Author: Frank T. Manheim

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International Trends Personal Policy and Politics

Ernest Manheim’s Encounter With Jomo Kenyatta at the London School of Economics

On March 8, 2013 results of the presidential election in Kenya gave Uhuru Kenyatta, son of the famed first President of independent Kenya, Jomo Kenyatta, a narrow win (1). Kenyatta was a Kikuyu like his father.  The runnerup in this history-evoking and bitterly contested election was Raila Amollo Odinga, a member of the Luo tribe, He was the then current Prime Minister of Kenya and a son of the first Vice President of Kenya, Jaramogi Oginga Odinga. Odinga challenged the election on grounds of irregularities in a suit rejected by the  Kenyan Supreme Court in 2013. An indictment by the International Criminal Court against Kenyatta for instigating violence against the Luo tribe was dropped in 2014 (2). The position of Prime Minister was abolished in Kenya on April 9, 2013.

The events in Kenya brought back to me a story told by my father, Ernest Manheim, of an encounter with Jomo Kenyatta when he and Kenyatta were students at the University of London in 1935. My father’s His own early story had plenty of drama. Born in Budapest Hungary (1900), young Ernő was gifted in music and interested in chemistry. But during World War I at the age of 17 he volunteered for the Royal Hungarian Military Academy and in 1918 fought on the Italian front in the Hungarian Army, part of the Austro-Hungarian army that was allied with Germany. After the war and the dismantling of the Austro-Hungarian Empire, Czechoslovak and Romanians forces moved into Hungary in 1920. Young Ernö volunteered again for the national Hungarian army mobilized by the revolutionary (Communist) government of Béla Kun. In charge of a platoon of Bosnian machine gunners, he was captured by the Romanians, who would also take Budapest and end the Kun government. Ernő escaped to East Hungary (now Slovakia).

Affected by the cataclysmic events of war and collapse of the “eternal” Austro-Hungarian empire, Manheim moved to Germany to study sociology.  After a PhD dissertation in sociology at the University of Leipzig he moved in 1934 to the London School of Economics at the University of London, where his older and more famous cousin, Karl Mannheim (the name given by an English publisher to Manheim Károly) was already well established.

The University had many foreign students, among whom were Jomo Kenyatta (3). Kenyatta (1891-1972), earlier known as Kamau wa Ngengi, became a pupil at the Church of Scotland mission near Nairobi. Kamau converted to Christianity in 1914 and in 1922 became a clerk and water reader for the Nairobi Department of Public Works. He became active in Kikuyu politics, rising to become General Secretary of the Kikuyu Central Association in 1928. Sent to London in 1929 to lobby for Kikuyu tribal land affairs Kenyatta studied briefly in London and then in Moscow until the Soviet Union, seeing Britain and France as potential allies against Hitler’s growing power, withdrew its support for the movement against colonial rule in Africa. In 1934 Kenyatta enrolled in the University College, London. He initiated doctoral studies at the  London School of Economics under the internationally renowned Polish-British anthropologist, Bronislaw Malinowski. Ernest Manheim was also a Malinowski student, ultimately completing a second dissertation on power relationships in Southern Africa.

Ernest continued fascination with folk music, to which he had been introduced through the field collections and research of Hungarian composers Béla Bartók and Zoltán Kodály. He developed common interests with fellow student Kenyatta both regarding folk music and Africa. Ernest related that on one occasion Kenyatta took him up to his room to demonstrate some Kikuyo songs. He stripped off his shirt and, accompanying himself on a drum, launched into  song, during which he became visibly affected on an emotional level.

In 1938 Kenyatta later released a book revised from his dissertation at LSE, Facing Mount Kenya (4). 

REFERENCES

1.  Wikipedia, “Uhuru Kenyatta”, 2015

2.  Marlise Simons and Jeffrey Gettleman, “International Court Ends Case Against Kenyan President in Election Unrest“, New York Times, Dec. 5, 2014. 

Uhuru Kenyatta Faced Allegations of Crimes Against Humanity

By MARLISE SIMONS and JEFFREY GETTLEMANDEC. 5, 2014

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Supporters of President Uhuru Kenyatta of Kenya celebrated Friday in Nairobi after charges were dropped in The Hague.

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3. Wikipedia, “Ernest Manheim”, 2015

4. Jomo Kenyatta, Facing Mount Kenya, Vintage Books editionl, 352 p. (1962)

Categories
American history Policy and Politics

Seymour Martin Lipset and American Exceptionalism

If everything else about him is forgotten, the noted American sociologist, Seymour Lipset (1922-2006) will surely be remembered for coining the term, “American Exceptionalism” through his 1996  book,  American Exceptionalism: A Two-Edged Sword. Before I took up social science as a “second language” at George Mason University, Lipset’s last academic residence, I was a federal earth scientist avocationally interested in public policy. The only social scientists whose names I recall seeing at regular intervals in the American flagship journal for the sciences,  Science Magazine,  were Lipset, along with Robert Merton, Amitai Etzioni, and Don Price.

Lipset had omnivorous curiosity and interests. Among his many memberships and honors, he was the only person to serve as President of both the American Sociological Association and the American Political Science Association. Lipset could marshall vast amounts of statistical data and tossed out bold generalizations that other academics had not arrived at or were afraid to venture without their conclusions being quantitatively established by “empirical” studies.

For readers not familiar with social science methods the terms “empirical” and “normative” need explanation. Once I got serious about social science I  learned that social scientists used the term “empirical” differently than it was used to among physical scientists like biologists, chemists, geoscientists and oceanographers. For me it loosely referred to relationships suggested by systematic observation, rather than studies involving theory. For social scientists, however, “empirical studies” focus on rigorous statistical testing of specific hypotheses and are ‘king” in leading journals like the American Journal of Political Science. The other major type of research recognized by the social sciences is the “normative” study. It involves a broader approach to problems and may use any relevant methods. Although this more holistic approach better fits decisionmakers’ needs and is the only kind accessible to the general public, normative studies have a lower professional prestige than empirical studies.

