Odds and ends number 92

The more regular than it used to be look at the pile that’s my e-mail box and dredging out items worth a few sentences to a few paragraphs starts now:

A private fight for $15

My friends at the Maryland Public Policy Institute recently pointed out that there are a number of Maryland companies who are already paying starting employees $15 an hour (or soon will be.) MPPI’s Carol Park notes that, “The main goal for Maryland government should be to incentivize businesses in Maryland to grow larger and more profitable, so that they can become the new Amazon and Target and not only pay their employees $15 an hour but employ hundreds and thousands of Marylanders who are looking for a job.”

While Park is right, she also misses a point. Using that argument, larger businesses may be comfortable latching onto the so-called “Fight for $15” because it allows them to throttle back prospective competition. Small companies running on tighter margins won’t be able to pay the higher wages, so they won’t be able to compete.

Listen, if the SEIU and big business are on the same side (and, according to Leonard Robinson III of the Capital Research Center the SEIU is greasing a lot of Democrats’ palms to get this enacted at the federal level) it just can’t be good for the rest of us.

Returning to the subject of MPPI, they have also recently asked the state to “resist” raising taxes in the wake of the Kirwan Commission report advocating an additional $3.8 billion in school spending – none of which is slated to follow the child as it should. They cite prospective income tax increases on the middle class as well as possible expansion of the sales tax to include more services and business tax hikes as possible outcomes.

Knowing how the Kirwan Commission came together, is it any wonder higher taxes are on the docket? Resist we must.

Did Trump really cave? Or is it “fake news” from the dividers of Indivisible?

This probably deserves its own post, but we all know Indivisible will take credit for anything that’s a loss to America or makes President Trump look bad – naturally, that extends to the end of the recent Schumer-Pelosi shutdown. So this was their “state of play” after the furlough ended.

Pay attention to the “ask” – Republican Senators are asked for “No new wall money. Keep the government open.” It sounds to me like the Democrats have already determined they will shut it down again and try to blame Trump again. Nope, that one would be on you – particularly since Democrats have the majority in the conference committee.

In another Indivisible-related item I found interesting, they laid out a fundraising wish list in an e-mail I received in the wake of the shutdown:

  • $1,475,000 for “doubling our organizing team,” adding 14 state-level organizers, 3 digital organizers, and 3 training organizers.
  • $80,000 for Hubdialer, which, as the name implies, assists volunteers in making phone calls.
  • $114,000 for Mobile Commons, which is a text messaging system.
  • $1,315,820 for digital ads. More money for Mark Zuckerberg.
  • And $140,000 for ActionKit, a “mass e-mailing tool.”

All told, that “ask” is a little over $3 million, which I’m sure they’re going to invest in pushing more propaganda for 2020. Yep, that’s some grassroots for you.

And speaking of Astroturf…

If you wondered why Obamacare has hung tough despite its unpopularity, maybe this is why. From CRC’s Hayden Ludwig:

At least thirteen pro-Obamacare organizations aren’t independent organizations at all, but websites hosted by a handful of mega-funder nonprofits: the Sixteen Thirty FundNew Venture Fund, and Hopewell Fund.

Those three funds are in turn managed by Arabella Advisors, a mysterious consulting firm based in Washington, D.C. Arabella Advisors advises wealthy clients on what it calls “strategic philanthropy.” In practice though, Arabella’s strategic giving involves philanthropic investments to left-leaning causes and organizations.

“Who is Behind the Groups Pushing Obamacare?”, Hayden Ludwig, Capital Research Center, January 10, 2019.

Nor should we forget this tangled web the Left weaved.

And people thought the TEA Party was Astroturf because Americans for Prosperity printed up a batch of signs? Okay then, feel free to be wrong.

More wasteful spending

Another winner from the CRC comes in this investigation by Robert Stilson – employment programs that make work for connected non-profits. It’s yet another case of low-hanging fruit to be plucked and another score for the Capital Research Center, which is beginning to become a (sorely needed) bulldog of the Right. Don’t miss their look at the Census controversy either.

The state of American energy…is strong

At least according to the lengthy (over 120 pages) and colorful annual report from the American Petroleum Institute. It should be required reading for environmentalist wackos, including one Larry Hogan. Maybe he’d learn something and get back to what he promised.

