Manhattan Contrarian In Investors Business Daily

An op-ed written by myself and co-author Jim Wallace appeared Wednesday afternoon in IBD, titled "With Tax Reform Done, Trump Should Set Record Straight On Climate Change."  Here is a link to the piece.

The piece summarizes the Wallace, et al., research on the subject of attribution (or lack thereof) of global temperature change to human influences.  I have previously covered the Wallace, et al., research reports when they have been issued, most notably in "The 'Science' Underlying Climate Alarmism Turns Up Missing" on September 19, 2016, and "The Greatest Scientific Fraud Of All Time -- Part XV" on July 8, 2017.  It has taken some time, but finally this work is seeing a somewhat wider audience.

Key quote from the IBD op-ed:

So, what is the actual science behind the EF [Endangerment Finding -- the Obama EPA's determination that CO2 constitutes a "danger" to human health and safety]?  We confidently assert that in any Red/Blue evaluation of the science, where the Blue team supports the EF, the Blue team will lose badly.

"Warmists" claim a 97% scientific consensus regarding the hypothesized catastrophic impact of increased atmospheric concentrations of CO2 and other GHGs. But this illusion of consensus has only come about through misrepresentation of global temperatures and research results plus rigid enforcement of orthodoxy and refusal to debate for some two decades.

In accordance with the scientific method, the EF has been shown to be invalid at least three separate times over the past two years. One of us (Wallace) is the lead author of three scientific research reports that, each in a unique fashion, invalidated all of the lines of evidence on which EPA claimed to rely for its EF.

Go to the IBD link to read the remainder of the piece.

More Late Stage Socialism At NYCHA

Here in New York City, we love to bash landlords.  First, we impose on many apartments a rent regulation regime that makes it almost impossible for landlords ever to raise the rent.  And then, woe be to any landlord who fails to provide heat or hot water on some cold day in the winter, or to fix a leak promptly.  This regime is guaranteed to engender a degree of animosity between landlords and tenants, and indeed it does so.  From time to time the authorities single out some particularly disliked landlord to make an example of, and have him sent to prison.

Obviously the answer to this exploitative capitalist housing system is a public ownership socialist model system.  And sure enough, New York City has gone for such a socialist model system in a big way with its publicly-owned low-income housing provider known as the New York City Housing Authority, or NYCHA.  NYCHA's exploits have previously been covered many times here at MC.  NYCHA is the landlord for about 180,000 apartments, mostly in what are called the "projects," that house in excess of 400,000 people, or about 5-6% of the City's population.

Surely then, the NYCHA projects have brought perfect justice and fairness to the housing of the low-income residents of New York?  Well, perhaps we had better check in on that.  The Wall Street Journal helpfully provides a detailed article on the subject in today's Greater New York section, headline "Residents Vent Over Housing Woes."  (may be behind pay wall)  Uh-oh, that headline already sounds ominous.  Here's the introduction:

More than 143,000, or 80%, of New York City’s 175,000 public housing apartments have been without heat or hot water at times this winter, city officials said Tuesday.  Tempers flared over widespread heat and hot water outages in New York City public housing at an unusually contentious City Council hearing. Some residents were in tears. . . .   Residents have been left without heat sporadically throughout the winter, on average for two days at a time, according to city officials. The outages, which the city has blamed on aging boilers, have affected more than 320,000 people.

Wait a minute -- I thought this is exactly the kind of ill treatment of tenants that public ownership was supposed to fix.  And it seems that the City Council thought that too, so they decided to hold a hearing on the subject yesterday, and to call the head of NYCHA, one Shola Olatoye, on the carpet.

“She has haplessly presided over a humanitarian crisis,” Councilman Ritchie Torres said.

So what is your answer, Shola?

Ms. Olatoye said she was struggling to maintain even basic services after decades of declines in federal funding. The city’s public housing agency has lost $3 billion in federal aid since 2001.

Really?  Funny, but I thought to check on that, and I was able to find "NYCHA Projected Revenue by Source" for 2003, and then "NYCHA 2016 Operating Plan Revenues."  And, believe it or not, the two are actually presented in the same format, thus facilitating direct comparison.  (Most bureaucracies would never allow such a thing to happen, and would gradually change the format of presentation over time so that you could never hold them accountable.  Probably, that only means that NYCHA is uniquely incompetent.)  Anyway, the answer is, in 2003 NYCHA got $664.2 million from the feds as "Federal Public Housing Operating Subsidy," and $680.6 million as "Federal Section 8 Housing Choice Voucher."  For 2016 those numbers became $910.0 million for "Federal Operating Subsidies" and $982.8 million for "Section 8 Subsidy."  

