Tag: corruption
Orwell in Argentina
Stephen Kotkin: Putin, Stalin, Hitler, Zelenskyy, and War in Ukraine | Lex Fridman Podcast
Why Can’t We Build Anything?
“it’s not true that Washington is actually “sending the money.” Because of Congress’ longstanding inability to perform one of its most basic functions—pass a budget—significant swathes of transportation spending are stalled at 2020 levels. In November, the infrastructure bill did indeed authorize over a trillion in spending. But before all of that money can actually head out the door, there needs to be an appropriations bill in place”
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“The U.S. is the sixth-most expensive country in the world to build rapid-rail transit infrastructure like the New York City subway or the Washington, D.C., metro system.
Part of the reason is just plain waste and corruption. The federal infrastructure bill has created massive incentives for rent-seeking while ballooning the municipal lobbying sector. Like contestants on a game show, states and localities are scrambling for dollars, correctly understanding that this might be the only major windfall in this area for a decade or more—again, largely due to Congress’ inability to do its job in a predictable way in concert with a chief executive who can set clear achievable policy priorities.
More than 1,000 municipal entities spent just shy of $50 million on federal lobbyists in the second half of 2021 as the infrastructure bill was finalized and passed, according to data tracked by OpenSecrets. That’s about 7 percent higher than the $46.7 million that municipal entities spent in the same period of 2020, which was hardly a dry spell given the federal pandemic spending that was already underway. That number likely underestimates the real demand, since it doesn’t capture contracts signed right at the end of the year.
In theory, no lobbyist is needed to tap into the new infrastructure money. At the end of January, Mitch Landrieu, a former mayor of New Orleans who is overseeing infrastructure spending for the Biden administration, proudly announced the existence of a 465-page guidebook that explains the different pots of money available to communities, along with a data file that is—get this—searchable!
Despite all this, there’s no reason to think the U.S. is notably worse on these measures than other developed nations. Likewise, while some of the cost is inputs, such as material and labor, they don’t explain the disparity fully. A recent study of the interstate highway system from George Washington University professor Leah Brooks and Yale University professor Zachary Liscow suggests that the X-factor is “citizen voice,” which can take the form of legitimate opposition to eminent domain, or which might be less charitably described as “not in my backyard” obstructionism and environmental regulatory foot dragging.”
How Manchin used politics to protect his family coal company
“As governor, Joe Manchin supported an unusual detail in a clean energy bill that was moving through the West Virginia Legislature in 2009.
The provision classified waste coal as an alternative energy.
The muddy mix of discarded coal and rocks is one of the most carbon-intensive fuels in America. And Manchin’s family business stood to benefit financially when it was reclassified as something akin to solar, wind and hydropower.
Selling the scrap coal has earned Manchin millions of dollars over three decades, and he has used his political positions to protect the fuel — and a single power plant in West Virginia that burns it — from laws and regulations that also threatened his family business.
It continues today.
Only now Manchin has enormous influence over federal climate policy. He is using his chair role of the energy committee — and role as maverick Democrat – to shape environmental policy across the states.”
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“By 2006, when Manchin was governor, the plant’s owners went before the West Virginia Public Service Commission and claimed it was on the verge of shutting down.
The commission, then chaired by Jon McKinney, a Manchin appointee, raised the rate that Grant Town could charge for its electricity from $27.25 per megawatt to $34.25. They also gave the plant a way to stay in business longer, by extending its power purchase agreement with FirstEnergy by eight years to 2036.
Those changes still reverberate today. West Virginia has seen some of the highest electricity rate increases in the nation. Its loyalty to coal is one reason for that.
The price of residential power in a dozen other states that share the PJM grid with West Virginia has declined, according to a report released last month from the West Virginia University’s Bureau of Business and Economic Research.
“Over the past 10 years, West Virginia’s residential prices have risen, while PJM’s average price has come down considerably,” the report found.
Between 2010 and 2019, utility bills in West Virginia rose at five times the national average, according to calculations by James Van Nostrand, a West Virginia University professor who spent 22 years as a lawyer representing energy clients in state regulatory proceedings.
Power prices are higher in West Virginia in part because coal is more expensive than natural gas and renewables. In other states, aging coal plants that can’t compete economically are allowed to shut down.”
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“Manchin’s business interests reflect long-standing ethical questions in Congress, said Shaub, the former government ethics official. Lawmakers have the power to prevent obvious conflicts of interest. But neither party has changed its rule to stop members from making money off their votes in the Capitol, he said.”
