Vermont Tiger

The Davos Delusion

why trust the gobal elites to fix things?  like everyone else, they act in their own self-interest.

It’s hard to be a convincing Spenglerian amid so much good food and drink, not to mention money. But let’s ponder one aspect of what might be called the “Davos Dystopia” — namely, the way in which the elite networking it represents has unintentionally worked to undermine social cohesion in the larger world. Even as the elites have become better connected, resentment toward them has seemed to grow back home — fueling discontent.
    David Ignatius, Washington Post

For a glimplse into the reality of Davos, read Tom Evslin who has been there and done that and did not come home empty handed ... or, more importantly, empty headed.

Around the Web

by Art Woolf

My weekly look at interesting sites, economic and otherwise, on the web.

1.  James Hamilton, at Econbrowser, gives us the secret of wealth creation:  Buy low and sell high.  A macroeconomist who specializes in energy issues, he writes

It's a strategy that works for individuals, and can work for the entire nation as well. If you can figure out a way to find resources whose value in their current use is not very great-- in other words, if you buy low-- and redeploy them somewhere else where their value is much greater-- in other words, sell high-- then you will not only add to your personal wealth, you will be creating new wealth for society as a whole. The process of allocating resources to their most efficient use is the heart of what drives economic growth. The fact that individuals have a strong personal incentive always to be looking for better ways to do that is the primary factor responsible for the standard of living that we enjoy today.

He then applies that commensense notion to the Keystone Pipeline.   Well worth reading the blog post.

2.  Welcome to the Year of the Dragon, which appears to be a very good year for stocks.  I'll take a 7% real return on my portfolio.  Let's hope. 

3.  Alex Tabbarok has a new book out called Lauinching the  Innovation Rennaisance.  His short Atlantic essay is an excerpt from the book. 

Regulatory thickets are also strangling energy innovation. The U.S. Department of Energy, for example, estimates that small and environmentally friendly hydro-electric projects could generate at least 30,000 MWs of power annually. That's equivalent to the generating capacity of about 30 nuclear power plants. Moreover, since 97% of U.S. dams are generating zero power today, these projects would not require building any new dams. So what's the problem? The problem is that building even a small hydro-electric project requires the approval of numerous agencies, including the Federal Energy Regulatory Commission, the U.S. Fish and Wildlife Service, the Army Corps of Engineers, State Environmental Departments and State Historic Preservation Departments. It's simply too expensive, time-consuming and risky to build these projects when any of these agencies could veto it at any time. 

That Yankee Case: Two Views:

A wise lawyer once advised:  If you have the law, hammer the law. If you have the facts, hammer the facts. If you have neither the law nor the facts, hammer the table."  None of that seemed to work in the recent case of Entergy vs the State of Vermont. 

Attorney General William Sorrell has his view of why the judge ruled the way he did.. 

In an op-ed published in the Saint Albans Messenger last week, Emerson Lynn expressed another.

 

Legal Bills

it gets expensive arguing your case in federal court ... especially when you lose
 
by John McClaughry
 
Franklin County Republican Senator Randy Brock, who is challenging Gov. Shumlin this fall, offered this comment after the state was blown out of court in the Entergy case: “We seem to be spending a huge amount of money over and over again in defending laws that don’t conform to federal requirements.”

It’s worth looking more closely at the three recent examples.

In 1997 the legislature, led by Senate President Peter Shumlin, passed a draconian campaign finance restriction bill (Act 64). Shumlin voted yes.

The case against it went to the U.S. Supreme Court which, after a comically embarrassing courtroom performance by attorney general William Sorrell, tossed it out as an unconstitutional restriction on speech under the First Amendment. The state’s legal costs were estimated at $1.5 million.

Bruce Lisman: an interview

 

what is Campaign for Vermont and where is it going?  a conversation with it's founder, Bruce Lisman.

VT:  It has now been almost two months since you launched Campaign for Vermont. How is it going?

Lisman: A lot better than I ever would have guessed.  We have more than 5,000 people on our email list.  A growing Facebook contingent.  We’ve been fortunate to reach people in a way that makes many of them want to volunteer to help us and more who simply want to hear what we have to say.  From Rotary Clubs, and business groups, to radio stations, we are getting inquiries from people who are interested in our message. 

 So we’ve seen a lot of support, but we have also been called divisive and controversial by others.  One of our aims is to ensure there is a robust debate where there is none now.

 VT:  Is there a next chapter that we can look forward to any time soon?

Important Event

Art Woolf will be participating in a forum tonight, at the town hall in Charlotte, where the topic under discussion will be "Our Energy Future."  Time is 7:00 PM.  You should attend, if possible, and hear what Art has to say.  Then go forth spread the word.

More Here

Davos: Where the Elite Meet

... and do what, exactly?