Back to Lipset’s generalizations. In the introduction to American Exceptionalism Lipset states flatly that U.S. is the most religious country in Christendom, and the only one where churchgoers adhere to sects. Protestantism influenced opposition to wars, but earlier affected American foreign policy. The U.S. disdain of authority led to the highest crime rate and the lowest level of voting participation in the developed world.

I found that Lipset’s generalizations had to be respected but taken advisedly. This is illustrated by the abovementioned claim that the U.S. had the lowest level of voting participation in the developed world. In fact, this statement only applies to recent years. The Wikipedia article on “American election campaigns in the 19th century” points out that elections in the midwestern states of Illinois, Indiana, Iowa, Michigan, and Ohio, reached 95% voter turnout in 1896. Generally high voter turnouts continued after the turn of the 20th Century.

Lipset’s used the term “American exceptionalism” to confirm that America is qualitatively different from all other nations. He indicates that this was first established by the 19th Century French observer, Alexis De Tocqueville, in a famous book, Democracy in America, published in two volumes in 1835 and 1840. Besides lack of respect for authority Lipset identifies  other characteristic features in U.S. society. These include “identification creeds” (moralism), rather than ethnic or other commonalities; firm belief that the U.S. is best and unique among nations; distrust of a strong state, aversion to state-provided welfare, weak working-class radicalism, and lack of a significant socialist movement. Americans were described as holding tightly to the principle of democracy; elections at various levels are more pervasive than in any other nation.

Lipset recognized that the strong American penchant for moral absolutism could lead to excesses. This is abundantly demonstrated by today’s partisan political polarization and Congressional gridlock – unique among advanced nations. Each contending faction declares in ringing pronouncements the rightness of its principles and the hopeless error of the opposition. Andrew Bacevic’s recent book (2008) The Limits of Power: The End of American Exceptionalism, cites a long list of disastrous policies the author attributes to American moral utopianism and hubris over the past 40 years. He cites chicanery, dirty tricks, “suppression of open discussion and insulation of error against public criticism”, blatant corruption, making common cause with dictatorial regimes, and squandering of billions of dollars, all of which were justified in the name of higher moral goals. In asserting the end of American exceptionalism Bacevic clearly means the “America is best” kind; he would presumably admit to exceptionalism on the undesirable side. Lipset avoids “good/bad” characterizations, like most social scientists.

From my own studies of the history of political polarization in the U.S. I see a problem with Lipset’s exuberantly presented theories and generalizations. He often fails to test them, look for exceptions and differences due to location and especially the factor of time and history in assessing social problems. Wherever I look I find problems with stereotypes when history isn’t taken into account. Let’s take U.S. “high crime”, for example. The U.S. has not been a high crime nation always and everywhere. Prior to the emergence of mobs in the 1920s police in Chicago, Philadelphia, and New York, as well as lesser cities did not wear guns. FBI crime statistics for Massachusetts show that there was a more than ten-fold increase in violent crime from 1960 to 1980 (see figure). Criminality before 1960 was no higher in Massachusetts and other northeastern states than in many European nations from which most immigrants came. This agrees with accounts that the U.S. was a far safer place before the 1960s than it is today. Women are said to have been able to walk safely late at night in Harlem, NY in the 1930s and 40s.

From around 1910 to 1950 America was generally pragmatic and efficient in planning and maintaining societal infrastructure. The American railroad network, which reached its peak extent around 1910, provided extraordinarily comprehensive service for such a geographically large nation. Larger cities maintained efficient central management and planning systems that anticipated traffic and waste treatment needs. They rapidly accommodated introduction of electrical light and power.  The construction and integration of the record-breaking Chrysler building into Manhattan, completed in 1930, took only 20 months. The New York subway system maintained its cost of a nickel from 1904 to 1944 – during which time it expanded the subway network.

Andrew Bacevic documents that American exceptionalism took on more extreme character after 1960. But a conclusion not mentioned by Bacevic or Lipset is that parochialism and the tendency to embrace new ideas for society without reasonable testing was spearheaded by leading educational institutions. For example, before the 1960s virtually all colleges and universities required at least one foreign language for admission. Leading universities required two. U.S. industry, academia, and goverment kept in touch with foreign developments (recall that the early U.S. space program was led by a German scientist,Wernher von Braun). But in the 1960s language requirements were eliminated altogether by Princeton and MIT. Brown University announced with pride elimination of all mandatory course requirements for undergraduate students. And from the mid 1960s on Congress virtually ignored foreign experience in lawmaking.

The effect of the huge growth of the U.S. academic establishment after the 1950s, accompanied by disciplinary fragmentation and increasing disengagement from the nation’s practical affairs is almost completely overlooked by Lipset, possibly obscured by his absorption with academic analysis and stimulating contacts with academic peers and students. This isn’t a trivial issue. Academic leaders have the resources and responsibility to train the nation’s educated workforce and future leaders, conduct research and identify national problems and potential solutions. But have economists, sociologists, and political scientists improved the nation’s conditions in their areas of activity since the 1960s? “If not why not?”. This and the possibility that we can no longer afford even brilliant academic jousting as a respectable game would have been great questions to ask Lipset were he still with us.

Categories
American history Economy Policy and Politics

The U.S. has entered a 21st Century “Gilded Age”. Can earlier history offer insights on reform?

The “Gilded Age” from 1870 to ~1890 was a time of rampant public and private corruption. Congressional seats could be bought and sold. “Robber Barons” made giant killings through monopolies and manipulation – and brought on devastating panics.

The signposts are all around us that ethics in government and society have deteriorated. In recent years record increases in the proportion of national income going to the ultra rich (Fig.1), appointment of partisan political loyalists rather than competent officials to high level agencies,  the rising influence of money on elections and politics, and flagrant public and private lapses in ethics have caused  a number of economists and historians  to refer to U.S. society as having gone into a “New Gilded Age”. Many citizens are angry and looking for change. How can such change come about? 

