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Thursday, January 31, 2008

Stimulus Package Getting Bad Reviews Locally

Looks like our local pundits are lining up in opposition to the stimulus package along with yours truly. SD Watch sees the pending handouts as nothing more than government bribing us with our own money. And our man Hunter at MDL weighs in on the stimulus package as well, branding it an "ironic" effort to solve our borrowing problems with more borrowing. Actually, Jon, a better term might be"paradoxical," or, per Robert Reich, "silly."

Note that Todd, Jon, I, and probably every other naysayer you can find has stated explicitly that we will indeed cash those checks when they come. But wouldn't it be interesting if the government would listen to the voters out here on both sides of the aisle (liberal media Jon Hunter's paper is not) and say, "Forget the stimulus package. We've made our fiscal bed; now let's lie in it."

Senate Offers Tax Breaks to Subprime Lenders

We all believe in the free market and responsibility, right? Provide a good product or service, you do well in the market. Screw up, make bad business decisions, you get what's coming to you.

But really screw up and cause a recession, and what happens?

Subprime lenders, homebuilders and banks stand to benefit from a $14.4 billion tax break passed yesterday by a Senate committee as part of an economic stimulus package.

A provision in the bill adopted by the Finance Committee would allow businesses to use operating losses they have in 2007 and 2008 to claim a refund of taxes paid in any of the previous five years. Without the legislation, companies would have to wait years to apply those losses against future profits.

Banks, which have posted $145 billion in writedowns and credit losses tied to the falling value of mortgage securities since the subprime crisis began, stand to be among the provision's biggest beneficiaries, said Robert Willens, president of Robert Willens LLC, a firm that advises Wall Street firms on tax and accounting issues.

"There is an irony in it,'' Willens said.
"Clearly, it's helping to bail out those that made improvident decisions,'' lending money to people with questionable ability to repay it [emphasis mine; Ryan J. Donmoyer, "Subprime Lenders Get Tax Breaks in U.S. Senate Stimulus Plan," Bloomberg via Yahoo, 2008.01.31].

So is the Senate trying to stimulate the economy or just give some handouts to its rich banker friends who helped get us into this mess in the first place? Try explaining that one to the kids and grandkids we are borrowing this money from.

HB 1005: Income Tax for Farmers

...so what about the rest of us?

HB 1005 is the South Dakota income tax bill I've been waiting for. The two things I don't like about it:
  1. Getting rid of the 150% rule is nuts: again, why should my taxes be affected by my neighbor's ability to get an exorbitant price for his land?
  2. It only applies to ag land and not everybody's property, ag, commercial, and residential.
Otherwise, HB 1005 rocks. It follows the intent of my old argument in favor of replacing property tax (and any other tax we can offset) with income tax. Instead of making farmers pay taxes based on how much someone else might pay to buy the land to build a strip of McMansions or an ethanol plant or who knows what else, HB 1005 bases taxes on the productive value of the land -- in other words, on the income a farmer can make on that land.

Now the bill's authors, including primary sponsor Rep. Larry Rhoden (R-29/Union Center), go through all sorts of contortions to keep this from being a straight income tax. The productivity tax would employ a raft of experts from South Dakota State University and, if necessary, the South Dakota Agricultural Statistics Service to create a database of productivity values for all the ag land in the state. The SDSU economics department would then make recommendations each year what factors to use in calculating the productive value of the land. The productivity tax would replace the conventional assessment in 2010 (for taxes payable in 2011) and be based on the data from 2001 through 2008, with two years, the years of maximum and minimum income, thrown out. The database would then be updated each year and calculations based on the eight most recent years for which data is available.

Now this formula sounds like spreadsheet heaven to me. But with all due respect to the experts at SDSU and the legal wizzes writing this bill, wouldn't it be easier (and cheaper) to just say, "How much did you make? O.K., send us 7%."

But either way, as I've argued before, this productivity formula should be the basis for everyone's taxes. If we want to be all complicated about it, fine. Car dealers: let's have the SDSU economists add up the revenue-generating capacity of all the new and used car lots in the state, factor out the outlying data points, and tax them based on how much money they could be making selling and serving cars. Homes: figure out how much folks could make raising vegetables in their garden, telecommuting, babysitting, whatever prodcutive uses their homes could be put to, and tax them accordingly. Fancy second homes on the lake: calculate how much income could be generated from renting such places out to tourists (there's a revenue booster!)

Or, let's just keep it simple. Tax our actual income.

Property tax made sense in the old days -- the really old days, when property tax was really just the most convenient form of income tax. Almost everyone's wealth came directly from the amount of land they held and the crops or livestock they raised or other goods they produced on that land. But now most people don't create anything of tangible economic value on their own property; their land is just where they eat and sleep and have fun with their kids before heading to the plant or the office. And our taxpaying ability -- our wealth -- is much more clearly, objectively defined by a single number on a tax return or bank statement than it is by one county assessor's arbitrary guess as to how much our houses might sell for.

HB 1005 is a step toward recognizing this reality. HB 1005 is an income tax. It's not a direct income tax; it's still piled with statistical wizardry that will require several eggheads to compile and explain. But HB 1005 returns us to the principle that property tax was based on in the first place, that we should pay taxes based on what we produce.

Wednesday, January 30, 2008

People Power on Lake Herman: Annexation Dies

I just got home from our Lake Herman Sanitary District meeting tonight. For the first time in recent history, we had a crowd in attendance. A standing-room-only crowd. And a remarkably unanimous crowd: these property owners thought our distict's proposed expansion was about as good an idea as sleeping with the windows open tonight. Folks saw the annexation at best as a poorly planned map, at worst as a bald-faced tax grab by the district. After some spirited discussion with lots of public input, the LHSD board formally voted to retain the current boundaries of the district. In other words, annexation is dead.

One citizen asked at what point the process would come to a public vote if we would have pursued annexation. Our legal counsel Jerry Lammers informed us that sanitary district actions cannot be referred to a public vote. Residents can petition to appeal sanitary district board decisions on annexation or exclusion of territory to circuit court, but if the judge upholds the board's decision, the petitioners pay the legal costs (at least that's how I read SDCL 34A-5-44). So aside from voting for the trustees, the citizens of a sanitary district -- as well as anyone around the district the board might feel like annexing -- have no right to vote on district affairs. Yuck!

Fortunately, that's not what happened tonight. The LHSD board presented a proposal for annexation. A lot of people spoke up and said, "Bad idea." The board listened. And that's the way it should be.

Update 2008.01.31: Coverage at KJAM; MDL to follow this evening....

Flat Wrong About Lincoln -- A Madville Times Apology

I got Abe Lincoln flat wrong in a post yesterday. I ran a quote attributed to President Lincoln by, among others, Al Gore in The Assault on Reason (p. 88). Professor Schaff's keen ear heard something amiss, something unLincolnesque in the text and went looking. Sure enough, it's bogus, not a Lincoln quote. It appears nowhere in Lincoln's collected works. Rather, as Andrew Fersuson wrote last summer, it comes from a sham artist of the 1880s:

Writing in 1999 in the Abraham Lincoln Association's newsletter, the great Lincoln historian Thomas F. Schwartz traced the bogus passage to the 1880s, about 20 years after Lincoln's death. One theory is that it first appeared in a pamphlet advertising patent medicines. Opponents of Gilded Age capitalism -- Gore's forerunners -- found the quote so useful that Lincoln's former White House secretaries felt compelled to launch a campaign "denouncing the forgery," Schwartz said. Robert Todd Lincoln, who was the president's only surviving son and himself a wealthy railroad lawyer, called it "an impudent invention" that ascribed to his father views that the former president would never have held.

"I discovered what I think is the true and only source of this supposed quotation," Robert wrote in an unpublished letter, probably tongue-in-cheek. "It originated, I think, at what is called a Spiritualist Séance in a country town in Iowa, a number of years ago, as being a communication by President Lincoln through what is called a Medium." Even bloggers might think twice about trusting such a source [Andrew Ferguson, "What Al Wishes Abe Said," Washington Post, 2007.06.10].

Indeed. Even if Robert Todd Lincoln wasn't kidding, I'm not about to appeal to the supernatural for support in my efforts against the plutocracy.

Ferguson notes further that the language of the passage doesn't match Lincoln's typically plain prose. Nor does it match Lincoln's own background:

A corporate lawyer whose long and cunning labor on behalf of the railroads earned him a comfortable income, Lincoln was a vigorous champion of market capitalism, even when it drifted (as it tends to do) toward large concentrations of wealth. Many of his administration's signal initiatives -- the transcontinental railroad, for example -- amounted to what liberals today would condemn as "corporate welfare." Lots of speculators got rich under Lincoln, as Gore notes. As Gore does not note, Lincoln seemed not to have minded [Ferguson 2007.06.10].

