Category: regulation

Yeah, Subsidies, That Will Work

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The California Air Resources Board (CARB) has come to the conclusion that the Gypsy cab companies like Uber and Lyft are dysproportionally responsivle for greenhouse gas emissions in the state, and so they are looking to pass a rule mandating electric vehicle adoptions by those companies.

Uber and Lyft want public subsidies to follow the law.

The response of California should be to tell them to go Cheney themselves:

California clean-air regulators want nearly all trips on Uber and Lyft ride-hailing platforms to be in electric vehicles, mandating costly measures that the companies call unrealistic without more public subsidies for EVs.

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And yet the firms are pushing back on the CARB effort to force the transition, arguing taxpayers should shoulder much of the burden.

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Uber and Lyft say they can’t afford the EV transition either. Uber said in a December letter to CARB that, without “sufficient” subsidies, the rule would unduly burden the companies, along with their drivers and consumers.

Uber and Lyft have already proved that they are an enemy of good government (Proposition 22), let them pay their own way.

So Much for the Unfettered Free Market

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 It turns out that former FCC Chair Ajit Pai’s promises of a brave new world of competition and performance increases and price drops when ISPs were released from burdensome regulation.

Instead, prices continued to rise unabated, and there was no meaningful improvement in performance.

Not a surprise.  The broadband industry is about extracting monopoly rents, and deregulation increases their ability to extract the aforementioned rents:

The average US home-Internet bill increased 19 percent during the first three years of the Trump administration, disproving former Federal Communications Commission Chairman Ajit Pai’s claim that deregulation lowered prices, according to a new report by advocacy group Free Press. For tens of millions of families that aren’t wealthy, “these increases are felt deeply, forcing difficult decisions about which services to forgo so they can maintain critical Internet access services,” Free Press wrote.

The 19 percent Trump-era increase is adjusted for inflation to match the value of 2020 dollars, with the monthly cost rising from $39.35 in 2016 to $47.01 in 2019. Without the inflation adjustment, the average household Internet price rose from $36.48 in 2016 to $46.38 in 2019, an increase of 27 percent.

The nominal increase in each of the three years was between 7.27 percent and 9.94 percent, while inflation each year ranged from 1.81 percent to 2.44 percent.

“That means the nominal increase in broadband bills was more than four times the rate of inflation during those three years,” Free Press said. The report is based on the Bureau of Labor Statistics (BLS) Consumer Expenditures Survey data, which does not yet include 2020.

………

“[B]roadband prices consistently increase faster than the rate of inflation while the providers’ own costs do not. This makes this increasingly critical infrastructure service both more expensive in real terms to users and more profitable for the ISPs,” the report said.

Capital investment by Internet providers has dropped, “with substantial declines at large companies like AT&T (where 2020 investment was 52 percent below the 2016 total for the company on an inflation-adjusted basis) and Comcast (where 2020 cable segment investment was 22 percent below 2016’s level on an inflation-adjusted basis),” the report said.

In a press release, Free Press said that ISPs “grew their profits to record levels before and during the COVID-19 pandemic by increasing their prices during an unprecedented economic downturn,” and that “low-priced entry-level options for high-speed Internet service are disappearing, raising the adoption barrier for low-income families.”

The entire narrative that has driven the overpriced and under-performing connectivity situation is a lie.

The Just in Time Economy

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Now the global chip shortage has moved from automobiles to consumer electronics.

The capitalist system cannot create robustness in markets, because the creation of safety margins are expensive, and inherently unprofitable.

Our hyper-efficient global economy has a glass jaw:

The deepening global chip crunch is spreading to makers of smartphones, televisions and home appliances, according to suppliers in Asia, as companies boost stockpiles of in-demand semiconductors.

Chip supplies have tightened due to booming demand for electronics during the Covid-19 pandemic and outages at large production facilities.

But the shortage has been worsened by hoarding by sanctions-hit Chinese groups, which has made it harder for some companies to secure components for everyday electronics such as washing machines and toasters.

………

LG, a big appliance maker, said the chip shortage had not yet disrupted its production but admitted it was a risk. “We are closely monitoring the situation as no manufacturer can be free of the problem if it gets prolonged,” the company said.

A small TV maker in Seoul said: “It is getting more difficult to secure key components unless you pay higher prices. We have to hike TV prices, reflecting the rising material costs.”

Production of low-margin processors that carry out simple tasks such as weighing clothes in a washing machine or crisping bread in a smart toaster has been affected.

“Microcontroller units are in tight supply, which could be impacting general appliances,” said Randy Abrams, head of Asian semiconductor research at Credit Suisse.

………

Foundries in South Korea said they were unable to satisfy surging orders even while operating at full capacity.

This is why we need governments, and government regulation.

Running a society completely on selfishness is insane.

A Good Primer on Why We Need Aggressive Antitrust

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Here is how preventing a merger led to lower prices and better products:

Stopping mergers is good for business. Take a very simple consumer product – razors and razor blades for shaving, or disposable wet shave safety razors.

Short version:  A couple of competitors to the disposable razor duoopoly went from online to store shelves, and forced the incumbents to reign in their high prices, particularly when one of the attempts to buy out one of the companies was stopped by the FTC.

