Sunday, May 22, 2022
“The radiant soda of the seashore fashions
Fun, foam and freedom. The sea laves
The shaven sand. And the light sways forward
On self-destroying waves.’’
— From “Far Rockaway,’’ by Delmore Schwartz (1913-1966)
“One should always have one’s boots on and be ready to leave.’’
— Michel de Montaigne (1533-1592), French essayist and philosopher
“In old age we increasingly feel we are strangers and we warm to those who treat us as if we’re not.’’
— V.S. Pritchett (1900-1997)
Providence’s Big Bet
It will take a long time for Providence – and so the State of Rhode Island — to recover from the outrageous pension giveaways to the public-employee unions under the mayoralties of former Mayor (and current local real-estate mogul) Joseph Paolino and the late Mayor Vincent Cianci. Current Mayor Jorge Elorza wants to address the problem by borrowing around $500 million to invest to reduce the city’s liability.
The city now has a $1.2 billion unfunded pension liability, one of the worst in America. About 20 percent of the city’s budget goes straight to paying pension costs.
City officials are in a bind, politically and financially. Raising taxes a lot to directly pay for the pension giveaways could hit the city’s economy hard, as could slashing public services.
I agree with businessman and former gubernatorial candidate Ken Block that the least the city should do if it goes ahead with a pension-bond sale is to insist that retirees and unions agree to pension give-backs and structural reforms — especially regarding disability pensions. They’ve benefited from pension benefits that are virtually unheard of in the private sector and rare in the public sector. City and state officials should warn them that they would lose a lot more in a Providence bankruptcy than from givebacks in negotiations that could prevent the bankruptcy. (I’ve thought for a long while that bankruptcy isn’t the worst thing that could happen to Providence.)
The city should be encouraged or compelled to bring the pension benefits in line with the state system.
There certainly are substantial risks to this pension-bond strategy. The idea behind these securities is that a government borrows money, invests the money and, it hopes, earns more per year on those investments than its interest costs. But interest rates are climbing and the outlook for the securities markets is volatile, to say the least.
As GoLocal has reported:
The Government Finance Officers Association has issued an alert recommending that state and local governments do not issue pension obligation bonds (POBs) because:
“- The invested proceeds might fail to earn more than the interest rate owed over the term of the bonds, leading to increased overall liabilities for the government.
“- POBs are complex instruments that carry considerable risk. POB structures may incorporate the use of guaranteed investment contracts, swaps, or derivatives, which must be intensively scrutinized as these embedded products can introduce counterparty risk, credit risk and interest rate risk.
“- Issuing taxable debt to fund the pension liability increases the jurisdiction’s bonded debt burden and potentially uses up debt capacity that could be used for other purposes.’’
State Treasurer (and congressional candidate) Seth Magaziner has come up with reasonable suggestions on how to implement the dubious bond plan if it goes forward. He suggests it:
“Contain a provision forbidding the city from closing on a [pension bond] sale if the true interest cost of the bonds exceeds 4.5 percent. Putting a cap on the allowable cost of borrowing increases the odds that the investment earnings of the proceeds will exceed the cost of borrowing.”
“Require that no more than $150 million of the proposed $500 million POB authorization be issued in any six-month period … [to reduce] the risk of unfavorable investment timing.’’ Alternatively: “issue the full $500 million in one transaction but invest the proceeds in equities in a staggered schedule over 12-18 months.”
“Require the inclusion of at least one ‘call option’ during the term of the bond, so that the city has the option to refinance the [bond] if it becomes feasible to achieve a lower interest rate.”
“Reduce the authorized term of the bond from 30 years to 25 years.”
On the Beach
The decision of Narragansett’s Town Council to let those identified as members of the Narragansett Indian Tribe walk onto Narragansett Town Beach for free sounds nice, and is certainly politically correct. But as with all special deals, other people have to make up the money and some of those people may be considerably worse off than tribal members.
The special freebies and discounts for the elderly are a prime example of these special-interest giveaways. Though they’re generally economically better off than most other groups, old people are favored for special deals from public authorities, especially because they are avid voters. But then there often seems little limit to the goodies that elected officials hand out to some powerful groups, especially in election years.