The Madville Times apologizes to all who may have been deceived, however briefly. Thanks also to Professor Schaff for his quick investigative work and polite correction. Instead of deleting the erroneous post, I will leave it, with conspicuous correction, as a permanent record of the egg on my face, and a reminder to all fellow crusaders against corporate welfare to check your sources!

And now a bonus for Madville Times readers: a real Lincoln quote! (Yes, I checked this time.)

I believe it is an established maxim in morals that he who makes an assertion without knowing whether it is true or false, is guilty of falsehood; and the accidental truth of the assertion, does not justify or excuse him.
--Letter to Allen N Ford (11 August 1846)

Dang -- all the more reason to check your sources!

Johannsen Files for Lake County Commission

Democratic incumbent Craig Johannsen is the first candidate to file for anything in Lake County this year. KJAM reports he has filed his petition for a crack at re-election to his seat on the county commission. That brings us to one and a half candidates for that august body: current Madison Central School Board member Rod Goeman has his campaign website all updated for 2008, but we haven't seen the formal papers at the courthouse yet to guarantee he's going to take a second crack at moving over to the county commission.

Recession Caused by Concentration of Wealth

Robert Reich comments on the "silly" stimulus package and the failure of supply-side economics on Marketplace this morning (and hooray! American Public Media has the text online!). He notes that one part of the stimulus package, condensing corporate tax breaks for machinery purchases from the usual several-year scale to all happen this year ("accelerated depreciation") won't work (and didn't work last time it was tried in 2002) because "companies won't invest in more machines when demand is dropping for the stuff the machines make. And right now, demand is dropping for just about everything" [Robert Reich, "Don't Leave Demand out of the Equation," Marketplace Morning Report, 2008.01.30].

But wait a minute: if Americans are all getting richer, shouldn't there be more demand? Even if it's just the rich getting richer and the middle and lower class treading water, well, rich folks know how to "Buy, buy, buy!" just like anyone else, don't they?

Actually, no, says Reich:

Most of what's being earned in America is going to the richest 5 percent, but the rich devote a smaller percent of their earnings to buying things than the rest of us because, after all, they're rich -- which means they already have most of what they want. Instead, the rich invest their earnings wherever around the world they can get the highest return.

Now add all this together and there's just not enough consumer demand out there to keep the American economy going. We're finally feeling the whirlwind of widening inequality and ever more concentrated wealth [Reich, 2008.01.30].

Look at the stimulus package in terms of what Reich just said:

Suppose we are willing to borrow $146 billion from our kids just to keep today's economy humming. If we handed every penny of it in big chunks to the million richest Americans, they'd blow, say, 50% of it on buying things. (That stat is a wild guess; hard data is welcome!) The rest of the money would go into investments, much of it into foreign economies. If we handed every penny of it in little chunks to the hundred million poorest Americans, they'd spend almost all of it on stuff, just like they do with their regular incomes.

But forget the stimulus package: Reich is pointing out that if the economy is slowing down, it's happening in part due to the increasing concentration of wealth. If you're going to base your economy on consumer spending, well, you need consumers to have wealth to spend. Concentrate that wealth in the hands of a few, sandbag the many with increasing debt, and you get a situation like, oh, now.

Recession Round-up: Partly Cloudy, 35.5% Chance of Falling GDP

The U.S. House voted yesterday to explode the FY2008 deficit by $146 billion. Now the Senate considers whether to pass the bill as is, load it with gifts for more voters, or play true fiscal conservative and let the country ride out whatever economic trouble is coming without the extra life preserver. What to do?
  1. The International Monetary Fund thinks the stimulus package is a good idea and will help the U.S. economy avoid a recession. The IMF sees economic growth for the U.S. declining from 2.2% in 2007 to 1.5% in 2008, down from its October prediction of 1.9%. The IMF also sees 4.1% growth for the world economy in 2008, down from 4.9% in 2007. Last July , the IMF predicted 5.2% growth in 2008, then revised that guess down to 4.4% in October [Christopher S. Rugaber, AP, "IMF Sees Slowing World Economy in 2008," BusinessWeek.com, 2008.01.29].
  2. The U.S. economy did hit the brakes hard last fall: after posting relatively vigorous 4.9% growth in the third quarter, fourth quarter GDP growth was only 0.6%, half the rate economists had been predicting. Consumer spending grew "only" 2% ["Fourth-Quarter GDP Nudges Up 0.6%; 2007 Growth Slows to 2.2%," FoxBusiness.com, 2008.01.30].
  3. The core inflation rate, that silly statistic that excludes food and energy, was only 2.4% for 2007, the lowest rise since 2005. Unfortunately for those of you who choose to consume food and energy, food costs rose 4.9% and energy costs rose 17.9%. Overall inflation for 2007: 4.1%, biggest jump since 1990 [AP, "2007 Inflation up by Largest Amount in 17 Years," MSNBC.com, 2008.01.16].
  4. Dr. Mankiw points us to a January 2008 study by Congress's Joint Economic Committee which says that the probability that the economy is in recession right now is 35.5% [PDF alert!]. This figure comes from the "employment recession probability index," a stat based on weekly unemployment insurance claims. The good news: we don't call it a recession until the index reaches 65%. The bad news: last month the index stood at 10%.

Recession or not? The numbers aren't happy, but they aren't negative. The economy isn't shrinking; it's just not growing as fast as some would like. Whether that constitutes a $146-billion crisis is now the question for the Senate.

Tuesday, January 29, 2008

Lake Herman Sanitary District Talks Annexation Wednesday

As mentioned here previously, the Lake Herman Sanitary District is discussing annexation tomorrow night, Wednesday, January 30, 6:30 p.m., at the Madison Public Library meeting room. (Our district doesn't have the money to build it's own office, let alone a centralized sewer system.) MDL gives the possible annexation some coverage tonight. More information about the annexation, plus the latest agenda for Wednesday's meeting, is available at the sanitary district website.

So this annexation: good move for responsible growth and environmental protection? Creeping curse of bigger government? Part of the vast left-wing globalist conspiracy? Come to the meeting Wednesday to find out!

Four-Day Work Weeks: You Noem, You Love 'Em...

At least one legislator is weighing in favorably on the Legislature's four-day work weeks. District 6's blogging Representative Kristi Noem (R-Castlewood) says the shorter weeks are working for her:

I will say I’m appreciating the shorter weeks as it allows me more time to complete work at home and at our family businesses, attend crackerbarrels and events to update community members on capital events, and still have quality time with my family. South Dakota maintains a citizen’s legislature, which I believe is to its benefit. Our legislators do not make politics their career. They own and operate businesses in our communities and earn their living the same as those who elected them. It’s important that they have this experience to apply in their decision making that will affect all people in the state. A little extra time on the weekends gives legislators time to complete their responsibilities and spend time researching and reading bills for the coming week [Rep. Kristi Noem, "Week Three... Can We Agree on Anything?" KristiNoem.com, 2008.01.29].

The extra day off doesn't bring service in the Legislature any closer to feasibility for most full-time workers in the state. But for those who can afford to take two months off from their businesses, the four-day work week sounds like a useful benefit. And note that Rep. Noem isn't just putting her feet up during that extra day; she's using at least some of that time to catch up with research and prepare for the next week of debate.

So, other legislators, lobbyists, denizens of the Capitol, how's the four-day week working for you? Your impressions and recommendations are welcome.

Overheard Today at LAIC Annual Meeting

Today's Lake Area Improvement Corporation annual meeting was a potpourri of bits and pieces about Madison. (It also was a free lunch -- good potato chips!) Among things seen and heard:

--Darin Namken received the LAIC's Community Service Award. In business for 20 years, single-handedly doubling (tripling? more?) the number of DSU grads we manage to keep here to live and work, donating all sorts of web space and service to various groups -- he's a busy community booster.

--Jerry Johnson and Mechelle Nordberg don't plan to run for re-election to the city commission (the apparent consensus at my table: who can blame them?). Possible candidates: Myron Downs* (who has served before) and Monica Campbell (a force to be reckoned with!).

*Update 2008.01.31: I spoke with Myron himself last night. He says no way is he running for anything. Another correspondent with a nose for news says he'll be surprised if we can come up with a full slate of candidates for any of the open offices -- city, school, or county.

--Outgoing LAIC President Jim Iverson reported that the LAIC helped create 125 new jobs in 2007, including positions at Rosebud, CE Attachments, and Farmers AG Center (the merging F&M Coop and Farmers Elevator, which also received the Growth and Achievement Award). Choose your preferred level of optimism: these gains offset the loss of 18 jobs from Pavement Services, Inc. and 89 jobs from Arctic Cat.