My recent research comparing developments in the old Gilded Age with the New Gilded Age  (1) shows that reform was out of reach as long as the public accepted the extravagant promises and  favorable treatment they got from politicians. A turnaround became possible only after a wave of revulsion on the part of the public over events in the early 1870s (Grant administration)  allowed real reformers to be elected to high public office. This process began with  the election of 1877, but it took two decades to bring about clean, competent governmental agencies and even-handed executive actions (Theodore Roosecelt) that gained widespread public trust.

Postscript: Since this essay was last edited in January 2014, evidences of public dissatisfaction and anger in both parties have emerged in terms of the 2016 Primary election campaign. This may be be a precursor to real reform.

 

POLITICAL HISTORY

Experts agree that the founders of the United States represented a flowering of political talent and statesmanship that forged a new government system designed to anticipate human fallibilities affecting democracies. Historians have suggested that the writing of the Constitution was aided by the fact that while American colonists inherited Enlightenment ideas from Great Britain, they were largely self-governing and free from the deep corruption that characterized politics in the mother country (until the middle of the 19th Century).

The first six presidents maintained George Washington’s policies of basing appointments of federal employees on competence. President Andrew Jackson broke with this tradition. His administration (1829-1837) introduced the “spoils system” that led to turnover in government appointments in subsequent administrations.

Public and private corruption peaked in the administration of Ulysses S. Grant (1869-1877). It marked the beginning of a “Gilded Age” of unprecedented veniality after the Civil War. An example is the Salary Grab Act of 1872. It doubled President Grant’s salary to today’s equivalent of $900,000/year, and awarded each Congressman a one-time bonus equivalent to $90,000 in today’s dollars. Public outrage forced its repeal and helped support the rise of reform candidates in the subsequent presidential election. President Rutherford B. Hayes (1877-1881) committed himself to a single term in order to focus on reform of the federal government. Subsequent reforms culminated in the administration of Theodore Roosevelt (1901-1909). They brought about a system of efficient government operation with independent federal agencies that operated largely free of arbitrary interference.

Stresses on federal government operations after World War II included growing environmental concerns, the assassination of President Kennedy in 1963, and other developments. An environmental crisis triggered by the Santa Barbara offshore oil spill of 1969 caused Congress, in effect, to take over responsibility for environmental management from federal and state professional agencies through unprecedentedly detailed laws. Rigorous centralized intervention in basic economic activities and expanded roles for federal courts politicized environmental policy. The Democratic Party became the party of environment, and the Republican Party became the party of industry. Both parties reintroduced patronage systems with turnover in federal agency administrations after elections.

RECENT “GILDING” TRENDS 

 Income disparities. Economic researchers Thomas Piketty and Emmanuel Saez have shown that the share of U.S. national income received by the top 10% bracket reached 50% in 2007, values last seen in 1927.

Role of money in elections. A recent CNN report showed the average cost of Congressional campaigns increased from $360,000 in 1986 to $1.6 million in 2013 for a seat in the House of Representatives. The Supreme Court’s “Citizens United” decision in 2010 lifted restrictions on political contributions by independent corporations, associations, and labor unions. 

Interest groups dominate policymaking. Over the past 40 years decisionmaking by Congress and official agencies in the U.S. has been increasingly influenced by partisan politics and diverse interest groups ranging from drug companies and gun lobbies, to environmentalists and trial lawyers. Special interest policies are promoted by lobbyists whose aggregate payments were recently estimated at $3.2 billion per year, by litigation, mass mobilization for campaigns, and cultivation of influential officials. The system has led to flawed decisionmaking and conflict, including Congressional gridlock. Courts and judges have increasingly come to decide issues outside their intended roles, and where they have no professional expertise. 

Federal and state governments increasingly ignore the spirit or letter of laws. For decades the IRS has required payment of taxes on gambling winnings by individuals in states where gambling was illegal. To maximize compliance it pursued a de facto policy of not disclosing information on these payments to states. States, in turn, received taxes from illegal immigrants, turning a blind eye to their status and avoiding disclosure of information to the Immigration and Naturalization Service.  Twelve states have passed laws legitimizing marijuana that directly violate federal law. 

Presidents get around laws. Besides the Watergate scandal that led to Richard Nixon’s resignation in 1974, Democratic and Republican presidents have increasingly pursued policies in conflict with the spirit or letter of the law. In a retrospective essay ardent environmentalist Jimmy Carter reported that as President he asked his Secretary of the Interior, Cecil Andrus, to find ways to sequester Alaskan land. He then used the obscure American Antiquities Act of 1906, originally designed for parcels like the Statue of Liberty, to protect 60 million acres of federal land in Alaska from economic use through designations as “National Monuments”. The Act specifies that parcels “in all cases shall be confined to the smallest area compatible with proper care and management of the objects to be protected”.  Carter acknowledged that Ronald Reagan was furious about his action, regarding it as a “land grab”.

After Carter’s defeat in the 1980 election, Reagan appointees sought to roll back the tide of environmental regulations and sequestration of federal land by slashing enforcement budgets and curtailing (mandated) enforcement of 1970s environmental laws by the Environmental Protection agency. When opposition at hearings got in the way of implementing expansive new leasing policies, Secretary of Interior James Watt simply stopped holding hearings.

President George W. Bush set new records for “signing statements”, i.e. signing Congressional laws with reservations signaling that he did not intend to abide fully by the laws’ provisions. The White House and other federal agencies tried to influence or inhibit science and regulatory agency reports, actions that were formally censured by the Comptroller of the United States and Interior’s Inspector General.

With support from his Attorney General, President Obama declared that he regarded the Defense of Marriage Act (DOMA) unconstitutional, and therefore would not enforce it. Regardless of the merits of this view, no such discretion is given to the President by the Constitution. Arbitrary interpretations or circumvention of drug and immigration laws have followed.