It’s a 5-10 minute read, and well worth it.

Your Charter School Update

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We lead with the story of how Clark and Jeanette Parker of Beverly Hills used charter schools as a piggy bank, following a long history of dodgy accounting in the “charity” sector, moving to a new location whenever their self-dealing and underperformance became known by the local educational regulators.

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The Parkers have cast themselves as selfless philanthropists, telling the California Board of Education that they have “devoted all of our lives to the education of other people’s children, committed many millions of our own dollars directly to that particular purpose, with no gain directly to us.”

But the couple have, in fact, made millions from their charter schools. Financial records show the Parkers’ schools have paid more than $800,000 annually to rent buildings the couple own. The charters have contracted out services to the Parkers’ nonprofits and companies and paid Clark Parker generous consulting fees, all with taxpayer money, a Times investigation found.

Presented with The Times’ findings, the Parkers did not respond to multiple requests for comment.

How the Parkers have stayed in business, surviving years of allegations of financial and academic wrongdoing, illustrates glaring flaws in the way California oversees its growing number of charter schools.

Many of the people responsible for regulating the couple’s schools, including school board members and state elected officials, had accepted thousands of dollars from the Parkers in campaign contributions.

Like other charter operators who have run into trouble, the Parkers were able to appeal to the state Board of Education when they faced the threat of being shut down; the panel is known for overturning local regulators’ decisions. A Times analysis of the state board’s decisions has found that, over the last five years, it has sided with charters over local school districts or county offices of education in about 70% of appeals.

California law also enables troubled charter operators to escape sanction or scrutiny by moving to school districts more willing to accept them. The Parkers have used this to their advantage, keeping one step ahead of the regulators.

“They’re like cats,” said Kawamoto, who began working at one of the couple’s charter schools in 2006. “They have so many lives.”

Charter schools are technically public schools operated by private entities.  Make the subject to the freedom of information acts that normal schools do.

That Which Can Be Destroyed By the Truth, Should Be

        —P.C. Hodgell

On the “Good News” side, we have a public education advocate turned public education advocacy lawyer Robert Skeels, who has been beating the Charter School establishment like a drum in court:

On Tuesday, March 23, 2021, I got my second big win in court against a charter school corporation. It was also a major victory over their California Charter Schools Association (“CCSA”) trade association, which tried to use the case to carve out immunity to the California Public Records Act (“CPRA”). I represented @DotKohlhaas in the action.

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My first win against a corporate charter school was a year ago as third chair in a suit to overturn a wrongful expulsion of a student of color. The Partnerships to Uplift Communities (“PUC”) charter chain (of convicted felon Ref Rodriguez fame) had violated the student’s due process rights. Violated isn’t a strong enough word for what they did. PUC unilaterally changed the charges at the appeals hearing and then branded the child as a terrorist in his permanent record. Under the tutelage of the brilliant partners at the law firm I was a part-timer at the time (I am currently transitioning to full time there), plus sage advice from @DrPrestonGreen, we built a strong case.

It was my argument that the charter corporation never proved specific intent — a crucial element to Ed. Code § 48900.7, as well as PUC’s glaring lack of notice afforded to the student, that saw the court overturn the wrongful expulsion and give the student their life back.

This latest case was a charter trying to hide all its dirty secrets by not complying with the CPRA. The scandal-ridden The Accelerated Schools (“TAS”) charter chain’s leaders absconded when the community started pushing back and started asking questions about union busting.

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I suppose I can’t blame them. The charter industry — long used to unaccountably spending tax dollars in total secrecy — fought tooth and nail the imposition of the CPRAand Brown Act added by Ed. Code § 47604.1(b)(2)(A). When the statute took effect January 2020, charter school corporations were already looking for ways to skirt the law. At the firm where I’m a junior associate, we use the CPRAfor pre-discovery work against charter corporations. Michael Kohlhaas dot org, on the other hand, has used the CPRAto expose some of the ugliest, scandalous conduct by an industry already infamous for scandal. Uncovering the vile Nick Melvoin’s sharing of Los Angeles Unified School District’s (“LAUSD”) confidential legal strategieswith their then party-opponent in a lawsuit(the CCSA) was a blockbuster revelation enabled by the CPRA.

When one looks at the corruption, self dealing, and opacity of the Charter School industry, it’s almost as if the entire process was designed to serve the dual goals of resegregating public education and allowing private operators to loot the public coffers. 

Oh wait, it was.

Nope, Nothing Dodgy Here

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Have you heard about SPACs? (AKA, “Blank check companies.”

The short version is that they are shell companies created to raise capital to take other companies public.

The SPAC issues shares, raises money, and then buys a company, taking the target public.

If this sounds dodgy, as in, “Why don’t those companies go public on their own?” you are right.

The answer is, as far as I can tell, evading regulations and increasing the opacity of the investment, since there is no SEC due diligence and the like.

Their rates of returns to investors suck, as they are typically a number less than 0, a loss, though the managers make bank, and I suppose money launderers are OK with taking the hit.

As such, it is not surprising that the SEC has opened an investigation into the recent explosion of these arcane financial instruments:

The U.S. securities regulator has opened an inquiry into Wall Street’s blank check acquisition frenzy and is seeking information on how underwriters are managing the risks involved, said four people with direct knowledge of the matter.

