by Lisa Gonzalez | December 9, 2013
In 1999, Laurens County Schools and Dublin City Schools needed to move past dial-up Internet access. The City of 16,000 built a fiber network to serve students in the community. It now also serves local government and businesses in the Dublin area.
Once the network was in place, AT&T and Charter Communications began building in Dublin. AT&T begin installing DSL in areas of town within a year of the fiber network deployment.
During the first few years, the City connected its network to the Internet with a 45 Mbps AT&T connection but needs quickly outgrew capacity. The City looked for alternate ways to connect to the Internet. City staff discovered that a major dark fiber backbone ran through Dublin from Atlanta to Jacksonville, Florida. The company that owned the line (the company has since been purchsed by Level 3) allowed Dublin to splice into the dark fiber to connect to Atlanta. The opportunity allowed Dublin to buy bandwidth at Atlanta prices rather than being stuck with massive markups by the few firms that can provide access. The City has since spliced another line to the backbone to achieve redundancy. The City has also expanded to offer Wi-Fi from over 40 access points in the downtown area.
Eight city school facilities and six county school facilities use the network today for connections between buildings. Dublin City Schools have 10 Gbps speeds between facilities; Laurens County Schools have equipment in place for 1 Gbps connections between schools. Both school districts use the Georgia Technology Authority for Internet access.
Twelve Laurens County and Dublin City facilities connect to the network. The City also uses the network for voice between city facilities. Eliminating a large number of landlines saves significant public dollars.
Forty-five business customers, including YKK fastening and architectural products and Farmer’s Home Furniture, connect to the network. Prior to the deployment, incumbents could not offer the high-speed connections businesses needed. Since the deployment, cable and DSL have come to Dublin, but the City’s commercial customers stick with their City service. Local businesses appreciate working with a local provider because they know the people who will address the problem.
You can read more about Dublin’s network on MuniNetworks.org, where we provide ongoing coverage of publicly owned networks and telecommunications issues. You can also subscribe to a once-per-week email with stories about community broadband networks.
Source URL: http://www.ilsr.org/dublin-municipal-network-serves/
by David Morris | December 6, 2013
In November, in what history may judge the ultimate triumph of ideology over evidence, the U.S. Department of Justice dropped its lawsuit against the merger of American Airlines and United Airways.
It is altogether fitting that the green light for allowing just 4 airlines to control 85 percent of the domestic market was given by a Democratic administration. For airline deregulation, the precursor for all things deregulatory, was a liberal cause. In 1978 Democrats controlled the White House and both chambers of Congress. Teddy Kennedy, Chair of the Senate Judicial Committee was deregulation’s principal architect. Ralph Nader was one of its most passionate advocates.
The argument they made would not be out of place at a Tea Party meeting today. Industry had captured the Civil Aeronautics Board (CAB), the airlines regulatory agency. As a result fares were much higher than necessary. (more…)
Source URL: http://www.ilsr.org/airline-deregulation-triumph-ideology-evidence/
by admin | December 4, 2013
2013 was a big year for ILSR. We successfully countered attempts by big corporations like Walmart, Xcel Energy, and Time Warner Cable to expand their market power and override local decision-making authority. And we worked with communities and policymakers across the country to advance new models and policies that build strong, sustainable, locally owned economies.
ILSR’s 2013 Annual Report highlights how our analysis and strategic partnerships are shifting the public debate about our economic future and securing policy change at the federal, state, and local level.
Download our report to read more about our progress in 2013, which included:
Download the Institute for Local Self-Reliance 2013 Annual Report.
We need your support today. Help us continue the fight against the concentration of corporate power, the loss of control of our local economies and government, and the growing threats to our environment.
Join us by making a one-time or recurring donation to help communities take control of their economies and their futures by:
Source URL: http://www.ilsr.org/annual-report-2013/
by David Milavetz | December 3, 2013
Thomasville belongs to Community Network Services (CNS), serving six communities in southwest Georgia. Thanks in part to revenue generated by the network, this community of 18,000 has eliminated its local fire tax. In 2013, Thomasville is estimated to earn a net income of up to $8.5 million from its utility services while keeping prices affordable in Georgia.
Customers of CNS in Thomasville pay $3.32 per month below the state average per 1,000-kilowatt hours of electricity. Bundled services save customers up to $420 per year. CNS is also a shining example of collaboration among multiple cities in different counties. Thomasville could have built a network on its own, but recognized a greater benefit in combining forces with nearby municipalities, despite the need for extra coordination. The added scale and cost sharing afforded by this model likely played a big role in the benefits Thomasville has reaped from CNS.
You can read more about Thomasville’s tax benefit on MuniNetworks.org, where we provide ongoing coverage of publicly owned networks and telecommunications issues. You can also subscribe to a once-per-week email with stories about community broadband networks.
Source URL: http://www.ilsr.org/georgia-town-eliminates-local-ta/
by David Morris | November 26, 2013
Schools have a lot to learn from business about how to improve performance Bill Gates declared in an Op Ed in the Wall Street Journal in 2011. He pointed to his own company as a worthy model for public schools.
“At Microsoft, we believed in giving our employees the best chance to succeed, and then we insisted on success. We measured excellence, rewarded those who achieved it and were candid with those who did not.”
Adopting the Microsoft model means public schools grading teachers, rewarding the best and being “candid”, that is, firing those who are deemed ineffective. ”If you do that,” Gates promised Oprah Winfrey, “then we go from being basically at the bottom of the rich countries to being back at the top.”
The Microsoft model, called “stacked ranking” forced every work unit to declare a certain percentage of employees as top performers, then good performers, then average, then below average, then poor.
Using hundred of millions of dollars in philanthropic largesse Bill Gates persuaded state and federal policymakers that what was good for Microsoft would be good for the public schools system (to be sure, he was pushing against an open door). To be eligible for large grants from President Obama’s Race to the Top program, for example, states had to adopt Gates’ Darwinian approach to improving public education. Today more than 36 states have altered their teacher evaluations systems with the aim of weeding out the worst and rewarding the best.
Some states grade on a curve. Others do not. But all embrace the principle that teachers continuing employment will depend on improvement in student test scores and teachers who are graded “ineffective” two or three years in a row face termination.
Needless to say, the whole process of what has come to be called “high stakes testing” of both students and teachers has proven devastatingly dispiriting. According to the 2012 MetLife Survey of the American Teacher, over half of public school teachers say they experience great stress several days a week and are so demoralized that their level of satisfaction has plummeted from 62 percent to 39 percent since 2008.
And now, just as public school systems have widely adopted the Microsoft model in order to win the Race to the Top, it turns out that Microsoft now realizes that its model has led that once highly competitive company in a Race to the Bottom.
In a widely circulated 2012 article in Vanity Fair two-time George Polk Award winner Kurt Eichenwald concluded that stacked ranking “effectively crippled Microsoft’s ability to innovate. “ He writes, “Every current and former Microsoft employee I interviewed—every one—cited stack ranking as the most destructive process inside of Microsoft, something that drove out untold numbers of employees. It leads to employees focusing on competing with each other rather than competing with other companies.”
This month Microsoft abandoned the hated system.
On November 12 all Microsoft employees received a memo from Lisa Brummel, Executive Vice President for Human Resources announcing the company will be adopting “a fundamentally new approach to performance and development designed to promote new levels of teamwork and agility for breakthrough business impact.”
Ms. Brummel listed four key elements in the company’s new policy.
•More emphasis on teamwork and collaboration.
•More emphasis on employee growth and development.
•No more use of a Bell curve for evaluating employees.
•No more ratings of employees.
Sue Altman at EduShyster vividly sums up the frustration of a nation of educators at this new development. “So let me get this straight. The big business method of evaluation that now rules our schools is no longer the big business method of evaluation? And collaboration and teamwork, which have been abandoned by our schools in favor of the big business method of evaluation, is in?”
Big business can turn on a dime when the CEO orders it to do so. But changing policies embraced and internalized by dozens of states and thousands of public school districts will take far, far longer. Which means the legacy of Bill Gates will continue to handicap millions of students and hundreds of thousands of teachers even as the company Gates founded along with many other businesses, have thrown his pernicious performance model in the dustbin of history.
Source URL: http://www.ilsr.org/good-microsoft-turns-bad-public-schools-and-microsoft/
by Lisa Gonzalez | November 25, 2013
ILSR’s Christopher Mitchell recently published an opinion piece in the Baltimore Sun. Comcast has abused its standing as the dominant provider for years and the community is examining options. Mitchell’s op/ed addressed the issue foremost in the mind of Mayor Stephanie Rawling-Blake: jobs and connectivity.
In the past, City leaders have considered investing in a network but never moved beyond the idea stage. The City hired Magellan Advisors this summer to provide options, identify anchor tenants, and review risk assessment. There are considerable fiber resources in place around Baltimore and Magellan Advisors will analyze possible uses.
Mitchell provided some context by referring to other communities that have invested in municipal networks. He also reminded readers that Comcast and big cable take extreme measures to mislead the public to secure their dominance.
Mitchell put the situation in context by focusing on the real purpose of municipal networks:
Meanwhile, the overwhelming majority of community owned networks are doing exactly what they intended — breaking even financially while providing a valuable public service. Big cable companies argue that these networks have failed if they aren’t making big profits each year, a misunderstanding of public accounting. Community owned networks aim to break even, not make a profit.
He also reminded readers that the path to strong economic development is not an easy ride, but one that increasingly depends on better local connectivity options:
None of these successes mean local governments should rush unprepared into a network investment. Nor should they be scared off by cable lobbyists trying to preserve what is effectively a monopoly. Building a successful network is a challenge, but so is trying to grow an economy while relying on yesterday’s technology at artificially inflated rates.
Read the entire op/ed in the November 25, 2013, edition of the Baltimore Sun. You can also read our coverage of Baltimore at MuniNetworks.org.
Read ongoing coverage related to networks at ILSR’s site devoted to Community Broadband Networks. You can also subscribe to a once-per-week email with stories about community broadband networks.
Source URL: http://www.ilsr.org/chris-mitchell-munis-baltimore-sun/
by David Morris | November 20, 2013
I support foreign aid because it reflects a willingness of rich nations to share resources with those less fortunate. I criticize foreign aid because it tends to go from government to government, often encouraging corruption and wastefulness. Or is driven primarily by self-interest, often undermining rather than nurturing a country’s independence (e.g. U.S. food aid that has to be spent importing US food and ends up driving local farmers off the land).
Which makes this short video from UpWorthy so inspiring. The focus is on Kelvin Doe, an ingenious 15 year old from Sierra Leone. The foreign aid in this case resulted a 3-week guest residency at MIT for Kelvin, the result of yeoman efforts by MIT’s Media Lab’s David Sengeh who is also from Sierra Leone.
Sengeh is on a mission. He firmly believes that countries like his own will not progress until they identify and nurture tens of thousands of rooted and committed young people who view problems as challenges and opportunities and possess the ingenuity and persistence to make the most of the opportunities.
Kelvin is one of those young people. Even in this brief video we are witness to an unusual combination of talent and humility and an abiding love of family and community.
Kelvin taught himself electronics and when he discovered the lights in his village sometimes come on only once a week he scrounged used materials and parts to build a battery. To give youth a voice and the community a vehicle for participating in decisions he built a radio transmitter and generator.
His visit to MIT expanded his horizons but didn’t diminish his devotion to family and community. Whatever I’ve learned here I will go back and share and do it as a team he calmly and assuredly says. “I want to help my family,” he notes, and the pictures indicate a very large family indeed. And a tear runs down his cheek.
Source URL: http://www.ilsr.org/foreign-aid/
by Lisa Gonzalez | November 20, 2013
As new FCC Chairman Tom Wheeler begins serving the public, we want to welcome him with open arms and some good advice. ILSR teamed up with the Media Action Grassroots Network (MAG-Net) to create a personalized postcard with ILSR’s Christopher Mitchell. We hope he will print it out, frame it, and place it prominently on his desk.
Wheeler, the 31st Chairman of the FCC, began serving on November 4, 2013.
Find this and other resources at ILSR’s site devoted to Community Broadband Networks. You can also subscribe to a once-per-week email with stories about community broadband networks.
Source URL: http://www.ilsr.org/postcard-for-fcc-tom-wheele/
by Lisa Gonzalez | November 20, 2013
ILSR, the Consumer’s Union, and Common Cause recently filed comments with the FCC as it examines E-rate. The agency’s Wireline Competition Bureau is currently reviewing the E-rate program for Schools and Libraries. The program provides funding from the Universal Services Fund to help schools and libraries pay for Internet access and other telecommunications services. The proceeding to examine ways to update the E-rate program began in July.
ILSR, Common Cause, and the Consumer’s Union filed Reply Comments to address misstatements supplied by telecommunications industry leaders. The three co-filers corrected the misleading statements with a representative list of communities where municipal networks offer schools and libraries reliable, affordable, and high-quality service.
The Reply Comments also touched on schools and libraries ability to make their own decisions in obtaining service. The group advocated for greater transparency in pricing of broadband options as a way to encourage competition, quality in service, and more affordable pricing. Additionally, the groups stressed the importance of the Lifeline program that offers free and low cost phone service to lower income individuals.
The Reply Comments submitted by the Consumer’s Union, Common Cause, and ILSR can be viewed online.
Read ongoing coverage related to networks at ILSR’s site devoted to Community Broadband Networks. You can also subscribe to a once-per-week email with stories about community broadband networks.
Source URL: http://www.ilsr.org/ilsr-collaborators-file-comments-fcc/
by David Morris | November 18, 2013
The announcement that the US Postal Service will deliver packages for Amazon on Sundays came just a few days after a federal judge halted USPS’ sale of Stamford’s historic downtown post office. The juxtaposition of the two events throws into stark relief the new Janus-like philosophy of the postal service: a big hug to big business, the back of the hand to the public.
For its first 175 years the US Post Office also served business. But protecting the public took precedence. When private carriers began to siphon away the most profitable parts of the mail delivery system, raising the cost and lowering the quality of services the Post Office could provide the general public Congress created an effective post office monopoly. Which enabled a sharp reduction in the price of a stamp and mail delivery to the doors of urban, and later rural residents and businesses. When private packaging companies mistreated their customers, the Post Office established Parcel Post. When shaky banks didn’t pay their depositors the post office established the Postal Bank.
In 1971 Congress transformed the cabinet level Post Office Department to the quasi-public United States Postal Service. Nevertheless the Postal Reorganization Act explicitly noted its public purpose, “The United States Post Office shall be operated as a basic and fundamental service provided to the people by the Government of the United States, authorized by the Constitution, created by Act of Congress, and supported by the people.” Or, to paraphrase Lincoln’s immortal phrase, the postal service was to be, as the Post Office had been, an institution “of the people, by the people, for the people”.
But the actions of USPS management mock those words. The USPS not only gives business access; it gives them handsome subsidies. Companies that preprocess their mail qualify for a discount. By law discounts cannot exceed the avoided costs of USPS doing the work, but the Public Regulatory Commission, an independent agency, estimated in 2012 that businesses were given $1.5 billion annually in excess discounts. Indeed, as William Burrus, former President of the American Postal Workers Union notes that as the cost of USPS handling a letter dropped discounts actually increased.
The agreement with Amazon should be viewed in this pro-business light. The Washington Post reports, “For years Amazon wanted to deliver seven days a week but was stymied by the cost of getting packages from distribution centers to doorsteps.” Normally a business would have to pay a premium to have the post office deliver on a Sunday. Under the new deal Amazon will not be charged a premium. Why? According to the USPS they will be served by part time, low paid employees, a growing part of a USPS workforce that has been reduced by over half a million career employees since 2000.
While the Postal Service bends over backwards to help big business it often takes an in-your-face attitude towards the general public. Casual readers of USPS’ proposal earlier this year to end Saturday delivery might have missed the fact that it would apply only to first class mail not to junk mail. (more…)
Source URL: http://www.ilsr.org/amazon-rest-us-welcome-post-office/
by Stacy Mitchell | November 13, 2013
Today, ILSR issued a report on Walmart’s rapidly expanding climate pollution and joined with leading environmental organizations in calling for change.
The new report, Walmart’s Assault on the Climate: The Truth Behind One of the Biggest Climate Polluters and Slickest Greenwashers in America, finds:
“A closer examination of what Walmart is actually doing behind all of its climate announcements shows the company continues to externalize its costs on people and the environment,” said Stacy Mitchell, ILSR Senior Researcher and author of the report.
The report comes as leading environmental organizations call for change. In an open letter to the company, several organizations, including Sierra Club, Rainforest Action Network, Friends of the Earth, and Energy Action Coalition, call on Walmart to implement a publicly verifiable, accurate tracking of all of their climate change emissions, make an overall 20 percent reduction in emissions, and stop funding the campaigns of those who oppose legislation to address the climate crisis.
Download: Report | Press Release | Open Letter
The Sierra Club made the following statement, which was delivered by Michael Marx, Director of the Sierra Club’s Beyond Oil Campaign:
“Walmart is failing on climate exactly like it is failing on worker’s rights. The company’s carbon pollution is up 14 percent while it pours millions of dollars into a misleading PR campaign around sustainability and anti-environmental public officials who obstruct solutions to climate disruption. If Walmart wants us to live better it can start by treating its workers with the dignity and respect they deserve and taking real steps to cut carbon pollution.”
Philip D. Radford, executive director of Greenpeace USA, said:
“As the nation’s largest employer, and the largest company in the world, Walmart has an obligation to match its clean energy commitments with a greater commitment to reducing its global warming pollution and improve how it treats its employees.”
Source URL: http://www.ilsr.org/walmart-climate/
by Brenda Platt | November 9, 2013
On November 6, 2013, Debra Lynn Dadd’s Toxic Free Talk Radio Show had ILSR’s Brenda Platt as a guest representing the Sustainable Biomaterials Collaborative and talking about bioplastics. Brenda is Director of the Sustainable Plastics Initiative, Co-Chair of the Sustainable Biomaterials Collaborative (www.sustainablebiomaterials.org), and co-director of the Institute for Local Self-Reliance, based in Washington, DC. She has worked 26 years on waste reduction, recycling and composting issues.
The show focused on compostable bioplastics, made from renewable resources instead of fossil fuels. Brenda is working as part of several coalitions to spur the use of biobased products that are sustainable from cradle to cradle. The Sustainable Biomaterials Collaborative has developed environmentally sustainability criteria for biobased plastics, and recently released purchasing specs for biobased compostable food service ware.
Listen to the Toxic Free Radio Show
Source URL: http://www.ilsr.org/brenda-platt-talks-bioplastics-toxic-free-radio/
by David Morris | November 4, 2013
In July 2011 the United States Postal Service (USPS) management announced it would rapidly close 3600 local post offices and eventually as many as 15,000. And shutter half the nation’s mail processing centers.
A frenzy of grassroots activity erupted as citizens in hundreds of towns mobilized to save a treasured institution that plays a key and sometimes a defining role in their communities. Only when Congress appeared ready to impose a six month moratorium on closures and consolidations that December did USPS management agree to a voluntarily moratorium of the same length.
That moratorium ended in May 2012. Rather than proceed with closings, management embraced a devilishly clever new strategy. Instead of closing 3600 it would slash the hours of 13,000 post offices. That could be accomplished very quickly because reduction in hours, unlike outright closures, requires little if any justification while appeals are very limited.
Germany circa 1940 would have envied the efficiency of the USPS’s blitzkrieg against itself and America’s rural communities. By November 2013, almost 8,000 post offices already have seen hours whacked.
As required USPS held community meetings but they went not to listen but to dictate. As the web site Save The Post Office, the go to source of information about the ongoing assault on the post office observes, “The decision to reduce the hours was made almost a year ago and what the new hours will be comes as an announcement, not a matter for discussion. There’s no need for a lot of talk about the options because there aren’t any.”
When communities ask the postal service management for the data upon which it made the decision they are invariably rebuffed. Postal management considers it none of their business.
A reduction in hours doesn’t generate the same level of outrage as a closure but its impact on a community may, even in the short run, be almost as negative. The building remains open but its value to the community is dramatically diminished. Hours may be cut in half. A part time inexperienced non-career employee replaces a full time experienced career postmaster.
At a meeting in Great Capacon, West Virginia small business owners talked about how the abundant knowledge of the current postmaster, Rick Dunn, helped them cut costs and improve service. One resident offered another measure of Dunn’s value, relating how he had called in a wellness check on a senior he hadn’t seen in a few days. It turned out the man needed medical attention. Dunn may have saved his life.
A reduction in hours may set up a slippery slope to full closure because the postal service reviews the workload and revenues of individual post offices annually. As one resident in Greenwood, Virginia reasonably inquired, “How in the world can our revenue increase if they’re reducing the hours that our window can perform retail sales?” (more…)
Source URL: http://www.ilsr.org/steps-save-incredible-shrinking-post-office/
by Stacy Mitchell | November 1, 2013
In an exciting new development for the local economy movement, seven independent business organizations have come together to launch the Advocates for Independent Business (AIB), a new coalition dedicated to ensuring that locally owned, independent businesses succeed and thrive.
The coalition was founded by the American Booksellers Association, American Independent Business Alliance, American Specialty Toy Retailing Association, Independent Running Retailers Association, National Bicycle Dealers Association, Professional Association of Innkeepers International, and Record Store Day.
AIB will provide a structure for its member organizations to exchange information about successful programs that deliver value for their members, generate new ideas to support independent businesses, and work together to advocate for shared public policy goals.
ILSR helped the coalition get off the ground and is coordinating its work. We think building a national coalition will give independent businesses a stronger voice on critical public policy issues.
AIB has its roots in the Advocates for Independent Retail Summit organized by the American Booksellers Association two years ago. The day-long meeting drew over 50 people from more than 30 trade associations covering a broad range of independent businesses.
Recognizing the significant opportunity represented by that gathering and the value of having an ongoing vehicle for sharing ideas and collaborating to support independent businesses, the founding members of AIB began meeting earlier this year to create the coalition.
They anticipate that it will grow in the coming months as other organizations join. Membership is open to organizations that primarily represent independent, locally owned businesses.
More on the AIB’s website.
Source URL: http://www.ilsr.org/indie-trade-associations-form-coalition-2/
by David Morris | October 30, 2013
By Stacy Mitchell and David Morris
For years Goldman Sachs gave only a tiny fraction of its profits, less than 1 percent, to charity. Then the depression hit and the huge bank was in the public’s crosshairs for its role in that collapse and the billions it continued to give out in bonuses.
Even as millions of people were losing their homes and tens of millions were losing their jobs, Goldman’s CEO Lloyd Blankfein continued to bluster, famously declaring his bank was “doing God’s work.” He defiantly declared that Goldman Sachs would not mend its ways. “I’d like [Goldman’s employees] to continue to do what they are doing. I don’t want to put a cap on their ambition. It’s hard for me to argue for a cap on their compensation.”
But Goldman did mend one of its ways. It increased its charitable giving more than six-fold over pre-recession levels, but the purpose was less to better the world than to better Goldman Sachs’ image and therefore its bottom line.
The New York Times reports, “… in late 2009, the company faced mounting criticism about the billions of dollars it was paying out in bonuses in the wake of the financial crisis. The firm needed some good public relations. And fast. Goldman committed $500 million over five years to another program, 10,000 Small Businesses, which helps businesses in the United States and Britain…The small business project, the firm hoped, would put it in the good graces of Main Street, and give people a better understanding of the firm.”
Goldman is spending handsomely to promote its small business friendly image. But when it comes to actually helping small business, Goldman is far more miserly. We took a look at Goldman’s recent small businesses lending and compared it to that of community banks. Goldman’s $113 billion commercial bank unit has a pathetic $10 million in small business loans on its books, or about 1/100th of 1 percent of its assets. Community banks (those with assets under $1 billion) currently have about $189 billion, or 12 percent of their assets, in small business loans, more than 1,000 times what Goldman Sachs provides.
Goldman is not above using small businesses but it still won’t actually serve them.
Source URL: http://www.ilsr.org/small-businesses-figure-heavily-goldman-sachs-pr-portfolio/
by Neil Seldman | October 30, 2013
A Review of The Zero Waste Solution: Untrashing the Planet One Community At a Time
(By Paul Connett, published by Chelsea Green Publishing)
Review by Neil Seldman, Institute for Local Self-Reliance, Washington, DC
Neil Seldman is President and co-founder of the Institute for Local Self-Reliance (ILSR). He is a specialist in recycling and the history of ideas. He is co-founder of the National Recycling Coalition, 1980, Grass Roots Recycling Network, 1995 and Zero Waste International Association, 2003. Seldman wrote the “Introduction” to the International Zero Waste Dialogue, Anthony and Liss, Editors, Grass Roots Recycling Network, 2000.
Disclosure: Neil Seldman and Paul Connett have worked together for over 25 years fighting against waste incineration and for total recycling and economic development, or zero waste, in the US and UK. The book under review includes discussion of Neil Seldman’s and ILSR’s ideas and work.
Paul Connett’s newly released book displays his personal charisma, scientific knowledge and applied wisdom to the deadly serious, though mundane, world of waste. It is a book worthy of the man who Richard V. Anthony, president of the Zero Waste International Association, refers to as the ‘rock star’ of the anti-incineration, pro zero waste movement.
Indeed, Professor Connett’s lectures are scientific tarantellas of facts, consequences, warnings and solutions, accompanied by charts, tables and slides that lay out the biological and chemical realities of wasting and poor management of residuals. They are also wonderfully entertaining, generating more than one side splitting laugh at his metaphors, similes and profound aphorisms — the Devil Burns, God Recycles, Make Love Not Waste, and for older folks, Make Friends Not Waste. The lectures end with a most spirited rendition, lead by Connett, of “No Incineration Forever”, with words set to the tune of “Battle Hymn of the Republic.” Audiences clamor for more.
What a boon to the US and international zero waste movement! This is one super star who charges no money for his participation in thousands of grass roots events over the decades.
Connett is a retired chemistry professor who currently works on fluoridation issues, while still maintaining a heavy schedule of anti wasting speeches and workshops. He initiated and coordinated the Citizens Dioxin Conferences and produced the videos Zero Waste: Idealistic Dream or Realistic Goal? and Road to Zero Waste in the l990s. Most recently, Connett has worked with Rossano Ercolini, a former schoolteacher and winner of the 2013 Goldman for Excellence in Protecting the Environment in Europe for his anti incineration in Italy.
Connett, a native of the UK, fits in well with the US tradition of citizen scientists Rachel Carson and Barry Commoner who used their scientific skills for grass roots rather than corporate or bureaucratic interests. These environmental and scientific heroes strive to apply the benefits of scientific knowledge for the common good, the ideal form of science hailed in Rousseau’s First Discourse on the Arts and Sciences, those that make for a better and happier world.
The text is grounded in Connett’s optimistic belief that there can be a world where local decision making counts. Garbage is just the tip of the iceberg. Wasting is a paradigm that encompasses energy, jobs and small businesses, climate change, toxicity, the fate of the oceans. The solutions to wasting open up a world of renewed possibilities for the human race and nature.
Nothing if not specific, Zero Waste educates us about the Five Rs (Recycle, Reuse/Compost, Redesign, Reduce, Responsibility) and the Four Cs (Common Sense, Community, Creativity, Children). These simple, yet profound, concepts and practices are critical for sustained resource management and broad prosperity. Zero waste is not one big solution for waste management, a large incinerator or mega landfill. Rather the solutions are small scale, locally owned and environmental sound. These policies, programs and enterprises are ‘pieces of zero waste’ that have spontaneously emerged in every part of the globe, the instinctual human response to the bourgeoning and threatening waste stream.
Zero Waste identifies the needs for citizen and small business organizing and solidarity as the necessary socio-political context for zero waste technologies, policies and businesses to thrive. With localism and citizen participation at every stage of development, zero waste is a pathway to a stable, steady state economy as envisioned by previous economic visionaries John Stewart Mill, Frederick Engels, Kenneth Boulding and Herman Daly.
Zero Waste also includes the stories of US and world grass roots leaders who have shaped the new paradigm in resource management and made it possible for business people and residents to say no to incinerators and landfills that destroy resources and pollute. There are essays written by leading activists and thinkers in the zero waste movement: Eric Lombardi links the practicalities of zero waste to world peace, Dan Knapp and Mary Lou Van Deventer, pioneers in reuse entrepreneurialism, the leading theoreticians of the US total recycling and zero waste movement, Jeffrey Morris a leading zero waste economic analyst, Buddy Boyd a recycling practitioner who discusses the need for political leadership, Richard V. Anthony and Gary Liss describe zero waste efforts in the private sector. I have an essay linking recycling to resilient communities and cities.
Following these essays, Connett provides detailed updates and lessons learned from local accomplishments in Canada. Europe, Asia, Mid East, South America and Australia-New Zealand.
The book’s publication took two years.. Yet, even as the essays contain older information, they are quite useful. They need updating in some places as ideas and projects around the world have grown and new issues emerged. The sections on Extended Producer Responsibility (EPR) as they stand are inadequate. They are not informed by the latest push back against the rigid, ideological, EPR Formula and Framework that have resulted in zero waste dystopias in British Columbia, Canada and Europe where Extended Producer Responsibility has been diverted from core values of zero waste including small scale, local ownership entrepreneurialism, anti monopoly and anti incineration. Most pertinent are the recent policy statements that place EPR under local government rather than industry control, the Zero Waste Commission, Berkeley, CA, and the Global Recycling Council of the California Resource Recovery Association, the dialogue within local and national Sierra Club chapters and committees, and the Grass Roots Recycling Network. Connett addresses these inconsistent policies, but EPR deserves more sophisticated essays on its own. Recyclers and cities are not willing to turn over their cities, companies and industries to the concentrated corporations that produce wasting in the first place.
The history section could use more details from the pre-1985 period. During the late 1960s and l970s and early l980s, the infrastructure of the post World War II recycling movement was rebuilt on the remaining paper and metal scrap industries by private consulting firms (SRD and SCS Engineers), dozens of community based recycling companies (Santa Rosa Community Recycling, EcoCycle in Boulder, Ann Arbor Ecology Center) and regional anti toxics groups (Western Washington Anti Toxics Coalition, Concerned Citizens of South Central Los Angeles, ReClaim, Springfield, MO), and direct technical assistance groups (ILSR, NYPIRG, BioCycle). It was this groundswell of activism that finally, by 1985, caught the attention of the national environmental organizations, which then formed their own response to garbage and wasting.
Finally, I disagree with an assessment cited to the effect that the current challenge posed by the incinerator industry is greater than in previous decades (1970-1995) and that the industry is now better organized. The current number of proposed incinerators is half of that in previous decades. The current grass roots institutions that have emerged and proved their mettle as a firewall against mass propaganda for technological fixes, false science, financial patronage and a government-industry revolving door still serve every corner of the country. Years ago these local and regional organizations had to pull themselves together as they fought off incinerators, which benefited from far more comprehensive government support and subsidies than today. The anti incineration movement is as vibrant and diversified today as it was yesteryear when 300 planned incinerators were defeated.
These shortcomings are minor compared to the enormous value of this book. Zero Waste will contribute greatly to the public discussion of waste. It will become a standard text for students of all ages. No longer can business and government leaders ‘sleepwalk’ through an era of “socially sanctioned wasting that characterized the Twentieth Century.”
In my last book review, Garbology: Our Dirty Love Affair with Trash , I praised its lively description of the social history of wasting in the US economy. Zero Waste by Paul Connett complements this history. It is required reading for those who seek to understand the recycling phenomenon and avoid the economic and environmental pain that will certainly follow if zero waste is not introduced immediately throughout the world.
One further recommendation, after reading Zero Waste, watch the movie “Trashed: No Place for Waste,” which features Dr. Connett.
 www.AmericanHealthStudies.org, click on videos
 Helen Spiegelman, Zero Waste, page 47.
Source URL: http://www.ilsr.org/review-waste-solution-untrashing-planet-community-time/
by John Farrell | October 7, 2013
Minneapolis, MN (October 7, 2013) – The economy has stalled and so has the war on climate change. But a new report from the Institute for Local Self-Reliance describes how dozens of cities are boosting their local economies while dramatically reducing greenhouse gases.
City Power Play: 8 Practical Local Energy Policies to Boost the Economy reports on how Chattanooga, TN, is adding over $1 billion to its local economy in the next decade by implementing one of the most advanced smart grids while delivering the fastest internet service in the country. Sonoma County, CA, has created nearly 800 local jobs retrofitting over 2,000 properties for energy savings with city financing. Babylon, NY, repurposed a solid waste fund to finance retrofits for 2% of the city’s homes, saving residents an average of $1,300 a year on their energy bills at minimal cost to the city.
“These savings weren’t dependent on state or federal grants,” said report author John Farrell, ILSR’s Director of Democratic Energy. “These cities used their own resources to seize control of their energy future and economy.”
The report highlights eight practical energy policies cities can and have used to their economic advantage, from more rigorous building codes to solar mandates and easier permitting to the use of a wide array of financing tools to spur renewable energy and energy efficiency. The brief case studies link to the text of the relevant ordinances.
The policies aren’t tied to a political ideology, but a practical and local one. Cities have identified where they have untapped resources and deployed them to generate jobs and keep more of their energy dollars in the economy.
“Not every city can use every policy,” notes Farrell, “but every community can find at least one that will help them strengthen their local economy while contributing to the worldwide effort to reduce climate change.”
The report is freely available from ILSR’s Democratic Energy program: http://www.ilsr.org/initiatives/energy/
Source URL: http://www.ilsr.org/report-8-ways-local-energy-policies-boost-economy/
by John Farrell | October 7, 2013
The economy has stalled and so has the war on climate change. But dozens of cities are creating jobs and cleaner energy using their own power.
|Read the report:
|View the infographic (coming soon): ||View presentation:
This report details eight practical energy policies cities can and have used to their economic advantage:
Case studies of each policy vividly illustrate their impact with specific examples, right down to the text of the relevant ordinances.
The policies aren’t tied to a political ideology, but a practical and local one. Cities have identified where they have untapped resources and deployed them to generate jobs and keep more of their energy dollars in the economy.
Some cities are more limited than others. While the federal constitution typically reserves all powers not expressly given the federal government to the states, states typically do not similarly reserve powers for cities. In fact, an opinion issued by Justice Dillon of the Iowa Supreme Court in the mid-1800s (Clark v. City of Des Moines) set a precedent for local authority that extends to this day in most states: many cities have only those powers expressly granted them by the state or that are indispensable in being a city. Issues like energy codes or property assessed clean energy programs don’t fit under “Dillon’s Rule.”
On the other hand, many states have instituted a form of “home rule,” that grants (at least some) powers of self-governance to cities. The following map illustrates the complex landscape of local authority.
No city, no matter how committed to boosting its economy, could adopt all eight policies (heck, the first two are incompatible). Forming a municipal utility means a tough fight with the incumbent utility. Few states allow community choice aggregation.
But nearly every city has a local budget and borrowing power, can issue permits for buildings, and can set local policy. And likely no city has explored the full potential of their power to boost the local economy with local energy policies. This report shows how dozens have done so, in the hopes it inspires many more to act.
Like what you see? Get email updates on ILSR’s energy work!
Source URL: http://www.ilsr.org/city-power-play/
by David Morris | October 5, 2013
In 2009, when Congress passed the health care bill, only one Republican voted in favor. In 2010, with opposition to the new health care law as their rallying cry, Republicans gained a net 63 seats and control of the House of Representatives. They also won control of 11 additional states, bringing their total to 25.
On October 1st, the first day of the new federal fiscal year and the launch of the new health care exchanges, the victors of 2009 collided with the victors of 2010. The entire nation felt the impact.
Even when it ends, the government shutdown will have demonstrated the willingness, indeed the eagerness, of Republicans to do everything possible to stop the health care law. Already well-funded campaigns are trying to persuade healthy 25 year olds not to purchase health insurance through the exchanges. If successful, these campaigns will result in higher premium rates for those who do sign up, which will spawn dissatisfaction with the new law.
The health care law finances “navigators” to help people sign up, similar to what Medicare has. But red states are hamstringing navigators, often requiring them to pass licensing exams, obtain insurance bonds, and pay heavy fees. Tennessee recently adopted an emergency rule requiring any “enrollment assister” to undergo a criminal background check, fingerprinting and take 12 hours of course work. The more problems people have with the exchanges the greater their dissatisfaction will be with the new law.
Given this level of intransigence what is to be done? President Obama and the Democratic Party are resolute about rolling out the health law in all 50 states. They refuse to give in to what they see as blackmail. But I believe the country, and the Democratic Party itself would be better served if Republican controlled states were allowed to opt out of the Affordable Care Act, but only under three conditions.
First, opting out requires opting out of all provisions of the law. No individual mandate. No health exchanges. No requirement that insurance companies spend 80 percent of the premium dollar on health care and cover people with pre-existing conditions. No federal incentives contained in the new law will be provided.
Second, those states that are implementing the health care law will be given great latitude in designing their new health systems. Several states, for example, want to create a single payer insurance system similar to that which Canadian provinces have had for almost 50 years. The existing law allows significant autonomy only in 2017. A bill should be passed that gives them the authority to do so immediately. (more…)
Source URL: http://www.ilsr.org/red-states/
by John Farrell | September 27, 2013
What is solar worth to a utility? It’s an issue of national debate, but one unexpected state – Minnesota – is engaging a formal process for determining the methodology for setting the value of solar. As the first multi-utility process, it’s likely to set a precedent nationwide for what the “value of solar” will mean and whether it will aid the continued growth of distributed solar power.
So what’s happening with solar in Minnesota?
It starts with the recently adopted solar energy standard, which requires investor-owned utilities to get 1.5% of their energy from solar by 2020, establishes a standard, long-term contract for buying distributed solar, and allows utilities to file for a “value of solar” tariff (VOST).
The “value of solar” concept is designed to solve one of the most pressing problems with expanding solar power. Utilities see customers generating their own energy as a mortal threat to their business model, because the regulatory structure and their business rely on selling kilowatt-hours. The policy in place, net metering, allows customers to get a credit on their bill that’s the same whether they made power from the sun or reduced their energy use by turning off lights. Either way, it means less sales for the utility, but while the utility can’t fight conservation, they can make trouble for solar.
The value of solar concept is a means to catalog and make transparent the many benefits solar energy provides to the grid system (producing energy at times of high demand, being very close to where people use energy). The idea is that utilities would pay solar producers that full value (on a per kilowatt-hour basis) and that customers would reduce their energy bill with the money from that sale, rather than a credit based on how much energy they produce. The benefit to the utility would be transparent, and customers would continue to see how much energy they are using.
The law sets out the required components of the VOST:
Source URL: http://www.ilsr.org/setting-solar-part-1-minnesotas-process/
by Brenda Platt | September 23, 2013
Source URL: http://www.ilsr.org/ilsr-co-sponsoring-cultivating-community-composting-forum/
by David Morris | September 11, 2013
A month before the 1932 election, Franklin Roosevelt traveled to Portland, Oregon to deliver a speech about government and governance. Some 80 years later, his talk, given in the depths of the Depression to a nation that had yet to accept that government should play an important role, remains one of the clearest and most accessible explications of the relationship between the public and the private.
FDR specifically addressed the relationship of government to electric utilities but one could easily translate the theory and principles he proposes to today’s banks, or cable companies or airlines.
In the decade before FDR’s visit to Portland the electricity sector had undergone a sea change. Power companies that once served neighborhoods now served cities and even states. The era of competition when Chicago had 29 electric companies and New York at least 6 had given way to a consensus that the inherent nature of electricity production and distribution lent itself to monopolies.
The key question after 1920 was who would own and control these monopolies. At the local level, the war between the public and the private raged for a decade. More than 2200 smaller cities eventually built their own electric networks. Most large cities lost the battle although a few like Los Angeles, Seattle and Cleveland emerged victorious.
FDR began with the basic question, then and now. Why not leave electricity production and distribution in private, unregulated hands? He answered: (more…)
Source URL: http://www.ilsr.org/defending-public-good-fdrs-portland-speech/
by Neil Seldman | September 11, 2013
A Review of 40 Years of Curbside Recycling: A Celebration of Our Culture’s Greatest Environmental Movement, Waste & Recycling News, Detroit, August 2013, 42 pages
By Neil Seldman, Institute for Local Self-Reliance, Washington, DC
(Neil Seldman is President of ILSR and a specialist in recycling and economic development. He works for cities and counties, community and environmental organizations, and small businesses.)
And a worthy celebration it is! Recyclers should be grateful that the editors and publishers of Waste & Recycling News (WRN) invested their time in preparing this retrospective. Despite some curious lapses in their recounting of the history of recycling, the essays and tables they present will significantly add to the growing literature of recycling for the next generation of Americans.
“No other environmental movement,” the report begins, “can come close to changing the way we think about garbage in our daily lives. None other can match recycling’s economic, cultural and ecological impact…on humanity’s greatest environmental idea.”
Oddly, WRN begins by incorrectly crediting the “hippies” of the 1960s for the recycling revolution. Nothing can be further from the truth, as readers soon find out when they delve into the text. Cliff Humphrey of Modesto Environmental Action, Penny Hansen of the EPA, and the children and grandchildren of 19th century immigrant scrap entrepreneurs hardly fit the image of hippie culture. To be sure, Cliff and Mary Humphrey’s mock funeral for a new car was hippie-like in its irreverence for materialism and counter-culture message. But these activists were no flash in the pan. They and thousands more followed up with years of hard work and political organizing.
Praise is duly noted for the “scrappies” who, out of necessity, built viable businesses in scrap metal and paper that kept recycling alive as it withered under the emerging post-World War II throwaway economy. Mayor Sam Yorty’s 1960 campaign to end curbside recycling in Los Angeles as a spoil of victory of World War II is duly noted as the harbinger of wastefulness and hubris. In Washington, DC, it was ABC Salvage that preserved markets for materials, and invested money and equipment in community-based drop-off centers—an important building block for the curbside recycling that was soon to follow. Hundreds of “scrappies” from across the country did the same. WRN estimates that 1 billion tons of raw materials derive from US recycling efforts since curbside was reintroduced in the early 1970s.
The retrospective covers individual and community accomplishments, the evolution of collection and processing equipment as curbside recycling reappeared, and the change in the economics of recycling during the mid-1980s emergence of a recycling culture. WRN correctly emphasizes the staying power of recycling through the 2008 recession and the current stagnant economy.
WRN also walks us through the latest recycling effort: the one bin, “dirty MRF” system being rolled out in Houston and other cities. Dirty refers to the fact that processing lines recover recyclables and compostables from mixed waste streams, thus reducing the quality of materials recovered. Recyclers also object to dirty MRFs: if people no longer sort their own garbage, efforts to educate them about the waste stream will be for naught, and previous behavior modification surrounding recycling will be lost. Dirty MRFs may also end up as feedstock for planned incinerators, as proponents in Houston and elsewhere anticipate.
Throughout WRN’s report, there are stories that reinforce lessons learned over the past 30 years, and that remind us of both the conventional and unconventional people and ideas that formed and continue to drive the movement to this day.
There are, however, significant omissions in the retrospective that deserve attention. The subtitle is misleading in that it separates the recycling movement from the prior emergence of a larger environmental movement. One could not have been possible without the other: Rachel Carson, Barry Commoner and other scientists prepared the groundwork for the general population’s acceptance of recycling by revealing the appalling state of the environment and the imminent dangers of current practices. These citizen scientists were the midwives of modern recycling. Their work led directly to the national consensus that allowed for 1965′s groundbreaking National Solid Waste Management Act, which marked the first time in a century that the federal government paid attention to garbage. New federal, state and local rules began to change quickly. Like the Clean Air and Clean Water Acts, recyclers starting aiming for a Clean Land Act, as reflected in the now unfolding zero waste paradigm.
Despite WRN’s initial focus on the grassroots origin of the movement, there is little follow-up on grassroots activism. The l980 Fresno Recycling Congress is omitted in the timeline completely, as is the 1995 emergence of the Grass Roots Recycling Network, a critical development in reaction to the takeover of the National Recycling Coalition by industry consultants and corporations. It would have been helpful to describe the critical role of environmental educators in spreading recycling literacy in schools and in the public’s consciousness. Recycling education has been a vehicle for public knowledge about closely related issues of water, energy and air issues.
The report omits mention of transformative works that deserve attention include Brenda Platt’s 1990s EPA-supported case studies Beyond 25% Recycling, Beyond 40% Recycling and Cutting the Waste Stream in Half, Institute for Local Self-Reliance, and Tania Levy’s Garbage to Energy: The False Panacea, Santa Rosa (CA) Community Recycling Center.
Levy’s 1979 booklet launched the anti-incineration movement. Recyclers and ad hoc local groups eventually scuppered over 300 planned incinerators in virtually every major US city and county. WRN chooses to highlight the Mobro Garbage Barge incident as the source of vitality for the recycling movement in the mid l980s. It’s true that the daily images of Long Island garbage floating around the world on the nightly news—ultimately to be returned to NY—were indeed powerful. The threat of massive pollution and the high cost of incinerators in cities, however, were what really galvanized local actions and raised the recycling movement to the forefront of people’s imaginations as a viable alternative to incineration and, later, the parallel development of mega-landfills.
Surprisingly, WRN’s retrospective does not focus on how important citizen- and small business-led anti-incineration activism was to the recycling movement. The prospect of 1000 ton per day plus garbage incinerators led to a broad, locally based movement in opposition. Citizens learned that recycling was a viable alternative to incinerators but that to become the predominant way we handled garbage, we needed to change the rules.
My colleague Brenda Platt’s work appeared as a crucial antidote to industry and EPA periodic assertions in the 1970s that only 10% (later raised to 25%), of MSW could be recycled. Platt’s case studies changed the solid waste narrative by showing communities what other communities had already accomplished. Once people could see successful recycling in action, it became much easier to replace the “burn and bury” paradigm with the recycling and economic development paradigm. Today, hundreds of communities in the US are recovering over 50% of their discarded materials. Some have reached over 70% diversion, while striving for 90%. Recycling has, remarkably, continued to expand its hold on the public’s imagination and practice to this day.
The timeline of WRN’s report focuses mostly on the business side of the movement. Readers should supplement their understanding of the recycling movement by comparing WRN’s timeline with ILSR’s grassroots-oriented timeline.
Despite these omissions, the “40 Years” report is a most welcome addition to our history. It provides insights and context that are required if current and future generations are to understand and learn how grassroots democracy can work when decision-making remains in the hands of local government where organized citizens can change the rules.
Source URL: http://www.ilsr.org/review-40-years-curbside-recycling/
by John Farrell | September 5, 2013
In 2011, citizens of Boulder, CO, opted to oust their monopoly, corporate electric utility for a locally owned, cleaner, more affordable model despite being outspent 10-to-1. They’ve since shown that a locally owned utility could deliver 54% renewable energy, lower greenhouse gas emissions by half, and all at a cost as good or better than the incumbent utility.
But Xcel Energy is doubling down after their 2011 loss, preparing to spend well more than $1 million (what they spent in 2011) to protect their profits (and their outmoded business model). They’ve sponsored a new ballot initiative that would spike Boulder’s wheel and make running a municipal utility nearly impossible. It’s a textbook example of a corporation looking to buy the election result they want, and all that’s standing in their way is a committed group of local citizens.
But the citizens aren’t giving up without a fight. This video – headlining their crowdfunding campaign – shows what’s at stake, and how you can be part of a solution to deliver real. local. power. in Boulder, and across the country. Boulder might be the first to fight to be energy deciders for a cleaner energy future, but it’s not fighting alone. Already their campaign has raised 3 times it’s goal of $40,000, and with a little more help (from you), they can put up a terrific people powered campaign to stop one utility’s dirty money, and put a shot across the bow on local climate action.
Source URL: http://www.ilsr.org/shot-bow-real-local-power/
by Neil Seldman | August 16, 2013
A Review of Garbology: Our Dirty Love Affair with Trash, by Edward Humes
Penguin Group, NYC, NY, 2012
By Neil Seldman, Institute for Local Self-Reliance, Washington, DC
Pulitzer Prize-wining writer, Edward Humes, has turned his attention to garbage. Most recently, in a Cato Institute publication, he wisely observes, recycling is America’s last line of defense against waste, when it should be the last. His book, Garbology, contains an excellent concise history of how the US became addicted to garbage and the socioeconomic and environmental dilemmas of today. It also introduces us to extraordinary individual activists and entrepreneurs attempting to solve problems, and provides useful summary charts and tables to further inform readers. Garbology also addresses key issues of corporate bigness and incineration with less success.