Financial scandals. In the early 1990s bad judgment and fraud closed 747 of the nation’s 3200 savings and loan banks.  In 2003 a multiagency settlement implicated ten of the nation’s largest investment firms in wrongdoing. Prolonged, unprecedented lapses in financial and ethical judgment on the part of the nation’s private and public economic and financial leaders led to the financial crash of 2008 and the worst recession since the great depression of the 1930s. The semi-public lending institutions, Fannie Mae and Freddie Mac were involved in the fiscal meltdown. Notwithstanding tightened controls since 2008, a record fine of $2.6 billion for deceptive practices was recently levied against the iconic J.P. Morgan Chase bank.

Breakdown of moral and ethical standards. The above actions are signs of erosion of a sense of community that remained strong in the U.S. for a time after World War II. Over the past 30 years behaviors of previously unthinkable kinds, like wanton killing of innocent students and school children have increased. Government employees without ties to foreign governments have taken it upon themselves to release vast amounts of classified and highly sensitive documents in response to perceived governmental abuses.

HISTORY’S INSIGHTS FOR FUTURE REFORM 

 The U.S. is showing increasing disillusionment with political institutions. Experience from the earlier reform period suggests that meaningful restructuring of government must be comprehensive. Government is now vastly larger than in the past and the serious reform may seem unlikely. However, we can gain insights on pathways to reform if and when it comes, from earlier history.

How earlier change came about. Reform after 1877 took place through committed political leaders and influential citizens. Reform measures often met resistance, including that of the public, which liked aspects of the patronage system. As reformer Carl Schurz observed, the public often created barriers to meaningful change. Serendipitous events  were often keys to creating changes in opinion favorable to action. For example, the assassination of President Garfield by a disgruntled office seeker ultimately aroused the public and Congress to pass the monumental Civil Service (Pendleton) Act of 1882. Reform leaders generally prepared reform measures with balance so that once enacted they would be effective and gain support by the public and politicians.

Predictions about the future of reform. We should not expect governmental reforms from a Congress that is unable to reform its own operations. Academic researchers on government and policy have become dispersed in fragmented disciplines that study real-world politics from a safe distance and whose publications are not used by decision makers. Nor should we expect reform from popular movements. These, like Occupy Wall Street, and The Tea Party can register disapproval or demand specific actions, but are unlikely to have the in-depth knowledge and balance to produce effective policies. Moreover, Gallup polls in 2013 showed that while voters gave Congress as an institution all-time low approval ratings – approaching 10%, 60% of voters liked their own Congressman. This kind of relationship was already described in the 1830s by the famous French observer of U.S. society, Alexis De Tocqueville. He noted in his book, Democracy in America, that the surprising lack of vision in U.S. politicians could be explained by the fact that voters were often poorly informed and preferred politicians who served their immediate purposes and told them what they wanted to hear. If history is a guide, urgency about improving governmental operations must reach a point where genuine reformers can gain influence and be preferred over the charisma or ideological appeal of alternative candidates for high office. We may need deeper crises in order to reach that point. 

Categories
Policy and Politics

Natural Resource Management Reform: Recommendations To Governor Terry McAuliffeE

 

VIRGINIA’S DILEMMA: The reality of what happened to offshore drilling and the uranium proposal of 2007. 

Two major Virginia natural resource action proposals got national visibility in recent years: offshore oil and gas drilling, and a proposal for uranium mining. Both initiatives involved resource as well as policy issues of significant magnitude. Both were objects of detailed, well-motivated reports by Virginia’s legislature. Both became mired in controversy and sank out of sight without Virginia’s general public really understanding the issues, how Virginia would oversee proposed operations, and the background to opposition that ultimately killed the initiatives.

This report takes a critical look at the uranium mining issue. Regardless of whether one starts with a negative or positive attitude toward uranium mining, the emerging events tell a hard-to-avoid story. Virginia’s current political structure is incapable of providing objective and credible professional assessment, useful public information, and oversight or coordinated management of major natural resource recovery operations. The reason is that the state government’s existing system is politicized. This virtually guarantees inability to provide responsive and independent evaluation and oversight that can gain public trust – especially where sensitive environmental issues are involved, while treating potential operating organizations proactively and fairly.

Virginia could change a condition that is dysfunctional and frustrating to both environmentally concerned people as well as elected officials and enterprises interested in developing Virginia’s natural resources. Suggested steps briefly offered in this report would involve a combination of structural reform and  emphasis on the integrity of the primary oversight agency. No laws, regulations, or technical procedures can substitute for the latter. 

URANIUM MINING DEVELOPMENTS, 2007-2012 

Summary

In 2007 interest in lifting a 30‐year old moratorium on mining uranium in Virginia arose. The stakes were big. The Coles Hill area has the largest undeveloped uranium deposits in the nation. It could supply a significant proportion of the uranium needed for the U.S. nuclear energy industry – 92% of which is now imported.  But a final report delivered by the Governor’s Uranium Working Group in 2012 only increased mounting opposition to mining. It became clear that Virginia’s system for handling natural resource initiatives associated with environmental sensitivities was inadequate. A legislative proposal to remove the 30-year old moratorium on uranium mining was withdrawn. During 2013 reports about renewed interest in uranium mining emerged, but action would have little chance at meaningful consideration under present conditions.

Uranium mining ran into trouble because: 1) responsibility to advise on action was given to elected politicians and their appointees who, without prejudice to their efforts, lacked relevant scientific and professional expertise and ability to render independent judgment; 2) the voluminous advisory reports left the key  questions and issues of prime concern to the public and environmental groups unresolved.

This paper respectfully recommends to Governor-elect McAuliffe that he initiate bipartisan exploration of fundamental changes that could promote citizen confidence in and more effective management of Virginia’s natural resources, not limited to uranium.

The key recommendation is that the current office of Secretary of Natural Resources be transformed from a political position (answering to the Governor) to a qualified professional office. It would have responsibilities and missions decided by the legislature and governor, but be insulated from outside pressures in performing scientific evaluations and other functions by having independent civil service status. It should be authorized to develop cooperative agreements with federal agencies.

