Archive for the ‘Business & Economy’ Category

Yankee Wisdom

Monday, March 1st, 2010

Yogi Berra, where are you?

Without mentioning the great man’s name, Vermont’s dwindling collection of Vermont Yankee supporters have been invoking the wisdom of one of this more admirable Yankee’s most famous utterances (and one he apparently uttered, which is not true of all of them): “It ain’t over ‘til it’s over.”

Indeed it ain’t. It might not be over for 24,000 years, roughly how long the spent nuclear fuel stored on site will remain dangerous, unless by then it is moved elsewhere.

But last week’s overwhelming vote by the State Senate against allowing the Public Service Board to relicense the nuclear power plant for another 20 years, was a powerful – if not quite fatal – blow to the plant.

To employ a metaphor the aforementioned Mr. Berra would appreciate, a baseball team that has fallen behind 26-4 (the Senate vote) at the end of eight innings can still win. It rarely does.

Today’s post is particularly designed to fulfill one of the purposes of this web site, as expounded at its outset – to compensate for the flaws in mainstream news coverage stemming not from lack of ability but from the rise of “opinions on the shape of the earth differ” journalism, in which quoting each side accurately is considered doing the job even if the words quoted are absurd.

The premise seems to be that if a reporter points out the absurdity he or she will be considered biased. It’s a foolish premise. There is no bias here on the issue; the News Guy is neither an opponent nor a booster of nuclear power. The only “bias” is for evidence and against nonsense.

Start with the oft-quoted dismissal of the Senate vote by Yankee’s most important backer, Gov. Jim Douglas.

“There was a lot of theater here yesterday, but from a legal standpoint, nothing’s changed,” Douglas told WPTZ-TV (Channel 5) News. “The law says absent an affirmative vote from the Legislature, the Public Service Board can’t move forward with relicensure. So I expect there’ll be more chapters in this drama to play out.”

Could be. As the Governor and other Yankee advocates pointed out, by next year, Yankee’s image, battered by news of tritium leaks and official misstatements,  might have recovered. Besides, there are elections this November, and the lawmakers who take office next year could be less hostile to Yankee and its owner, Entergy Company.

But that would require a far greater turnover of Senate seats than seems likely. And on the basis of recent development, it’s just as likely that another misstep or another revelation would drive Yankee’s reputation even lower. Right now, the Senate’s decision appears likely to stand.

As to the consequences of shutting down the power plant in two years, actual evidence (as opposed to rhetoric) supports not taking either side one hundred percent seriously.

The gloom and doom projections are certainly overblown. There is a power surplus throughout the Northeastern United States. Your lights will go on with or without Vermont Yankee.

Might your electric bill be higher? Yes, but it was going to be higher either way. Yankee may now provide some 35 percent of Vermont’s electricity at a low price. But under its most recent contract offer, it would provide less power at a higher price. Interestingly, the utilities that buy Yankee’s power have been relatively quiet during the recent tumult. That’s because they’ve figured out how to replace the power they get from Yankee at an acceptable price.

Besides, if people are serious about controlling global warming (as to be sure many are not, though all evidence indicates that most Vermonters are) everybody is going to have to pay more for all kinds of energy so that everybody uses less. Markets work; the easiest way to reduce consumption of any commodity is to raise its price.

None of this proves that electricity might not be slightly more expensive without Yankee than with it. But “might” and “slightly” are the key words here. Either way, the increase is hardly likely to eliminate Vermont’s status as the cheapest-power state in the region. So those warning about how shutting down Yankee will chase away businesses because of high utility rates need not be taken seriously.

So what should be taken seriously? In ascending order, the following:

1—Without a nuclear power plant, more greenhouse-gas-creating fossil fuel will be burned so Vermonters can turn on their lights, run their computers, and the like. Most of that fuel will probably be natural gas, which burns cleaner than coal and oil, but not as clean as nuclear, (at least once the nuclear fuel is refined from its ore, a process that burns a great deal of fossil fuel). Eventually, wind, solar, and other “sustainable” sources will provide more power, probably at a higher cost. But (see above) higher costs are both inevitable and desirable.