Proper Setting but Improper Analysis
In presenting garbage as “nothing less than the lens on our lives, our priorities, our failings, our secrets ands our hubris”, Humes uses the 102-ton-per-life generated by each of us in the USA as a metaphor for the garbage crisis and the opportunities to turn the waste stream into a raw materials stream.
The waning days of the vast Puente Hills landfill in Los Angeles County is the setting. This ‘temporary’ facility has stayed open for decades as the planned network of incinerators for Los Angeles city and county never materialized due to citizen and small business financial and environmental concerns. This pattern of frustrated incinerator deals has impacted New York, New Jersey and other major urban areas. Alas, Humes concludes that European style garbage incineration is the key to any realistic solution. Yet the conditions that make European systems appealing (use of steam for district heating, public ownership, small scale) are virtually impossible to replicate in the US. The conditions that defeated 300 planned garbage incinerators in the l970s, 1980s and 1990s have become stronger than ever before. In 2013 facing a new round of garbage incineration proposals, anti incineration efforts have defeated or stalled all but one proposed facility.
Humes unfortunately takes short cuts with his research and analysis of landfills and incinerators. He praises Waste Management, Inc. CEO David Steiner for the insight that the millions of tons the company handles is worth billions of dollars, an insight that has been recognized for over 40 years. He fails to point out that the company still makes more money from landfill than recycling, that its recycling program was forced upon WMI by new rules imposed by citizens, that the company is trying to repeal yard debris bans from landfills and incinerators, and that the key to WMI success was its ability to raise tons of capital to buy out competitors and build RCRA prescribed landfill systems that cities and smaller companies could not afford.
Misplaced admiration grows worse with Nickolas Themelis who heads a pro-incineration industry think tank at Columbia University. Data presented on incineration costs, environmental or economic impacts are unreliable. Nor does he present the depth of the justified anger against proposed incinerators by citizens and small businesses owners that propel the anti incineration and pro recycling movement. Finally, the discussion on European garbage incineration omits the fact that recyclable plastic and paper are burned because of overbuilt incineration capacity and industry dominated Extended Producer Responsibility programs. Western Europe incinerates an estimated 54 million tons of garbage annually, but has an estimated 64 million tons of incineration capacity. This explains the significant increase in international transport of garbage on the continent and the burning of recyclable and compostable materials. To remedy this, the European Parliament is developing a policy framework to phase out the destruction of these valuable materials by 2020. (See this report for more information)
Humes, provides plenty of data but fails to properly analyze it. He emphasizes the high cost of recycling some materials but does not compare this to the multi billion dollar cost of incineration; capital, bond debt, high operating costs.
Readers must balance Humes’ caricature of garbage incineration with accurate information, analysis and context from Bradley Angel, GreenAction for Health and the Environment, Mike Ewall, Energy Justice Network, Paul Connett, professor of chemistry (ret), Caroline Eader, No Incineration Frederick County, MD and Jean Marc Simon, Global Anti Incineration Alliance/Europe. In Carroll County, MD, conservative county commissioners refused to move forward on garbage incineration after citizens showed them that the plant would have to be subsidized through a new System Benefit Charge on their homeowner tax bill.
The Political Economy of Garbage in the US
The book’s history of the US garbage generation is well worth reading. While Humes overlooks two early social critics — Thorstein Veblen who first alerted Americans to the bourgeoning social, economic and moral crisis of over and conspicuous consumption (Theory of the Leisure Class: An Economic Study of Institutions, 1899, Theory of the Business Class, 1904) and William Leiss focuses on the psychological impacts of the our society’s embarrassment of riches (The Domination of Nature, 1972, Limits to Satisfaction, 1976) — his narrative is highly educational. It makes us take a good look at ourselves for falling under the sway of what Stuart Ewen refers to the ‘captains of consciousness’ that is the base cause of consumption without responsible discard management. It would also have been good if Humes considered the work of economist Kenneth Boulding who described the US as a ‘cowboy economy’ to extend the waste discussion to a broader economic context.
Humes picks up the sordid tale in the late 1940’s with marketing and design genius Gordon Lippincott’s pivotal notions of the ‘super consumer’: one who is ready to consume unneeded products and discard and replace useful products to support the national prosperity. This American willingness to part with something before it is worn out is a phenomenon of no other society in history, he observed. Based on the economy of abundance, this willingness “must be further nurtured even though it runs contrary to one of the oldest inbred laws of humanity, the law of thrift,” Lippincott taught companies and their ad agencies. The failure to waste was the enemy, Hume writes, and the message has been carried to the highest levels of mass communication through Presidents Eisenhower, Reagan and Bush. Hume continues by aptly describing the companies and products that eased these unnatural habits of consumption (TV dinners, Styrofoam, Coca Cola’s one-way bottle and a river of other disposable products and packaging) that introduced the ‘Throw-Away Society’. Here too are presented the financial, cultural and technology changes that catered to the consumption fest: plastic bags, credit cards, compaction garbage trucks and the Golden Age of TV which made all of this seem so natural and inevitable. Along with mass consumption with no thought to disposable, Humes underscores, the idea of thrift was erased from consciousness, and the resulting historic low individual savings in the US.
Against the tidal wave of consumption, Vance Packard’s brilliant warning about the insidious use of subliminal advertising and general veneration of promoting consumption (The Hidden Persuaders, 1957, The Waste Makers, 1960), made no headway. By l960, Packard notes, “The people …are becoming a tiger….They are taught to consume more and more…or their magnificent machine may turn and devour them….Their ever-expanding economy demands it.” “Not even Packard imagined”, Humes writes, that Americans would achieve a 102-ton legacy.”
The Wrong Direction
In addition to this excellent social history, Hume describes the efforts of individual citizens who have opted to live without ‘stuff’. Others have joined efforts to document and halt the plasticization of the oceans. Still others were inspired to start businesses to serve a zero waste economy such as TerraCycle and Chico-Bag. Humes concludes with a compilation of practical steps that individuals can take to reduce the environmental impacts of their discards.
This is the wrong message. The garbage crisis will not be solved by individual heroics. Community organizing, anti incineration organizing and local political campaigning are the strategic tools to take against the war on waste. Cooperative and combined efforts by citizens and small businesses is the only strategy that can challenge the onslaught of stuff that makes our economy and environment unsustainable. These are in fact the ways and means that the ‘burn and bury’ paradigm has been transformed to the ‘recycling and economic development’ paradigm in the last 40 years. Humes does not see the critical nature of combined efforts, because he focuses on the individual. He does not know the history of the recycling movement.
Curiously, Humes does not address the issues of Extended Producer Responsibility or Bottle Bills, although these are hotly debated among professionals in the field and public at large.
Garbology will remain a curiosity to veteran recyclers and solid waste planners based on its uneven treatment of the field. For those new to the fascinating world of garbage, parts of the book will be very helpful in understanding the scale of garbage dilemma and the history of how the US got into the mess that we must clean up. For a more thorough analysis these readers will have to read on.
Neil Seldman is president and co-founder of the Institute for Local Self-Reliance. He works with cities, businesses and community organizations start and expand recycling, reuse and composting businesses and implementing policies that nurture a homegrown economy. Seldman also assists communities in implementing alternatives to garbage incineration and landfill. His book and movie reviews appear in Bicycle Magazine, Greenyes Listserve and ILSR’s Waste to Wealth web page.
Source URL: http://www.ilsr.org/book-review-garbology-dirty-love-affair-trash/
by David Morris | August 16, 2013
In 1985 the United States was home to 24 airlines. Today there are 7. The Justice Departments under Presidents Reagan, Bush, Clinton, Bush II and Obama welcomed all mergers. Then in August 2013 the antitrust division of the Justice Department suddenly discovered why there is an antitrust division.
According to the New York Times, “But antitrust officials said on Tuesday that despite the cost savings for the carriers from consolidation, domestic airfares, on average, had increased much faster than inflation over the last several years, prompting the department to revise its thinking about what was best for the consumer…And the fares varied greatly, often depending on the level of competition.”
“Justice Dept. Alters View of Mergers By Airlines.” New York Times. August 15, 2013
Source URL: http://www.ilsr.org/stop-presses-washington-discovers-mergers-reduce-competition-increase-prices/
by David Morris | August 15, 2013
“Caterpillar has pioneered a two-tier wage system in which workers hired after a certain date are consigned to a significantly lower wage scale than others and it recently pressed its longer-term employees into accepting a six year wage freeze. Many Caterpillar workers ask why the company insisted on a pay freezer when it reported repeated record profits-$5.7 billion last year, amounting to $45,000 per Caterpillar employee. Caterpillar’s chief executive, Douglas Oberhelman (whose compensation has increased more than 80 percent over the last two years) says the freeze was vital to keep wages competitive with rival companies. “I always try to communicate to our people that we can never make enough money”, he recently told Bloomberg BusinessWeek. “We can never make enough profit.”
Steven Greenhouse, “Fighting Back Against Wretched Wages.” New York Times. July 28, 2013
Source URL: http://www.ilsr.org/we-money-ceo-ever-poorer-workers/
by David Morris | August 15, 2013
In September 2012 the Library Board of Pulaski County raised property taxes $1 per year for a typical homeowner to maintain the existing level of services in its five libraries. Voters were not given the opportunity to reject the increase; in 2006 however, they were and resoundingly approved a much larger increase to finance a new library.
But in 2006 the county and the country did not have a Tea Party. That grassroots movement sprang up early 2009 in fury at the federal government’s attempt to help millions of people facing foreclosure stay in their homes. In 2010 it escalated into a full-throated attack on the federal government’s attempt to expand medical care access to tens of millions. By 2012 the Tea Party movement’s virulent anti-government, anti-tax philosophy and take-no-prisoners, I’m-not-my-brother’s-keeper attitude had come to define American politics.
Pulaski County Tea Partiers, justifying their fury by noting the $1 increase had not been voted on by the people began circulating a petition to dissolve the library tax district completely. The effort’s leader declared her group would stop accumulating signatures only if all members of the current library board resigned.
The Board did not resign and ultimately the petitioners found they had too little time to gather the necessary signatures. But the Tea Party had demonstrated its strength and revealed its willingness to use scorched earth tactics.
A year before the Pulaski library district raised property taxes without asking voter permission, the Campbell County Library Board proposed a $20 per year tax increase to finance the construction of a new library in the underserved southern part of the County. It would submit the proposal to voters on the November 2012 ballot.
In six public hearings Tea Party members tried to stop the project from being on the ballot. When they failed they asked a lawyer to identify ways to halt the project. He came across a 1964 statute that prohibited library taxing district formed by a petition from voters – as the Campbell County district was – to change its tax rate without a petition signed by at least 51 percent of voters in the last election. In January 2012, eleven months before the voters were to decide the issue (they rejected the project) several Tea Party members went to court. A few months later tea party members in Kenton, a neighboring County, did the same.
Source URL: http://www.ilsr.org/tea-party-vs-public-library/
by David Morris | August 13, 2013
Our attitude toward medical marijuana has unfolded like a sisyphean tragedy in three acts.
Act I: The People Press Their Case, Again and Again
In 1937 Congress passed the Marihuana Tax Act, which made the recreational use of marijuana illegal. But it affirmed the right of physicians and pharmacists to prescribe and dispense it. The American Medical Association opposed the Act not because it allowed medical marijuana but because it required doctors to register with federal authorities and pay an annual tax or license fee that the AMA felt would unduly inhibit doctors ability to offer their patients this medicine. The AMA was right. Few doctors were any longer willing to prescribe marijuana. In 1942 cannabis was removed from the United States Pharmacopeia of existing medicines.
In 1961, 74 nations signed the UN Single Convention on Narcotic Drugs. Again the treaty criminalized the recreational use of marijuana but allowed it for medical purposes. Indeed Article 49 specifically advises, “The use of cannabis for other than medical and scientific purposes must be discontinued as soon as possible…”
Physicians retained the ability to legally prescribe marijuana until the Controlled Substance Act of 1970 made marijuana a Schedule I drug, equivalent to heroin and, according to the Congress, with no medical uses. In the debate leading up to its passage the Assistant Secretary for Health and Scientific Affairs, responding to a Congressional request for guidance noted there was “still a considerable void in our knowledge of the plant and effects of the active drug contained in it” and recommended it be retained within schedule I temporarily while “certain studies now underway to resolve the issue.”
Those studies were undertaken by the newly created National Commission on Marijuana and Drug Abuse Commission, chaired by Pennsylvania Governor Raymond P. Shafer, who had earned a reputation as a tough-on-crime U.S. Attorney.
President Nixon had already made up his mind. In May 1971 he told H.R. Haldeman, “I want a goddamn strong statement about marijuana. Can I get that out of this sonofa-bitching, uh, domestic council? I mean one on marijuana that just tears the ass out of them.” And Nixon told Shafer directly, “You’re enough of a pro to know that for you to come out with something that would run counter to what the Congress feels and what the country feels, and what we’re planning to do, would make your commission just look bad as hell.”
In June 1971, to pre-empt the Commission’s report Nixon declared a War on Drugs. “America’s public enemy number one in the United States is drug abuse. In order to fight and defeat this enemy, it is necessary to wage a new, all-out offensive.” Over the next year marijuana arrests jumped by over 100,000.
In March 1972 the Shafer Commission’s submitted its report to Congress. Revealingly titled Marijuana, A Signal of Misunderstanding the Commission concluded, “The actual and potential harm of use of the drug is not great enough to justify intrusion by the criminal law into private behavior, a step which our society takes only ‘with the greatest reluctance’.”
Source URL: http://www.ilsr.org/medical-marijuana-40-years-sanity-bottom-insanity-top/
by Stacy Mitchell | July 29, 2013
Of all the places President Obama might give a speech on job creation, an Amazon warehouse is a particularly perplexing choice. Here are five ways Amazon is costing our economy and undermining real job growth.
1. Amazon destroys more jobs than it creates.
Brick-and-mortar retailers employ 47 people for every $10 million in sales, according to an analysis by ILSR of US Census data. (If you exclude chains and look just at independent retailers, the figure is even higher — 52 jobs.) But Amazon employs only 14 people per $10 million in revenue. As Amazon grows and takes market share from other retailers, the result is a decline in jobs, not a gain. In 2012, Amazon expanded its share of retail spending in North America by $8 billion, which works out to a net loss of about 27,000 jobs.
2. Most Amazon jobs are awful.
How does Amazon manage to sell so much stuff with so few workers? The online giant is technologically efficient, yes, but it also excels at squeezing a back-breaking amount of labor out of its employees. Amazon’s workplace abuses, including life-threatening temperatures inside its warehouses, injury-inducing workloads, and neo-Nazi guards, have been well-documented by investigative journalists.
At the Amazon warehouse Obama is visiting in Chattanooga, workers are paid about $11.20 an hour, according to Glassdoor.com. That’s 17 percent less than the average wage for U.S. warehouse workers reported by the U.S. Labor Department.
3. Amazon pilfers value created elsewhere in the economy.
Another way Amazon gets by with such a small workforce is by leaning on the services provided by brick-and-mortar stores. Through its mobile app, Amazon actively encourages consumers to try-out merchandise in stores and then buy online. This allows Amazon to free-ride on the value created by other businesses. Take books, for example. Amazon now accounts for about one-third of book sales. But, if you ask Amazon book shoppers where they learned about a book, only rarely is the answer Amazon. Far more often, according to research by Codex Group, they discovered the book while browsing in an actual bookstore.
A similar dynamic is at play across a wide variety of products, from toys to cameras. The threat Amazon’s free-riding poses to the U.S. economy is that, over time, brick-and-mortar stores will no longer be around to showcase new products, depriving both consumers and manufacturers of a valuable service that stimulates demand and innovation.
4. Amazon drains dollars from local economies. (more…)
Source URL: http://www.ilsr.org/amazonfacts/
by Neil Seldman | July 18, 2013
For the first time a court of law has disqualified trash burning as a non-renewable energy source. The Sierra Club Grand Canyon Chapter in Arizona has been victorious in its challenge to the Arizona Corporation Commission’s ruling that trash burning could qualify for renewable energy credits.
On July 16, the Maricopa County Superior Court ruled that the Commission erred and abused its discretion in deciding to give renewable energy credits to the Mohave Electric Cooperative for the project it planned near Phoenix by the Reclamation Power Group.
The Sierra Club argued that burning trash to produce power was not a use intended under the state’s renewable energy standard, and that funds should be redirected to support truly renewable energy resources such as wind and solar. The Sierra Club filed a lawsuit last September challenging the Commission’s decision to allow trash burning to be considered a renewable energy resource.
“This decision is good news for clean renewable energy such as solar and wind,” said Sandy Bahr, director of the Sierra Club’s Grand Canyon chapter. “Promoting polluting and dated technologies such as burning trash to produce electricity would be a step backward for Arizona’s renewable energy programs.”
ILSR’s Brenda Platt worked with Jeff Morris of Sound Resource Management in preparing expert testimony for the case and assisting the Sierra Club and the Arizona Center for Law in the Public Interest in its analysis and submissions. According to Brenda Platt, “This is a critical precedent as state renewable energy incentives perversely subsidize trash burners, making it more difficult for non-burn and safer reuse, recycling, and composting options to compete. Now in Arizona this money can support legitimate renewable energy systems. Trash is not renewable.”
The average value of a renewable energy credit in 2010 in Massachusetts was between $20 and $40 per MWh. (“Burning Recycling, “Resource Recycling, May 2013.)
For more information on the Arizona decision, view:
Sierra Club Grand Canyon Chapter & Arizona Center for Law in the Public Interest press release.
Arizona News Tribune July 16th article, “Judge rules burning trash isn’t renewable energy” here.
Arizona Star Net July 16th article: “Maricopa Superior Court: Trash burning not a renewable resource – Utility Can’t Use Incineration to Meet Mandate, Judge Says” here.
For information and fact sheets on ILSR’s 2011 work in Maryland fighting the weakening of that state’s renewable portfolio standards, go to:
Trash Is Not Renewable
For additional data on the environmental, energy, and climate problems posed by trash incineration, see ILSR’s 2008 report, Stop Trashing the Climate.
Source URL: http://www.ilsr.org/az-incinerator/
by Neil Seldman | July 8, 2013
Neil Seldman provides an update and review of recycling and Extended Producer Responsibility (EPR) developments based on his interviews with recycling practitioners, local officials and environmental leaders.
Download the policy review.
Source URL: http://www.ilsr.org/does-recycling-movement-face-hostile-takeover/
by Stacy Mitchell | July 5, 2013
This presentation was delivered on June 14, 2013, at the BALLE Conference in Buffalo, New York. Download a PDF version of the text.
Welcome, everyone. Thanks for being here. (Slide 2) I’m Stacy Mitchell. I direct the Institute for Local Self-Reliance’s Independent Business Initiative, which provides research, policy analysis, and tools to help communities gain greater control over their own economic futures.
Let me begin by offering a little background on this session. (Slide 3) The movement for local economies has grown dramatically over the last decade. We’ve attracted public support and engaged tens of thousands of entrepreneurs and community leaders. But I think we’ve reached a point where we can’t get much further solely with the strategies we’re using now. We’re at a stage where we need to up our game. I want to suggest to you today that moving a policy agenda is a key part of what we need to do.
I’m hoping we can tackle four key questions in this session (Slide 4):
The format for today is that I’m going to kick off the session by providing some thoughts on each of these questions. Then we’re going to turn to the panel. We have four terrific panelists today: Kimber Lanning of Local First Arizona; David Levine of the American Sustainable Business Council; Micaela Shapiro-Shellaby of the Coalition for Economic Justice here in Buffalo; and Jonathon Welch, owner of Talking Leaves Books, also here in Buffalo. They each have a story to share about a policy win that will help us reflect on some of these themes. And then we’re going to have a roundtable discussion. I’ll be bringing in all of you at that point for what I hope will be a lively conversation. So, with that, let me dive in. (more…)
Source URL: http://www.ilsr.org/localist-policy-agenda/
by Stacy Mitchell | July 1, 2013
This article was originally published on Grist.
This month, citizens and planning officials in Cape Cod, Mass., will get a chance to do what almost no one else in the U.S. is allowed to do when deciding whether to approve or reject a big-box retail development: weigh the likely impacts on the region’s economy.
Thousands of proposals to build big-box stores and shopping centers will be submitted to cities and towns this year. (Walmart alone is pushing to open 220 new stores by January.) In almost every case, local planning policies will limit any review of these projects to conventional zoning issues, like how much traffic the store will generate and whether the site has sufficient landscaping.
Questions about the economic impacts of these projects will be off the table. Residents who want to talk about how a new shopping center will affect the viability of Main Street business districts, wage rates for local workers, or even the cost of public services will be told that those issues cannot be considered as part of the planning board’s deliberations.
This narrow approach to land-use policy strips communities of an important tool for shaping their own economic future, constraining the reach of extractive corporations, and moving toward less carbon-intensive economic systems and shopping patterns.
One exception to this common state of affairs is Cape Cod, a peninsula home to about 217,000 people.
Mindful of the Cape’s fragile environment and economy (despite pockets of wealth, the peninsula’s median household income is below the state as whole), residents voted to create the Cape Cod Commission in 1990. Made up of representatives of each of the Cape’s 15 towns, this regional planning body has the authority to review, and reject, large development projects that could significantly impact the local economy or environment, including any commercial building over 10,000 square feet. The commission does not supplant municipal planning boards, but rather adds a second layer of review for large projects, in which all of the region’s towns are given a say.
Guided by a Regional Policy Plan that frowns on development outside of town centers and favors projects that protect the Cape’s character, expand local ownership, and enable the region’s communities to meet more of their own needs instead of relying on imports, the Cape Cod Commission has turned down several big-box stores over the last two decades, including a Walmart in Falmouth, a Sam’s Club in Hyannis, a Costco in Sandwich, and a Home Depot in Yarmouth.
A few big retailers have made it in, but only by proposing much smaller stores and locating them on sites that were already developed. Walmart finally won approval to open its one and only store on the peninsula when it applied to put a 73,000-square-foot store (one-third the size of a typical supercenter) into a building in Falmouth previously occupied by a defunct regional department store chain. Home Depot likewise was given the green light to take over an empty retail space in Hyannis, opening a store about half its standard size. (more…)
Source URL: http://www.ilsr.org/heres-smart-handle-big-box-stores/
by John Farrell | June 20, 2013
When President Obama unveils his climate policy proposal in the coming days, he should focus on the one key element of successful climate and energy policy. It’s not about utilities or incentives or numbers, it’s about ownership.
Climate-protecting energy policy succeeds when communities can keep their energy dollars local by directly owning and profiting from investments in renewable energy.
Look at Denmark, with wind power capacity sufficient for 28% of its electricity use. When the world’s nations descended on Copenhagen in 2009 for the climate conference, attendees could have gleaned their most important lesson by gazing across the water at the Middelgrunden offshore wind farm – 50% owned by over 10,000 Copenhagen residents. Local ownership like this was the centerpiece of building over 4,000 megawatts of wind power in Denmark, increasing energy independence by letting ordinary citizens collectively own wind farms that brought money right back into their community. Ownership let Danes focus on their own energy independence and economy. Concern for the climate was secondary.
Andrew Cumbers of the UN Research Institute for Social Development explains the ongoing strength of the Danish commitment to renewable energy:
The participation of communities in the ownership and development of the technology has been a critical factor in the successful growth of renewable energy capacity. Surveys suggest around 70 per cent of the population are in favour of wind farms with only around 5 per cent against (Soerensen et al 2003), figures that are far higher than found elsewhere. (emphasis added)
Germany’s roaring success reinforces why ownership should be President Obama’s highest priority. Over 60% of mid-day electricity demand was met with wind and solar on a recent sunny day, and almost 25% of annual German electricity usage comes from renewable sources. Once again, it’s a people-powered transition (or as the Germans like to call it, Energiewende, or “energy change”).
Nearly half of all German renewable energy capacity is owned by individuals, not utilities. These small, quickly built distributed energy projects multiplied quickly under simply policies that made it easy for Germans to own a share in their energy future.
Despite numerous attempts by various political factions to curtail the renewable energy transition (most frequently citing high costs), Germans remain stolidly committed to growing renewable energy, with over 60% willing to pay more to continue its expansion. A survey of Germans towns suggest that ownership, more than anything else, has built this steadfast political support for a low carbon energy future.
Evidence that ownership holds the key to political success lies closer to home, as well. After a near-death experience at the polls, Ontario’s Liberal Party revised their renewable energy program to prioritize new wind and solar projects that sport local ownership and public support. Most U.S. state renewable portfolio standards include language that requires or prefers qualifying projects to be in state,* to link the economic and environmental outcomes. These statutes have survived an all-out assault by the corporate-funded conservative lobbying group ALEC. And one should not ignore the power of having the Atlanta Tea Party testifying alongside solar power advocates against monopoly utility Georgia Power, arguing that more people should be able to generate their own energy.
Ownership is good politics not just because of who wins, but how much they win. A study from the National Renewable Energy Laboratory shows local ownership dramatically multiplies the economic returns of renewable energy for the host community.
No climate proposal from President Obama will sail past Republican opposition (see: Waxman-Markey), but his greatest chance for a climate legacy lies in empowering Americans to take control – with their votes and their dollars – of their own energy future.
Photo credit: Black Rock Solar
*Note: a recent court decision struck down this provision in Michigan, jeopardizing the in-state preference for all states that include this policy.
Source URL: http://www.ilsr.org/obamas-climate-policy/
by David Morris | June 18, 2013
The gridlock that plagues Washington leads many, fairly or unfairly, to lump together the two parties and declare a pox on both their houses. But most state governments are not gridlocked. Just the opposite. In almost two thirds one party controls both legislative houses (Nebraska has a unicameral legislature) and the governorship: Republicans 20, Democrats 13.
In these states, parties can translate ideology into policies virtually unimpeded. An examination of these policies allows us to get behind the name-calling and 30-second sound bites and discover the remarkable difference between the two parties on fundamental issues.
Contrary to popular wisdom, the fundamental difference between Republicans and Democrats is not on the size of government but the purpose and goals of government. Both parties believe in taxing heavily and spending lavishly when it comes to protecting our nation from external attack. Both parties fervently embrace the Declaration of Independence’s insistence that among our “unalienable rights” are “life, liberty, and the pursuit of happiness”. But their conceptions of security and liberty differ radically.
Democrats believe that governments should not only secure our borders but also advance our personal security. As reflected in recently enacted state laws, that belief translates into policies extending health care access to as many as possible, raising the minimum wage and expanding unemployment insurance. Republicans vigorously oppose this use of government. They insist we should not be compelled to be our brothers’ keeper. Of the 13 states that so far have refused the federal government’s offer to pay 100 percent of the costs of expanding health care coverage to millions of their residents, for example, Republicans dominate 12. All six of the states that are leaning that way are Republican controlled.
What Democrats see as steps to enhance security Republicans view as steps that restrict liberty. They assert that government-created health exchanges interfere with the right of insurance companies to manage their own affairs while the requirement that everyone have health insurance constitutes an act of tyranny. Minimum wage laws interfere with the economic liberty of business and the freedom of the marketplace.
Republicans argue that taxes, especially those that tax the rich at higher rates than the poor, interfere with our liberty to pursue happiness by amassing unrestrained wealth. In the last legislative session Democrat-controlled California, Maryland, Massachusetts and Minnesota raised the income tax rate on millionaires while in the last two legislative sessions, Republican-controlled Kansas reduced such rates by 75 percent and legislators in Kansas as well as in North Carolina and Nebraska are openly pushing for the complete elimination of the income tax.
It is important to note that these Republican actions often result less in a tax reduction than in a tax shift from income taxes to sales or property taxes that burden lower income households most heavily.
When it comes to personal liberty, however, Republicans believe in big government. As former Republican Senator and Presidential candidate Rick Santorum observed, “The idea is that the state doesn’t have rights to limit individuals’ wants and passions. I disagree with that. I think we absolutely have rights because there are consequences to letting people live out whatever wants or passions they desire.” Even if their wants or passions do not harm others.
This legislative session Rhode Island, Delaware and Minnesota joined 9 other states and the District of Columbia in extending the freedom to marry to include those of the same sex. Meanwhile, of the 25 states with constitutional prohibitions on same sex marriage, 22 are completely controlled by Republicans. None are Democrat dominant.
Of the 17 states that have enacted medical marijuana laws, 10 are Democratic and only two are Republican. (The rest are not controlled by a single party.) As if to put an exclamation point on this difference, the same day last November that voters in Washington and Colorado approved the legalization of marijuana, voters in Arkansas handily defeated a proposal to allow the drug to be used for medicinal purposes with a doctor’s prescription.
Gun control is an issue that for Republicans and Democrats affects both liberty and security. For Republicans the ability to own unlimited numbers of guns and carry them whenever and wherever one wants with a minimum of government oversight, constitutes an essential part of freedom while allowing the owner to protect herself from physical harm. For Democrats widespread gun ownership significantly contributes to physical violence inside and outside the gun owner’s household; thus in this case unrestrained liberty must give way to regulation.
In this legislative session while Democratic states like New York and Connecticut and Maryland tightened gun laws, more than a dozen GOP states scaled back their already minimal gun laws. Statistician Nate Silver insists, “Whether someone owns a gun is a more powerful predictor of a person’s political party than her gender, whether she identifies as gay or lesbian, whether she is Hispanic (or) whether she lives in the south…”
For both Democrats and Republicans liberty means being able to participate in influencing the political decisions that affect our lives and futures. But here again their conception of liberty differs significantly. For Republicans it means the liberty of money, allowing individuals to spend unlimited amounts to elect candidates and lobby legislators while restricting the liberty of people by making voter access more difficult. For Democrats it means the opposite.
Recently Colorado, Delaware and Maryland have enacted laws making it easier for people to register and vote while Arkansas, Indiana, Nebraska, Tennessee and Virginia have made it harder. Nine of ten states that have voter photo ID laws are Republican dominated.
One could hope that in 2014 the stark evidence emerging from state capitols about the difference between the parties can lay the foundation for a nationwide debate on the purpose of government and the ends to which collective authority should aspire that goes beyond the are-you-for-it-or-against-it attitude that contaminates and diminishes that debate.
Source URL: http://www.ilsr.org/liberty-security-democrats-republicans-differ/
by John Farrell | May 30, 2013
Read reactions to this piece here
If you follow the renewable energy industry and haven’t been sleeping, then you’ve probably heard about one of the few pieces of federal legislation purported to help clean energy that’s actually moving: expanding Master Limited Partnerships (MLPs) to cover wind and solar energy. (H.R.1696)
This is not a good thing.
MLPs originated in 1986, when Congress decided that to allow certain businesses (oil and gas pipelines) to avoid paying corporate income tax. These partnerships function a lot like publicly traded corporations, with publicly traded stock, but don’t pay income taxes. Most folks who’ve touted expanding MLPs to include renewable energy projects see this move as “leveling the playing field.” And it will, allowing big energy corporations to avoid paying taxes on their renewable energy projects just like they do for pipelines.
But that’s not the worst. Several years after the MLP was created, the federal agency responsible for setting the prices to use these oil and gas pipelines (the Federal Energy Regulatory Commission) allowed the not-paying-corporate-income-tax companies to charge rates for access as though they DID pay the corporate income tax. Including this phantom tax payment in rates amounted to a 75% increase in after-tax profits for pipeline companies. This policy wasn’t even set in a public forum (such as a docket with public hearings), but through a shadow “policy statement” released after private meetings with the oil and gas industry (and after a federal judge had previously struck down the absurd notion that users of pipelines should have to pay phantom taxes).
This makes two big problems in adding renewable energy companies to the list of eligible Master Limited Partnerships.
First, there are many powerful, regulated industries that would love a bite at this apple, like the existing electric and gas utilities. The cost to taxpayers from letting these hogs get to the trough is likely much, much larger than the opportunity for renewable energy. These big industries – with huge lobbying budgets – are not likely to miss the opportunity.
But even more important, the extension of MLPs to renewable energy is likely to reinforce centralized, corporate control of the energy system. Right now, renewable energy – particularly solar – is transforming the energy system. It’s turning energy consumers into producers, re-routing energy dollars back into community economies, and giving cities and towns more control over their energy future. Half or more of new solar power in the U.S. is being put on the rooftops of homes and small businesses. New community solar policies (like one just adopted in Minnesota!) are giving even more Americans a chance to have skin in the energy game and share in the profits of a transition to renewable energy.
The average American isn’t going to be a shareholder of a Master Limited Partnership, but they probably will pay a share of phantom taxes in their electric and gas rates if MLPs are expanded to other energy industries. Even if Congress miraculously limits the MLP expansion to just the renewable energy industry, subsidiaries of most of the large corporations in the energy business (Shell, BP, Exxon) are building wind and solar projects. These subsidiaries would certainly be reorganized as MLPs, giving them a tax advantaged opportunity to crowd out competitors (like community solar or other distributed generation) AND make larger profits off their renewable energy business.
There are many ways the federal government could improve its policy toward renewable energy. A CLEAN Contract or feed-in tariff could supplant tax credits that act as a barrier to production-based payment for energy and avoid paying for panels that don’t produce power. The feds could remove ridiculous bonus incentives for long-distance, high-voltage transmission that gives electric companies an incentive to build power lines for 20th century power plants instead of distributed solar and wind power. They could set a federal distributed renewable energy standard that requires utilities to procure energy from places close to where people use it.
But let’s not expand a tax loophole to big renewable energy companies. This is one playing field best left unmoved.
(most of this article is based on a book, The Fine Print by former New York Times writer David Cay Johnston)
Photo credit: Michael Fleshman
Source URL: http://www.ilsr.org/master-limited-partnerships-lousy-policy-solar-or-business/
by John Farrell | May 20, 2013
Launched in 2009, Ontario’s “buy local” Feed-In Tariff (FIT) program promised to deliver hundreds of megawatts of new renewable energy and create 50,000 new jobs by the end of 2012. The program has had some notable achievements, and the province has worked hard to remedy some of the remaining roadblocks to success.
The bottom line is that the FIT program and its predecessors (despite facing significant threats) have jumpstarted renewable energy development in Ontario: the province would rank #4 and #11 for solar and wind deployment, respectively, if it were a U.S. state. It has created 31,000 jobs. It has also enabled widespread participation in renewable energy generation: 1 in 7 Ontario farmers is participating, earning a return on their investment. Finally, it has enabled the province to shut down all of its coal-fired power plants by the end of 2014.
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The biggest challenge for the FIT program is the overwhelming demand. Already, signed contracts for nearly 5,000 megawatts of new renewable energy capacity will allow the province to meet most of its 2030 renewable energy target, 12 years early. Actual deployment has kept pace with many U.S. states, but poor preparation has meant that less than 10% of energy under contract (thus far) is actually producing electricity.
Source URL: http://www.ilsr.org/expect-delays-reviewing-ontarios-buy-local-renewable-energy-program/
by David Morris | May 13, 2013
For 225 years the U.S. Post Office has been the most admired and ubiquitous manifestation of government. From 1789 until the 1960s, the Cabinet level agency saw its mission not only to deliver the mail but to aggressively defend the public good. In the late 19th century when oligopolistic mail order delivery companies abused their rural customers the Post Office launched parcel post. The competition quickly forced private companies to reduce their exorbitant prices and dramatically improve the quality of their service. In the early 20th century, when bank collapses resulted in depositors losing their life saving the Post Office created postal banks that for half a century provide security and attractive interest rates to millions of small depositors.
In 1970 Congress stripped the post office of its cabinet status and stopped providing public funding. The new quasi public corporation was urged to adopt a more business like attitude. Its name, the U.S. Postal Service, reflected a circumscribed mission statement. No longer was it to be a tool to check the predations of the private sector. Its sole mission would be to deliver the mail.
The USPS used its new flexibility and ability to borrow to dramatically increase productivity. By the 1990s, despite the elimination of a public subsidy that in 1970 had accounted for 25 percent of its total budget the USPS was generating a consistent profit. But to USPS management the mandate to operate in a more businesslike manner was viewed as a mandate to operate more like a private business, improving its internal balance sheet at the cost of weakening the balance sheet of the communities it served. Again and again Congress had to step in to prevent USPS management from pursuing actions that would have inflicted harm on the nation: stopping closing Saturday delivery, closing rural post offices willy-nilly.
In 2006, in an accounting maneuver I’ve discussed in more detail elsewhere Congress forced the USPS to pay $5.5 billion a year to do what no other public agency or private corporation does—prepay 100 percent of its future health insurance costs. As the Postal Regulatory Commission (PRC) later observed, these payments quickly “transformed what would have been considerable profits into significant losses.” Today the USPS deficit has reached $20 billion. Headlines constantly use the word “bankruptcy”, conveying the message that the post office is an antiquated institution doomed to irrelevancy in the age of the internet, but 80 percent of this huge deficit has been caused not by a decline in first class mail but by this human contrived financial burden.
The debt may be contrived, but its impact is real. USPS management is cutting its “deficit” by eviscerating the institutional commons it oversees. By closing rural post offices the USPS is delinking the institution from the community. By closing half of its processing centers, the post office is eliminating local overnight delivery of the mail, a severe burden on weekly newspapers and undermining another sense of geographic community. In 2012 the USPS announced that first class mail delivery would take at least one more day. USPS is selling off dozens of magnificent buildings constructed during the New Deal that have served as testaments to a time when the very design of public buildings was seen as part of the commons. Tens of thousands of workers with the most experience have taken early retirement, resulting in an increasingly less knowledgeable and lower paid workforce.
Source URL: http://www.ilsr.org/save-commons-post-office/
by David Morris | May 11, 2013
In his 1996 State of the Union Address Democratic President Bill Clinton famously declared, “the era of big government is over.” And during his tenure he did everything he could to make that true–deregulating the telecommunications and the financial industry, enacting a free trade agreement severely restricting the authority of the federal government to protect domestic jobs and businesses and abandoning the 75 year old federal commitment to the poor.
Seventeen years later I fully expect a Republican Governor or two to declare in their state of the state address, “the era of small government is over”. For again and again, Republican governors and legislatures are preempting and abolishing the authority of communities to protect the health and welfare of their communities.
Earlier this year Wisconsin passed a law eliminating the authority of cities villages and counties to require public employees to live inside city limits and voiding any existing requirements.
A few weeks ago Kansas passed a law prohibiting cities, counties, and local government units from requiring private firms contracting with the city to provide leave, benefits or higher compensation than the state minimum wages.
The Florida House recently voted to preempt local governments from enacting “living wage” laws and “sick time” ordinances. If signed into law, the bill would also overturn counties like Miami-Dade and Broward that have “living wage” ordinances that require companies that contract with the county to pay wages higher than the federal minimum wage, and sometimes provide certain benefits.
Source URL: http://www.ilsr.org/conservatives-communities-decide-themselves/
by Brenda Platt | May 8, 2013
Two new reports from the Institute for Local Self-Reliance’s Composting Makes $en$e Project document the importance of expanded composting and compost use to enhance soils, protect watersheds, reduce waste, and create green jobs and a new made-in-America industrial sector.
For press release, click here.
With compostable material making up almost one-half of municipal solid waste, there is an enormous opportunity to achieve higher recycling levels with comprehensive composting. Increasing composting and compost use are also drivers of local economic growth and vital for cleaning up the Chesapeake Bay and other watersheds. When added to soil, compost has the unique ability to filter pollutants and absorb water, reducing flash runoff that causes erosion and pollution downstream. It’s a win-win for local economies and the environment.
Pay Dirt: Composting in Maryland to Reduce Waste, Create Jobs, & Protect the Bay
This 47-page report summarizes the current composting infrastructure in the state of Maryland, compares the number of jobs sustained through composting versus disposal facilities, outlines the benefits of expanding composting and compost use, underscores the importance of a diverse composting infrastructure, and suggests policies to overcome obstacles to expansion. One key finding is that 1,400 new full-time jobs could potentially be supported by converting the 1 million tons of yard trim and food scraps now disposed in Maryland into compost and using that compost locally in green infrastructure and low-impact development.
For full report, click here.
For Executive Summary, click here.
For Key Findings, click here.
For List of Benefits of Composting & Compost Use, click here.
For Job Potential Summary Tables, click here.
Building Healthy Soils with Compost to Protect Watersheds
This 12-page report highlights the importance of organic matter to healthy soils, and links healthy soils in turn to a healthier watershed. It makes the case that amending soil with compost is the best way to increase the level of organic matter. This report identifies watershed problems, the benefits of compost-amended soils, model initiatives and policies, frequently asked questions, and resources for more information.
For full report, click here.
Pay Dirt and Building Healthy Soils with Compost to Protect Watersheds were produced by ILSR’s Composting Makes $en$e Project under funding support from the Town Creek Foundation and from the University of the District of Columbia’s Water Resources Research Institute.
Source URL: http://www.ilsr.org/paydirt/
by John Farrell | May 3, 2013
Community renewable energy has significant political and economic benefits, but is often hindered by five major barriers. Watch this vividly illustrated presentation to learn how communities can overcome the barriers and advance more local renewable energy.
ILSR Senior Researcher John Farrell gave this presentation as part of a Sustainable Economies Law Center webinar on April 30, 2013.
You can also download or view just the slide show.
Source URL: http://www.ilsr.org/5-barriers-solutions-community-renewable-energy/
by admin | May 1, 2013
On the first of May 1974 Neil Seldman, Gil Friend and David Morris self-consciously incorporated the Institute for Local Self-Reliance. We thought it made for a suitable birthing day.
A little history might be in order.
Traditionally May Day marked the beginning of spring. In the Middle Ages it belonged to the workers. No work was done and the landlord of was required to provide a huge feast for all his tenant farmers and employees. The day was totally given over to enjoyment: dancing, singing, games, feasting.
After the Civil War as the industrial revolution moved into high gear, workers organized for an 8-hour day and used May 1st as the day for demonstrations. On May 1, 1886, protests erupted across the United States. Some 340,000 workers took part. An estimated 190,000 went out on strike.
As a large peaceful protest was winding down in Chicago’s Haymarket Square on May 4, 1886 someone threw a dynamite bomb that killed a policeman. That led to a battle in which 12 were killed. A widely publicized trial followed and the eventual hanging of four anarchists.
What came to be known as the Haymarket Massacre became a powerful symbol for workers around the world. In 1889, the Second International, a group comprised of leading communists and anarchists officially initiated the tradition of May Day labor demonstrations. In 1894, the first Monday in September was established as a federal holiday in the United States.
May Day celebrations later spread to Communist governments. Which led President Eisenhower, in 1958, to proclaim May 1 as Law Day.
Source URL: http://www.ilsr.org/happy-39th-birthday-ilsr/
by David Morris | April 17, 2013
I’m not saying it’s time to break out the champagne and start chanting, “The people united will never be defeated”. But the past few weeks have brought us some heartwarming demonstrations that the popular will still has a bite.
February 22: After a major public outcry, the Office of Science and Technology Policy (OSTP) directed federal agencies to make published results freely available to the public. Director John Holdren declared, “Americans should have easy access to the results of research they help support.”
The announcement by the Obama Administration came after 65,000 people petitioned the White House to make publicly supported research available to the public and 6 weeks after the suicide of Aaron Swartz who was facing up to 35 years in prison for freely distributing nearly 5 million scholarly articles from a privately owned digital archive. The death of Swartz, whose 2008 manifesto declared sharing information a “moral imperative” and the “privatization of knowledge” a curse, became a rallying cry for those who wanted to honor his legacy by changing a federal bias toward the privatization of public information first adopted by Ronald Reagan.
March 3: By more than 2 to 1, Swiss voters approved the “fat cat initiative”, a Constitutional amendment that bans big payouts to new and departing managers, gives shareholders the right to veto executive compensation and makes prison the penalty for executives who defy the new rules. All 26 Swiss cantons approved the amendment. A few weeks before the vote the nation was both outraged and energized by the $78 million payoff offered to the outgoing Chairman of Novartis even as the firm was cutting jobs. The vote reflected a deep-seated public sense “that company managers have been ransacking the coffers at the expense of society”, noted one Zurich newspaper.
March 21: The European Right to Water Initiative announced it had gathered 1.3 million signatures on a petition to demand the European Commission stop mandating or encouraging the privatization of water utilities. To be formally recognized by the European Union, the petition needs not only a million signatures but also a sufficient number from 7 EU member states. Currently 5 states have exceeded that level; several more are close.
April 10: The US Postal Service reversed its February 6th decision to end Saturday mail delivery as of this August. The Postal Service blamed Congress for requiring six-day delivery in a continuing budget resolution in March, but the culprit really was the groundswell of public opposition to its decision. Indeed, the leading advocate of privatizing the Post Office, Representative Darrell Issa (R-CA) Chair of the House Oversight and Government Reform Committee declared, “Despite some assertions, it’s quite clear that special interest lobbying and intense political pressure played a much greater role in the Postal Service’s change of heart than any real or perceived barrier to implementing what had been announced.”
Source URL: http://www.ilsr.org/victories-public-good/
by John Farrell | April 17, 2013
If you’re a state legislator in Minnesota, here are a few grains of salt to season the message you’ve been getting from electric utilities about the proposed solar energy standard. The bill (HF956/SF901) requires most utilities to get 4% of their energy from solar by 2025 and offers a standard, fixed-price contract to distributed solar energy producers (the same deal utilities get when they build their own power plants). The bill works by combining a utility-financed, revenue-neutral, market-based “value of solar” tariff and a ratepayer-financed incentive that is explicitly capped at a one-time 1.33% increase in electric rates.
Utilities are crying foul over the cost, the same utilities that have raised electric rates by 35-40% in the past decade. Let’s start with the average retail price of electricity, as reported by the utilities to the federal Energy Information Administration.
The average retail rate for Minnesota electricity customers has increased by 40% in the past decade, spread fairly evenly over the three customer classes: residential, commercial, and industrial.
Source URL: http://www.ilsr.org/proposed-solar-standard-cheap-compared-minnesota-utilities-rate-increases/
by admin | April 10, 2013
Reposted from Energy Justice – http://www.energyjustice.net/content/victory-against-marylands-waste-portfolio-standard-latest-creative-way-prop-incinerators
by Mike Ewall
What does an incinerator industry do when they can’t compete? Change the rules. Biomass and trash incinerators are the most expensive way to make energy, and trash incineration costs more than directly landfilling the waste. These industries survive to the extent that they can change the rules to get monopoly waste contracts, become ‘renewable’ energy in state mandates, or as we’re seeing in Maryland: worse.
In 2011, Maryland became the first state to change their state Renewable Portfolio Standard (RPS) law — a law that mandates “renewable energy” use — to move trash incineration from the dirtier “Tier II” to the not-quite-as-dirty “Tier I” (where wind and solar, but also biomass and landfill gas compete). Many states with RPS laws have two tiers, where the cheaper, already-built, and dirtier technologies (usually trash incineration and big old hydroelectric dams) are put in a second tier menu of options where the credits are cheaper, and in Maryland’s case, where the mandate gets phased out over time. Putting trash incineration in the same tier as wind power creates a much larger and growing market with more valuable credits. Since this, several other states have seen proposals to do the same.
In 2013, Maryland tried to set an ever worse precedent. Covanta (the nation’s largest waste incinerator corporation) wrote a bill that gets more creative: a municipal solid waste portfolio standard. Taking the notion from renewable energy laws, this law would phase in a 50% recycling goal, but also phase out direct landfilling of waste. By doing so, the law would create a strong incentive to incinerate waste before burying the ash. Zero waste, as defined by the Zero Waste International Alliance, means diverting as much waste as possible (90%+) from both landfills AND incinerators. However, the incinerator industry has managed to hijack the “zero waste” idea by pushing this “zero waste to landfill” rhetoric which many cities and corporations are mimicking — which really means “toxic ash to landfills.”
On April 8th, the Maryland legislature came very close to passing this awful precedent, but thanks to work by Community Research, Clean Water Action, Energy Justice Network and 15 other groups who lent their name to opposing this bill, it died a quiet death in the state House after passing the state Senate earlier in the last day of the 2013 legislative session. Covanta’s lobbyist was fuming and we can now focus back on stopping the two large new waste incinerators planned for the state, without worrying that they’ll be propped up by yet another pro-burn state policy. Keep an eye out for this tactic in your state.
Source URL: http://www.ilsr.org/victory-against-maryland-incinerator-bill/
by Stacy Mitchell | March 27, 2013
Originally published on Alternet, Truthout, and Salon.
When Michelle Obama visited a Walmart in Springfield, Missouri, a few weeks ago to praise the company’s efforts to sell healthier food, she did not say why she chose a store in Springfield of all cities. But, in ways that Obama surely did not intend, it was a fitting choice. This Midwestern city provides a chilling look at where Walmart wants to take our food system.