If you want something a little more “official” the far less colorful Energy Information Administration Annual Energy Outlook 2019 is out as well. Both documents are chock full of good news for the energy industry as long as government stays out of the way.

So is the state of American manufacturing

Fresh off “another strong month of job growth,” the folks at the Alliance for American Manufacturing believe, “This strength in factory and overall hiring gives the administration considerable leverage headed into the final leg of trade talks with China,” according to AAM President Scott Paul.

But they’re never quite happy, always wanting something more. On the heels of a Trump “buy American” executive order, the group wants it expanded already. Here’s what it covers, in a nutshell:

Within 90 days of the date of this order, the head of each executive department and agency… administering a covered program shall, as appropriate and to the extent consistent with law, encourage recipients of new Federal financial assistance awards pursuant to a covered program to use, to the greatest extent practicable, iron and aluminum as well as steel, cement, and other manufactured products produced in the United States in every contract, subcontract, purchase order, or sub‑award that is chargeable against such Federal financial assistance award.

“Executive Order on Strengthening Buy-American Preferences for Infrastructure Projects,” issued by President Trump January 31, 2019.

While the additional jobs are good news, I’ve always been a little leery of “Buy American” orders such as these just because it’s gaming the market and making American products just that much less competitive on a global scale. Why invest in new technology and better facilities when you have a captive customer?

Having said that, I do believe President Trump is trying to level the playing field a bit as other nations subsidize their industries to varying degrees, too. For several years I received missives from AAM and others decrying the “dumping” of steel on the American market by Asian competitors, and that’s a case where a “Buy American” law can be of assistance. But I would rather see fair trade as a part of free trade, and there can be instances where “Buy American” may not be the best option.

Fighting the last war

In terms of total votes, the most popular politician in Maryland isn’t Larry Hogan. Instead, the top vote-getter in 2018 was Comptroller Peter Franchot, who drew 1,620,264 votes in winning a fourth term in office. Peter carried all but three counties (Cecil, Garrett, and Washington) in defeating the vastly underfunded Republican challenger Anjali Phukan. (Her campaign, beginning in May, 2017 and ending last December, raised a grand total of $2,051.25. The remaining $460 was donated to charity.)

But Phukan remains convinced that Franchot’s victory was achieved through underhanded means. Recently she attempted to convince the Maryland Board of Elections that an investigation into Franchot’s campaign finance was necessary, but to no avail. So she took the next step:

With no administrative options left, at the suggestion of some fellow Republicans, I filed a “Writ of Mandamus” with the Circuit Court in Anne Arundel County, to make the Board of Elections investigate my concerns, and act accordingly, as required by Maryland law. In this writ I also requested an injunction and declaratory judgement. I had presented my concerns before the election board as I discovered things in the process of reviewing his campaign’s financial records, and yet the account was still deemed compliant enough for Franchot to be certified!

Anjali Phukan, newsletter to supporters, January 27, 2019.

She’s also began plugging an obscure electoral watchdog website that’s had barely 700 visits in the last 2-plus years (as there is still 2016 information on it.) A GoFundMe campaign for it has raised a grand total of $5. But while it seems Phukan is tilting at windmills, she brings up some very troubling concerns about the Maryland campaign finance system.

Having written and read a few campaign finance reports in my time, I’m sure I’ve pointed out the weaknesses in the system. But a glaring one is how one very minor change in information submitted could conceivably allow an entity to donate far more than the prescribed limit, and seldom does the Board of Elections act on these irregularities. Since I haven’t heard of them overturning any elections due to unlawful campaign finance, I presume the punishment is generally making the campaign return the donation and perhaps a modest fine to the candidate and/or treasurer.

I glanced through Phukan’s summary of Franchot’s issues and, while it wasn’t a vast percentage of his campaign funding, you would think a person who is charged with being an accurate collector of revenue wouldn’t have such large accounting errors. It seems to me that the Board of Elections is just putting these self-reported records out to present a fig leaf of accountability but not really checking into them. (And let’s face it: most campaigns in this state don’t involve enough money to pay the mortgage for a year.)

And, by extension, the lack of interest in checking Franchot’s campaign finance seems to be echoed in their lack of interest in (or utter contempt regarding) cleaning out voter rolls. The erstwhile watchdog group Election Integrity Maryland found thousands of duplicate registrations in a May, 2014 survey. (Third release here, from an archived web page.) It’s now February, 2019, and something tells me that number is twice as high. Just wait until they get the automatic voter registration!