--We got visits from our Congressional delegation, or at least from their field reps. Steven Dahlmeier came and said hi from Stephanie Herseth-Sandlin. Carmyn Asencio (another old debater who loves South Dakota!) represented Tim Johnson, while John Thune's staffer Ben Ready was the lonely Republican at the front table. All sang praises of the stimulus package. Ready said Thune is considering tacking an infrastructure/transportation bond measure onto the stimulus package, allowing states to sell bonds for highway projects instead of raising taxes. Ready also emphasized that the stimulus package is deficit spending, something he vaguely associated with the Democratic leadership's lack of attention to that issue. Ready then in the next breath expressed Thune's readiness to buck the President's staunch opposition to earmarks to bring home "necessary" projects for South Dakota.

--New LAIC president Mike McDowell laid out some goals for the LAIC this year. Among them:
  1. develop and implement the housing study (to be released Feb 20)
  2. apply for Rural Development grants (also known as government handouts, right? ah, socialism)
  3. implement a Main Street program (holy cow! where do we sign up to help?!)
  4. do an economic impact study on Highway 34 to persuade Congress to write us an earmark for our four lanes to I-29!
--And the LAIC will be hiring yours truly at $150/hour to conduct a three-day seminar on how to avoid plagiarism. Oh, no wait -- sorry! Wishful thinking. I've already told them how to do that. Silly me, giving away all that information for free....

Freebie for Bob: Huckabee Talks Like Marxist

...or at least like Martin Luther King and Bill Clinton, which should close enough.

Dr. Mankiw directs my attention to a diverting little study by Dartmouth professors Bruce Sacerdote and Owen Zidar on our presidential candidates' word choices (PDF alert!). The curious professors analyzed word frequencies in the speeches of Huckabee, McCain, Romney, Thompson, Giuliani, Clinton, Obama, and Edwards and compared them with word frequencies in the speeches of Reagan, ML King, LBJ, Bill Clinton, GW Bush, JFK, and Stalin.

On a scale comparing candidate speeches to the words of Reagan and King, ranging from 0 for Reaganesque speech and 1 for Kingly speech, Huckabee scored a 1.466, highest of all the candidates, even higher than Obama (1.051) and Clinton (0.751).

Shift the scale of comparison to LBJ (0) vs. Bill Clinton (1), and Huckabee sounds much more like his fellow Arkansian, scoring 0.993, second only to Hillary (whose 1.743 points to the obvious conclusion: same speech writers!).

Most startling and amusing: on a scale of comparison to Stalin (0) vs. JFK (1), Huckabee ranks way down in old-school Red territory with a score of negative 0.587. (Don't chuckle too loudly, grieving supporters of Thompson: old Fred sounded pretty Stalinist too, scoring 0.007).

I've been bemused by the steady drone of anti-Huckabee propaganda posted by some who think a Southern Baptist preacher poses the greatest threat to the Christian worldview (or maybe just the party of evangelical plutocracy) since Nero. But now I see the Huckabee-haters can back up their claims with some good old secular humanist science.

Enjoy, Bob -- think of it as an early Groundhog Day present.

Just a couple more interesting notes from the study: Giuliani, that liberal sheep in GOP wolf's clothing also scores closer to King, Bill Clinton, and Stalin in Sacerdote and Zidal's analysis. But churchgoers and unconstitutional religious testers, take note; in placing candidates on the Reagan-King scale, the researchers found that Obama uses the word "god's" twice as often as McCain and almost four times as often as Hillary Clinton. Obama also uses the word "church" more than twice as often as HRC and twelve times more frequently than McCain.

I think I hear Todd humming, "Oh come, all ye faithful...."

For more number fun, read the whole study here.

Gilded Age Forgers Agree: Plutocracy Imperils the Republic

Update 2008.01.30: Professor Schaff catches me in a flat-out goof: after some literary sluethery, he finds that President Lincoln never wrote the words ascribed to him below. I apologize to all who might have been deceived, and thank Professor Schaff for his quick investigative work. I remain in wholehearted agreement with the forger... but not with their nefarious tactics of lying about the source! We can beat the plutocracy without lying.

Mrs. Madville Times glances up briefly from her intense theological studies to forward me another quote for our plutocracy file BUT THIS QUOTE IS NOT FROM LINCOLN!

I see in the near future a crisis approaching. It unnerves me and causes me to tremble for the safety of my country. The money power preys upon the nation in times of peace and conspires against it in times of adversity. It is more despotic than a monarchy, more insolent than autocracy, more selfish than bureaucracy. It denounces, as public enemies, all who question its methods or throw light upon its crimes.

I have two great enemies, the Southern Army in front of me & the financial institutions at the rear; the latter is my greatest foe. Corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until the wealth is aggregated in the hands of a few, and the Republic is destroyed.

--NOT written by President Abraham Lincoln, Nov 21, 1864 (letter to Col. William F. Elkins)

Now I've been called a tyrannical Communist and Marxist for my occasional chastisement of the corporate giants trying to bend the state to their will. Would any of my favorite apologists for plutocracy care to level the same charges against President Lincoln?

Reminder: Money is power. Concentrating money and power in fewer and fewer hands is bad for working people and for liberty. Oh yeah, and corporations aren't people!

Lange vs. Olson II?

Dakota War College gazes southward and comments on the possibility of his friend Russell Olson jumping from the State House to Senate in District 8 this year. He also comments scornfully on the possibility of my neighbor Gerry Lange challenging Olson for that Senate seat, citing some Lange's past comments that didn't sit well with some voters.

Now I've heard the story three ways -- Gerry's running for Senate, Gerry's running for House, Gerry's not running for anything. Conventional wisdom might suggest that Lange would be a longshot if he did throw in for either the House or the Senate. He came in third in 2006, behind Olson and Rep. Gassman. Gerry is getting up there in years, and folks in 2006 seemed to be thinking Gerry'd had his turn and it was time to give someone younger a try.

But don't count Gerry out just yet. He is a tough competitor and energetic campaigner. He's got plenty of fire in the belly, and as Fred Thompson's folks will tell you, fire in the belly is essential. Russ won in 2006 in part because he spent $32,000, and in part perhaps because he claimed the "change" vote. Folks who wanted a different face (or the one they saw grinning from all the expensive full-color billboards) picked Russ, then split their votes between the two incumbents, Dave and Gerry. Dave keeps his head down and doesn't make anyone mad, while Gerry takes some unpopular stands, meaning that in a choice between Dave and Gerry, there are more people who'd have an axe to grind against Gerry.

But in a one-on-one contest between Gerry and Russ, the situation is different. Russ is no longer the new guy. His record doesn't show a lot of new initiatives; he might easily be cast as part of the moneyed establishment (that's the plutocracy, right, Mr. Sibson?). Dems may well unite behind Gerry to keep the Republicans from taking the District 8 Senate seat. PP may think Russ would coast to an easy victory in the Senate, but a challenge from Gerry could be more interesting than the conventional wisdom might portray it.

We thus look eagerly toward March 25, the petition deadline, to see whose hats end up in which ring.

Putting the Kid Gloves Back on: Pipeline Tax Watered Down by Dems

Yesterday's Senate State Affairs Committee vote to send SB 190, the pipeline tax, to the floor wasn't quite the small victory of South Dakota interests over Big Oil that it appeared to be. Sure, it passed 6-3 (the three opposing votes were Kundson, Dempster, and Gray, all urban Republicans). But Senators Nesselhuf and Heidepriem, my fellow Democrats, put forward an amendment to water down the bill. Now, instead of the first $30M in revenue going into a crude oil pipeline compensation fund and any revenues about that going toward a water and environment fund, the tax has been capped at $30M. Once the fund reaches $30M, the state stops collecting the tax, and TransCanada and other pipeline operators get to ship their crude oil through the state for free. The tax doesn't kick in again until something bad happens (spill, explosion, etc.) and the pipeline compensation fund is spent down below $5M.