OK, the handouts may not have gone up as much as you would have liked, but how in the world do you get to characterize what are obviously large increases in funding as "los[ing] $3 billion in federal aid"?  A clue can be found in the big "NextGeneration NYCHA" Report that the de Blasio administration put out back in 2015.  At page 7 of that Report, we find a claim that NYCHA had suffered a "$1 Billion Loss in Operating Funding since 2001."  But when they describe that "loss," we find that the "loss" is not an actual decrease in funding, but rather a "loss" measured by comparison to some formula of increasing hypothetical amounts that they somehow think they ought to have gotten:

Annual Proration and Federal Operating Funding Cumulative Loss by Year
Of the total operating funding NYCHA is eligible for on an annual basis from HUD, NYCHA receives only a portion, due to lower Congressional appropriations. This is known as a prorated amount. 

Got that?  Now, how Ms. Olatoye managed to jack up the $1 billion to $3 billion for her testimony at this hearing, I cannot explain.  But hey, when you have obviously gotten large increases in funding, and you nevertheless want to claim a "cut" based on some ginned-up calculation that you don't disclose and nobody would understand anyway, what's the difference whether it's $1 billion or $3 billion?  Why not make it $5 billion?

Another subject covered in the testimony at the hearing was the amount of necessary but unfunded capital repairs that need to be made on the NYCHA buildings.  In that "NextGeneration NYCHA" Report a couple of years ago, it was $17 billion.  Yesterday:

City officials also said for the first time Tuesday that the housing agency’s infrastructure needs total about $25 billion, up from $17 billion several years ago.

Mayor de Blasio was giving his own news conference across the street at about the same time, and somebody asked him for his comment on the NYCHA issues.  Here it is:

“People in public housing deserve the very best living standard we can give them with the money we have,” Mr. de Blasio said. “But do I think we in the public sector can achieve everything that a private sector can achieve, with much greater resources in the private sector? No, I don’t have that illusion.”

 Was that an admission that socialism doesn't work? 

New York's Patented Formula For Decline: Spend More To Get Less

In New York, we love to feel good about ourselves because of our great "compassion" in turning high taxes over to the government so that it can solve all human problems.  As you undoubtedly know, New York not only has a State income tax, and also a City income tax, and these are at such stratospheric levels as to place us right near the very top among the states.  (California actually has a top rate of 13% that slightly exceeds the maximum New York State plus City rate at the very highest income levels.)  The state closest to us in population -- Florida -- has no income tax.  

You may be less aware of some other comparisons between New York and Florida.  After rapid growth in recent years, Florida actually has slightly greater population:  20.1 million versus 19.8 million.  Yet New York's annual state budget is about double Florida's:  $150.7 billion for New York, versus $78.4 billion for Florida.  Surely, though, for all that money, New York would have a much lower poverty rate than Florida?  Not at all!  In fact, the most recent reported poverty rates for both New York (State) and Florida are exactly the same:  14.7%.  In New York City, where we spend even more money to cure poverty, the poverty rate is still higher:  15.4%.  Per student school spending for K-12?  In Florida it's $8881, and in New York $21,206.  Go through the NAEP data here, and you will find that Florida outperforms New York slightly in most categories.

Our current Governor, Andrew Cuomo, is just getting started on his re-election campaign for his third term.  The Republicans have at least one quality candidate running against him, Assemblyman Brian Kolb of upstate Geneva.  But Kolb is little known in New York City or its suburbs, home to close to 70% of the state's population.  Barring a melt-down by Cuomo, he is thought likely to cruise to an easy victory.  Would you think that New Yorkers might care that they pay double and more national norms for inferior outcomes in most areas?  Not that you can tell.  

And indeed, if anything Cuomo is busy doubling down on failure.  His two most recent big initiatives would seem to suggest that the whole idea of government in New York is to pay at least double what you need to to get basic services -- and perhaps far more.  Here are the two big initiatives:

Congestion pricing.  You may be aware that the New York subway system has experienced a recent spate of problems and extensive delays, leading some to start referring to the situation as a "crisis."  Beginning in November, the New York Times ran a series of big articles about the decline in maintenance and increase in problems and delays, for example here and here.  The series culminated with an article on December 28 by Brian Rosenthal, which finally got to the heart of the problem:  New York's costs of construction and capital maintenance for the subway are way out of line when compared to national and international norms.  In many instances the level of excess costs in New York runs five to ten times international norms.  In a post here at Manhattan Contrarian on December 30 I commented that various projects in the pipeline "cannot and should not be built" until the costs come under control.

Ah, but that is not the New York way!  On January 16 the New York Times reported that the "solution" that Governor Cuomo has come up with is a big new revenue raiser known as "congestion pricing," or, in other words, we're going to institute a charge to enter the southern half of Manhattan by car.  A few days later, a commission appointed by the Governor issued a report called FixNYC, laying out the proposal in considerable detail.  It looks like the charge will be around $11+ every time you come into the district.  (Wait a minute -- I live here!)  A version of the congestion pricing plan is now expected to be in the Governor's budget, due out soon.  

So how about doing something about the way-out-of-line costs before we just throw multiple new billions at this problem?  You will not be surprised to learn that there is not one single word about cost control in the FixNYC Report.  Hey, the Governor wants the support of the Transport Workers Union in the upcoming election, so what do you expect?  