The Perverse Incentives of Puerto Rico’s Debt Deal
“While Puerto Rico has failed to make debt service payments since 2017, government spending is up over 12 percent since then despite a drastic population decrease. Long says Puerto Rican officials are realizing “how easy it is to hide financial data, pretend austerity, and fool their creditors.” For its part, she adds, the U.S. government is creating all the incentives for Puerto Rico “to become a serial defaulter, like Argentina,” a country on the brink of its tenth default since 1816.
The comparison is ominous; Argentina’s longstanding practice of acquiring heaps of debt on the global markets before failing to repay it reflects the workings of its internal politics. As scholars Pablo Spiller (of the University of California, Berkeley) and Mariano Tomassi (of the Universidad San Andrés in Argentina) wrote in 2007, Argentina’s brand of federalism combines decentralized spending for the provinces with largely centralized tax collection and funding schemes. The system, which began to arise in the late 19th century, still motivates “subnational governments [to] adopt a lax fiscal stance in the expectation that they will be bailed out in the event of a fiscal crisis.”
In turn, they write, the top regional politicians tend to be the crony machine operators “who are best at the game of extracting rents from the common central pool.” Similarly, negotiating rescue packages with the International Monetary Fund has become a part of an Argentine president’s unofficial job description. Will governors of Puerto Rico assume the same role vis-à-vis the White House and Congress?
Certainly, U.S. taxpayers should consider the long-term consequences of their bailout of Puerto Rico, where children of politicians tend to be overrepresented as recipients of six-figure government salaries and seven-figure government contracts. The habitual debt busts of Buenos Aires is one Latin American export that is better left on the dock.”
Soviet Ethnic Policies Split Kyrgyzstan
“Former physicist Askar Akayev was Kyrgyzstan’s first president. He built a reputation for striving to create a real liberal democracy but shifted into a more autocratic stance as parliament resisted some of his economic policies.
Akayev’s rule lasted until 2005, when his administration fell amid a violent revolution. His successor, Kurmanbek Bakiyev, was toppled by another uprising in 2010. Tribalism, nepotism, corruption, and the meshing of government with organized crime—the nation produces and is a transit point for heroin in international markets—have been hallmarks of Kyrgyz politics for much of the post-Soviet period.”
Lebanon’s electricity was down for a day, but the crisis was years in the making
“the crisis came to a head..when the nation’s two largest power stations ran out of enough diesel fuel to provide even a few hours of electricity in a country already confronted with multiple crises.”
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“The blackout comes just over a week after the government allowed a contract with a Turkish company supplying power via two barges off the coast of Beirut to lapse, cutting off that energy supply.
Though common, private generators proved insufficient during the outage — as Beirut-based journalist Bel Trew pointed out on Twitter Saturday, not only are such generators incredibly expensive to run and equally subject to Lebanon’s fuel shortages, but they do little to keep essential services like hospitals running.”
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“Lebanon has dealt with energy problems for decades; hours-long outages have long been a part of everyday life. But the country’s current economic crisis, combined with political corruption, has turned what was once a serious, but for many, manageable inconvenience into a far more acute crisis.”
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“The shutdown comes as Lebanon is experiencing shocking hyperinflation; the Lebanese lira, which is pegged to the dollar, has dropped 90 percent in value since fall 2019 and is currently trading about 18,900 lira per dollar on the black market. Prior to Lebanon’s 2019 economic implosion, the exchange rate was 1,500 lira per dollar.
That astronomical inflation makes ordinary goods like medicine hard to come by, much less enough fuel to power an entire country.
Critically, the compounding crises have serious political implications, both internally and outside of Lebanon. Hezbollah, the Iran-backed Shia militant group — which is part of Lebanon’s government, although the US has designated it a terror group — brought in gasoline fuel by the truckload from Iran via Syria, according to a New York Times report last month, apparently flouting US sanctions.
Currently, according to the Washington Post, those US sanctions are also a major obstacle to a plan for Lebanon to import gas from Egypt via Syria, which could improve the long-term outlook for Lebanon’s power grid. That could soon change, as US ambassador to Lebanon Dorothy Shea confirmed in August that the Biden administration is seeking “real, sustainable solutions for Lebanon’s fuel and energy needs.”