Springfield is one of nearly 40 metro areas where Walmart now captures about half or more of consumer spending on groceries, according to Metro Market Studies. Springfield area residents spend just over $1 billion on groceries each year, and one of every two of those dollars flows into a Walmart cash register. The chain has 20 stores in the area and shows no signs of slowing its growth. Its latest proposal, a store just south of the city’s downtown, has provoked widespread protest. Opponents say Walmart already has an overbearing presence in the region and argue that this new store would undermine nearby grocery stores, including a 63-year-old family-owned business which still provides delivery for its elderly customers. A few days before the First Lady’s visit, the City Council voted 5-4 to approve what will be Walmart’s 21st store in the community.
As Springfield goes, so goes the rest of the country, if Walmart has its way. Nationally, the retailer’s share of the grocery market now stands at 25 percent. That’s up from 4 percent just 16 years ago. Walmart’s tightening grip on the food system is unprecedented in U.S. history. Even A&P — often referred to as the Walmart of its day — accounted for only about 12 percent of grocery sales at its height in the 1940s. Its market share was kept in check in part by the federal government, which won an antitrust case against A&P in 1946. The contrast to today’s casual acceptance of Walmart’s market power could not be more stark.
Having gained more say over our food supply than Monsanto, Kraft, or Tyson, Walmart has been working overtime to present itself as a benevolent king. It has upped its donations to food pantries, reduced sodium and sugars in some of its store-brand products, and recast its relentless expansion as a solution to “food deserts.” In 2011, it pledged to build 275-300 stores “in or near” low-income communities lacking grocery stores. The Springfield store Obama visited is one of 86 such stores Walmart has since opened. Situated half a mile from the southwestern corner of a census tract identified as underserved by the USDA, the store qualifies as “near” a food desert. Other grocery stores are likewise perched on the edge of this tract. Although Walmart has made food deserts the vanguard of its PR strategy in urban areas, most of the stores the chain has built or proposed in cities like Chicago and Washington D.C. are in fact just blocks from established supermarkets, many unionized or locally owned. As it pushes into cities, Walmart’s primary aim is not to fill gaps but to grab market share.
The real effect of Walmart’s takeover of our food system has been to intensify the rural and urban poverty that drives unhealthy food choices. (more…)
Source URL: http://www.ilsr.org/walmarts-death-grip-food-system-intensifying-poverty/
by John Farrell | February 21, 2013
In this edition of Local Energy Rules, John Farrell and Wade Underwood speak with Steve Johnson of Convergence Energy about a successful 660 kilowatt community solar project near Delavan, WI. The project required 33 separate LLCs to take advantage of the state’s net metering rules, and also used the limited-time federal cash grant program to pull it together. Unfortunately, the policy environment isn’t as favorable for repeats, and Convergence has interest in, but no plans to replicate the project.
Just north of Delavan, Wisconsin, is Dan Osborne’s nursery farm. Where you once found a bean field now sit 80 solar panels on 100 tracking towers, generating power for over 125 homes. It’s a small, but successful energy harvest. The solar farm was developed by Convergence Energy of Lake Geneva, WI. Steve Johnson, vice president of business development, spoke to John Farrell and Wade Underwood about the solar farm in Delavan,
“The genesis of the project from the beginning was to try and provide an offsite location for individuals interested in investing in solar.”
Many individuals interested in going solar can be stymied because their property has tree cover or inadequate roof space, so Dan Osborne’s fields offered a better option, a community solar project.
Dan, who had worked with Convergence in the past, offered up 14 acres of his farm for the 660 kilowatt (kW) facility outside of Delavan. From there, Convergence arranged for 33 individual Limited Liability Companies to invest in 20 kW increments, which are sold back to the utility at retail price as a part of the net-metering policy (note: the utility’s net metering policy does not require the solar project to offset on-site load). The state’s net metering policy caps projects at 20 kW, hence the 33 separate companies.
In addition to receiving the retail electricity price for solar electricity produced, the projects also received grants from the state’s Focus on Energy program and used the cash grant option (since expired) in lieu of the 30% federal tax credit. Project investors signed up for either an 11-year or 20-year investment term (with an 8% return on investment) after which the project ownership reverts to Convergence Energy.
As Steve says, their investors are happy with the solar farm, but there have been precious few opportunities for similar networked projects to grow. The federal cash grant program has expired and the Focus on Energy incentives have been reduced. Despite the changed landscape, Steve and Convergence Energy are keeping their eyes open for opportunities where the success from the Osborne farm might be replicated. It’s small seed that they want to see growing in many places.
This is the third edition of Local Energy Rules, a new ILSR podcast that will be published twice monthly, on 1st and 3rd Thursday. In this podcast series, ILSR Senior Researcher John Farrell talks with people putting together great community renewable energy projects and examining how energy policies help or hurt the development of clean, local power.
Click to subscribe to the podcast: iTunes or RSS/XML, sign up for new podcast notifications and weekly email updates from the energy program!
Photo credit: Dan Lassiter, from Walworth County Today
Source URL: http://www.ilsr.org/steve-johnson-episode-3-local-energy-rules-podcast/
by John Farrell | February 19, 2013
Like many cities attempting to solve climate change at a local level, Minneapolis is finding the prospect more challenging that it may have imagined. The lion’s share of emissions (two-thirds in the case of Minneapolis) come from electricity and gas sold by two monopoly, corporate utilities. Minnesota’s state-level policy is helping: a renewable energy standard pushes the electric utility to 30% clean energy by 2020 and a conservation standard aims to reduce the growth in energy consumption. But state (and federal) policies aren’t enough, and Minneapolis has had no leverage to force its utilities to de-carbonize.
But an opportunity is coming soon.
In a short time, the city’s “franchise” contracts with its electric and gas utility will expire, giving the city a once-in-20-years chance to negotiate new terms for its energy services. These contracts are largely focused on right-of-way agreements, discussing an annual payment to city coffers in exchange utility use of city right-of-way to deliver energy services (in other words, payments for poles and wires in the alleys). But the contracts need not be limited to such mundane matters, especially when the city has a commitment to a climate-safe future and a populace strongly supportive of more clean, local energy. Already, the city’s franchise working group – a select four city council members – is examining alternatives to the status quo, options for energy services that reduce greenhouse gas emissions.
But there’s a catch. State law gives the utilities a monopoly on serving Minneapolis customers, regardless of their interest in negotiation. In other words, there’s not much incentive for Xcel Energy or CenterPoint Energy to talk turkey with Minneapolis when their citizens are a captive audience.
That’s the motivation behind Minneapolis Energy Options, giving the city an option and giving residents and businesses a choice for more control over their energy future. To do it, the city needs to put a municipal utility on the ballot this fall. If passed, it would authorize the city to create a municipal utility but only if it could be cleaner, more affordable, more reliable, and generate more local energy than the incumbent utilities. (see the video below for more about Minneapolis Energy Options).
It’s been done before, in Boulder, Colorado. After many years of fruitless negotiation with their monopoly electric utility (Xcel Energy, by coincidence), citizens in Boulder narrowly approved authorization of a city-owned utility in fall 2011. It hasn’t closed the door to negotiation; in fact, Xcel continues to ply the city with alternatives to forgo losing tens of thousands of customers and millions in profits. The utility’s motivation should not be lost on Minneapolis or other cities with an eye on meeting ambitious climate and energy goals:
If you want investor-owned, for profit, monopoly utilities to work on reducing greenhouse gas emissions, they need a financial incentive. And there’s no better incentive than losing customers.
In the next two years, Minneapolis will have a once-in-a-generation opportunity to take charge of its energy future in its utility franchise negotiations. But it’s only likely to make a difference if they have options on the table. Here’s hoping city council gives citizens that chance.
Source URL: http://www.ilsr.org/city-clean-local-energy/
by John Farrell | February 8, 2013
Suddenly everyone knows about Germany’s solar power dominance because Fox Newsheads made an ass of themselves, suggesting that the country is a sunny, tropical paradise. Most media folks have figured out that there are some monster differences in policy (e.g. a feed-in tariff), but then latch on to the “Germans pay a lot extra” meme. Germans do, and are perfectly happy with it, but that’s still not the story.
The real reason Germany dominates in solar (and wind) is their commitment to democratizing energy.
Half of their renewable power is owned by ordinary Germans, because that wonky sounding feed-in tariff (often known as a CLEAN Contract Program in America) makes it ridiculously simple and safe for someone to park their money in generating solar electricity on their roof instead of making pennies in interest at the bank.
It also makes their “energy change” movement politically bulletproof. Germans aren’t tree-hugging wackos giving up double mochas for wind turbines, they are investing by the tens of thousand in a clean energy future that is putting money back in their pockets and creating well over 300,000 new jobs (at last count). Their policy makes solar cost half as much to install as it does in America, where the free market’s red tape can’t compete with their “socialist” efficiency.
Fox News’ gaffe about sunshine helps others paper over the real tragedy of American energy policy. In a country founded on the concept of self-reliance (goodbye, tea imports!), we finance clean energy with tax credits that make wind and solar reliant on Wall Street instead of Main Street. We largely preclude participation by the ordinary citizen unless they give up ownership of their renewable energy system to a leasing company. We make clean energy a complicated alternative to business as usual, while the cloudy, windless Germans make the energy system of the future by making it stupid easy and financially rewarding.
I’m all for pounding the faithless fools of Fox, but let’s learn the real secret to German energy engineering and start making democratic energy in America.
Source URL: http://www.ilsr.org/germany-solar-power-wins/
by David Morris | February 6, 2013
“When the post office is closed, the flag comes down. When the human side of government closes its doors, we’re all in trouble.” Senator Jennings Randolph (West Virginia) 1958-85
For the post office the end game is on. This year the post office will close half its processing centers. By late spring a first class letter will take 1-3 days longer to arrive at its destination. By the end of this summer Saturday delivery is scheduled to end. Over the next year the Post Office plans to close over 3000 local post offices while slashing some 220,000 of the its 650,000 employees.
How did we come to this place? In retrospect, it is easy to distinguish three discrete stages in the 221-year life of the Post Office.
Stage 1: The Post Office Has a Broad Public Mandate
The first stage began in 1792 when President George Washington signed legislation making the United States Post Office a Cabinet level Department. It was a public institution with a clear mandate: to enable universal low cost access to information. In its early years this led it to initiate free and low cost delivery of newspapers and eventually, to offer a special rate for periodicals and books.
The post office helped tie the country together physically as well as intellectually. Post roads were essential to the early development of the country. Rural free delivery established in the late 19th century, spurred improvements in roads and bridges since the post office would not offer service where roads were bad. In the 20th century mail contracts underwrote the embryonic aviation industry
In the 1820s, when private companies began charging a handsome fee to deliver information faster, enabling cotton speculators to make a killing on the difference in prices at the docks of New York and the plantations of Alabama, the post office responded by establishing its own express mail service. The private sector complained. A Congressional investigation concluded “(T)he Government should not hesitate to adopt means…to place the community generally in possession of the same intelligence at as early a period as practicable.
In the 1840s, when the private sector began siphoning off the most profitable mail routes, leaving to the post office only money losing routes, Congress gave the post office a monopoly, enabling it to dramatically reduce the price of postage and initiate free door to door delivery in cities. In 1858 the first mailboxes appeared on street corners.
At the end of the 19th century, when private parcel companies began treating their customers badly, the post office introduced parcel post. The competition resulted in reduced prices and improved customer service.
Source URL: http://www.ilsr.org/post-office-public-institution/
by Stacy Mitchell | February 6, 2013
FOR IMMEDIATE RELEASE
CONTACT: (Additional contacts below)
Stacy Mitchell, Institute for Local Self-Reliance, 207-774-6792
MINNEAPOLIS, MN (Feb. 6, 2013) – An annual survey has found that independent businesses experienced solid revenue growth in 2012, buoyed in part by “buy local first” initiatives and growing public interest in supporting locally owned businesses.
But the survey also documented significant challenges facing independent businesses, most notably an increase in “showrooming” and competition from online retailers, tax and subsidy policies that favor their big competitors, difficulty obtaining loans, and a customer base still reeling from the recession.
The 2013 Independent Business Survey, which was conducted by the Institute for Local Self-Reliance in partnership with several business associations, gathered data from 2,377 independent businesses across 50 states and the District of Columbia. Among its findings:
Source URL: http://www.ilsr.org/2013-independent-business-survey/
by Brenda Platt | February 5, 2013
Tools exist that can remove up to 96% of stormwater pollutants. Are you interested? Attend this FREE seminar on March 5, 2013, to learn how compost-based BMPs can dramatically reduce sediment and targeted pollutants entering the Chesapeake Bay.
ILSR has partnered with local watershed and organizations to sponsor this event. Scientists from Filtrexx International and representatives from EPA, Anne Arundel County, and others to share insight on the challenges facing the watershed and the natural systems that can be harnessed for ecological and economic benefits.
SPACE IS LIMITED. To register download the PDF and follow the instructions to submit your RSVP.
Compost BMPs: EPA-WIP/TMDL Challenge
Date: March 5, 2013
Time: 9 a.m. – 4:00 p.m. EST
Location: Annapolis Maritime Museum
723 2nd Street, Annapolis, MD 21403
Compost BMPs Seminar Invitation (PDF)
Source URL: http://www.ilsr.org/md-seminar-compost-bmps-watershed-protection/
by Neil Seldman | January 28, 2013
Berkeley, CA, and El Cerrito, CA, in the San Francisco Bay area have been special examples of government, grassroots, and private business collaboration in recycling and reuse for the past 30 years. Below are comments on the decentralized model by one of its key advocates and activists, Dan Knapp. Dan is the founder of Urban Ore, which operates in both cities. Urban Ore is a reuse enterprise that handles 7,000 tons of materials a year with just 2% going to landfill. Among other achievements, Dan has authored the 12 categories of materials and products in the discard supply to allow for proper planning for each subset of materials and products.
Urban Ore and ILSR are long-term working partners.
Decentralized Recycling Models for Cities: Berkeley, CA, population 113,000, and El Cerrito, CA, population 24,000
by Dan Knapp, Ph.D.
Berkeley is a good example of a city that has an interlocking set of specialized operators with access to different subsets of the discard supply. All the operators cooperate with one another on policy, compete with one another for supply, and even trade resources with one another on a daily basis. All together, there are six major enterprises: one for-profit, two nonprofit, and three that are municipally owned and operated. They are: Urban Ore (transfer station salvage, reuse, some recycling including regulated materials); Community Conservation Centers (clean MRF operator, buyback and drop off operator, regulated materials operator), Ecology Center (residential CleanStream split-cart curbside pickup); and three City Operations: commercial curbside pickup including separate pickup for mixed plant debris and putrescibles, transfer station management, including more regulated materials and hard-to-recycle materials, and construction and demolition materials recovery from mixed loads. The City also provides garbage pickup service, but I don’t include that as recycling.
All this has been built up incrementally over time, in a process that is ongoing. Berkeley’s biggest problem, apart from periodic upsets caused by people who think a monopoly would be better, is that our facility is old and the customer interface is too small because the whole thing was designed to feed an incinerator that was never built. Altogether the City-owned discard management center occupies 9.6 acres; Urban Ore’s Ecopark adds another 2.6 to the total footprint of materials recovery in West Berkeley. There are other smaller companies dealing with smaller subsets of the discard supply, but these are the main ones.
For a community pursuing essentially the same model as Berkeley, consider the City of El Cerrito, about five miles to the north. They opened their source-separation facility in the early 1980s, and rebuilt it in 2011 after citizens rejected the idea of closing it down. The rebuilt facility opened in 2012 on Earth Day and has been a big success. It features quick in-and-out traffic flow, a fine and welcoming administration building, and a large customer interface with over thirty drop-off options. It is city-owned and operated, but there are a number of contractors, including Urban Ore, that also provide specialized recovery services onsite.
I personally think there are many advantages to this decentralized model. Last year at the CRRA (California Resource Recovery Association) conference held in Oakland, Berkeley’s operators presented their businesses as a case study of the ecology of commerce in action.
Photo credit: Urban Ore. A sculpture was made mainly from materials salvaged at Urban Ore by Bay Area artist Nemo Gould.
Source URL: http://www.ilsr.org/decentralized-recycling-models-cities-berkeley-el-cerrito-ca/
by admin | January 21, 2013
Reposted from New Mexico Recycling Coalition
Many people associate recycling as something that is good for the environment. But, not many realize the number of jobs created and what a significant economic driver the recycling industry plays in our state and country. In fact, nationally the recycling industry represents more jobs than the car manufacturing industry. A general rule of thumb is that for every landfill job there could be 10 recycling jobs for that same amount of material handled. The recycling industry is a $236 billion industry compared to the $45 billion waste industry.
A new report released by the New Mexico Recycling Coalition (NMRC) details the estimated number of jobs in the recycling industry and predicts how many jobs could be gained through increased recycling activities. It is estimated that close to 5,000 new direct, indirect and induced jobs will be created in New Mexico when the state recycling rate reaches 34%.
With recent investments and commitments made in both rural and urban areas, New Mexico is poised to meet this goal. Recycling activity is measured by the New Mexico Environment Department: Solid Waste Bureau, which calculates the state’s 2011 recycling rate at 21% of the municipal solid waste stream. That rate has witnessed a 16% average annual increase over the previous 5 years. If this trend continues, reaching the national average of 34% could be attained by 2015. (more…)
Source URL: http://www.ilsr.org/nm-recycling-industry-poised-add-5000-jobs/
by John Farrell | January 14, 2013
Within a decade, 300,000 megawatts of unsubsidized local solar power could compete with utility electricity prices in almost every state, enough clean energy to produce 10% of U.S. electricity. Grid parity is building like a relentless wave, but how much solar is at parity today? In 2016? In 2020? On homes or businesses? With incentives or without?
Answer all of these questions with the Greatest, Most Interactive U.S. Solar Grid Parity Map from the Institute for Local Self-Reliance. Click the link or the map image below to interact.
For more on the data behind the map, see ILSR’s Rooftop Revolution resources.
Source URL: http://www.ilsr.org/amazing-interactive-u-s-solar-grid-parity-map/
by David Morris | January 4, 2013
Who should pay the costs of climate disasters? In light of the current debate in the United States about federal assistance to Hurricane Sandy victims and the recent debate at the recent Doha Climate Conference about international assistance for climate change victims, that has become an increasingly pressing question for humankind.
The frequency and cost of natural disasters is rapidly increasing. Since the 1980s the number of billion dollar natural disasters in the United States has tripled from two to six. In 2011 there were 14 separate $1 billion plus weather events and losses topped $60 billion. This year Hurricane Sandy alone will exceed that total.
As costs have exceeded the ability of insurance companies, individual homeowners, businesses and communities to pay, some states have created statewide pooled risk funds. After Hurricane Andrew in 1992, for example, Florida created the Florida Hurricane Catastrophe Fund.
An increasing federalization of disaster relief has been occurring since the 1988 passage of the Stafford Act that required Washington to assume at least 75 percent of the costs of federally declared disasters. Predictably, the number of such declarations has increased dramatically, from 53 in 1992 under George H.W. Bush to 110 in 1999 under Bill Clinton, to 143 in 2008 under George W. Bush. In 2011 President Obama set a record by declaring federal disasters 242 times.
But as Hurricane Sandy has demonstrated, natural disasters are exceeding even FEMA’s expanded financial capacity, leading to the need for additional ad hoc Congressional appropriations. This has given a boost to efforts to create a natural catastrophe insurance fund that would pool the risk nationally, similar to the terrorist catastrophe fund we put in place immediately after 9/11 with the passage of the Air Transportation Safety and System Stabilization Act. The fund created by that Act eventually paid out about $7 billion to more than 7400 victims.
In 2002 Congress passed the Terrorism Risk Insurance Act. The program is triggered if losses exceed $100 million and cost to an individual insurance company is more than 20 percent of premiums paid. When the program is triggered, the federal government pays 85 percent of insured terrorism losses in excess of individual insurer trigger/deductibles while the insurer pays 15 percent. The program is capped at $100 billion per year.
Source URL: http://www.ilsr.org/pay-costs-climate-disasters/
by David Morris | December 19, 2012
Robert J. Shiller, Professor of Economics and Finance at Yale recently weighed in with his perspective on subsidizing charity with a New York Times column whose title clearly conveys his message: “Please Don’t Mess With the Charitable Deduction.”
There is a case to be made for charitable deductions. Regrettably, this isn’t it.
Shiller offers three arguments.
First, giving is a fundamental part of who we are. He cites anthropological research by Marcel Mauss and Karl Polanyi that contends reciprocal gift giving ”has pervaded healthy human society from its Neolithic beginnings.” And he points to recent brain imaging research revealing, “reciprocity is supported by fundamental structures in the brain.”
But Shiller misreads this evidence and its implications. Reciprocity is the key word. Polanyi and Mauss, and more recently, Lewis Hyde have argued that socially obligatory gift giving was the glue that held many societies together. It was the material expression of cohesive relationships.
Polanyi and Hyde made clear that market economies have undermined the concept of reciprocity, made relationships more impersonal, severely injured the culture of sharing and caused grievous social harm. In a review of Hyde’s 1983 book, The Gift, Detroit librarian JoAnn Schwartz notes the fundamental difference between a market economy and a gift economy. “In a market economy, one can hoard one’s goods without losing wealth. Indeed, wealth is increased by hoarding— although we generally call it ‘saving’. In contrast, in a gift economy, wealth is decreased by hoarding, for it is the circulation of the gift(s) within the community that leads to increase— increase in connections, increase in relationship strength.”
Our declining sense of reciprocity is not an argument for subsidizing charity but for reducing the dominance of market thinking. Not surprisingly, Professor Shiller does not pursue this argument.
Source URL: http://www.ilsr.org/subsidize-giving/
by David Morris | December 18, 2012
A letter to the editor in today’s New York Times succinctly makes the case that when guns are involved, people die. When they’re not, people are hurt.
To the Editor:
The New York Times, Dec. 15, 2012:
Page A1: “Gunman Massacres 20 Children at School in Connecticut.” Twenty children shot, 20 died.
Page A9: “Man Stabs 22 Children in China.” Twenty-two received knife wounds, 22 survived.
National Rifle Association claim: Guns don’t kill. People do.
JOHN ISRAEL . Decatur, Ga., Dec. 16, 2012
Source URL: http://www.ilsr.org/headlines-all-guns-involved-people-die/
by John Farrell | December 14, 2012
At the start of 2012, the United States had over 4,000 megawatts (MW) of solar photovoltaics (PV) connected to the grid, with the pace of new installations accelerating as the price continues to fall. There has never been a better opportunity for Americans to generate their own electricity on-site nor such a challenge to the electricity system paradigm and for its policy makers and regulators. The greatest challenge is to prepare: although only 0.1% of electricity is generated by solar power in 2012; within a decade, 300,000 MW of unsubsidized solar power will be at parity with retail electricity prices in most of the United States and more than 35 million buildings may be generating their own solar electricity sufficient to power almost 10% of the country.
|Read the reports:
||View the interactive map:
||View the infographic:||View presentation:
Source URL: http://www.ilsr.org/rooftop-revolution/
by David Morris | December 7, 2012
Lincoln is a magnificent movie. But as I left the theatre, to echo Paul Harvey, the late radio commentator, I wanted to know “the rest of the story”.
The movie begins in January 1865, exactly 2 years after Lincoln issued the Emancipation Proclamation, declaring slaves of the Confederate States “thenceforward and forever free. ”
As Lincoln himself told Secretary of the Navy Gideon Welles issuing the Proclamation was a “military necessity. We must free the slaves or be ourselves subdued.” Indeed, Lincoln wanted to issue the Proclamation in July 1862 but Secretary of State William Seward cautioned that the series of military defeats suffered by the Union army that year would lead many to view such a move simply as an act of desperation. The victory at Antietam in September gave Lincoln the opportunity he needed.
The Emancipation Proclamation helped the Union immeasurably. It converted a war to preserve the union into a war of liberation, a change that gained widespread support in key European nations. And by rescinding a 1792 ban on blacks serving in the armed forces, the Proclamation solved the increasingly pressing personnel needs of the Union Army in the face of declining number of white volunteers. During the war nearly 200,000 blacks, most of them ex-slaves joined the Union Army, giving the North additional manpower needed to win the war. As historian James M. McPherson writes, “The proclamation officially turned the Union army into an army of liberation…And by authorizing the enlistment of freed slaves into the army, the final proclamation went a long step toward creating that army of liberation.”
Abolitionists viewed arming ex-slaves as a major step toward giving them equality. Frederick Douglass urged blacks to join the army for this reason. “Once let the black man get upon his person the brass letter, U.S., let him get an eagle on his button, and a musket on his shoulder and bullets in his pocket, there is no power on earth that can deny that he has earned the right to citizenship.”
The movie focuses on one month—January 1865–and the Congressional vote on the 13th Amendment to the U.S. Constitution. Indeed, it could have been subtitled, “How a bill becomes a law.” The film ends with triumphant celebrations by whites and blacks after the Amendment that ended slavery throughout the nation passed by the razor thin margin of two votes. But earning the rights of citizenship was to prove a much more protracted affair.
Source URL: http://www.ilsr.org/lincoln-movie-rest-story/
by John Farrell | December 4, 2012
The United States has over 4,000 megawatts (MW) of solar photovoltaics (PV) connected to the grid, with the pace of new installations accelerating as the price continues to fall. There has never been a better opportunity for Americans to generate their own electricity on-site nor such a challenge to the electricity system paradigm and for its policy makers and regulators. The greatest challenge is to prepare: although only 0.1% of electricity is generated by solar power in 2012; within a decade, 300,000 MW of unsubsidized solar power will be at parity with retail electricity prices in most of the United States and more than 35 million buildings may be generating their own solar electricity sufficient to power almost 10% of the country.
Solar parity begins in areas with strong sun and high electricity prices. In some places (like Hawaii) that has already occurred. In several parts of the country, e.g. southern California, New York, parity is just around the corner. Commercial solar represents a third of the total installed base for solar PV and it has grown faster and the price has fallen more rapidly (by nearly 30% in two years) than for residential solar. Meanwhile, retail electricity prices have risen by 3% per year in the past decade.
Until now, the solar energy boom has largely been driven by federal tax incentives and state-based incentives. But incentive policies will also need to change to accommodate the uneven geographic distribution of unsubsidized solar at price parity.
Furthermore, almost all attention on solar power has been focused on cost, but industry, utilities, and policy makers need to begin addressing significant non-cost barriers that will become prominent as parity arrives.
The following table shows the parity potential for residential and commercial solar power by year. For example, in 2016 when the installed cost of solar will approach $3 per Watt, there’s a potential to install 75,000 MW of residential solar and 33,000 MW of commercial solar in utility service territories at prices competitive with retail electricity.
Existing federal and state incentives expand and accelerate the parity opportunity, but also create pitfalls. The sudden reduction of the federal tax credit in 2016 could set back solar markets in several states by 5 to 6 years. But without incentive changes, the tax credit may over-reward producers in sunny states at the expense of those in states with nascent solar markets.
Policy makers need to replace a one-size-fits-all incentive program with one that can adapt to the rapidly falling cost of solar and variations in regional competitiveness (e.g. a CLEAN Contract). It will also be necessary to address unexpected barriers to solar that emerge as the cost issue fades away.
The following maps illustrate the enormous potential for the spread of solar at retail price parity. An impressive 5.5 gigawatts of solar is already at price parity in 2012, rising to 122 gigawatts in 2022.
Like what you see? Get email updates on ILSR’s energy work!
Source URL: http://www.ilsr.org/commercial-roofop-revolution/
by Stacy Mitchell | December 1, 2012
In this TEDx talk, delivered on October 20, 2012 at TEDxDirigo‘s Villages conference at Bates College in Lewiston, Maine, conference, ILSR Senior Researcher Stacy Mitchell argues for a new phase in the local economy movement. She notes that there’s been a resurgence of support for small farms, local businesses, and community banks, but argues:
“As remarkable as these trends are, they are unlikely to amount to more than an small sideshow on the margins of the mainstream if the only way we can conceive of confronting corporate power and bringing about a new economy is through our buying decisions… What we really need to do is change the underlying policies that shape our economy. We can’t do that through the sum of our individual behavior in the marketplace. We can only do it by exercising our collective power as citizens.”
Please watch and leave us your comments. And please share it. (The “Share” button on the YouTube page makes it easy to embed the video on your own website or Facebook.)
Source URL: http://www.ilsr.org/ted/
by Stacy Mitchell | December 1, 2012
Walmart now captures $1 of every $4 Americans spend on groceries. It’s on track to claim one-third of food sales within five years. Here’s a look at how Walmart has dramatically altered the food system — triggering massive consolidation, driving down prices to farmers, and leaving more families struggling to afford healthy food.
This infographic was also published on Grist and Huffington Post. Click to enlarge.
Source URL: http://www.ilsr.org/infographic-walmart-food/
by Stacy Mitchell | November 27, 2012
While just 24 percent of big banks offer totally free checking, more than 60 percent of credit unions and small banks do, according to a new report (“Big Banks, Bigger Fees“) from the U.S. Public Interest Research Group (PIRG).
To gather data for the report, PIRG staff made inquiries at over 300 bank and credit union branches in 17 states. They found that credit unions and small banks have lower fees on average and do a better job of disclosing fees to prospective customers.
(Data from 2009 likewise show that, the bigger the bank, the higher the fees.)
PIRG also found that many financial institutions are failing to comply with the Truth In Savings Act, which requires that banks make complete fee schedules available to prospective customers. (more…)
Source URL: http://www.ilsr.org/free-checking-rare-big-banks-common-small/
by admin | November 14, 2012
We are expanding our team and are looking for an energetic individual passionate about ILSR’s mission to serve as Director of Strategy and Development. This is a great opportunity for an experienced fundraiser and nonprofit leader to help ILSR grow and develop new strategies during an important time. (more…)
Source URL: http://www.ilsr.org/director-strategy-development/
by Neil Seldman | November 13, 2012
The joint venture between Westmoreland Community Action (WCA), Greensburg, PA, and The ReUse People (TRP), Oakland, CA, completes a circle begun over a decade ago when HHS engaged ILSR to explore the feasibility of building deconstruction as a community development tool. The ILSR technical assistance work that followed led to the start up and expansion of numerous deconstruction companies and projects. As advisor to TRP, ILSR suggested that WCA would be a suitable partner as TRP expanded from its base in CA to nine additional sites throughout the US. WCA and TRP have been working together for the past two years.
Westmoreland Community Action, a 501(c)(3) non-profit organization in Greensburg, PA, has been serving disadvantaged residents in Westmoreland County and surrounding counties in southwestern Pennsylvania since 1980. WCA’s mission is to “strengthen communities and families to eliminate poverty,” and the organization currently runs 22 programs to achieve its organizational goals. WCA provides housing services including the construction of 10-20 homes per year. The organization also offers emergency assistance in addition to employment, mental health, and child development programs. (more…)
Source URL: http://www.ilsr.org/westmoreland-deconstruction-case-study/
by John Farrell | November 9, 2012
ILSR Senior Researcher John Farrell is giving this presentation to a collaborative meeting of the Federal Energy Regulatory Commission (FERC) and the National Association of Regulatory Commissioners (NARUC) this weekend. It highlights the proven value of distributed solar to utility grid systems and the urgent need for regulators and utilities to incorporate this value into their long-term plans, because distributed and unsubsidized solar is poised to explode as it reaches retail price parity.
Source URL: http://www.ilsr.org/finding-distributed-generation-finds/
by David Morris | November 8, 2012
“Neither rain, nor snow, nor sleet, nor hail shall keep the postmen from their appointed rounds.” Bill Fletcher Jr. of the Institute for Policy Studies tells of how he was reminded of that covenant when in the middle of superstorm Sandy he saw a postal van traveling on his street. And he reminded us that we should not expect such commitment and dedication by a public institution and public servants if private companies and private employees delivered the mail.
Postal Service Undeterred by Superstorm Sandy
Source URL: http://www.ilsr.org/superstorm-sandy-stop-mailman/
by John Farrell | October 31, 2012
Last week the Minnesota Public Utility Commission had a rare live public comment period on Xcel Energy’s long term planning process (called an Integrated Resource Plan). At the urging of several fellow clean energy advocates, I gave my 3 minute testimony about the enormous gulf between Xcel’s 10-year plan for solar power and the solar opportunity.
In their plan, the state’s largest electric utility indicated an interest in adding 20 megawatts (MW) of solar power to their Minnesota system (in comparison to a current statewide capacity of around 6-7 MW). If that seems small, consider that our forthcoming report on commercial solar grid parity indicates an opportunity to construct 940 MW of commercial rooftop solar at a price (without subsidies) that matches or beats retail electricity prices. The opportunity for residential solar is 2-3 times greater. Combined, 4400 MW of unsubsidized rooftop solar could compete with utility retail prices statewide by 2022.
In other words, Xcel’s plan is remarkable under-estimate of Minnesota’s likely solar market in the next decade.
Minnesota is a utility-regulated state. In other words, Xcel is a government-sanctioned monopoly with guaranteed customers and a guaranteed profit. Being the public utility for half the state means Xcel also has a public responsibility to the citizens of Minnesota, many of whom will want to take advantage of the chance to generate their own power, cut their electric bills, and keep their energy dollars local.
There are several ways Xcel could meet that public responsibility:
As a government-sanctioned monopoly, Xcel should enable its customers to make energy decisions that reduce their bills, generate clean energy, and keep their energy dollars local. It’s the least they can do for their guaranteed shareholder return.
Source URL: http://www.ilsr.org/utilities-distributed-solar/
by David Morris | October 30, 2012
If this election is a referendum on the benefit of government then superstorm Sandy should be Exhibit A for the affirmative. The government weather service, using data from government weather satellites delivered a remarkably accurate and sobering long range forecast that both catalyzed action and gave communities sufficient time to prepare. Those visually stunning maps you saw on the web or t.v. were largely based on public data made publicly available from local, state and federal agencies.
As the storm neared, governors and mayors ordered the evacuation of low lying areas. Police and firefighters ensured these orders were carried out and helped those needing assistance. As the storm hit, mayors imposed curfews.
Government 911 and 311 telephone operators quickly and effectively responded to hundreds of thousands of individual calls for assistance and information. Indeed, the volume of those calls may lead us to propose a different answer to the question asked by those famous lines from the movie Ghostbusters. “If there’s something weird and it don’t look good who ya gonna call?” Government.
Public schools and other public buildings were quickly converted into temporary shelters. Transit systems and bridges were closed when public safety might be compromised.
Tens of thousands National Guard troops were mobilized to assist at evacuation shelters, route clearance, search and rescue and delivery of essential equipment and supplies. USNORTHCOM placed its forces on 24-hour alert to provide medium and heavy lift helicopters and rescue teams and activated local military bases for possible use by the Federal Emergency Management Agency (FEMA).
Before the storm hit state agencies required emergency preparedness plans from publicly regulated utilities and after the storm hit monitored their responses.
The President quickly issued Major Disaster Declarations that allowed states and communities to access funding for recovery efforts. His ongoing hands-on role earned him the fulsome praise of New Jersey’s Republican Governor Chris Christie who told Good Morning America, “I have to say, the administration, the president himself and FEMA Administrator Craig Fugate have been outstanding with us so far.”
Public agencies swung into action to protect bridges, and roads, and sewer plants and subways and to plan for a cleanup that will require clearing debris, repairing infrastructure, and providing financial and other assistance to homeowners and businesses.
Seven years ago, Katrina showed the tragic consequences when government fails its duty to respond to natural disasters. But that was the exception that proves the rule. When disasters hit, the government is the only agent with the authority and capacity to marshal and mobilize resources sufficient to the undertaking. It can coordinate across jurisdictions and with both public and private actors. And its mission is not to enhance its balance sheet but to preserve the well being of its citizens. And in October 2012 it has shown how effectively it can perform that task.
Source URL: http://www.ilsr.org/sandy-importance-government/
by Stacy Mitchell | October 22, 2012
A number of critical small business issues are at stake in next month’s federal and state elections. Below we take a look at six of these issues.
1. Restructuring the Banking System
Nearly half of all small businesses have been unable to secure adequate financing, according to recent surveys. Even as the economy recovers, lending is unlikely to improve significantly because the problem is largely structural. Big banks, which increasingly dominate the banking system, do relatively little small business lending. Since 2007, the share of bank assets held by the largest 18 banks grew from 52 to 60 percent. Meanwhile, small and mid-sized banks, which provide most small business loans, have been losing ground. Over 900 of these banks have disappeared since 2007, casualties of the recession and government policy responses that have favored big banks.
What to look for in Congressional candidates:
Presidential positions: Romney has said that he does not support breaking up big banks. The Obama Administration opposed an amendment to the Dodd-Frank financial reform law that was similar to the SAFE Banking Act.
What to look for in candidates for state offices:
2. Closing Corporate Tax Loopholes (more…)
Source URL: http://www.ilsr.org/small-business-issues-stake-election/
by David Morris | October 16, 2012
In a democracy the majority wins. Which makes minority groups vulnerable. At the dawn of the Republic John Adams warned about “the tyranny of the majority.”
Almost a century later, the 14th Amendment finally declared that no State shall “deny to any person within its jurisdiction the equal protection of the laws.” Despite its being passed specifically to protect the rights of ex-slaves from the south’s new Black Codes, the Supreme Court astonishingly ruled the 14th Amendment did not apply to states as it dismissed indictments for lynching two blacks that had been issued based on violations of the Amendment.
Sixty years later the Court reversed itself. In the 1950s and 1960s the Warren Court, now viewed by conservatives as engaging in unwanted judicial activism, intervened to protect minorities from state legislatures.
In 1966, the Supreme Court struck down a $1.50 tax imposed on each voter (equivalent to about $10.50 today). Legislators in southern states defended the poll tax as a way to prevent “repeaters and floaters” from committing voting fraud. The Court disagreed. It rules that voting is a fundamental constitutional right and thus the burden was on the state to prove that a discriminatory law was necessary. The Court argued that introducing a “wealth or payment of a fee as a measure of a voter’s qualifications” violated the equal protection clause by unfairly burdening low-income, mostly black voters.
In 1967, the Court overturned bans on interracial marriage that remained on the books, and in some cases the constitutions of 16 states. The defendant, the state of Virginia argued that marriage laws are traditionally under the control of states and it had a rationale for treating interracial marriages different from other marriages because some studies found that children of interracial couples suffered intellectually and emotionally and the Bible clearly revealed God’s intention to separate the races. The Virginia Supreme Court had agreed, “Both sacred and secular history teach that nations and races have better advanced in human progress when they cultivated their own distinctive characteristics and culture and developed their own peculiar genius.”
“The freedom to marry has long been recognized as one of the vital personal rights essential to the orderly pursuit of happiness by free men,” the Court declared. “Marriage is one of the ‘basic civil rights of man,’ fundamental to our very existence and survival.” And because the freedom to marry is a fundamental right, the burden of proof is heavily on the state to offer substantial evidence that limiting access to that fundamental right was necessary to achieve a compelling government interest. (more…)
Source URL: http://www.ilsr.org/difference-court/
by admin | October 11, 2012
Reposted from Elemental Impact’s Zero Waste in Action blog
By: Holly Elmore
The Sustainable Food Court Initiative (SFCI) Airport Pilot, Hartsfield-Jackson Atlanta International Airport, works closely with the SFCI Team to bring sustainable operating practices to their operations, especially regarding food waste. In early 2012 the Atlanta Airport made a bold statement in the new concessionaire contract, the largest foodservice contract executed in North America. In the new contract, airport food vendors must meet the following provision:
“Concessionaire shall use compostable serviceware along with consumer facing packaging and source separate all food service wastes for direct transport to off airport composting facilities.” (more…)
Source URL: http://www.ilsr.org/atlanta-airport-exemptions-added/
by David Morris | October 9, 2012
Sometimes everywhere I turn, the story line seems to pivot on hormones.
Recently the Boys Scouts denied Ryan Anderson, a gay 17 year-old the rank of Eagle Scout because “he does not meet scouting’s membership standard on sexual orientation.” Last April, Jennifer Tyrrell, a lesbian parent in Ohio, was forced out as a den mother of her son’s Tiger Scouts group. (Can it be the Tiger Scouts were worried their boys would become lesbians?)
Way back in 1991, the Girl Scouts also grappled with the issue of homosexuality, but they came to a starkly different conclusion than their male counterparts. “As a private organization, Girl Scouts of the U.S.A. respects the values and beliefs of each of its members and does not intrude into personal matters. Therefore, there are no membership policies on sexual preference.” They’ve never found it necessary to revisit that policy nor, apparently have they been under much pressure to do so.
And then there’s the Catholic Church.
A few months ago, on orders from male Pope Benedict XVI, the all male Congregation for the Doctrine of the Faith (popularly known as the Holy Inquisition) appointed a male Archbishop from Seattle to reform the Leadership Conference of Women Religious (LCWR). The LCWR is an association comprised of 80 percent of America’s Catholic sisters. What was the nuns’ heresy? Focusing too much on promoting social justice and too little on opposing contraception and same-sex marriage. The head of the church’s doctrinal office informed the nuns they should regard their receivership as “an invitation to obedience.”
And Wall Street.
Unlike the Catholic Church, Wall Street cannot use scripture to justify excluding and diminishing women. Yet its organizational ranks eerily echo those of the Vatican. Women comprise only 2.5 percent of U.S. CEOs of finance and insurance companies. And Wall Street also treats its heretical women with contempt.
In 1997, in Congressional testimony Brooksley Born, head of the Commodity Futures Trading Commission warned that unregulated trading in derivatives could “threaten our regulated markets or, indeed, our economy without any federal agency knowing about it.” She called for greater transparency. The New York Times later revealed that Alan Greenspan treated her with “condescension”. Larry Summers “chastise(d) her.” When she persisted Greenspan, Robert Rubin and the head of the SEC, Arthur Levitt, Jr., called on Congress “to prevent Ms. Born from acting.” Months later, the huge hedge fund Long Term Capital Management nearly collapsed–confirming Born’s warnings. (Bets on derivatives were a key reason for the collapse.) “Despite that event,” the Times reports,” Congress ‘froze’ Born’s Commissions’ regulatory authority.” The next year, she left as head of the Commission.
Source URL: http://www.ilsr.org/hormones/
by Neil Seldman | October 4, 2012
The Illinois Electronic Products Recycling and Reuse Act is breaking the mold of 25 state e-scrap laws. Under the law, passed in 2008 and amended in 2011, companies that reuse machines get twice the credit of those companies that recycle the materials.
The law addresses the fastest growing part of the U.S. waste stream, mandating that manufacturers pay for recycling their products after consumers are through with them. According to Mel Nickerson, of the Environmental Law & Policy Center, over 130 million cell phones are discarded annually in the U.S. Most e-scrap is sent overseas where improper “recycling” burden people and the environment with dioxins, mercury, lead and other toxics. When these materials go to U.S. landfills they act as filters for rain, which then pollutes groundwater with these same toxic materials. (more…)
Source URL: http://www.ilsr.org/illinois-game-changing-e-scrap-law/
by David Morris | September 26, 2012
Watching professional football these days reminds me of Lily Tomlin’s Ernestine the telephone operator on Saturday Night Live and her famous punch line, “We don’t care. We don’t have to. We’re the phone company.”
Or in this case the National Football League. For those who don’t follow football, let me bring you up to date. In June the NFL locked out its referees and has been using replacements ever since. Referees at major college conferences refused to become scabs so the NFL reached down into the lower college and even high school ranks.
The result, as many predicted, has been a disaster.
“We have all seen officials have bad games. We have even seen bad officials. This is different, and unlike anything I can remember,” writes Michael Rosenberg of Inside NFL. “These guys are overwhelmed. They look like they spent 20 years riding a bicycle and now they have to fly a plane, and they keep looking around the cockpit for the handlebar brakes.”
Mike Pereira, who used to oversee NFL officiating before he went on Fox t.v. reveals that his on-the-air commentary has become much more challenging. “I’m not sure how refs arrive at rulings when they aren’t using NFL rules.”
Games are longer and much more tedious as replacement officials huddle and huddle and huddle trying to figure out what to do. “They’re killing the tempo and flow of the game,” CBS’ Shannon Sharpe asserts.
Typically, the home team wins a little more than 50 percent of the time. This season, the home team is 31-17 writes Marc Tracy at The New Republic. Some believe this is a result of replacements being intimidated by hometown fans.
It’s gotten so bad that Mitch Mortaza, founder of the Lingerie Football League, a league that has fined players for wearing too many clothes, recently tried to make his league look good by comparison. “Due to several on-field incompetent officiating we chose to part ways with a couple crews which apparently are now officiating in the NFL,” he writes on the league’s Facebook page. “We have not made public comment to date because we felt it was not our place to do so. However in light of tonight’s event, we felt it was only fair that NFL fans knew the truth as to who are officiating these games.”
The “event” he was referring to occurred on Monday Night Football. With a few seconds to go the Seattle Seahawks QB launched a Hail Mary pass into the end zone. A Packer caught the ball and a Seahawk quickly grabbed on to it. According to NFL rules that meant the pass was an interception. Two replacement officials, positioned perfectly on either side of the corner of the end zone, made two opposite calls. They huddled and huddled and after reviewing the play ruled it a touchdown. Only the hometown fans were happy. Others are already calling it the play that will live in infamy.
The assault on the integrity of the game, and the safety of the players, has not fazed the NFL. Before the season began Dave Zirin and Mike Elk predicted in The Nation, “The NFL clearly believes with no small amount of justification that they can do this because no one will care.” At the time NFL Vice President Ray Anderson apparently agreed, “You’ve never paid for an NFL ticket to watch someone officiate a game.”
By the second week of the new football season coaches and players were vigorously complaining about the officiating. The NFL quickly responded by threatening to discipline those coaches or owners who publicly protested. “We contacted them to remind them that everyone has a responsibility to respect the game,” said NFL’s Ray Anderson. A few days later the fines began.
On SportsCenter, former Forty Niner QB Steve Young forthrightly explained to fans that nothing could be done, “Everything about the NFL now is inelastic for demand. There’s nothing they can do to hurt the demand for the game. So the bottom line is they don’t care. Player safety—doesn’t matter in this case. Bring in the Division III officials–-doesn’t matter. Because in the end, you’re still going to watch the game, we’re going to all complain and moan and gripe and say there’s all these problems, all the coaches say it, the players say it—doesn’t matter. So just go ahead, gripe all you want.”
After griping, Josh Levin at Slate grudgingly agrees, “It’s crappy to know that you and I and all the NFL fans out there provide the NFL’s leverage against its workers. But what are we supposed to do—not watch football? … Being a silent accomplice to Roger Goodell’s union-busting barely even registers.”
The key bargaining issue between owners and workers has to do with money. No surprise there. What is surprising is how little money is involved–$3.3 million a year according to Peter King of Sports Illustrated. That’s the amount the NFL wants to cut from its current pension contributions.
Compare that to the $3 billion a year the 32 owners of the NFL are dividing up in t.v. revenue, plus the tens of millions of dollars more they make from selling tickets, merchandise, concessions, etc. The cost of keeping referees pensions where they are is about $100,000 per team. A few days ago Forbes came out with its 2012 list of billionaires. Three more NFL owners made the list, bringing the total number of billionaire football owners to 18.
Ironically, there is another sticking point between referees and owners. The owners want to be able to “bench” referees who make mistakes in order to hold them accountable. But no replacement referee has yet to be benched.
And who will hold the owners accountable for the way they have undermined the sport? Apparently no one. We like our football too much.
Source URL: http://www.ilsr.org/were-nfl-dont-care/
by John Farrell | September 20, 2012
What happens when a city’s franchise contracts with its incumbent electric and gas utilities expires? A once-in-20-year opportunity to consider how its energy can be cleaner, more affordable, more reliable, and more local. ILSR Senior Researcher John Farrell presents to Environment Minnesota’s Green Ideas and Ham policy breakfast, discussing the implications of an expiring franchise and some examples of how municipal utilities are pushing the envelope on clean, local energy.
Listen to the presentation audio as you click through the slides.
Source URL: http://www.ilsr.org/john-farrell-presents-local-energy-options-minneapolis/
by David Morris | September 13, 2012
The recent colorful tirade by Minnesota Vikings punter Chris Kluwe against a legislator who demanded the Baltimore Ravens owner fire linebacker Brendon Ayanbadejo for supporting gay marriage and the overwhelmingly positive response to it by football fans and players alike are heartwarming developments. It shows how far we’ve come. But the fact that voters in four states—Maryland, Maine, Minnesota, Washington—will have an opportunity this November to ban same sex marriage and voters in 31 states have already approved constitutional amendments to that effect, usually by wide margins, shows how far we have to go.