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Virginia’s uranium resources 

The Coles Hill area in Pittsylvania County holds the largest undeveloped uranium deposit in the U.S., with approximately 120 million pounds of estimated reserves having a gross value of around $6 billion at current uranium oxide (U3O8) prices (~$50/lb.). The U.S. may be the only advanced nation in the world that would allow such a large resource to stay under moratorium for 30 years while the nation imported 92% of uranium needed by its nuclear power industry. A breakthrough in mining operations and oversight achieved in such a way as to gain public confidence would also help lift the existing depressed state of mining in the United States – a desirable and necessary activity for a nation like the U.S. Advanced mining and associated technologies have important spinoff benefits for handling waste materials, cleanup of brownfields, and other activities in which leadership has moved abroad.

In 2007 exploration at Coles Hill resumed under license from the Virginia Dept. of Mines, Minerals and Energy. Local owners formed Virginia Uranium, Inc. in cooperation with a Canadian mining company. The Uranium Subcommittee of the Virginia Legislature’s Commission on Coal and Energy requested a report from the National Academy of Science, and explored lifting of the moratorium.

Environmental concerns

Uranium has a low level of radioactivity. For short exposure it has about the same toxicity as lead. The main concern lies in solid radioactive daughter products, primarily radium (226Ra) and radium’s gaseous decay product, radon (222Rn) that build up over time in tailings deposits and associated pore waters. These radionuclides are alpha emitters that are hazardous (cancer risk) if breathed or ingested.

The Town of Virginia Beach gets water supplies from reservoirs that could be affected by radioactive daughter products of uranium, should there be leakage from mine tailings disposal sites (see location map). The Town commissioned or otherwise received a series of reports that provide an overview of uranium mining and regional data for Virginia. These reports include slide shows providing useful background for the general public.

Map showing previous uranium leases in the Coles Hill area and waterways in south-central – western Virginia and northern North Carolina, from Town of Virginia Beach online documents.

See website: http://www.vbgov.com/government/departments/public-utilities/pages/uranium-mining.aspx

 

Downstream Drinking Water Map

The Governor and the Virginia legislature’s actions

The legislature earlier created a Uranium Subcommittee of the Commission on Coal and Energy. The subcommittee requested a report from the National Academy of Sciences, which was published in 2011, along with a consulting expert’s report. On January 18, 2012, Governor Robert McDonnell appointed an additional Uranium Working Group made up of staff of the Departments of Public Health, Mines, Minerals and Energy, and Environmental Quality, three of the six agencies under the Secretary of Natural Resources, and citizens. The UWG was authorized to get outside assistance for its report, and two RFP’s were released.

The two Virginia working groups chose qualified consultant groups that included individuals familiar with Canadian uranium mining and regulatory procedures. Advisory group members visited Saskatchewan uranium mining areas to get hands–‐on exposure to mining, waste disposal, hazard, and other issues. The final report of the UWG produced a large amount of background research in a short time. Consultant reports included state and U.S. federal regulatory systems and policies in considerable detail. The 345‐page National Academy of Sciences report confirmed the commercial viability of the Coles Hill deposits and provided an exhaustive overview of radioactivity–‐related and other potential problems associated with mining. But it did not get into operational or organizational detail applicable to the Virginia case.

What happened?

The state advisory bodies’ reports contained voluminous documentation. However, groups and people continued to join opposition led by the Piedmont Environmental Council, Virginia chapter of the Sierra Club, and Southern Environmental Law Center. That things were not going well was brought home by the fact that Governor McDonald’s election partner, Lieutenant Governor Bill Bolling, and some business groups also registered opposition to lifting the moratorium. Ultimately, Senator John Watkins, a Vice Chair of the Uranium Subcommittee and initiator of a proposal that would have lifted the moratorium, withdrew it.

Virginia is left with the 30 year–old moratorium that says, in effect

“We are scared of uranium. We don’t trust our state system to evaluate proposals that involve hazards. We prefer to shut everything down until a new law details procedures to manage uranium mining safely“

WHAT’S WRONG WITH THE CURRENT SYSTEM?

The Dept. of Mines, Minerals and Energy licenses traditional mining and other natural resource activities. It does so in cooperation with other agencies under the Secretary of Natural Resources. This system may have worked reasonably well and with minimum bureaucracy for well-established normal operation. However, large and controversial initiatives such as offshore drilling and the uranium mining proposal have been handled by legislative committees and commissions, supplemented by advisory bodies appointed by the Governor.

The appointed bodies were not asked to judge advisability of uranium mining, but provide policy guidance for the General Assembly. The Uranium Working Group said that detailed regulations would have to be developed by the Departments of Mines, Minerals and Energy (DMME), and Environmental Quality. As mentioned previously the Subcommittee on Uranium requested and obtained a study by the National Academy of Science on the uranium mining issue. But the report did not provide hands-on practical guidance on how best to evaluate and develop practical answers to the questions facing Virginia.

A major problem was that the advisory bodies were composed of elected political officials, their appointees, and state employees from agencies whose leaders serve at the pleasure of the governor. They lacked formal expertise or experience with the complex problems involved in mining uranium. Though they showed discretion in choice of consultants and labored diligently, the process did not gain public confidence.

The advisory bodies’ “start from scratch” approaches left priority questions unresolved.

The advisory groups were not authorized to make definitive recommendations about mining. What the reports delivered was a daunting array of complex background data, descriptions of potential hazards, state and federal permitting and regulatory procedures, etc. They offered no clear pathway for action by the General Assembly. The provision in the existing moratorium that a new law prescribing regulatory guidelines would be needed prior to initiation of mining was also left to future resolution. An earlier draft bill was left untouched. There was something of an air of unreality about state advisory bodies embarking on  “start-from” scratch addresses to mining of a commodity for which the federal government and private industry already had a sixty-year operational and regulatory history.

Capabilities of the operating company were not established

A prime concern is the disposal of uranium‐enriched tailings under Virginia’s conditions of rainfall, groundwater, and occasional floods. This contrasts with arid western environments of previous and existing mining areas. One might have expected Virginia Uranium Inc. to describe its expertise and offer an indication of techniques for dealing with uranium in Virginia’s unconventional setting for uranium deposits. But the Company merely cited the state advisory documents and indicated that it would develop operating strategies in the future. [http://www.virginiauranium.com/]. Since the company provided no technical detail advisory group consultants had to use hypothetical operational procedures for predictive models.

