Category Archives: Economics

Business, Economics, Political Commentary, Science And Society, Social Commentary

The Green Dream

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…is a nightmare for California’s middle class:

Unfortunately, California environmentalists are trying to turn much of the Central Valley’s farmland back into desert too. Thanks to the Endangered Species Act, federal courts have ordered farmers to divert hundreds of billions of gallons of water away from crops and into the Sacramento River, where it is supposed to help revive the delta smelt.

The diverted water has not helped the smelt much, but it has turned hundreds of thousands of acres of farmland fallow and sent unemployment in some farming communities as high as 40 percent.

California could solve this problem by building more dams, thus adding water capacity. But the state hasn’t built a major new dam since 1979 and none is on the drawing board.

One reason is the California Environmental Quality Act of 1970. Modeled after the federal National Environmental Policy Act, CEQA was intended to make infrastructure planning easier. As the accompanying chart shows, it is anything but an easy law to follow. Unlike most state environmental planning laws, CEQA allows plaintiffs to recover attorney’s fees from defendant infrastructure developers (whether they be state, city or private actors).

This has created an entire environmental lawsuit industry — a very profitable one that chills development. According to the California Chamber of Commerce, CEQA has become “a morass of uncertainty for project proponents and agencies alike.”

Local government smart-growth plans have made it next to impossible for developers to build single-family homes near job centers such as the Bay Area or Los Angeles. As a result, real estate prices along California’s coast are among the highest in the nation, forcing many middle-class families to downsize or move elsewhere.

But the moron voters keep reelecting these people.

Business, Economics, Media Criticism, Political Commentary

Jack Lew’s Primary Talent

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He always gets paid:

When he left NYU, Lew received what he describes as “a one-time severance payment upon my departure.” He wasn’t fired, usually the occasion for severance pay. He simply left and got paid for the act of leaving. Hey, that’s Jack Lew — he gets paid when he stays, and he gets paid when he goes.

He went to Citigroup, which NYU had made its primary private lender for student loans in exchange for a cut of those loans. (Coincidences happen to everyone, including Jack Lew.) At Citi, Lew established beyond a doubt his expertise at getting paid. In 2008, as the bank nearly blew up and laid off one-seventh of its employees, Lew ran its disastrous Alternative Investments unit — and got paid $1.1 million.

The bank had to be bailed out by the federal government, but it couldn’t stop paying Jack Lew. The journalist Jonathan Weil of Bloomberg has unearthed Lew’s contract at Citi. It said, reasonably enough, that he wouldn’t get his “guaranteed incentive and retention award” if he left the company. It made an exception, though, if Lew left to get “a full-time high level position with the United States government or regulatory body.”

He shouldn’t have been worth the money (and in many instances, probably wasn’t). But in a corporatist government, this is what happens.