The path from prejudice to understanding and acceptance has been much smoother in other countries. Eight European countries have legalized same sex marriage, including predominantly Catholic countries like Portugal and Spain. In Europe this is not a left-right issue. The new Socialist-led government in France promises to legalize same sex marriage next year. The Conservative-led government in Britain will introduce similar legislation.
On this continent, in 2000 the Canadian Parliament, by a wide margin, banned same-sex marriage. Five years later, after a series of court decisions overturned bans on same-sex marriage in several Canadian provinces the nation’s legislators revisited the issue, reversed themselves and legalized same-sex marriage.
In this country, by contrast, whenever state courts have overturned a ban on same sex marriage as a violation of state constitutions, Americans often have reacted by changing state constitutions or enacting federal laws that devalue same sex marriage in those states that do legalize it. In 1996, for example, after a Hawaiian court concluded that denying same-sex couples the right to marry violated the equal rights provision of its constitution Congress quickly passed the Defense of Marriage Act denying federal benefits to same-sex couples even if they are legally married under state law. And Hawaiians promptly changed their constitution to allow their legislature to ban gay marriages, which it just as promptly did.
As I was doing research for my recently published book, The Thoughtful Voter’s Guide to Same Sex Marriage: A Tool for the Decided, the Undecided and the Genuinely Perplexed, I was struck by how many times we’ve addressed and changed the institution of marriage. We’ve upgraded the status of wives (originally subordinate to their husbands in the eyes of the law), enabled no-fault divorce (initially a spouse had to prove adultery), permitted family planning (initially in many states the sale of contraceptives was illegal), and overturned bans on interracial marriage.
I was also reminded of how often scripture was used to justify opposition to change. Believe that wives must be subservient? Cite Genesis 2:24. Oppose allowing divorce simply when both parties want one? Cite Matthew 19:3-9. Oppose contraception? Cite Genesis 1:28. Oppose interracial marriage? Cite Acts 17:24-26.
Opponents of same sex marriage argue they are defending the institution of marriage but their arguments have little to do with marriage. After all, the institution of marriage has suffered grievously in the only-heterosexuals-can-marry era. The percentage of households comprised of married couples plunged from 78 percent in 1950 to just 48 percent in 2010. Meanwhile the 2010 Census reported about 600,000 same sex households in this country. Allowing those among them who want to abandon cohabitation and choose marriage to do so can only strengthen the institution of marriage.
Nor does the argument opponents make that they are defending the psyche and safety of children have anything to do with marriage. Same sex couples already parent 115,000 children and study after study after study finds them at least as well-adjusted as children of heterosexual couples. In 2008 a Florida Circuit Court judge, after taking voluminous testimony from both sides on whether to overturn that state’s ban on adoption by same-sex couples flatly concluded, “… based on the robust nature of the evidence available in the field, this Court is satisfied that the issue is so far beyond dispute that it would be irrational to hold otherwise; the best interests of children are not preserved by prohibiting homosexual adoption.” Indeed, as psychologist Abbie Goldberg points out, the fact that gays and lesbians do not become parents by accident, compared to almost 50 percent accidental pregnancy rates among heterosexuals “translates to greater commitment on average and more involvement”. And allowing same sex couples with children to marry can only benefit the child.
No, the arguments against same-sex marriage are not about marriage; they’re about homosexuality. We should remember that only a generation ago an admission of homosexuality could not only get one fired but arrested. In 1970 the IRS rejected the application of The Pride Foundation for a non profit tax exemption by declaring the organization’s goal of “advanc(ing) the welfare of the homosexual community” to be “perverted or deviate behavior…contrary to public policy and therefore not ‘charitable’”.
We’ve come a long way since then, but the road has been bumpy and we have yet to arrive at our destination. In a cover story, Entertainment Weekly noted that just 15 years ago when Ellen DeGeneres came out of the closet the story became the cover of Time magazine, a major story on Oprah and the subject of an editorial in the New York Times. Today t.v. and movie actors come out with little publicity. “What was impossible 60s year ago and dangerous 40 years ago and difficult 20 years ago is now becoming no big deal.”
Nevertheless, prejudice against homosexuals is still widespread. In 34 states it is still legal for lesbian and gay employees to be fired simply because their employers disapprove of their sexual orientation. And the vitriol of opponents of same sex marriage, especially among the clergy, has lent legitimacy to that prejudice. The FBI reports a significant increase in hate crimes directed at gays and lesbians.
In several states the Catholic Church is leading the fight against legal recognition of same sex couples. In Minnesota virtually all funding for the opposition to same-sex marriage has come from the Catholic Church. Earlier this year the Archbishop of Saint Paul and Minneapolis declared the banning of same sex marriage one of the most important ambitions of the Church and made clear he would brook no dissent on this issue from any member of the clergy. He then ordered priests to sermonize on the sins of same sex marriage and say a prayer for its prohibition every Sunday and began sending teams to high schools to tutor seniors on the definition of marriage.
The Archbishop has had trouble finding scriptural justification for his frenetic campaign. In a letter to the clergy early this year he offered two pieces of biblical evidence to support his crusade. A passage in Genesis that says Adam was lonely so God made Eve and they, the only two people on earth, had sex (even though they weren’t married.) And a passage from Matthew that contains Jesus’ opposition to divorce and has nothing to do with homosexuality, which Jesus never condemns) nor same sex marriage.
The Catholic Church, regrettably, doesn’t point to the part of the New Testament that conveys the essence of the values that Jesus hoped would be the foundation of Christianity. Matthew relates the story of a Pharisee asking Jesus, “Teacher, which is the greatest commandment in the Law?” His answer is both instructive and revealing as to which side of the debate He might take. “Jesus replied: ‘Love the Lord your God with all your heart and with all your soul and with all your mind.’ This is the first and greatest commandment. And the second is like it: ‘Love your neighbor as yourself.’ All the Law and the Prophets hang on these two commandments.” (22:36-40)
I suspect that for Jesus what is important is not a family structure based on biology or even heterosexual relationships but the quality of love exhibited in relationships. Unfortunately, those who oppose the right of loving, committed individuals to become married often seem driven more by hate than love.
In 2010, the Ninth Circuit Court of Appeals ruled that the constitutional amendment approved by the voters that banned same-sex marriage violated the U.S. Constitution. After taking weeks of testimony from both sides he concluded, “The considered views and opinions of even the most highly qualified scholars and experts seldom outweigh the determinations of the voters. When challenged, however, the voters’ determinations must find at least some support in evidence… Conjecture, speculation and fears are not enough. Still less will the moral disapprobation of a group or class of citizens suffice, no matter how large the majority that shares that view. The evidence demonstrated beyond serious reckoning that Proposition 8 finds support only in such disapproval.”
To date no ballot initiative to ban same-sex marriage has been defeated. We will see in November whether that string continues or whether we will be able to say we have turned a corner and are willing to join the increasing part of the rest of the western world that accepts the diversity of the human condition and truly honors the precept, “Love your neighbor as yourself.”
Wedding rings (c) Jeff Belmonte. Published under a creative commons license.
Source URL: http://www.ilsr.org/times-achanging-they/
by John Farrell | September 7, 2012
Update 12/20/12: This project includes battery storage.
Just last month, the Wright-Hennepin Cooperative Electric Association, serving communities just north and west of the Twin Cities metropolitan area, announced Minnesota’s first community solar project. The 40 kW solar array will be located at the cooperative’s headquarters, with members allowed to purchase individual panels in the project for $869. In exchange, members will receive a credit on their bill equal to the electricity production of their portion of the 40 kW array.
Participation in the community solar project lowers the payback period for solar, as compared to individual ownership, by 7-12 years.
The project is organized by the Clean Energy Collective, a Colorado-based firm that has already built two community solar projects with rural electric cooperatives in that state and with plans to build several more. Their projects are noteworthy for being the only consistently replicable community solar model, as evidenced by their success. (for more on community solar projects, see our 2010 report).
Partnership is the key to CEC’s success, with the company providing cooperatives with “RemoteMeter” software allowing them to handle the accounting part of the community solar project (and a smartphone app to allow participants to track production). They also handle all of the project financing and development, with utilities having merely to market the program to their members and help oversee the project interconnection to their electric grid.
The community solar project provides a good deal for members, for three reasons. Most Minnesotans lack an appropriate, sunny space for a solar array (75% of people rent or have a roof that is unsuitable for solar). With Wright-Hennepin’s community solar array, participants can own a share of a local, centralized system that will be maintained by the cooperative, and still get their share of the electricity as though it were on their own rooftop.
Source URL: http://www.ilsr.org/minnesotas-community-solar-project-minnesota-made/
by David Morris | August 31, 2012
After 20 years of debate one might reasonably ask why another report on same-sex marriage would be necessary. Our reply is that although the debate has been long it has often generated more heat than light.
We learn best through debate, by listening to both sides and sifting through the evidence they present. Too often, outside the courtroom where examination and cross-examination are the basis of judicial decision making, we hear only one side or the other. And in this case we too often lose the forest for the trees, failing to step back and examine the heated debates over the definition of marriage that have occurred throughout U.S. history and abroad.
We begin with a background that puts the current debate about same-sex marriage in a historical context. We then present both sides of the debate, with extensive footnotes that allow the interested reader to dig deeper.
We opted for thoroughness rather than sound bites. The result, we concede, is a long document that demands a willingness to spend some time on the issue. We believe the reader will find the time spent rewarding. The issue itself is one of the most important ever put before voters.
Or download the guide as an eBook, in ePub or Kindle format
The Guide is also in print. Bulk copies are available for as little as 50 cents apiece if ordering over 50. For more information contact David Morris at firstname.lastname@example.org
Source URL: http://www.ilsr.org/thoughtful-voters-guide-same-sex-marriage/
by Stacy Mitchell | August 30, 2012
No other large American city has done as much to check the spread of chain stores as San Francisco. Under a city law enacted in 2006, a “formula” retail store or restaurant cannot open in any of the city’s neighborhood commercial districts unless it undergoes a public hearing and obtains special approval from the Planning Commission.
The restrictions have helped San Francisco maintain a relatively vibrant independent retail sector. The city has twice as many independent bookstores per capita as New York. It is home to some 80 local hardware stores. It also boasts more than 900 independent retailers selling fresh food, including more than 50 locally owned grocery stores of at least 5,000 square feet.
But San Francisco’s policy has major gaps. The law, for example, covers only neighborhood business districts, leaving the city’s downtown and other commercial areas unprotected. Its guidelines for approving formula businesses, which were written with smaller stores like Walgreens in mind, are also ill-suited to evaluating the impacts of big-box stores and large supermarket chains, which recently began pushing their way into San Francisco and other urban areas.
These gaps have allowed scores of new chain stores to slip into the city over the last couple of years. Target is opening two stores this fall. Fresh & Easy, a subsidiary of the British mega-retailer Tesco, has won approval for four stores and is working on a fifth. Whole Foods has opened half a dozen outlets. Several new malls are under construction. Even Walmart is scouring the city for sites. And, while San Francisco still has half as many Starbucks stores per capita as Manhattan, it’s now home to a staggering 66, along with about the same number of chain drugstores.
“San Francisco is perceived to be a tough place for big businesses and corporate formula retail chains. The facts don’t bear this out,” said Supervisor Eric Mar, who chairs the city’s Land Use and Development Committee. “We continue to hear from neighborhood merchants and residents that they feel the city is being steadily overrun by chain stores.”
Should that trend continue, it will not only erode the city’s distinctive character. It will also weaken its economy. According to a 2005 study by Civic Economics, local retailers have a much larger market share in San Francisco than they do nationally. This high proportion of local ownership is great for the city’s economy, because every $1 million in consumer spending the flows to independent businesses instead of chains generates about twice as many local jobs. (more…)
Source URL: http://www.ilsr.org/san-francisco-dealing-chains/
by Stacy Mitchell | August 22, 2012
ILSR’s Stacy Mitchell was a guest on Your Call on San Francisco public radio station KALW. She joined host Rose Aguilar and Charles Fishman, author of The Wal-Mart Effect, for an hour-long conversation about how Walmart came to dominate the economy and what local business owners and retail workers are doing to counter its market power.
Listen to the show.
Source URL: http://www.ilsr.org/stacy-mitchell-interview-kalw/
by David Morris | August 16, 2012
Almost daily we read about another apparently stiff financial penalty meted out for corporate malfeasance. This year corporations are on track to pay as much as $8 billion to resolve charges of defrauding the government, a record sum, according to the Department of Justice. Last year big business paid the SEC $2.8 billion to settle disputes.
Sounds like an awful lot of money. And it is, for you and me. But is it a lot of money for corporate lawbreakers? The best way to determine that is to see whether the penalties have deterred them from further wrongdoing.
The empirical evidence argues they don’t. A 2011 New York Times analysis of enforcement actions during the last 15 years found at least 51 cases in which 19 Wall Street firms had broken antifraud laws they had agreed never to breach. Goldman Sachs, Morgan Stanley, JPMorgan Chase and Bank of America, among others, have settled fraud cases by stipulating they would never again violate an antifraud law, only to do so again and again and again. Bank of America’s securities unit has agreed four times since 2005 not to violate a major antifraud statute, and another four times not to violate a separate law. Merrill Lynch, which Bank of America acquired in 2008, has separately agreed not to violate the same two statutes seven times since 1999. Outside the financial sector the story is similar. Erika Kelton at Forbes reports that Pfizer paid $152 million in 2008; $49 million a few months later; a record-setting $2.3 billion in 2009 and $14.5 million last year. Each time it legally promised to adhere to federal law in the future. Each time it broke that promise.
The SEC could bring contempt of court charges against serial offenders, but it doesn’t. Earlier this year the SEC revealed it has not brought any contempt charges against large financial firms in the last 10 years. Adding insult to insult the SEC doesn’t even publicly refer to previous cases when filing new charges.
We know that CEOs of big corporations never go to jail. We probably didn’t know they often benefit financially even when the corporations under their control violate the law. GlaxoSmithKline CEO Andrew Witty recently received a significant pay boost to roughly $16.5 million just four months after Glaxo announced it will pay $3 billion to settle federal allegations of illegal marketing of many of its prescription drugs. Johnson & Johnson Chairman and CEO William Weldon received a 55 percent increase in his annual performance bonus for 2011 and a pay raise despite a settlement J&J is negotiating with the Justice Department that could run as high as $1.8 billion.
Source URL: http://www.ilsr.org/encouraging-corporate-crime/
by Stacy Mitchell | August 16, 2012
Choosing a locally owned store generates almost four times as much economic benefit for the surrounding region as shopping at a chain, a new study has concluded. The analysis also found that eating at a local restaurant produces more than twice the local economic impact of dining at a chain restaurant.
The research firm Civic Economics analyzed data from fifteen independent retailers and seven independent restaurants, all located in Salt Lake City, and compared their impact on the local economy with four chain retail stores (Barnes & Noble, Home Depot, Office Max, and Target) and three national restaurant chains (Darden, McDonald’s, and P.F. Chang’s).
The study found that the local retailers return an average of 52 percent of their revenue to the local economy, compared with just 14 percent for the chain retailers. Similarly, the local restaurants re-circulate an average of 79 percent of their revenue locally, compared to 30 percent for the chain eateries.
What accounts for the difference? In a handy graphic, Civic Economics shows the breakdown. Independent businesses spend much more on local labor. They also procure more goods for resale locally and rely much more heavily on local providers for services like accounting and printing. This means that much of the money a customer spends at a local store or restaurant is re-spent within the local economy, supporting other businesses and jobs.
Chains have little need for local goods and services, and keep local labor costs to a minimum. Most of the revenue that these stores and restaurants capture leaves the community.
This study was sponsored by Local First Utah. “Most of us have a natural sense that local businesses are good for communities,” said Betsy Burton, who co-chairs the organization’s board and owns the King’s English Bookstore. “And studies in other parts of the country have borne this out… Now we have hard evidence right here in our own city that consumers can have a huge impact on the local economy, just by shifting some of their purchases to local businesses.”
The study is part of a nationwide research project being conducted by Civic Economics in partnership with the American Booksellers Association. Other communities where a similar data analysis is underway include Bainbridge Island, Washington; Chicago, Illinois; Las Vegas, New Mexico; Louisville, Kentucky; Milwaukee, Wisconsin; Pleasanton, California; and Raleigh, North Carolina.
Source URL: http://www.ilsr.org/independent-businesse-deliver-bigger-economic-benefit/
by David Morris | August 14, 2012
In 2012 we accept as received wisdom that government is unresponsive while a competitive marketplace forces private business to offer quality customer service. So when Representative Henry Cuellar (D-TX) introduced his warmly received bill, The Government Customer Service Improvement Act, we considered his announcement a truism, “When taxpayers interact with a government agency, they deserve the same timely, reliable assistance they would expect from a private sector business,”
Ironically, just as we achieve a bipartisan consensus that to improve customer service government should act like a private business both the empirical and anecdotal evidence is telling us it should be the other way around.
Consider the results of a new study by the Commonwealth Fund that compares private health insurance companies to government Medicare. Government was the hands down winner. People covered by private health plans were much more likely than Medicare beneficiaries to forego needed care, experience access problems, encounter medical bill problems, and be less satisfied with their coverage. Is anyone who’s had a conversation, or tried to have a conversation, with his or her private insurance carrier surprised?
Indeed, the evidence that government is far better than business at delivering health insurance is so compelling that anti-government Americans have adopted an ingenious strategy to avoid conceding the point. They have simply decided that Medicare is a private insurance program. Recall the signs and letters and talk show host warnings during the health reform debate that President Obama better keep the government out of Medicare!
We no longer even expect personal customer service in the fastest growing part of the economy and the one with which we interact the most–internet based services. “Twitter’s phone system hangs up after providing Web or e-mail addresses three times,” the New York Times recently reported. “At the end of a long phone tree, Facebook’s system explains it is, in fact, “an Internet-based company.” …LinkedIn’s voice mail lists an alternate customer service number. Dial it, and the caller is trapped in a telephonic version of the movie “Groundhog Day,” forced to work through the original phone tree again and again until the lesson is clear: stop calling.” Google’s phone system (what, you didn’t know Google has a phone number?) sends callers back to the Web no less than 11 times.
Internet based companies argue that with millions of users, they cannot possibly pick up a phone.
But of course they could. They certainly have the resources. This year Google’s profits will hit $10 billion with revenues approaching $50 billion. Diverting just 10 percent of its profit, 2 percent of its revenue to customer service would allow Google to hire an additional 80,000 people to answer the phone.
“Mikkel Svane, the chief executive of Zendesk, which helps companies manage incoming requests offers the companies’ 21st century perspective on customer service, “People get aggressive or aggravated; people are depressed or crying. It’s just hard talking to customers.”
Yes dealing with humans is messy. But hard as it is, government, unlike private business, appears equal to the challenge. In 1996 Baltimore launched the nation’s first 311 number, a single non-emergency number that residents can call to complain, ask advice, or request service. The number now receives 1 million calls a year. New York City 311, activated in 2003, receives 20 million calls a year on a remarkable range of issues. My mom once called to ask why the reception of her beloved local public television station had become intermittent after the conversion to digital. The 311 operator politely and efficiently shifted her to a person at Channel 13 who provided her with a clear (albeit ultimately unsatisfying) explanation.
Unlike Google, New York devotes about 2 percent of its revenues to this most personal and effective customer service. “We consider 311 one of the most used and most critical city services,” says Joseph Morrisroe, executive director of NYC 311.
Budget difficulties have led several cities to launch online options to reduce costs. But they don’t see them as a replacement for a human answering the phone. Spencer Stern, a 311 consultant for more than 10 years notes, “Technology is an important tool, but everyone I’ve worked with — from city managers to county executives — is also very much focused on human interaction…They realize having that human touch is important to their constituents — no matter what the cost.”
Despite the cost, and shrinking budgets, cities don’t appear to be slowing their embrace of 311.
Why do big businesses all but ignore customer service? Because the profits of Facebook and Google and Humana do not depend on providing high quality customer service. In fact, some keen observers of the giant companies that have come to dominate the private sector have concluded that good customer service actually hurts the bottom line. The New York Times reports on the epiphany of one such observer, Richard X. Bove, an analyst with Rochdale Securities about customer service in the banking sector. “Spending time solving problems with people is not selling products. It’s wasting time.” “One of the core beliefs you have about any company is that the quality of their product is the determinant of the company’s financial success,” says Mr. Bove. “The point is, it doesn’t work here.” He adds, “I’m struck by the fact that the service is so bad, and yet the company is so good.” Good to an analyst means the stock price has increased.
Mr. Bove gained this insight from personal experience. He was a longtime customer of Wachovia, acquired by Wells Fargo in 2007. Since then investors have pushed up Wells Fargo’s stock price so much that it is now the largest American bank by stock market capitalization. Meanwhile its customer service ratings have plunged. In 2007, J. D. Power & Associates rated Wachovia among the banks with the highest level of customer satisfaction. After it was taken over its banks received below-average customer service ratings. In Florida, where Mr. Bove lives, Wachovia/Wells Fargo was 10th out of 11 banks.
Mr. Bove recently upgraded his recommendation on Wells Fargo stock to a buy. At about the same time he began to move his personal accounts to another bank.
A few years ago Kevin Drum, a writer at Mother Jones, after describing his infuriating experience dealing with customer service at another corporate giant, Verizon nicely encapsulated what may become the new received wisdom. “Frankly, my dealings with the government, on average, are better than most of my dealings with corporations. The government might sometimes provide poor customer service just because they lack the motivation to do better, but corporate America routinely provides crappy customer service as part of a deliberate and minutely planned strategy.”
Source URL: http://www.ilsr.org/quality-customer-service-government-business/
by John Farrell | August 8, 2012
Many people expect that solar power will dramatically expand once it bursts through the cost barrier and becomes less expensive than grid electricity. But archaic utility rules can effectively cap local solar development at just 15% of peak demand. Fortunately, pioneering states like Hawaii and California are exploring ways to lift the cap and bring utility rules into the 21st century.
Source URL: http://www.ilsr.org/archiac-utility-rules-stall-local-solar-infographic/
by Brenda Platt | August 6, 2012
Composting is inherently local; it supports local green jobs, farmers and other businesses. Indeed, farmers have a vital role to play in producing and utilizing compost to restore depleted soils. They also have land, a necessary factor for developing the capacity to compost. State permitting rules can facilitate on-farm and other small-scale operators, thus helping to expand and diversify the composting infrastructure.
Source URL: http://www.ilsr.org/supportive-rules-small-scale-composting/
by David Morris | August 5, 2012
On this, the 20th anniversary of the opening of the first charter school, kudzu comes to mind.
In the 1930s the Soil Conservation Service (SCS) paid farmers $8 per acre to plant this Japanese vine whose deep root structure helps reduce erosion and enrich a depleted soil. Farmers planted more than 1.2 million acres.
Twenty years later the SCS declared kudzu a virulent, parasitic weed. Its rapid growth shades the native flora, blocking their access to life-sustaining light. As these plants die, nutrients previously used by them become available to kudzu.
Initially, charter schools were embraced as a strategy to enrich what many viewed as an increasingly sterile public school landscape. Early promoters included most famously Albert Shanker, President of both the United Federation of Teachers and the American Federation of Teachers. The first charter school opened in Minnesota, one of the nation’s most liberal states.
“Groups of teachers and administrators who wanted to innovate and try new things would band together and little laboratories of education would emerge,” Dr. Gary Miron, Professor of Evaluation, Management and Research at Western Michigan University recalls, “The idea was simple: anything valuable culled from these experiments could be copied by the district…”
Within a decade the goals of experimentation and innovation were replaced by a focus on kudzu-like growth. Charter schools were less and less viewed as a way of improving public schools and more and more seen as a direct competitor and eventual replacement for them. For conservatives, charter schools are an effective weapon for undermining Democratic strength in big cities and teacher unions. For investors, charter schools are cash cows as local non-profit public school laboratories morphed into multi-state non-profit and eventually for profit corporations. More than a third of all charter schools are now operated by private corporations. Student enrollment in for-profit charter schools has soared from approximately 1,000 in 1995-1996 to slightly less than 400,000 in 2010-2011. About 80 percent of Michigan’s charter schools are operated by for-profit corporations.
As charter schools began to vie with public schools for supremacy Congress and the White House titled the playing field sharply in their favor. To improve public education No Child Left Behind (NCLB) enthusiastically embraced what came to be known as “high stakes accountability”. Parents of children in public schools that fail to make continued improvement on standardized tests for two years can transfer them to charter schools. If progress continues to stall the public school is closed. The NCLB pointedly does not apply to charter schools. To be eligible for funding from Obama’s Race to the Top program states must eliminate caps on charter schools.
Today 2 million students attend some 5,600 charter schools in 41 states, with a waiting list of more than 600,000. In the last 18 months, 23 states have approved new laws aimed at promoting their growth. Meanwhile, last year cities announced the closing of about 2000 public schools. And the cycle feeds on itself. The more charters the less money for public schools, the more public education deteriorates and the greater the popularity and number of charter schools.
Source URL: http://www.ilsr.org/charter-schools-kudzu-2/
by Brenda Platt | July 30, 2012
Hartsfield-Jackson Atlanta International Airport (HJAIA) sends more than 19,000 tons of waste to Georgia landfills each year. Food scraps are the single largest component of HJAIA waste, making up about one-third of this tonnage. In fact, food waste is the most prevalent material disposed in the landfills in the State of Georgia. Non-recyclable paper and plastic foodservice ware represent significant volumes of HJAIA’s trash as well. HJAIA has a goal to divert 50% of its waste from landfill disposal by 2015. Composting food waste is essential to reach this goal, and switching to compostable food packaging will enable successful food residuals recovery. (more…)
Source URL: http://www.ilsr.org/atlanta-airport-launches-compostable-foodservice-ware-packet/
by David Morris | July 27, 2012
Nowhere is the phrase American Exceptionalism more appropriately used than when describing our debate over health care. Outside the bubble that is the United States health care is viewed as a right, recognition that sickness and injury can strike anyone despite their best efforts and an acknowledgement of a basic obligation civilized societies have to its members.
If members of those societies were to tune in to the American debate I suspect they’d be baffled to watch grown men and women come up with ingenious ways to complicate a very simple moral issue.
From the Sublime
Consider Richard Epstein’s response to the Supreme Court’s decision to uphold most of the health reform law. Epstein, an influential law professor at the University of Chicago chided Chief Justice Roberts in the New York Times for relying on Congress’ Constitutional power to “lay and collect Taxes.” He reminds us that the Constitution restricts the use of that power solely “to pay the Debts and provide for the common Defence (sic) and general Welfare of the United States.” And he insists that extending health care to 30 million Americans does not meet this standard because “general welfare” means “benefits that must be given to all citizens, if given to any,” that is, “matters that advance the welfare of the United States as a whole.”(Italics in the original)
Extending health care to 30 million does not enhance the general welfare, argues Epstein, because it does not extend health care to all 330 million Americans.
Now consider the argument by the vast majority of the Supreme Court who voted to strike down the law’s provisions regarding states’ expanding Medicaid. Under existing law the Secretary of Health and Human Services has the right to withdraw Medicaid funding from any state that does not meet minimum standards of access and coverage. The new law gave the Secretary the authority to strip states of their existing Medicaid funding if they do not expand Medicaid. The Court struck down this provision, arguing, “the expansion accomplishes a shift in kind, not merely degree. The original program was designed to cover medical services for particular categories of vulnerable individuals. Under the Affordable Care Act, Medicaid is transformed into a program to meet the health care needs of the entire non-elderly population with income below 133 percent of the poverty level.”
Source URL: http://www.ilsr.org/debating-health-care-american-bubble/
by John Farrell | July 26, 2012
First in the U.S., Hawaii residents and businesses can install solar power – without incentives – for less than the cost of grid electricity. But as local Earthjustice lawyer Isaac Moriwake notes, “the gates of heaven do not open just because solar is cheap.” Instead, a number of unexpected barriers have kept the solar market from to its full potential or growing as quickly as it might. ILSR’s new report, Hawaiian Sunblock: Solar Facing Unexpected Barriers Despite Low Cost, explores these barriers and how Hawaii’s experience might provide valuable lessons as the cost of solar makes it competitive across the country.
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An island state reliant on imported oil for 83% of its electricity generation, Hawaii has become the pioneer for solar grid parity in the United States. It had an early commitment to solar power in the name of energy independence and state energy mandates and incentives encouraged the development of more solar power.
A rapid rise in the price oil and a rapid decline in the cost of solar have suddenly removed the economic barrier to solar, but like a receding tide, it has also uncovered unexpected and previously hidden barriers.
With abundant sunshine and falling solar costs, solar power in Hawaii can pay back in a remarkably short time. Since 2010, electricity from solar has cost less than electricity from the utility, with the gap steadily growing. Without any incentives, an investment in a residential solar project pays back in just 10 years while adding significant value to the property. Adding in federal and state tax credits reduces that payback period to 5 years. Payback periods for commercial solar are even better, thanks in part to federal accelerated depreciation.
Source URL: http://www.ilsr.org/hawaiian-sunblock-solar-facing-unexpected-barriers-cost/
by David Morris | July 26, 2012
If chutzpah is killing your parents then throwing yourself on the mercy of the court because you’re an orphan then Peter Orszag is the poster child for chutzpah. In his recent article in Bloomberg News he insists the best fix for the post office is to take it private. Where does the chutzpah come from? Orszag was Director of the Office of Management Budget (OMB), an agency that played a key role in crippling the USPS with a manufactured financial crisis.
Here’s the back-story. In 1970, after almost two centuries, the Post Office was transformed from a Cabinet agency to the quasi-independent US Postal Service (USPS). In keeping with its new status, Congress eventually moved its finances off budget. Yet, as I’ve discussed before, the OMB and the Congressional Budget Office (CBO) ignored Congress and continued to include the USPS in the unified budget, the budget they use for “scoring” legislation to estimate its impact on the deficit.
Fast forward to 2001. The Government Accountability Office put the Postal Service on its list of “high-risk” programs because of rising financial pressures resulting from exploding demand from both the residential and commercial sectors. Then in 2002 the anxiety level fell dramatically when the Office of Personnel Management found the Postal Service had been significantly overpaying into its retirement fund.
It seemed a simple matter to reduce future payments and tap into the existing surplus to pay for current expenses. And would have been if the OMB and the CBO did not insist on adhering to their make-belief accounting system.
Several times between 2002 and 2005 Congress did overwhelmingly approved tapping into the existing surplus. Each time the White House nixed the idea because it would increase the deficit.
Finally, in 2006 the Post Office and Congress agreed to literally buy off the CBO and OMB. Budget neutrality over a ten-year period was achieved by requiring the USPS to make ten annual payments of $5.4-5.8 billion. The level of the annual payments was not based on any actuarial determination. They were produced by the CBO to equal the amounts necessary to offset the loss of the escrow payments. Under the Postal Accountability and Enhancement Act of 2006 the USPS was forced to prefund its future health care benefit payments to retirees for the next 75 years in ten years, something no other government agency or private corporation is required to do.
The Postal Regulatory Commission noted that those payments “transformed what would have been considerable profits into significant losses.” Indeed, 90 percent or more of the current deficit is a result of these artificially created debts.
The Post Office is indeed in a financial crisis, but not one of its own making.
Enter Peter Orszag who still subscribes to the make believe world created by his old agency. His article lists three problems the USPS faces. The artificial debt is not among them. He lists three counterarguments people might use to oppose privatization. The artificial debt is not among them.
A real world solution to the USPS fiscal crisis would be to remove the artificially generated financial noose from its neck and then build on its two most important assets: its ubiquitous physical infrastructure and the high esteem in which Americans hold it. In combination, these assets offer the post office an enviable platform upon which to generate many new revenue-producing services.
But for Peter Orszag the solution is to ignore the fraudulent financial burden imposed on the USPS and sell off and dismantle its ubiquitous infrastructure. “In addition to its 32,000 post offices, it has 461 processing facilities, monopoly access to residential mailboxes and an overfunded pension plan,” he writes. “These assets would attract bidders. Consider, for example, that many processing facilities and post offices sit on valuable real estate, and it may be smarter to sell many of them than to keep them.”
Did I forget to mention that Peter Orszag is currently vice chairman of corporate and investment banking at Citigroup? Citigroup certainly be in the running to oversee the privatization of the post office, a process that would generate tens of millions of dollars in fees and undoubtedly handsomely benefit Mr. Orszag personally.
Now that’s chutzpah.
Source URL: http://www.ilsr.org/chutzpah-peter-orszag/
by David Morris | July 25, 2012
“Texas judge rules atmosphere, air is a public trust”, reads the headline in the Boston Globe. A tiny breakthrough but with big potential consequences. And as we continue to suffer from one of the most extended heat waves in US history, as major crops wither and fires rage in a dozen states, we need all the tiny breakthroughs we can get.
Back in 2001, Peter Barnes, a co-founder of Working Assets (now CREDO) and On The Commons and one of the most creative environmentalists around, proposed the atmosphere be treated as a public trust in his pathbreaking book, Who Owns the Sky: Our Common Assets and the Future of Capitalism (Island Press).
In 2007, in a law review article University of Oregon Professor Mary Wood elaborated on the idea of a Nature’s Trust. “With every trust there is a core duty of protection,” she wrote. “The trustee must defend the trust against injury. Where it has been damaged, the trustee must restore the property in the trust.”
She noted that the idea itself is not new. In 1892 “when private enterprise threatened the shoreline of Lake Michigan, the Supreme Court said, ‘It would not be listened to that the control and management of [Lake Michigan]—a subject of concern to the whole people of the state—should . . . be placed elsewhere than in the state itself.’ You can practically hear those same Justices saying today that ‘[i]t would not be listened to’ that government would let our atmosphere be dangerously warmed in the name of individual, private property rights.”
In 2010 Wood, along with Julia Olson, Executive Director of Our Children’s Trust “had the vision to organize a coordinated international campaign of attorneys, youth, and media around the idea that the climate crisis could be addressed as a whole system,” Barnes observes, replacing a situation in which “legal solutions were fragmented, focused on closing down a particular power plant or seeking justice for a particular endangered species, threatened neighborhood or body of water impacted by our fossil fuel abuse.”
On behalf of the youth of America, Our Children’s Trust, Kids Versus Global Warming and others began filing suits around the country, arguing the atmosphere is a public trust. So far cases have been filed in 13 states.
The “public trust” doctrine is a legal principle derived from English Common Law. Traditionally it has applied to water resources. The waters of the state are deemed a public resource owned by and available to all citizens equally for the purposes of navigation, fishing, recreation, and other uses. The owner cannot use that resource in a way that interferes with the public’s use and interest. The public trustee, usually the state, must act to maintain and enhance the trust’s resources for the benefit of future generations.
In Texas, after a petition to the Texas Commission on Environmental Quality (TCEQ) to institute proceedings to reduce greenhouse gases was dismissed, the Texas Environmental Law Center sued on behalf of a group of children and young adults. The Center asserted the State of Texas had a fiduciary duty to reduce emissions as the common law trustee of a “public trust” responsible for the air and atmosphere
Source URL: http://www.ilsr.org/texas-judge-rules-sky-belongs/
by admin | July 15, 2012
Sally Sorbello, a grassroots organizer with the No Incinerator Alliance, is a small business women and citizen activist from Frederick, MD. Small business people and citizens have been fighting a proposed garbage incinerator in their County for seven years. Ms. Sorbello’s letter to her local newspaper captures the essence of the case against the incinerator. It is based on years of research and analysis of solid waste management in Frederick County and the state of Maryland.
The No Incinerator Alliance has an excellent web page filed with information about the Frederick, MD anti-incinerator fight that can be applied to other locales fighting incineration of garbage.
Source URL: http://www.ilsr.org/living-financial-reality/
by Stacy Mitchell | July 13, 2012
Lately Walmart has taken to claiming that its stores are actually good for nearby small businesses, at least those that do not compete in the same product lines. As Walmart tries to elbow its way into cities from New York to L.A., this assertion has become a standard part of the company’s PR rhetoric, repeated in media interviews and marketing materials.
On a website set up to promote its expansion in Seattle, the company contends: “Walmart stores often serve as magnets for other new businesses, large and small. The small businesses that surround our stores generally have products and services we don’t offer or are strong in areas where we can’t compete.”
On a similar web site devoted to its Chicago plans, the retailer even provides a list of the types of small businesses that supposedly thrive in the shadows of Walmart stores. The list includes everything from appliance stores to specialty grocers.
The empirical evidence, though, indicates otherwise.
In a study published in the Journal of Urban Economics, economists John Haltiwanger, Ron Jarmin, and C.J. Krizan analyzed about 1,200 big-box store openings and looked at the impact on two sets of independent businesses in the vicinity: those competing directly with the new big box and those offering different products and services.
For competing retailers, the study found “large, negative effects” on those within a 5-mile radius of the new big box, including a substantial number of store closures. Although the impact was greatest in the immediate vicinity, the researchers also documented significant negative effects on competing businesses as far away as a 10-mile radius from the new store.
In addition to the closures, the number of new retail stores opening in the neighborhood dropped sharply.
As for non-competing businesses, the study found that big-box stores generate no positive spillover whatsoever. Nearby businesses offering other products and services neither increased their growth nor expanded in numbers after the big box opened.
The study found that small chains did not fare any better, with the exception of small chain restaurants, which experienced a modest positive effect when a big-box store opened nearby.
Most ominous for cities like Chicago, where about half a dozen Walmart stores have already been approved, the study found that big-box stores have a greater negative impact on local businesses in densely populated cities, compared to low-density suburbs, and the effects are worse still in low-income neighborhoods.
Source URL: http://www.ilsr.org/walmart-claims-stores-magnets-small-businesses-so-research-finds/
by John Farrell | July 10, 2012
Update 12/21/12: Corrected chart. Overhead and Sales Tax had been switched in the German data column.
I often get flak when I publish research on the cost trajectory for solar (e.g. my Rooftop Revolution report estimates 100 million Americans reaching grid parity by 2021). About half think I’m too conservative, and half think I’m too overconfident that solar will continue to drop in price by 7% per year indefinitely.
But I’m not alone in perceiving an enormous cost reduction opportunity for solar in the United States. An article in Forbes last week suggested that we can “Cut The Price Of Solar In Half By Cutting Red Tape“. It provides a chart (reproduced below) like one I published in March, that shows how a similarly sized residential solar array in Germany costs 60% less than one built in the U.S.
This anecdote from a colleague illustrates the ridiculous disparity in red tape between the two nations (and consequently, the enormous opportunity):
There’s an article in the most recent issue of PHOTON describing a German family that got a 4.6 kW PV array installed and interconnected to their roof 8 days after calling a solar installer for the first time. The homeowner had a proposal from the installer within 8 hours. The installer called the utility the morning of the installation to request an interconnect that afternoon. The installer called at 10am, the utility came and installed 2 new meters and approved the interconnect at 2:37pm– the same day. The online registration of the PV system with Federal Grid agency and approval of the feed-in tariff took 5 minutes.
I’m sure that not every project gets completed that fast in Germany, but an interconnection and permitting process that takes less than a day?! 10 times that…would still be just incredible.
By comparison, New York City’s permitting goal under Solar America Cities was 100 days (before Solar America Cities it took 365 days).
As I’ve mentioned before, the difference is mostly in “soft costs,” not hardware, and these cost barriers are solved by policy, not technological, innovation. For example, soft costs include an enormous paperwork burden for U.S. solar installers, pictured at the top (photo taken from the Forbes post on cutting costs), and already there are policy ideas that significantly reduce these costs.
So is it too ambitious to assume the price of solar continues to fall by 7% per year? On the contrary, if the cost of solar continues at that pace, it will take the U.S. until 2025 – 13 years! – to match today’s cost of solar in Germany. Can anyone honestly claim we’ll remain so far behind for so long?
When you add potential hardware innovations (e.g. like this) to the soft cost reduction opportunity, the cost of solar is likely to keep falling rapidly in the United States.
Source URL: http://www.ilsr.org/why-pay-double-solar-america/
by Stacy Mitchell | July 5, 2012
This op-ed is cross-posted from Other Words, which distributes commentary articles to newspapers. It is licensed for use under a Creative Commons “Attribution-No Derivatives Work” license.
Sam Walton opened the first Walmart store in Rogers, Arkansas, 50 years ago this month. Sprawled along a major thoroughfare outside the city’s downtown, that inaugural store embodied many of the hallmarks that have since come to define the Walmart way of doing business. Walton scoured the country for the cheapest merchandise and deftly exploited a loophole in federal law to pay his mostly female workforce less than minimum wage.
That relentless focus on squeezing workers and suppliers for every advantage has paid off since July 1962. Walmart is now the second-largest corporation on the planet. It took in almost half-a-trillion dollars last year at more than 10,000 stores worldwide.
Walmart now captures one of every four dollars Americans spend on groceries. Its stores are so plentiful that it’s easy to imagine that the retailer has long since reached the upper limit of its growth potential. It hasn’t. Walmart has opened over 1,100 new supercenters since 2005 and expanded its U.S. sales by 35 percent. It aims to keep on growing that fast. With an eye to infiltrating urban areas, Walmart recently introduced smaller “neighborhood markets” and “express” stores.
While the big-box business model Sam Walton pioneered half a century ago has been great for Walmart, it hasn’t been so great for the U.S. economy.
Walmart’s explosive growth has gutted two key pillars of the American middle class: small businesses and well-paying manufacturing jobs.
Between 2001 and 2007, some 40,000 U.S. factories closed, eliminating millions of jobs. While Walmart’s ceaseless search for lower costs wasn’t the only factor that drove production overseas, it was a major one. During these six years, Walmart’s imports from China tripled in value from $9 billion to $27 billion.
Small, family-owned retail businesses likewise closed in droves as Walmart grew. Between 1992 and 2007, the number of independent retailers fell by over 60,000, according to the U.S. Census.
Their demise triggered a cascade of losses elsewhere. As communities lost their local retailers, there was less demand for services like accounting and graphic design, less advertising revenue for local media outlets, and fewer accounts for local banks. As Walmart moved into communities, the volume of money circulating from business to business declined. More dollars flowed into Walmart’s tills and out of the local economy.
In exchange for the many middle-income jobs Walmart eliminated, all we got in return were low-wage jobs for the workers who now toil in its stores. To get by, many Walmart employees have no choice but to rely on food stamps and other public assistance.
Walmart’s history is the story of what has gone wrong in the American economy. Wages have stagnated. The middle class has shrunk. The ranks of the working poor have swelled. Whatever we may have saved shopping at Walmart, we’ve more than paid for it in diminished opportunities and declining income. (more…)
Source URL: http://www.ilsr.org/walmart-50-years-gutting-americas-middle-class/
by Neil Seldman | July 3, 2012
ILSR, working under a recycling and economic development grant from US EPA Region 1 and the Office of Mayor Bill Flint of Bridgeport, CT, facilitated the development of a mattress refurbishing and recycling plant that opened for business on June 27. (more…)
Source URL: http://www.ilsr.org/twenty-jobs-created-bridgeport-mattress-refurbishing-plant/
by Stacy Mitchell | June 20, 2012
For years, Amazon has used its size and market power to bully publishers and keep other retailers from competing in the e-book market. And, for years, the U.S. Department of Justice (DOJ) has done nothing to constrain Amazon’s abuses or bring about a more competitive marketplace.
So it was quite a shock last month when the Justice Department decided to intervene in the book industry, but, instead of going after Amazon, filed suit against five publishers that had dared to challenge Amazon’s dominance and Apple, an e-book retailer with a modest market share. In filing the case, the DOJ moved from ignoring concentrated market power to actively abetting a monopolist.
Two of the publishers and Apple plan to fight the lawsuit in court, but the other three publishers, facing sizeable legal costs, have agreed to settle. If the DOJ’s proposed settlement is accepted by a federal judge, it could spell disaster for the book industry. The proposed settlement would return control of e-book pricing to Amazon. It would likely push the online giant’s only viable e-book competitors, including about 400 independent bookstores, out of the market, helping Amazon regain the 90 percent market share it held as recently as two years ago.
(Public comment on the proposed settlement is being taken through Monday, June 25th. We urge you to submit comments. More details on how to do so at the end.)
The case alleges that the five publishers (HarperCollins, Hachette, Macmillan, Penguin, and Simon & Schuster), with Apple’s help, colluded to fix e-book prices. The activities in question took place as Apple was preparing to launch the iPad in early 2010. At the time, Amazon was essentially the only outlet for e-books, and it was selling new releases at a steep loss in order to maintain its monopoly. Amazon paid publishers a wholesale price of about $12-14 for top new titles and then retailed them for $9.99. Other retailers, including Barnes & Noble, did not have the cash to sustain similar losses and were thus locked out of the growing e-book market.
Publishers feared Amazon’s tactics would ultimately destroy competing retailers, leaving the industry in the hands of a single dominant player. With the launch of the iPad and the iBookstore, they saw an opportunity to renegotiate terms. They signed deals with Apple to sell e-books through an “agency” pricing model, under which publishers set the retail price of their books and retailers collect a 30 percent commission on each sale. Publishers then insisted on the same terms with Amazon.
There is nothing illegal about agency pricing. In fact, it’s a common pricing model for electronic goods. It is, for example, the same approach that Apple uses with its App Store: app makers set the retail price and Apple keeps a commission. It’s also the way both electronic and print books are sold in many European countries. (more…)
Source URL: http://www.ilsr.org/dojs-lawsuit/
by John Farrell | June 19, 2012
Back in April, President Obama signed the JOBS Act and one of the most-heralded elements was so-called crowdfunding. The law sought to solve a major problem: it’s hard to finance small-scale business ventures. Wall Street only cares about multi-million dollar plays and securities regulations make small-dollar projects rather difficult (and costly) to jointly fund.
The Act could have big implications for community-based renewable energy projects.
Right now, there are two kinds of community-based renewable energy projects, the charitable or the persistent. Solar Mosaic, for example, was founded and funded on the concept that many environmentally-motivated people would help finance local solar projects with 0% interest loans. They succeeded in building several projects, but the model is constrained by the limited universe of people who have money at hand and are willing to let it be used for no reward.
The other kind of renewable energy project allows participants to get some kind of financial reward through sheer persistence, overcoming enormous regulatory and legal barriers to success (some of which I covered in this 2007 report). It means finding a complex legal structure to capture federal tax credits despite needing investors with “passive tax liability” or sacrificing federal incentives for simple ownership structures like cooperatives or municipal utilities. It means having “accredited” (rich) investors or only soliciting investors through personal relationships. This community wind project is an illustration, as are several solar projects in this report.
The JOBS Act may finally allow thousands of regular folks to make a modest return (5-10%) by investing in local renewable energy projects. The Act allows for crowdfunding under the following circumstances:
The $1 million limit is the approximate cost of a 200 kW solar project, so crowdfunding could mean a significant boost for community-based solar arrays, especially in states with virtual net metering (allowing those potential investors to share the electricity output).
Crowdfunding won’t mean much for wind projects, where a single turbine costs well over the dollar limit, but the JOBS Act also opened the door for more community-based wind with changes to SEC exemption Regulation A. (For more on this, read my 2007 report on wind energy ownership and then this article on the changes to Regulation A).
It’s not all roses and unicorns. There are still several potential hangups for the crowdfunding model:
I’ll be interested to see how it develops.
Source URL: http://www.ilsr.org/crowdfunding-community-power/
by John Farrell | June 11, 2012
This report from the Institute for Local Self-Reliance identifies all of the existing CLEAN (Clean Local Energy Accessible Now) programs in the United States (also known as feed-in tariffs) and examines the lessons learned from the early adopters.
Read on the Kindle, Nook, or Apple iBooks
CLEAN programs (Clean Local Energy Accessible Now) provide long-term contracts with utility companies whose price is set to guarantee a modest return for investors. They have long been used in Europe (as “feed-in tariffs”) to spur renewable energy development, often with remarkable success. In Germany for example, CLEAN contracts have been credited with developing over 50,000 megawatts of wind and solar power. Indeed, so successful have these contracts been that Germany recently all but eliminated the premium paid for solar energy and re-directed the premium to encourage innovation in on-site use and storage systems.
While late to the game, Americans are finally in the game. In 2012, all or part of fourteen American states have adopted CLEAN contracts for renewable energy. Many more are in development.
U.S. States With CLEAN or Similar Program
The recent surge in popularity coincides with the recognition that on-again, off-again federal tax incentives undermine renewable energy investments and that the falling price of solar energy creates a need for a more flexible and regionally tailored transitional incentive.