What is a good program – for everyone — is RIPTA’s express bus service to take kids from poor families in Providence to the beach this summer. Thank you, Gov. Dan McKee, for saving the service, which seemed about to get the ax. The program helps to reduce in its small way hot-weather tensions and crime in the city and broadens the knowledge of these kids about what is, after all, called The Ocean State.
It’s good to see an effort by some local casino workers to get those establishments to ban smoking. Smoking not only causes lung cancer and other illnesses in smokers, it can sicken nonsmokers near them. That’s particularly true for casino workers, who must be there 40 hours a week.
Casino operators love smokers because they tend to be more prone to addictions in general, including gambling and booze. Drinking, smoking and gambling neurologically reinforce each other.
Consider that Spectrum Gaming Group estimates that 21 percent of Atlantic City casino visitors are smokers but account for 26.1-31.3 percent of the casinos’ revenue. The casino owners and executives, seeking to maximize profits, and the states, seeking to maximize tax revenues from the industry, don’t want to discourage any high rollers.
As with such things as legalizing “medical” and “recreational” marijuana (which in some people is a gateway to harder drugs) – more tax revenue! — government promotion of gambling tends to poison society.
The embrace by many Republican/Qanon Party members of the idea that “the white race” faces extinction because of immigration ignores what should be the obvious fact that populations have always been moving. Europeans moved to what became the United States, mostly replacing (by epidemics or killing them outright) “The Indians,’’ whose distant ancestors came from Siberia. And given that all ethnic groups can interbreed – we’re all the same species! – “replacement,” or call it diffusion, is inevitable. Of course, many people, especially those with anxiety disorders and the less educated (thus more vulnerable to demagogues), are bound to resent and fear the arrival of people who don’t look or talk like them. That’s especially in periods of rapid, and thus unsettling, technological and economic change, including widening income inequality.
The replacement process is said to be a well-organized plan to bring in people who will vote according to the wishes of evil, power-hungry plotters (of course, led by Jews, according to many of these theorists). Well, anyone who can see a highly organized program in the chaos of U.S. immigration policy under Republican and Democratic administrations of the past half-century has a vivid imagination. Consider the decades-long failure of Congress to pass real immigration reform!
The ancestors of many of those complaining now were themselves the object of much hatred amongst “Anglo-Saxon Americans” when immigrants poured in from southern and eastern Europe in the late 19th and early 20th centuries – in the days before passports were required to get into the country.
Appealing to this anxiety can be very lucrative, as the likes of very rich preppie Tucker Carlson’s Fox “News” ratings show. By the way, a great-great-great grandfather of Carlson used massive amounts of immigrant labor (mostly Mexican) in becoming a cattle and land baron in California. Of course, many Mexicans were “replaced’’ by Americans when the U.S. grabbed much of the Southwest from Mexico in the Mexican War of 1846-1848.
Government and some private businesses – albeit with good and/or commercial intentions — can exacerbate the resentment of white-replacement believers by, for example, providing services in languages other than English, mostly Spanish. (I remember French street signs in some northern New England towns half a century ago.) And the ever-increasing media coverage of minority groups (sometimes well in excess of their percentage of the whole population) makes the replacement believers angry. Every older generation tends to feel that new people are usurping them.
Other groups besides Whites have replacement-conspiracy theories. For example, some Blacks think that there was a conspiracy to remove Black folks from large parts of Washington, D.C., (one of whose nicknames used to be “Chocolate City’’) as part of gentrification, most of it by Whites and Asian-Americans, in recent decades.
Many of the plastics in use today are made of polyethylene terephthalate (PET for short), in turn made from petroleum and natural gas, and are nearly indestructible. Most bacteria cannot break them down. UV light from the sun can break down such plastics, but it takes a long time. Note all that stuff fouling the beaches this summer! Much of that plastic is hazardous to animals, including us.
Plastic pollution, much of it from single-use products, is indeed a terrible problem. And buying fossil fuel to make it enriches vicious petrostate dictatorships such as Russia, Saudi Arabia and Venezuela.
But progress is being made in developing alternatives.