The U.S. Securities and Exchange Commission (SEC) in recent days sent letters to Wall Street banks seeking information on their special purpose acquisition company, or SPAC, dealings, the four people said.

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The SEC, which declined to comment for this story, has previously said it was monitoring the SPAC boom, but the letters are the strongest sign yet that it is stepping up scrutiny of such deals and the Wall Street banks that underwrite them.

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Wall Street’s biggest gold rush of recent years, SPACs have surged globally to a record $170 billion this year, outstripping last year’s total of $157 billion, Refinitiv data showed.

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Investors have sued eight companies that combined with SPACs in the first quarter of 2021, according to data compiled by Stanford University. Some of the lawsuits allege the SPACs and their sponsors, who reap huge pay-days once a SPAC combines with its target, hid weaknesses ahead of the transactions.

Hiding weakness ahead of the transactions is the PURPOSE of SPACS.

BTW, if you are wondering just how dodgy this whole mess is, look no further than WeWork, whose IPO infamously collapsed on insider looting and misleading accounting.  They now intend to go public via merging with a SPAC: 

Even though WeWork has long lost billions of dollars, it always found ways to attract huge investments from deep-pocketed investors. Now, less than two years after it was rescued from a collapse, the co-working company has found yet another backer willing to overlook its losses.

The company announced on Friday that it had agreed to merge with a blank-check firm in a deal that would give it a listing on the stock market it was denied when it was forced to shelve an initial public offering as investors questioned its financial strength and dubious governance practices.

Instead of a traditional I.P.O., WeWork is merging with BowX Acquisition, a company listed on the stock exchange for the sole purpose of buying a business, in a type of deal that has become hugely popular in recent months. Investors, bankers, and even celebrities and athletes have rushed to float such special purpose acquisition companies, or SPACs, because they offer their creators a chance to mint huge profits relatively quickly. And merging with these vehicles is attractive to companies like WeWork because they provide an express lane onto the stock market without the obstacles that scuttled WeWork’s public offering in September 2019.

“Obstacles,” what a quaint way to describe flagrant fraud and misrepresentation.

This is yet another way for Wall Street to steal from you,

バカにつける薬はない*

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In response to raucus partying and a refusal to engage in proper social distancing, Miami Beach has announced a curfew.

Who could have possibly known that a bunch of drunk college students on spring break would take of their masks and swap bodily fluids?

The answer to this question is, “Anyone with 2 brain cells to rub together.” 

One day after the spring break oasis of South Beach descended into chaos, with the police struggling to control overwhelming crowds and making scores of arrests, officials in Miami Beach decided on Sunday to extend an emergency curfew for up to three weeks.

The officials there went so far as to approve closing the famed Ocean Drive to all vehicular and pedestrian traffic from 8 p.m. to 6 a.m. — the hours of the curfew — for four nights a week through April 12. Residents, hotel guests and employees of local businesses are exempt from the closure.

The strip, frequented by celebrities and tourists alike, was the scene of a much-criticized skirmish on Saturday night between at-times unruly spring breakers who ignored social distancing and masking guidelines, and police officers who used pepper balls to disperse a large crowd just hours after the curfew had been introduced.

The restrictions were a stunning concession to the city’s inability to control unwieldy crowds of revelers that the city and the state of Florida aggressively courted amid the continuing coronavirus pandemic.

Florida, man.

*Pronounced in Japanese, “baka ni tsukeru kusuri wanai”, which means, “There is no medicine for stupidity.” Apologies for any inaccuracies in the text, I do not know Japanese.

Looks Like Another Take on the B-70 Valkyrie

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Not particularly informative, but the patent application has a bit more information


The B-70 with the wingtips lowered to contain the sonic boom


106 is the Engine, 108 is the nacelle, and 114 is the underside of the wing


Some more detail.

I just came across this brief bit about New Century Transportation & Aeronautics Research’s (NCTAR) concept for a low sonic boom SST, and it seems rather similar to the compression lift concepts developed for the B-70 supersonic bomber in the late 1950s.

It had wingtips that folded down (see picture, those wing tips are each as big as a Mirage III wing) that contained the shock waves generated off of the inlet and fuselage which increased lift.

This contained the pressure under the aircraft and increased lift and so improved its lift to drag ratio. (It also moved the center of lift forward, reducing trim drag at supersonic speeds, but that’s for another post)

It appears taht NCTAR is looking to do the same thing, only with an additional goal of using shock waves and bypass air from the engine to reflect the sonic boom (shock wave) back up to the wing, and hence attenuate the, “Boom.”

Basically shock-waves off the engines, which are located in front of the wing keep the boom, and its pressure  contained under the wing, increasing efficiency and reducing boom.

A part of this is that the bypass air is not, as is normally the case, ejected radially, but rather from the bottom of the nacelle, further reinforcing the “wall” that contains the shockwave.

It’s a nifty concept, though I wander what the trade-offs might be:

With the resurgent interest in supersonic air travel, aircraft designers are looking at different ways to work around the problem of sonic booms. Flying supersonic only over water, or at a low enough Mach number to prevent shockwaves reaching the ground or shaping the airframe to minimize boom strength are all approaches being taken with aircraft now in development.

