made as much money before it failed?

    Which would you rather do, amke a million bucks and then go bankrupt, or be broke all your life?

    RH

  15. we need to differentiate what an "investment" is and is not.

    we need to recognize how a "short term investment" differs from a "long term investment" and we need to differentiate between investment in capital equipment and facilities, even commodities and investment in the TRADING OF these things – derivatives.

    we should not be incentivizing derivatives at all..

    we should not allow tax write offs for anything connected to a derivative.

    this is little more than pure speculation and gambling.

    we should treat it like we treat conventional gambling losses – NOT deductible.

  16. Some people still argue that there is no measurable change in our climate: that all is well within historical norms. They beleive that either we should do nothing, there is nothing we can do, or the only thing we can do is learn to adapt.

    Some people argue that there is no evidence that CO2 is responsible for a measurable warming of our atmosphere, let alone that the Anthropogenic portion (3%) of the total cartbon budget is responsible. These people believe that the idea we can control our environment is a hoax.

    The rudder on my boat only controls a small amount of the water the boat moves around, yet it still controls where the boat goes.

    Clearly human activites have and are changing our environment, both the natural environment and the man made one. Those that argue we need to manage this are essentailly arguing for a bigger and more powerful rudder.

    We may or may not be able to do something abot the damage we cause or the damage the universe rains down on us with the next meteor, but TRYING to do something is going to cost a lot of money and cause a lot of disruption, angst and probably war, which will be the least helpful environmental result of all.

    Whether we build and install that big new rudder or not, we are going to have to make accomodation and expenditures.

    The question is not whether the Earth can eventually begin to heal itself and reach ecological equillibrium again, but whether humans will be a part of that equillibrium.

    So we have the chicken little's on the one hand saying we face a catastrophe and we have to do something big and immediate to stop it. And at the same time they are saying it will "only" cost 3% of GDP, and it is going to solve all our problems so no adaptation will be required: we can carry on just as before, but with all renewable resources.

    I don't believe that is a credible argument. The climate hoax theorists and the climate control hoax theorists at least recognnize that the climate will control what happens to us.

    The climate catastrophe theorists are the ones holding out "business as usual, only a little more expensive" as the means to salvation.

    I believe that course of action is still going to require considerable adaptation on the part of humans: it is a question of whether we let the environment and climate decides what happens to us or whether we decide what happens to us.

    there isn't much point in instaling that big new rudder unless we agree on where we are going.

    RH

  17. Ray – some people used to believe that we could set off nuclear bombs and it would not affect the world's climate.

    there are still a few that think that – but we consider them not of sound mind.

    the question is – do you think that there ARE things that WE can do that WILL AFFECT world weather and climate..

    and the answer is clearly – YES.

    the only question after that is what activities we believe can and which we believe will not and there are two very important things that are also true.

    1. – we guess wrong all the time – did it on virtually every pesticide that was subsequently banned

    2. – the consequences of being wrong on the climate issue are as bad as being wrong on setting off multiple nukes.

    so we know – for a fact now – that there are clearly manmade activities that can result in great, great damage to the earth.

    at least most of us admit to this.

    I put the folks who doubt global warming into the same category of people who originally thought multiple nukes would have no ill affect

    not only were they wrong – but they themselves never allowed that they might be wrong.

    it took others of more sane minds to do understand not only the harm – but the gamble.

  18. Tom – I got the link.

    you misunderstand.

    I'm not talking about available capacity.

    when we generate electricity form coal – we do great harm to the environment.

    when we idle the coal plants back at night – the theory is that they are "idling" as low as they can and still be brought back up come daylight

    and that in theory – at their low power settings – that they are still generating more power than what the grid is demanding and that it is THIS "left-over" power than can be used to recharge the PHEVs – essentially for "free" with no increased emissions (more than the minimum that would be required anyhow).

    My view is that first I'm a bit skeptical that there really is any "spare" power on the grid in the first place.. what is it being used for right now?

    are those plants just burning coal but the steam is vented instead of generating electricity?

    but second – if I accept the "spare" power theory – there is only a certain amount available before the coal plant has to add more coal to the boilers to provide more power on the grid.

    so I'm asking.. how much "free" power do we have – expressed in terms of how many PHEVs can we currently support on this "free" power.

    Is it 100,000, 1000000, 10000000 etc ?

    this is important because if you're going to power PHEVs with coal – that's as bad or worse than powering vehicles with other dirty fossil fuels.

    where would I have this wrong?

  19. yes.. after looking at your California demand curve – where California has a decoupled rate structure.. then compare that curve with demand curves that don't have decoupled rate structures:

    http://nofreewind.blogspot.com/2009/05/this-is-todays-51009-electricity-demand.html

  20. "Futures exchanges, such as Euronext.liffe and the Chicago Mercantile Exchange, trade in standardized derivative contracts. These are options contracts and futures contracts on a whole range of underlying products. The members of the exchange hold positions in these contracts with the exchange, who acts as central counterparty. When one party goes long (buys) a futures contract, another goes short (sells). When a new contract is introduced, the total position in the contract is zero.

    Therefore, the sum of all the long positions must be equal to the sum of all the short positions. In other words, risk is transferred from one party to another. "

    Wikipedia.

    "….we should not allow tax write offs for anything connected to a derivative."

    So, no tax write-offs for anything connected to the commodities exchange, meaning any other business would be in a preferential tax position compared to the exchange.

    How long would the exchange exist, or how well would it function under those conditions?

    I think you are kidding yourself. Suppose I'm interested in buying a $100 contract that comes due in six months. I can buy a six month bond at no risk that returns me $102.50.

    I believe there is a 75% chance that my conttract will return me $110 and a 25 percent chance that I will lose money and it will return me only $90. So my expected value on the contract is $105, which is a better deal than the bond.

    Tax is not an issue since the treatment is the same for a gain as a loss. (My net gain is $7 if it happens, and my net loss is $7.)

    But, if my gain is taxed and my loss is not deductible, then we are looking at a 75% chance that the contract returns $107 and 25% chance it returns $90, and now my expected value is only $102.75.

    Why would I play that game any more? The expected benefit isn't worth the risk.

    I would not play, and the price of a box of cereal on your shelf would go up. you would pay the price of additional government management.

    Total Cost = Production Cost + External Cost + Government Cost

    RH

  21. Ray – some people used to believe that we could set off nuclear bombs and it would not affect the world's climate.

    I'm not taking a position here, I'm just describing what the arguments look like to me: each of them appears to be ignoring a major fact in order to make their argument appear to be a) better than it is and b) something it is not. ie the people who argue there is no shange in climate are really arguing against the costs of controlling it: it is a false argument.

  22. I might pay more for cereal but I might not but if you subsidize the production of the cereal via crop subsidies and/or have the govt buy the surplus – and then on top of that allow people to speculate -then the govt is creating a moral hazard whereby we are essentially rewarding speculation – and we are insuring the losses from it.

    we're going to stop doing this – even if it makes cereal more expensive when I seriously doubt in the first place.

    right now – we have a big govt-run casino.. and that's got to stop.

  23. Ray, my opposition to this type of speculation goes in both directions. It distorts markets and is unfair.

    TMT

  24. I don't know the outcome either but I do know the consequences of being wrong are far, far more expensive than the consequences of being more conservative (odd word there) until we know more.

    None of our superfund sites would have been necessary had we taken a more conservative approach instead of rushing to get the benefits before we knew the ultimate costs.

  25. " and that in theory – at their low power settings – that they are still generating more power than what the grid is demanding "

    That is a pretty crazy theory. If that electricity is generated and sent out on the grid it has to do SOMETHING. The only way this works is if there is a minimum setting for the furnace, which generates steam which you do NOT send to the turbine, but vent to the atmosphere.