Now $30M may still sound like a lot of money. But let's put that amount in perspective (the back of the envelope, please):

  1. Oil spilled by the Exxon Valdez in 1989: 250,000 barrels.
  2. Amount Exxon spent to clean up that oil: $2.5 billion
  3. Cleanup cost per barrel in 1989: $10,000
  4. Average increase in Consumer Price Index since 1989: 4.6%
  5. Cleanup cost per barrel in today's dollars: $23,500
  6. Maximum size of oil spill a $30M cleanup fund could cover ("max spill"): 1280 barrels
  7. Amount of oil to flow through Keystone pipeline each day by 2010: 590,000 barrels
  8. Number of Exxon Valdez oil spills Keystone pipeline will carry through SD each year: 860
  9. Max spill as percentage of daily volume: 0.22%
  10. Time it would take max spill to flow past a given point: 3.12 minutes
  11. Possible volume spillage characterized by TransCanada consultants as "pinhole leaks" that might not be detected for up to 90 days: 1.5%
  12. Oil that could spill if TransCanada responded to, excavated, and clamped off a major leak within 45 minutes: 25,000 barrels

Environmental experts and TransCanada engineers reading this blog (and SiteMeter knows you're out there) are invited to submit corrections and clarifications to these estimates. After all, cleaning up an oil spill from a tanker in the ocean is surely a very different operation from cleaning up a spill from an underground pipeline.

But as it stands, it appears our cowardly legislators are capping the one guaranteed source of funding for dealing with environmental damage from a crude oil pipeline at $30M, enough to clean up a 1280-barrel spill. That doesn't come anywhere near covering the size of spills that could take place. $30M also doesn't cover further damages -- compensation for lost agricultural production value, legal costs, and whatever other expenses folks might seek reimbursement for following a pipeline accident.

As a commenter noted here last night, the pipeline tax is a great revenue opportunity for South Dakota. Not one penny comes out of South Dakotans' pockets, and the oil companies paying it will hardly notice two cents out of each $90 per barrel. We hit our own citizens much harder with utility hook-up fees, business licenses, and local taxes when they start up businesses in state; why are we giving a foreign oil corporation an almost free pass to ship black gold through our state without making them pay for the privilege?

Let's remove the cap from the pipeline tax. TransCanada is using and endangering South Dakota's resources to make its oil profits: South Dakota has every right to claim a piece of the action.

Monday, January 28, 2008

Pipeline Tax Passes Committee, Heads for Floor

A correspondent in Pierre says SB 190, the two-cent-per-barrel pipeline tax, passed the Senate State Affairs Committee this morning on a 6-3 vote. Yahoo! At least three Republicans had to vote for it. I'm still thinking we should quintuple the tax -- ten cents a barrel is still just 0.1% of the value of the product, 40 times the rate South Dakota charges its own citizens for food. But two cents a barrel is better than a free pass for Big Oil. Call your legislators, tell them the pipeline tax is a source of revenue too good to pass up.

Advice to New Legislators: Bring Wooden Stakes

Some bad legislation is just hard to kill. The Senate Health and Human Services Committee killed the sonogram bill last Wednesday, only to have it dragged back to life by Senator Duenwald and friends. In sillier news, the State Senate Transportation Committee killed SB 20, which would have eliminated vanity license plates just to make DMV director Deb Hillmer's job easier. But now Senator Napoli is leading another vanity license plate bill into the fray -- and, perhaps for lack of anything better to do, District 8's own Senator Dan Sutton is backing him.

Compared to SB 20, this new measure, SB 185, is at least funny. It lists specific messages to be banned from South Dakota license plates, including...

  1. the number 69, "unless used in combination with the vehicle make" (sorry, Bryan Adams fans -- and you know who you are -- "SUMR 69" is right out);
  2. any reference to illegal drugs or paraphrenalia (alas, no "BIGBONG" for bell makers);
  3. any reference to folks who use illegal drugs (if we're counting past use, looks like "MPEACHW" might be outlawed after all, not to mention "CLINTON");
  4. any reference to race, color ("BLACK"?!), ethnic heritage, sexual orientation (forget about "STR8"), disability status, or political statement, with exceptions for "generally accepted" racial or ethnic terms, like "IRISH" or "VIKINGS" (though I'm betting other sections mean "PACKERS" is out);
  5. any reference to a government agency (perhaps my conservative friends would agree that government agencies are inherently obscene).

One glaring oversight: this bill takes no steps to eliminate the inevitable serendipitous occurrences of "69" in standard license plates. "43A D69" -- yikes! The state itself is issuing hundreds of such filthy license plates. Deb Hillmer and the county treasurers should be rounded up and sternly chastised, perhaps even subjected to a week-long sensitivity seminar.

This is the silliest legislation I've read yet this session. What does it take to kill a bad idea once and for all in Pierre?

Update 2008.01.30: This bill was so bad, the DMV itself didn't want it. Napoli himself asked the Senate Transportation committee to kill the bill, and they did so yesterday, without comment.

Sunday, January 27, 2008

Stimulus Package -- Borrowing from Our Kids for Our Comfort

The more I think about it, the more the anti-recession stimulus package feels like a bad idea. The Congressional Budget Office forecasts economic growth of under 2% this year. If I recall HS economics correctly*, a recession is when the economy shrinks, not when it grows less than what some stock brokers might want. University of Michigan professor Mark Perry puts together a chart on unemployment claims that suggest we are nowhere near a recession. And Harvard's Prof. Mankiw posts a list of eleven columnists comprising what he calls "The Coalition Against Fiscal Stimulus," including George Will and Robert Samuelson. In agreement with the likes of those two conservatives that the stimulus package won't work is Robert Reich, Bill Clinton's labor secretary, now UC Berkeley prof.

Count me in with the stimulus package naysayers. Even if our economy is in the crapper, it is in large part because a lot of people borrowed more money than they should have, and because banks and subprime lenders let them borrow. While I cringe at the thought of taking away people's homes, it may be time for some economic tough love. We as a nation have borrowed irresponsibly; we are lucky the economy isn't in worse shape. Instead of borrowing $140 billion dollars from our children so we can continue to live beyond our means, maybe we should finally accept responsibility for our greed and overspending.

I'm not eager to give up $1500 in free money from Uncle Sam. I certainly don't want the Powers clan to go shoeless for want of its expected $3300 tax rebate. But if there's not really a recession, and if a stimulus package won't do much to stop one, then why throw $140 billion of our children's money down the consumer spending drain now?

We won't like it, but maybe we need to just weather this economic storm (if it even rises to that level), pay our debts (federal and household), and start putting the economy on a more stable footing for our kids. Hmm, sounds like a much more doable plan for building a legacy than bringing peace to the Middle East....

*I do remember my high school econ and govt teacher, Ken Reitzel. Sad news for my Madison readers: Mr. Retizel passed away last week at age 77. The MDL obit says he served in the Army in Japan during the Korean War. Mr. Reitzel then taught in Estelline, served as principal in Hurley and Willow Lake and superintendent Colman, then came to Madison, where he taught social studies for 26 years. Condolences may be sent to the family through Weiland Funeral Chapel.

Blog of the Week: Congressional Budget Office Director!

I like to keep it local, but here's a policy blog I just found that deserves notice: Dr. Peter R. Orszag, Director of the Congressional Budget Office, is blogging! He's the guy who gives Congress its information on little things like budget deficit projections ($219 billion this year) and economic stimulus packages (make them fast, temporary, and cost-effective, and focus on low-income folks, even if they didn't pay taxes in the first place).

Director Orszag's blog went live just last month, and while he's not as prolific as your favorite South Dakota bloggers, the stuff he puts online is substantial. Reviews of economic studies, his own notes from Congressional testimony... wow! Talk about an awesome source! Dr. Orszag hasn't enabled comments yet, but he does sound like he's open to public comment (he encourages folks to e-mail him) and maybe opening comments up as he gets more comfortable with the medium.

Get ready for the new democracy, kids -- government officials online, talking to you, unfiltered, reachable with the click of the mouse.

Tax the Pipeline -- My Ten-Cents Worth

It appears from the minutes that the Senate State Affairs Committee didn't get around to Senate Bill 190, the pipeline tax, on Friday; they thus put off action until Monday. The meeting starts at 7:45 a.m., and SB 190 is second on the agenda, so if you're looking to get your two-cents' worth in, better get there early.

Two cents is the tax SB 190 would impose on every barrel of crude oil piped through the state (in pipelines carrying 10,000 or more barrels a day -- see Section 2). That money would go into a "pipeline compensation fund" to be used to cover costs for pipeline clean-up. Any revenue above $30M goes to a water and environment fund (see Section 3).

Two cents is a far cry from the ten cents per gallon that the WEB Water Development Association has called for (see page 20 of this PDF). Ten cents per barrel on $100-per-barrel oil would put $15.9M in the state coffers each year. As noted here previously, a ten-cent-per-barrel tax would be far from burdensome: one day's worth of the oil to be pumped through the TransCanada Keystone pipeline would generate over $40M of revenue. In other words, TransCanada could cover a year's worth of ten-cents-per-barrel tax with the oil pumped through the pipeline before lunch on January 1.

I probably shouldn't push the legislators: it's hard enough getting them to hold Big Oil to any sort of responsibility. Even a two-cent tax is a step in the right direction. But our legislators should understand that they don't need to treat TransCanada with kid gloves: two cents, ten cents, fifty cents a barrel won't stop TransCanada's plans to make billions on tar sands oil.