Failure to consider public reception of the reports

The public is not equipped to interpret detail about uranium mining, hazards, legal and regulatory procedures, reports of hearings, etc. in the thousands of pages in the UWG report and cited references. It and especially environmental organizations clearly lacked confidence in plans that offered no indication of state management systems, lines of authority, professional competence, and priority attention to the problem of mining in Virginia’s special environment should mining take place.

SUGGESTIONS FOR  REFORM OF VIRGINIA’S SYSTEM FOR MANAGING NATURAL RESOURCES

Laws and regulatory provisions can prohibit or make approval so difficult that they in effect exclude initiatives like uranium mining. What they cannot assure alone is safe and effective operation. Only well-qualified, competent operators and knowledgeable and conscientious oversight agencies can do that.

An authoritative agency head is needed to interface with the public and legislature. The office must be able to make assessments and explain and justify balanced policies and decisions in the face of political pressure or economic inducements on the one hand, and exaggerated fears or claims on the other. The  town of Virginia Beach actually offered more useful and intelligible background data and summaries of the pros and cons of uranium mining than did state agencies.

Beyond technical qualifications, the agency leader needs balance and rock‐like integrity. Such persons exist but must be searched for. They are unlikely to be among candidates in normal short lists for state appointments.  A new reform opportunity in Virginia should be attractive to qualifying individuals.

Norway’s large and highly effective oil and gas industry, co‐located offshore with Norway’s major fishing industry, is an example of successful management of a potentially hazardous activity. The responsible agency is the Norwegian Petroleum Directorate. Its founding Chief retired in 2004 after more than 34 years of service. Prior to the major federal environmental laws of the 1970s a number of states like Texas (Texas Railroad Commission), Kansas (Kansas Geological Survey) and Illinois and Wisconsin environmental protection agencies exercised effective and respected oversight over natural resource and environmental activities.

To recruit and retain agency leaders with competence, experience, and integrity, who can exercise scientific and operational judgment independently of external pressures a state needs to provided civil service status and tenure after a trial period. This means that they individuals cannot be arbitrarily replaced or pressured by political leaders or outside groups.

Many people will ask: could we really trust agencies and officials? The answer is yes if agencies and people with integrity are prioritized. But they can’t survive in a politicized system such as currently exists. Politicization doesn’t mean that governors or legislators have bad intentions. But it does not provide the necessary buffer and protection that is required.

Virginia needs an agency empowered to coordinate agreements with federal science and regulatory agencies.

In both the case of offshore drilling and uranium mining it would be unreasonable to expect Virginia’s state government to provide the in-depth expertise and oversight capability for such complex activities alone. The resource management agency should be authorized and qualified to develop partnerships with federal agencies and other states, and seek expert assistance from federal agencies. But it ought to have the skills to work out agreements that allow for maximum input from the state. It should not share in revenues from activities that it oversees, in order to avoid conflict of interest. But it should be able to seek funding for research, cooperation, and supporting activities from federal sources.

Final conclusions 

Virginia is a state with a tradition of consistent internal management except in the case of major natural resources. A new governor and the current narrow balance between political parties offer the opportunity to set in motion planning for a modernized natural resource management structure. A competent system that inspires trust could also help inform and guide proposers or framers of new or modified legislation. It would help the state evaluate and make proactive and prudent decisions about future activities and operations, moving them from outcomes determined by lobbying and opposition campaigns to open analysis and consensual decisionmaking. Success in achieving such goals could make Virginia a model for dealing with environmental and natural resource issues at a time when there is conflict, paralysis and gridlock in federal environmental and resource policy.

SELECTED REFERENCES

Technical Report on the Coles Hill Uranium Deposits by Peter A. Christopher, Geological and Engineering Consultant: http://www.imcc.isa.us/ColesHillUranium.pdf

Virginia Uranium Mining, Inc., home page: http://www.virginiauranium.com/

Summary of concerns by the Southern Environmental Law Center, taken from the National Academy of Science Report, Uranium Mining In Virginia (2012):http://www.southernenvironment.org/uploads/fck/file/uranium/summary_key_findings_NAS_report.pdf

Virginia Beach Uranium Mining Impact Study, 2011:http://www.vbgov.com/government/departments/public-utilities/pages/uranium-mining.aspx
Includes appendix of 16 relevant studies

Commonwealth Of Virginia 2012 Uranium Working Group Report,http://www.uwg.vi.virginia.gov/pdf/UWG%20Report%20-%20FINAL%2030Nov2012.pdf

Categories
American history Policy and Politics

A 19th Century French Observer Sheds Light On America’s Unstable Politics

Alexis De Tocqueville arrived in the United States in 1831. The French nobleman, superbly educated and with Enlightenment ideals,  came with a companion to study democracy in the young nation.  The last major  representative system, the Roman Republic, had been overthrown in 27 BC by Julius Caesar, who had himself crowned leader of a Roman Empire that would continue for nearly 500 years. After final ratification of the U.S. Constitution in 1791 the United States became the the world’s first representative political system in more than 1800 years. In the early 19th Century European governments continued to be ruled by monarchs or other systems lacking full popular representation. Power sharing systems like parliaments, such as in Great Britain, existed, but appointments to these positions were mainly limited to the nobility or upper classes and hereditary monarchs retained much power.

The turbulent French experience with democracy. Three years after the adoption of the U.S. Constitution the French had their own popular revolution in 1789. But its bloody and chaotic outcome  – including execution of one of France’s greatest scientists, Antoine Lavoisier, on grounds that he was an aristocrat (the judge who condemned him famously observed that “France had no need of savants”), ultimately led to restoration of the Bourbon monarchy from 1814 to 1830. The first restoration king, Louis XVIII, granted a written constitution and bicameral legislative body. However, his successor, Charles X (1824-1830), returned to a more authoritarian governing style.