    Any power engineers out ther that can help us out? What really happens at the plant?

    If the argument is that there is base capacity that is not used at night, then you can generate more power withut increased plant capacity, but you cannot do it without increased emissions.

    RH

  26. " I do know the consequences of being wrong are far, far more expensive "

    That is your claim. My claim is that nobody actually knows. we haven't even made a reasonable guess as to how to find out.

    The reason we do not know is that people like you refuse to try to figure it out, based on the fact that we already "know" the answer.

    Your claim is that the consequences of being wrong far outweigh the consequences of your solution, which you assume to be right.

    It isn't the right way to look at it. The right way to look at it is to consider whether the cost of being wrong one way outweghs the cost of being wrong another way (the "right" way).

    But in order to do that you must calculate the costs of doing things the "right" way.

    That, you refuse to do (or else we deliberately minimize the costs problem: it's "only" 3% of GDP) because your starting argument is that it doesn't matter what it costs because the other wrong way is even worse.

    I don't know about anyone else, but you can never convince me of the logic in this. it simply makes no sense.

    RH

  27. It distorts markets and is unfair.

    How is it not fair if the total risk is zeroed out, as described in WIKI?

    You don't think that lack of capital and lack of liquidity distorts the market?

    RH

  28. "…I might pay more for cereal but I might not but if you subsidize the production of the cereal …"

    Might, might not. Isn't that gambling?

    And you are critcizing the MARKET for being a gambling ring?

    I'd much rather have the market doing the gambling than the policy makers. I expect policy makers to ONLY make a move if it is a net social benefit, which of course means the winners have enough to pay off the losers and still come out ahead.

    RH

  29. " It distorts markets and is unfair. "

    I don't think so. But your ropposition would distort the market, which is the point of my example.

    If your opposition is a 30% tax penalty (subsidy) one way and not the other, you distort the market.

    If you have the same tax penalty(subsidy) in both directions there is no distortion. If you have zero tax penalty in both directions there is no distortion.

    You opposition only makes sense if you are unhappy with the way the market is, and you INTEND to distort it.

    Good luck with that, because as my example shows, the market STILL WORKS THE SAME WAY, all you do is introduce one more variable to consider in the search for short term profits, which is how you get to long term profits.

    If your gamble pays off.

    RH

  30. we have a history of being wrong on these issues and having to pay far, far more in cleanup than the original benefits that derived from it.

    In many cases, the damage is permanent, costly and cannot be undone.

    This is what many superfund sites are – land taken out of production – value lost – production lost – that far, far exceeded the benefit of what resulted in the destruction of the land.

    we have a track record of being wrong much if not most of the time.

    You cannot cite instances of where we caused permanent harm by waiting until we were sure.

    at most, we cost a temporary loss rather than permanent loss.

    and that's the problem here.

    we're gambling between what could be a catastrophic permanent loss verses a waiting period until we know more.

    our record – when we gamble – is that we are far more often wrong on the more costly side of the equation…

    You want me to take the word of the same folks who would put dioxin, Pcbs, nuke waste into the environment on a gamble – take the word of the same kind of folks that global warming is also not a problem.

    we already know about these kinds of folks Ray.

    they are not only usually wrong, but they are disastrously wrong most of the time.

    this is like listening to folks at the gambling casino telling you have to increase your wealth.

  31. "You cannot cite instances of where we caused permanent harm by waiting until we were sure."

    You are right, I cannot provide a negative proof.

    I don't need to in any case, since I'm on your side so far as the intended results go.

    I just can't follow your logic, and therfore I cannot support your proposed course of action.

    I don't think that kind of thinking advances us toward our goals.

    The wrong thing costs us far more that the right thing, no matter how much the right thing costs?

    That's not an argument, and it isn' even true, besides.

    RH

  32. "…our record – when we gamble – is that we are far more often wrong on the more costly side of the equation…"

    My argument exactly. Our policy makers are so often wrong that we need to have policy made by the market: it is a lot better at assesing costs and risks.

    At least in the short term. government has a longer term view of things, so what you want to do is harness the markets ability to make decisions.

    Now, what is the market? It is people voting with their wallet. That is what makes it both more effective and more popular than voting at the polls.

    Gvernment has a kind of schizophrenic problem here, because government has devolved to a situation where it is mostly about voting with OTHER PEOPLES WALLETS.

    And only when government protects everybody's wallet equally can it expect the market (polls) to work correctly, and produce the lowest cost answer.

    But just claiming without any attempt to show the truth of the matter that your proposed andser is better or cheaper than the current problem, does not convince me.

    RH

  33. "You want me to take the word of the same folks who would put dioxin, Pcbs, nuke waste into the environment on a gamble "

    I never said any such thing, and I fail to see how or why you characterize me that way.

    If you can't beat the message, beat the meesenger?

    RH

  34. "we need to market to assess risk"

    are you DAFT Ray?

    the market externalizes risk.

    when you can make a profit on a product and you dump the deadly by-products in the river.. you're letting the market assess the risk the way that it will .. if you let it.

    the "market" is what is telling us that global warming is not a problem.. the same exact way the "market" told the cod fisherman that extinction was a myth…

    that's the way the market works anytime there is profit involved.

    You simply cannot trust the market to keep from destroying things in their quest for profit.

  35. "we need to market to assess risk"

    are you DAFT Ray?"

    I didn't invent this, and we do it all the time, in fact.

    Ergotomine is a known deadly poison but I used to take it routinely.

    Thalidomide caused horrible effects, and yet it has valid uses.

    Gold is a bioaccumulator which has known toxic limit values and known therapeutic uses.

    We could just as easily rationalize a ban on any of these things just as we have done for kepone, but we would not know if it was the right answer or worth the cost unless we measure.

    Or we can just claim we are right no matter what the costs to whoever. We establish our rights as paramount over all those who benefit from ergotomine, and steal from them the right to the benefits they used to have.

    Pointing to the number of times we wer right or wrong in the past doesn;t do anything to justify taking guesses in the future which we justify up front by acknowledging that they are extreme in their conservatism.

    This is a good way to be wrong. You may not beleive it, and you may characterize me as the enemy because my position is politically unpopular.

    I'm just a scientist. I pose a hypothesis, and then a test to see if the hypothesis is right. If the test fails it does not mean that I am wrong, it means the hypothesis is wrong. I still win because now I know the truth.

    But in your world you simply posit an axiom. "I know this is the truth so there is no reason to test it."

    Knock yourself out. Just don't ever expect to convince me that way.

    You keep saying, for example that I have no right to choose the value of my property, the county does that for me to protect everyone. Everyone except me, that is.

    I don't expect to have the right to choose the value of my property, but I think the market ought to do that and not the government.

    The government has a legitimate interest in and a right to limit externalities, like infrastructure that affects the rest of the community. But they have no right to charge one dime extra, and the only way you can figure that out is by having a market where such things can be traded.

    Only then will youknow the value, the price, and the cost. Otherwise, your decision is as much of a crap shoot as mine might be. Whatever "proof" you have diminishes, not increases as you shift the burden of proof to others.

    RH

    RH

  36. We decided that many things were too dangerous, so we put restrictions on their manufacture.

    Other places thought the benefits outweighed the risks, and now they manufacture our goods and recycle our waste.

    That is the envronmental market at work. At least as it stands today.

    I think we can do a lot better than that. But we cannot do it by denying that the market does what it does. Go ahead, slap a penalty on profits from speculating, or polluting, or anything you don't happen to like, smoking, hunting, eating meat, giving abortions.