I'm also not convinced funneling the first $30M (the first ten years of revenue SB 190 would generate, according to the back of my envelope, and assuming there are no disbursements from the fund during that time) strictly into a clean-up fund is the best use of that money. When truckers come through South Dakota, their gas tax dollars don't go into a fund that pays strictly for accidents those truckers cause. Those gas tax dollars go into general upkeep of all roads in South Dakota, while the truckers are still held personally liable for any wreck they cause (or at least that's how I assume it works).

Similarly, TransCanada is still responsible for any spill or other damage that its pipeline might cause. We should expect them to pay any damages out of their own pocket. The tax they pay on their pipeline should simply be the bank account they draw on to pay for spills and explosions on our turf. Instead, pipeline tax revenue should be viewed as the price TransCanada pays for the privilege of doing business in our state. Pipeline tax revenue should be the pipeline company's contribution to the general fund for environmental protection and energy conservation.

If two cents per barrel is the most we can get the cowardly SD GOP to accept, then so be it. The Keystone pipeline is a big project, and it could cause some big environmental damage. The South Dakotans who have to live with this threat to the land, water, and life itself deserve some guarantee that Big Oil will take responsibility for whatever damage it causes.

Below are the Senators on the State Affairs Committee. Click on each name, then on "Detail" in the upper left corner for each Senator's contact info. Give them a call before tomorrow's hearing, tell them to stick up for South Dakota. Let's consider upping that tax rate to make TransCanada pay its fair share for using our resources for its profit. And let's definitely pass SB 190

Abdallah, Gene (R-10/Sioux Falls)
Dempster, Thomas (R-9/SF)-- Chair

Gray, Bob (R-24/Pierre) -- Vice Chair

Hanson, Gary (D-1/Sisseton)
Heidepriem, Scott (D-13/SF)
Knudson, Dave (R-14/SF)
McCracken, Royal "Mac" (R-34/Rapid City)
Nesselhuf, Ben (D-17/Vermillion)
Olson, Ed (R-20/Mitchell)

Sioux Falls Goes Old-School Red, Names Neighborhood Pettigrew Heights

The Red Tide Returns! After a month of feverish voting (actually, just 1142 votes, fewer people than bother to read the Madville Times in a week), "Pettigrew Heights" has emerged victorious as the new name for the Irving neighborhood, The Loop, Hell's Kitchen, or whatever you like to call the historic central residential district of Sioux Falls.

However, the neighborhood's new namesake, Richard F. Pettigrew, one of South Dakota's first senators and one of Vladimir Lenin's favorite authors, might not approve. "Pettigrew Heights" was not the public's first choice. Actually, the name placed third, 93 votes behind "Old Town" and "Historic Heights." The Mayor's Neighborhood Conservation Area committee overruled public sentiment and decided to recommend the third-place finisher to the City Council. (Take heart, Douglas: maybe John Edwards can get a break like that at the convention!)

Senator Pettigrew might see more subversion of the popular will by the elites here. If there is some plutocratic plotting afoot, we can all revel in the splendid irony of their undemocratic choice on behalf of the author of Triumphant Plutocracy, Pettigrew's blistering 1921 critique of government corruption, corporations, and especially lawyers (read at your own peril, Todd!) that gained him Lenin's favor.

And in this case, the elites on the committee may actually have shown more sense of style than the proletariat. According to Walker, the committee felt "Historic Heights" didn't distinguish the neighborhood from other historic parts of town, while Old Town had no unique connection to Sioux Falls. Pettigrew Heights at least memorializes a unique and significant figure in South Dakota and Sioux Falls history, something town marketers all too often fail to do in their "community branding" efforts.

Still, democracy means trusting the people and getting the government we deserve. If folks vote for a rotten governor or a rotten neighborhood brand, well, they should have to live with it. But even if "Pettigrew Heights" is yet one more sign of elites imposing their will on the masses, we can find some solace in seeing that the powers that be in Sioux Falls are willing to forgive Senator Pettigrew his political apostasy and honor his name on the map.

Now, when will the Sioux Falls Roosevelt Socialists Club start having house parties there?

Friday, January 25, 2008

Environmental Engineer to Address Lincoln County Dems on Hyperion

SD Watch reminds me of an event of interest coming up in Canton Monday: environmental engineer Karen Hall will come over from Rapid City to talk to anyone interested about the proposed Hyperion refinery. Her presentation is part of the Lincoln County Democrats January meeting, Monday night, Jan 28, 7 p.m., at the Home Federal Bank community room in Canton. Hall has worked as an environmental engineer for Koch Refining (now Flint Hills Resources). Hall has spoken to other groups and to the press about the proposed refinery, urging Union County residents to base their decisions about the refinery on solid science, not fears and rumors. Sounds reasonable to me!

If you're in the Canton neighborhood Monday, drop in and give Ms. Hall a listen!

Douglas School District Nixes Four-Day Week

I like the idea of a four-day school week, but is it a sure-fire way to improve education? The Douglas School District doesn't think so. Their school board was looking into making the switch to four-day school week, but a survey (of the community, I'm assuming) found 2-to-1 opposition to the plan, so they're dropping the issue.

(Wow -- a school board that responds to the popular will? That's a novel concept in some places. ;-) )

Board President Cathy Melendez told the RC Journal that she didn't see enough support from the public or from documented evidence of potential gains in academic achievement or cost savings to justify pursuing the change. District Superintendent Loren Scheer said rural districts may benefit from the four-day week by eliminating one day a week of long bus rides for kids, but Douglas kids only ride 45-50 minutes a day on the bus (this skinny kid will note, however, that even 20 minutes on a bus can sometimes feel like an eternity when you just want to get home, have some cookies, and watch Captain 11). Scheer further argues, "In the end, [the four-day week] doesn't increase student achievement, and it's detrimental to low-income students because they don't get that fifth hot meal during the week" [Kayla Gahagan, "Douglas School District Rejects 4-Day School Week," Rapid City Journal, 2008.01.25].

Now nowhere do the folks in Douglas say the four-day week would make things worse. The RC Journal cites Custer principal Larry Luitjens, who still says the four-day week the Custer schools have gone to works fine. It has saved them money, although not as much as they had expected. And Custer can now focus on scheduling basketball games for Thursdays, Fridays, and Saturday, when they will interfere much less with homework.

But Douglas is taking the very reasonable position of "If it ain't broke, don't fix it." If the four-day school week doesn't offer major benefits, schools shouldn't feel any pressure to switch.

Montrose Dominates One-Act -- Props to My Theater Peeps

Speaking of intellectual extra-curricular activities, the Montrose High School Theater Company won the Region I-B One-Act Play Contest at Brandon Valley yesterday. The kids, directed by Montrose HS English department Megan Francis, earned straight first-place rankings from all three judges over their competition from Chester, Colman-Egan, Irene-Wakonda, and Freeman Academy. Five Montrose thespians -- Katie Lebeda, Corinne Waba, Lauren Ollerich, Erin Binder, and Dathan Rappana -- won outstanding performer awards (and the latter four are juniors, so they'll be back for more next year!).

The Montrose cast earned their seventh straight trip to the State One-Act Festival, which takes place this year on the big stage at the Johnson Fine Arts Center, Northern State University, next week, Thursday through Saturday, Jan 31-Feb 2. My source in the show tells me Montrose will perform at State on Friday night, 8:15 p.m., an awesome time slot when the house is usually packed with kids and coaches who want to have a good time.

Good work, kids! I'm glad to see you prove that it wasn't my directing through five seasons that got you where you are: it's your talent and hard work. Rehearse hard next week, do what your director Ms. Franics says, then break a leg and rock the house on Friday!

How Do You Spell $99 Entry Fee? O-U-T-R-A-G-E-O-U-S

In a world of war, poverty, and corruption, permit me a moment to rail against a small but galling injustice against smart kids: After 80 years of no entry fees, the Scripps National Spelling Bee has imposed a $99 entry fee.

The immediate result: fewer entries. KELO reports that the Corn Palace Regional Spelling Bee has taken a big hit. Last year's spell-o-rama under the corn domes drew 160 eager orthographists from 25 schools. This year, only 48 students from 8 schools.