But U.S. CLEAN programs still suffer from four common shortcomings.
Program Caps: A key shortcoming of U.S. programs is very small program size, especially given that these are multi-year, cumulative caps. Evidence from other countries is that larger scale programs achieve greater cost reductions.
Scant Support for Small Scale: Another shortcoming, as discussed in greater detail in the full report, is the lack of support for on-site residential solar. Sacramento, for example, allocated almost all of its 100 megawatt (MW) allocation to projects 1 MW and larger. Palo Alto’s program is restricted to projects 100 kilowatts (kW) and larger. Although there may be some cost savings involved in focusing on larger projects, these are modest. On the other hand, the benefits of having tens of thousands of households with on-site solar and therefore an economic self-interest in supporting expanded renewable energy far outweigh the possible increased costs. Europe has found this to be the case. Nearly 90% of Danish wind turbines are locally owned, as is most of German solar and half its wind power. (more…)
Source URL: http://www.ilsr.org/u-s-clean-programs-now-learned/
by John Farrell | June 8, 2012
This report, done for the Solar Works for Minnesota campaign, explores the value of solar power on schools, libraries, and other public buildings in Minnesota. It was co-authored by John Farrell of ILSR and Christina Mills of IEER.
Source URL: http://www.ilsr.org/solar-power-minnesota/
by Stacy Mitchell | June 5, 2012
Source URL: http://www.ilsr.org/amazon-infographic/
by David Morris | June 4, 2012
Handicapping occurs in sports to equalize the winning chances of contestants of varying abilities. Sometimes, as in horse racing, superior horses, based on past performance, are required to carry more weight. Sometimes, as in golf, poorer players are allowed more strokes.
Unbeknownst to most of us, the competition between the public and private sectors is also handicapped. But contrary to the popular wisdom, it is the private sector that often cannot compete without being given more strokes.
Everywhere we look this principle seems to hold true.
About 75 percent of Pennsylvania’s school districts now use private firms to bus their students. Yet according to a new report by the Keystone Research Center (KRC), “Contracting out substantially increases state spending on transportation services. We estimate that if all districts switched to the self-supply of transportation services, total spending on student transportation services would fall by $78.3 million dollars…”
Despite the higher costs school districts continue to contract out. Why? Because, to use the golf analogy, the private sector receives a handsome handicap. Back in 1970 the Pennsylvania School Code added a provision requiring the state to reimburse school districts that contract out at a higher rate. Legislators knew the private sector couldn’t compete without a handicap.
The result is that while bus privatization costs Pennsylvania taxpayers more, the state subsidy often slightly reduces the cost to the contracting school district itself.
In 1994 the Republicans took over the House of Representatives and immediately began to privatize Medicare. Their first step, achieved in 1997 with the support of President Clinton was Medicare+Choice. But the Republicans made a serious tactical mistake. They were so confident in the inherent superiority of the private sector they didn’t ask for a handicap. Private insurers received the same amount as the service cost under Medicare.
The private sector lost the race. Badly. Private insurers began pulling out en masse. In 2000, more than 900,000 patients were dropped from the program.
No one should have been surprised. Private insurers overhead costs-marketing, profits, etc.—dwarf those of Medicare: Slightly under 17 percent compared to about 5 percent for Medicare. So to become competitive the private sector required at least a 12 percent handicap.
Source URL: http://www.ilsr.org/private-sector-isnt-competitive-subsidy/
by David Morris | May 29, 2012
As every 6 year old learns, there is real and there is make believe. The massive Post Office deficit that is driving management to commit institutional suicide by ending 6 day delivery, closing half of the nations’ 30,000 or so post offices and half it’s 500 mail processing centers, and laying off over 200,000 workers, is make believe.
Here’s why. In 1969 the federal government changed the way it did accounting. It began to use what was and is called a unified budget that includes trust funds like social security previously considered off budget because they were self-sustaining through dedicated revenue.
At that time the Post Office was, as it had been since 1792, a department of the federal government like the Department of Energy or the Department of Agriculture. While generating most of its revenue from postage it also received significant Congressional appropriations.
In 1970 Congress transformed the Post Office into the U.S. Postal Service (USPS). The new quasi-public agency was intended to put the Postal Office on a more business like footing. The Postal Service was allowed to borrow to make needed capital investments and was given more flexibility in how it spent its money. In return Congress required the Postal Service to become self-sufficient. The subsidy, at that time running about 15 percent of total revenues (close to $10 billion a year in 2012) was phased out over the next 15 years. After the mid 1980s the only taxpayer funds involved, amounting today to $100 million a year, subsidizes mail for the blind and official mail to overseas voters.
In keeping with the new philosophy that the Postal Service should be independent Nixon’s Office of Management and Budget administratively moved its finances off budget in 1974. In 1989 Congress did it by statute.
None of this made any difference, as exhaustively detailed by the USPS Inspector General in a 2009 report. The OMB and the Congressional Budget Office (CBO) continued to treat the postal service as part of the unified budget, the budget they use for “scoring” legislation to estimate its impact on the deficit.
And that’s where the make believe comes from.
Source URL: http://www.ilsr.org/phantom-accounting-destroying-post-office/
by David Morris | May 24, 2012
In May 1998 the European Union voted to adopt a single European currency. A few days later David Morris set down his thoughts about that momentous decision from a local self-reliance perspective. Fourteen years later, as Greece and Europe revisit the costs and benefits of the Euro, we thought it appropriate to offer that column on our front page. Not to say “we told you so” but to demonstrate that in an age of globalization, local self-reliance can still be a powerful analytical tool.
“A man is wise with the wisdom of his time only and ignorant with its ignorance”, Henry David Thoreau wrote. “Observe how the greatest minds yield in some degree to the superstition of their age.”
What is the superstition of our age? Globalization. In its name we are willing to take any risk, no matter how great, to achieve benefits no matter how small.
Consider what happened last weekend. Eleven nations, in an unprecedented political and economic leap of faith, formally adopted a single European currency. A New York Times headline accurately describes the experiment, “The euro: High Wire Without a Net”.
On January 1, 1999, the euro will come into existence. National currencies will begin to disappear. New government bonds will be issued in euros; old ones will be redenominated. Stocks and other financial assets will be redenominated as well. European businesses will keep their books in eros. On January 1, 2002, euro notes and coins will enter general circulation. On July 1, 2002, national currencies will cease to be legal tender within participating countries.
The transition to a single currency is expected to cost as much as half a trillion dollars.
Source URL: http://www.ilsr.org/euro-local-self-reliance-flashback/
by Stacy Mitchell | May 16, 2012
A few weeks ago, The New York Times ran a story on the front page of the business section under the headline “Unexpected Ally Helps Walmart Cut Waste.” The retailer’s accomplice, readers of the article learned, is the Environmental Defense Fund, one of the largest and most influential environmental groups in the country. EDF has been working closely with Walmart on its sustainability efforts since 2005, and has even opened an office in Bentonville, Ark., where Walmart is headquartered.
The Times noted that EDF “does not accept contributions from Walmart or other corporations it works with.” EDF itself often mentions this when the subject of Walmart comes up, making note of it on its website, as well as in blog posts and other communications about its work with the company.
But, while it’s true that Walmart does not fund EDF (either directly or through its internal, company-run foundation), the environmental group does receive an awful lot of money from the Walton Family Foundation. Since 2004, the foundation has given EDF more than $53 million. Last year, the foundation’s $13.7 million grant to the group amounted to about 15 percent of EDF’s budget. After readers brought this to the attention of The Times, the newspaper amended its story and ran a correction noting the Walton foundation’s grants to EDF.
Established by Walmart founder Sam Walton in 1987 and run today by his children and grandchildren, the Walton Family Foundation has quietly grown into one of the largest foundations in the country. Last year, it ranked second in the nation based on total giving, behind only the Bill & Melinda Gates Foundation.
It’s impossible to untangle all the connections between the Walton Family Foundation and the Walmart corporation. They are separate entities, but the Waltons pull the strings within both — the family has complete control over the foundation and significant control over the corporation.
The foundation’s board is made up entirely of Waltons. Walmart’s board includes three family members: Rob Walton, who’s been a director since 1978 and chair since his father Sam died 20 years ago; Jim, another of Sam’s sons; and Greg Penner, who is married to Rob Walton’s daughter, Carrie, one of the more visible and active directors of the foundation.
More important than board seats is stock: The Waltons own about 50 percent of Walmart’s stock. Yes, it’s mind-boggling, but a single family owns half of the second-largest company on the planet, a corporation whose revenues last year exceeded the GDP of all but 23 countries. (more…)
Source URL: http://www.ilsr.org/walmart-heirs-quietly-fund-walmarts-environmental-allies/
by Stacy Mitchell | May 9, 2012
A new ranking of states based on “small business friendliness” was released this week by Thumbtack, in partnership with the Ewing Marion Kauffman Foundation. Thumbtack, an online directory that helps people find local service providers, surveyed over 6,000 small business owners who list their services on its site and, based on their responses, assigned letter grades to each state.
The survey-takers were asked to rate their state across several measures of small business friendliness. Many of the questions dealt with regulations. Business owners were asked how friendly or unfriendly their state is with regard to environmental, labor, health & safety, licensing, and land use regulations.
In the final results, which you can see in this interactive map, states that have more regulations tend to rank low, while those with fewer and looser rules top the list. The five states deemed least friendly to small businesses are Rhode Island, Vermont, Hawaii, California, and New York. The five most friendly are Idaho, Texas, Oklahoma, Utah, and Louisiana.
In a press release, Thumbtack put a point on the findings by quoting the owner of a roofing business in Texas: “With comparatively few regulations or government oversight on small businesses, Texas is truly a small-business-friendly state.”
The trouble with this analysis, though, is that many of the “unfriendly” states are actually home to much larger numbers of small businesses than the “friendly” states. (more…)
Source URL: http://www.ilsr.org/lightly-regulated-states-friendly-small-businesses/
by David Morris | May 9, 2012
After winning the Illinois primary, Mitt Romney delivered a victory speech in which he deplored America’s lost “can do spirit”. Unsurprisingly, he blamed it on government. If elected he promised, “We’re going to get government out of the way”. Then he offered a few examples of what he meant. “We once built the interstate highway system and the Hoover Dam. Now we can’t even build a pipeline.”
Romney liked the line, and the thunderous applause it generated so much that a few weeks later at a Tea Party gathering in Pennsylvania he used it again.
Rachel Maddow and many others have pointed out the fundamental flaw in Romney’s argument. The government built both the Hoover Dam and the interstate highway system. Republican administrations championed both projects. They were testaments to the can-do spirit of government, grand collective undertakings that benefited generations to come.
How grand? The Hoover Dam cost the equivalent of $24 billion in today’s dollars, notes Steve Benen. Congress appropriated $25 billion to build the first 40,000 miles of the interstate highway system, equivalent to $830 billion in today’s dollars.
Few have commented on Romney’s second sentence. “Now we can’t even build a pipeline”. Having cited two examples that contradicted his thesis that government lacks the can do spirit, he offered an example of how government is preventing the private sector from having the can do spirit that may be even more problematic.
Romney, as everyone in his audience and most of the country knew, was talking about the Keystone XL pipeline. President Obama had delayed construction while a detailed environmental impact study is completed, generating universal Republican outrage.
If completed, the pipeline will transport crude oil extracted from Canadian tar sands through the United States and to Gulf Coast refineries where it will then be exported. Demonstrating that private sector can-do spirit Romney so exalts, TransCanada, the company that owns the pipeline, is continuing to acquire land to construct the pipeline despite Obama’s decision. “We don’t need a presidential permit in order for us to obtain the easements that we need for the right of way for this project,” says TransCanada spokesman Terry Cunha.
Apparently, the foreign corporation also doesn’t think it needs permission of the landowners to move ahead. When some farmers refused to sell their land, TransCanada began the process of seizing their private property. Which has led many of Mitt Romney’s most ardent supporters to rebel.
A month before Romney’s speech this major story appeared in the Texas Tribune, “Keystone Pipeline Sparks Property Rights Backlash”. The reporter conveyed the anger of Julia Trigg Crawford who manages a 600-acre farm in Lamar County that’s been in her family since 1948. “I’m just an angry steward of the land. A foreign-owned, for-profit, non-permitted pipeline has taken a Texan’s land. Doesn’t sound right, does it?”
Does it? The Texas Constitution requires that eminent domain, that is, the right to seize private property, can only be exercised for “public use.” In the past courts have routinely dismissed challenges to pipelines by landowners.
But last year the Texas Supreme Court ruled that a company that wanted to build a CO2 pipeline for its own use was a private carrier and couldn’t use eminent domain to get an easement on a Houston-area rice farm. In his opinion for the majority, Justice Don Willett wrote that “even when the Legislature grants certain private entities ‘the right and power of eminent domain,’ the overarching constitutional rule controls: no taking of property for private use.”
“The ruling sent shockwaves through the oil and gas lobby, which is now urging the Supreme Court to rehear the case,” the Texas Tribune observes.
Ms. Crawford successfully obtained a rare restraining order from the courts that halted any further encroachment on her land until questions surrounding TransCanada’s right to condemn her property are resolved.
The case is going to court. There will be a hearing in June and possibly a trial in July. I hope they are televised. Texas’ two Republican Senators and its Republican Governor have come out against the Crawford Family
The Hoover Dam and the interstate highway system were built by the people for the people. They were and are public assets, huge public undertakings that have generated huge public benefits. The Keystone XL pipeline is proposed by a private company for private gain. The private company insists it has the right to seize private land to enhance the value of its private asset.
Perhaps an enterprising reporter on the campaign trail could ask Mitt Romney if he would like to revisit his comments?
This article first appeared on On The Commons. www.onthecommons.org
Source URL: http://www.ilsr.org/romney-hoover-eisenhower-pipeline-2/
by David Morris | May 3, 2012
A few weeks ago Congressman Barney Frank (D-MA who is retiring from the House this year, gave a memorable interview to New York magazine in which he criticized President Obama for aggressively pushing health care reform. Frank says he warned Obama the Democratic Party would pay “a terrible price.”
Apparently Frank was not alone in counseling Obama to take health care off the front burner. “At various points, Vice President Joe Biden, senior advisor David Axelrod and Chief of Staff Rahm Emanuel advised the President to focus entirely on the economy and leave comprehensive health care for another day,” Jonathan Alter, senior editor of Newsweek reports. “‘I begged him not to do this’, Emanuel told me when I was researching my book about Obama’s first year in office.”
After the law passed Alter asked Obama why he overruled his team. The President responded, “‘I remember telling Nancy Pelosi that moving forward on this could end up being so costly for me politically that it would affect my chances’ in 2012.” But he and Pelosi agreed that if they didn’t move at the outset of the his Presidency “it was not going to get done.”
In 2009 Obama put country above party. Bringing health security to over 30 million Americans, strengthening the social compact and laying the foundation for a major restructuring of our health system were sufficient rewards for him to accept the political risks.
Almost exactly 45 years before Obama’s decision we witnessed another profile in political courage. Former Texas Senator Lyndon Baines Johnson, after becoming President on the death of JFK, aggressively and decisively ended the south’s filibuster against a Civil Rights Act, ensuring its passage in July 1964. In 1965 he secured enactment of the Voting Rights Act.
As is the case with the health care law, the Constitutionality of the Civil Rights Act was tested. Southern states argued the federal government had no right to force the private sector to treat blacks and whites the same. The Supreme Court ruled it did.
One hundred years after the Civil War, millions of southern blacks effectively gained the right to vote. LBJ also put country above party, at least the country that strives to honor the foundational moral values of the Declaration of Independence.
Source URL: http://www.ilsr.org/profiles-political-courage/
by John Farrell | May 1, 2012
In the next two years, the U.S. may get a lot less solar and wind power than it could.
It’s not a shortage of solar panels or the cost of turbines. Rather, it’s a problem of the perverse nature of federal incentives for renewable energy. Right now, the owner of a solar or wind energy project can get a federal tax credit based on the value of the project or the electricity it produces. But many owners don’t have enough tax liability to make use of the entire credit, and their search for a “tax equity” partner has created a logjam in the renewable energy market.
As reported in Greentechmedia,
CITI calculates there is a need in solar for $10 billion to $12 billion in tax equity for 2012 through 2014, but not more than $5 billion in tax equity is available. That, Salant said, is “a massive supply-demand imbalance” that is not “going away anytime soon.” [emphasis mine]
The following graphic (from the article) illustrates:
A big part of this big money problem is a focus on big projects (and technologies that can’t economically be done at small scale):
“PV can be done on a much smaller scale and be economic, and a large project can be done in phases. It’s a lot easier to finance $250 million or $500 million than it is to get $3 billion all at once.” [Concentrating solar power] requires vital economies of scale “so you’ve got to raise $2 billion all at once. That’s a lot harder to do than to raise $500 million four times.”
That’s a small-scale solution to a big problem. There may be a handful more folks who can invest $500 million than $2 billion.
But there are millions more Americans who could invest a few thousand dollars in community-based solar and wind power. In 2009, American taxpayers cumulatively paid $865 billion in federal income taxes. If just 1 in 100 could invest in a renewable energy project, it would nearly quadruple the tax equity market (from $3.2 billion to ~$12 billion). And since 1 in 3 Americans will be able to get electricity from rooftop solar for less than their utility provides in the next decade, policy makers should find a way to open the small investor floodgates
The answer is community-based solar and wind projects, for three reasons:
But there are three policy solutions needed to enable community power:
Some of these policy solutions are already in play. As many as eight states already offer community net metering. The federal 1603 cash grant (now expired) was one of the best tools for community-based projects (like this one); President Obama has proposed another solution.
The U.S. could spend the next few years letting wind and solar power development lag because of artificial financing constraints. Or policy makers could use two or three carefully crafted tools to open the floodgates to a massively democratic investment in local, clean energy.
Source URL: http://www.ilsr.org/massive-supply-demand-imbalance-for-solar-and-wind-project-financing/
by Stacy Mitchell | April 27, 2012
This article originally appeared on Grist.
Walmart spent much of last week burnishing its green image and touting its progress “toward becoming a more sustainable, responsible company.” All the while, those at the very top of the company, including CEO Mike Duke, knew that The New York Times was about to publish an explosive story that would lay to waste the notion that Walmart cares about anything other than its own growth.
The Times story presents credible evidence that Walmart’s Mexican subsidiary spent millions of dollars bribing local officials in order to speed up permits for new stores, get “zoning maps changed,” and make “environmental objections vanish.” When top executives, including Duke, learned of the bribes in 2005, they declined to notify U.S. and Mexican law enforcement, shut down Walmart’s own internal investigation, and continued to lavish promotions on the alleged ringleader, Eduardo Castro-Wright, who currently serves as Walmart’s vice chair.
In the days since the Times story broke, attention has turned to the potential punishment Walmart might face. A criminal investigation is underway at the U.S. Department of Justice, which, under the Foreign Corrupt Practices Act, could pursue prosecutions that might lead to substantial fines and even jail time for Duke and others implicated. The Mexican government, meanwhile, has initiated its own inquiry.
If justice is to be served in this case, though, Walmart must not only face fines and prison terms, but also be forced to sell off a sizeable number of its ill-gotten Mexican stores. By bribing officials, Walmart was able to crush its competitors, opening new stores so fast they had no time to react. In just a few years, Walmart came out of nowhere to dominate the Mexican economy.
But, as any athlete or other competitor knows, if you’re caught cheating your way to a win, then you most certainly do not get to keep the prize.
Walmart’s expansion into Mexico began in earnest in 1997 when it bought a controlling stake in one of the country’s largest retail chains. Walmart then began to build new stores with stunning speed. By the time the bribery allegations reached executives at the company’s Arkansas headquarters in the fall of 2005, Walmart had more than 750 stores in Mexico and was opening new ones at the rate of almost two per week.
As Walmart grew, Mexico’s traditional vendors, open-air markets, and independent businesses declined. Competing supermarket chains were left in the dust too, unable to match Walmart’s speed and financial muscle.
Although Walmart’s expansion plans often encountered strong grassroots opposition, as its stores frequently do in the U.S., the company consistently outmaneuvered local residents, in part, we now know, by using bribes to skirt land-use rules and quickly win approvals. (more…)
Source URL: http://www.ilsr.org/walmart-de-mexico-scandal/
by John Farrell | April 24, 2012
Local ownership of a wind project accounts for half of its lifetime economic value to the community!
From: Value Creation for Local Communities through Renewable Energies [pdf]
Source URL: http://www.ilsr.org/local-energy-valuable/
by David Morris | April 16, 2012
A few days ago 26 states argued before the Supreme Court that the health law’s dramatic extension of Medicaid coverage constitutes unconstitutional federal coercion. ”Congress easily could have designed an act that encouraged rather than forced states to expand their Medicaid programs,” their brief submitted to the Court argues. “By making a conscious decision to deprive states of any choice in the matter, Congress has effectively forced this court’s hand.”
Since virtually all these states are headed by Republican Governors, we can consider this the Republican Party position.
What form does this coercion take? According to the states, it is the unprecedented federal generosity that allows them to achieve the required expansion at virtually no cost. They believe the federal government is making them an offer they can’t refuse, which rises to the level of an unconstitutional invasion of state prerogatives.
A little background may be in order. Medicare guarantees health care to those over 65. It is funded from payroll taxes. Enacted at the same time as Medicare, Medicaid is aimed at lower income households. It is funded out of general revenues. State participation is voluntary but if states offer minimum levels of coverage, the federal government will pay the majority of the costs. Currently the average federal share is 57 percent but it can be much higher for specific states.
The Affordable Care Act (ACA) requires participating states to extend Medicaid eligibility to all households with incomes up to 133 percent of the federal poverty level (in 2012 about $15,000 for an individual and $30,000 for a family of four). In return for their doing this the federal government will pick up 100 percent of the costs of Medicaid for new entrants for the first three years. Then states will pick up a tiny share of the cost, gradually growing to 10 percent by 2020, and remaining there.
I have a question for these 26 mostly Republican Governors. Whom do you think you are representing? It’s hard to believe it’s the citizens of your states.
Consider the impact of the law on Alabama, one of the signatories to the Supreme Court brief. Medicaid in Alabama is a $6 billion-a-year program. The federal government covers more than $4 billion of that. Under the new law, the number of Alabamans covered by Medicaid, currently about 1 million of its 5 million residents, would rise by 500,000. That may increase Medicaid spending between 2014 and 2019 by $470 million but federal expenditures in Alabama would increase by $10.3 billion. For every additional dollar Alabama will spend on health care for new Medicaid enrollees out of its general budget, federal spending in the state on health care will increase by more than $20.
Source URL: http://www.ilsr.org/republican-governors-representing-citizens-health-care/
by admin | April 10, 2012
Star Tribune, April 9, 2012
In this piece in the Star Tribune David Morris speaks out on the need to stop the tidal wave of post office closings that will occur when the Post Office’s self-imposed moratorium ends in mid May.
Last year, 3,600 communities, about 90 in Minnesota, were notified that they’ll probably lose their local post office. Last December, a popular uprising persuaded members of Congress to speak out, which led U.S. Postal Service management to impose a 6-month moratorium on further closings.
That ends in mid-May. We need to demand that it be extended indefinitely. Our local post offices are too valuable to lose.
Tens of millions of Americans will be negatively affected by the closures, while the Postal Service’s own estimates are for savings that are trivial. Closing all 3,600 would save $200 million — 0.03 percent of its $64 billion budget.
“We’re not the only ones going through this trend,” insists Dean Granholm, vice president of delivery and post office operations for the Postal Service. “All sorts of retailers are trying to find ways to do this.”
But the post office is not Starbucks or McDonalds or Wal-Mart. It is a commons, a public service — and a significant part of that service is the ubiquity of post offices themselves.
Postal Service management is deciding which post offices live or die using a cost-benefit methodology almost identical to that used by private retailers. Only half the equation is included: the savings to the USPS. The other half, the costs to the community, is ignored.
Consider the post office closure in Prairie City, S.D. It saved the Postal Service $19,000 a year. The community it served will spend far more each year to travel to a more distant post office.
But it is the qualitative costs that haunt the community. The Prairie City post office was a gathering place where people could keep up with one another and with the local news. Prairie City postal clerks kept a pot of coffee brewing and posted birth and death notices.
The Wall Street Journal reports that the area’s only major hospital and pharmacy is in Hettinger, N.D., 40 miles away. Before, when an elderly person or farmer in Prairie City quickly needed an antibiotic or other medication, a pharmacist in Hettinger would rush prescriptions to the Hettinger post office, catching the mail carrier who each day traveled from Hettinger to the Prairie City post office.
The closing eliminated that direct route, and now Prairie City mail is sorted and delivered on a rural route out of Bison, S.D., delaying the delivery of medicine from Hettinger by two or three days.
The Postal Service is our most ubiquitous and admired public institution. Six days a week, it delivers an average of 563 million pieces of mail, 40 percent of the entire world’s volume, often directly to our front doors.
For the price of a 44-cent stamp, the lowest postal rate in the world, you can mail a letter anywhere within the nation’s borders. And if the recipient can’t be found, the Postal Service will return it at no extra charge. Business Week calls it “the greatest bargain on earth.”
After the 1970s, the Postal Service became its own agency. Congress eliminated its taxpayer subsidy. Productivity soared. By the 1990s, it often generated a profit. As of 2005, it was free of debt.
So how is it that today the service is being forced to decimate itself to pay off a huge deficit?
Here’s the back story. The Postal Service pays into several retirement and health funds. Almost everyone agrees that in the past it has vastly overpaid, some estimate by as much as $100 billion.
One would think it a simple matter for Congress to allow the USPS to tap into these excess funds to pay current health benefits. One would be wrong. The Congressional Budget Office counts the surplus funds as part of the existing budget.
Thus if the Postal Service were to use its own money, it would increase the deficit. In 2006, it finally agreed to buy off the CBO. Budget neutrality over a 10-year period was achieved by requiring the USPS to make annual payments of $5.4 billion to $5.8 billion.
This manufactured financial crisis legitimized the privateers attack on the Postal Service. Proposals include ending Saturday delivery, which would open the door to private companies; divesting half the service’s physical infrastructure, and even ending door-to-door delivery.
Eventually the Postal Service plans to close more than 15,000 post offices. A nationwide grass-roots resistance has emerged that cuts across party lines, uniting rich and poor, rural and urban, black, white and Hispanic.
They are fighting to save a government institution that fundamentally contributes to their sense of community, of social cohesion, of well-being.
We need to demand that Congress end the manufactured financial crisis and cease forcing the transformation of the nation’s oldest public institution into an increasingly private enterprise that looks to strengthen its internal balance sheet by weakening the balance sheets of hundreds of millions of Americans it serves.
This is a public institution worth fighting for.
Source URL: http://www.ilsr.org/post-offices-important-stamped/
by David Morris | April 4, 2012
For its first 200 years the American Republic slowly, sometimes infuriatingly slowly and at horrific human cost (e.g. the Civil War) expanded the franchise.
In 1870 the 15th Amendment gave blacks the right to vote. In 1920, the 19th Amendment extended the franchise to women. In 1924 Congress granted Native Americans citizenship and thus the right to vote. In 1961 the 23rd Amendment gave the residents of the District of Columbia the right to vote for President. In 1971 the 26th Amendment gave l8 year olds the vote. In 1986 Congress gave military personnel and other US citizens living abroad the right to use a federal write-in absentee ballot for voting for federal offices.
The right to vote, however, did not ensure that one could vote. Beginning at the end of the 19th century, states began passing legislation directed at restricting minority voting with often dramatic effect, especially in the South where turnout fell from 64.2 percent in 1888 to 29.0 percent in 1904.
For 100 years after the Civil War the Supreme Court ruled that even where state voting rules were discriminatory, the federal government had no right to intervene. Then in 1965 Congress finally gave blacks and other minorities the effective vote by passing the Voting Rights Act, eliminating most voting qualifications beyond citizenship for state and federal elections, including literacy tests and poll taxes. In 1966 the Supreme Court affirmed that law.
Since 1970 federal and state voting reforms have all moved in one direction: facilitating access. In 1993 the National Voter Registration Act (NVRA) offered citizens the opportunity to register or re-register to vote at many public facilities, including Motor Vehicle offices and post offices.
Between 1973 and 2009 nine states enacted Election Day registration laws. States made provisions for early voting and eased the rules on absentee voting. Some allowed voting by mail. Between 1997 and 2010 twenty-three states either restored voting rights or eased the restoration process of voting rights for those convicted of felonies.
Virtually all these laws were passed with overwhelming bipartisan support and signed into law by Republican and Democrat Governors alike.
Source URL: http://www.ilsr.org/democracy-attack/
by admin | April 2, 2012
It’s all still here. We have reorganized the NewRules.org and ILSR.org websites to better coordinate and publicize our work. All of the project’s activity, research, and information continues here, on the Institute for Local Self-Reliance’s new web site.
The New Rules Project’s primary focus areas — Energy, Banking, Broadband, Independent Business, and The Public Good — are now organized as Initiatives, under which you will find the full depth of news, research, publications, and policy models as before.
The project’s extensive collection of rules — policies, bills, regulations, and ordinances — has also been transferred here. These policy models can be found under the Rules Library, where you can filter your search by both level of government (local, state, etc.) and sector (agriculture, banking, etc.). The rules for each Initiative can be found under that Initiative as well.
We hope you’ll find the new site a useful and easy-to-use resource. As always, we welcome your questions and feedback.
Source URL: http://www.ilsr.org/what-happened-to-the-new-rules-project/
by admin | April 1, 2012
Soujourners Magazine, April 1, 2012
In this cover story for Sojourners Magazine, Stacy Mitchell writes that there is remarkably little evidence to support the idea that bigger banks are superior and calls for a new set of rules—banking policies for the 99 percent.
One meaning of the word “occupy” involves asserting sovereignty over a place. For the demonstrators who set up camp in lower Manhattan last fall, “occupying” was a reassertion of popular sovereignty at the very epicenter of our economic system. It was a challenge to the power that giant corporations—and Wall Street banks in particular—have amassed. It was a challenge to the way these firms have captured the levers of government and rigged policy to protect their own positions and profits at the expense of everyone else.
More than three years after their reckless greed triggered the Great Recession, the nation’s biggest banks have paid almost no penalty and are bigger than ever. In 2007, the top four banks—Bank of America, JPMorgan Chase, Citigroup, and Wells Fargo—held assets of $4.5 trillion, which amounted to 37 percent of U.S. bank assets. Today, they control $6.2 trillion, or 45 percent of bank assets, according to the Federal Deposit Insurance Corporation. For them, the recession was a brief hiccup, promptly ameliorated by a public bailout and a return to robust profitability. Last year, these four firms, together with the next two largest banks, Goldman Sachs and Morgan Stanley, paid out $144 billion in compensation, making 2011 their second highest payday ever. According to the Bureau of Labor Statistics, the average bank teller made $24,980 in 2010. Such rank-and-file employees didn’t benefit from the big bonuses and compensation packages which were heavily concentrated at the top of the corporate ladder.
Meanwhile, joblessness, staggering debt, and foreclosure have devastated countless families. Many have shared their stories on the We Are the 99 Percent Tumblr website, which should be required reading for the 1 percent. It provides a heart-breaking account of living in a society “made for them, not for us,” of drowning in debt and struggling merely to secure a means of keeping food on the table.
The Occupy movement brought this injustice to the forefront and reawakened American populism. It set the public discourse in a new direction and launched a conversation about the scale and structure of our banking system. Many Americans seem quite eager to have this conversation, and to act on it. Last fall, more than 600,000 people, citing the issues raised by Occupy, closed their accounts at big banks and moved to small local banks and credit unions. (more…)
Source URL: http://www.ilsr.org/banking-for-the-rest-of-us/
by Stacy Mitchell | March 7, 2012
FOR IMMEDIATE RELEASE
Contact: Stacy Mitchell, ILSR, 207-774-6792, email@example.com
March 7, 2012 | Minneapolis, MN — In a report released today, the Institute for Local Self-Reliance documents how Walmart’s heavily promoted sustainability initiatives are falling short. The report, “Walmart’s Greenwash”, examines all aspects of the major retailers environmental impact to see how sustainable Walmart really is.
Download the Report: Walmart’s Greenwash
“Walmart’s sustainability campaign has done more to improve the company’s image than to help the environment,” said Stacy Mitchell, the report’s author and a senior researcher at ILSR. Since Walmart unveiled its sustainability campaign in 2005, the number of Americans with an unfavorable view of the company has fallen by nearly half, from 38 to 20 percent.
The report’s key findings include:
— At its current pace, Walmart will need roughly 300 years to reach its goal of 100 percent renewable energy. As of 2011, Walmart was deriving only 2 percent of its U. S. electricity from its wind and solar projects.
— Walmart’s greenhouse gas emissions are increasing rapidly. Its energy efficiency and renewable projects are too modest to match the scale of the company’s operations.
— Walmart’s price pressure on manufacturers is undermining the quality and durability of consumer goods, which has contributed to a sharp increase in the amount of stuff Americans buy and a doubling of the trash households generate.
— Walmart has not addressed the habitat and climate impacts of its land development practices. The retailer continues to build sprawling stores on undeveloped land, often just a few miles from older, vacated Walmart stores.
— Walmart has made little progress toward its goal of developing a Sustainability Index to rate consumer products. (more…)
Source URL: http://www.ilsr.org/new-report-walmarts-greenwash/
by David Morris | February 10, 2012
On February 8, 1921 twenty thousand people, braving temperatures so low that musical instruments froze, marched in a funeral procession in the town of Dimitrov, a suburb of Moscow. They came to pay their respects to a man, Petr Kropotkin, and his philosophy, anarchism.
Some 90 years later few know of Kropotkin. And the word anarchism has been so stripped of substance that it has come to be equated with chaos and nihilism. This is regrettable, for both the man and the philosophy that he did so much to develop have much to teach us in 2012.
I am astonished Hollywood has yet to discover Kropotkin. For his life is the stuff of great movies. Born to privilege he spent his life fighting poverty and injustice. A lifelong revolutionary, he was also a world-renowned geographer and zoologist. Indeed, the intersection of politics and science characterized much of his life.
His struggles against tyranny resulted in years in Russian and French jails. The first time he was imprisoned in Russia an outcry by many of the world’s best-known scholars led to his release. The second time he engineered a spectacular escape and fled the country. At the end of his life, back in his native Russia, he enthusiastically supported the overthrow of the Tsar but equally strongly condemned Lenin ’s increasingly authoritarian and violent methods.
Source URL: http://www.ilsr.org/where-is-kropotkin-when-we-really-need-him/
by David Morris | February 3, 2012
Recent comments by Mitt Romney, the probable Republican nominee for President all but guarantee the inequality issue will remain front and center this election year.
When asked whether people who question the current distribution of wealth and power are motivated by “jealousy or fairness” Romney insisted, “I think it’s about envy. I think it’s about class warfare.” And in this election year he advised that if we do discuss inequality we do so “in quiet rooms” not in public debates.
A public debate, of course, is inevitable. And welcome. To help that debate along I’ll address the five major statements that comprise the Republican argument on inequality.
Actually it is. Since 1980 the top 1 percent has increased its share of the national income by an astounding $1.1 trillion. Today 300,000 very rich Americans enjoy almost as much income as 150 million.
Since 1980, the income of the bottom 90 percent of Americans has increased a meager $303 or 1 percent. The top 1 percent’s income has more than doubled, increasing by about $500,000. And the really, really rich, the top 10th of 1 percent, made out, dare I say, like bandits, quadrupling their income to $22 million.
Meanwhile a full-time worker’s wage was 11 percent lower in 2004 than in 1973, adjusting for inflation even though their productivity increased by 78 percent. Productivity gains swelled corporate profits, which reached an all time high in 2010. And that in turn fueled an unprecedented inequality within the workplace itself. In 2010, according to the Institute for Policy Studies, the average CEO in large companies earned 325 times more than the average worker.
This is folklore. A worker’s initial position in the income distribution is highly predictive of how much he or she earns later in the career. And as the Brookings Institution reports “there is growing evidence of less intergenerational economic mobility in the United States than in many other rich industrialized countries.”
The bitter fact is that it is harder for a poor person in America to become rich than in virtually any other industrialized country.
Source URL: http://www.ilsr.org/challenging-the-republicans-five-myths-on-inequality/
by Stacy Mitchell | February 2, 2012
This is the ninth and final article in a special 9-part series written by ILSR’s Stacy Mitchell and published by Grist. You can read the whole series here.
Walmart’s sustainability campaign is not your typical corporate greenwash. It is more complex and clever than that. It has enough substance mixed in with the spin to draw you in. It’s easy to get swept up in the big numbers Walmart can roll out — like the 30 tons of plastic hangers it recycles every month — and to be charmed by the very fact of this giant company, with its hard-nosed corporate culture, using a word like “sustainability.”
More than a few environmentalists have been won over. With their endorsements and the flood of positive press that seems to follow each of Walmart’s green announcements, the company has managed to turn around flagging poll numbers, shift its labor practices out of the limelight, and, most crucially, crank up its expansion machine.
The environmental consequences of Walmart’s ongoing growth far outweigh the modest reductions in resource use that the company has made. Walmart’s business model and its future success depend on further accelerating the cycle of consumption, industrializing our food supply, and exacerbating sprawl. It’s not just Walmart, but also Target, Home Depot, and other big chains. The big-box model is “efficient” only to the degree that many of its costs are borne by the planet and the public at large. As these retailers take over an ever-larger share of the economy, more sustainable enterprises and systems of production and distribution are squeezed out.
Walmart’s expansion is not inevitable. The rise of Big Retail, much like Big Ag, has been aided and abetted by government policies and a host of hidden and not-so-hidden subsidies (which I detail in my book Big-Box Swindle).
Lately, though, instead of advocating for new and better policies, mainstream environmental groups having been abetting Walmart’s growth and helping to secure its future supremacy. It’s time to drop that failing strategy.
Source URL: http://www.ilsr.org/four-ways-enviros-can-keep-walmart-in-the-hot-seat/
by Stacy Mitchell | January 26, 2012
FOR IMMEDIATE RELEASE
CONTACT: (Additional contacts below)Stacy Mitchell, Institute for Local Self-Reliance, 207-774-6792
MINNEAPOLIS, MN (Jan. 26, 2012) – An annual survey has found that independent businesses had strong sales growth over the holidays and appear to be benefitting from growing public interest in supporting locally owned retail stores, banks, restaurants, and other enterprises. (more…)
Source URL: http://www.ilsr.org/independent-businesses-report-strong-holiday-sales/
by Stacy Mitchell | December 30, 2011
This is the eighth article in a special 9-part series written by ILSR’s Stacy Mitchell and published by Grist. You can read the whole series here.
Aubretia Edick has worked at a Walmart store in upstate New York for 11 years, but she won ’t buy fresh food there. Bagged salads, she claims, are often past their sell-by dates and, in the summer, fruit is sometimes kept on shelves until it rots. “They say, ‘We’ll take care of it,’ but they don ’t. As a cashier, you hear a lot of people complain,” she said.
Edick blames the problems on the store’s chronic understaffing and Walmart’s lack of respect for the skilled labor needed to handle the nation ’s food supply. At her store, a former maintenance person was made produce manager. He’s often diverted to other tasks. “If the toilets get backed up, they call him,” she said.
Tracie McMillan, who did a stint working in the produce section of a Walmart store while researching her forthcoming book, The American Way of Eating, reports much the same. “They put a 20-year-old from electronics in charge of the produce department. He didn ’t know anything about food,” she said. “We had a leak in the cooler that didn’t get fixed for a month and all this moldy food was going out on the floor.” Walmart doesn’t accept the idea that “a supermarket takes any skill to run,” she said. “They treated the produce like any other kind of merchandise.”
That’s plenty to give a shopper pause, but it’s just the tip of the iceberg when it comes to reasons to be concerned about Walmart’s explosive expansion into the grocery sector.
Growth of a giant
In just a few short years, Walmart has become the most powerful force in our food system, more dominant than Monsanto, Kraft, or Tyson.
It was only 23 years ago that Walmart opened its first supercenter, a store with a full supermarket inside. By 1998, it was still a relatively modest player with 441 supercenters and about 6 percent of U.S. grocery sales. Last year, as its supercenter count climbed above 3,000, Walmart captured 25 percent of the $550 billion Americans spent on groceries.
As astonishing as Walmart’s national market share is, in many parts of the country the chain is even more dominant. In 29 metro markets, it accounts for more than 50 percent of grocery sales.
Seeking an even bigger piece of the pie, Walmart is campaigning to blanket New York, Chicago, Washington, D.C., and other big cities with its stores. It has made food the centerpiece of its public relations strategy. In a series of announcements over the last year, Walmart has deftly commandeered high-profile food issues, presenting itself as a solution to food deserts, a force for healthier eating, and a supporter of local farming.
It is a remarkably brazen tactic. On every one of these fronts, Walmart is very much part of the problem. Its expansion is making our food system more concentrated and industrialized than ever before. Its growth in cities will likely exacerbate poverty, the root cause of constrained choices and poor diet. And the more dominant Walmart becomes, the fewer opportunities there will be for farmers markets, food co-ops, neighborhood grocery stores, and a host of other enterprises that are beginning to fashion a better food system – one organized not to enrich corporate middlemen, but to the benefit of producers and eaters.
The big squeeze
Walmart’s rise as a grocer triggered two massive waves of industry consolidation in the late 1990s and early 2000s. One occurred among supermarkets, as regional titans like Kroger and Fred Meyer combined to form national chains that stood a better chance of surviving Walmart’s push into groceries. Today, the top five food retailers capture half of all grocery sales, double the share they held in 1997.
The second wave of consolidation came as meatpackers, dairy companies, and other food processors merged in an effort to be large enough to supply Walmart without getting crushed in the process. The takeover of IBP, the nation’s largest beef processor, by Tyson Fresh Meats is a prime example. “When Tyson bought IBP in 2001, they said they had to do that in order to supply Walmart. We saw horizontal integration in the meat business because of worries about access to the retail market,” explained Mary Hendrickson, a food systems expert at the University of Missouri. Four firms now slaughter more than 80 percent of cattle. A similar dynamic has played out in nearly every segment of food manufacturing.
“The consolidation of the last two decades has created a food chain that’s shaped like an hourglass,” noted Wenonah Hauter, executive director of Food & Water Watch, explaining that a handful of middlemen now stand between 2 million farmers and 300 million eaters.
Their tight grip on our food supply has, rather predictably, come at the expense of both ends of the hourglass. Grocery prices have been rising faster than inflation and, while there are multiple factors driving up consumer costs, some economic research points to concentration in both food manufacturing and retailing as a leading culprit.
Farmers, meanwhile, are getting paid less and less. Take pork, for example. Between 1990 and 2009, the farmers’ share of each dollar consumers spent on pork fell from 45 to 25 cents, according to the USDA Economic Research Service. Pork processors picked up some of the difference, but the bulk of the gains went to Walmart and other supermarket chains, which are now pocketing 61 cents of each pork dollar, up from 45 cents in 1990.
Another USDA analysis found that big retailers have used their market power to shortchange farmers who grow apples, lettuce, and other types of produce, paying them less than what they would get in a competitive market, while also charging consumers inflated prices. In this way, Walmart has actually helped drive overall food prices up.
What Walmart means when it says “local”
Last year, Walmart announced that it would double the share of local produce it sells, from 4.5 to 9 percent, over six years.
This doesn’t necessarily mean shoppers will soon find a variety of local produce at their nearest Walmart, however. Walmart counts fruits and vegetables as local if they come from within the same state. It can achieve much of its promise by buying more of each state’s major commodity crops, such as peaches in Georgia and apples in Washington, and by using big states like California, Texas, and Florida, where both supercenters and large-scale farming are prevalent, to pump up its national average.
“It speaks to the weakness that we’ve all known about, which is that ‘local’ is an inadequate descriptor of what we want,” said Andy Fisher, former executive director of the Community Food Security Coalition. “It’s not just geography; it’s scale and ownership and how you treat your workers. Walmart is doing industrial local.”
Walmart’s sourcing is becoming somewhat more regional, but the change has more to do with rising diesel prices than a shift in favor of small farms. It’s a sign that Walmart’s Achilles heel – the fossil-fuel intensity of its far-flung distribution system — might be catching up with it. According to The Wall Street Journal, trucking produce like jalapeños across the country from California or Mexico has become so expensive that the retailer is now seeking growers within 450 miles of its distribution centers.
“They see the writing on the wall. They know the cost of shipping from California back to Georgia and Mississippi is high now,” said Ben Burkett, a Mississippi farmer who noted that Walmart is now meeting with producers in his region. He’s hoping to sell the chain okra through a cooperative of 35 farmers. “We’ll see. My experience in the past with Walmart is they want to pay as little as possible.”
That skepticism is shared by Anthony Flaccavento, a Virginia farmer and sustainable food advocate. “If multimillion-dollar companies like Rubbermaid and Vlasic can be brought to their knees by the retail behemoth, how should we expect small farmers to fare?” he asks.
Walmart’s promise to increase local sourcing is reminiscent of its pledge five years ago to expand its organic food offerings. “They held true to their corporate model and tried to do organics the same way,” said Mark Kastel of the Cornucopia Institute. For its store-brand organic milk, for example, Walmart turned to Aurora Organic Dairy, which runs several giant industrial milking operations in Texas and Colorado, each with as many as 10,000 cows. In 2007, the USDA sanctioned Aurora for multiple violations of organic standards. Earlier this year, the agency stepped in again, this time revoking the organic certification for Promiseland Livestock, which had been supplying supposedly organically raised cows to Aurora.
These days, Walmart’s interest in organic food seems to have ebbed. “Our observation is that they sell fewer organic products and produce now than four years ago,” said Kastel. Ronnie Cummins of the Organic Consumers Association agrees. Today, he says, “the proportion of their sales that is organic is the lowest of any major supermarket chain.”
Leveraging food deserts
Walmart has renewed its push to get into big cities, after trying and failing a few years ago. This time the company has honed a fresh strategy that goes right to the soft underbelly of urban concerns. In July, Walmart officials, standing alongside First Lady Michelle Obama, pledged to open or expand as many as 300 stores “in or near” food deserts.
Walmart sees underserved neighborhoods as a way to edge its camel’s nose under the tent and then do what it’s done in the rest of the country: open dozens of stores situated to take market share from local grocers and unionized supermarkets. Stephen Colbert dubbed the strategy Walmart’s “Trojan cantaloupe.” For example, an analysis by Manhattan Borough President Scott Stringer’s office estimates that if Walmart opens in Harlem, at least 30 supermarkets, green grocers, and bodegas selling fresh produce would close.
For neighborhoods that are truly underserved, it seems hard to argue with the notion that having a Walmart nearby is better than relying on 7-11 and McDonald’s for meals. But poor diet, limited access to fresh food, and diet-related health issues are a cluster of symptoms that all stem from a deeper problem that Walmart is likely to make worse: poverty. Poverty has a strong negative effect on diet quality, a 15-year study recently concluded, and access to a supermarket makes almost no difference.
Neighborhoods that gain Walmart stores end up with more poverty and food-stamp usage than communities where the retailer does not open, a study published in Social Science Quarterly found. This increase in poverty may owe to the fact that Walmart’s arrival leads to a net loss of jobs and lowers wages, according to research [PDF] by economists at the University of California-Irvine and Cornell.
Walmart has also been linked to rising obesity. “An additional supercenter per 100,000 residents increases … the obesity rate by 2.3 percentage points,” a recent study concluded. “These results imply that the proliferation of Walmart supercenters explains 10.5 percent of the rise in obesity since the late 1980s.”
The bottom line for poor families is that processed food is cheaper than fresh vegetables — and that’s especially true if you shop at Walmart. The retailer beats its competitors on prices for packaged foods, but not produce. An Iowa study found that Walmart charges less than competing grocery stores for cereals, canned vegetables, and meats, but has higher prices on most fresh vegetables and high-volume dairy foods, including milk.
The future of food?
We stand to lose a lot if Walmart keeps tightening its grip on the grocery sector. Signs of a revitalized food system have been springing up all over — farmers markets, urban gardeners, neighborhood grocers, consumer co-ops, CSAs — but their growth may well be cut short if Walmart has its way.
“People need to keep an eye on the values that are at the root of what is driving so much of this activity around the food system,” said Kathy Mulvey, policy director for the Community Food Security Coalition.
Walmart is pushing us toward a future where food production is increasingly industrialized, farmers and workers are squeezed, and the promise of fresh produce is used to conceal an economic model that leaves neighborhoods more impoverished. Are we going to let it happen, or are we going to demand better food and a better world?