U.S. startup New Century Transportation & Aeronautics Research (NCTAR) has patented (U.S. patent 10,618,638) a different approach: use the engines and their exhaust plumes to reflect and attenuate the shockwaves from the wing and so reduce the sonic boom reaching the ground.

In NCTAR’s concept, the engines are located ahead of a wing that is curved so that, in cruise, the downward-propagating compression waves from the leading edges are focused onto the exhaust plumes. The shockwaves reflect off the shear layer between the freestream airflow and supersonic exhaust plume and back up onto the underside of the wing. This increases pressure under the arched wing and generates additional compression lift to improve supersonic lift-to-drag ratio.

Like I said, kind of nifty, in a B-70 bomber kind of way.

That being said, I really don’t see this for commercial airliners, because even with improvements, the aircraft will be less fuel efficient than their subsonic counterparts, but given the current trajectory of our society, I could see something akin to a supersonic version of a Gulfstream private jet come from this.

First Court Ordered Antitrust Breakup in Decades

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And it was the result of private litigation, not any action of the agencies that are actually supposed to protect us from monopolists.

The case involved “Door Skins” which are the inside and outside surfaces of residential doors, which over the years, through buyouts and mergers, has become a completely uncompetitive market.

After buying its biggest competitor, Jeld Wen, which also makes complete doors, cut off door manufactures from its supplies of door skins, and court has ruled that it must sell off one of its factories:

Federal antitrust enforcers have long succeeded at unwinding consummated mergers. By contrast, private antitrust plaintiffs have not successfully forced companies to break up a completed acquisition. Until now.

On February 18, 2021, the U.S. Court of Appeals for the Fourth Circuit issued a historic decision in Steves and Sons, Inc. v. JELD-WEN, Inc., affirming a district court’s remedy of divestiture after a jury found a violation of Section 7 of the Clayton Act in the door manufacturing industry. To the Fourth Circuit’s knowledge (and the consensus of the antitrust bar), the Steves and Sons case is the first time a private plaintiff has secured a federal court order compelling a defendant to divest assets acquired through a past merger.

Absent further appellate relief, the Fourth Circuit’s opinion will require that the defendant unwind a 2012 acquisition of a doorskin manufacturing plant through an auction process supervised by a court-appointed special master. The decision has put parties to corporate merger and acquisition activity firmly on notice that private antitrust litigation may lead to unscrambling the eggs of a merger years after consummation, even when federal and state antitrust enforcers do not move to block the transaction as anticompetitive.

 This is likely going to end up at the Supreme Court, given the literally unprecedented nature of the ruling.

In 2012, JELD-WEN, Inc., one of the world’s largest door and window manufacturers, acquired Craftmaster International (CMI), a competing manufacturer. Before the combination, JELD-WEN and CMI each manufactured both interior molded doors and doorskins, which are veneers that are glued to the front and back of a frame to make a molded door. CMI produced doorskins at its plants in Towanda, Pennsylvania. Before the merger was consummated, it was investigated, but not challenged, by the Antitrust Division of the Department of Justice (DOJ). After the transaction closed, only two doorskin manufacturers remained in the U.S. market (JELD-WEN and Masonite). A JELD-WEN investor later noted that this duopoly “over time will improve our pricing power.”

Based on a long-term supply contract, JELD-WEN sold doorskins to Steves and Sons (Steves), an independent door manufacturer owned and operated by the same family for 150 years. In 2014, Masonite announced it would stop selling doorskins to independent door manufacturers like Steves. Shortly thereafter, JELD-WEN exercised its right to terminate the supply contract with Steves, effective in September 2021. As JELD-WEN’s prices increased and quality issues arose, Steves asked the DOJ to reexamine JELD-WEN’s merger with CMI. In 2016, the DOJ closed its investigation. Unable to secure any enforcement action, Steves filed a complaint in the U.S. District Court for the Eastern District of Virginia, alleging, among other things, that the JELD-WEN/CMI acquisition violated Section 7 of the Clayton Act. Steves asked for equitable relief to unravel the CMI acquisition and to divest JELD-WEN’s doorskin plant in Towanda.

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On appeal, the Fourth Circuit vacated much of the antitrust damages award, but rejected JELD-WEN’s numerous arguments related to antitrust injury, “antitrust impact,” evidentiary rulings, and the propriety of divestiture as a remedy, and held that the district court did not abuse its discretion by ordering divestiture of the Towanda plant. The appeals court noted that private lawsuits under the Clayton Act “seeking divestiture are rare and, to our knowledge, no court had ever ordered divestiture in a private suit before this case,” but that divestitures in private Clayton Act actions are based on well-established U.S. Supreme Court precedent. Ultimately, the court concluded that the Steves case “is a poster child for divestiture” given that the 2012 CMI merger had created a duopoly and the remaining suppliers “used their market power to threaten [the] survival” of independent door manufacturers like Steves.

Lots of footnotes at the link, but the this is, to quote President Biden, “A big f%$#ing deal,” at least as long as the ruling stands.

It has the potential for tying up mergers and acquisitions for months through private litigation by competitors, particularly if some well heeled groups arrange for pro bono, or at least subsidized legal action.

This is why I expect the Supreme Court to rule on this, and I’m not optimistic about the outcome there.