2—Closing the plant will have some economic impact in and around its home base of Vernon. Even Arnold Gundersen, the consultant who has been critical of Vermont Yankee, acknowledged that if the plant stops producing power when its license expires in 2012, it will lay off some 200 nuclear engineers.

Yankee critics point out that most of those engineers live in Massachusetts or New Hampshire. True, but they come to Vernon five days a week (or more) and spend money there. Losing them will be noticeable.

But not catastrophic. Businesses and policy makers have at least two years to prepare. Furthermore, shutting down a nuclear power plant is a major undertaking, requiring hundreds of highly skilled workers for a decade or more. Vernon can prosper for the foreseeable future if it keeps its head.

3—And here’s the only real reason the Vermont Yankee matter is not really closed (all that other stuff is just why people will still jabber about it). Entergy could challenge the state’s power to block its relicensing in federal court.
The company might win. Federal law trumps state law if they conflict (See Article VI, US Constitution). But it’s complicated. Elsewhere, state regulatory agencies play a role in licensing nuclear plants, which seems not to have been challenged.

Besides, companies are often wary about using raw power to impose themselves where they are not wanted. Nobody is going to boycott electricity. Still, fighting the state in federal court could turn out to be what Yogi Berra (maybe) once called “a wrong mistake.”

Correction: Last Monday’s post said the recent Vermont poll taken by Research 2000 had a margin of error of plus-or-minus four percent. That was a typographical error of the mind. It’s five percent (as the computations in the next paragraph correctly indicated).

Correction 2: A reader noted that the picture used to illustrate Friday’s post did not seem to come directly from the US. Agriculture Department’s Food Environmental Atlas, but via a “secondary sourc.” Said reader is right. The map should be credited to the always-helpful Rural Blog from the University of Kentucky.

Healthy (or at least healthier) Vermont

Friday, February 26th, 2010

Fruit and vegetable consumption by state

Real Vermonters eat their fruits and vegetables, do their exercises and don’t care much for Big Macs.

At least in comparison with most other Americans.

It isn’t that plenty of people in Vermont don’t swill sugared sodas, eat in fast food restaurants, or chow down on platefuls of fried foods while sitting in front of the TV. But either they do it less, or fewer of them do it, or both, according to figures compiled by the U.S. Department of Agriculture and collected in the Food Environmental Atlas.

Available for free on line, the Atlas contains detailed county-by-county information about where and what people eat, how much they spend on food, how extensively poverty affects their diet, whether they get much exercise, and the extent to which they have diet-related health problems.

On almost all counts, Vermont emerges as one of the healthier states, in part because Vermonters seem to try harder than most other Americans to eat a healthier diet and get some exercise.

The Atlas does not provide exact national or statewide statistics, at least not as could be discovered by your less-than-brilliant on-line operative, who also failed to reach an Agriculture Department spokesperson.

But the maps, with color-coordinated rankings by county, added to the county-by-county statistics, leave little doubt that Vermonters have relatively healthy eating habits.

Take fast-food restaurants.(Please!). In Lamoille County there are (or were in 2008) 21 of them, or 0.855 per thousand residents. That’s on the high side for Vermont. There were 0.738 per thousand in Chittenden County, 0.793 in Windsor, and only 0.393 per thousand residents of Caledonia County.

Most of the rest of the country seems to need a lot more. Far and away the champ fast-food county is San Juan County, Colorado (Silverton is the County seat), where there are 7.117 fast food restaurants for every thousand people. That’s twice the ratio of the runner-up, Norton County, Virginia (yup, the county seat is Norton, too; nope, I don’t know where it is, either) where there are a “mere” (compared with San Juan County) 3.235 fast food joints per thousand folks.