    You will have less of those things as a result. But you won't necessarily have lower costs or live better or longer or more fairly.

    RH

  37. "…that's the way the market works anytime there is profit involved."

    If there isn't a profit involved, there is no market.

    That still doesn't mean you got the lowest price. In fact it preety much means you won't, because either your demand goes unmet, or you turn to the black market.

    The black market is illegal, of course, but so is taking private property for public use.

    Either way you have taken a pass on the opportunity to run an experiment to discover the lowest price, best value, and cheapest cost.

    RH

  38. "ALL unregulated markets will breakdown when the people with guns arrive. Put differently, no market will function without regulation (e.g., enforceable laws on property rights, contract, fiat money, etc.) The question is HOW MUCH regulation…"

    David Zetland, PhD, UC Berkeley

  39. Nobel prize in Economics::

    "The judges cited Ms. Ostrom's "analysis of economic governance, especially the commons," the way in which natural resources are managed as shared resources."

    "[By] summarizing much of the available evidence on the management of common pools, [Ostrom} finds that users themselves envisage rules and enforcement mechanisms that enable them to sustain tolerable outcomes. By contrast, governmentally imposed restrictions are often counterproductive because central authorities lack knowledge about local conditions and have insufficient legitimacy."

    "Ostrom proposes several principles for successful CPR management. Some of them are quite
    obvious, at least with the benefit of hindsight. For example, (i) rules should clearly define who
    has what entitlement, (ii) adequate conflict resolution mechanisms should be in place, and (iii) an individual’s duty to maintain the resource should stand in reasonable proportion to the benefits. '

    Does tht sound familiar?

    Who has what entitlement? Who "owns" what?

    Fair conflict resolution, not mob rule.

    Duty to maintain the resource in proportion to benefits recieved.

    So my duty to maintain, say, a flood plain resource ( a Common pool resource) that happens to be located within my property boundaries is limited to something proprotional to the benefits I receive. But if the flood plain benefits primarily accrue to others, then why should only I bear the costs?

    The view that Larry holds is very commonly held, especially among those indoctrinated to the environmental movement. But it is a view with very significant limitations and real costs that are entirly ignored, or even worse, tacitly accepted in theory and then selfishly or cynically ignored in practice.

    For example the constitution clearly states that when private property is taken for public use that compensation is in order, and this has been upheld by the Supreme court, and yet the general practice in the lower courts and local governance is to ignore those standards or to put them out of reach of the property owner.

    RH

  40. "when you can make a profit on a product and you dump the deadly by-products in the river.. you're letting the market assess the risk the way that it will .. if you let it."

    No you are not. You are creating and externality. the whole point is that there is no market for river dumping – but there should be. If there were we would have a) less river dumping because now you have to pay for it. b) more efficient river dumping because only the most valuable products can afford to pay the market price.
    and c) more efficient and effective allocation of natural resources: The owners of the natural resources will only sell dumping rights as long as the value of the dumping rights is greater tahn the value of the resources lost.

    RH

  41. note just how well her theories hold for whales when pursued by folks like the Japanese who don't agree to the "governance"

    or the killing of exotic animals for their body parts…to sell to folks in Asia

    or the Salmon Fisheries in the Northwest that are "stealing" the farmers irrigation water.

    or the now commercially extinct cod fishery in Newfoundland

    or in our own case – the commercial extinction crab and oyster fisheries in the Chesapeake Bay…

    I don't see much in her theory because basically it is at it's simplest that users of a resource CAN AGREE to share it AND to agree to what the meaning of sustainability is but there is no scientific theory here – it's an agreement – one that can and is broken because of the black market.

    The only way for such "governance" to work is to have an enforcement ability where "outaws" are brought to heel.

    Of course those "outlaws" will use the same argument that Ray uses when talking about "property rights" … and winners & losers.

    why agree to governance if you can get more fish by not agreeing to the governance?

    She got the award for the same reason that Obama did – it's an "attaboy"… get it?

    except in Obama's case it was an "attaboy" and a "oh yeah, good riddance don't let the door whack you on the way out – to the cowboy".

    say slowly after me Ray –

    "Some Nobel awards are not really for achievement in real science".

    Bonus: Anyone who thinks economics is a real "science" need only to read this:

    How Did Economists Get It So Wrong? by Paul Krugman a Nobel Prize winner

    http://www.nytimes.com/2009/09/06/magazine/06Economic-t.html

    Mr. Krugman argued long and vociferously that the Wall Street whiz kids using their "scientific equations" were playing with fire – and that was no theory – it was a fact.

  42. there no market for river dumping Ray for the same reason there is no market for Rape.

    no one pays you to not pollute or to not rape you.

    both are illegal and the perpetrators subject to jail.

  43. I don't know for a fact, but I hear that if you pay some people enough money, they will let you rape them.

    Just because we don't recognize the market as legal doesn't mean there is no market.

    We can argue whether legalizing marijuana is a good idea but few people doubt we could get a better social result economically than we do without a market.

    Same goes for river dumping. That stuff is going to get dumped somewhere, at some price. We can claim the price of dumping it in the river is higher than any other option until we are blu inthe face, but unless we go measure we won't know what the best socio-economic result is.

    RH

  44. when pursued by folks like the Japanese who don't agree to the "governance"

    If you don't agree to the governence, then it is not a democracy, is it?

    "Ostrom proposes that (iv) monitoring and sanctioning should be carried out either by the users themselves or by someone who is accountable to the users.

    Ostrom also finds that (vi) governance is more successful when decision processes are democratic,
    in the sense that a majority of users are allowed to participate in the modification of the
    rules"

    She was way ahead of you on that complaint. It is only democratic if the users agree to the rules and the punsishments.

    Otherwise it is mob rule by outsiders, unless outlaw activity exists, in which case you have failed mob rule.

    Youare missing the point, as usual.

    The point is this, how do you find the best and cheapest socioeconomic result?

    You don't do it through dictatorship.

    You don't find it by allowing anyone, no matter how self righteous they claim to be, to have superior or supreme rights.

    You don't find it by demanding a system where we haggle over evey check and everyones use of everylittle thing to the penny.

    You don't find it by having the government tax one particular bad activity, like profiting on speculation.

    You don't find it by allowing group A to control the property of much smaller group B.

    You don't do it by ignoring what the market does, maximises profits and minimises costs considering all the market factors. Throw in a new factor like a tax on profits, and the market simply assimilates that cost.

    So the obvious best thing to do is to throw as much stuff in the market as you can, even stuff that at first thought would be abhorrent to us, like river dumping.

    Speaking of which, been to Blue Plains lately?

    RH

  45. the kinds and types of substances and their concentrations are not decided by the market but by environmental law.

    there is no such thing as a market for Kepone or thousands of other controlled substances some of which have a zero concentration allowed.

    If a new substance is created, the govt usually gets around to deciding if it is safe and thus can be traded in a market – not the market.

    we know that you do not agree with this aspect of govt – but non-the-less – your assertion that markets "SHOULD be allowed because they will happen anyhow" is patently and demonstrably wrong as you will find no shortage of fellows who will immediately come to take you away – as they should – if you should insist on said viewpoint and you can continue your insistence of the righteousness of your viewpoint as they are in the process of delousing you and leading you to your new quarters.

    and no.. it won't do you no good to claim that you've been told by a Nobel Scientist that you're right and the govt is wrong.

  46. "By contrast, governmentally imposed restrictions are often counterproductive because central authorities lack knowledge about local conditions and have insufficient legitimacy.".

    She is right.

    Dillon's Rule is an abomination.

    I'd give her another Nobel Prize just for figuring that out.