H/t Matt Stoller’s Big.

Yes, Lying about Self Driving Cars Is a Bad Thing, Elon

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The NTSB has called out Elon Musk and Tesla for serial lying about their self driving capabilityes, saying that this puts the driving public at risk.

This is not a surprise. 

Tesla’s culture comes from the height of the Dot Com bubble, with a, “We’ll fix it in Beta,” mentality, which is negligent at best, and potentially criminal when dealing with 4000 pound high speed death machines like automobiles:

The National Transportation Safety Board has filed comments blasting the National Highway Traffic Safety Administration for its permissive regulation of driver-assistance systems. The letter was dated February 1 but was only spotted by CNBC’s Lora Kolodny on Friday. The letter repeatedly calls out Tesla’s Autopilot for its lax safety practices and calls on NHTSA to establish minimum standards for the industry.

The dispute between federal agencies is the result of Congress dividing responsibility for transportation safety among multiple agencies. NHTSA is the main regulator for highway safety: every car and light truck must comply with rules established by NHTSA. NTSB is a separate agency that just does safety investigations. When there’s a high-profile highway crash, NTSB investigators travel to the scene to figure out what happened and how to prevent it from happening again. NTSB also does plane crashes and train wrecks, allowing it to apply lessons from one mode of transportation to others.

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Under then-President Donald Trump, NHTSA largely let automakers do what they liked when it came to advanced driver-assistance systems (ADAS) and prototype driverless vehicles. NHTSA has generally waited until safety problems cropped up with ADAS systems and dealt with them after the fact. NTSB argues NHTSA should be more proactive, and it put Tesla and Autopilot at the center of its argument.

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The NTSB also calls for NHTSA to require driver-monitoring systems to ensure drivers are paying attention to the road while driver-assistance systems are active.

“Because driver attention is an integral component of lower-level automation systems, a driver-monitoring system must be able to assess whether and to what degree the driver is performing the role of automation supervisor,” NTSB argued. “No minimum performance standards exist for the appropriate timing of alerts, the type of alert, or the use of redundant monitoring sensors to ensure driver engagement.”

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Finally, NTSB argues that NHTSA should require automakers to limit use of driver-assistance systems to the types of roads they’re designed for. For example, some ADAS systems are designed to only work on limited-access freeways. Yet few cars actually enforce such limitations. Many systems can be activated on roads the systems weren’t designed for.

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The NTSB mentions Tesla 16 times in the report—far more than any other automaker. This is partly because Tesla vehicles have figured so prominently in the NTSB’s work. NTSB says it has investigated six crashes involving driver-assistance or self-driving systems between May 2016 and March 2019. Four of those were fatal. One of these four was the 2018 death of Elaine Herzberg after she was hit by an Uber self-driving prototype. The other three were Tesla owners who relied too much on Autopilot, and it cost them their lives.

………

In its report on the crash, NTSB noted that, at the time of the crash, Autopilot software was only designed for use on controlled-access freeways—not rural highways where cars and trucks can enter the highway directly from driveways and side streets. NTSB pointed out that its report on the Brown crash “recommended that NHTSA develop a method to verify” that companies selling driver-assistance systems like Autopilot have safeguards to prevent customers from using the systems on roads they aren’t designed for. Such a system might have prevented Brown from activating Autopilot on the day of his death.

………

“The NTSB remains concerned about NHTSA’s continued failure to recognize the importance of ensuring that acceptable safeguards are in place so the vehicles do not operate outside of their operational design domains and beyond the capabilities of their system designs,” the agency wrote. “Because NHTSA has put in place no requirements, manufacturers can operate and test vehicles virtually anywhere, even if the location exceeds the AV control system’s limitations.”

NTSB then called out Tesla again, specifically criticizing the decision to release its “full self-driving beta” software to a few-dozen customers.

“Tesla recently released a beta version of its Level 2 Autopilot system, described as having full self-driving capability,” NTSB wrote. “By releasing the system, Tesla is testing on public roads a highly automated AV technology but with limited oversight and reporting requirements.”

This is negligent behavior, both on the part of Tesla and on the part of the NHTSA, and it has already gotten people killed.

What Should Be Done Now, and Won’t Be Done

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Now that the Senate Parliamentarian has ruled that a minimum wage increase cannot be passed through the reconciliation process, the course of action is clear, or at least it should be.

The President of the Senate, Vice President Kamala Harris, can overrule the unelected Senate official, and it would require a vote of 60 Senators to overrule her decision.

Unfortunately, given that Biden has already said that he thought that a minimum wage increase was dead, and Biden’s chief of staff has said that Harris would not rule against her, it appears that they are playing to lose.

Not a surprise.  Learned helplessness, is an innate trait of the Democratic Party establishment (There is no Democratic Party establishment), and Joe Biden has enormous affection for an institution frequently called, “A Petri Dish for Psychopaths.”

If they were not cowards or delusional, here is what would happen:

On Thursday, a key Senate official advised Democratic lawmakers that the chamber’s rules do not allow them to include a minimum wage increase in President Joe Biden’s first COVID-19 relief legislation. The ruling from the parliamentarian means that Vice President Kamala Harris could decide the fate of one of the Democratic Party’s most significant campaign promises — but it remains unclear what she will end up doing.