Perhaps because there weren’t that many fast food places, Vermonters spent relatively little in them, less than $400 per person per year, a level of restraint matched only by their fellow-Americans in Idaho, Wisconsin, Iowa, Pennsylvania, New York and New Jersey. The big fast-food spenders. Shelling out more than $500 a head, were in California, the Southwest, the Midwest, the deep South, and – go figure – Massachusetts.

Along with Maine, Wisconsin, and several states in the northern Rockies, Vermont has the highest percentage of adults (more than 70 percent)  deemed to be “exercising enough,” though it was not clear what constituted “enough” or who determined what constituted it.

At any rate, exercise is one of those areas in which Vermont might look good only in relation to the rest of the country. Statewide (because the number was the same for every county) 48 percent of Vermont high school students are physically active. That put Vermont in the top rank, along with North Dakota, Wyoming, Utah, Oklahoma, and Iowa.

But less than half of high school students are physically active?

That’s scary. Throw away their computers, or at least their computer games.

There is too much information in too many categories in every county to deal with it all here. Anyone who is interested can find the Atlas, either at the Agriculture Department site through usa.gov, or just by Googling Food Environment Atlas, and find out all sorts of stuff about his or her county and its eating/spending/exercise habits.

Suffice to say that Vermont comes across as the state whose residents drink less soda, eat less meat and more vegetables, buy food directly from a local farm, and take care of themselves than most other Americans.

Raising some troubling questions: Do Vermonters enjoy themselves? Of are they a bunch of eat-your-spinach, life-is-serious, let’s-find-only-the-nutrition-and-not-the-flavor-in-our-food wimps? Do they spend so much time at the gym (remember, the adults seem to exercise more than the teenagers) that they’ve forgotten the joy of sitting around a fine dinner table covered with a touch of wretched excess (in moderation, to be sure)?

The Food Environment Atlas does not directly answer that question. But the Atlas does contain one hint, and it’s a hopeful one. Vermonters may spend less money than most Americans at fast food joints, but it ranks high in full service restaurants per thousand people, and is one of only 21 states where folks pay more than $500 a year per capita in restaurants.

Where they might actually be enjoying themselves over good food and drink.

Before state boosters get what the late, great boxing trainer Whitey Bimstein used to call “a swelled head,” the Atlas shows that while Vermonters may be less likely to be obese or diabetic than most other Americans, neither are they all that unlikely to be obese and diabetic.

In Windsor County, 7.1 percent of adults are diabetic, according to the Atlas, and 22.8 percent obese. Almost ten percent of low-income pre-schoolers are obese. Those numbers are higher in Caledonia County.

And however low Vermont’s obesity and diabetes rates may be compared to other states, they are higher than they used to be, according to figures released last week by the Attorney General’s office and the Department of Health.

There’s nothing peculiar to Vermont about these increases, and according to Kelly Brownell of Yale University’s Rudd Center, who was in Montpelier last week, one reason is that more people are eating more fatty, sugary, processed foods, and for good reason. They’re cheaper.

Between 1985 and 2000, Brownell said, the price of fruits and vegetables rose 117 percent, compared to 46 percent for sugars and sweets and only 20 percent for soft drinks. Markets work. When a commodity’s price goes up, consumption of it goes down. When the price goes down (relative to inflation and alternative prices) consumption goes up.

Markets, but not free markets. Soda is cheap because of government subsidies to agriculture. Having, so to speak, sown, Americans now reap, even Vermonters, if a little less so.

Fee For Service

Wednesday, February 24th, 2010

There is a political campaign going on right now in Vermont, and we can’t say we haven’t been told about it.

No, this has nothing to do with who’s going to be governor come next year. This is a campaign which ends Tuesday, and while it has regional – perhaps even statewide – ramifications, the electorate is confined to the residents of one town: Lowell, where 550 voters are on the checklist.

Any doubts about this being a political campaign were erased in the Burlington Free Press the Sunday before last, in an excellent front page story by the estimable Candace Page., who explained how Green Mountain Power Co. was employing standard political devices to convince Lowellites to approve a wind power development on three miles of their town’s ridge lines.

