Tuesday, September 22, 2015

BAP, Illustrated

This week's Saturday Leader Times editorial page included one pleasant surprise. As usual, they published only two letters from readers, but both letters were from readers who expressed relatively progressive opinions. One letter was written by a former union member who encouraged the members of the USW who were locked out of ATI to stick together. The other was a plea to voters to stop blaming PA governors for the nearly annual budget impasses we have experienced over the last decade and instead to vote out of office the local house representatives who keep refusing to compromise.

The editorial board added two editorials. The first criticized attorney general Kathleen Kane's office for opposing the release of staff emails to the Philadelphia Inquirer on the grounds that they are not public records since they do not address matters related to agency business. IOW, they were emails dealing with personal matters delivered through a government email system. The editors are correct that this is a bad argument, but I just don't have the time or proclivity to dig into the Kane case in any detail. The editorial board, along with the editorial board of the parent Tribune-Review, has had it in for Ms. Kane for several years. They will tell you it is because of public corruption and/or incompetence. I haven't been following any of these stories closely enough to agree or disagree and don't plan to now. It seems that a lot of bad things were going on in the attorney general's office before she got there, but her tenure may have made things worse. It's a sad story all around. That's all I've got to say on that matter.

The second editorial attempts to argue that the Obama administration's Clean Power Plan will be too costly and should be rejected by the states. They base this argument on two major points drawn from a study by Nicolas Loris of the right-wing think tank, the Heritage Foundation. Yeah, that Heritage Foundation, the one that draws support from people like the Koch brothers and -- surprise, surprise! -- Scaife family foundations, the same people who founded the Tribune-Review and whose endowments help keep papers like the Leader Times in print. As for Loris himself, he was an employee of a Koch brothers foundation before joining the Heritage Foundation. OK, that's enough information to raise suspicions about the reliability of the source, given the history of the Heritage Foundation's prior advocacy efforts and the supposed public-mindedness (cough, cough) of its funding sources.

The editorial's first main point is that California's Clean Energy Jobs Act "increased taxes on corporations to fund energy-saving inititatives and green programs, primarily at schools. The initiative was supposed to generate more than $550 million annually and create 11,000 new green jobs, notes Nicolas Loris of the Heritage Foundation. Three years later, more than half of the $297 million doled out to schools has been sucked up by consultants and energy auditors. A board created to oversee California's initiative and provide annual progress reports has never met the Associated Press reports. So, of course, fumbling politicians who foisted this farce on Californians are calling for better oversight."

The second main point is that the section of the 2009 Federal stimulus bill that was dedicated to promoting green energy initiatives produced only 11,613 jobs that lasted more than 6 months, about 16% of the goal. Conclusion? "Unless states intend to follow California's abysmal example, they must reject the feds latest green scheme."

This editorial is a classic illustration of the BAP ("bullshit asymmetry principle"). I cannot hope to uncover every misrepresentation or refute every bad argument in this editorial, much less in Loris's report, especially since a lot of the refutation depends on first telling you what Loris and the editorial board fail to mention. My goal is to present enough of the missing information to demonstrate the logical error that invalidates the editorial's conclusion.

OK, now for the missing context regarding California's Clean Energy Jobs Act (AKA Proposition 39). First off, "fumbling politicians" did not foist this on Californians. The editorial board was apparently too apoplectic to remember that in California propositions are enacted by a plebescite. The proposition passed during the 2012 elections and was put into effect at the beginning of the 2013 fiscal year. The law rolled back a previous arrangement whereby corporations were given two different ways to calculate their state income tax liability. The previous arrangement had the pernicious effect of rewarding corporations that moved facilities and employees out of California with lower tax rates. The changes instituted by Proposition 39 mostly affected a small number of large corporations. Both Loris's report and the editorial skip over that little detail.