As the presiding officer of the Senate, Harris — who has long touted her support for a $15 minimum wage — can now use the power her predecessors have used to ignore the advisory opinion and fulfill Biden’s campaign promise to boost the wage. A confidential memo obtained by The Daily Poster now circulating on Capitol Hill spells out exactly how that could be accomplished.

However, White House chief of staff Ron Klain this week declared that Harris will refuse to use that power — a decision that would effectively put the Biden-Harris administration in the position of potentially killing the prospect of minimum wage legislation for the foreseeable future. Immediately after the parliamentarian’s ruling, the White House issued a statement reiterating Klain’s comment, declaring that “Biden respects the parliamentarian’s decision.”

Some congressional Democrats have already been arguing that the Biden administration’s refusal to overrule the parliamentarian would be immoral and a political disaster for their party.

………

As such, Democrats are working to pass the COVID bill using the convoluted budget reconciliation process. The process will allow for a simple majority vote on the final legislation, but it also allows Senate parliamentarian Elizabeth MacDonough to recommend tossing certain provisions if she decides they violate the so-called Byrd Rule, which is designed to prohibit extraneous matters outside of federal spending issues to be added to budget legislation.

BTW, while not common, overruling the parliamentarian is by means rare, particularly given that the Senate can pass one reconciliation bill in a year:

Vice presidents have ignored the parliamentarian in the past. According to Slate, “Vice President Hubert Humphrey routinely ignored his parliamentarian’s advice.”

Roll Call reported last month: “Precedents for ignoring parliamentary advice include 1967, 1969, and 1975 efforts to change the Senate’s threshold to end debate from a two-thirds vote to three-fifths.”

 ………

In a new memo circulating to lawmakers and obtained by The Daily Poster, Harris’s power as the presiding Chair of the Senate is spelled out, citing a precedent set during the Clinton administration.

“It would take 60 votes to overturn the ruling of the Chair on a Byrd Rule point of order, regardless of what the Parliamentarian advises,” states the memo. “Based on a search of the Congressional Record, it appears that only twice has the chair’s ruling on a Byrd Rule point of order been appealed. Both instances occurred on August 6, 1993, during consideration of the Omnibus Budget Reconciliation Act of 1993. Neither appeal garnered the 60 affirmative votes necessary to overturn the Chair’s ruling.”

Like I said, the Dems are playing to lose, and come 2022, lose they will.

I Hope That This Is Illegal

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Not that anyone will be prosecuted for it, because it is Alabama, but Amazon offering $2,000 “Resignation Bonuses” so that it can replace potentially pro-union workers with scabs ahead of the vote is skeevy as hell.

Bribes in union elections are expressly forbidden under the NLRA, and I am pretty sure that this is a bribe not to vote, particularly since they are giving the impression that they will hiring folks back after the union election: (Yeah, sure)

As the historic union election at Amazon in Alabama heats up, Amazon is pulling all the tricks to stop the union.

In violation of Amazon’s social distancing policy, Amazon has forced workers to attend anti-union meetings and sent workers constant text messages daily, hinting that a union could possibly lead to the warehouse closing. Amazon has even gotten the local authorities to shorten the time of stoplights outside of the plant so that union organizers can’t hand out pro-union literature to workers passing in their cars.

Now, Amazon is doing something that labor observers have never seen before in a union election; they are offering $2,000 “resignation bonuses” to quit.

Last night, workers throughout the plant received emails offering them bonuses if they simply quit their jobs. The emails offer workers, who worked for 2 peak seasons, at least $2,000 to quit. If workers have been there at least 3 peak seasons, they are offering them $3,000.

Some Amazon workers, who dislike their job at the warehouse, may find the bonuses a tempting bridge to quit their job and seek something better. Workers are even being told that if they quit now that they could regain their jobs later after the union election.

However, if workers quit now, they won’t be eligible to vote in the ongoing union election. In the meantime, many labor observers expect that Amazon will seek to hire replacements that will vote solidly anti-union.

“That should be illegal, how can you pay someone to resign,” says 48-year-old Black Amazon worker Jennifer Bates “They are going all the way, they are pulling out all the stops”.

Under federal labor law, the bonuses could be considered a bribe and could lead to the union election being thrown out. Employers are strictly forbidden from improving the material conditions of workers in the lead up to elections and the “resignation bonuses” could be grounds for the union to petition the National Labor Relations Board (NLRB) to order a new union election if RWDSU loses this round.

Keeping this in litigation for the next decade is a part of Amazon’s strategy.

You won’t stop this without frog marching senior executives out of corporate offices in handcuffs.

Of Course They Are

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Despite the Pandemic, despite the new variants spreading across the nation, despite the fact that sick workers coming into work further spread the disease, Republicans are still trying to kill paid sick leave, because if your employer cannot exploit you, they want you dead:

Pennsylvania state Rep. Seth Grove introduced legislation last month to block cities and municipalities from imposing paid sick leave requirements on businesses, even as COVID-19 cases are raging throughout his state and the country. Last week, local news media reported that the Republican lawmaker was now quarantining after exhibiting coronavirus symptoms and awaiting test results.