In passing

I couldn’t let this post go by without mentioning the recent passing of my former colleague on the Wicomico County Republican Central Committee, Dave Goslee, Sr. Sadly, the 78-year-old Goslee had just in November won a seat on an institution he’d been fighting to reform for the first ten years of his twelve-plus year tenure on the Central Committee, the Wicomico County Board of Education.

Dave showed the value of getting out the vote as he won that Board of Education seat by one vote after a December recount showed that vote was incorrectly credited to his opponent. But the fourth-term WCRCC member couldn’t beat leukemia, and it’s likely his opponent will get the seat back anyway as a 14-member panel mainly comprised from the local schools will select Goslee’s successor – that committee selected William Turner, who Goslee defeated for the seat, in 2017.

Dave and I were not the closest of friends on the committee when we first started, but over the years we developed a respectful relationship as we each came to understand what the other brought to the table. He was also a devoted season ticket holder for the Shorebirds, so I saw him often even after I left the WCRCC. He will be missed, both at the games and certainly in local politics.

Coming up…

I almost put this into the odds and ends, but decided I would devote a stand-alone post to those who would tell me how to do my job. I may use that as the light-hearted stack of stuff to start the weekend.

I also have the third in a quick batch of record reviews to do for Saturday, but that may be the last for a short while. Or it may not.

Longer term, a suggestion I’ve had placed in my hopper once again was to bring back something I tried for a couple seasons in 2014 and 2015: predicting the 25-man Delmarva Shorebird opening day roster. (My 2014 guesses had 10 correct for Opening Day and 5 coming along later in the season. In 2015 I had 11 on Opening Day and 6 later on. That year I did it a week before the season, but it didn’t help.)

This year’s roster may be even more tricky because of the new management for the Orioles – players who may have been favorites under the Duquette regime may not catch the eye of Mike Elias, who will presumably prefer a player more like those in the Astros organization from which he came. (And who am I to argue with their success? Not only was the major league team a division winner in 2018, so were four of their top five farm clubs – the other was a close second. On the other hand, the Shorebirds were barely a .500 team but that was still best among Baltimore’s full-season affiliates last season.)

But since my situation is a little better than it was back in mid-decade I think I’ll give it a shot. Still not going back to Shorebird of the Week but at least I’ll enhance my coverage this way.

So the mailbox is emptier and you’re up to date.

Is the era of full employment over?

Simply put, March was not a good month for job creation around the country. Numbers were down markedly from previous months while, as the Americans for Limited Government advocacy group pointed out, the labor participation rate tied a 37-year low.

The news was even worse in the manufacturing sector, where it contracted by 1,000 jobs. While Scott Paul of the Alliance for American Manufacturing blamed the strong dollar, calling it “a big loser for factory jobs in the United States,” it’s only a piece of the puzzle.

Paul would favor a more interventionist solution, adding:

There’s plenty that could be done to turn this around. The Treasury should crack down on currency manipulators, the Federal Reserve shouldn’t act prematurely, USTR should be assertive about enforcing our trade laws, and Congress must address currency and trade enforcement in the context of new trade legislation.

Based on Barack Obama’s promise to create a million manufacturing jobs in his second term, he needs to add 628,000 in the next 21 months – a Herculean task for any president, and almost impossible for this one. Let’s consider a few facts:

First of all, the continued low price of both oil and natural gas has tempered the energy boom to some extent. According to Energy Information Administration data, the number of oil and natural gas rigs in operation last week was 1,048. In terms of oil operations, the number is down 45% from last year and for gas it’s down almost 27%. While gasoline in the low $2 range is good for the overall economy, oil prices need to be between $60 and $80 a barrel for operators to break even, and the benchmark price has held lately in the high $40s.

As I noted, low energy prices are good for some aspects of job creation, but the energy boom is on a bit of a hiatus and that affects manufacturing with regard to that infrastructure. Throw in the unfair competition we’re receiving when it comes to OCTG pipe and it doesn’t appear this will be the cure to what ails us as far as job creation goes.