At the time of De Tocqueville’s departure from France on April 2, 1831.  King Charles X had been forced by the July Revolution to abdicate in favor of a constitutional monarchy under Louis Philippe.  De Tocqueville and his companion, Gustave De Beaumont, wanted an official government mission and financial support for their travel. Since democracy was too sensitive to justify their request, they initially covered up their real goal, and received approval to study the American penal system.

De Tocqueville finds national character traits different from those in nations that supplied immigrants.  The risk of reporting on democratic systems in America receded after Louis Philippe took the throne.  De Tocqueville described his observations in a famous two-volume book, Democracy in America (1). Published simultaneously in French and English in 1835 and 1840, it created a sensation. De Tocqueville’s work has been described as the most perceptive book ever written about the United States. A highlight of his observations was that descendants of European immigrants in the United States looked very much like people in France and Europe. But they showed characteristics not found in any nation from which Americans had emigrated.

 “American Exceptionalism – a double-edged sword”. The special features of American society, now often described as “American exceptionalism” (2) remain widely noted  today.  But few Americans  who have heard of De Tocqueville realize that he described not only positive qualities that continue to be associated with the United States, like strong commitment to democracy, entrepreneurial drive, willingness to take bold risks, and openness to communication and forming new associations for mutual benefit.

De Tocqueville also described less flattering national tendencies that he apologized for detailing but felt needed attention. These include characteristics like shallowness, opinionatedness,  and focus on material acquisitions and self-interest. De Tocqueville suggested that these qualities helped explain the attraction of American voters to politicians who served their immediate concerns and told them what they wanted to hear. He described his surprise at the lack of vision in political and other societal leaders. The connections between self-interest and lack of leaders with vision becomes more understandable when we consider that statesmen and other leaders with vision see issues that may be valid but unwelcome and  that people would prefer to avoid.

Polling data offer striking resemblances between national characteristics that De Tocqueville reported more than 170 years ago and those we see today. Recent Gallup polls (3)  report that public approval ratings for the performance of the U.S. Congress have declined to he lowest levels (approaching 10%) since polls on such questions have been conducted. At he same time, a representative sampling of citizens showed approval of their own Congressional representative at 62%.

We have met the enemy and he is us (Pogo). When the full implications of the above connections sank in after recently reading De Tocqueville in the original rather than in summaries and interpretations that I had seen or heard earlier,  it seemed tough medicine. If traits like the above were hard-wired in the population, improving the performance of American national politics would face steep odds. If voters don’t really want politicians who know and tell the truth and work toward realistic solutions. If they prefer instead those who serve their immediate interests and offer charisma and “magical” policies to deal with larger national needs, then it’s not  politicians who are the fundamental problem. We could throw out all the leaders who serve today – but we would elect another group just as bad in their place.

Realistic reform potentials. De Tocqueville does offer windows of hope in his observations of politics in America. He noted that at times of crisis – notably during the Revolutionary war – Americans became more willing to accept statesmanlike leaders. And Americans are flexible.  And once Americans accept the reality of major problems they are quicker than in other societies to correct them.

Movements like Occupy Wall Street and the Tea Party show deep dissatisfaction with the status quo.  But projects like former Comptroller General of the U.S. David Walker’s Come Back America movement,  Ted Talks, based on a desire for informed action,  and other reform movements, still seem in early stages of development. We may need a bigger crisis before Americans become willing to take the need for true reform seriously.

References 

1. Alexis De Tocqueville. Democracy in America, four-volume multilingual edition, edited by Eduardo Nolla, and translated from the French by James T. Schleifer, Liberty Fund, Indianapolis. This edition adds previously unpublished drafts, notes, and correspondence by De Tocqueville (who interviewed President Andrew Jackson as well as many other leaders, and also spent extended time with an Indian tribe)

2. Lipset, S. M. (1996). American Exceptionalism–A Double Edged Sword. NY, Norton

3.  Mendes, Elizabeth, 2013. Americans Down on Congress; Ok with their own Representative, Gallup Inc. http://www.gallup.com/poll/162362/americans-down-congress-own-representative.aspx

Categories
Uncategorized

A Review of Trade Books That Warned of the 2008 Real Estate and Financial Meltdown

Political science is not very good at predicting the future – but once an event takes place we can explain why it was inevitable (1)

February 5, 2013

Experts were blindsided

On October 23, 2008 former Federal Reserve Board Chairman, Alan Greenspan, arguably the most respected financial expert in the U.S., testified grim-faced in a Congressional hearing that the banking crash had taken him by surprise:

“those of us who have looked to the self-interest of lending institutions to protect shareholder’s equity (myself especially) are in a state of shocked disbelief” (2)

The U.S. financial bubble had received equal-opportunity, bipartisan nurturing. Chairman Greenspan and earlier federal officials’ discomfiture was increased by a PBS Television Frontline report that highlighted the battle by Brooksley Born, Chairman of the Commodities Future Trading Commission (CFTC) to control derivatives. Born felt that financial instruments like credit default swaps lacked transparency. She felt that their uncontrolled growth threatened markets and the economy. However her warning to President Clinton’s Working Group on Financial Markets was rejected by four powerful federal officials, Fed Chairman Greenspan, Treasury Secretary Robert Rubin, Deputy Secretary Larry Summers, and SEC Head, Arthur Levitt. When she went public with proposed regulation of derivatives trading, the above men essentially forced her to resign and got her replacement to rule out further regulation of derivative trading.

The scholars

The housing and financial debacle of August, 2008 led to a flurry of reexamination of financial models, trigger and warning indices in the scholarly literature. To illustrate, the key words: “warning”, “financial”, and “crash”, in the Google Scholar search engine recovered 65,000 titles of scholarly articles and books. Publications from 2008-2012 yielded 16,300 titles, nearly all involving the U.S. However, there had been no shortage of theoretical interest before the crash, the period from 2000 to 2006 yielding 16,900 titles. Random checks of publications from among these titles showed that virtually all scholarly publications dealt with financial models and generic issues involved in detecting instability in financial and economic systems. One of the most authoritative overviews, conducted by IMF researchers in 2000 (3) summarized literature on recent crises, time and regional effects, trade linkages, main variables, benchmarks, robustness of models, frequency of crises by country group, etc.