Excerpted from a novel by Tom Evslin

( ed. intro:  It happens every year at about this time.  From all over the world, prime ministers, presidents, bankers – central and otherwise – CEOs, religious leaders, the occasional king, futurists, journalists, and assorted others who consider themselves insiders and essential to the orderly functioning of the new global economy ... they all head for a little town in Switzerland.  They come for the same reason that people in Hollywood attend the Academy Awards.  Because not to go, if you are invited, would be unthinkable. And not to be invited …

The event is called The World Economic Forum.  In good years, the attendees discuss what a wonderful job they have done, what with prosperity spreading across the globe.  In the not-so-good years, like this one, they talk about the economy as though it is some great, smelly beast that resists even their good efforts to housebreak it.  Some attendees may actually be able to do something about the economy but lack the political sand to do it.  Angela Merkle delivered the keynote this year; she took a hard line on expanding Europe’s bailout fund.  Larry Summers will also be there and he has already let everyone know what he thinks they must accomplish.  Since his fingerprints are all over the corpse of the American economy, he is in a fine position to lecture.

POTUS on Energy

not all bad ... but not all good, either.  especially on what government has done, left undone, and cannot do

by Tom Evslin

President Obama recognized the importance of natural gas and the new, disruptive technologies which have made at least 100 years of this fuel available to us; that's the good news from the State of the Union Address. The bad news is that the President appears to have learned a lot of wrong lessons about the proper role of government in innovation and appears poised to take a lot of wrong-headed actions. Here's that section of the speech as reported in The New York Times with annotations by them (NYT) and by me (TE).

POTUS: And nowhere is the promise of innovation greater than in American-made energy. Over the last three years, we've opened millions of new acres for oil and gas exploration, and tonight, I'm directing my administration to open more than 75 percent of our potential offshore oil and gas resources. (Applause.)

NYT: An administration official declined to explain exactly what this potentially huge expansion of offshore activity meant, except to say that the Interior Department would be announcing new lease sales in the coming weeks. Those sales will not include areas the administration has already ruled off-limits, including most areas off Florida and along the Atlantic Coast, the official said, so it is not clear how the president reaches his target.
     John M. Broder

POTUS: Right now -- right now -- American oil production is the highest that it's been in eight years. That's right -- eight years. Not only that -- last year, we relied less on foreign oil than in any of the past 16 years. (Applause.)

TE: That is good news but obviously most of the increase in domestic production comes from actions taken before the present administration was in charge. Also a recession-related decrease in demand cut into imports. But still good news.

POTUS: But with only 2 percent of the world's oil reserves, oil isn't enough. This country needs an all-out, all-of-the-above strategy that develops every available source of American energy. (Applause.)

A strategy that's cleaner, cheaper, and full of new jobs. We have a supply of natural gas that can last America nearly 100 years. (Applause.)

And my administration will take every possible action to safely develop this energy. Experts believe this will support more than 600,000 jobs by the end of the decade. And I'm requiring all companies that drill for gas on public lands to disclose the chemicals they use. (Applause.)

Danger Ahead?

by Art Woolf

 VPR and VTDigger report that a bill in the legislature would simplify the registration process that small  residential electricity providers need to go through.  Under the "net metering" law a wealthy Vermonter who puts a solar electric array on her home gets paid for any excess electricity she produces and doesn't use. 

Why do I say "a wealthy Vermonter"?  According to Renewable Energy Vermont, a 5 kw system will cost $30,000, although, and I will quote directly

With financing, the Incentive Rebate, and the Federal Tax Credit, this system can be as low as $18,375.

But wait. There's more!

After the system is paid off, your electricity will be 90-100% free!

Of course, they don't tell you when that will be.  I won't get into the math here, but we're talking about a long time until we get to free.

Even with a price "as low as $18,375" I don't think too many low or even moderate income Vermonters will buy them.   Putting solar panels on your roof is not a good way to get rich, but if people want to put them on their house, fine.  

It's that $12,000 subsidy that is the problem, and an even bigger problem is the price that utilities pay for the electricity they buy from net metering.

On Appeal

Vermont spent more than $200,000 on the losing end of a lawsuit brought by Entergy Corp. to keep the Vermont Yankee nuclear plant open, and is still weighing whether to appeal the decision in federal court ...
“I'm disappointed and surprised, and I thought that both legally and factually we had the evidence and arguments in front of the court to have the case come out differently,” Attorney General William] Sorrell said.
Sorrell said he has been talking with Gov. Peter Shumlin, a fellow Democrat who has led the opposition to Vermont Yankee, and to other state officials about whether Vermont should appeal.
    John Gregg, Valley News

There is a lot of speculation about where the feud between the state and Vermont Yankee will go from here.  This is the best appraisal yet.

Leadership Needed

the state's agricultural universe could use a star

 Politics by Emerson Lynn

When Neale Lunderville gave his final report on the damage wrought by Tropical Storm Irene one of the expected casualties was the damage caused to agriculture. Less expected was the sense that many of the farmers – particularly those involved in fruit, produce and vegetables – operated in a vacuum. They were not connected to a system larger than themselves. As Mr. Lunderville noted, the crisis exposed their vulnerability. It also points out the obvious; a limited, self-centered network stunts their potential.

That would seem counter intuitive. Vermont has agriculture as part of its historical center. The production of food, writ large, is the state’s vanguard movement. How could it be that any agricultural group is not connected to the whole?