More important, though, is the financial aspect. Our corporate tax structure is among the most punitive in the developed world, which leads to capital flowing offshore despite the “economic patriotism” appeals of our government to demand it come back. Once you have the opportunity to take advantage of other countries’ willingness to charge 20% or even 15% tax, why should you willingly pay a 35% rate? Their slice of the pie may be less, but they get a lot more pies this way.

And then we have the aspect of regulations, particularly when it comes to the financial restrictions that Dodd-Frank places on the lending industry and the environmental mandates an overzealous EPA is putting on industry – look at coal as an example. If we went back to the conditions of 2006 the environment would likely not suffer serious harm and companies would have a much easier time with their accounting. I haven’t even touched on Obamacare, either.

Not all of this is Obama’s fault, but the majority of these problems can be laid at his feet. Alas, we have 21 months left in his term so many of these things will not change despite the presence of a Republican Congress which will be blamed for any setbacks.

So the question becomes one of just how many employers in general, not just in manufacturing, will be able to weather this storm. Even the recent news that both Walmart and McDonalds will be increasing their wages brought out the cynics and doubters. But it’s worth pointing out that both Walmart and McDonalds have stated they wouldn’t oppose a minimum wage hike. Such a move makes sense for them because their bottom lines can more easily manage a modest wage hike for their employees and they know their local competitors can’t. Both also have the flexibility to adopt more automation where they used to have a row of low-wage employees. As an example, most of the local Walmarts adopted a number of self-serve checkout lanes over the last year or so. If you hire a dozen fewer cashiers it’s easier to give the others another dollar an hour.

Change is a constant in the labor market, and we know this. But there are some circumstances under which businesses thrive and others where they struggle, and history has gone long enough to suggest the broad outlines we should follow. It’s unfortunate that some want to blaze a new trail when we know where the correct path is.

A shift in the air currents

You probably recall that last month I detailed a study claiming that wind-created energy saved consumers $1 billion in last year’s “polar vortex.” Ironically enough, it was released on the anniversary of the 2014 polar vortex in the midst of more unusually cold weather at a time when the favored energy source of natural gas was serving the twin masters of electricity generation and home heating.

Yet a bone of contention for the wind industry has been the overdue renewal of a production credit of 2.3 cents per kilowatt hour, allowed over the first ten years of a qualifying project’s life. A five-year extension of this credit, sponsored by Senator Heidi Heitkamp of North Dakota, was included in an amendment to the Keystone XL authorization bill in the Senate, but the amendment lost 47-51. One opponent of the credit, Americans for Limited Government, called it:

(J)ust another example of the crony capitalism that runs rampant in Washington, D.C. distorting our nation’s energy markets while encouraging the non-economically sustainable wind farming of America.

Of course, the American Wind Energy Association, while touting the increased capacity put into place last year, lamented the lack of this tax incentive:

2014 saw the completion of 4,850 megawatts (MW) in generating capacity, with cumulative installed capacity increasing eight percent to a total of 65,875 MW. That current wind capacity will avoid over 130 million metric tons of CO2 emissions annually, equal to taking 28 million cars off the road, when the current wind capacity produces generation for a full year.

However, the amount installed in 2014 still falls far short of the record 13,000 MW that the U.S. wind energy industry was able to complete during 2012.

Industry leaders blamed uncertainty over federal policy. The renewable energy Production Tax Credit was only extended for two weeks at the end of last year, and has now expired again.

“Wind is gaining strength, but as recent history shows, we can do a whole lot more,” said AWEA CEO Tom Kiernan. “We’re looking forward to working with Members of Congress from both sides of the aisle so that a reasonable, responsible tax policy is in place that allows the wind industry to continue lowering costs and investing billions of dollars in U.S. communities.”

So is it a “reasonable, responsible tax policy,” or a boondoggle?

As noted above, the tax credit is equal to 2.3 cents per kilowatt hour. According to the Energy Information Administration, the average American home uses just over 900 kilowatt-hours of electricity per month. Rounding down to 900 for ease of math, it means that each month a wind-powered home creates a tax credit of $20.70 – over a year that adds up to $248.40.

In the same AWEA release, they claim that “U.S. wind farms now provide enough power for the equivalent of 18 million typical American homes.” If this is so, then the annual cost of this tax credit would be nearly $4.5 billion. Granted, this assumes that all wind capacity in the country would qualify for the credit, but stick with me.