One alternative is making a sort of biodegradable, compostable plastic by mixing mycelium, a kind of mushroom root, with agricultural waste. It’s a way to cut down on such noxious packaging stuff as Styrofoam.
One can hope that the lessons we’ve gotten recently from severe weather events related to global warming caused by burning fossil fuel and Putin’s gas-and-oil-financed assault on Ukraine will intensify efforts to get off the depressingly necessary poison faster.
In other possibly hopeful news:
A Japanese joint venture – JERA – is buying three fossil-fuel-powered power plants, in Sandwich on Cape Cod, with the plan to repurpose them to provide electricity from wind farms in the ocean south of New England to the regional power grid.
Commonwealth Magazine reports an interconnection agreement lets the plants deliver up to 1,500 megawatts of electricity into the grid. “The plants rarely deliver that much power, and the new owners think the unused capacity could be sold to offshore wind farms, saving them the money and trouble of building their own connections to the grid,’’ the magazine reports.
Further, the magazine says, the enterprise envisions quickly shifting the fuel of the power plants from oil and gas to renewable diesel and eventually to hydrogen produced by using electricity from the offshore wind farms.
It’s heartening to hear of companies that have been dependent on fossil fuels thinking of ways to rapidly move beyond them.
I recently heard some talk on my car radio on the history of worrying about how newer media hurt young people. In recent years social media have been presented as the culprit (and God knows, they have done a lot of damage). Hit this link to hear the broadcast;
But back in the ‘40s and ‘50s, radio and comic books were denounced by some (usually on the right) as undermining morals and social stability.
I’m old enough to remember the last of the golden age of radio (golden in part because demagogic political talk-show hucksters hadn’t taken over so much of the medium).
That was especially from when I was very young and compelled to take an afternoon “rest’’ of half an hour or so. In fact I spent the time listening to radio shows, which were mostly soap operas, detective and adventure shows, baseball games, interspersed with detergent, toothpaste and cigarette commercials. I heard them via a big wooden radio with cloth on the front. The radio’s vacuum tubes got hot enough to make the device a heater for much of the room.
It seemed that everyone on the radio in those days had rich resonant voices, perhaps from smoking lots of those cigarettes being advertised on these shows. A friend of mine who was a TV anchorman told me that a station manager in the ‘50s advised him to smoke to achieve the perfect baritone for broadcast.
My parents took a couple of us kids to New York from time to time to see the sights. On one such trip, we visited NBC’s radio studios in Rockefeller Center, where they showed us how they created the sounds that evoked pictures in the mind’s eye of listeners. As I recall, wooden boards and mallets, sheets of metal and running water were heavily used. The onrush of TV was about to make much of that obsolete.
My colleague, Dr. Edward Iannuccilli’s recent paean to Franklin Roosevelt’s Works Progress Administration, reminded many of us how much good a visionary government can do. The WPA put up many public works — roads, bridges, water systems, post offices, libraries, schools, etc., that were so well constructed that they’re in good shape today. And building them kept many people working in the Great Depression, keeping the wolf from the door for many families.
Putin is starving parts of the world by making it impossible to farm much of Ukraine and by blocking Ukraine’s ports, from which the country’s usually huge grain exports are shipped. But then, would you expect otherwise from someone who enjoys murdering civilians by the thousands?
He’s the author of, among other books, Bloodlands: Europe Between Hitler and Stalin and On Tyranny: Twenty Lessons From the Twentieth Century.
Britain’s year-to-year inflation rate in April was 9 percent; it was 8.3 percent in the U.S., 7.5 percent in the European Union, and 6.8 percent in Canada. But it all must be Biden’s fault….
Robert Whitcomb is a veteran editor and writer. Among his jobs, he has served as the finance editor of the International Herald Tribune, in Paris; as a vice president and the editorial-page editor of The Providence Journal; as an editor and writer in New York for The Wall Street Journal, and as a writer for the Boston Herald Traveler (RIP). He has written newspaper and magazine essays and news stories for many years on a very wide range of topics for numerous publications, has edited several books and movie scripts and is the co-author of among other things, Cape Wind.
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