Now those numbers are bad, but let's not burn the Scripps folks at the stake. They're a non-profit organization, and they are just trying to cover rising expenses as revenues decline. The KELO story cites Mitchell Middle School Principal Brad Berens as saying cost is just part of the issue; there's also a decline in student interest [AP, "Fewer Schools Entering Spelling Bee," KELOLand.com, 2008.01.25]. The $99 enrollment fee is per school, not per student: I suspect if a school had to come up with $99 extra to send kids to a traditional basketball tournament, they'd find a way to shake that money loose from the boosters or some obscure corner of the budget. But if kids aren't interested -- i.e., if parents and teachers and coaches aren't encouraging kids to make some extracurricular effort in intellectual activities along with athletics -- well, extra funding won't do much good anyway.

That $99 enrollment fee does look like a disadvantage for homeschool families, who don't have public tax dollars to draw upon. But the Scripps website notes that the $99 fee applies to homeschool associations, not individual families. An individual family that isn't part of an association can enter their kids for $10, probably not an unreasonable price, especially for a homeschool family already looking ahead to taking their kids to the big spelling bee in Washington, D.C.

So maybe Scripps isn't the bunch of greedy heartless SOB's I was ready to lambaste them as when I wrote my headline. Still, there's a bad trend here. Whether students are being priced out of the contest or whether administrators are just using cost as an excuse to drop the program, it's a shame to see healthy academic competition like this attracting fewer students. Sports are good for promoting physical agility and brute strength, but brainpower is the engine of the modern economy, and we need to encourage all of our kids to take part in spelling bees, debate contests, and all of those activities that kids can win by sheer wits.

But if you'll allow some Friday fun, let's step into the world of the vast plutocratic conspiracy:

The last thing the globalizing plutocrats want is kids who are smart enough to figure out the shenanigans the plutocrats perpetrate. And they certainly don't want poor kids developing their intellect and getting ideas. An educated workforce is a dangerous workforce... for corporate profits. The plutocrats put the screws to the Scripps folks and said they had to start discouraging poor kids. Presto! An entry fee, and another victory for the plutocrats against intellect and liberty. Ha ha ha!

Regulations on TransCanada: Enviro-Whackiness, or Just Plain Good Business Sense?

Opposition to the TransCanada Keystone pipeline is not environmental whackiness. Most folks who don't like TransCanada's proposal thus far aren't saying "No pipeline, nowhere, not ever." They're asking that TransCanada and any other pipeline company simply play by the rules we expect fo any other business.

The South Dakota Resources Coalition has circulated a pretty good argument for three sensible conditions on TransCanada's building of the Keystone pipeline:
  1. Responsibility for damage: The SDRC says we should require TransCanada to put up a financial guarantee that it will clean up any damages its pipeline causes. That concept is no more radical when Mom tells you to clean up after yourself. It's also no more radical than the bid bonds the county can impose on vendors: if a snowplow company bids a snowplow at $100K, the county can require the company put up a 10% bond. That way, if the company fails to deliver the plow, the county can use the $10K to cover the inconvenience of emergency rental or turning to the second-place (and probably more expensive) bidder.
  2. Annual reimbursements for landowners: TransCanada wants to pay landowners for just the inconvenience of lost crops and such during construction. But TransCanada is deriving value, causing inconvenience, and posing an environmental threat to landowners every year of operation (and even after operations end). TransCanada should have to pay rent on the land it uses every year, like any other tenant would. SDRC also notes that in any other rental situation, the landowner dictates the terms of the agreement to the tenant, not the other way around. When's the last time you heard of a renter getting to condemn his apartment so he could make a one-time payment and keep his stuff there indefinitely?
  3. "Flow fee" -- Share the wealth: TransCanada will make a lot of money off this pipeline. Anyone else who does business in South Dakota pays into the state coffers. Truckers hauling fuel or anything else through our state pay their share of taxes and fees. TransCanada should pay a per-barrel tax to support the state that will allow it to make its big oil profits.
The full text of the SDRC statement is below. As you can see, the proposals they make are not enviro-whackiness, just good business sense for the state of South Dakota.

South Dakota Resources Coalition (SDRC) is asking for your consideration to provide a three-part approach for common sense to the Keystone Pipeline Project. A key word in our name-"Resources"- implies but also demands that we as a state perform as a steward for those precious gifts that we inherit. Part of that stewardship requires that we act as prudent business people when it comes to the future direction of the Keystone pipeline.

Numerous individuals at the recent PUC hearings concerning the permitting of Keystone suggested the need for bonding both for performance and clean up. Any claims for proper performance can only be backed by bonding and insurance not public claims. Granting a permit even under the most stringent requirements will not guarantee proper performance. There must also be incentive and personal responsibility to guarantee proper performance. There is no better incentive than an insurance company insisting that there be no mistakes. Keep in mind, that Trans Canada is multi-national, for profit, company that uses a corporate "veil" to separate its assets and resources from potential liability. No one individual associated with Trans Canada is at risk for losing his/her personal finances. As business people, we need to make sure that performance is not just spoken but also secured with incentive and responsibility. Proper bonding is not a choice. It must be a requirement. With the operation of Keystone, failure is not an option.

Most easements obtained by Keystone only provide monies for crop damage and initial construction during the first year. Easements whether granted freely or by eminent domain need to provide annual reimbursements as long as the pipeline lies within the boundaries of the properties affected. How many landlords allow a tenant to occupy a property rent free by only making a down payment deposit? Further more, how many landlords use a lease written by a tenant as the basis for the rental arrangement? The state of South Dakota urgently needs to develop a proper template for easement contracts that financially secures and rewards the property owner for their cooperation with Keystone not just now but for the entire life span of the pipeline. Again, we as a state of SD need to behave like business people.

Goods and services moving within and through SD provide an "economic blood flow" that helps to build and grow our state. When goods and services are purchased or consumed in our state sales and excise taxes are paid. When transport vehicles or trucks use our interstates/highways systems, they pay a state fuel tax. When crude oil flows through a pipeline buried underground running through SD, there needs to be a "flow fee" paid to the state of SD. We tax most every other for profit activity in this state. When a multi-national for profit company partners with our state to make financial gain, we as a state need to be duly compensated. Once again, we need to act like business people.

SDRC strongly urges the public officials of our state to act as stewards of our resources with the responsibility to be prudent business people. With over 35 years as an advocate for the resources of our state, SDRC has the knowledge and background to sense what is important. Our members come from all ways of life in South Dakota. We as all South Dakotans expect that you demonstrate leadership on these difficult issues concerning Keystone. Proper bonding, adequate annual compensation for landowners, and financial dividends to the state of SD need to be part of the package that Keystone provide as it partners with the people of South Dakota. SDRC appreciates your consideration and serious thought to our proposal.


SDRC Board of Directors
[forwarded by Charlie Johnson, 2008.01.23]

Stop Treating TransCanada with Kid Gloves

South Dakota Republicans appear to be approaching the whole TransCanada Keystone pipeline with the wrong mindset. They're operating from their typical and flawed "elephant hunt" or "Toyota lottery" (see #2) mindset: we're just poor little South Dakota, so that big company probably don't really want to come here, so we'd better not impose any taxes or regulations or demands or even send any signals that might scare them away.

Why else would our governor have done absolutely nothing to help landowners threatened with eminent domain (and claimed he hadn't been aware he was supposed to do anything)? Why else would the Republicans on the State Senate Agriculture and Natural Resources kill SB 138, which would have required TransCanada and other pipeline companies to put up some guarantee of financial responsibility for any damage caused by a pipeline accident? (Note: Democratic Senator Tim Johnson and Representative Stephanie Herseth-Sandlin think such a requirement is perfectly reasonable.)

A quick glance north will demonstrate that we don't have to bend over backwards to accommodate TransCanada. North Dakota has been asking for some concessions from TransCanada and getting them. ND's Public Service Commission has gotten TransCanada to agree to lay thicker pipe near the Fordville aquifer and Lake Ashtabula. The City of Fargo played hardball with TransCanada and got them to add some safety features to protect the city's water sources. The ND Forest Service got TransCanada to agree to use horizontal drilling, a method that costs five times as much as regular trenching, and adjust the pipeline route to minimize its span across the Pembina Gorge area.

A few environmental regulations and resistance to eminent domain aren't going to stop TransCanada. They've got oil that's worth $90 a barrel now, twice its value five years ago, and will only increase in value as demand increases and supplies dwindle. Like any business, they want to maximize their profit, and their accountants could probably show us that it's worth the gamble for TransCanada to pay lawyers to try getting the land for cheap through eminent domain and to pay lobbyists to tell our legislators that bond requirements are an excessive financial burden. We all do that when we negotiate: we argue for the best deal we can imagine, then settle for a deal that works.