Among the classic campaign maneuvers being used: voter registration, direct mail, living room meetings, and a get-out-the-vote campaign including driving voters to the polls.

And what, one may ask, is wrong with any of that?

Not a thing. And there wouldn’t be a thing wrong with it even if the wind project opponents weren’t employing the same tactic (albeit on a smaller scale because they have less money). Among the words that could be applied to this process is ‘democracy.’

But there’s another, to which the Free Press story alludes, but without using the word.

The word is ‘bribery.’

Perfectly legal bribery, to be sure, meeting the dictionary’s (American Heritage Second College Edition) second definition of the word “bribe”: “something offered or serving to influence or persuade,” not the first definition, in which the “something” is given to induce him or her to “act dishonestly.”

In this case nothing is being sought from the recipients of largesse but their ‘yes’ vote, which violates no law. Furthermore, there is nothing covert about the gift. Green Mountain Power is openly offering to give the town between $400,000 and $535,000 every year, which would enable the town to cut its town tax rate to zero or pretty close to it.

Lowell residents and businesses would still pay the statewide school property tax of course. But according to the Free Press’s calculations, the owner of a $200,000 home could save close to $1,000 a year.

Enough, it would seem “to influence or persuade” a homeowner.

All of the above should be taken as observation, not condemnation. In fact, the point of today’s post is neither to censure nor to reveal information kept hidden from the general public. Instead, it is to ponder why information that is known to the general public is so widely accepted by that public under it euphemistic – rather than its real – label: an ‘incentive, not a ‘bribe.’

There’s a difference?

Consider the new wood pellet plant to be created not far east of Lowell, in Island Pond, but only thanks to $10 million of federal loans, $9 million of it guaranteed by the U.S. Department of Agriculture.

Or the extra $15 million that a special legislative panel – at the request of Gov. Jim Douglas – added to an economic development program to entice four businesses to move into the state (see January 13 post, VEGI Burgher). Again, there might be nothing wrong with this. There certainly isn’t anything unusual about it. Almost every state, county, and city in America offers loans, loan guarantees, or outright grants to firms who pledge to expand or relocate, even though the evidence that any of this spending creates a single job that would not otherwise be created is skimpy at best.

It may be good policy. But another thing it is is bribery, however legal and respectable. And one thing it is not is free enterprise, at least not as taught in the Economics 101 textbooks. There, firms open or expand because their leaders think they can sell enough goods or services to earn a profit after meeting their costs, which include interest on loans from the private banking system.

Outside the textbooks, some firms, at least,  hold out for an inducement from the government, often playing one state or city off against another. The result is a form of socialism which is never called by that name, especially by the recipient entrepreneur, who often spends much of his spare time railing against government profligacy.

Except, of course, when he’s the beneficiary.

As mentioned, this is a national phenomenon, but perhaps especially pertinent to Vermont these days. The national-state connection was evident the other day when President Barack Obama proposed $9.8 billion in loan guarantees for new nuclear power plants just as Vermonters debate the future of the only one they have.

Again, let’s stipulate for the purposes of today’s discussion that Obama’s policy is wise, or at least defensible, and that the defenders of Vermont Yankee have a point. There is a case to be made for nuclear power (and against it, as is true with wind power).

But one of the arguments made by the plant’s supporters is that it is unsubsidized, contrasting its independence with the de facto subsidy the Legislature gave “sustainable” (wind, solar, hydro, methane) power last year when it passed a bill granting those producers higher rates.

That bill (H 446) is effectively a subsidy. But nuclear power plants aren’t subsidized? Give us a break. For more than half a century the Price-Anderson Act has limited the nuclear power industry’s liabilities from lawsuits. And all – all – of the initial research and development costs for nuclear power were borne by the taxpayers in a program that was secret at the time but has since become widely known: The Manhattan Project.

This is not an argument against nuclear power. It’s an argument against self-delusion.