It turns out that the factual claims about the goals and results of Proposition 39 in both Loris's report and the editorial come from an Associated Press article written by Julia Horowitz. Why they treat this article as an oracle of God I don't know. As far as I can tell the factual data she includes in the article is correct, but she fails to provide supporting evidence and misleads by failing to put the apparent shortcomings of the law's results in context. As has been pointed out here and here the law's requirements lead to precisely the pace of development that has taken place so far. I could figure that out for myself, since the target of the funds raised was schools. Had the funds gone directly to utilities there would not have been as much money spent on auditing and consulting in the early stages. It could be argued that this is a flaw in the design of the program if the intent was to stimulate job growth quickly, but the law is written to prioritize genuine energy efficiency gains over quick job growth. Obviously schools are not experts in efficient green energy projects and so needed plenty of lead time to obtain metrics and guidance on how to meet the requirements for the stimulus money. Furthermore, by directing the money to schools rather than utilities, the projects will be "off-grid" in the sense that the schools are not likely to invest directly in efficient generation of utility power. For many schools that will mean infrastructure changes, including major building renovations or new buildings. These types of changes can take years to get completed. The law stipulates that schools have until June 21, 2020 to submit green energy project plans and June 21, 2021 to submit a final report on project completion. Therefore, it is not at all surprising that many schools have not even applied for stimulus money yet. They may simply not be ready to begin a major building project. Since a lot of the generated employment will be in construction and related fields, it is again not surprising that only a few new jobs have been created so far. Assuming that the stimulus funds raised are all eventually distributed, there should be significant job gains in the next five years. None of this makes the law a failure. Ms. Horowitz simply does not have enough experience to offer a realistic evaluation of the law. Loris and the Leader Times editorial board don't have this excuse. Oh, and let me point out that conservatives have been screaming about how the administration's Clean Power Plan timeframe is too ambitious and will force utilities to make costly upgrades too soon. Why do they now insist that California must rush to complete its energy efficiency projects or the program is a failure?

On the other hand, the law also required an oversight board keep watch over distribution of the funds and monitor funded projects to ensure that the requirements are met. That board has not met yet, and the article's exposure of that failure has stimulated overdue action to get the board moving. It is also true that the law has failed to generate the revenue originally projected. While that may be disappointing, it doesn't at all entail that the law should not have been passed or that the energy efficiency projects that can be funded are not worth the investment. The law's supporters can be faulted for promising too much, but that doesn't mean the law itself is bad or the money raised is being wasted.

There is no point in ignoring the failed green enterprises, e.g. Solyndra, funded by the 2009 federal stimulus bill. On the other hand these failures pale besides the huge increase in green power generation kicked into high gear by that stimulus money. Just don't expect the Leader Times editorial board to tell us about that. It doesn't fit into their narrative that government ruins everything it touches (except, of course, the military). The editorial board is correct that as of 2012 the 2009 stimulus bill had failed to produce anywhere near the number of "green" jobs originally promised. But that is not the whole story by any means. For one thing, they fail to mention that the stimulus bill's kickstart has propelled a lot of growth in renewable energy generation in the intervening years. Of course, conveniently for conservatives, the 2013 sequester killed the government program that was tracking "green" job growth, making it far more difficult to come up with reliable numbers. But the green energy stimulus was never just about jobs; it was also about jump-starting migration away from fossil fuels, and in that regard the stimulus has had significant impact. And there is every reason to believe the Clean Power Plan will do the same.

This leads me to the editorial's conclusion. Since the results of California's Proposition 39 are not abysmal, the editorial no longer has a valid basis to predict that the Clean Power Plan will be an abysmal failure either. Could Proposition 39 yet fail spectacularly? Anything is possible, but it doesn't look likely. Did the federal green energy stimulus fail spectacularly? No. It didn't accomplish everything President Obama promised, but it has accomplished much. Therefore, the narrative that government ruins everything it touches is false. Without that narrative, the editorial's conclusion doesn't follow even if Proposition 39 had failed spectacularly. Just because one government program fails doesn't mean that another government program administered by a different jurisdiction and targeted at a different set of objectives will also fail. In short, the editorial's argument is bullshit.

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