  47. Groveton – read this doc:

    you'll learn a lot about how the various states do land-use.

    OPTIONS FOR IMPROVING THE COORDINATION OF TRANSPORTATION
    AND LAND USE PLANNING IN VIRGINIA

    http://www.virginiadot.org/vtrc/main/online_reports/pdf/04-r14.pdf

    If you think Virginia is onerous – you ought to meet the states that ALSO do not delegate land-use to the localities and instead plan it at the state level.

    Virginia looks downright loose compared to these other states.

  48. "…most interesting about Ostrum's work is that where common property regimes work well they are often enforced with very strong social sanctions and/or coercion. The notion that somehow in the absence of markets or government intervention we might get some sort of Kumbuya agreement- a favorite fantasy of some leftist critiques of markets- is not supported by the facts. Instead, complete social ostracization and even physical violence are often necessary in order to enforce common property rules. "

    RH

  49. …are not decided by the market but by environmental law.

    Yes, and environmental law EXPLICITLY states that cost benefit anlyses are required, minorities may not be discrimated against, and no person or group must endure and undue burden due to either enforcement or lackof enforcement or imposition of new environmental regulations.

    Under environmental law it is pretty easy to get to court, a feature tha Sierra Club and industrialists have exploited well. This has resulted in pretty even handed regulations at the federal level: the regs get set when the lawsuits are for equal amounts.

    But, the states are more onerous, and local laws more onerous still. If you want to get to court on a zoning issue, you can pretty much forget about it.

    Oregon tried to implement a reasonable land use law, but money flooded into the state to support a new referendum to overturn it.

    The whole system needs to be rebuilt from the top down, based on the constitutional requirement that when property is taken for public use the owner must be compensated, and incorparting hte best provisions of the environmenal socila justice provisions.

    RH

  50. "it won't do you no good to claim that you've been told by a Nobel Scientist that you're right and the govt is wrong."

    Not with you it won't, you are incorrigibly pigheaded. The nice thing about arguing with you is that your arguments are so bad that shooting holes in them is like painting a caricature of allthe selfish environmental bigots on the planet.

    I'll take my personal satisfaction where I can get it. All I want is what is fair and honest, in addition to sustainable.

    Apparently, that is too tall an order for you and EMR and manyothers to comprehend. Certainly it takes a lot more work and a little more thought than simply going out and stealing environmental virtue.

    RH

  51. "These plans may be implemented
    through four primary mechanisms: zoning ordinances, subdivision ordinances, site plan reviews,
    and a capital improvements plan. Of these four, the Code requires only subdivision ordinances;
    the others are enacted at the discretion of the county.5"

    Well, there are three things we can get rid of, with verylittle harm done.

    RH

  52. "The scope of this study was limited to information that could be obtained through a
    review of the literature, an assessment of state legislative codes, and interviews with practitioners in state and federal agencies."

    Thereby guranteeing a one sided vison of the state of the art.

    RH

  53. Ray – you forgot the most important line – why did you ignore it?

    " Bottom line: managaing common resources is very hard no matter what institutions are in charge."

    Indeed. the first and most obvious step in "governance" is to determine who owns the commons (and who does not) and therefore who will govern.

    Having one group assert ownership while deciding that other groups do not have ownership becomes, in effect a "taking" in the eyes of those who have been declared not to have ownership.

    as they say – the guns will appear

    I find it especially ironic that Mr. Property Rights here apparently has no problem with some folks deciding they are legitimate property owners and at the same time deciding that others are not and then calling this "governance".

    ha ha ha.. this DOES sound like Ray.

    and then this irony also –

    that even the folks who agree to be part of the governance – also agree to abide by the decisions agreed to by the majority – mob rule.

    and the purpose of the "governance" is – to keep any one member from taking actions that adversely affect the others. In other words, the rules are to LIMIT the property owners not the other way around.

    there are lot of ways to look at what the lady (a political scientist) is advocating but it's not science.

    you can run the same experiment many times – and the outcomes will not be the same.

    In science, condition A generates condition B Every time and it does not matter whose rights are at issue.

    If it rains hard and the river washes away half your land or destroys your crops or flattens our home – there is no appeal to the "governance" for compensating for that "taking".

  54. "Maryland targets growth-related capital projects, such as significantly improved highway
    and transit facilities, to priority funding areas established through legislation (the Smart Growth and Neighborhood Conservation Act of 1997) and subsequent executive orders."

    Well, that was the theory behind this high minded and unfortunately mis-named act, but he practice has turned out much differently, primarily due to lack of funding for capital projects.

    RH

  55. " EXPLICITLY states that cost benefit anlyses are required"

    when? and by who? and who makes the decision and who decides they did the cost/benefit "properly"?

  56. Ray – you forgot the most important line – why did you ignore it?

    " Bottom line: managaing common resources is very hard no matter what institutions are in charge."

    I didn't ignore it, I thought it was obvious. My soapbox here has always been that we are doing a lousy job of it and we need to try harder.

    It's easy to do things with force and coercion; it is a lot harder to have real concensus AND be fair about it.

    RH

  57. " Under environmental law it is pretty easy to get to court, a feature tha Sierra Club and industrialists have exploited well. This has resulted in pretty even handed regulations at the federal level: the regs get set when the lawsuits are for equal amounts."

    huh?

    "But, the states are more onerous, and local laws more onerous still. If you want to get to court on a zoning issue, you can pretty much forget about it."

    wait. in the first paragraph what are you talking about?

    land-use or environmental law?

    then in the second paragraph?

    how convoluted can we make this?

    just FYI – most states DEQ's carry out the Federal EPA Environmental laws and regs and if they do not, the EPA takes over.

    Until the landmark Clean Water and Clean Air acts were passed, Environmental regs were highly variable with the "property owners" shopping the states and playing them off against each others.

    Now.. when Kepone is outlawed – it is outlawed – not shifted around.

  58. when? and by who?

    When is a good question, the answer might change over time.

    I believe reports are prepared by the agency (subcontracted out to Battelle or one of the other big environmental consulting houses) and held open for a period of public comment,and ten vetted or approved by GAO. Under George Bush that became a convenient burying ground, even though GAO is supposed to be independent.

    One big problem is that evey time we do one it is a stand alone deal: no comparison or measurments are made against previous submissions and subsequent results.

    RH

  59. The first paragraph refers to federal environmental law. Even federal law has plenty of room for improvement and a lot of abuse.

    State and locla law get more explicit, but their powers are limited,so environmental law is frequently masquerading as land use or zoning law, wher court action is hard to come by.

    RH

  60. " incorrigibly pigheaded"

    well that.. and the little fact that I pretty much support much of the way the system currently works (which some provisos) which puts me with a lot of other folks including the folks who make laws and the folks who interpret them and the folks who implement them.

    you? aligned with the fringe property rights folks who seem to reject the idea that the larger group of property owners are legitimate owners of properties also.

    what kind of "governance" would you prefer in not participation of all owners?

  61. you're a stitch Ray

    " Thereby guranteeing a one sided vison of the state of the art."

    "scope of this study was limited to information that could be obtained"

    Ray – the limit was what they could find documented…

    and it's not one sided in any way shape or form..

    it's merely a summary/comparison .. that I'm betting has info you do not know…

    Don't you find it interesting that out of the 4 options in Va that it is the Subdivision ordinance that IS REQUIRED?

  62. Don't you find it interesting that out of the 4 options in Va that it is the Subdivision ordinance that IS REQUIRED?

    Not at all, it is the most important.

    Also the most abused. It would have cost me over $100,000 to make the application for a subdivision which consisted of one mosdets home.