Grove’s preemption bill is the latest salvo in an ongoing war over stripping worker protections that continues to be fought in statehouses and Congress, even as the coronavirus pandemic spirals out of control. With Democrats in Washington preparing to drop paid sick leave from President Joe Biden’s first COVID relief bill, potentially leaving 87 million workers without protection, the responsibility for providing the benefit to workers now falls squarely on states — the very place the war has been waged for the last decade.

Paid sick leave statutes require businesses to provide employees with medical leave for ailments and injuries. Grove has been pushing for legislation to bar localities from imposing such requirements since 2013. His latest bill, reintroducing the measure, would be retroactive to 2015 — the year Democratic strongholds Philadelphia and Pittsburgh passed laws mandating paid sick leave.

 F%$# them, and the horse they rode in on.

They Can Find it In Their Couch

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Apple was just assessed a €13 billion ($14.4 B) fine tax delinquency for using Ireland as a tax haven. Essentially the European Commission ruled that Apple received tax breaks from Ireland that amounted to an illegal subsidy to the computer and phone maker:

Apple has warned that future investment by multinationals in Europe could be hit after it was ordered to pay a record-breaking €13bn (£11bn) in back taxes to Ireland.

The world’s largest company was presented with the huge bill after the European commission ruled that a sweetheart tax deal between Apple and the Irish tax authorities amounted to illegal state aid.

The commission said the deal allowed Apple to pay a maximum tax rate of just 1%. In 2014, the tech firm paid tax at just 0.005%. The usual rate of corporation tax in Ireland is 12.5%.

“Member states cannot give tax benefits to selected companies – this is illegal under EU state aid rules,” said the European competition commissioner, Margrethe Vestager, whose investigation of Apple’s complex tax dealings has taken three years.

Here is where it gets weird: Ireland, which stands to benefit to the tune of €2800 for every man, woman, and child in the country is fighting this, as is the US Treasury department, which one would expect to fight this sort of illegal tax scheme:

Vestager’s ruling prompted an angry response from Apple and from Ireland and is likely to spark a political row between the US and the EU. The US Treasury said the ruling threatened to damage “the important spirit of economic partnership between the US and the EU”.

………

The commission said Ireland’s tax arrangements with Apple between 1991 and 2015 had allowed the US company to attribute sales to a “head office” that only existed on paper and could not have generated such profits.

………

The Irish government, however, wants the ruling reversed because it wants to preserve its status as a low-tax base for overseas companies.

Ireland’s finance minister, Michael Noonan, said Dublin would appeal against the ruling. He said: “The decision leaves me with no choice but to seek cabinet approval to appeal. This is necessary to defend the integrity of our tax system, to provide tax certainty to business and to challenge the encroachment of EU state aid rules into the sovereign member state competence of taxation.”

This was money laundering, pure and simple.

And this won’t really hurt Apple:

Apple, which changed its tax arrangements with Ireland in 2015, should easily be able to pay the huge tax bill because it has a cash mountain of more than $230bn (£176bn) of cash and securities, mostly held outside the US. The tech group keeps the money outside the US because it would be forced to pay US tax charges if it repatriated the money.

It’s pocket change for them, but hopefully this will make further Irish tax shenanigans less common.

I would hope that we would see some more movement in this direction, but the Obama administration, in the person of Jacob Lew, seems determined to prove that only little people pay taxes.

I Am Not Sure What This Means

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ITT Educational Services, you’ve probably seen their ads for ITT Technical Institute, has been prohibited from enrolling new students using any federal aid

It sounds like a big deal, but the educational chain has been circling the drain for a while, so it’s not like the Depoartnebt if Education went after a major going concern.

It has been showing signs of financial distress for some time, and its accreditation has been problematic as well:

The federal Department of Education imposed strict new rules on Thursday on one of the nation’s largest for-profit education companies, ITT Educational Services, barring it from enrolling new students who use federal financial aid and ordering it to pay $153 million to the department within 30 days to cover student refunds if its schools close down.

John B. King Jr., the secretary of education, said the department took action to protect both ITT’s students and the taxpayers who are on the hook for losses when students default on their federal aid. “Looking at all of the risk factors, it’s clear that we need increased financial protection and that it simply would not be responsible or in the best interest of students to allow ITT to continue enrolling new students who rely on federal student aid funds,” Mr. King said in a statement.

 The action threatens the viability of the beleaguered company, which like most for-profit education entities relies heavily on government financial aid programs for students to fund its operations. As of June 30, according to a regulatory filing, ITT had only $78 million in cash on its balance sheet.

Dead School Walking.

ITT operates 137 campuses in 39 states, providing career-oriented programs to 43,000 students at ITT Technical Institute and Daniel Webster College locations. ITT was once a highflying stock, trading above $75 a share in 2012. On Thursday, its shares closed at $1.40.

Ouch.

The company has been under increased scrutiny by the Education Department since 2014 and has been accused by both federal and state regulators of misleading students about the quality of its programs and their employment potential upon graduation. The Consumer Financial Protection Bureau filed a lawsuit against ITT two years ago, accusing the college chain of predatory student lending.