Yesterday our not-so-illustrious former governor Martin O’Malley blustered in the New York Times that:

(R)enewable-energy businesses still aren’t even competing on a level playing field with fossil-fuel companies, which enjoy more than $4 billion in guaranteed federal subsidies each year.

Yet if you work out the wind power tax credit, that section of renewables could get a tax break exceeding $4 billion per year, not to mention the carve-outs states like Maryland provide for renewables at the expense of less expensive and more reliable fossil fuels. The benefit of having a share of a market worth tens of billions of dollars handed to renewable energy (or, as is more common, the treatment of this rent-seeking as a penalty paid by energy companies) is rarely factored into the equation, but stands as an advantage for the renewables side that traditional sources do not enjoy.

To really get a sense of where wind power can compete, not only should we permanently eliminate the Wind Production Tax Credit, but also do away with the market share requirements for renewables. Only then can we get a sense of where the market really is for that type of energy.

There’s a reason we have cars that run on gasoline, electrical plants which run on coal and natural gas, and fervent exploration for new sources of oil, just as there’s a reason wind turbine construction came to a near-halt in 2013. The market seeks its own level.

A sea change in Maryland too?

In the midst of what’s good news about energy production in America – despite the headwinds created by an administration that believes global warming is a large problem while spending millions to prop up failing green energy companies – the question can be asked whether Maryland has achieved its share. I want to quote writer Mark Green from the Energy Tomorrow blog, who writes that based on Energy Information Administration data that:

This is a snapshot of America’s energy revolution – the fundamental shift from energy scarcity to abundance that would have been unthinkable less than a decade ago. The shift is the result of surging oil and natural gas production using advanced hydraulic fracturing and horizontal drilling, harnessing oil and gas reserves in shale and other tight-rock formations. Safe, responsible energy development has made the United States the world’s No. 1 natural gas producer, and the U.S. could become the world’s top producer of crude oil related liquids before the year is out.

Larry Hogan has acknowledged that western Maryland has an “enormous” amount of natural gas and that he favors an “all of the above” energy policy. On the other hand, Anthony Brown is studying the issue to death. At the other end of the state and scale, Brown backs his boss’s offshore wind boondoggle while Hogan mentions that “proponents (of wind power) rarely mention the actual costs which include billions in state and federal subsidies.” In a separate statement, he also decries the potential for offshore wind’s “crony capitalism” under a Brown administration.

You know, there’s no question that the key issue in this gubernatorial race is the economy. Maryland is a state lagging behind its peers, and more and more people speak about pulling up stakes and relocating somewhere else: Delaware, Florida, Virginia, the Carolinas, Tennessee – name a state south of the Mason-Dixon Line and it’s likely someone you knew in Maryland moved there.

But one piece of the puzzle is energy, and those who toil in the oil and gas industry understand what the potential is. In his piece, Green closes by quoting American Petroleum Institute president and CEO Jack Gerard:

We need leaders who reject the outdated political ideology of the professional environmental fringe and the political dilettantes who advance the irresponsible and unrealistic “off fossil fuel” agenda. Because if we get our energy policy right today, we can be the generation that erases what for decades has been our country’s most potent and intractable economic vulnerability: dependence on energy resources from less stable regions and countries hostile to our goals, ideals and way of life.

Writer Rob Port at the Say Anything Blog also asks the pertinent question, and the answer on a state level can be found in Maryland.

I look at it this way. There was a governor and a majority in the General Assembly who were willing to risk over a billion dollars in ratepayer money on something which studies suggested might work but hadn’t been tried in Maryland before, offshore wind. Conversely, given the success of the Marcellus Shale formation in several surrounding states (most notably Pennsylvania), why not encourage the exploration of several other regions in the state which share many of the same characteristics? The worst that can happen is that we find these areas aren’t worthwhile for natural gas with current technology, but the rapidly evolving science of energy extraction means studies done even as recently as a few years ago may be rendered worthless.

Given the correct conditions for marketable extraction of coal and natural gas and an aggressive expansion of power plant capacity which uses those resources, it should be a goal to make Maryland self-sufficient in electricity by 2030. I don’t think offshore wind will get us there, but extracting those resources we have gives us a shot, and provides good-paying jobs for Maryland families who need them.