Almost nothing South Dakota can do regulatorily will make TransCanada say, "Ah, forget it, we don't really want to build this pipeline. We'll just leave this oil in the tar sands." We could bring back SB 138 and double the requirements. We can pass SB 190, which would put a two-cent-per-barrel tax on the pipeline to create an oil-spill cleanup fund, and even amend it to slap on another quarter per barrel to replace the food tax. The attorney general could step in to help the landowners fighting eminent domain. We could impose the South Dakota Resource Council's three-part proposal for regulations on TransCanada -- proper bonding, adequate annual compensation for landowners, and significant taxes on pipeline profits (as communicated to me in an e-mail from SDRC board member Charlie Johnson).

We could do all that and probably even require TransCanada VP Robert Edward Jones to walk the length of the pipeline route wearing a chicken suit, and you know what TransCanada would say? "Cluck cluck -- so can we dig now?"

We're not trying to convince a factory to bring a couple hundred jobs here instead of South Carolina or someplace warmer. We're talking about a pipeline that's going to make big money for Big Oil. They're going to make billions. TransCanada's dealings with North Dakota prove they're not on a shoestring budget, and their project isn't just one regulation or one tax away from collapse.

Quit being chicken, Republicans. Let's hold TransCanada's feet to the fire... and say, does someone have a chicken suit?

Thursday, January 24, 2008

Moral of the Week, Brought to You by the War College

No joking this time, kids:

Dakota War College humbles and surprises me without trying. Earlier this afternoon, I teased the War College for his eagerness for free money from the government that he so often mistrusts.

Does he come after me with a blistering attack on my own human failings? Does he taunt me for having a daily hit count only a tenth the size of his (a tenth! I can dream...)? Does he question my manhood for only having one child so far?

Heavens no. He doesn't bother swatting such a small, silly gadfly. But he responds to some other comments about the welfare mentality, like the following from a 50-something divorcee:

But there are people who live in shacks in the rattiest area of Rapid City, but they have satellite dishes and expensive video games, then wonder why they don’t have enough money to buy their kids a warm set of clothes. And in the RCJ today, there’s a single welfare-supported woman with two kids and she’s pregnant again! I am tired of subsidizing people who crank out rugrats they can’t afford, and tired of subsidizing people who make bad choices ["Second-class citizen," 2008.01.24 3:50 p.m.].

Before I could go track down the appropriate Christian theology links, PP beat me to the punch:

I’m kind of surprised at the tone of a couple of the comments here, such as Anton complaining that someone poor might actually own a playstation.

I’m not on welfare, but you have to take a few things into consideration. If they have a few kids, it’s entirely possible that it might be a family christmas gift, as the Wii Santa dropped off at my house was.

THAT was actually cheaper for me than buying everyone an individual gift. Or in an other instance, I have an xbox I bought broken and well used. I fixed a couple of parts, and managed to save myself $100.

Having been (being) an auctioneer, I can’t tell you how many times we auctioned off DVD players, Stereo equipment, big screen tv’s, etcetera, and people who might not have been able to afford new would buy them, happily taking the cast offs from a segment of society much better off than they.

I don’t have a lick of sympathy for parents who choose to drink or gamble their paychecks away. But by the same token, if someone who makes $7 or 8 an hour by digging ditches manages to scrape together enough cash to buy a used HDTV for a couple hundred dollars for entertainment at night because they can’t afford movies or restaurants, I’m not going to begrudge those things to them.

Think about walking a mile in their shoes before you group them as parasites on society, please.

[Pat Powers, 2008.01.24 4:18 p.m.]

Thank you, Dakota War College, for wisdom and decency. Here endeth the lesson.

Kucinich Out -- Where's a True Democrat to Turn?

My black veil, please: The bell tolls today for the Dennis Kucinich Presidential campaign. My man Dennis is on record in his hometown Cleveland Plain Dealer saying he is "transitioning" out of the Presidential race to focus on fighting a primary battle for his seat in Congress (that vote happens in Ohio March 4).

Two heavy sighs rise from the western shore of Lake Herman. A blunt "Good riddance!" probably comes from Cleveland transplant SD Moderate.

Unlike my friend Mr. Epp, who needed just one caucus victory to jump from Edwards to Obama, the Madville Times will need some time to reflect... and maybe gather some signatures.

Dennis, thanks for the effort. You're still the smartest Dem. We still love you here at Lake Herman, and that dinner invitation still stands for you and Elizabeth.

Photo courtesy of "Miss Ruby Foo" 2006.11.30

Update 2008.01.25 10:05 CST: SD Moderate weighs in, as expected:

So the universal heath care champion who didn’t even provide it for his staff has quit because of lack of campaign funds after blowing $27,000 on a re-count in a primary where he barely registered? No wonder Cleveland went belly up on his watch, good bye and good riddance Dennis. [Bob Schwartz, "If a Tree Fell in a Forest..." SDModerate.com, 2008.01.25]

Republicans Block Pipeline Responsibility Bill in Committee

The SD Senate Ag and Natural Resources Committee voted against SB 138 today. The bill would have required pipeline companies to put up a bond or other financial guarantee that they would pay for any damage caused by their pipeline. Straight party-line vote: Dems for it, GOP against.

What happened to Republicans being the party of personal responsibility? Oh, I guess we only use that line when we're trying to punish people whose behavior we don't approve of, like uppity women or poor people. We can't burden corporations with taking responsibility for their actions. We'll grant corporations personhood, but not expect personal responsibility from them. Heavens no.

But don't worry: we all know pipelines are perfectly safe, and corporations always own up to their responsibilities.

Dakota War College Becomes Dakota Welfare Queen

Remember the old days when the greatest danger facing our nation was the evil Welfare Queen, the poor, usually black woman living in the inner city, not working, having babies just to get a bigger check from the government? Where'd she go?

Oops, found her: alive and well and living high off the nanny-state hog in Brookings:

Sweet! I am so buying groceries when I get that check.

By PP at the SDWC | January 24, 2008

Check out the latest on the economic stimulus and incentive plan coming out of DC. With 7 kids, I am going to make out like a bandit... [read more on the numbers]

$300 bucks a child... O.K., I'm convinced. When the nanny state can make even the mighty Dakota War College jump for joy and head to Sam's Club to join the orgy of consumerism, it's time to abolish every form of government all the way down to tribal councils and save our souls from the corrupting influence of big government.

Dang -- Mrs. Madville Times and I have only one child. But I hear it might take the IRS a while to print those checks. Maybe if the feds would hold off on those checks for a year, they'd stimulate more than GDP....

Pass Kloucek's Pipeline Responsibility Bill

Open letter to the South Dakota State Senate Agriculture and Natural Resources Committee, concerning Senate Bill 138, "An act to require financial assurances for certain petroleum pipeline operations for the remediation of potential environmental damage and to declare an emergency", scheduled for a committee vote this morning:

Please vote "Do Pass" on SB 138 requiring pipeline companies to put up bonds or other guarantees to cover damages caused by their work. South Dakota requires its own citizens to carry proof of financial responsibility when they drive a car; it makes at least as much sense to require oil companies to guarantee their financial responsibility for damages their pipeline operations might cause in our state. With TransCanada's Keystone pipeline pending, we need this legislation now.

There have been arguments that the chances of a pipeline accident -- a spill, an explosion, etc. -- are slim. However, we should also weigh the chances that, if a pipeline does leak or worse, the company that owns it may try to avoid its responsibilities or may even go insolvent and not be able to pay for the cleanup. We should not take a chance with our natural resources, our safety, or even our own state budget. Vote to send SB 138 to the full Senate with a "Do Pass" recommendation. Thank you for protecting South Dakota's interests.

Wednesday, January 23, 2008

What's That Sound... Oh, Just a Pipeline Exploding

Gee, pipelines can explode? Probably not what TransCanada wants us to think about as they try to convince us to make way for a South Dakota oil boom.

Hmm, that makes two explosions in a two-month span. I thought TransCanada's paid expert Heidi Tillquist said that accidents happen only once every 41 years -- oh, wait, that was one spill every 41 years....

Pipelines explode. Wind turbines don't. Neither do cornfields or wetlands.

Senate Bill 138 comes before the Senate Ag and Natural Resources Committee again tomorrow. Perhaps the senators will hear the lingering echo of that little explosion in Rapid City.

Oral Roberts University as a Voting Issue

A respectful reader calls me on a breach of civil discourse:

Yesterday I commented favorably on Representative Joel Dykstra's sponsorship of HB 1184, a measure that would create a new tax incentive for a wide range of renewable energy projects. Lest anyone think the fundagelicals slipped a mickey in my hot chocolate, I made clear that, props on this particular piece of legislation notwithstanding, "There's still no way I'm voting for an Oral Roberts University graduate for Senate, and I remain suspicious of anyone who has made a living working for Big Oil."