    And the application would surely have been turned down.

    Evn though the same home would have been by-right a few weeks earlier.

    RH

  63. Ray – from YOUR point of view – wouldn't it have been better for the State to have one uniform statewide subdivision ordinance that treated all landowners equally?

    I'm just asking you…

    I cannot tell so far by my reading if there are any other states that do just that.

    so.. in Va a Dillon Rule state that about 2/3 of states use – and which limits what localities can do on their own without state permission – the one thing that the state almost totally delegated was one of the most important parts of land-use – subdivision.

    ironic huh?

  64. "you? aligned with the fringe property rights folks who seem to reject the idea that the larger group of property owners are legitimate owners of properties also."

    Not at all, and that is an example of what I mean by pig headed. you readily change the facts or re-state my position just so you can say things like that.

    I am not aligned with fringe property right wing nuts, and they would have no idea about the issues I support. I do not support THEIR property rights, or yours, or those of the larger body of owners that that believes in mob rule, orproperty rights tat supercede other peoples rights.

    I believe that EVERYONES property rights should be protected equally, and that means aomong other things that we need to define a lot more thngs as property, not just real estate.

    I believe that a piece of property is still property, I reject the idea that a taking has not taken place just because the government left you with 5%. If I robbed you and took 95% of what was in your wallet, you would still think you were robbed.

    I believe the government can make any stupid kind of regulation it likes as long as it applis only to property purchased from that point forward.

    I believe you do not have the right to perpetually control your property from the grave.

    I believe the Constitution meant exactly what it said concerning payment for property takings.

    I believe there are commonly used procedures for determining what propertyis worth. Usually that means allowing them to be bought and sold.

    I believe income and sales should be taxed, but money (property) simply held should not be taxed.

    I'm in favor of plain speaking and honesty, I dislike obfuscation, spin, and euphemism.

    I believe a lot of simple answers are wrong.

    Other than that, I'm a regular guy.

    RH

  65. State to have one uniform statewide subdivision ordinance that treated all landowners equally?

    I believe the rules should be fair, transparent, and predictable. And not retroactive. If they meet that standard, I don't care who administrates them.

    Personally speaking, I would most likely be better off with a state rule. Other than the right to use tools onthe farm, I don't know what else the state and county could take away from me.

    RH

  66. " I don't know what else the state and county could take away from me."

    this one is easy. They could make your taxes so high – you'd have trouble keeping your land.

    that's happened to many a farmer.

  67. "..and the little fact that I pretty much support much of the way the system currently works (which some provisos) which puts me with a lot of other folks including the folks who make laws and the folks who interpret them and the folks who implement them."

    OK, so you support the ongoing business of theft as usual.

    The effort and lengths we go to just to screw innocent people turns my stomach, and so does the bleating about what is far and unfair by people who are not even remotely involved. You would think it is not possible to make a living honestly and fairly, or run a government that governs without discrimination.

    If you like the system we have now, then I just figure you have low standards. It shows in your arguments, which invariably come down to it is OK to be unfair because thats the way the majority wants it.

    We can do a lot better.

    RH

  68. "this one is easy. They could make your taxes so high – you'd have trouble keeping your land."

    ———————————

    It's not my land now. I'm just a sharecropper to the county. If one of my animals dies, I can't even bury it here. If they finally force me out, they would probably be doing me a favor, but they and the next guy will still be faced with the same problem: the place is zoned for agricultural failure. Otherwise known as rich people's estates.

    But that is typical of your thinking: they could make YOUR taxes so high you'd have trouble keeping your land. Never mind anything that is remotely fair or appropriate, or justifiable: just they could do it to you.

    Well fine, lets tax only me and not tax everyone the same way, after all, I'm the troublemaker.

    How about if we tax everyone out of their home, that way we would be treating everyone equally. Of course it might be a little hard to come up withthe net public benefit that justifies such a move, but what the heck, it worked for Hitler, for a while.

    Anyway, it isn't the land tax that upsets me, it is land tax for which I get nothing in return. "Land use" tax that gets spent on residential use. Tax for a hundred years of nothing that gets immediately forgotten when a chance for "windfall profits at the expense of my neighbors" arrives.

    RH

  69. "The regulators still face significant hurdles if they want to dramatically expand government's reach. Most proposed regulations have to be vetted by a central White House office headed by another new appointee, Cass R. Sunstein, whose embrace of cost-benefit analyses may mean he will discourage expensive new rules. "

    From WaPo today

    RH

  70. Natural resource accounting can provide part of the solution by presenting quantitative and monetary values for the goods and services that economies rely on, such as food, water, energy, timber and climate regulation. In a deregulated market, or one poorly linked to the physical reality of the underpinning resources, there is a severe risk of boom and bust cycles. The history of resource exploitation is littered with examples of what happens when the basics of accounting are missing.

    * In fisheries management, laissez-faire markets, poorly timed interventions, politically driven regulation and a lack of real-time information about fish stock recruitment and abundance, have led to a history of extreme boom and bust cycles and the demise of many of the world’s fish stocks.
    * In the rush to develop biofuels, both developed and developing countries lacked the ability to pull together resource accounts to allow them to regulate the growth of the market and fully analyse the impacts and unintended consequences on land use and commodity prices.

    If the world is to green the brown economy and embrace a low-carbon future, a global accord on carbon accounting will be needed, including a significant increase in the categorisation of carbon credits for different forms of pollution.

    Just as in managing a bank account, natural resource accounts can provide information about the quantities and qualities of the stocks and flows of natural capital and ecosystem services. The System of National Accounts – the globally recognised accounting framework for generating statistics on GDP, production, investment and consumption – is now being revised to include natural resource accounts.

    ————————-

    Including the full costs of pollution, degradation and destruction of natural capital and its replacement costs in the system of national accounts is the first step. But to be successful, these costs will also need to be internalised into market prices using taxes, tradable permits, regulations, liability regimes and the removal of perverse subsidies.

    All this may well make the use of natural capital like water and carbon more expensive, but as many business leaders have recognised these costs must be included in the measures of societal wealth and success if plans for the future are to be realistic.

    —————

    The second major problem in greening the economy is that as governments and institutions rush in with new rules and regulations, sometimes poorly conceived or over-zealous, there is a real danger that they will cause policy conflicts and trigger severe boom and bust cycles that could potentially push the world over critical economic, social and environmental thresholds.

    For rules and regulations to be successful, it is important that they abide by the principles of good governance. Even the multi-billion euro European Economic Recovery Plan will fail if new approaches are not adopted that explicitly encourage public participation, create transparent arbiters of equity and fairness, protect the public good and provide explicit evidence of the status of all forms of capital.

    http://thegovmonitor.com/world_news/europe/going-green-needs-carbon-accounting-9907.html

  71. The proposed approach would be an attempt to manage direct discharge from land rather than managing farm activity itself, he said.

    "Instead of saying you can't put a dairy farm there . . . what we'd say is, we don't care what you farm, just that you cannot have more than a set standard of sediments coming off the land."

    ——————-

    Fair, transparent, and predictable.

    RH

  72. …" what we'd say is, we don't care what you farm, just that you cannot have more than a set standard of sediments coming off the land."

    wanna hear the developers and property right folks yell Bloody Murder?

    Change the above to this:

    " what we'd say is, we don't care what you DO ON THAT PROPERTY, just that you cannot have more than a set standard of sediments AND OTHER SUBSTANCES including STORMWATER coming off the land."

    doesn't this violate your idea that doing this would be a de-facto "taking"?

  73. No.

    This is a proposal for new land use regulations in new Zealand, which is far more reasonable, progeressive, and successful than we are in the states.