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1 Lecture by Sydney Verba, Emeritus Professor of Political Science, Harvard University, and former Director, Harvard Library, May 2012
2 Hearing on October 23, House of Representatives Committee on Oversight and Governmental Reform (http://clipsandcomment.com/wp-content/uploads/2008/10/greenspan-testimony-20081023.pdf)

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To gauge perceptions of professional economists I canvassed the titles and abstracts submitted to the annual conference of the American Economic Association, the premier professional association for economists, for 2008 (www.aeaweb.org/home/annual_meeting/assa_programs/ASSA_2008.pdf). To the extent that I could discern, only a few papers, including one whose authors included Kenneth Rogoff, offered warnings or concern about a potential meltdown.

Who knew about the risks and issued warnings?

The above data do not mean there there were no warnings. In 2003 investor Warren Buffett called derivatives “weapons of mass destruction”. Although there are caveats, the five largest Canadian banks all made money in 2008. The largest and most substantial warnings came from “trade” or popular books, among which no fewer than 16 issued explicit warnings or predictions as early as 2000, usually backing up their assessments with data. The table provides a chronological list of books compiled from the Google Books search engine and the Amazon.com website using key words like “crash”, “meltdown”, “bust”, etc.

Poorly justified doomcrying books are not the norm

Knowing the contradictionary nature of predictions by stock market advisory bulletins, one might assume that any given time there might be books predicting bad economic news. However, the data indicate that books predicting crashes have been rare in the past; the recent spate of books predicting a crash is unique. There may be logical reasons why poorly justified predictions at book length are not common. Stock market experts, market journalists, and others who write books place their reputations on the line when they boldly predict negative outcomes that will be tested by future developments. Hence, authors who venture into this kind of prediction tend to draw on substantive data and rationales. Several of the authors included in the table already had reputations for making correct calls and enhanced their credentials.

Discussion

The divergence of opinions noted above involves some complex factors. While American political partisanship has affected many agencies, leaders of the critical areas of finance and public security are so important to the nation that they have tended to be chosen on perceived competence and on a nonpartisan basis. Nevertheless, in the area of finance we can observe that prestigious ideas have carried a great deal of weight, even though they may have been flawed. These ideas appear to have discounted the kinds of information and perpectives reflected in trade books.

So should we replace academically credentialed leaders by predictors of economic trends like those listed? No, but we have an object lesson. People who work with advanced conceptual ideas and complex analytical systems and are in positions of authority, whether intellectual or political, are tempted to build walls that shield them from conflicting data and ideas.

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3 Caramazza, F., Ricci, L., & Salgado, R. (2000). “Trade and Financial Contagion in Currency Crises”, IMF Working Paper

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Year Author Short title Author occupation
2008Stanley J. Kazwell Jr. (F)The Mortgage MeltdownPresident of Kazwell Financial Services Inc., host of radio show real estate, publiserh of newsletter and speaker
2008Paul Muolo and Matthew Padilla (J)Chain of Blame: How Wall street Caused the Mortgage and Credit CrisisInvestigative reporters
2008John R. Talbott (F)Contagion: The Financial Epidemic ..Former investment banker Goldman Sachs, visiting scholar, UCLA Anderson School of Management
2008James Turk and John Rubino (F)The Collapse of the Dollar and How to Profit from ItTurk is an international finance, banking, and investment expert; Rubino is editor of a financial website and advisor on gold and preservation of capital
2008Michael J. Panzner (F)Financial ArmageddonColumnist for Real Money and AOL blog on stocks, works for companies like HSBC Soros Fujnds, Moregan Chase, Dresdner Bank
2007Stephen Leeb (with Glen Strathy) (F) (W)The Coming Economic Collapse: How You Can Thrive When Oil Costs $200 a Barrel (F)Well-known stock market analyst, specializing in energy investments
2006David Decker and George G. Sheldon (B) (W)Cash in on the Coming Real Estate Crash (B) (W)Founder Decker Properties, real estate brokerage, mgmt and development firm, and writer; Sheldon is a professional writer
2006Jim Mellon and Al ChalabiWake Up! Survive and Prosper in the Coming Economic TurmoilMellon is a well-known fund manager with international experience; Chalabi is a financial writer; both are British citizens
2006John R. Talbott (F,S)Sell Now The End of the Housing Bubble (F,S)Former investment banker Goldman Sachs, visiting scholar, UCLA Anderson School of Management
2005Warren Brussee (B-M,E)The Second Great Depression (B-M, E)GE plant manager, engineering mgr GE 33 years
2005Richard Duncan (F)The Dollar Crisis: Causes, Consequences, CuresFinancial analyst Richard Duncan worked for leading companies like Salomon Brothers, HSBC Securities, International Monetary Fund and The World Bank.
2005Addison Wiggin and Wm. Bonner (F,W)Empire of Debt: The Rise of an Epic Financial CrisisMaverick financial writers
2004Maverick financial writersFinancial Reckoning Day: Surviving the soft depressionMaverick financial writers
2003John R. Talbott (F,S)The Coming Crash in the Housing MarketFormer investment banker Goldman Sachs, visiting scholar, UCLA Anderson School of Management
2003Peter D. Schiff and John Downes (F)Crash ProofRuns the financial websites, Greenstock Investing.com and Dollarcollapse.com
2002Daniel A. Arnold (B,F)The Great Bust AheadMgr and consultant with GE 15 years; started successful mfg co Santa Clara CA; bought out by larger co. Arnold focyused on investment & longterm economic trends
2002Robert Prechter (F)Conquer the Crash: You Can Survive and Prosper in a Deflationary Depression,Stock market analyst, publisher, and popularizer of the Elliott Wave principle; said to have predicted bull market of the 1980s; now predicts major bust (also updated version in 2006).