Source URL: http://www.ilsr.org/eaters-beware-walmart-is-taking-over-our-food-system/
by Stacy Mitchell | December 23, 2011
This is the seventh article in a special 9-part series written by ILSR’s Stacy Mitchell and published by Grist. You can read the whole series here.
In 2006, Walmart made headlines when its vice president for corporate strategy and sustainability, Andrew Ruben, told a congressional committee that the company “would accept a well-designed mandatory cap-and-trade system for greenhouse gases.” Other major U.S. companies had spoken favorably of cap-and-trade, but Walmart made a bigger splash. Not only was it America’s second-largest corporation; it also had deep roots in the country’s coal-burning heartland.
But even as Ruben was delivering his testimony, Walmart’s political action committee (PAC) was funneling a river of campaign cash into the coffers of lawmakers who would ensure that the U.S. did absolutely nothing to curb its greenhouse gas emissions. During the 2007-2008 election cycle, 80 percent of Senate campaign contributions that came from Walmart’s PAC and large donors employed by the company went to senators who helped block the Lieberman-Warner cap-and-trade bill, according to data on political giving published by the Center for Responsive Politics. (When the bill arrived on the floor in 2008, it came up 12 votes shy of the 60 needed to overcome a filibuster.) (more…)
Source URL: http://www.ilsr.org/walmart-spends-big-to-help-anti-environment-candidates/
by Stacy Mitchell | December 22, 2011
Last update: June 28, 2013
Below are summaries and links to key studies that examine the impact of large retail chains and the benefits of locally owned businesses. For ease of use, we’ve organized these studies into the following categories, although they do not all fit neatly into one category.
(In addition to these studies, see the book Big-Box Swindle: The True Cost of Mega-Retailers and the Fight for America’s Independent Businesses for a look at the far-reaching impacts of large retail chains and the advantages that accrue to communities that opt for locally owned, independent businesses instead.)
Independent BC: Small Business and the British Columbia Economy — by Civic Economics, February 2013
Commissioned by the British Columbia division of the Canadian Union of Public Employees, this study analyzes the market share and economic impact of the province’s independent retailers and restaurants. It finds that BC’s independent retailers captured just over half of all retail sales as recently as 2003, but have since lost ground. By 2010, independents accounted for 45 percent of BC’s overall retail sales and only 34 percent of the market with automobile and gasoline sales excluded. Although BC has a reputation for innovative planning initiatives, on this measure it lags the rest of Canada, where independents account for 42 percent of retail spending. Among restaurants, BC’s independent sector accounts for 72 percent of full-service dining and 19 percent of limited-service dining. With regard to economic impact, the study finds that, for every $1,000,000 in sales, independent retail stores generate $450,000 in local economic activity, compared to just $170,000 for chains. Among restaurants, the figures are $650,000 for independents and $300,000 for chains. Across both sectors, this translates into about 2.6 times as many local jobs created when spending is directed to independent businesses instead of chains. The study concludes that a shift of just 10 percent of the market from chains to independents would produce 31,000 jobs paying $940 million in annual wages to BC workers.
Indie Impact Study Series: Salt Lake City, Utah — Civic Economics, August 2012
In this study, Civic Economics analyzed data from fifteen independent retailers and seven independent restaurants, all located in Salt Lake City, and compared their local economic impact with four national retail chains (Barnes & Noble, Home Depot, Office Max, and Target) and three national restaurant chains (Darden, McDonald’s, and P.F. Chang’s). The study found that the local retailers return a total of 52 percent of their revenue to the local economy, compared to just 14 percent for the national chain retailers. Similarly, the local restaurants recirculate an average of 79 percent of their revenue locally, compared to 30 percent for the chain eateries. What accounts for the difference? In a handy graphic, Civic Economics shows the breakdown. Independent businesses spend more on local labor, goods procured locally for resale, and services from local providers. This means a much larger share of the money you spend at a locally owned store stays in your local economy, supporting a variety of other businesses and jobs.
Going Local: Quantifying the Economic Impacts of Buying from Locally Owned Businesses in Portland, Maine — by Garrett Martin and Amar Patel, Maine Center for Economic Policy, December 2011
On a dollar-for-dollar basis, the local economic impact of independently owned businesses is significantly greater than that of national chains, this study concludes. Analyzing data collected from 28 locally owned retail businesses in Portland, Maine, along with corporate filings for a representative national chain, the researchers found that every $100 spent at locally owned businesses contributes an additional $58 to the local economy. By comparison, $100 spent at a chain store in Portland yields just $33 in local economic impact. The study concludes that, if residents of the region were to shift 10 percent of their spending from chains to locally owned businesses, it would generate $127 million in additional local economic activity and 874 new jobs.
Thinking Outside the Box: A Report on Independent Merchants and the Local Economy -by Civic Economics, September 2009
This study examined financial data from 15 locally owned businesses in New Orleans and compared their impact on the local economy to that of an average SuperTarget store. The study found that only 16% of the money spent at a SuperTarget stays in the local economy. In contrast, the local retailers returned more than 32% of their revenue to the local economy. The primary difference was that the local stores purchase many goods and services from other local businesses, while Target does not. The study concludes that even modest shifts in spending patterns can make a big difference to the local economy. If residents and visitors were to shift 10% of their spending from chains to local businesses, it would generate an additional $235 million a year in local economic activity, creating many new opportunities and jobs. Likewise, a 10% shift in the opposite direction – less spending at local stores and more at chains – would lead to an economic contraction of the same magnitude. Another noteworthy finding of the study is that locally owned businesses require far less land to produce an equivalent amount of economic activity. The study found that a four-block stretch of Magazine Street, a traditional business district, provides 179,000 square feet of retail space, hosts about 100 individual businesses, and generates $105 million in sales, with $34 million remaining in the local economy. In contrast, a 179,000-square-foot SuperTarget generates $50 million in annual sales, with just $8 million remaining in the local economy, and requires an additional 300,000 square feet of space for its parking lot. See our New Rules article for more background on this study.
Local Works: Examining the Impact of Local Business on the West Michigan Economy – by Civic Economics, September 2008
This study concludes that if residents of Grand Rapids and surrounding Kent County, Michigan, were to redirect 10 percent of their total spending from chains to locally owned businesses, the result would be $140 million in new economic activity for the region, including 1,600 new jobs and $53 million in additional payroll. The study calculates the market share of independent businesses in four categories: pharmacy (41%), grocery (52%), restaurants (50%), and banks (6%). It analyzes how much of the money spent at these businesses stays in the area compared to national chains. Local restaurants, for example, return more than 56% of their revenue to the local economy in the form of wages, goods and services purchased locally, profits, and donations. Chain restaurants return only 37%. Measuring the total economic impact of this difference, including indirect and induced activity, the study estimates that $1 million spent at chain restaurants produces about $600,000 in additional local economic activity and supports 10 jobs. Spending $1 million at local restaurants, meanwhile, generates over $900,000 in added local economic activity and supports 15 jobs. The study also analyzes the economic impact of independent vs. chain businesses on a square footage basis, noting, “In a largely built-out city like Grand Rapids, policy dictates seeking the highest and best use of available properties, and this analysis strongly supports the idea that local firms should be the preferred tenants for city sites.”
The San Francisco Retail Diversity Study – By Civic Economics, May 2007
This study finds that San Francisco remains a stronghold for locally owned businesses, which generate sizable benefits for the city’s economy. The study has three parts. The first calculates market shares for independents and chains in several categories: bookstores, sporting goods stores, toy stores, and casual dining restaurants. In all four categories, independent businesses capture more than half of sales within the city of San Francisco, a much larger share than they have nationally. The second part examines the economic impact of locally owned businesses versus chains. It finds that local businesses buy more goods and services locally and employ more people locally per unit of sales (because they have no headquarters staff elsewhere). Every $1 million spent at local bookstores, for example, creates $321,000 in additional economic activity in the area, including $119,000 in wages paid to local employees. That same $1 million spent at chain bookstores generates only $188,000 in local economic activity, including $71,000 in local wages. The same was true in the other categories. For every $1 million in sales, independent toy stores create 2.22 local jobs, while chains create just 1.31. The final part of the study analyzes the impact of a modest shift in consumer spending. If residents were to redirect just 10 percent of their spending from chains to local businesses, that would generate $192 million in additional economic activity in San Francisco and almost 1,300 new jobs.
The Andersonville Study of Retail Economics – By Civic Economics, October 2004
This compelling study, commissioned by the Andersonville Development Corporation, finds that locally owned businesses generate 70 percent more local economic impact per square foot than chain stores. The study’s authors, Dan Houston and Matt Cunningham of Civic Economics, analyzed ten locally owned restaurants, retail stores, and service providers in the Andersonville neighborhood on Chicago’s north side and compared them with ten national chains competing in the same categories. They found that spending $100 at one of the neighborhood’s independent businesses creates $68 in additional local economic activity, while spending $100 at a chain produces only $43 worth of local impact. They also found that the local businesses generated slightly more sales per square foot compared to the chains ($263 versus $243). Because chains funnel more of this revenue out of the local economy, the study concluded that, for every square foot of space occupied by a chain, the local economic impact is $105, compared to $179 for every square foot occupied by an independent business.
The Economic Impact of Locally Owned Businesses vs. Chains: A Case Study in Midcoast Maine – by the Institute for Local Self-Reliance and Friends of Midcoast Maine, September 2003.
Three times as much money stays in the local economy when you buy goods and services from locally owned businesses instead of large chain stores, according to this analysis, which tracked the revenue and expenditures of eight locally owned businesses in Midcoast Maine. The survey found that the businesses, with had combined sales of $5.7 million in 2002, spent 44.6 percent of their revenue within the surrounding two counties. Another 8.7 percent was spent elsewhere in the state of Maine. The four largest components of this local spending were: wages and benefits paid to local employees; goods and services purchased from other local businesses; profits that accrued to local owners; and taxes paid to local and state government. Using a variety of sources, the analysis estimates that a national big box retailer operating in Midcoast Maine returns just 14.1 percent of its revenue to the local economy, mostly in the form of payroll. The rest leaves the state, flowing to out-of-state suppliers or back to corporate headquarters. The survey also found that the local businesses contributed more to charity than national chains.
Economic Impact Analysis: A Case Study – by Civic Economics, December 2002.
This study examines the local economic impact of two locally owned businesses in Austin, Texas—Waterloo Records and Book People—and compares this with the economic return the community would receive from a Borders Books store. The study finds that spending $100 at Borders creates $13 worth of local economic activity, while spending $100 at the local stores generates $45 in local economic activity. The difference is attributed to three factors: a higher local payroll at the independent stores (because, unlike Borders, none of their operations are carried out a an out-of-town headquarters office); the local stores purchased more goods and services locally; and the local stores retained a much larger share of their profits within the local economy.
The Effects of Wal-Mart on Local Labor Markets - by David Neumark (University of California-Irvine), Junfu Zhang (Clark University), and Stephen Ciccarella (Cornell University), Journal of Urban Economics, Mar. 2008
This study presents the most sophisticated analysis to date of Wal-Mart’s impact on retail employment and wages. Analyzing national data, the study found that the opening of a Wal-Mart store reduces county-level retail employment by 150 jobs. Because Wal-Mart stores employ an average of 360 workers, this suggests that for every new retail job created by Wal-Mart, 1.4 jobs are lost as existing businesses downsize or close. The study also found that the arrival of a Wal-Mart store reduces total county-wide retail payroll by an average of about $1.2 million. This study improves substantially on previous studies by convincingly accounting for the endogeneity of the location and timing of Wal-Mart’s entry into a particular local market. That is, Wal-Mart presumably does not locate stores randomly. When expanding into a particular region, it may, for example, opt to build in towns experiencing greater job growth. Unless this location selection bias is accounted for, one might compare job growth in towns that gained Wal-Mart stores versus those that did not and erroneously conclude that Wal-Mart caused an expansion in employment. The authors of this study have devised a persuasive method of accounting for this bias. They also argue that the method developed by Basker (see next item below) to account for this bias is flawed and therefore her conclusion that Wal-Mart has a small positive impact on retail employment is not reliable.
Job Creation or Destruction? Labor-Market Effects of Wal-Mart Expansion – By Emek Basker, University of Missouri, Review of Economics & Statistics, February 2005
Often cited and typically misrepresented by Wal-Mart supporters, this study examines the impact of the arrival of a Wal-Mart store on retail and wholesale employment. It looks at 1,749 counties that added a Wal-Mart between 1977 and 1998. It finds that Wal-Mart’s arrival boosts retail employment by 100 jobs in the first year—far less than the 200-400 jobs the company says its stores create, because its arrival causes existing retailers to downsize and lay-off employees. Over the next four years, there is a loss of 40-60 additional retail jobs as more competing retailers downsize and close. The study also finds that Wal-Mart’s arrival leads to a decline of approximately 20 local wholesale jobs in the first five years, and an additional 10 wholesale jobs over the long run (six or more years after Wal-Mart’s arrival). (Wal-Mart handles its own distribution and does not rely on wholesalers). This works out to a net gain of just 10-30 retail and wholesale jobs, and the study does not examine whether these jobs are part-time or whether they pay more or less than the jobs eliminated by Wal-Mart. The study also found that, within five years of Wal- Mart’s arrival, the counties had lost an average of four small retail businesses, one midsized store, and one large store. It does not estimate declines in revenue to retailers that survive. Basker looked at the effect of Wal-Mart on retail employment in neighboring communities, but found that the confidence intervals were too large (meaning the results showed wide variation) to draw any conclusion about Wal-Mart’s impact. (Her initial working paper, published in 2002, reported an average decline of 30 retail jobs in surrounding communities, but, after correcting an error, she determined the confidence intervals were too large to produce a precise result.)
3. WAGES & BENEFITS Studies have found that big-box retailers, particularly Wal-Mart, are depressing wages and benefits for retail employees, and that median incomes have risen faster in places with more small businesses compared to those dominated by big businesses.
Does Local Firm Ownership Matter? — by Stephan Goetz and David Fleming, Economic Development Quarterly, April 2011.
Goetz and Fleming analyze 2,953 counties, including both rural and urban places, and find that, after controlling for other factors that influence growth, those with a larger density of small, locally owned businesses experienced greater per capita income growth between 2000 and 2007. The presence of large, non-local businesses, meanwhile, had a negative effect on incomes.
Living Wage Policies and Big-box Retail: How a Higher Wage Standard Would Impact Wal-Mart Workers and Shoppers – UC Berkeley Center for Labor Research and Education, April 2011.
About 900,000 Wal-Mart workers, or 65 percent of its U. S. workforce, are paid less than $12 an hour. More than one-fifth earn less than $9 an hour. Overall, Wal-Mart’s hourly workers earn 12.4 percent less than retail workers as a whole. This study finds that raising their pay to a minimum of $12 an hour would lift many out of poverty, reduce their reliance on public assistance, and cost the average consumer, at most, $12.49 a year.
A Downward Push: The Impact of Wal-Mart Stores on Retail Wages and Benefits – By Arindrajit Dube, T. William Lester, and Barry Eidlin, UC Berkeley Center for Labor Research and Education, December 2007
This study analyzes the impact of the opening of Wal-Mart stores on the earnings of retail workers. (It uses a similar technique to account for possible biases in Wal-Mart’s store location decisions as the study described in the RETAIL EMPLOYMENT section above, “The Effects of Wal-Mart on Local Labor Markets.”) This study focuses on stores that opened between 1992 and 2000 and concludes, “Opening a single Wal-Mart store lowers the average retail wage in the surrounding county between 0.5 and 0.9 percent.” Not only did Wal-Mart lower average wage rates, but “every new Wal-Mart in a county reduced the combined or aggregate earnings of retail workers by around 1.5 percent.” Because this number is higher than the reduction in average wages, it indicates that Wal-Mart not only lowered pay rates, but also reduced the total number of retail jobs. The study goes on to look at the cumulative impact of Wal-Mart store openings on retail earnings at the state level and nationwide. “At the national level, our study concludes that in 2000, total earnings of retail workers nationwide were reduced by $4.5 billion due to Wal-Mart’s presence,” the researchers find. Most of these losses were concentrated in metropolitan areas. Although Wal-Mart is often associated with rural areas, three-quarters of the stores it built in the 1990s were in metropolitan counties.
What Do We Know About Wal-Mart? – By Annette Bernhardt, Anmol Chaddha, and Siobhán McGrath, Brennan Center for Justice, August 2005
This scrupulously fact-checked and footnoted report outlines what we know about Wal-Mart, in terms of its wages, health insurance benefits, compliance with labor laws, and cost to states. It details average starting wages for various job classifications. It reports that Wal-Mart employees earn 20 percent less than retail workers on average. It outlines the out-of-pocket costs, coverage limitations, and eligibility requirements for the retailer’s health insurance plan, and compiles information on what various states are spending to provide Medicaid to uninsured Wal-Mart employees and their children. The report also summarizes Wal-Mart’s record of labor law violations.
Reviewing and Revising Wal-Mart’s Benefits Strategy – Memo to the Wal-Mart Board of Directors from Susan Chambers, Wal-Mart’s executive vice president for benefits, Oct. 2005
This internal memo leaked to Wal-Mart Watch assesses Wal-Mart’s current health care benefits and offers strategies to both reduce the company’s health insurance costs and neutralize criticism of its employment practices. The memo reports that only 48 percent of the company’s employees are enrolled in its insurance plan, compared to an average of 68 percent for national employers. Excessive out-of-pocket costs, including expensive premiums and high deductibles, are to blame. “Our coverage is expensive for low-income families, and Wal-Mart has a significant percentage of Associates and their children on public assistance,” the memo notes. Employees enrolled in Wal-Mart’s insurance plan spend an average of 8 percent of their income on health care, nearly twice the national average. Almost 40 percent spend more than 16 percent of their income, a crippling cost for workers who earn less than $20,000 a year on average. The memo also reports that Wal-Mart has a larger share of its employees and their children enrolled in Medicaid compared to other companies. “In total, 46 percent of Associates’ children are either on Medicaid or are uninsured,” it notes. The memo offers strategies for reducing Wal-Mart’s health care costs, including increasing the percentage of part-time employees and “design[ing] all jobs to include some physical activity (e.g., all cashiers do some cart gathering).” The latter recommendation aims to “dissuade unhealthy people from coming to work at Wal-Mart.”
The Impact of an Urban Wal-Mart Store on Area Businesses – by Julie Davis, David Merriman, Lucia Samayoa, Brian Flanagan, Ron Baiman, and Joe Persky, Economic Development Quarterly, October 2012. (Here’s a earlier free version of the study.)
The opening of a Wal-Mart on the West Side of Chicago in 2006 led to the closure of about one-quarter of the businesses within a four-mile radius, according to this study by researchers at Loyola University. They tracked 306 businesses, checking their status before Wal-Mart opened and one and two years after it opened. More than half were also surveyed by phone about employees, work hours, and wages. By the second year, 82 of the businesses had closed. Businesses within close proximity of Wal-Mart had a 40 percent chance of closing. The probability of going out of business fell 6 percent with each mile away from Wal-Mart. These closures eliminated the equivalent of 300 full-time jobs, about as many Wal-Mart added to the area. Sales tax and employment data provided by the state of Illinois for Wal-Mart’s zip code and surrounding zip codes confirmed that overall sales and employment in the neighborhood did not increase, but actually dipped from the trend line. Although Wal-Mart claims its urban stores recapture dollars leaking to the suburbs, the findings of this study suggest that urban Wal-Mart stores primarily displace sales from other city stores. “There is no evidence that Wal-Mart sparked any significant net growth in economic activity or employment in the area,” the researchers conclude. The study also examines Wal-Mart’s Job and Opportunity Zones initiative, which provided marketing for five local businesses, and found it largely ineffective.
Business Churn and the Retail Giant: Establishment Birth and Death from Wal-Mart’s Entry — by Carlena Cochi Ficano, Social Science Quarterly, 2012.
Within 15 months of a new Walmart store opening, between 4.4 and 14.2 existing retail establishments close, while at most 3.5 new retail establishments open, according to this study. The study’s methodology accounts for Walmart’s expansion strategy and controls for a variety of other economic and demographic factors likely to influence the birth or death of businesses. The author notes that, while the findings on store closures are robust, those on new store openings are not and should be interpreted cautiously. Also, the study only accounts for Walmart’s effect on businesses that have at least one employee and does not track the impact after the first 15 months. The results explain the seeming discrepancy in other studies finding that Walmart has a relatively modest effect on retail employment, but causes a substantial increase in poverty rates. This study suggests that Walmart triggers significant churn in the local labor market, with large numbers of people laid off, facing periods of unemployment followed by new jobs that may be only part-time or lower paying.
Mom-and-pop Meet Big-box: Complements Or Substitutes? — by John Haltiwanger, Ron Jarmin, and C.J. Krizan, Journal of Urban Economics, 2010.
In this study, economists John Haltiwanger, Ron Jarmin, and C.J. Krizan analyzed about 1,200 big-box store openings and looked at the impact on two sets of independent and small chain businesses in the vicinity: those competing directly with the new big box and those offering different products and services. For competing retailers, the study found “large, negative effects” on those within a 5-mile radius of the new big box, including a substantial number of store closures, and smaller but still significant impacts on those in a 5-10 mile radius. As for non-competing businesses, the study found that big-box stores generate no positive spillover. Nearby businesses offering other products and services neither increased their growth nor expanded in numbers after the big box opened.
Major Flaws Uncovered in Study Claiming Wal-Mart Has Not Harmed Small Businesses [PDF] – by Stacy Mitchell; Institute for Local Self-Reliance, December 2008
A new and widely publicized study, “Has Wal-Mart Buried Mom and Pop?”, claims that there is no evidence that Wal-Mart has had an overall negative impact on the small business sector. A close inspection of the study by the Institute for Local Self-Reliance, however, found major flaws. The authors failed to use the correct U. S. Census data when attempting to show that “mom and pop” businesses have not experienced a net decline over the past two decades. When the correct data set is used, it is clear that the small business sector is much less robust now than it once was, with the number of retail businesses with fewer than 10 employees declining by one-fifth from 1982-2002. This decrease is even more drastic when measured relative to the population. During the 20-year period, the number of retail firms with 1-4 employees per 1 million people fell by 38% and retail firms with 5-9 employees per 1 million people declined by 30%.
The Impact of ‘Big-Box’ Building Materials Stores on Host Towns and Surrounding Counties in a Midwestern State – by Economics Professor Kenneth E. Stone and Extension Program Specialist Georgeanne M. Artz, Iowa State University, 2001.
This study examines several Iowa communities where big box building supply stores, such as Menards and Home Depot, have opened in the last decade. Sales of hardware and building supplies in the host community and surrounding counties are tracked over several years to test what the authors call the “zero-sum-game theory,” namely that the retail sales gains generated by big box stores are offset by sales losses at existing, often locally owned, retail stores. The results confirm the theory, finding that sales of hardware and building supplies grow in the host communities, but at the expense of sales in smaller towns nearby. Moreover, after a few years, many of the host communities experienced a reversal of fortune: sales of hardware and building supplies declined sharply, often dropping below their initial levels, as more big box stores opened in the surrounding region and saturated the market.
What Happened When Wal-Mart Came to Town? A Report on Three Iowa Communities with a Statistical Analysis of Seven Iowa Counties – by Thomas Muller and Elizabeth Humstone, National Trust For Historic Preservation, 1996.
This study examined the impact of Wal-Mart on several Iowa communities. It found that 84 percent of all sales at the new Wal-Mart stores came at the expense of existing businesses within the same county. Only 16 percent of sales came from outside the county—a finding which refutes the notion that Wal-Mart can act as a magnet drawing customers from a wide area and benefiting other businesses in town. “Although some suggest that the presence of Wal-Mart outside of, but near to, the downtown area results in additional activity downtown, both sales data and traffic data do not show this gain,” the study concludes. “None of the nine case studies was experiencing a high enough level of population and income growth to absorb the Wal-Mart store without losses to other businesses.” The study documents losses in downtown stores after Wal-Mart opened. “General merchandise stores were most affected,” the study notes. “Other types of stores that closed include: automotive stores, hardware stores, drug stores, apparel stores, and sporting goods stores.” The supposed tax benefits of Wal-Mart did not materialize either: “Although the local tax base added about $2 million with each Wal-Mart, the decline in retail stores following the opening had a depressing effect on property values in downtowns and on shopping strips, offsetting gains from the Wal-Mart property.”
Competing with the Discount Mass Merchandisers – By Dr. Kenneth Stone, Iowa State University, 1995
The basic premise of this study and others by Ken Stone is that the retail “pie” is relatively fixed in size (it grows only incrementally as population and incomes grow). Consequently, when a company like Wal-Mart opens a giant store, it invariably captures a substantial slice of the retail pie, leaving smaller portions for existing businesses, which are then forced to downsize or close. This study of Wal-Mart’s impact on Iowa towns found that the average superstore cost other merchants in the host town about $12 million a year in sales (as of 1995), while stores in smaller towns nearby also suffered substantial revenue losses. These sales losses resulted in the closure of 7,326 Iowa businesses between 1983 and 1993, including 555 grocery stores, 291 apparel stores, and 298 hardware stores. While towns that gained a Wal-Mart store initially experienced a rise in overall retail sales, after the first two or three years, retail sales began to decline. About one in four towns ending up with a lower level of retail activity than they had prior to Wal-Mart’s arrival. Stone attributes this to Wal-Mart’s strategy of saturating regions with multiple stores.
St. Albans, Vermont State Environmental Board Act 250 Decision, 1994
A cost/benefit analysis of a proposed Wal-Mart store in St. Albans, Vermont, found that the store would cause dozens of existing businesses to close, leading to a net loss of 110,000 square feet of retail space. The 214 jobs created by the new superstore would be offset by the loss of 381 jobs at other businesses. The analysis also found that the overall tax losses expected from the small business failures would be greater than the tax revenue generated by the new Wal-Mart. Moreover, the city would incur a variety of new costs to provide roads, sewers, police, and fire protection to service the sprawling new development. The analysis concluded that for every dollar in tax benefit created by the superstore, there would be 2.5 dollars in tax losses and public costs.
Wal-Mart and County-Wide Poverty – by Stephan Goetz and Hema Swaminathan, Social Science Quarterly, June 2006
The presence of a Wal-Mart store hinders a community’s ability to move families out of poverty, according to this study. After controlling for other factors that influence poverty rates, the study found that U.S. counties that had more Wal-Mart stores in 1987 had a higher poverty rate in 1999 than did counties that started the period with fewer or no Wal-Mart stores. The study also found that counties that added Wal-Mart stores between 1987 and 1998 experienced higher poverty rates and greater usage of food stamps than counties where Wal-Mart did not build, all other things being equal. Although the study does not attempt to draw a conclusion about why Wal-Mart expands poverty, the study’s authors suggest several possible factors, including a loss of social capital that occurs when locally owned businesses close and the shift from comparatively better paying jobs at independent retailers to lower paying jobs at Wal-Mart (an earlier, unpublished draft can be downloaded for free here.) Many university libraries also carry Social Science Quarterly.
6. SOCIAL CAPITAL AND WELL-BEING These studies find that a community’s level of social capital and well-being is positively related to the share of its local economy held by local businesses, while Walmart’s presence undermines social capital and civic participation. (See this for more background.)
The Health and Wealth of US Counties: How the Small Business Environment Impacts Alternative Measures of Development – by Troy C. Blanchard, Charles Tolbert, and Carson Mencken, Cambridge Journal of Regions, Economy, and Society, 2011.
This is one of several studies that have drawn a link between an economy of small-scale businesses and improved community well-being, including lower rates of crime and better public health. “Counties with a vibrant small-business sector have lower rates of mortality and a lower prevalence of obesity and diabetes” compared to places dominated by big firms, the authors conclude. They surmise that a high degree of local ownership improves a community’s “collective efficacy” — the capacity of its residents to act together for mutual benefit. Previous research has linked collective efficacy to population health, finding that engaged communities tend to create the kinds of infrastructure that foster healthier choices.
Street Survey of Business Reopenings in Post-Katrina New Orleans – by Richard Campanella, Tulane University, January 2007
To understand how businesses respond to catastrophe, Campanella, a geographer at Tulane, surveyed 16 miles of three major commercial arteries in New Orleans for the 15 months after Hurricane Katrina. He found that national chains were much slower to reopen than locally owned businesses. Almost half of locally owned businesses reopened within a month, compared to one-quarter of chains. After 15 months, 75 percent of locally owned businesses had reopened, compared to only 59 percent of national chains. By reopening promptly, locally owned businesses helped neighborhoods recover by providing goods and services, as well as creating community gathering spots for residents to commiserate and find mutual aid.
Wal-Mart and Social Capital – by Stephan J. Goetz and Anil Rupasingha, American Journal of Agricultural Economics, Dec. 2006.
The presence of a Wal-Mart store reduces a community’s level of social capital, this study found. The study examined communities that had or gained Wal-Mart stores in the 1990s and controlled for other variables known to affect social capital stocks in a community, such as educational attainment. “Both the initial number of [Wal-Mart] stores and each store added per 10,000 persons during the decade reduced the overall social capital measure,” Goetz and Rupasingha found. Communities that gained a Wal-Mart had fewer non-profit groups and social capital-generating associations (such as churches, political organizations, and business groups) per capita than those that did not. Wal-Mart’s presence also depressed civic participation and is associated with lower voter turnout in the 2000 presidential election. Goetz and Rupasingha hypothesize that the drop in social capital is owned to the disappearance of local businesses and the decline of the downtown following Wal-Mart’s arrival.
The Configuration of Local Economic Power and Civic Participation in the Global Economy – by Troy Blanchard and Todd L. Matthews, Social Forces, June 2006.
This study finds that residents of communities with highly concentrated economies tend to vote less and are less likely to keep up with local affairs, participate in community organizations, engage in reform efforts or participate in protest activities at the same levels as their counterparts in communities with dispersed economies composed predominantly of locally owned small businesses.
7. CITY COSTS These studies find that the cost of providing big-box stores with city services — road maintenance, police, fire, etc. — can exceed the local tax revenue generated by these stores, resulting in a net loss to taxpayers.
Rolling Back Property Tax Payments: How Wal-Mart Short-Changes Schools and other Public Services by Challenging Its Property Tax Assessments by Philip Mattera, Karla Walter, Julie Farb Blain and Colleen Ruddick, Good Jobs First, October 2007
This first-ever investigation of Wal-Mart’s local property tax records finds that the retail giant systematically seeks to minimize its payment of taxes that support public schools and other vital local government services. Online appendices with lists of stores and distribution centers examined.
Understanding the Fiscal Impacts of Land Use in Ohio – by Randall Gross, Development Economics, August 2004
This report reviews and summarizes the findings of fiscal impact studies conducted in eight central Ohio communities between 1997 and 2003. In seven of the eight communities, retail development created a drain on municipal budgets (i.e., it required more in public services, such as road maintenance and police, than it generated in tax revenue). On average, retail buildings produced a net annual loss of $0.44 per square foot. “The concept that growth is always good for a community does not seem to correlate with the findings from various fiscal analyses conducted throughout central Ohio,” the report concludes. It cautions cities not to be taken in by the promise of high tax revenue from a new development without also considering the additional costs of providing services. Unlike retail, office and industrial development, as well as some types of residential, produced a net tax benefit.
Fiscal Impact Analysis of Residential and Nonresidential Land Use Prototypes – by Tischler & Associates, July 2002.
Big box retail, shopping centers, and fast-food restaurants cost taxpayers in Barnstable, Massachusetts, more than they produce in revenue, according to this analysis. The study compares the tax revenue generated by different kinds of residential and commercial development with the actual cost of providing public services for each land use. The study found that big box retail generates a net annual deficit of $468 per 1,000 square feet. Shopping centers likewise produce an annual drain of $314 per 1,000 square feet. By far the most costly are fast-food restaurants, which have a net annual cost of $5,168 per 1,000 square feet. In contrast, the study found that specialty retail, a category that includes small-scale Main Street businesses, has a positive impact on public revenue (i.e., it generates more tax revenue than it costs to service). Specialty retail produces a net annual return of $326 per 1,000 square feet. Other commercial land uses that are revenue winners include business parks, offices, and hotels. The two main factors behind the higher costs for big box stores, shopping centers, and fast-food outlets, compared to specialty retail shops, are higher road maintenance costs (due to a much greater number of car trips per 1,000 square feet) and greater demand for public safety services.
Understanding the Tax Base Consequences of Local Economic Development Programs – by RKG Associates, 1998
The city of Concord, New Hampshire provides an example of what can happen when a community allows massive commercial growth while failing to protect its existing economic assets. Over the last 12 years, Concord added 2.8 million square feet of new commercial and industrial development. Yet tax revenue has actually declined by 19 percent. To make up for lost revenue, the town now has one of the highest property tax rates in the state. This study by RKG Associates, an independent economic consulting firm, found that there were several reasons for the declining tax base. One was that new retail development, primarily big box stores, had harmed local businesses. Property values, and subsequently tax revenue, in the older shopping areas had declined sharply. Another factor was that the new development had eroded the value of residential property, probably due in part to increased traffic and noise. The end result was that the city actually experienced a declining tax base despite all of the new growth.
Impacts of Development on DuPage County Property Taxes – Prepared by DuPage County Development Department for the County Regional Planning Commission, Illinois, October 1991.
This study demonstrated that the costs of encouraging new commercial development— extending highways and utilities, expanding municipal services like police and fire protection, and providing development financing and incentives—exceeded the new property and sales tax revenues the new development generated. The study concluded “… there is a significant statistical relationship between new development (both residential and nonresidential) and increases in personal property taxes.”
8. STATE COSTS Because many of their employees do not earn enough to make ends meet, states are reporting high costs for providing healthcare (Medicaid) and other public assistance to big-box employees.
In addition to the following studies, see Good Jobs First’s web page detailing states that have disclosed how much they are spending on providing health insurance for employees of Wal-Mart, Home Depot, Target, and other big-box retailers.
Employers Who Had Fifty or More Employees Using MassHealth, Commonwealth Care, or the Health Safety Net in State Fiscal Year 2010 — by Commonwealth of Massachusetts, February 2013.
This report from the state of Massachusetts discloses the 50 companies that have the most employees enrolled in the state’s Medicaid and other publicly funded health insurance programs for low-income people. About half of the 50 companies identified are retail and restaurant chains. Walmart ranks third overall, with 4,327 employees, approximately one-fifth of its Massachusetts workforce, relying on state health care assistance at a cost to taxpayers of $14.6 million per year. Target ranks fourth with 2,610 employees enrolled, approximately 36 percent of its Massachusetts workforce, at a cost of $8.3 million per year. Other retailers on the list include CVS, Shaw’s, Home Depot, May Department Stores, Sears, Kohl’s, Walgreen, Lowe’s, Best Buy, and Whole Foods.
(Also see similar reports released in 2013 from Wisconsin and Missouri.)
Wal-Mart’s Low Wages and Their Effect on Taxpayers and Economic Growth — by the Democratic staff of the U.S. House Committee on Education and the Workforce, May 2013.
Extrapolating from data released by the state of Wisconsin on the number of Walmart employees and their dependents enrolled in the state’s Medicaid program, this analysis estimates that Walmart employees require an average of about $3,000 per year in public assistance, such as Medicaid, food stamps, and housing assistance. That works out to a taxpayer cost of about $4.2 billion per year for all of Walmart’s U.S. stores. Covering that cost would require Walmart to forgo about one-quarter of its profits or raise prices at its U.S. stores by 1-2 percent.
Hidden Cost of Wal-Mart Jobs – by UC Berkeley’s Institute for Industrial Relations, August 2004
California taxpayers are spending $86 million a year providing healthcare and other public assistance to the state’s 44,000 Wal-Mart employees, according to this study. The average Wal-Mart worker requires $730 in taxpayer-funded healthcare and $1,222 in other forms of assistance, such as food stamps and subsidized housing. Even compared to other retailers, Wal-Mart imposes an especially large burden on taxpayers. Wal-Mart workers earn 31 percent less than the average for workers at large retail companies and require 39 percent more in public assistance. The study estimates that if competing supermarkets and other large retailers adopt Wal-Mart’s wage and benefit levels, it will cost California’s taxpayers an additional $410 million a year in public assistance.
9. SUBSIDIES These studies document the massive public subsidies that have financed the expansion of big-box stores and how this subsidized development has failed to produce real economic benefits for communities.
An Assessment of the Effectiveness and Fiscal Impacts of the Use of Local Development Incentives in the St. Louis Region By East-West Gateway Council of Governments; January 2011
This study finds that over the last 20 years local governments in the metropolitan St. Louis region have diverted more than $5.8 billion in public tax dollars to subsidize private development. About 80 percent of these subsidies supported the construction of big-box stores and shopping malls, mostly in affluent suburbs. Despite this large public expenditure, the region has seen virtually no economic growth. “The number of retail jobs has increased only slightly and, in real dollars, retail sales or per capita have not increased in years,” the authors conclude. The subsidies have almost exclusively benefitted large chains, the study finds, and the region’s retail sector has grown increasingly concentrated. More than 600 small retailers (under 10 employees) have closed in the last ten years. “Both municipal finance and quality of life suffer when a city loses its base of small retail establishments,” the study notes. While some municipalities have seen gains in revenue as a result of luring retail development, these gains have come entirely at the expense of neighboring municipalities. Today, most of the region’s local governments are in financial trouble. “A significant number of municipalities faced budget deficits, lay-offs and service cuts between 2000 and 2007, even though that was a period of time when the economy had generally fared well,” the study finds.
Fishing for Taxpayer Cash by Andrew Stecker and Kevin Conner, Public Accountability Initiative, June 2010
This report documents how Bass Pro, an outdoor sporting goods chain, has won over $500 million dollars in taxpayer subsidies from cities and states by promising jobs, tourism and growth. But as this report shows, in city after city, Bass Pro has failed to deliver on its promises. In Mesa, AZ, for example, taxpayers put up $84 million for a development anchored by Bass Pro, but a year after opening the project was described as a “ghost town” that had done little more than undermine the viability of other retail areas. A taxpayer-subsidized Bass Pro in Harrisburg, PA, meanwhile, created only one-third of the jobs promised.
Skimming the Sales Tax: How Wal-Mart and Other Big Retailers (Legally)Keep a Cut of the Taxes We Pay on Everyday Purchases [PDF] By Philip Mattera with Leigh McIlvaine; Good Jobs First; November 2008
This study highlights little-noticed laws in 26 states that allow retailers to keep a portion of the sales taxes they collect from shoppers. The stated purpose of these policies is to compensate retailers for the costs they incur collecting the tax. However, while half of these states cap the amount retailers can keep, the other 13 states have no cap. Because the cost of collecting sales taxes declines with volume, states without caps are providing big retailers with outsized compensation that bears little relationship to their actual costs. This practice is costing states over $1 billion a year and lining the pockets of large chains, notably Wal-Mart. The report breaks down the losses for each state. Additionally, this study exposes how local governments subsidize the large chains by giving them sales tax rebates or funding part of their projects with sales tax increment financing. Using these two strategies, Wal-Mart has received $130 million in sales tax diversion over the past decade.
Shopping for Subsidies: How Wal-Mart Uses Taxpayer Money to Finance Its Never-Ending Growth – by Good Jobs First, August 2004
This study identifies 244 Wal-Mart stores and distribution centers in 35 states that have received state and local development subsidies totaling just over $1 billion. The subsidies took many forms, including property tax rebates, free or reduced-priced land, and funding of site preparation and on-site infrastructure. Tax increment financing (TIF) ranked as one of the most common mechanisms used by local governments to underwrite Wal-Mart’s growth. The total value of public giveaways to Wal-Mart is undoubtedly much higher than the $1 billion documented by the report. Obtaining complete data on subsidies is virtually impossible. In most states, local governments and state agencies are not required to report subsidies, and there is no centralized record or database. Good Jobs First relied primarily on the online archives of local newspapers to assemble the list of subsidy deals, the details of which were confirmed by interviews with local officials.
Same Generic Drug, Many Prices – by Consumer Reports, May 2013
Average prices for common generic prescription drugs are lower at independent pharmacies than many national chains, including Walmart, Target, Walgreens, CVS, and Rite Aid, according to this Consumer Reports analysis.
Wrestling with Wal-Mart: Tradeoffs Between Profits, Prices, and Wages – By Jared Bernstein, Josh Bivens, and Arindrajit Dube, Economic Policy Institute, June 15, 2006
This analysis refutes the findings of a 2005 study by Global Insights (GI) that found that Wal-Mart saves U.S. consumers $263 billion annually, or $2,329 for the average household. The Economic Policy Institute concludes that the GI study is “fraught with problems.” It identifies major internal inconsistencies in GI’s figures and finds that the firm’s statistical analysis “fails the most rudimentary sensitivity checks.” The authors state, “Once we addressed these weaknesses the statistical and practical significance of Wal-Mart’s price effects effectively vanished.”
Time to Switch Drugstores? – Consumer Reports, October 2003.
“If you’re among the 47 percent of Americans who get medicine from drugstore giants such as CVS, Eckerd, and Rite Aid, here’s a prescription: Try shopping somewhere else. The best place to start looking is one of the 25,000 independent pharmacies that are making a comeback throughout the U.S.” opens this article, which presents the results of a year-long survey of more than 32,000 readers about their drugstore experiences. The survey found that, by “an eye-popping margin,” independent drugstores outranked all other pharmacies– –including drugstore chains, supermarkets, mass merchandisers (e.g., Wal-Mart), and internet companies—in terms of providing personal attention, offering health services such as in-store screenings, filling prescriptions quickly, supplying hard-to-find drugs, and obtaining out-of-stock medications within 24 hours. Prices at independent pharmacies were lower than at chain pharmacies, but higher than at mass merchandisers and internet companies.
Trip Generation Characteristics of Free-Standing Discount Superstores - by Georgiena M. Vivian, ITE Journal, August 2006
This study found that supercenters of 200,000 square feet or more generate an average of 42 percent more traffic than the rate listed in the Institute of Transportation Engineers Trip Generation manual. Traffic engineers, developers, and city officials use the figures in this manual to estimate the traffic impact of development projects. This study, which relies on traffic counts conducted at five supercenters in Oklahoma and Texas, indicates that the manual significantly underestimates the traffic generated by large supercenters (stores that combine general merchandise and a full grocery department) and that traffic analyses based on it are unreliable indicators of the actual traffic impact of a supercenter development.
Business Contributions to Community Service – by Patricia Frishkoff, Small Business Administration, 1991
In 1991, Dr. Patricia Frishkoff, Director of the Family Business Program at Oregon State University, completed this study of charitable giving by 182 businesses in four communities. She combined cash donations with the value of in-kind contributions and found that the small businesses were more generous. Companies with fewer than 100 employees gave an average of $789 per employee, compared to $334 per employee at firms with more than 500 employees.
Source URL: http://www.ilsr.org/key-studies-walmart-and-bigbox-retail/
by David Morris | December 13, 2011
On November 2nd nearly 70 students walked out of an introductory economics class at Harvard in solidarity with the Occupy movement. The mainstream media largely ignored the protest. That’s regrettable since the economics profession has provided the intellectual framework and justification for the inequality and centralization of corporate power the Occupiers are challenging.
“You can ’t get into so disastrous a situation as we are in now without extraordinarily bad thinking and the economics departments were the source of that bad thinking,” observes Steven Keen, Professor of Economics at the University of Western Sydney and author of Debunking Economics.
The Harvard students were protesting EC 10. The course is taught by Professor N. Gregory Mankiw, author of the world’s best selling economics textbook, Principles of Economics, former Chairman of the Council of Economic Advisers under George W. Bush and regular New York Times columnist. A prerequisite for social studies and economics majors, the class may be taken by nearly half of all Harvard students before they graduate.
“Today we are walking out of your class, Economics 10, in order to express our discontent with the bias inherent in this introductory economics class,” the protestors explained in a letter to Mankiw. The course “espouses a specific—and limited—view of economics that we believe perpetuates problematic and inefficient systems of economic inequality in our society today.”
On December 3rd Mankiw responded in the Times. He expressed “sadness at how poorly informed the Harvard protesters seemed to be”. “If my profession is slanted toward any particular world view, I am as guilty as anyone for perpetuating the problem. Yet, like most economists, I don ’t view the study of economics as laden with ideology.”
Quoting Keynes, Mankiw maintained he teaches “a method rather than a doctrine, an apparatus of the mind, a technique for thinking, which helps the possessor to draw correct conclusions.”
Regarding Mankiw’s insistence that his textbook and course simply instruct students in “a method rather than a doctrine” Moshe Adler, Professor of Economics at Columbia University and author of Economics for the Rest of Us notes the singularly consistent conclusions that result from the application of that “technique of thinking”. “(W)henever it is necessary to choose sides between the rich and the poor, between the powerful and the powerless, or between workers and corporations, economists are all too often of one mind…”
The Consistent Conclusions of Conventional Economics
Consider the issue of inequality. “We economists can try to estimate the cost of redistribution —that is, the negative impact on efficiency that comes with attempts to achieve more equality,” writes Mankiw. “But in the end, picking the best point on the tradeoff between efficiency and equality comes from policy preferences about which we, as economist must be agnostic.”
Translation. The economist’s role is to help us understand that we will all be poorer if we reduce inequality but to abstain from advocating specific polices. Of course, no economist worth his or her salt, including Professor Mankiw would refrain from advocating specific policies.
“Reasonable people can disagree about whether and how much government should redistribute income,” Mankiw’s observes. “But don’t let anyone fool you into thinking that when the government taxes the rich, only the rich bear the burden.” We can tax the rich but the result will be a smaller overall economic pie.
In 2001 Mankiw wrote a blistering Op Ed in the Boston Globe decrying a student sit-in aimed at gaining a living wage for janitorial staff. “The living wage campaign wants to repeal the law of supply and demand”, Mankiw insisted, as if the “law” of supply and demand were actually a law and thus more incontrovertible than, say the theories of evolution or gravity. If Harvard were to pay its janitors more, Mankiw predicted, the result would be lost jobs, more teenagers dropping out of school and fewer adults making the transition from welfare to work.
In his Presidential Address to the Eastern Economics Association (AEA) Mankiw used economics-speak to explain why janitors don’t deserve a living wage while Wall Street executives deserve billions. “Under a standard set of assumptions, a competitive economy leads to an efficient allocation of resources…it is also a standard result that in a competitive equilibrium, the factors of production are paid the value of their marginal product. That is, each person’s income reflects the value of what he contributed to society’s production of goods and services. One might easily conclude that, under these idealized conditions, each person receives his just deserts.” Oh.
Before Mankiw, EC 10 was taught by Martin Feldstein former Chairman of the Council of Economic Advisers under Ronald Reagan. Feldstein used Mankiw’s book as his text. In 2004 Feldstein’s Presidential Address to the AEA focused on health insurance. He informed his colleagues that the principal problem facing the health system isn’t its lack of universal coverage but low deductibles and copayments that encourage people to visit the doctor too often. In economics jargon, “They (low payments)…lead to an increased demand for care that is worth less than its cost of production.”
Professors Mankiw and Feldstein, of course, would not consider any of these conclusions biased or ideologically driven. That they always favor the rich and powerful and disfavor the poor and weak must be chalked up to simple coincidence.
The Conclusions From Unconventional Economics
Those who rely on a different “way of thinking” often arrive at diametrically opposite and far more equitable conclusions.
Consider Feldstein’s thesis. Americans actually visit doctors less often than their counterparts in countries with universal health coverage. Yet the level of medical spending in those countries is 30-50 percent less than ours and achieves better outcomes. Might one conclude that enabling Americans to visit their doctors more rather than less could improve the efficiency of the overall system? If people don’t see a doctor they can end up in vastly more expensive hospital beds. Sometimes common sense trumps complex models.
In his 2001 column, Mankiw dismissed the widely disseminated finding by economists David Card and Alan Krueger in Myth and Measurement that raising the minimum wage does not reduce employment. Mankiw considered them outliers and noted that many economists had “attacked their data, methods and results”. Indeed they did, often and aggressively. For as John Cassidy pointed out, “Card and Krueger didn’t just question the conventional wisdom; they attacked it in a novel and powerful way. Instead of concocting a mathematical model and `testing’ it with advanced statistical techniques, which is what most economists call research, they decided to test the theory in the real world.”
Recently Arindrajit Dube, Assistant Professor of Economics at the University of Massachusetts Amherst and an expert in studies of the effects of minimum wage policies reviewed the impact of Card and Krueger’s work. Their methodology as well as their empirical results have stood the test of time, he concludes. Indeed “today, writing a paper arguing that moderate increases in minimum wage do not have any appreciable effect on jobs because the labor market exhibits search friction is not a conversation stopper or a career ender.” Perhaps raising the minimum wage reduces turnover and hiring and training costs? Just a theory. Not a law.