    In effect it puts a measurable metric in place. As long as you don;t violate the metric, your neighbors can go pound sand. They have no measurble way of proving they are absorbing a negative effect.

    RH

  74. More than half of the nation's state attorneys general and two dozen interest groups have weighed in on a high-profile regulatory takings case that the Supreme Court will hear in December.

    Skip to next paragraph
    More News From Greenwire
    BLM Employees Too Cozy With Advocacy Groups, IG Report Says Business Blitz Seeks Fast Passage of Senate Climate Bill Senate Democrats Push N.M., Ore. Wilderness Bills Investor Advocates Press Business Groups Over Climate Policy Do U.S. Chamber Defections Reflect New Dynamic in Climate Debate?
    A blog about energy, the environment and the bottom line.

    Go to Blog » Solicitor General Elena Kagan, attorneys general from 26 states, the National Association of Counties, the National League of Cities, the U.S. Conference of Mayors and others filed friend-of-the-court briefs yesterday in Stop the Beach Renourishment v. Florida, which turns on whether Florida's Supreme Court violated the Constitution's regulatory takings clause when it upheld a plan to create a state-owned public beach between private waterfront land and the Gulf of Mexico.

    Amicus briefs supported the state of Florida and come a month after more than a dozen other organizations, including the National Association of Home Builders, the Cato Institute and the Pacific Legal Foundation filed similar briefs backing the private waterfront landowners who filed the lawsuit (Greenwire, Aug. 26).

    The case arose in 2004, when property owners filed a lawsuit to halt the planned restoration of beaches in Walton County along the Florida Panhandle.

    Under the state's Beach and Shore Preservation Act, counties and cities can restore beaches eroded by hurricanes and storms by adding sand beyond a state-designated erosion control line, which separates private property from state property. Sand placed beyond the line becomes public beach because the projects are funded with state and federal dollars.

    A Florida district court ruled in 2006 that the state's restoration effort constituted an uncompensated taking, depriving property owners of their right to maintain contact with the water and their "right to accretion," which is the gradual accumulation of land by natural forces.

    Last September, the Florida Supreme Court reversed the lower court order.

    In June, the U.S. Supreme Court agreed to hear the case.

    A majority finding that the Florida Supreme Court violated the takings clause "would undermine the states' well established and traditional authority to determine the scope of their own property laws," the attorneys general warned in their combined friend-of-the-court brief.

    "It would do this by expanding takings law to subject state court property law determinations to federal review," they wrote.

    —————————-

    I believe that I predicted recently that eventually we would come to a case that could propagate the constitutional requirement for compensation down to the states.

    The states have been playing fast and loose with this, and suddenly they are terrified that they might have to obey the law of the land.

    RH

  75. "Opponents are trying to frame it as the environment versus property, but this is really property owners versus property owners," said John Echeverria, an environmental law professor at Vermont Law School who filed a friend-of-the-court brief on behalf of the American Planning Association and the Florida Chapter of the American Planning Association.

    "Only a handful of affected landowners have joined in this lawsuit," Echeverria said. "Others are saying they're glad that the government stepped in to protect the beachfront."

    —————–

    Well of course the ones who are not affected could care less what happens to the minority. But if this is such a benefit, the majority could buy the minority off and stay out of court.

  76. The Florida-based Coalition for Property Rights, which counts among its members owners of oceanfront property who have been affected by the statute at issue in the case, said Supreme Court intervention was necessary to reel in a state action that went too far.

    "In attempting to 'balance' the landowners' littoral rights against other countervailing interests (mainly the newly-created governmental duty to 'preserve' the beach), the Florida Supreme Court erroneously applied a multi-factor test in this physical takings case," CPR argued in its amicus brief.

    —————–

    So what we have here is an example of exactly what I have been talking about. A newly created agency is bothcreating and taking over newly defined property rights. These are rights taht never existed before, and yet now the state presumes to claim they have a superior rights position over those bought and paid for under a previous set of rules.

    RH

  77. I don't think the state has to "claim" it has superior rights.

    it does – by constitution and law.

    the question is – who owns newly created land?

    I can see where the state thinks they do but it sort of depends on who you view other "new" land that they did not claim.

    it might boil down to whether they had a plat-specified metes/bounds property line or their property line was said to be something like the mean high tide line…

    this is going to be a busmans holiday for the lawyers.

  78. Ray, with all due respect, I think that you are begging the question. Does a beachfront landowner have a right to prevent the state from creating land that is located between the beachfront landowner's lot and the ocean?

    I don't know the answer to this question. But I would not automatically conclude that landowners' ownership rights extend to what is now the ocean. I wouldn't conclude the opposite either. It is possible that a person's lot does not extend into the ocean and that the state could lawfully restore a beach beyond the landowner's property. In other words, there may not be a right to maintain contact with the water. Or such right might well exist. Apparently, the Florida Supreme Court does not believe that such a right exists.

    I'd like to read the Florida court's decision.

    TMT

  79. cases like this often get decided literally sometimes on the difference between a word in a passage saying "shall" rather than "may".

    so .. many that I have read – they seldom yield a bright line principle.

    sometimes I think the courts do this on purpose – you know – job security…

    😉

  80. I don't think the state has to "claim" it has superior rights.

    it does – by constitution and law.

    ———————

    I don't think so. The state is merely a reperesentation of the people and no person has superior rights over another. By extension, neither does the state.

    That's why the constitution requires the Federal government to pay for property it takes.

    RH

    RH

  81. the question is – who owns newly created land?

    ————————-

    That is half the question. Or maybe a third.

    Who owned the land where the new land was moved from?

    Clearly if the government (or anyone else) makes something then they own it.

    But you cannot make any thing or do anything without creating some kind of externality, and that has costs as well: you don;t really own something until you have paid for what you built AND its externalities. That is your argument about development fees.

    Suppose government went out a half mile and mad the new beach out there, as a barrier island. Then it would havelittle effect on the current landowners. Infact you might charge them extra for providing them additional protection.

    But that isn;t the case. By building new land adjacent to the present owners beach government is removing some proerty rights the owners had before.

    The owners bought and presumably paid a premium price for land with private beach. They will lose the value of that premium due to government action.

    Furthermore, under Florida law the owners also have the right of accretion: if the sea deposits more land in front of their property, they own it. So, part of th eprice you pay for your land amounts to a vbet thet eventually you will have more land.

    If that is the case then why would the state choose such a place for "beach protection" unless they have an ulterior motive?

    If it is not the case then the landowners beach may be eroding, and the state is saving their property. Rather than sending them a bill for dredging, the state proposes to take payment in the form of additional property rights for everyone else: beach rights.

    The landowners don't agree to the terms of the deal.

    —————————

    ZIf everyone in the state gets beach rights then that is a realpublic benefit. It would seem a small price to pay to make sure that the existing owners who already paid for private beach rights which they will lose, and who will also pay proportionately for their share of the "new" beach rights, are adequately compensated.

    —————————-

    It seems to me this is (a little) analogous to the case of the undeveloped property owner. He like the beach proeprty owners contributes all along to the creaton of new infrastructure, which he doesn't need.

    Then when the new infrastructure finally happens, we expect him to pay an additional disproportionate price, as if anything that happened before doesn't matter.

    (Then we'll turn around and slap him with a historical designation, based on the argument that waht happened before matters very much.)

    RH

  82. " government is removing some proerty rights the owners had before."

    Ray – if they get the land from the bottom of the ocean then who owned it ?

    come one guy.. you're struggling here.. get it together.

  83. " If everyone in the state gets beach rights then that is a realpublic benefit"

    so are you saying that if the govt uses tax money to dredge the and from the bottom and deposit it on the beach that the public owns it?