For the time being, however, the Lebanese government has been conspicuously absent in responding to the interconnected crises facing the country, despite the fact that Lebanon formed a new government last month. That absence has only served to highlight Hezbollah’s ability to deliver basic goods where the central government fails, potentially giving the group a larger foothold in the country.
Lebanon’s new government is also its first functional administration since a major explosion rocked its capital, Beirut, last year, according to the BBC. In the aftermath of that crisis, the existing government resigned, creating a stalemate that took 13 months to resolve.”
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“Lebanon’s 2019 financial collapse sprang from decades of bad economic policy: Ultra-wealthy, deeply entrenched public servants have long benefited from a peculiar political system and enriched themselves further by helping themselves to public funds. From 2018 to 2020, the country’s GDP fell from $55 billion to $33 billion — a precipitous drop typically associated with the outbreak of conflict”
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“The explosion also destroyed Lebanon’s major grain silo, leaving the country with less than a month of reserves at the time. It also destroyed Beirut’s port area, which handled about 70 percent of the food imports in a country that imports about 85 percent of its food.”
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“”Lebanon’s political system is the product of a decades-old power-sharing arrangement among leaders of Lebanon’s 18 religious sects, the most important being the Sunni and Shia Muslims and Maronite Christians. This system, known as confessionalism, parceled out political power according to sectarian quotas, with each sect usually led by one or several members of prominent political families.”
Despite the lack of public services and the blatant corruption of those in power, Lebanese politicians have generally proved adept at playing up sectarian disputes and doing just enough to keep their constituents satisfied.”
A Look at America’s Most Corrupt Police
“The book, by the reporters Baynard Woods and Brandon Soderberg, pieces together the story of the 2017 Gun Trace Task Force (GTTF) scandal, in which a federal investigation has so far led to the conviction of a dozen Baltimore Police Department (BPD) officers on charges of robbery, extortion, racketeering, filing false reports, and lying to federal grand juries.
At the center of the story is Sgt. Wayne Jenkins, the head of the GTTF. Jenkins was a hard-charging cop with a fat misconduct file and a talent for turning up illegal guns and drugs. His crew was filled with other bad apples, including one whose habit of excessive force and petty thievery was so well-known that he’s been name-dropped in local rap songs. In addition to committing massive overtime fraud, members of the GTTF padded their incomes by skimming seized cash and targeting drug dealers for robberies. As the book recounts in scenes recreated through court records, wiretap recordings, and interviews, the task force fabricated evidence, lied on search warrant affidavits, entered houses without warrants, and used GPS trackers to conduct illegal surveillance.”
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“Woods and Soderberg show the bureaucratic and political incentives that allowed dirty cops to flourish within the Baltimore Police Department. Those incentives exist in many other cities, and it would be a mistake to take it on trust that departments elsewhere are immune to the temptations that let the Gun Trace Task Force fester.”
Who Watches the Government’s Watchdogs?
“Inspectors general are the watchdogs of government, tasked with keeping government officials and their agencies honest and with detecting fraud and abuse. It’s an important position given the money and power that flows through the organs of the state and the resulting opportunities for shenanigans, great and small. So, it’s more than a little worrying when one of the watchdogs is charged with criminal abuse of his position of trust in an effort to enrich himself.”
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“The indictment of Charles K. Edwards, a former acting inspector general for the U.S. Department of Homeland Security (DHS), came down as most of the country was distracted by the prospect of viral doom.”
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“The indictment charges Charles K. Edwards, 59, of Sandy Spring, Maryland, and Murali Yamazula Venkata, 54, of Aldie, Virginia, with conspiracy to commit theft of government property and to defraud the United States, theft of government property, wire fraud, and aggravated identity theft. The indictment also charges Venkata with destruction of records.”
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“Edwards, who resigned from his post at DHS in 2013, had his associates copy proprietary software as well as information about internal investigations and personal identifying information on DHS and Postal Service employees. His intent, says the Justice department, was to sell an improved version of the software back to the government.
According to an internal privacy notice at DHS, the stolen data included “names, Social Security numbers, dates of birth, positions, grades, and duty stations” on 246,167 employees. The affected workers were offered 18 months of paid identity-protection services and urged to take other defensive steps, including freezing their credit.”
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“Edwards also socialized with senior DHS officials—the people he was supposed to be watching—in an apparent effort to gather support for a permanent appointment to his position. He “would boast about his close relationship with members of DHS management, how frequently he met or dined with DHS management, and that his nomination was all but assured.””