 In addition to the enrollment restrictions imposed by the Education Department, ITT is also prohibited from awarding raises to employees, paying bonuses to its executives or paying special dividends without department approval. In recent years, ITT has not paid bonuses to its executives. Still, Kevin Modany, its chief executive, received total compensation of $1.4 million last year, the company’s proxy statement shows.

 The Education Department also required ITT to develop “teach-out” plans for current students, allowing them to finish their programs at other colleges if ITT shuts down.

 ITT, based in Carmel, Ind., must also inform its students that its accreditor, the Accrediting Council for Independent Colleges and Schools, has determined that the institution is not in compliance with its criteria. That determination was made this month. Earlier this year, ITT said it believed its schools were in compliance, but it also acknowledged that if the schools lost the accreditation, they would no longer have access to government loan programs.

 Those programs are the lifeblood of ITT and other for-profit education companies. Federal aid accounted for almost 70 percent of ITT’s $850 million in revenues last year, the Education Department said.

It would be nice if it happened when predatory for profit schools were not already in a death spiral.

A Good Start

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The Department of Justice has announced that it will be ending its use of private prisons:

The Justice Department plans to end its use of private prisons after officials concluded the facilities are both less safe and less effective at providing correctional services than those run by the government.

 Deputy Attorney General Sally Yates announced the decision on Thursday in a memo that instructs officials to either decline to renew the contracts for private prison operators when they expire or “substantially reduce” the contracts’ scope. The goal, Yates wrote, is “reducing — and ultimately ending — our use of privately operated prisons.”

 “They simply do not provide the same level of correctional services, programs, and resources; they do not save substantially on costs; and as noted in a recent report by the Department’s Office of Inspector General, they do not maintain the same level of safety and security,” Yates wrote.

Note that this only applies to federal prisons run by the DoJ, not state and local prisons or immigrant detention facilities maintained by the Department of Homeland Security.

As to whether this policy will move quickly enough, my guess is that we’ll have to wait for the next President.
Memo after the break.

It’s a Self Licking Ice Cream Cone

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The DEA has decided to keep classifying Marijuana as a Schedule 1 Drug, which means that they claim that it has no therapeutic value.

It also means that a large portion of the DEA’s budget, the part that is driven by its anti-pot activities, remains safe.

How convenient:

For the fourth consecutive time, the Drug Enforcement Administration has denied a petition to lessen federal restrictions on the use of marijuana.

While recreational marijuana use is legal in four states and D.C., and medical applications of the drug have been approved in many more, under federal law, it remains a Schedule 1 controlled substance, which means it’s considered to have “no currently accepted medical use” and a “high potential for abuse.”

The gap between permissive state laws and a restrictive federal policy has become increasingly untenable in the minds of many doctors, patients, researchers, business owners and legislators.

For instance, last fall, a Brookings Institution report slammed the federal government for “stifling medical research” in the area of marijuana policy. As a Schedule 1 drug, it’s much harder for researchers to work with marijuana than with many other controlled substances. The American Academy of Pediatrics has called on the government to move marijuana into Schedule 2 to facilitate more research into medical uses.

Perhaps this determination should be made by an organization whose budget is not contingent on it remaining illegal.

The Term Here is Eating Our Seed Corn

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It appears that Colony Collapse Disorder, which has been decimating bees across the nation, is not just an issue with a specific type of insecticide, but a more general consequence of chemical intensive farming:

As we’ve written before, the mysterious mass die-off of honey bees that pollinate $30 billion worth of crops in the US has so decimated America’s apis mellifera population that one bad winter could leave fields fallow. Now, a new study has pinpointed some of the probable causes of bee deaths and the rather scary results show that averting beemageddon will be much more difficult than previously thought.

Scientists had struggled to find the trigger for so-called Colony Collapse Disorder (CCD) that has wiped out an estimated 10 million beehives, worth $2 billion, over the past six years. Suspects have included pesticides, disease-bearing parasites and poor nutrition. But in a first-of-its-kind study published today in the journal PLOS ONE, scientists at the University of Maryland and the US Department of Agriculture have identified a witch’s brew of pesticides and fungicides contaminating pollen that bees collect to feed their hives. The findings break new ground on why large numbers of bees are dying though they do not identify the specific cause of CCD, where an entire beehive dies at once.

 When researchers collected pollen from hives on the east coast pollinating cranberry, watermelon and other crops and fed it to healthy bees, those bees showed a significant decline in their ability to resist infection by a parasite called Nosema ceranae. The parasite has been implicated in Colony Collapse Disorder though scientists took pains to point out that their findings do not directly link the pesticides to CCD. The pollen was contaminated on average with nine different pesticides and fungicides though scientists discovered 21 agricultural chemicals in one sample. Scientists identified eight ag chemicals associated with increased risk of infection by the parasite.

Most disturbing, bees that ate pollen contaminated with fungicides were three times as likely to be infected by the parasite. Widely used, fungicides had been thought to be harmless for bees as they’re designed to kill fungus, not insects, on crops like apples.

“There’s growing evidence that fungicides may be affecting the bees on their own and I think what it highlights is a need to reassess how we label these agricultural chemicals,” Dennis vanEngelsdorp, the study’s lead author, told Quartz.

This is going to get ugly, and I expect to see a collapse of some bee pollinated crops, most likely almonds, before we actually start applying some common sense regulation to the industry.