Mankiw insists that workers are paid based on how productive they are. “Our real wages are ultimately determined by our productivity.” Yet the evidence argues that the proportion of the wealth generated by increased productivity that accrues to labor is highly dependent on the percentage of the work force that belong to unions. As union membership has dwindled and workers are forced to negotiate as individuals with ever-more-powerful and mobile corporations that proportion has plummeted while corporate profits are at an all time high.
Mankiw and other conventional economists argue that increasing taxes on the rich reduces economic growth and dismiss the idea that lowering taxes on the wealthy has played a significant role in increasing inequality. Recently two Professors of Economics, Thomas Piketty and Emmanuel Saez examined data from 18 OECD countries and came to the opposite conclusions. They found little evidence that low taxes on the rich raise productivity and economic growth. And they found “a strong correlation between the reductions in top tax rates and the increases in top 1% pre-tax income shares from 1975–79 to 2004–08”. For example, the U.S. slashed the top income tax rate by 35 percent and witnessed a large ten percent increase in its top 1% pre-tax income share. “By contrast, France or Germany saw very little change in their top tax rates and their top 1% income shares during the same period.”
And in what can only be considered a direct repudiation of virtually all conventional economic theory, the researchers’ rigorous analysis estimated the top tax rate could be as high as 83% without slowing economic growth.
The Economic Crisis And Conventional Economics
How has the economic crisis changed what Mankiw offers in his freshman course? “…not as much as you might think,” he answers. “Despite the enormity of recent events, the principles of economics are largely unchanged.”
Mankiw does admit that the precipitous collapse of most western economies has convinced him to entertain some “subtle” changes. For example, he might introduce a few overlooked factors into his course such as the role of FINANCE or the importance of LEVERAGE.
Many economists who are not slaves to conventional economic models with their “standard assumptions” and “idealized conditions” recognized the importance of these issues long before the crisis. In 1994, for example, Marxist economist Paul Sweezy told Harvard economic graduate students. “In the old days finance was treated as a modest helper of production. By the end of the decade (1980s) the old structure of the economy, consisting of a production system serving a modest financial adjunct, had given way to a new structure in which a greatly expanded financial sector had achieved a high degree of independence and sat on top of the underlying production system.”
In 2001, economist Steven Keen bluntly challenged conventional economics. “An economic theory that ignores the role of money and debt in a market economy cannot possibly make sense of the complex, monetary, credit based economy in which we live.”
What about the failure of the economics profession to forecast the economic collapse? Mankiw concedes, “It is fair to say that this crisis caught most economists flat-footed.” But he insists; “Yet this is no reason for embarrassment….Some things are just hard to predict.”
Mankiw is certainly correct that most conventional economists were caught flat-footed. Indeed, many boasted that their “method not a doctrine” had led to policies that had achieved enduring prosperity and stability. The “central problem of depression-prevention has been solved,” declared Nobel Prize winner Robert Lucas in his 2003 Presidential Address to the AEA.
Before 2008, conventional economic theory championed the deregulation and expansion of the financial sector as a strategy to enhance economic efficiency and lower risk. It taught us that speculation is not a problem because all of the actors have all the information necessary to make the right decision.
It ignored the tsunami of increasing private debt while concentrating its attention and disapproval on a much slower growing public debt.
“The problem is that economists (and those who listen to them) became over-confident in their preferred models of the moment: markets are efficient, financial innovation transfers risks to those best able to bear it, self-regulation works best and government intervention is ineffective and harmful,” Dani Rodrik, Professor of Economics at Harvard comments.
Again Keen is more blunt. “Neoclassical economists were effectively trained to not see this crisis coming, by theoretical fallacies that led them to ignore crucial real-world phenomena like the ballooning levels of private debt, and rampant speculation and fraud in the private sector.”
In 2003, when Feldstein taught EC 10, students first rose up against its perceived bias. Some 700 students and alumni signed a petition asking Harvard to offer an alternative economics course. After much deliberation, Harvard agreed, but refused to allow economics majors to receive credit for taking the alternative course.
Economics Professor Stephen Marglin teaches the alternative class. The author of The Dismal Science he believes the methods of economists do embody a doctrine. Their assumptions embody certain values and predetermine outcomes.
In an interview Marglin points out several potentially fatal flaws in conventional models.
It is highly misleading about how society actually works. Not only do you have to leave out all the ﬁne print about monopoly and oligopoly, externalities, public goods, asymmetric information…you have to separate individuals, focus on the individual, and leave out of the analysis the connections between individuals. You have to leave aside the limits of rational calculation. You have to assume that it is human nature always to want more, never to be satisﬁed with ‘enough.’ … you have to assume these rational, isolated individuals are completely self-interested. Because as soon as they are not self-interested anymore-even if that non-self-interest takes the benign form of altruism-then the theorems about Pareto optimality, the efﬁciency of markets, break down.
Marglin addresses an issue ignored by most economists: the effect of their models and the policies derived from them on our sense of community. How Thinking Like An Economist Undermines Community is the subtitle of his book.
“Community is important to a meaningful life,” he maintains. “Community is about human connections; we need community to foster and maintain these connections. And we are diminished as our human connections are diminished.” “The economics we have constructed makes it virtually inevitable that we will leave community out of consideration when we ask questions about economic policy.”
He offers students advice that would be considered heretical in a conventional economics course. “Choose very carefully which markets you will allow and which you will not in terms of what they do to communities.”
Remember. It’s the Bank of Sweden Economics Prize not the Nobel Prize
A few weeks ago the Nobel Prize for Economics was announced. The press dutifully noted that it wasn’t one of the official Nobel Prizes inaugurated in 1901. Yet the media continue to call it the Nobel Prize rather than by its actual name: The Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel.
Knowing that the prize is issued by a bank might help people understand why, since its inception in 1969, 70 percent of these economics prizes have been awarded to Americans compared to only 39 percent of the real Nobel Prizes in chemistry, physics, literature and medicine. And why ten have been won by University of Chicago faculty.
The study of economics may indeed help us understand the world and design appropriate policies. But we need to drop the pretense that economics is a science based on laws and objective models and accept that it is a normative discipline. We need to own up to the bias inherent in conventional economic models and the social damage policies based on those models has wrought.
Source URL: http://www.ilsr.org/occupy-economics-departments/
by Stacy Mitchell | November 29, 2011
This is the sixth article in a special series written by ILSR’s Stacy Mitchell and published by Grist. You can read the whole series here.
Earlier this year, the New Jersey Sierra Club and the Pinelands Preservation Alliance tried but failed to block a permit for a new Walmart supercenter in the small coastal town of Toms River. The development, now moving forward, will destroy habitat for the threatened northern pine snake. What’s especially frustrating about the project, local environmentalists say, is that Walmart already has a store in Toms River. It’s just a mile down the road and will be shuttered when the new supercenter opens.
The Toms River site is one of several environmentally sensitive areas Walmart aims to pave over in the coming months. Many follow a similar pattern. In Copley, Ohio, Walmart wants to develop 40 acres of fields and wetlands, and then close another store a mile away. In Davie, Fla., the chain is seeking permission to destroy 17 acres of wetlands to build in a location that’s just a 15-minute drive from six other Walmart stores.
The chain now has 698 million square feet of store space in the U.S., up from 530 million in 2005, plus another 287 million around the globe. Its U.S. stores and parking lots cover roughly 60,000 acres.
Walmart’s imprint on our landscape is “their most serious legacy for the environment,” according to Kaid Benfield, director of the Sustainable Communities and Smart Growth program at the Natural Resources Defense Council. “In terms of global warming, it’s a huge issue,” he notes. “Our per-person emissions are much higher in sprawl locations than they are in more walkable locations.”
In fact, it’s likely that Walmart’s land-use impacts indirectly contribute more CO2 to the atmosphere than all of its reported greenhouse gas emissions combined, including those from the electricity that powers its stores and the fuel that runs its trucks.
And, yet, land use is utterly absent from Walmart’s sustainability program. Its 2007 sustainability assessment briefly mentions “the unintended consequences associated with land development.” But annual sustainability reports since then have been silent on the issue. Words and phrases like sprawl, compact, mixed-use, pavement, impervious, runoff, auto-oriented, household driving, transit, and pedestrian do not appear anywhere in these reports.
Vacant Walmarts litter the landscape
Next year, Walmart plans to open at least 210 new stores in the U.S. A handful of these will be its new Express stores, which, at 10,000-15,000 square feet, are about the size of a Walgreen’s; they sell groceries and pharmacy items, and are designed to fit into dense urban areas without triggering a zoning review. But almost all of its new stores will be 185,000-square-foot supercenters built on virgin land at the edge of sprawling communities. Even in cities, Walmart still favors a big suburban-style store with a moat of parking. It only resorts to Express stores where necessity dictates. “They are not replacing the suburban model, but adding to it,” says Benfield.
Walmart’s development projects often encounter a host of local and state environmental regulations, but the retailer is remarkably adept at getting around them. In California, for example, Walmart has been using the initiative process to evade the requirements of the state’s Environmental Quality Act. As Will Evans recently reported on California Watch, by gathering signatures and submitting its development proposals as ballot initiatives, Walmart ensures they won’t be subject to the act. Under the initiative process, city governments must either approve the projects outright, with no conditions, or spend hundreds of thousands of dollars to hold a special election. Facing daunting budget problems, most cities just give in. Over the last two years, Walmart has used this technique to secure approval for at least seven new supercenters across the state.
The last thing the U.S. landscape needs is more retail space. At more than 40 square feet per capita, we now have twice as much retail space as we did in the early 1990s and nearly three times as much as Europe — and a shocking amount of it now sits empty. Even before the recession, Americans were unable to spend enough to support all of this development. The Denver metro area, which currently has at least 70 vacant big-box stores and a swelling supply of defunct malls, is typical of many American cities.
Walmart’s commitment to “zero waste,” which has led it to recycle a growing share of waste at its stores, does not, unfortunately, extend to reusing cast-off retail space — not even its own. The company’s realty website lists 150 available Walmart stores, some less than a decade old and most located barely a stone’s throw from a new supercenter. Apparently, Walmart has found there’s more profit to be made by building shiny new stores than by updating and expanding existing ones.
Walmart has signaled that it plans to continue treating its buildings as disposable. Last year, when it negotiated with SolarCity to put solar panels on some of its California stores, Walmart insisted on 10-year power-purchase agreements, rather than the usual 20 years, because it would not commit to occupying these locations for more than a decade.
How Walmart’s sprawl drives climate change
New Walmart stores are made mostly of cement and steel, two materials with high levels of “embodied” carbon, meaning they require a lot of energy to manufacture. These emissions are not counted in Walmart’s annual tally of its contribution to climate change. Nor does the company count the impact of turning CO2-absorbing forests and fields into asphalt.
Far more significant, though, is how Walmart’s development patterns change our communities, reconfiguring their geography so that day-to-day errands require ever more driving. Between 1990 and 2009 – a period when Walmart grew from a regional chain to a national juggernaut — the number of miles the average American household logged each year for shopping grew by more than 42 percent, according to the National Household Travel Survey. By 2009, the average household was driving nearly 1,000 miles more to and from stores each year than it did in 1990.
Driving in general increased during these years as more people moved to the suburbs, but shopping-related driving expanded six times faster than driving for all other purposes, including work, school, and recreation. Indeed, almost half of the total increase in driving in this period can be attributed to errands. It’s not that we’re taking more trips to the store. Households still report about 9 shopping trips each week on average. But each of those trips is about 2 miles longer. For the country as a whole, that’s an extra 149 billion miles on the road each year.
Not all of this extra driving can be attributed to the rise of Walmart and other big-box retailers, but a sizeable chunk of it can. There used to be many more small and medium-sized stores — independent grocers, pharmacies, hardware stores, and so on – dispersed across city neighborhoods and town centers. Most people only had to go a short distance to pick up something for dinner or buy a can of paint.
This more sustainable pattern, rooted in a time before most families had cars, began to fray with the advent of malls in the 1950s and ’60s. But it was the growth of retailers like Walmart, Home Depot, and Target that really decimated neighborhood businesses. While malls mainly sell clothing, the big boxes compete more directly with local stores catering to the day-to-day needs of a community. Today, retail is concentrated in a much smaller number of giant stores, each serving a larger geographic region than the many small stores it replaced. The inevitable result is that most households must drive a few miles more for most errands.
Walmart affects more than just shopping. Its arrival often shifts traffic patterns so dramatically that other businesses, and even institutions like churches and schools, are compelled to abandon older neighborhoods and move to the new center of activity, making every aspect of life more auto-dependent. “What they do on the landscape is hugely influential,” notes Kaid. “In many cases, [Walmart] went early to a location, not late. It’s partly a result of how much land they want to use. From their point of view, they couldn’t follow suburban development and still get that much land at a price that they wanted to pay. They go early and more sprawl comes in around them.”
The climate implications of all this are huge. To get a sense of the magnitude, say we attribute 10 percent of the increase in shopping-related driving since 1990 to Walmart. That’s probably conservative given how fast the company grew and the degree to which its stores have altered land use and traffic patterns, but 10 percent is Walmart’s current share of retail spending, so it’s a fair number to use. That would mean Walmart’s share of the extra miles driven is resulting in more than 5 million metric tons of CO2 emissions each year in the U.S. That’s almost a quarter of the company’s reported global CO2 emissions, which were at 21 million tons in 2009. Add in all of the other untallied climate effects of Walmart’s sprawl strategy and you can see how the company’s true carbon footprint balloons.
So, while Walmart claims to be taking a leadership role on climate change, it is refusing to address — or even acknowledge — one of the most significant ways its practices affect the earth’s atmosphere.
Source URL: http://www.ilsr.org/can-you-say-sprawl-walmarts-biggest-climate-impact-goes-ignored/
by Stacy Mitchell | November 22, 2011
In 2009, Walmart created a stir when it announced that it would develop a Sustainability Index to assess the environmental impacts of every item on its shelves and provide an easy rating system to help shoppers make greener choices. CEO Mike Duke described [PDF] the index as “a simple tool that informs consumers about the sustainability of products” and helps them “consume in a more sustainable way.” This, in turn, would induce Walmart’s 100,000 suppliers to shrink their footprints.
The company set a five-year timetable. Many commentators gushed. The New York Times found the news so momentous that it dedicated an editorial to it, noting, “Given Wal-Mart’s huge purchasing power, if it is done right it could promote both much-needed transparency and more environmentally sensitive practices.”
More than two years on, this ambitious project doesn’t have much to show for itself. A consumer label “is really far off and maybe not a reality,” according to Elizabeth Sturcken, a managing director at Environmental Defense Fund, which has partnered with Walmart on its sustainability initiatives. “This information is really complex. Getting it reduced into a simple label for consumers is very challenging.”
Still, Sturcken thinks the project could produce valuable information for Walmart and manufacturers, and drive product improvements behind the scenes. “I think getting it into a system that product buyers and suppliers could use is much more attainable,” she said.
But even that seems to be proving elusive.
To do the necessary product analysis, Walmart founded the Sustainability Consortium, a university-hosted group. It has since attracted 75 corporate members, including Monsanto and McDonald’s, each of which must contribute at least $100,000 to the effort. To run the consortium, Walmart chose two academic institutions with which it has close ties: the Applied Sustainability Center, which is part of the University of Arkansas’ Sam M. Walton College of Business and was established in 2007 with a grant from the Walmart Foundation, and Arizona State University’s Global Institute of Sustainability, whose board of directors is co-chaired by Rob Walton, son of Walmart founder Sam Walton and chair of Walmart’s own board.
Barbara Kyle, director of the Electronics TakeBack Coalition, is skeptical that such an industry-dominated endeavor could produce a meaningful rating scheme. “You end up with manufacturers voting only for criteria that they already meet,” she said, adding that many critical issues, such as the durability of products and the impact of toxic inputs on factory workers, are excluded when corporations define sustainability. Kyle, who was on the task force that developed the EPEAT environmental rating system for computers, volunteered to take part in a Sustainability Consortium meeting on electronics last year, but was rebuffed. “They have all this stuff on their website about transparency and accountability, but they are anything but,” she said.
In the first year or two after its founding in July 2009, the Sustainability Consortium was close-lipped about its progress. In the last few months, the consortium has finally said that it is not in fact developing a rating system or even product-specific information. It is assembling general lifecycle data for types of products – a typical environmental footprint for orange juice or detergent, say, but not for specific brands within those categories. Spokesperson Jon Nicol says this data could be a starting point for a rating system should a company wish to develop one. So far, the consortium has finished just 10 assessments. A Walmart supercenter carries roughly 140,000 items across thousands of product types.
Was Walmart woefully naive about what it would take to create the kind of Sustainability Index it promised? Was it a miscalculation to have corporations play a big role in developing environmental standards for their own products? Should Walmart have put its efforts instead into refining and adapting an existing rating system, one not controlled by industry, such as GoodGuide? Was the index just a PR ploy from the start?
Raising questions about Walmart’s sustainability questionnaire
Although the Sustainability Index may never materialize, Walmart has been taking environmental issues to manufacturers in other ways. The company sent all of its suppliers a “sustainability assessment” [PDF] last year, asking them to answer 15 questions about their practices. But that survey has been criticized by some sustainable business experts. Joel Makower, a green business strategist, described the questions as “superficial at best, voluntary in nature, and the answers are largely yes-or-no, self-reported, and unverified.” Some suppliers privately grumbled that the survey was merely a tool for Walmart to better understand their cost structures and use that knowledge against them.
In China, where Walmart sources roughly 70 percent of everything it sells, the company has been undertaking other efforts. In 2008, Walmart organized a Sustainability Summit for its Chinese suppliers. Both outgoing CEO Lee Scott and incoming CEO Mike Duke gave speeches to the more than 1,000 attendees. Much of the coverage of the event framed it as Walmart getting tough with suppliers: You had better dramatically reduce the environmental impact of your factory or we’ll stop buying your goods.
What the company’s executives actually said was that Walmart had two main environmental goals [PDF] for its Chinese suppliers. The first: “we will require all our suppliers here to clearly demonstrate their compliance with Chinese environmental laws and regulations.” In other words, Walmart will no longer look the other way when its suppliers violate water-pollution and air-pollution laws. It’s good that Walmart is now on the side of the law, but then what are we to make of the company’s previous assertions over the years that its sourcing practices were ethical?
Walmart’s second stated objective was: “By 2012, our goal is for the top 200 factories we source from directly in China to achieve 20 percent greater energy efficiency.” There is plenty of low-hanging fruit when it comes to energy efficiency in China’s industrial sector and Walmart seems to be picking some of it. It has a clear financial incentive: Reducing energy use cuts costs, which presumably could result in Walmart paying suppliers less. Last December, the Environmental Defense Fund, which, at the time, was working in China to help Walmart achieve these reductions, reported that the company was on track to meet this goal by next year. Among the success stories that Walmart likes to highlight is the towel-maker Loftex, which has cut its electricity use by 25 percent and water use by 35 percent.
But the top 200 factories in China constitute less than 1 percent of the 30,000 factories in the country supplying Walmart, so a key question going forward is whether the others will follow in large numbers and in a way that can be verified. “[E]nergy efficiency in supplier factories still seems to be viewed as extracurricular by Walmart managers. It is not, in the lexicon of the Walmart world, seen as a ‘core activity,’” wrote Andrew Hutson, a project manager for corporate partnerships at EDF, in a blog post last December. Hutson said the program lacked mandates for supplier participation and a solid system for measuring progress. “For the program to be impactful and meet its potential, it needs to up its game. Dedicating sufficient resources to get the job done would be a good place to start,” he wrote.
So far, there’s no evidence that Walmart’s purchasing patterns have been changed at all by the answers it’s received to its questionnaire, by its energy-efficiency efforts with Chinese suppliers, or by the Sustainability Index program. Aside from a handful of examples like concentrated laundry detergent and CFL bulbs, it doesn’t appear that greener products are edging out more damaging ones on Walmart’s shelves. The company has not established incentives for its buyers to favor more environmentally friendly products; their performance continues to be measured on sales volume and profit margins. Walmart also refuses to make longer-term purchasing commitments to its suppliers, which leaves many wary of investing in new technologies that may take years to pay off.
While Walmart may have made sustainability part of its conversation with manufacturers, so far this has done little to alter business as usual.
Source URL: http://www.ilsr.org/walmarts-promised-green-product-rankings-fall-off-the-radar/
by Stacy Mitchell | November 18, 2011
This is the fourth article in a special 9-part series written by ILSR’s Stacy Mitchell and published by Grist. You can read the whole series here.
Context is critical to understanding Walmart’s sustainability initiatives and their impact on the retailer’s overall environmental footprint. But context has been sorely absent in the news media’s coverage of Walmart’s green efforts. Even within the environmental community, conversations about Walmart tend to miss the big picture.
Walmart’s renewable-energy activities provide a perfect example. Six years ago, the company announced that it was setting a goal of being “supplied by 100 percent renewable energy.” Succinct, powerfully stated goals are a signature of Walmart’s sustainability campaign — in part, it seems, because journalists often repeat these goals verbatim, so they function like stealth marketing slogans that infiltrate media coverage. Walmart’s renewable-energy goal has been especially effective on this front, appearing in thousands of newspaper articles and countless blog posts. Many of these stories use the goal as a jumping-off point to highlight the retailer’s renewable-energy projects, which include putting solar panels on 130 stores in California and buying 180 million kilowatt-hours of wind power in Texas annually. These stories create the overall impression that Walmart is making great progress on renewable energy.
But what if, rather than repeating Walmart’s stated goal of 100 percent renewable power, these news stories had instead reported that the company currently derives less than 2 percent of its electricity from its solar projects and wind-power purchases? That’s not a figure Walmart has published, and journalists have done little to bring it to light. At its current pace of converting to renewables, it would take Walmart about 300 years to get to 100 percent clean power. Some of its competitors are already there. Kohl’s and Whole Foods (both of which, I should add, have their own problems when it comes to the gap between their environmental PR and reality) have fully converted to renewable power, as have many independent retailers.
What’s holding Walmart up? It doesn’t want to spend the money.
“Because wind and solar power generally cost more than electricity from coal, nuclear or natural gas in most places, Walmart can’t or won’t buy clean energy on a scale that matters,” sustainable-business reporter Marc Gunther wrote earlier this year. Walmart, which reported operating profits of $25.5 billion last year, said as much in its latest sustainability report: “it has sometimes been difficult to find and develop low-carbon technologies that meet our ROI [return-on-investment] requirements.”
This a very different picture from the one the media have presented so far, which has portrayed Walmart as taking a leadership role on renewable power.
Another step back adds even more context: While the company has been talking big about renewable energy, its greenhouse gas emissions have been rising steadily. Between 2005 and 2009, Walmart’s reported emissions in the U.S. grew by roughly 7 percent. In Asia, they doubled. The company says its operations produced 21 million metric tons of greenhouse gases in 2009, and it expects 30 million metric tons of cumulative growth in emissions by 2015.
Neither Walmart’s renewable-energy projects nor its efficiency efforts are operating at a scale even remotely in league with the company’s size and growth trajectory. In the U.S., Walmart’s energy-efficiency steps have reduced energy use in stores built before 2006 by 10 percent, on average, saving about 1.5 million metric tons of CO2 annually. But new stores built in the U.S. since 2006 have added at least 3.5 million metric tons to Walmart’s yearly CO2 output.
The big payback
Commentators often note that cutting use of fuel and electricity saves Walmart money. But this is small change compared to the real payoff: a greener image and an enormous amount of positive publicity. This PR boost has enabled Walmart to accelerate the pace of its expansion. Six years ago, even the retailer’s own customers were starting to avoid its stores, while its development plans in cities like New York and Washington faced an impenetrable wall of opposition. Today, public opinion has shifted. Walmart’s store proposals, especially in the environmentally conscious Northeast and West Coast, are moving forward with less friction than before.
With fewer obstacles in its way, Walmart is anticipating big growth over the next couple of years. In the fiscal year that will end on Jan. 31, 2012, Walmart expects to have added between 36 and 39 million square feet of store space worldwide, and over the next year, between 45 and 49 million more — altogether, the equivalent of up to 470 average-sized supercenters. It also expects, next year, to grow sales by 5 to 7 percent, or $21 to $29 billion.
The company’s growth and sales goals always have specific time frames attached, of course, while its renewable-energy goal remains as undefined as ever. So as Walmart expands, thanks in part to goodwill generated by its green campaign, its environmental footprint will keep expanding right along with it.
Source URL: http://www.ilsr.org/think-walmart-uses-100-clean-energy-try-2/
by Stacy Mitchell | November 11, 2011
This is the third article in a special 9-part series written by ILSR’s Stacy Mitchell and published by Grist. You can read the whole series here.
My friend Tony’s closet is as good a place as any to begin an investigation of Walmart’s environmental impact. Tony has a pair of Levi’s that date back to high school more than 20 years ago. They still fit him and they’re still in rotation. The fabric has a smooth patina that hints at its age, but, compared to another pair of Levi’s he bought only a couple of years ago, this pair actually looks far less worn. The denim is sturdier, the seams more substantial, the rivets bigger.
Tony’s old pair of Levi’s may well have been made in the U.S, and they likely cost more than his new pair. The new ones were manufactured abroad — Levi’s closed its last U.S. factory in 2003 — and, though Tony didn’t buy them at Walmart, their shoddy construction can be blamed at least in part on the giant retailer and the way it’s reshaping manufacturing around the world.
Since 1994, the consumer price of apparel, in real terms, has fallen by 39 percent. “It is now possible to buy clothing, long a high-priced and valuable commodity, by the pound, for prices comparable to cheap agricultural products,” notes Juliet Schor. Cheapness — and the decline in durability that has accompanied it – has triggered an astonishing increase in the amount of clothing we buy. In the mid-1990s, the average American bought 28 items of clothing a year. Today, we buy 59 items. We also throw away an average of 83 pounds of textiles per person, mostly discarded apparel, each year. That’s four times as much as we did in 1980, according to an EPA analysis of municipal waste streams [PDF].
Most consumer products have followed a similar trajectory over the last two decades. Walmart has done more than any other company to drive these changes, though other retailers have since followed its model. Where once we measured value when we shopped, Walmart trained us to see only price. Its hard bargaining pushed manufacturers offshore and drove them, year after year, to cut more corners and make shoddier products. As union-wage production jobs and family-owned businesses fell by the wayside, many Americans could no longer afford anything but Walmart’s cheap offerings.
Today Walmart says it wants to reduce the amount of pollution involved in making some of the stuff it sells. That seems like a good thing – except that everything else Walmart does is designed to undermine the durability of consumer goods, accelerate the flow of products from factory to landfill, and get us to buy more stuff. Even if Walmart does succeed in reducing the resources used to make a T-shirt or a television set, those gains will be more than outstripped by growth in the number of T-shirts and TVs we’re consuming.
The six-dollar toaster
On a recent visit to Walmart store No. 2659, just outside of Portland, Maine, I tried to find evidence of a shift to more sustainable products, but I didn’t see much beyond CFL bulbs and reusable shopping bags. There were no Seventh Generation cleaning supplies or organic cotton clothes, for example.
I did, however, spot a toaster that retails for $6.24 — a price that renders its longevity virtually irrelevant. If it breaks, just buy another.
Prices on general household goods have fallen by about one-third since the mid-1990s. Given how awash in stuff we were in those boom years, it’s shocking just how much more we buy now. Since 1995, the number of toasters and other small electro-thermal appliances sold in the U.S. each year increased from 188 million to 279 million. The average household now buys a new TV every 2.5 years, up from every 3.4 years in the early 1990s. We buy more than 2 billion bath towels a year, up from 1.4 billion in 1994. And on and on.
While there are certainly factors beyond Walmart that have contributed to this ever-expanding avalanche of consumption, the company has been a major driver of the trend. Its growth and profitability rest on fueling an ever-faster churn of products, from factory to shelf to house to landfill.
In a paper [PDF] that came out last year, three business professors illustrate how inducing manufacturers to cut product quality enhances Walmart’s competitive position. “Because lower quality products are usually cheaper to produce, it is often argued that discount retailers induce lower quality in order to drive down prices. Our model suggests, however, that the competitive and bargaining position effects provide incentives to induce lower quality regardless of changes in production costs,” the authors write.
In other words, getting manufacturers to make shoddier products doesn’t just mean that Walmart can offer super-cheap wares; it also helps Walmart marginalize its competitors and gain more dominance over its suppliers. By using its market power to drive down the quality of manufacturing, Walmart gains an advantage over department stores and independent retailers because quality (and the knowledgeable service that typically goes with it) is no longer an important factor in a consumer’s choice about where to shop. If you are going to end up with a crappy to mediocre blender anyway, then why bother spending more or availing yourself of the advice and service of a specialty retailer? Reducing the overall quality of products thus destroys a key competitive advantage of Walmart’s smaller rivals.
Even when a manufacturer responds to Walmart’s cost-cutting pressure by producing a separate, cheaper line to sell only in big-box stores — as many name-brand companies now do — the brand’s reputation for quality can suffer, making it hard for specialty retailers to persuade customers that the higher-quality, longer-lasting versions they offer are worth more.
As local stores and other competing retailers are weakened, manufacturers become more dependent on Walmart. Many major consumer products companies now rely on Walmart for one-quarter or more of their business. According to the study, this gives the chain greater bargaining power over its suppliers, who have fewer options for bringing their wares to market and thus little leverage to resist the retailer’s demands.
Walmart is also a master at getting shoppers to buy more than they came for. It employs all of the techniques that have been shown to spur “unplanned buying,” according to a recent study [PDF] in the Journal of Marketing. The study found that large stores that promote the concept of one-stop shopping and can only be reached by car generate the most impulse buys. Marketing messages that evoke abstract shopping goals are also highly effective at inducing people to put more stuff in their carts. The authors cite Walmart’s “Save Money, Live Better” slogan as a leading example.
According to the study, the least amount of unplanned buying occurs when a shopping trip involves multiple stores, each with a specific product focus, and the customer arrives on foot or by mass transit – in other words, when you shop at small neighborhood and downtown retailers.
A low-tar cigarette
Walmart has a powerful incentive to increase the scale of consumption. Sustainability will never be more than a modest sideshow to this larger endeavor. Nowhere in Walmart’s pronouncements about greening its supply chain does the company mention the durability of products or the pace at which households burn through the stuff its stores sell.
As consumers, we’re hardly innocent in all of this, of course. With prices falling below the real human and environmental costs of production, we have been happy to upgrade to a bigger TV or buy four T-shirts when one would suffice. But imagining that Walmart might be part of the cure is like putting tobacco companies in charge of ending smoking. Walmart’s sustainability plan is the low-tar cigarette of the environmental movement: it admits there’s a problem, but offers a kind of pseudo solution that’s really aimed at keeping us all puffing.
As Walmart takes over an ever-larger share of the global economy, companies that favor a more durable and sustainable model of production are squeezed to the margins. The business press is replete with tales of storied U.S. brands, like Levi’s, which held out against Walmart for years before finally giving in, moving overseas, and figuring out how to make a $10 pair of jeans. Some still resist. Stihl, for example, the world’s leading maker of chain saws, has been vocal about retaining the quality of its products by not selling to the big boxes. But if Walmart and those that follow its model continue to grow, there may soon come a day when no producer can escape its dictates.
Source URL: http://www.ilsr.org/is-your-stuff-falling-apart-thank-walmart/
by Stacy Mitchell | November 8, 2011
Under a measure that passed the House last Thursday, you may soon be able to invest in a portfolio of your favorite independent businesses. The bill, which won bipartisan support and cleared the House on a 407-17 vote, would overturn long-standing Securities and Exchange Commission (SEC) rules that make it nearly impossible for small businesses to raise capital (or borrow money) from their customers and communities.
Current SEC rules divide investors into two categories. Wealthy people (“accredited” investors) are assumed to have a certain degree of financial sophistication. Businesses are free to approach them for funding. The rest of us are covered by safeguards that bar businesses from soliciting our investments without registering a public offering of securities with the SEC, an arduous and expensive legal process that is well beyond the reach of a neighborhood restaurant or start-up clothing maker. The current rules do exempt some small investment offerings, but these exemptions are too narrow for most independent businesses to use without running afoul of the law.
The result is that, even as enthusiasm for independent businesses and locally produced goods has grown, the savings of almost all American households remains invested in the stocks and bonds of large corporations. We may buy local, but we invest transnational. There are few alternatives.
Many independent businesses, meanwhile, are short of the capital and credit they need. The rise of giant banks over the last twenty years has sharply reduced the ranks of local banks, making it harder for small businesses to obtain credit. For those that cannot secure a bank loan, but have an avid following, raising funds in small increments from the public can be a viable option. Some that have managed to do so without violating SEC rules, like Greenlight Books (read their story), have also discovered that grassroots financing has it advantages. It helps to build the relationships and community loyalty that can be so critical to surviving in the age of Amazon and Walmart.
Crowdfunding is further along in Europe, where the rules about offering small securities are more generous, according to Amy Cortese, whose new book Locavesting provides an inspiring look at the many ways our investment dollars might be redirected locally. One active platform is the UK-based Funding Circle. Since its inception in August 2010, Funding Circle has facilitated about £15 million ($24 million) in loans to 404 businesses. The site features a list of loan requests that have been vetted by Funding Circle’s underwriters and rated according to risk. Individuals can lend to as many as they like. A single loan may involve hundreds of lenders. Lenders are encouraged to join Circles, which are groups of people that have a common investing interest. Many are geographically focused — businesses in Edinburgh or Bristol, for example. So far, there have been two defaults and no cases of fraud.
Hoping to legalize crowdfunding in the U. S., the Sustainable Economies Law Center (SELC) sent a petition to the SEC in July of 2010 requesting that the agency establish an exemption for businesses seeking up to $100,000 with individual investments capped at $100. Although the SEC received more 150 letters of support for the petition, nothing much happened until September of this year, when President Obama endorsed an exemption for crowdfunding and said that he would work with the SEC to change the rules.
Within weeks, Representative Patrick McHenry had organized a committee hearing on the issue and introduced HR2930, which sailed through the House at breakneck speed. The legislation requires the SEC to exempt businesses seeking to raise up to $1 million, with the amount an individual could invest limited to no more than 10 percent of his or her income, a much higher threshold than the SELC proposed. The measure establishes disclosure and other standards for the companies soliciting funding, as well as third-party intermediaries that link borrowers and lenders.
Although the crowdfunding bill won overwhelming support in the House, it faces an uncertain future in the Senate. The SEC opposes the bill, saying it would create too many openings for fraud. But, as some in Congress have noted, it’s hard to defer to an agency whose oversight failed to protect investors from Bernie Madoff and a mountain of toxic mortgage-backed securities. “It’s a legitimate concern, but we feel that the regulatory focus should be happening more at the top [of the market], not at the grassroots,” says Jenny Kassan, co-director of the SELC.
Another source of opposition is state regulators. Their laws and rules governing offerings under $1 million would be preempted by McHenry’s bill. While states play an important role in securities oversight, Kassan says that their specific regulations vary so widely that it’s prohibitively expensive for an expanding small business or start-up to comply with 50 different sets of requirements.
Perhaps a more significant concern about McHenry’s bill is whether it would allow crowdfunding to stray too far from its community roots. This kind of financing works well when it’s grounded in real relationships — when those investing are also the company’s suppliers, customers, or neighbors. Nothing in the bill so far requires borrowers and investors to have a connection or something in common beyond the financing (a shared geography, say). Should McHenry’s legislation open the way for crowdfunding to become more national, web-based, and anonymous, the risk of defaults and fraud may grow.
Although Kassan, Cortese, and other advocates of community-based crowdfunding share this concern, they say that the legislation is still a good move on balance. As Cortese notes, “This could tap a huge pool of capital for companies that need it, and allow people to invest in companies they love.”
Source URL: http://www.ilsr.org/crowdfunding-bill-would-allow-people-to-invest-in-local-businesses/
by Stacy Mitchell | November 8, 2011
This is the second article in a special 9-part series written by ILSR’s Stacy Mitchell and published by Grist. You can read the whole series here.
Walmart’s six-year-old sustainability campaign has helped improve its public image, enabling the company to grow bigger and faster. That growth, ironically, has dramatically increased the retailer’s environmental footprint, and hurt local economies and the U.S. job market along the way.
2005 — year Walmart launched its sustainability campaign
38 — percentage of Americans who had an unfavorable view of Walmart in 20051
20 — percentage of Americans who had an unfavorable view of Walmart in 20102
530 million — total square footage of Walmart’s U.S. stores in 20053
698 million — total square footage of Walmart’s U.S. stores in 20114
641 million — approximate area of the island of Manhattan in square feet
1,587 — number of Walmart stores outside of the U.S. in 20055
4,557 — number of Walmart stores outside of the U.S. in 20116
60,000 — approximate number of acres covered by Walmart’s U.S. stores and parking lots7
0 — number of times since 2007 that Walmart’s annual sustainability reports have referenced the company’s impact on land-use patterns and household driving
152 — number of abandoned Walmart stores in the U.S. listed as available for lease or sale on the company’s realty website8
210 — minimum number of new stores Walmart plans to open in the U.S. in 20129
1.5 million — approximate metric tons of CO2 saved each year by energy-efficiency improvements Walmart has made to U.S. stores built before 200610
3.5-3.9 million — approximate metric tons of CO2 emitted each year by Walmart stores built in the U.S. since 200611
<2 — percentage of Walmart’s U.S. electricity consumption that currently comes from its solar projects and specially purchased wind energy12
300 — approximate number of years it would take for Walmart to reach 100 percent renewable energy at its current pace
1988 — year Walmart opened its first supercenter selling a full line of groceries
25 — percentage of U.S. grocery sales now captured by Walmart13
29 — number of U.S. metro areas where Walmart captures more than half of all grocery spending14
196,000 — number of U.S. jobs lost from 2001 to 2006 as a result of Walmart’s imports from China15
1,940 — number of small retail firms (fewer than 20 employees) per 1 million population in the U.S. in 199216
1,455 — number of small retail firms per 1 million population in the U.S. in 200717
$312 billion — Walmart’s revenue in 200518
$419 billion — Walmart’s revenue in 201019
$8.81 — average hourly wage at Walmart’s U.S. stores20
$943 — average annual cost to taxpayers of providing Medicaid, food stamps, and cash assistance for each Walmart employee, based on data from Ohio21
Sources and footnotes:
12. Author’s calculation based on data reported in Walmart’s annual sustainability reports. A small percentage of the electricity delivered by utilities around the country is also from wind and solar, so Walmart does get some additional renewable power that way, as we all do.
21. Data provided by the Ohio Department of Job and Family Services and published in a report by Policy Matters Ohio, “Public Benefits Subsidize Major Ohio Employers: A 2008 Update,” July 31, 2008.
Source URL: http://www.ilsr.org/walmart-by-the-numbers/
by Stacy Mitchell | November 7, 2011
This is the first article in a special 9-part series written by ILSR’s Stacy Mitchell and published by Grist. You can read the whole series here.
Walmart adopted sustainability as a corporate strategy in 2005. It was struggling mightily at the time. Bad headlines stalked the chain, as its history of mistreating workers and suppliers finally caught up with it. One analysis found that as many as 8 percent of Walmart’s customers had stopped shopping at its stores. Grassroots groups were blocking or delaying one-third of its development projects. Stockholders were growing nervous. Between 2000 and 2005, Walmart’s share price fell 20 percent.
As then-CEO Lee Scott told The New York Times, improving labor conditions would cost too much. It would also mean ceding some control to employees and perhaps even a union. Going green was a better option for repairing the company’s image. It offered ways to cut costs and, rather than undermining Walmart’s control, sustainability could actually augment its power over suppliers. Environmentalism also had strong appeal among urban liberals in the Northeast and West Coast — the very markets Walmart needed to penetrate in order to keep its U.S. growth going.
Since Scott first unveiled Walmart’s sustainability program, the company’s head office in Bentonville, Ark., has issued a steady stream of announcements about cutting energy use, reducing waste, and, more recently, selling healthier food. Most of these announcements declare goals, not achievements. But the goals sound audacious enough to reliably produce sweeping headlines and breathless accounts of how Walmart could remake the world by bending industrial production to its will.
By 2010, the number of Americans reporting an unfavorable view of Walmart had fallen by nearly half, from a peak of 38 percent in 2005, to 20 percent.
What the news media haven’t reported
As I started to work on this series, I looked back at the coverage of Walmart’s sustainability campaign over the last six years and was shocked by just how much of a public relations boost the media have given the company and how little public accountability they have demanded in return.
Some of the most serious environmental consequences of Walmart’s business model simply aren’t on the table. Walmart doesn’t talk about them and, despite expending a lot of ink and airtime on the company’s green activities, the news media don’t either. Indeed, journalists rarely stray beyond the parameters of what Walmart has put in front of them.
More surprising is the absence of basic information essential to evaluating what Walmart is actually accomplishing. Take, for example, the share of Walmart’s electricity that comes from renewable sources. There have been thousands of news stories and blog posts on the company’s renewable energy activities since 2005, so one would think this number would be reported often. I couldn’t find it anywhere. (I did eventually dig up enough data to figure it out myself. The answer: less than 2 percent of the company’s electric power in the U.S. comes from its wind and solar projects.)
Or take the case of the Sustainability Index, Walmart’s much-publicized effort to put a green rating on every product it sells. Two years after the media fanfare surrounding the announcement, no journalist, as far as I can tell, has investigated what progress, if any, Walmart has actually made. (According to my research: not much.)
This series aims to fill in some of these gaps and, hopefully, inspire other writers and journalists to take a closer look at what Walmart is and isn’t doing.
What environmentalists haven’t paid attention to
“Walmart is here to stay” — that’s the refrain I often hear from the many environmental organizations and green-business advocates who have applauded the company’s sustainability efforts. The world’s largest retailer isn’t going away, the thinking goes, so anything it does to reduce its footprint is a good thing.
But Walmart circa 2005 is, in fact, long gone. Today’s Walmart is much, much bigger. It sells 35 percent more stuff in the U.S., and its international store count has almost tripled, from about 1,600 to 4,600 stores.
For Walmart, sustainability is a growth strategy — and a highly effective (and darkly ironic) one at that. Six years ago, Walmart was facing widespread opposition, including legislation that would have required better labor practices and limited the company’s growth. Thanks at least in part to its sustainability campaign, and the warm reception from many environmentalists, those roadblocks have eroded and Walmart’s expansion is once again rolling at full speed.
As it grows, Walmart pushes out existing enterprises and local economic systems and replaces them with its own, often far more polluting, global supply chain and sprawling stores. If any single fact could sum up what’s at stake, it would be that Walmart now controls one-quarter of our country’s grocery sales and aims to capture half — a prospect with disastrous implications for the environment, social justice, and local economies.
So far, though, most mainstream environmental organizations have focused on the small bits of good that Walmart could do — reduce PVC in packaging, for example — while ignoring the much larger consequences of its ever-expanding business model.
This series will mark, we hope, the beginning of a more comprehensive and critical response to Walmart’s sustainability initiatives.
Read the articles in the series:
Source URL: http://www.ilsr.org/walmarts-greenwash-why-the-retail-giant-is-still-unsustainable/
by David Morris | October 6, 2011
A few months ago Nassim Taleb, author of the Black Swan, an influential book about the crucial importance of unpredictable, unforeseen events on our financial system was asked whether the hundreds of thousands taking to the streets in Greece was a Black Swan event. He replied, “No. The real Black Swan event is that people are not rioting against the banks in London and New York.”
They are now. Not rioting perhaps but vigorously protesting. Occupy Wall Street is moving into its second month. Twenty thousand strong demonstrated in New York City this week. Similar demonstrations are spreading nationwide.
In the 1976 movie, Network, anchorman Howard Beale tells his viewers,
Things have got to change. But first, you’ve gotta get mad!… You’ve got to say, ‘I’m as mad as hell, and I’m not going to take this anymore!’ Then we’ll figure out what to do about the depression and the inflation and the oil crisis. But first get up out of your chairs, open the window, stick your head out, and yell, and say it: “I’M AS MAD AS HELL, AND I’M NOT GOING TO TAKE THIS ANYMORE!”
We’re mad as hell and we’re not going to take this anymore. That is the message of the sit-ins by U.S. Uncut, the protests against Bank of America, the occupation of Freedom Plaza in Washington, D.C. to protest the war, Occupy Wall Street and the growing numbers of #Occupy demonstrations around the country. (more…)
Source URL: http://www.ilsr.org/its-labor-vs-capital-stupid/
by Stacy Mitchell | September 15, 2011
This article originally appeared in Yes! Magazine.
One of the most significant, but least noticed, consequences of the rapid and dramatic consolidation of the banking industry over the last decade is how much it has hindered the U.S. economy’s ability to create jobs.
To begin to understand this, take a look at each end of the banking spectrum. On one end are the nation’s 6,900 small, locally owned, community banks. These institutions control $1.4 trillion in assets. That’s 11 percent of all bank assets. They currently have $257 billion in loans to small businesses and farms on their books.
On the other end, four giant banks—JP Morgan Chase, Bank of America, Citibank, and Wells Fargo—now command $5.4 trillion in assets, or 40 percent of the total. Given that they are nearly four times as large as all local banks combined, one might expect that they would have made four times the small-business loans, or about $1 trillion. In fact, these banks have a mere $85 billion in small-business and farm loans on their balance sheets. (See this graph.)
Why do giant banks make so few small-business loans? Automation is the short answer. The only way these sprawling institutions can function efficiently is by taking a mass production approach to lending: Plug credit score, income, and appraisal into the computer—out comes the loan. That’s why the mortgage business was supposed to be so safe. The economic meltdown of 2007 shows that it’s actually very risky.
Small-business loans are not so easily mechanized. Each is a custom job, requiring human judgment to evaluate the risk associated with a particular entrepreneur, a particular business plan, and a particular market. Community banks excel at this. Their lending decisions are made locally, informed by face-to-face relationships with borrowers and an intimate understanding of their hometown economies. Big banks, whose decision-making is long-distance and dictated more by computer models than judgment, are pretty bad at it. So they don’t make many small-business loans.
Source URL: http://www.ilsr.org/how-state-banks-bring-money-home/
by David Morris | May 18, 2011
Unlike the public sector, the private sector is bred for efficiency. Left to its own devices, it will always find the means to provide services faster, cheaper, and more effectively than will governments.
James Jay Carafano, Private Sector, Public Wars
I suspect the vast majority of Americans would agree with Mr. Carafano. They probably consider the statement self-evident. The facts, however, lead to the opposite conclusion. When not handicapped by regulations designed to subsidize the private sector, the public sector often provides services faster, cheaper and more effectively.
Consider the results of recent privatization initiatives in three key sectors: health, education and national defense.
Alone among all industrialized nations, the US relies on private for profit insurance companies to manage its health care system. The result? The US has by far the most expensive health care system in the world both in total cost and as a percentage of GDP.
But we don’t have to look abroad to evaluate the comparative costs of private and public health systems. Consider Medicare.
Small privatization efforts under Medicare began in the 1980s but did not become full-borne until 1997 when the Republican Congress, with the support of President Clinton, created Medicare+Choice. Secure in their faith that the private is always superior to the public the Republicans agreed to a program in which private insurers would receive the same amount as the service cost under Medicare.
The public sector proved uncompetitive. Private insurers began pulling out en masse. In 2000, more than 900,000 patients were dropped from the Medicare+Choice program.
No one should have been surprised. Private insurers have a huge handicap. Their overhead costs-marketing, profits, etc.—dwarf those of Medicare: slightly under 17 percent compared to about 5 percent for Medicare.
How did the Republican Party react to this real world challenge to their foundational belief in the efficiencies inherent in a private enterprise system? They changed the rules. Having proven unable to win in a fair fight, private insurers were now given a handsome subsidy when Medicare Advantage replaced Medicare+Choice. The federal government now pays private insurers on average 14 percent more per member than the same care would cost under traditional Medicare.
The huge subsidy allowed private insurers not only to make a profit but to offer some low cost goodies, like membership to gyms, Medicare doesn’t offer. Today, about 8.5 million Medicare beneficiaries nationwide are enrolled in some form of private Medicare plan—nearly 20 percent of all Medicare beneficiaries.
Astonishingly, having proven that private health insurance costs more Republicans have now made the further privatization of Medicare the centerpiece of their budget deficit plan. Instead of directly insuring seniors their new plan would have the government give them a voucher to buy private insurance. The government would save money because the value of the vouchers would rise at a slower rate than health care costs.