    Isn't that Florida's position?

  84. " It seems to me this is (a little) analogous to the case of the undeveloped property owner. He like the beach proeprty owners contributes all along to the creaton of new infrastructure, which he doesn't need."

    "little" is the operative word.

    pvt landowners don't get to dictate the terms – govt does.

  85. You're a stitch Ray.

    "I don't think so. The state is merely a reperesentation of the people and no person has superior rights over another. By extension, neither does the state."

    you're the guy who keeps claiming that the Constitution gave people property rights

    and you argued against "mob rule" by the "people".

    The Constitution of Va and subsequent court cases have affirmed the fact that the State does indeed have the "right" to determine land-use …

    how you twist and turn on this is amusing to watch though.

    When the state has the "right" to take your land and the state also has the "right" to determine what your land is worth – then you can pretty much be sure that subordinate issues

  86. I don't follow your reasoning.

    "no person has superior rights over another. By extension, neither does the state."

    That is what precludes mob rule, not what enables it.

    ———————

    I never said the constitution invented property rights. All it says is that the government cannot take them from you without payment. The constitution merely recognizes the fact of property rights. By amendment, the constitution also recognizes the rights of minorities.

    I know people who beleive, after Ayn Rand, that the government has no rights to ANY of my property an therefore has no right to TAKE property from me in the form of taxes.

    That is an extreme view. If you are willing to not TAKE anything from government and live in a state of anarchy, then you can hold that position. I prefer to think of taxes as payments I make to buy something, which I then have property rights to. those rights have to be extended equally and protected equally, because that is government's job.

    I buy police protection, and I am entitled to te same protection whether I am white or black. The government wasn't doing its job in that respect, and that is how we got the laws and amendments protecting minorities.

    The constitution of Virgina and subsequent court cases are in direct contravention of Lucas vs South Carolina which was determined at the state level.

    Even if you don;t beleive they are in direct contravention, the very best you can say is that they are skating on the edge of the law rather than supporting the spirit of the law.

    That is why virtually every state has written briefs to the supreme court on this case. They see there is a chance that they will lose the advantage they have.

    That advantage boils down to an excuse NOT to do their principal job and protect all property equally. It gives them the legal framework to do things that are as morally and ethically wrong as owning slaves was. It offers the ability to get what they want, without paying for it.

    —————————-

    pvt landowners don't get to dictate the terms – govt does.

    "dictate" is the operative word here.

    What you are saying here is tht you agree with me. I don't own my farmland, the county does. I'm just an enforced sharecropper.

    The only difference between our views on this is that you don't see anything wrong with it. You don't seem to mind taking things from people without paying for them. You don't seem to mind dictating what people can earn or keep.

    I have a problem with it.

    RH

  87. Ray – if they get the land from the bottom of the ocean then who owned it ?

    If it is a natural resource, don't we ALL own it? isn;t that the premise of environmental protection, that it is a public property we are ALL invested in? Isn't that why oil compnaies pay depletion fees?

    RH

  88. what you are "entitled" to is a Constitutional Republic with a Constitution, laws and an elected government.

    And that Constitution says that the States decide who will do land-use – and in Va. their Constitution says that local elected govt has the "RIGHT" to decide land use.

    That's the deal Ray.

    The government gets to decide what property rights you have.

    There is no higher authority.

    If you disagree with the way they interpret that issue – and enough property owners agree with you – you can change it.

    you keep talking like there is some higher authority who will make things right..

    ultimately the higher authority is – your neighbors – not in the literal sense – but in the sense that that is how we do business in a Constitutional Republic.

    You can even change the Constitution – and we have done that – but you gotta have enough of your neighbors voting yes to do it.

    There is not "authority" higher than that – that will say " No – you cannot make a law that takes away property rights".

    they can – Ray – and they do.

    and it's WORSE in other governance systems because in many of them – they don't even bother to ask your neighbors and you how you feel about it – they do it – by fiat.

  89. I'm not struggling here, I'm just painting some pictures and holding them up to the light.

    It does seem that the property owners bought and paid for things they will no longer have if the state gets its way. They had private beach and they had accretion rights. Those will be gone and the state objects to paying for them.

    Now, the state could create a beach without taking those rights and that value, but it chooses not to. In effect, the state is building (in this case creating property), right up to the property lines, which is normally prohibited. It seems to me the state ought to adhere to the spirit of its own rules.

    It could probably just buy the damn houses cheaper than it can dredge that much sand. Therefore there is a real question as to whether this projec even represents a net public benefit.

    But assuming there IS a real benefit (the homes are more valuable than the sand), then what can be the state's motivation to not take some of the benefit and make sure there are no losers?

    All I can figure is that they like stealing and they want to make sure they can continue doing it. I have a hard time seeing how that works out to my benefit.

    RH

  90. Ray – the "state" in our system of governance is the sum of all property owners who express their wishes through elected government, laws, and the Constitution.

    The courts interpret the laws but in the end, laws, AND the Constitution can be changed.

  91. When I lived on Martha's vineyard we and our neighbors had a stretch of private beach. That beache as located between the town beach and the (public) steamboat pier.

    As a result it was next to impossible to enforce as private, and the owners (William Styron among them) smply tolerated a few people sitting on the beach in our back yard while they waited for the steamboat, or whatever.

    Of course, the problem with that is that eventually the public couldclaim owership by adverse possesion. To prevent that, you simply send a letter to the town granting them permission to treat the private property as an extension of the town beach.

    And there are liability issues, as well. And we kept the private beach signs up.

    But people abused the privilege. we had a amall shed where we stored Oars and spare parts for the boats, etc. At night people would rip shingles off the shed to start a bonfire onthe beach.

    Sometimes I would come down to row out to the boat and discover someoen had allowed their kid to fill my dinghy up with sand, as if it was their beach toy. The sand gets in the seams of the boat and cause it to leak, and if the boat is really full it will wreck the boat.

    On one occasion i cam down and a little boy was energetically shoveling sand in my boat while his father drank beer and watched. When I asked him not to let his boy do that, he became irate and threatening (beer maybe) screaming at me that it was a public beach and he could do as he liked.

    Give the public an inch, and they will take a mile. It is human nature, but that doesn't make it right.

    RH

  92. they can – Ray – and they do

    And it is still wrong.

  93. the "state" in our system of governance is the sum of all property owners who express their wishes through elected government, laws, and the Constitution.

    The state and the courts and he elected representative still have an obligation to protect minorities, and they still have an obligation to ignore the peoples wishes when they represent a wrong.

    Once elected, those representatives must represent and protect EVERYONE equally.

    The laws and interpretation of them can be changed and that is what this case is about.

    I hope the current interpretations are chaged to make them more protective and more equal. the state can still have whatever it wants, but now it has to pay for it instead of steal it.

    Paying for things is what keeps us honest. And it keeps us honest about what it is we want.

    RH

  94. they don't "protect" minorities any more or any less than the Constitution specifies and the interpretation of what that means is not up to individuals (that would lead to anarchy) but instead to the courts and the elected lawmakers.

    In the end – it takes a majority to decide these things an din the case of the Constitution it takes a very large minority – but in the end – it boils down to your neighbors ideas about what everyone's rights should be or not – as long as they apply equally to everyone.

    that's the way our system was designed to function.

  95. The 'business community' is OLD. They don't care about global warming because they will be dead soon anyway. They figure global warming is a mess to be cleaned up by their successors, as if that will be even possible. They refuse to take responsibility.

  96. Minorities don't deserve any more or any less protection tha the rest of us.

    But the majority still does not have the right to steal from them.