My reader offer this gentle chastisement:

"There's still no way I'm voting for an Oral Roberts University graduate for Senate," seems pretty harsh and arbitrary. We Augie grads, and probably some Presentation and USF grads would want to know how far that brush paints??? Heck, DSU grads would probably want to know if they are ok?

I realize blogs are for entertaining and cutting edge discourse, but the problem with those attack comments are that they encourage the mean spirited posts like the second one, and it kind of rolls down hill from there [reader e-mail, 2008.01.22].

I'll admit, for all my talk about civil discourse, I'm prone to throw elbows too. And yes, I am a lot harder on certain Republicans (Rep. Dykstra, Gov. Rounds, Bob Ellis...) than on my fellow Dems (although Herseth-Sandlin's wimpy statement on eminent domain still bugs me).

Even though I don't feel an apology welling up, I would like to at least clarify my anti-ORU comment. First off, Augie, USF, and Presentation grads, fear not: The Madville Times never has and never will go on a crusade against Lutherans, Baptists, Catholics or any other Christians for being Christians. I agree with the Founding Fathers that there should be no religious test for public office (see Article 6 -- funny that in the only instance of the word "religious" in the entire Constitution has the word "no" in front of it).

However, in his support for unworkable and unconstitutional abortion legislation, not to mention his well-known comment about rape, Dykstra has demonstrated the sort of bad thinking that comes from a narrow fundamentalist education. I disagree less with Dykstra's religion and more with his theology, his interpretation of what his religion tells him to do. What I hear coming out Dykstra and Oral Roberts University is a fundamentalism that threatens good government and the Constitution as I understand them, not to mention misses the true message of Christianity as my in-house theologian understands it. They represent the folks who claim to be Christians but seem more concerned with material wealth than spiritual consistency.

My beef isn't with Christianity; it's with Christians who get Christianity wrong.

Tuesday, January 22, 2008

Dykstra Right on Renewable Energy

There's still no way I'm voting for an Oral Roberts University graduate for Senate, and I remain suspicious of anyone who has made a living working for Big Oil, but I will give Representative Joal Dykstra (R-16/Canton) props on energy policy. Sure, he's primary sponsor of the silly and toothless House Bill 1123, but he's also prime sponsor of HB 1184, "An act to create a renewable energy property tax incentive program." HB 1184 would give a 50% property tax refund to anyone who builds a new facility that generates electricity from wind, solar, hydroelectric, hydrogen, biomass, geothermal, or "recycled energy" from "currently unused waste heat." The refund is limited to ten years and may not exceed the cost of building the facility.

Not a bad idea -- energy self-sufficiency is a vital goal worth sacrificing some tax revenue for. My only quibble is that, if I'm reading the bill correctly, the incentive excludes small scale projects that don't produce power for sale on the bulk transmission grid. Big wind farms and renewable power plants are good, but small operators who just want to invest in a wind turbine or a couple solar panels should get a similar incentive as well. Everyone, large or small, who does her part to produce her own power and take the burden off the common grid deserves a piece of the tax incentive pie.

(Props to District 8's delegation as well: Russ, Dan, and Dave are all on board as cosponsors of HB 1184!)

Now if only Dykstra would just spend more time on energy legislation than that monkey business he's sponsoring about sonograms....

Monday, January 21, 2008

Waiting for Kirkeby and Zaniya...

Two big issues that haven't popped up in the form of legislation this session: Kirkeby's university consolidation plan and the Zaniya Project's recommendations. I haven't seen anything related to university consolidation under the Board of Regents bills list, and the health care and Department of Health bills lists are even sparser.

Now maybe some of the smaller Zaniya recommendations have cropped up in separate bills (I'll admit, I haven't done a thorough review of all the bills on the agenda). But I don't hear anyone talking about the big proposals. Have I missed anything? Is Kirkeby waiting to tack an amendment onto one of the pending Board of Regents bills? Maybe someone will hoghouse Senate Bill 28 to create a Romney-Clinton health insurance mandate? The anticipation is driving me crazy!

Gassman Targets TransCanada in SB 138

Hat tip to my neighbor Charlie!

District 8 Representative David Gassman (D-Canova) has joined six other legislators to sponsor Senate Bill 138, "An Act to require financial assurances for certain petroleum pipeline operations for the remediation of potential environmental damage." Short form: anyone applying to the Public Utilities Commission to build, operate, or expand an oil pipeline in South Dakota has to put up a bond, insurance, or some other guarantee of payment to cover any environmental damage caused by said pipeline.

As you may recall from the PUC hearings in December, many of the folks testifying against TransCanada's proposed Keystone pipeline were asking for exactly this sort of guarantee from TransCanada. Remember, TransCanada's opponents in South Dakota aren't all saying, "No pipeline, not in my backyard!" Landowners are mostly just asking for respectful treatment, a fair price for the land rights they'll lose, and a guarantee from TransCanada that they'll take responsibility for any problems their pipeline causes.

Gassman and his colleagues (Senators Kloucek and Katus and Representatives Nygaard, Engels, Feinstein, and Thompson) include an emergency provision to make this law take effect immediately upon passage, obviously so it will apply to the Keystone pipeline. Gassman et al. receive the Madville Times' commendation of the week for being the first legislators to go on record as standing up for South Dakota's interests against TransCanada's push to plow up our land for its profits.

SB 138 gets a hearing before the Senate Agriculture and Natural Resources Committee tomorrow. District 8 Senator Dan Sutton (D-Flandreau) represents Miner County, which is on the Keystone route [careful! big JPEG file!], and serves on that committee. As a matter fact, all nine members of the Ag/Nat.Res. committee either farm or ranch or represent counties on the pipeline route (Senators Hanson and Kloucek do both). If you're interested in holding TransCanada accountable, call those senators -- it shouldn't be a hard sell to get them to fast-track SB 138 straight to the Senate floor for a vote. All we want is two words from the committee tomorrow: "Do Pass!"

Sunday, January 20, 2008

Stimulus Package, or Unnecessary Handouts?

I continue to wait for the conservative chorus to rise in protest against President Bush's proposed "stimulus package" -- a.k.a. the government handing people checks and telling them to spend that free money as fast as they can. Surely these "stimulus package" handouts will destroy any sense of personal responsibility, not to mention"reduce incentives to work, save and invest."

These stimulus package handouts also may not actually have any effect on the recession we may or may not be in. Harvard economics professor Greg Mankiw blogs about all things economic. Yesterday, asking "What ends recessions?" he cited a study by David and Cristina Romer on economic recovery efforts. They looked at postwar recessions and what governments have done to help their economies fire up again.

Remember that governments have two main tools for tinkering with the economy: monetary policy and fiscal policy. Monetary policy is what the Federal Reserve does, adjusting interest rates to encourage (or discourage) borrowing. Lower interest rates make it easier for people to borrow more money, which means there will be more money flowing in the economy and thus (we hope) increased economic activity.

Fiscal policy is what Congress and the president do, usually either cutting taxes to leave more money in the economy or increasing spending to pump more money into the economy. For instance, Congress could vote to buy the Army more boots, which would create a lot more business and jobs for folks making leather, laces, and boots (if only most of those jobs weren't in China). Or, as the President is currently proposing, the government could just cut everyone a check for $800 and say, "Have fun at Wal-mart!"

So what works better at fighting recessions, monetary or fiscal policy? You can sift through the academic language of the Romer study if you like, but the short version: the Romers find that interest rate cuts account for "nearly all of the above average growth that occurs early in recoveries."

Mankiw cites another paper from Princeton's Alan Blinder that similarly concludes that monetary policy is a much better tool than fiscal policy for fighting recession. Blinder doesn't rule out using fiscal policy, but he would reserve that tool for "occasional abnormal circumstances... such as when recessions are extremely long and/or extremely deep, when nominal interest rates approach zero, or when significant weakness in aggregate demand arises abruptly." Mankiw questions whether the current economy, with historically mild 5% unemployment and "a consensus near-term growth forecast of about 1 percent" meets Blinder's criteria for resorting to fiscal stimulus.

Perhaps we should question these handouts as well. Is it coincidence that Republicans and Democrats alike can so quickly agree on an unbudgeted $145 billion dollar expenditure in an election year?

And you know, maybe a little recession every now and then isn't such a bad thing. After all, the mere fear of recession has oil prices dropping (below $89 this morning, an 11% drop from the start of the month). Maybe Bush should hold off on that stimulus package until gas gets back down to $2 a gallon. Tough it out until then, and people might be able to save enough money on their own to spend in other sectors without any government intervention.

But don't get me wrong: you'll find me waiting by my mailbox as eagerly as the next guy for my check from President Bush. But then I'm a raving tax-and-spend liberal who believes in government handouts. I have my excuse. Fiscal conservatives, I await your hue and cry.