New Yorker business writer James Surowiecki sums up the conclusions of an analysis of the plan by the non-partisan Congressional Budget Office, “seniors would have to spend more and more of their income on private insurance and out-of-pocket expenses, or go without… Ryan’s plan would actually increase the amount of money Americans spend on health care, since private insurers aren’t as good at curbing costs as Medicare. But taxpayers would pay less.”
In 1958, the federal government established a student loan program. The federal Treasury made the loan directly. In 1965, as part of his Great Society initiative, LBJ wanted to dramatically expand the program, but ran up against budget rules that discriminated against direct lending. A direct loan showed up as a total loss in the year it was made, even though most of it would be paid back with interest in future years. A guaranteed loan, on the other hand, which placed the full faith and credit of the United States behind a private bank loan, would appear to have no up front budget cost at all because the government’s payments for defaults and interest subsidies would not occur until later years.
Knowing that a major direct loan program would show up as increasing a deficit already growing because of the expanding Vietnam War, the Democratic Congress opted to replace direct loans from the government with bank loans guaranteed by the government.
For the next 27 years, the direct loan program disappeared. Finally, in 1990 Congress eliminated the unfair rules. The new unbiased regulations led the Bush Administration to conclude that direct loans would be less costly and simpler to administer. In 1992, Congress created a direct lending pilot program. In 1993, President Clinton proposed replacing the guarantee program with direct loans as part of his own deficit reduction plan.
But in 1994 Republicans took over the House of Representatives. And as conservatives are wont to do, they refused to let facts get in the way of ideology. Led by Newt Gingrich, they tried to completely eliminate direct lending. To their surprise, college and university officials, frustrated by a guaranteed loan system the Government Accountability Office labeled a “complicated, cumbersome process” involving thousands of middlemen, fought back.
Ultimately, Congress stopped short of eliminating direct lending. Instead, it prohibited the Department of Education from encouraging colleges to switch to the direct loan program. Even without such encouragement, colleges recognized a good deal when they saw one and began shifting to direct loans. By 1998, about 35 percent of all student loans were direct loans from the government.
The private sector, having tasted the profits of guaranteed loans, fought back, led by Sallie Mae, the former Student Loan Marketing Agency. Set up in 1972 as a non-profit, government sponsored enterprise (GRE) supervised by the US Treasury, in 1997 Sallie Mae obtained Congressional approval to privatize. That allowed it to originate its own loans and acquire other companies. The new private profit making company quickly bought out its two major rivals.
Sallie Mae also purchased student loan collection companies. By 2006 it dominated all aspects of the student loan industry. According to CBS News, in 2005 nearly a fifth of its revenue came from collection agencies. Sallie Mae’s fee income increased by 228 percent between 2000 and 2005, from $280 million to $920 million while its stock price increased 1,600 percent from 1995 to 2005.
Colleges began to shift back to guaranteed loans. Wondering why they would do so to the detriment of their students, U.S. News and World Report investigated. It found that private lenders were supplying college official with free meals and drinks, golf outings and sailboat cruises. “Lenders offer the prospect of millions of dollars in profits to universities–if they drop out of the Education Department’s direct-loan plan.”
A 2006-2007 investigation by New York Governor Eliot Spitzer and Attorney General Andrew Cuomo uncovered a pattern of kickbacks and bribes to universities.
Private lenders worked not only to maximize their share of the market but to maximize their profits from each loan by changing the rules. U.S. News and World Report noted, the student loan industry “used money and favors, along with their friends in Congress and the Department of Education, to get what they wanted.”
In 1998, Congress allowed massive penalties and fees to be imposed on delinquent student loans, making it more profitable for the lenders and guarantors when students defaulted than when they repaid the loan on time. Congress also allowed for collection rates of up to 25 percent to be applied to the debt.
In 1999, lawmakers created a new interest-rate formula that boosted the lenders profits.
Student loans were specifically exempted from state usury laws and from coverage under the Truth in Lending Act.
Adding insult to injury, in 2005, the private lenders convinced Congress to make all student loans non-dischargeable in bankruptcy.
The loss to the taxpayers ran into the tens of billions of dollars. The loss to students may have run even higher.
In 2005 the Congressional Budget Office compared the impact on taxpayers of a guaranteed loan and a direct loan. For every $1 of loan guarantee the federal government incurred taxpayers lost 15 cents. For every $1 loans made directly by the federal government, taxpayers made 2 cents.
On a $3,000 student loan repaid in 10 years, the CBO estimated the cost to taxpayer for a guaranteed loan would be $450. A direct loan, however, would benefit taxpayers by $63.
The 2008 elections gave us a Democratic Congress and a Democratic President. In 2010, they ended 40 years of giveaways to the private sector and eliminated the guarantee loan program. Today all federal student loans are direct loans. The Congressional Budget Office estimates this will generate almost $68 billion in savings over the next ten years.
As early as the late 1970s the federal government began contracting out but privatization took center stage with Bill Clinton and Al Gore’s Reinventing Government initiative.
From then on politicians would boast about how much they had reduced federal payrolls while at the same time avoiding the unpleasant fact that on their watch the number of private contractors had increased even faster.
The Pentagon embraced privatization most eagerly, contracting out for a wide variety of services, including weapons engineering, security enforcement, training, tech support, food and outfitting management, and even frontline military strength to a new entity, the Private Military Company (PMC).
Secretary of Defense William Cohen led the effort. “During the summer of 1997 he assembled a committee that included leading executives from private industry to offer their wisdom about the road ahead”, Duke law professor Laura Dickinson writes in Outsourcing War & Peace. “Cohen then proceeded to pursue a reform path that aimed to modernize defense by embracing the rhetoric, practices, and methodologies of American businesses. This embrace is perhaps most apparent in his Defense Reform Initiative, which he launched in the fall of 1997 as an effort to ‘aggressively apply to the Department those business practices that American industry has successfully used to become leaner and more ﬂexible in order to remain competitive.’”
The Pentagon has always employed contractors for specialized functions that were not large in scope and not fundamental to regular military operations. This changed in the early 1990s. Peter Singer writes, ”In 1992 a relatively little-known, Texas-based oil services firm called Halliburton was awarded a $3.9 million Pentagon contract. Its task was to write a classified report on how private companies, like itself, could support the logistics of U.S. military deployments into countries with poor infrastructure. … it is hard to imagine that either the company or the client realized that 15 years later this contract (now called the Logistics Civilian Augmentation Program or LOGCAP) would be worth as much as $150 billion.”
The number of private military contractors soared, exceeding by 1999 the total combined number of active military troops, civilian employees, reserves and National Guards.
The result? An unmitigated mess. Contracts were shoveled out the door so fast the military lacked even basic information about the burgeoning force of private contractors. This was clearly evident when Congress asked the Army how many contract service workers it had. The Army’s answer? Somewhere between 124,000 and 605,000!
Did privatization save money? Usually not. One Congressional study found that contracts for intelligence support cost, on average, almost twice as much as in-house work.
Almost all of today’s logistics firms operate under “cost-plus” contracts–a structure ripe for abuse.
But privatizing the military has cost us more than just money. As Maj Kevin P. Stiens and Lt. Col. (Ret.) Susan L. Turley observed, “Not only did the cost savings fail to materialize, outsourcing caused other tangible losses. The government lost personnel experience and continuity, along with operational control, by moving to contractors.”
Walter Pincus opined in the Washington Post, “Particularly frustrating for organizations that require specialized expertise and experience, such as intelligence agencies, are organic personnel who leave for better pay with contractors after the government has trained them, obtained their security clearances, and given them experience…The government pays to get the worker qualified, then ends up leasing back . . . former employees.”
Our national security now depends on millions of workers with divided loyalties. “Private employees have distinctly different motivations, responsibilities and loyalties than those in the public military, Air Force Colonel Steven Zamperelli writes, “[T]hey are hired, fired, promoted, demoted, rewarded and disciplined by the management of their private company, not by government officials or the public.”
“The privatized military industry introduces very real contractual dilemmas into the realm of international security”, Peter Singer maintains, “For governments, the public good and the good of the private companies are not identical . . . [and] these two parties’ interests will never exactly coincide.”
In 2008 at least 12 U.S. soldiers were accidentally electrocuted inside their bases in Iraq. Later it was discovered that the private contractor, KBR, knew there were potentially serious electrical problems in the facility’s construction. But its contract didn’t cover “fixing potential hazards.” It only required repairing items already broken!
Singer offers another reason many are concerned about our increasing reliance on private contractors, “Many worry that the lack of control due to outsourcing could weigh even heavier and even put an entire military operation at risk. Consider what happened during the 2004 Sadr uprising, where a spike in attacks on convoys caused many companies to either withdraw or suspend operations, causing fuel and ammunition stocks to dwindle.”
It may be too late to turn the clock back on private military companies so long as government officials boast about reducing the size of the federal workforce while actually increasing it and lack the political courage to reinstitute a draft that would bring troop and troop support levels back to where they need to be.
Nevertheless, the pendulum seems to be swinging back. For the first time in 30 years, the 2008 National Defense Authorization Act encouraged what has come to be known as “insourcing”, bringing back in house tasks that have been outsourced. Stiens and Turley drily assert, “one of the primary benefits of insourcing is to undo outsourcing efforts that brought neither cost savings nor improved mission performance.”
So there we have it. Three disparate examples of privatization, all leading to the same conclusion. Privatization hurts. Unlike the public sector, the private sector is bred to maximize profits. Left to its own devices, it will always find a more profitable way to provide services even when that means increasing their cost, reducing their effectiveness and endangering the national security.
Source URL: http://www.ilsr.org/and-the-winner-is-the-public-sector/
by David Morris | April 29, 2011
“The word “public” has been removed from the name of the Fort Worth Library. Why? Simply put, to keep up with the times.“From the Media release on the rebranding of the Fort Worth Library
Fort Worth, you leave me speechless. You’re certainly correct about one thing. The public library is indeed an institution that has not kept up with the times. But given what has happened to our times, why do you see that as unhealthy? In an age of greed and selfishness, the public library stands as an enduring monument to the values of cooperation and sharing. In an age where global corporations stride the earth, the public library remains firmly rooted in the local community. In an age of widespread cynicism and distrust of government, the 100 percent tax supported public library has virtually unanimous and enthusiastic support.
Source URL: http://www.ilsr.org/all-hail-the-public-library/
by Stacy Mitchell | March 18, 2011
Stepping up their attacks on Elizabeth Warren and the new Consumer Financial Protection Bureau this week, House Republicans painted a picture of an all-powerful agency — Financial Services Chairman Spencer Bachus called it “the most powerful agency that’s ever been created in Washington”– whose director will rule the banking industry by fiat, be accountable to no one, and even determine her own budget.
Many have already pointed out how factually untrue these claims are. What’s also striking about them is how accurately they describe another financial regulator, the Office of the Comptroller of the Currency (OCC). The OCC is the nation’s top dog in charge of overseeing banks. Its powers are vastly broader than those of the CFPB and subject to far less oversight. Yet the OCC is well-liked by many of these very same Republicans, so much so that they went to bat last year to ensure that its authority would not be constrained in the slightest by the Dodd-Frank Act.
The difference between the two agencies is that the OCC sees its mission as protecting, not consumers, but big banks. Over the last two decades, the OCC has used its powers to ensure that the nation’s largest banks don’t have to play by the same rules that govern small community banks, can operate outside the jurisdiction of state attorneys general, and are immune from many consumer protection laws.
Unlike the CFPB, whose rules can be vetoed by the newly created Financial Stability Oversight Council, a panel of nine federal regulatory agencies (including the OCC), the OCC is subject to little in the way of checks and balances. It operates unilaterally and has spent much of the last two decades preempting state laws that big banks don’t like, including rules on credit card disclosures, payday lending, bank fees, and more. Most disastrously, in early 2000s, the OCC overturned numerous state laws that outlawed certain risky and predatory mortgage practices.
Throughout all of this, the OCC has been accountable to no one. When Congress reprimanded the OCC for its “inappropriately aggressive” preemption practices, the agency thumbed its nose and continued to obliterate state laws. When states sought relief through the courts, they ran headlong into a precedent that forces judges to defer to the opinions of the OCC. Nor has there been any accountability to citizens. Between 1995 and 2007, the OCC brought just 13 enforcement actions against banks for consumer protection violations. Even now, consumers in throes of the mortgage foreclosure debacle report that the OCC does not respond to their calls.
As with other major financial regulatory agencies, neither the CFPB’s budget nor the OCC’s are subject to the Congressional appropriations process. What does distinguish the two agencies’ budgets is where the money comes from. The CFPB’s expenses will be paid through a transfer from the Federal Reserve (with its budget capped and subject to annual GAO audits and reports to Congress), while the OCC derives almost all of its funding directly from the very banks it regulates. The largest 20 banks contribute two-thirds of the agency’s revenue.
What makes this set-up problematic is that banks can choose either a state or national charter. By giving nationally chartered banks a green-light to ignore state laws, the OCC has made its charter highly desirable and, indeed, its budget has soared as more banks have switched to a national charter. In other words, preempting consumer protections and running roughshod over state authority has profited both banks and the OCC itself.
All of this goes to show that what’s really at issue in the fight over the CFPB is not how the agency is structured or how much power it will have, but whose interests it serves. As Bachus himself put it recently, “In Washington, the view is that the banks are to be regulated, and my view is that Washington and the regulators are there to serve the banks.”
Source URL: http://www.ilsr.org/why-republicans-hate-warrens-cfpb-love-another-bank-regulator/
by David Morris | March 1, 2011
From all accounts, Charles Ferguson’s acceptance speech was the highlight of the Oscars. After winning an Oscar for Best Documentary for Inside Job, a compelling and searing indictment of Wall Street’s role in the economic crisis, Ferguson injected some much-needed real world relevance amidst the fabulously glitzy proceedings. “Forgive me, I must start by pointing out that three years after a horrific financial crisis caused by fraud, not a single financial executive has gone to jail — and that’s wrong.”
That bears repeating. Not a single financial executive has gone to jail.
The government was not always so cowed by Wall Street. In the 1980s, after deregulation led to the takeover of Savings and Loans by aggressive entrepreneurs who committed fraud on a massive scale, the federal government swung into action.
Joe Nocera in the New York Times recalls, “There were a dozen or more Justice Department task forces. Over 1,000 F.B.I. agents were involved. The government attitude was that it would do whatever it took to bring crooked bank executives to justice.”
Nearly 1,000 savings and loans — a third of the industry — collapsed, costing taxpayers over $200 billions. And the Department of Justice won 1,000 felony convictions in major cases.
The Department of Justice still prosecutes cases of financial malfeasance, as long as the perpetrators are not heads of major financial institutions. Consider its vigorous prosecution of Martha Stewart, who was convicted in March 2004, not even of insider trading but of lying to the SEC and the FBI about insider trading. She served five months in a West Virginia federal prison.
Compare that to the way the Department of Justice approached the investigation of John Mack that same year. Mack had just stepped down as President of Morgan Stanley and would soon become its CEO and Chairman of its Board. Matt Taibbi relates the story in the most recent of what are rapidly becoming iconic pieces of an era in Rolling Stone.
One day, with no advance research or discussion, Samberg had suddenly started buying up huge quantities of shares in a firm called Heller Financial. “It was as if Art Samberg woke up one morning and a voice from the heavens told him to start buying Heller,” Aguirre recalls. “And he wasn’t just buying shares — there were some days when he was trying to buy three times as many shares as were being traded that day.” A few weeks later, Heller was bought by General Electric — and Samberg pocketed $18 million.
Aguirre identified Mack, a close friend of Samberg’s, as the person most likely to have tipped Samberg off. Mack had been begging Samberg to cut him into a potentially lucrative deal involving a spinoff of the tech company Lucent. “Mack is busting my chops” to give him a piece of the action, Samberg told an employee in an e-mail.” A few days after Samberg sent that e-mail, Mack flew to Switzerland to interview for a top job at Credit Suisse First Boston. Among the investment bank’s clients was Heller Financial.
As soon as Mack returned from that trip, he called Samberg. The next morning, Mack was cut into the Lucent deal, an investment that made him more than $10 million. And as soon as the market reopened after the weekend, Samberg started buying every Heller share he could, right before it was snapped up by GE.
The deal looked like a classic case of insider trading. But in the summer of 2005, when Aguirre told his boss he planned to interview Mack, things started getting weird. His boss told him the case wasn’t likely to fly, explaining that Mack had “powerful political connections.” (The investment banker had been a fundraising “Ranger” for George Bush in 2004, and would go on to be a key backer of Hillary Clinton in 2008.)
Aguirre was contacted by Morgan Stanley’s regulatory liaison, a former top aide to Eliot Spitzer. A few days later, another of the firm’s lawyers, Mary Jo White, formerly U.S. attorney of the Southern District of New York, called the SEC director of enforcement.
Taibbi caustically and accurately assesses the situation.
Pause for a minute to take this in. Aguirre, an SEC foot soldier, is trying to interview a major Wall Street executive — not handcuff the guy or impound his yacht, mind you, just talk to him. In the course of doing so, he finds out that his target’s firm is being represented not only by Eliot Spitzer’s former top aide, but by the former U.S. attorney overseeing Wall Street, who is going four levels over his head to speak directly to the chief of the SEC’s enforcement division — not Aguirre’s boss, but his boss’s boss’s boss’s boss. Mack himself, meanwhile, was being represented by Gary Lynch, a former SEC director of enforcement.
Aguirre didn’t stand a chance. A month after he complained to his supervisors that he was being blocked from interviewing Mack, he was summarily fired, without notice. The case against Mack was immediately dropped: all depositions canceled, no further subpoenas issued.
In 2011 neither Congress nor the White House has much stomach for prosecuting Wall Street. Indeed, the four Republicans on the Financial Crisis Inquiry Commission (FCIC) voted to strip the following words from its report: “Wall Street,” “deregulation”.
As Finance Guy writes on his blog, “Which is sort of like writing the history of apartheid in South Africa and not being allowed to use the words “race,” “white,” “black” and “prejudice.””
President Obama did not use the words Wall Street in his State of the Union Address. The final report of the FCIC did. But it drew the line at using the “F” word: fraud. William Black, currently Associate Professor of Economics and Law at the University of Missouri – Kansas City and formerly the key person in the prosecutions of S&L executives in the 1990s slammed the FCIC, telling Real News, “They’ve drawn the picture of the horse, but they refuse to call it a ‘horse’”. Black notes that by the Commission’s own evidence, the financial crisis could only have occurred with fraud by the most senior ranks of the big banks. He estimates the incidence of fraud on their liars loans, mortgage where the lender does not verify the borrower’s income, was upwards of 90 percent and insists, “The only reasons you’d have millions of liars loans was to create fictional accounting income and loot the institutions
This latest financial crisis is some forty times as large as the S&L crisis. But the number of FBI agents assigned to look at white collar crime is only a fraction of those working in this area in 1992.
As for the Executive Branch, in January President Obama named William M. Daley as his Chief of Staff. Until his appointment, Daley had served on J.P. Morgan & Co’s Executive Committee since 2004.
At a November 2010 conference attended by hundreds of Wall Street lawyers, Robert Khuzami the SEC’s current director of enforcement, who had served as general counsel for Deutsche Bank proudly announced to Mary Jo White who introduced him, “You’ve spawned all of us”. Recall that White, the former U.S. attorney of the Southern District of New York, one of the top cops on Wall Street., was a Morgan Stanley lawyer in 2005 when she intervened to stop the investigation of John Mack. In December 2005, in an interview with Russell Mokhiber, editor of Corporate Crime Reporter, she effectively said that criminal cases should not be brought against financial corporations. “In the vast majority of cases, they should not be seeking anything from the company itself except its cooperation.
Lynn Turner, the former chief accountant for the SEC, told Taibbi, “I think you’ve got a wrong assumption—that we even have a law-enforcement agency when it comes to Wall Street.”
As the successful prosecutions of Savings and Loan executives in the early 1990s proves, the federal government has the tools to put in jail dozens if not hundreds of those responsible for millions of foreclosures, millions more unemployed and unprecedented federal and state deficits. It simply lacks the inclination to do so.
The Academy Award for Cowardice must be shared.
Source URL: http://www.ilsr.org/and-the-academy-award-for-cowardice-goes-to/
by Stacy Mitchell | July 14, 2010
Note: This article originally appeared on Huffington Post as part of a partnership with their Move Your Money campaign.
With the now-expected passage of the financial reform bill, giant banks see a golden opportunity to finally put the financial crisis, along with their culpability for wrecking our economy, in the rearview mirror.
“We are very pleased to have this certainty and closure,” declared Steve Bartlett when the House-Senate conference committee had finished negotiating. Bartlett is the president of the Financial Services Roundtable, a powerful big bank lobbying group that would like nothing more than to make this legislation the one and only policy response to the banking system’s catastrophic failure.
It’s up to all of us to make sure that it is not.
The economic crisis is not over, and the rot and malfunctioning at the heart of our banking system remains. Indeed, since the collapse, giant banks have only grown bigger and more powerful, and less responsive to the needs of the real economy. While the financial reform bill includes several worthwhile measures, it will not set the industry right or entail a fundamental alteration of its scale and structure.
It leaves us at best only modestly less vulnerable to another meltdown. And it fails utterly to confront a deeper problem: even in the best of times, our banking system does not serve us very well. The two main reasons to have banks, after all, are to facilitate the growth of businesses and help families build assets and financial security. Yet, its hard to find more than a trace of these core functions on the balance sheets of the giant banks that now dominate the industry.
Instead, much of what big banks have been up to over the last two decades has involved devising ways to extract ever more wealth from households and the real economy. They’ve saddled their own customers with high fees and dangerous products, swindled borrowers and investors, orchestrated corporate mergers that harmed employees and even shareholders, and cut off the flow of credit to small businesses while channeling ever more investment capital into derivatives and other complex gambling schemes.
In short, big banks have not been facilitating the real economy so much as consuming it.
What would a banking system truly aligned with the interests of households and businesses look like? For one, it would be composed primarily of small, locally owned banks and credit unions. Unlike big banks, local financial institutions devote nearly all of their resources to core banking activities, namely taking deposits and making loans. Their fortunes are thus inextricably linked to the well-being of their depositors and borrowers. They prosper only when their communities do.
It wasn’t that long ago that most Americans banked at local institutions. As recently as the 1980s, they held a majority of our deposits. But big banks and their allies in Congress have spent 25 years rewriting the nation’s laws to their own benefit. By 1995, the share of U.S. deposits held by small banks and credit unions had dropped to 34 percent and a brand-new class of supersized banks had emerged. Today, these giant banks — there are 19 of them, each with more than $100 billion in assets — have taken over nearly half of U.S. deposits, while the share held by small banks and credit unions has fallen to 21 percent.
This transformation succeeded because so many in Congress, undoubtedly predisposed by campaign cash from Wall Street, bought into the bigger-is-better dogma pedaled by Alan Greenspan, Robert Rubin, and the like.
But it turns out that small is in fact superior by nearly every measure.
Take, for example, small business lending, the lack of which is now impeding economic recovery. Although the crisis made it worse, the availability of credit for small businesses has been shrinking for some time. That’s because big banks do relatively little small business lending (see this graph). One reason is that they are not all that good at it: the computer models these vast corporations must rely on to evaluate loan applications are not very adept at gauging the nuances of risk associated with a particular local enterprise in a particular local market.
Local banks generally excel at this. Their lending decisions are made by people who are intimately familiar with local market conditions and who spend time getting to know the borrower and his or her enterprise. This enables them to better assess risk and to successfully extend credit to a broader range of small businesses. Indeed, research has found that, all else being equal, regions with more small banks are home to more small firms.
Or consider the idea, often touted in 1994 and 1999 as Congress dismantled long-standing rules restricting the growth of banks, that bigger banks would lower costs for consumers. In fact, interest rates are generally better at small banks and credit unions, studies have found, and fees are an astonishing 20-30 percent lower on average than at big banks. And most offer the same array of sophisticated services, from online banking to credit cards, that big banks do.
How can it be that small banks are such a better deal? Bigger is suppose to deliver economies of scale, after all. But economists have found that, in fact, banks peak in efficiency when they reach the size of roughly $5 billion in assets. Beyond that they become weighted down by bureaucracy and actually operate less efficiently.
Today’s giant banks are orders of magnitude larger than what economies of scale alone would dictate. Bank of America is 468 times that optimal size — which suggests that it is not market forces that have spawned these behemoths. Rather, their dominance owes more to their political power and the many subsidies that flow to those deemed too-big-to-fail.
So how do we change course and revive a banking system that is more local and responsive to the needs of communities? Ultimately, Congress must deliver another round of reform that tackles the problem of bigness head-on. That may seem a tall order given the current political dynamics, but it’s worth remembering that the stronger aspects of the reform bill actually gained support as the process wore on. That’s highly unusual and may bode well for future rounds. It’s also worth noting that it took Franklin Roosevelt years to enact his full suite of banking reforms.
The best way to spur Congress to act, however, isn’t to wait around for it to do so. We can and should take financial reform into our own hands.
That means moving our money — and not just our savings, but our borrowing too. Tens of thousands of people have already broken up with big banks and moved to locally owned institutions. Although the cascade has not yet been large enough to make a sizable dent in the finances of big banks, it has already been a boon to many small banks and credit unions, which are seeing a surge in deposits and lending.
Second, we must rally our state governments. Despite intense lobbying by big banks, the financial reform bill preserved a fair degree of state regulatory authority over banks. States should hold banks to a higher standard. Good policy models can be found in Vermont and, believe it or not, Texas, which have long prohibited many of the mortgage shenanigans that precipitated the crisis. Both states have suffered fewer foreclosures as a result and now have unemployment rates well below the national average.
Another smart move some states are beginning to consider is establishing a publicly owned “bankers’ bank” modeled on the Bank of North Dakota. By serving as a secondary market for loans, BND has helped North Dakota’s community banks thrive. The state has more local banks per capita than any other. And while that’s not the only reason North Dakota escaped the Great Recession, it hasn’t hurt.
As much as Citigroup, Goldman, and Chase may wish it to be, the overhaul of our banking system is not over. Round two begins now: in our wallets, our communities, and our state governments.
Source URL: http://www.ilsr.org/taking-financial-reform-our-own-hands/
by Stacy Mitchell | April 19, 2010
We have compiled the following resources to help community groups, including Independent Business Alliances and Local First organizations, develop local public educational campaigns that convey the benefits of choosing a locally owned community bank or credit union and help people make the switch.
Please let us know if you have questions, suggestions on what else to include here, or campaign materials from your community to share. We’ll be adding more to this page over time, so please check back or sign-up for periodic updates.
We also encourage you to visit the Move Your Money site.
Source URL: http://www.ilsr.org/resources-starting-local-banking-campaign-your-community/
by Stacy Mitchell | December 1, 2009
Where to Buy Big-Box Swindle:
One of the top ten business books of the year.
“. . . a galvanizing eye-opener that deserves the widest possible audience. This is one of those urgent, revelatory volumes that could change how many readers conduct their daily lives, since it illuminates a stunning collection of business outrages, government favoritism, environmental damages, hidden economic and societal costs, debunked myths and a rising swell of consumer activism against big-box blight. . . Big-Box Swindle could have been a downer to read, but Mitchell devotes the final quarter of her powerful book to. . . inspiring lessons from places that are turning the tide.”
—John Marshall, Seattle Post-Intelligencer
“This is the ultimate account of the single most important economic trend in our country—the replacement of local businesses, and all they represent, with the big boxes. What Nickel and Dimed did for the Wal-Mart worker, Stacy Mitchell does for the community threatened by mega-retailers.”
— Bill McKibben, author of The End of Nature
Continue reading reviews…
From the book jacket:
In less than two decades, large retail chains have become the most powerful corporations in America. In this deft and revealing book, Stacy Mitchell illustrates how mega-retailers are fueling many of our most pressing problems, from the shrinking middle class to rising pollution and diminished civic engagement—and she shows how a growing number of communities and independent businesses are effectively fighting back.
Mitchell traces the dramatic growth of mega-retailers —from big boxes like Wal-Mart and Home Depot to chains like Starbucks and Old Navy—and the precipitous decline of independent businesses. Drawing on examples from virtually every state in the country, she unearths the extraordinary impact of these stores and the big-box mentality on everything from soaring gasoline consumption to rising poverty rates, failing family farms, and declining voting levels. Along the way, Mitchell exposes the shocking role government policy has played in the expansion of mega-retailers and builds a compelling case that communities composed of many small, locally owned businesses are healthier and more prosperous than those dominated by a few large chains.
More than a critique, Big-Box Swindle provides an invigorating account of how some communities have successfully countered the spread of big boxes and rebuilt their local economies. Since 2000, over 200 big-box development projects have been halted by groups of ordinary citizens, and scores of towns and cities have adopted laws that favor small-scale, local business development which limit the proliferation of chains. From cutting-edge land-use policies to innovative cooperative small-business initiatives, Mitchell offers communities concrete strategies that can stave off mega-retailers and create a more prosperous and sustainable future.
Source URL: http://www.ilsr.org/bigbox-swindle-true-cost-megaretailers-and-fight-americas-independent-businesses/
by David Morris | February 7, 2002
Fashioning Minnesota Energy Policy: The Legislature’s Role
By David Morris
February 7, 2002
Testimony before the Minnesota Senate Telecommunications, Energy and Utilities Committee
On S.F. 2672 – Minnesota Economic, Environmental and Energy Security Act of 2002
My name is David Morris. I am Vice President of the Minneapolis-based Institute for Local Self-Reliance. I have worked on energy policy for almost 30 years. I have been a consultant or advisor to the federal energy departments of Presidents Ford, Carter, Clinton and the current Bush administration. I have been actively involved in Minnesota energy policy work since consulting with Mark Dayton when he was Commissioner of the Department of Energy and Economic Development in the early 1980s. I am the author of three books and over a dozen monographs on energy technologies and energy policies at the local, state and national policies.
Having, I hope, presented my bona fides to discuss this issue with the Committee, I want to spend my few minutes talking about the bill before you in a larger context.
This Committee and its predecessors have been making energy policy in incremental fashion for several decades. In the last few years the focus has been on electricity. The legislature has appropriated and presumably spent over $500,000 to intensively educate its members about electricity technologies and regulatory changes in order to inform your policymaking initiatives.
That education did inform this Committee last year when it developed and passed an energy bill that developed a more expedited and coherent system for transmission line planning. Unfortunately, the state’s utilities decided last October not to use that new planning process. As a result, the Public Utilities Commission has delayed by a year or more the implementation of this expedited process.
The Committee would do well to understand the problems attendant to developing an expedited approval process it has already designed before imposing another type of expedited process in this bill.
Often this Committee has acted in reactive fashion and crafted bills designed to benefit a single company or technology without examining the implications of those bills on overall state energy policy. The result is an incremental, often contradictory and sometimes just plain incoherent state energy policy.
Last year this Committee, if memory serves me right, unanimously passed out a bill that declared that the highest and best use of turkey manure was for generating electricity and formally declared this to be in the public interest. Although developed in response to a state biomass mandate, the bill was consciously designed so that only one company could qualify.
This bill before you today is another case of incremental decision making in response to the interests of an individual company. This time however, an incremental decision could profoundly affect the structure and direction of Minnesota electricity policy for the next decade or longer.
The title of the bill is broad, the Minnesota Economic, Environmental and Energy Security Act but it is written so as to allow only one technology and one company to qualify. It declares by legislative fiat that the state will need some 2,000 MW of new baseload capacity by 2012, when I am aware of no projection by utilities or regional power pools that Minnesota will need such an increase in baseload capacity as opposed to peak load capacity. Moreover, this bill states, also by fiat, that state policy is to give very large scale centralized electrical generation a priority over decentralized electricity generation. This is the implication of the sections that allow the coal gasification plant to bypass existing public review and require an unusually long power contract of 25 years and allow a premium of 10 percent in the price utilities pay for the electricity generated.
The gasification plant is being justified as an economic development project. But the premium permitted in the bill translates into $40-60 million a year in subsidies when the plant becomes fully operational, or about a billion dollars in subsidy over the life of the power contract. Power plants are the most capital intensive business in the economy. Thus if jobs were indeed the goal, the $40-60 million in subsidies would be better spent on other economic ventures in northern Minnesota.
I may surprise you by saying that I am in favor of coal gasification as a way to avoid an increasing reliance on natural gas. We have hundreds of years of coal supply in the upper midwest. If we can harness the energy the coal contains in a way that is environmentally benign, I would favor it. The gasification process is indeed far less polluting than the conventional coal combustion process.
But there’s no reason to support a 2,000 MW coal gasification plant. It would be the largest such power plant in the world. And would constitute the largest single electric generation facility in Minnesota. It would require an entirely new transmission infrastructure from northern Minnesota to southern Minnesota. It would inhibit the development of decentralized and renewable electric generation in the state for some time to come.
I would favor a much smaller coal gasification project, something in the order of 200 MW, the size of existing gasification plants in Tampa, Florida and Wabash, Indiana. Such a plant would not require an extensive new transmission system.
I would also strongly recommend that the plant also be required to store the carbon emitted underground. Carbon dioxide is the single largest greenhouse gas and coal gasification only marginally reduces CO2 emissions. Underground storage of CO2 has been done in Canada by natural gas pipeline companies and in Norway by electric power companies. It will raise the cost of electricity generation modestly, but it is a premium that Minnesotans may well be glad to pay for a project that demonstrates that coal can be used to generate electricity with little or no greenhouse gas impact. Indeed, the commercial trading of “carbon offsets” has already begun around the world. We can expect that as it expands, power plant owners that store carbon emissions will be rewarded. Thus the premium paid could be tied to the value of the stored carbon and as the latter goes up, the former would go down.
Institute for Local Self-Reliance
Source URL: http://www.ilsr.org/17037/
by admin | December 10, 2013
We last took a look at Palm Coast’s FiberNET over two years ago when Broadband Communities featured the open access fiber network along Florida’s upper east coast. Due to its initial focus on community anchor institutions and incremental build out, FiberNET serves as an outstanding example of how to justify a network investment with cost savings. We recently spoke with Courtney Violette who created the initial business plan for FiberNET under his previous role as Palm Coast’s CIO; he is now a Managing Partner with Magellan Advisors, an international broadband planning firm.
A presentation on the Palm Coast government website shows how FiberNET generates hundreds of thousands of dollars in annual cost savings for the City of Palm Coast, Flagler County School District and Florida Hospital. The data is impressive. The City of Palm Coast alone saves around $160,000 per year by switching to FiberNET for its networking needs.
Flagler County School District is likely the biggest beneficiary of cost savings in the community. Before FiberNET came onto the scene, the District paid Bright House Networks more than $500,000 per year for network services over a hybrid fiber-cable network. Now Flagler County School District pays around $300,000 for faster, more reliable services over FiberNET’s all-fiber network. These savings paid for the schools’ initial cost of connection after just one year.
Florida Hospital and its affiliates are also saving big. Affiliated doctors’ offices and clinics are required to maintain a 10-Mbps (minimum) connection with the hospital. Before FiberNET, these connections cost around $900 per month from the local incumbent. FiberNET now offers them for $250 per month. Similarly, the Hospital itself saves tens of thousands on its annual networking costs by switching to FiberNET.
It is worth noting these initial figures are conservative by not accounting for growing internal demand for high-speed networking. In other words, as these entities ramp up usage of faster network services available through FiberNET, their savings will grow accordingly. In fact, their savings will actually accelerate as they use services only available over fiber which the incumbent could not offer without incurring major upgrade costs.
With the network mostly built, expanding incrementally on a business case basis, FiberNET is now paying for itself in cost savings to the City and revenue from anchor institutions and businesses that previously paid much higher prices for slower services from the incumbent. Revenue has nearly doubled each year since 2010, reaching $522,940 in 2012, against expenses of $161,260. At this rate, FiberNET is expected to break even in less than six years.
Source URL: http://www.muninetworks.org/content/palm-coasts-fibernet-produces-dramatic-savings-locally
by Lisa Gonzalez | December 9, 2013
Ellensburg, located in central Washington, is considering the pros and cons of a municipal fiber network. A big pro for the community of 18,000 is the ability to predict costs rather than depend on Charter Communications. Charter wants to begin charging $10,300 per month for municipal connectivity it previously supplied at no cost in return for access to the public rights-of-way.
The Ellensburg Daily Record recently reported that the City Council unanimously passed the first reading of an ordinance that will allow the city to establish a telecommunications utility. The city began using Charter's fiber optic network in 1997 as part of the city's franchise agreement. Educational institutions, public safety, and the county public utilities district also use the network. Ellensburg owns and operates its own electric and natural gas utilities. Energy Services Director Larry Dunbar was quoted:
“It’s clearly in the city’s best interest to just build it on its own and own it, compared to leasing it,” he said.
The community needs approximately 15 miles of fiber optic network to replace Charter's institutional network. The two parties are still negotiating and may still reach an agreement for a new contract although the article reports:
In June, Council directed the city to solicit vendor proposals for building a city network, and Dunbar said the city is close to granting the contract.
He declined to share a total cost because contract negotiations are ongoing, but said it makes more sense for the city to build the network now rather than pay in perpetuity, he said.
“A telecommunications network is like a 35-year endeavor,” he said. “If we would have done a lease, we could have bought two or three networks over 35 years.”
Local median KIMA TV recently covered the story:
We would go further and note the many more advantages of owning rather than leasing. When the city owns the fiber network, it can expand it to connect local businesses and/or residents who feel that Charter is not meeting their needs. The network can be expanded at low cost over time in conjunction with other projects, for instance as part of an effort to create a new commercial or industrial park. Owning provides much more flexibility than leasing, particularly with a massive and inflexible corporation like Charter.
Source URL: http://www.muninetworks.org/content/charter-prices-inspires-washington-city-consider-its-own-network
by Neil Seldman | December 6, 2013
Neil Seldman authored an article published in the October 2013 issue of BioCycle.
One of the remarkable stories about recycling in the U.S. is the intensive and creative approaches to introduce it even though, at first, recycling was an add-on cost to solid waste management. This occurred during the 1970s and 1980s when small businesses and citizen activists, often fighting planned incinerators, began to change the rules in favor of recycling. Over the years, new rules have included mandatory household and commercial recycling, minimum content legislation, product and packaging bans, new collection equipment and routing, and more. By the mid 1990s, well organized recycling started to reduce the overall costs of solid waste management for cities. This coincided with the defeat of hundreds of waste to energy proposals across the nation, making the U.S. recycling movement one of the great success stories for citizen activism and environmental progress.
Read the full article here. 
Source URL: http://www.ilsr.org/earning-rewards-recycling/
by Brenda Platt | December 6, 2013
Composting and Community Resilience, is a presentation by Brenda Platt, Co-Director, Institute for Local Self Reliance. Brenda spoke on November 20, 2013, at a speaker series organized by the Prince George’s County Planning Department.
Based on the findings of two recent ILSR reports from the Composting Makes $en$e Project, the presentation features new research on the jobs sustained through composting and compost use in Maryland. ILSR found, for instance, that 1,400 new full-time jobs could potentially be supported for every 1 million tons of yard trim and food scraps converted into compost to be used locally in green infrastructure and low-impact development. The presentation also touches on how to grow markets for compost and its benefits for protecting the climate, enhancing soil, and building community resilience.
Download Presentation: Composting and Community Resilience
Source URL: http://www.ilsr.org/composting-community-resilience-presentation/
by Lisa Gonzalez | December 6, 2013
The City Council of Columbia is moving forward with efforts to improve connectivity in the town of 113,000. In November, elected officials hired a consultant to analyze the community's current infrastructure and develop a broadband plan.
According to a Tribune article, the initiative will be a collaborative effort between the City, Boone County, and the University of Missouri. Columbia hired Magellan Advisors who responded to a May Request for Proposals. A representative from Columbia Water and Light, Connie Kacprowicz, estimated a four month turn around on report. From the article:
Currently, Magellan Advisors is in the needs assessment stage of the process, Kacprowicz said, and that involves talking to different companies in town to gather information about their experiences with broadband services and suggestions for improvement.
"A lot of it is finding out what kind of resources we already have in town and what can be done with them," she said.
Image courtesy of Wikimedia Commons under Creative Commons License.
Source URL: http://www.muninetworks.org/content/columbia-missouri-hires-consultant-fiber-network-review-and-recommendations
by Lisa Gonzalez | December 5, 2013
As of December 2, students and staff in Cedar Falls schools have access to 1 gig Internet service from Cedar Falls Utilities (CFU). The WCF Courier reports that the Board of Education recently decided to switch from the Iowa Communications Network (ICN):
Doug Nefzger, the district's financial officer, said though Des Moines-based ICN has been a great partner for a number of years, it's always best to go with a local group.
"We may be paying a little bit more money but what this provides for our kids far outweighs the added expense associated with that," Nefzger said.
The District will pay CFU approximately $11,400 per year for gigabit Internet access to be shared between nine schools and three other District facilities. ICN provided 130 Mbps Internet service for $8,200 per year. The District will now have the capacity to provide a tablet or laptop to each student by 2015. The 1:1 goal is part of the District's five-year technology plan.
According to Rob Houlihan, Network Service Manager at CFU, each building is already connected via CFU fiber. As a result, District buildings will also enjoy a 1 gig WAN. Robust Internet access is important, but a high capacity WAN improves communication between facilities with no need to send data to the Internet. CFU provides fiber connections at no charge to the District, saving significant public dollars. Shane Paige, Supervisor of Technology Services at the Cedar Falls Schools noted via email:
That could easily cost us $5,000-$10,000 per month after discounts if we were leasing lines. We have been extremely fortunate in the fact that we have never been put in that position of having to deal with the extra costs of point to point connections for our buildings.
CFU also provides free cable television service to twelve District facilities, saving approximately $600 per month.
For more on how CFU is serving the community, listen to our recent conversation with Rob Houlihan, Network Services Manager, and Kent Halder, Communications Sales Manager. Christopher recently interviewed them on Episode 75 of the Broadband Bits podcast.
We also have numerous stories on the CFU network.
Source URL: http://www.muninetworks.org/content/cedar-falls-schools-get-1-gig-cedar-falls-utilities
by John Farrell | December 5, 2013
It may be one of the oldest cooperative utilities in the country, but in the next six months, Farmers Electric Cooperative (FEC) of southeastern Iowa will be leading the nation in this 21st century energy source. Upon completion of a new solar array, the 640-member cooperative will have over 1,500 Watts of solar per customer on their system, nearly double the #2 utility. It’s also the most reliable utility in Iowa. How can a small, member-owned utility be “America’s Most Progressive Utility“?
Find out in this interview with FEC Manager Warren McKenna, recorded via Skype, on November 18, 2013.
Unlike many small cooperative or municipal utilities, Farmers Electric Cooperative only buys 30% of its energy on long-term contracts. Instead, McKenna explains, they buy power on the spot market, using local power generation and demand management to avoid price spikes. This leaves them open to buying power from local generators, especially solar.
FEC hasn’t limited itself to just one strategy for adding solar to the grid. In fact, they don’t even have net metering, the most common policy for connecting small-scale solar projects.
Instead, they have a feed-in tariff at pays 20¢ per kilowatt-hour (kWh) for solar energy, as long as it’s 25% or less of a customer’s own use. For solar energy produced that is between 25 and 100% of a customer’s monthly usage, customers still get 12.5¢ per kWh (the retail electricity rate for residential customers). Surplus generation is purchased by the utility at 6¢ per kWh. Participating customers still buy all their electricity from the utility
FEC also has a 25 kW community solar project, selling shares to new customers in phase 2 for just $1.63 per Watt. Current participants can buy additional panels for $2 per Watt.
Finally, the cooperative has also commissioned a new 750 kW solar array which will sell power to the utility for its first 10 years, and the revert to cooperative ownership thereafter.
Since it’s a cooperative, technically every FEC member is an owner in a local solar project. But ignoring that for the moment, about 20% of the cooperative’s members either have their own solar array, own shares in the community solar project, or participate in the Green Power Project (a $3 per month green pricing program for purchasing local renewable energy).
The big question is, could your local utility do what Farmers Electric is doing? If your utility happens to be locally owned, says McKenna. Cooperatives are often very open to comments from their members, and if not, you can run for the board. Municipal utilities are overseen by elected officials, who are always looking for examples of strategies to increase local jobs, particularly from clean energy.
It’s inspiring to see what FEC has accomplished, regardless. Most of the greenest utilities in the U.S. are among the largest, and Farmers Electric shows that you don’t have to be a big utility to do big things with locally owned renewable energy.
This is the 12th edition of Local Energy Rules, an ILSR podcast with Senior Researcher John Farrell that shares powerful stories of successful local renewable energy and exposes the policy and practical barriers to its expansion. Other than his immediate family, the audience is primarily researchers, grassroots organizers, and grasstops policy wonks who want vivid examples of how local renewable energy can power local economies.
It is published twice monthly, on 1st and 3rd Thursday. Click to subscribe to the podcast: iTunes or RSS/XML
Source URL: http://www.ilsr.org/1-solar-utility-in-iowa-episode-12-local-energy-rules/
by Christopher | December 5, 2013
On November 25, the Baltimore Sun ran this opinion piece by me regarding Baltimore's approach to expanding Internet access in the city.
Baltimore Mayor Stephanie Rawlings-Blake recently spoke the plain truth: “You can’t grow jobs with slow Internet.”
This simple statement is the best explanation for why Baltimore is examining how it can use existing City assets and smart investments in the near future to expand access to fast, affordable, and reliable Internet access. It is also a slap across Comcast’s face.
The big cable and telephone companies have insisted for years that they already deliver the services residents and businesses need. But they also claim to offer reasonable prices that just happen to increase year after year with few customers having other options to choose from.
Baltimore’s reality is that Comcast does indeed offer speeds that are faster than many in rural Maryland can access. But they are not even in the same league as cities like Chattanooga, where every address in the community has access to the fastest speeds available anywhere in the nation, and at some of the lowest prices. There, as in hundreds of communities across the country, the local government built its own next-generation network.
Whenever a city announces the possibility of investing in a network, the cable industry public relations machine kicks into high gear. They argue that we have a plethora of choices for Internet access. The sleight of hand behind this claim is to include LTE wireless networks as a replacement for cable – something almost no household does because replacing your home wired connection with LTE will break your budget. According to bandwidth-management firm Sandvine, the average household uses more than 50 gigabytes of data each month. Between the data caps and overage fees from AT&T, that will cost over $500/month.
Meanwhile, the overwhelming majority of community owned networks are doing exactly what they intended – breaking even financially while providing a valuable public service. Big cable companies argue that these networks have failed if they aren’t making big profits each year, a misunderstanding of public accounting. Community owned networks aim to break even, not make a profit.
When Windom, Minnesota, ended a year with a $50,000 deficit from a network that kept many local jobs in the community, few complained. Ask any local government official what is more important: 10 jobs or $50,000 in the general fund. No contest, especially when the accounting does not include the tens of thousands saved by a local government that no longer has to lease expensive voice and data connections for schools and municipal facilities.
Chattanooga is often cited out as the most successful municipal network after becoming the first US city with universal gigabit access and having helped created 6,000 jobs. But Thomasville, Georgia, and Spanish Fork, Utah, have operated networks for over a decade and generate more than a million dollars each year for the general fund from the telecommunications net income.
However, a few community owned networks have failed, just as thousands of privately owned telecommunications companies have disappeared or declared bankruptcy in a very difficult business. Provo is a favorite of the cable lobbyists, who generally neglect to note that it had to compete with one hand tied behind its back due to Utah state laws pushed by Comcast and US West (now CenturyLink). Some 19 states have created special barriers to discourage publicly owned networks.
Let’s be clear, very few expect Baltimore to suddenly build a citywide fiber optic network offering residential services in competition with Comcast.
Baltimore will likely take another path, expanding the fiber-optic network it already owns to better benefit community anchor institutions, local businesses, and potentially even residents. This is a very low-risk approach similar to what Seattle has done for years. Now Seattle has a partnership with a company called Gigabit Squared that is building a gigabit network out to tens of thousands of households.
None of these successes mean local governments should rush unprepared into a network investment. Nor should they be scared off by cable lobbyists trying to preserve what is effectively a monopoly. Building a successful network is a challenge, but so is trying to grow an economy while relying on yesterday’s technology at artificially inflated rates.
Source URL: http://www.muninetworks.org/content/op-ed-baltimore-makes-smart-move-fiber-investment
Copyright ©2013 Institute for Local Self-Reliance unless otherwise noted.