    RH

  97. – as long as they apply equally to everyone.

    OK we agree on that. Now what do we mean by apply equally?

    You think that if we go into an existing neighborhood and apply new setbacks, that the rule applies equally because it applies to everyone – eventually.

    But it is complete horse manure because the PRACTICAL effect on those who already built is zero, but on those that have not built yet it is substantial.

    As long as thee is no penalty associated with this kind of behavior tere is no reason for th emajority not to do major damage to the minority.

    You can rationalize it bay saying the new rule applies equally, but the practical result is nothing but theft.

    The people who alrady built get something for nothing, and the people who haven't built lost something they had.

    The usual description of that kind of transaction is stealing. As long as we allow government to treat people that way then it is no wonder people feel the way they do about government: they don't trust it.

    RH

  98. Right.

    CO2 is a huge, deadly threat that we absolutely must fix right away, and fixing this huge problem will cost "only" 3% of global GDP.

    We need to redirect our entire energy industry but it will hardly cost us anything.

    What is wrong with this message?

    RH

  99. well.. what percentage of the GDP will be impacted if we don't fix it?

  100. CN) – A mobile home rent-control ordinance in Goleta, Calif., amounts to an unconstitutional taking of property, the 9th Circuit ruled in a 2-1 decision.
    The Pasadena-based panel ruled that the city should compensate trailer park owners Daniel and Susan Guggenheim and Maureen Pierce for capping the amount of rent they could charge their tenants.

    "Singling out mobile home park owners … and forcing them to rent their property at a discount of 80 percent below its market value 'is the kind of expense-shifting to a few persons that amounts to a takings,'" Judge Bybee wrote, quoting Federal Circuit precedent.

    The court pointed out that the city has other options for supporting low-income housing, including tax incentives, low-cost loans, rent supports and vouchers.

    [Judge] Bybee said the standing requirements established in Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City "forced us to close the courthouse door to aggrieved property owners like the Park Owners, and to close our eyes to the extreme effects of laws like the City's (rent-control ordinance)."

    In Williamson, the Supreme Court held that a takings claim is not ripe until the property owner has jumped through the state's procedural hoops and has been denied compensation for the property loss.

    But the Guggenheims and Pierce "have managed to pry these doors open a bit" by developing their case through several rounds of litigation, Bybee said. "We will not, therefore, throw these property owners back out and slam the courthouse door shut behind them. Today, our eyes are open."

    Bybee reversed the district court's dismissal of the takings claim and remanded for a determination of "just compensation."

    The court affirmed dismissal of the park owners' due process and equal protection claims.

    RH

  101. "Judge Andrew Kleinfeld — the lone dissenter on the three judge panel that made the ruling — noted that the Guggenheims bought the park at a much lower price than they would have if it had not been rent-controlled, which he maintained stripped them of a right to compensation."

    notice that this is an issue we have discussed. In this case I would agree with Judge Kleinfeld: since the restrictions were in place when they bought it, they should deserve no compensation.

    UNLESS

    the situation changed drastically over the years. For example if the original rent control amounted to a reduction of 5% and then it increased to 80% because all the surrounding rents went up that much, then there is an issue in that the ordinance did not change over time or allow for reasonable adjustments.

    BUT

    If the judge beleives that they are not entitled to compensation BECAUSE they bought it with restriction s in place, then you would have to believe that the court would hold that compensation was due if new regualtions apply after the purchase is made.

    This is essentially the model that the (now overturned) Oregon law followed.

    RH

  102. The 2-1 decision, handed down early last week, left the task of figuring out the implications of the decision to the Federal District Court that had ruled that, according to the Fifth Amendment of the U.S. Constitution, the ordinance comprises a regulatory taking of property. As it stands, the Circuit Court’s current ruling means that although the ordinance itself is constitutional, the Guggenheims — who have owned Rancho since 1997 — are entitled to compensation for land value lost due to the ordinance’s stipulation that rent increases be limited to 5 percent annually. “The Ninth Circuit covers all of California, so the impacts will be far reaching,”

    "How much money the Guggenheims could be entitled to is as yet unclear, although Close indicated that it could amount to tens of millions. “I assume the city would be setting aside the funds now to pay for this. That would be the prudent thing to do,” he said. While the city has a liability reserve, Giles said that a finding in the millions would seriously hamper the city’s ability to provide core functions to its citizens."

    —————————-

    I'm inclined to side with the dissenting judg on this: their complaint is hampered by the fact that the restrictions were in place when it was purchased. however, the court also agreed with my contention that the orinance became more nad more onerous over time.

    Finally, if the town has to shell out tens of millions of dollars, that is going to hurt. This is one example of what I have said before: if you think you gain some advantage because the government is allowed (for now) to steal from OTHERS, then you are kidding yourself.

    In the first place, you may be next to be denied equal protection and due process, and in the second you rgovernment could lose such a suit and you would have to give up all you gained for all those years.

    RH

  103. "Both the federal and Washington State constitutions provide that the government may not take private property unless it is for a public use and just compensation is paid. Just compensation is considered to be the fair market value of the property at the time of the taking. A government may "take" property in two basic ways: (1) by physically appropriating the property, such as for a right-of-way; or (2) by regulating or limiting the use of property under the government's police power authority in such a way as to destroy one or more of the fundamental attributes of ownership (the right to possess, exclude others, and to dispose of property), deny all reasonable economic use of the property, or require the property owner to provide a public benefit rather than addressing some public impact caused by a proposed use. "

    It is this last part where things get a lttle dicey. One might claim that the restriction is to mitigate the impacts of a proposed use, as Larry does with his argument concerning adequate infrastructure. but the result of the regulation my be that an owner winds up providing a public benefit.

    At the very least, addressing some potentail public impact caused by a proposed use that consequently does not happen, has to be counterbalnced by payment for the ensuing public benefit.

    In fact, this was an issue in Lucas vs South Carolina. Lucas bought the last tow beachfront builing lots in onw community for a substantial sum. Then the community passed an ordinace preventing him, and only him from building. He sued and won but was overturned at the astate suprem court which argued that the ordinace waas designed to prevent some damage and therefore no compensation was required. The US Supreme court rejected that argument, saying that there must be some proof beyond the mere CLAIM of damage or potential damage.

    So, despite Larry's protestation that the people and not the landowner decide, those are not the true facts. The people have no right to hide behind flimsily constructed "prevention of damage" arguments, and under law and court precedence it is THEY who must bear the burden of proof.

    RH

  104. "The question of when the impact of a law or regulation constitutes a taking for Fifth Amendment due process purposes is a hot one. For many years, taking meant literally taking – regulation alone was not enough to invoke due process protection. Then, in 1978, the Supreme Court allowed that government regulatory actions could under certain circumstances rise to the level of taking without physically seizing the property. Penn Central Transp. Co. v. New York City, 438 U.S. 104 (1978). The eye of that needle was exceedingly small at first, but has widened in recent years."

    RH

  105. "This Article argues that regulatory takings doctrine reflects one of the most developed, yet underappreciated, anti-subordination doctrines in the law. Both takings and critical race theory provide a template for properly focusing on ways to improve the lack of public accountability in development and the unresponsiveness of eminent domain doctrine to commonly accepted notions of fairness as a component of the public good. "

    "The conceptual language and analytical construct for appropriately addressing these issues come from critical race theory and its project of anti-subordination."

    ——————————

    I'm not the only one who believes that issues of regulatory taking and property rights have similar roots in our history of slavery and race relations.

    RH

  106. Your blog is really cool! I will wait when you finish. Thank you for interesting articles.
    more templates easy to download

Leave a Reply