Clean energy jobs and climate agenda.  That's the euphemistic title of the Governor's upcoming plans for the energy sector, released January 2.  Here are some highlights:

• Expand Regional Greenhouse Gas Initiative and Reduce Emissions Equitably From the Highest-Polluting, High Demand "Peaker" Power Plants
• Issue Solicitations in 2018 and 2019 to Develop at Least 800 MW of Offshore Wind Projects and Foster Offshore Wind Industry and Workforce in New York State
• $200 Million Investment to Meet Unprecedented Energy Storage Target of 1,500 Megawatts by 2025 In Order to Increase Transmission of Clean and Renewable Energy
• Create the Zero Cost Solar for All Program for 10,000 Low-Income New Yorkers

Where even to start?  Of course, once again, there is nothing in this proposal about costs.  Don't you know that this will create jobs?  The more money we waste the better!

OK, I'll start with the third bullet -- $200 million to provide 1500 MW of storage.  Do they know that storage is measured in MWH rather than MW?  As far as I know, after recent large price declines, you can get battery storage for about $200,000 per MWH.  The $200 million for 1500 MWH, if that's what they mean, would imply they're hoping for further price declines to about $133,000 per MWH, which may be optimistic, but perhaps not crazy.  But the problem is that New York State has a capacity requirement of 40,000 MW, which means it could use up to close to 1 million MWH of electricity per day (that's 40,000 x 24).  That 1500 MW(H) of batteries they are buying will be good for about 2 minutes of peak usage.  Wind power can go dead for days on end.  Do you want, say, three days worth of battery storage?  That will run you more like $300 billion -- about double a full year's worth of the entire state budget.  Do you think they would provide even the smallest amount of basic information about this extraordinary cost?  Sorry, that's not the New York way.

And then there's the hare-brained idea that we can get rid of our fossil fuel electricity and replace it with lots of "offshore" wind.  800 MW worth!  Oh, that's around 2% of our peak capacity requirement -- and wind doesn't work most of the time, only when it feels like it.  Robert Bryce of the Manhattan Institute had a piece in the New York Post on Friday, dissecting the craziness of this proposal, headline "Cuomo's latest green-power fiasco."  Key quote:

According to the latest data from the Energy Information Administration, by 2022 producing a megawatt hour of electricity from offshore wind will cost a whopping $145.90.  Offshore wind promoters claim costs are declining. Maybe so. But according to the New York Independent System Operator, the average cost of wholesale electricity in the state last year was $36.56.

So the offshore wind starts out at a cost about four times that of our existing sources of power, and that's before you get to the extra costs for back-up, and storage (see above) and transmission that go along with the offshore turbines.  By the time you're done making a full system that actually works 24/7, the total costs could easily be ten times what we currently pay.

But, that's how we do it here in New York.  Cuomo will likely cruise to victory.

Comments On The House Intelligence Committee Memo

Finally, after a long wait, we have the House Intelligence Committee memo detailing abuse by the FBI and Justice Department of the FISA process to spy on the campaign for President of the candidate of the opposing political party.  You will find the full text of the memo at this link.

Before getting to the memo itself, let's go back to March 4, 2017.  That's the day when new President Donald Trump issued a few of his most famous tweets, notably this one at 4:02 AM:

How low has President Obama gone to tapp my phones during the very sacred election process. This is Nixon/Watergate. Bad (or sick) guy!

The New York Times immediately reacted with outrage, in an article posted later that same morning with the headline "Trump, Offering No Evidence, Says Obama Tapped His Phones":

President Trump on Saturday accused former President Barack Obama of tapping his phones at Trump Tower the month before the election, leveling the explosive allegation without offering any evidence.

Oops -- looks like Trump has now been proved right, and the New York Times wrong.  The March 4 Times article also includes this Clintonesque non-denial denial from an Obama spokesman:

A spokesman for Mr. Obama said any suggestion that the former president had ordered such surveillance was “simply false.”

Were you fooled by that one?  Of course Obama didn't "order" the surveillance.  That's not even a relevant question.  Did Henry II "order" the murder of Thomas Becket?  ("Will no one rid me of this meddlesome priest?")  Try asking something relevant:  Did the people who signed off on the initial FISA application (FBI Director Comey and Deputy AG Sally Yates, according to the memo) at least run this by their boss (AG Loretta Lynch)?  Of course they did.  You would never, never get to that level of authority in life if you weren't smart enough to run something of this obvious significance and risk by your boss.  And did one or more of those three similarly run this by the big boss, Obama?  Same comment.  The chance of that having happened is one hundred thousand percent.  It will be strenuously denied until the day when one or all of Comey, Yates and Lynch are under criminal investigation.

One more thing before we get to the memo itself.  Just prior to release of the memo the FBI issued a statement opposing the release, the key line of which is "we have grave concerns about material omissions of fact that fundamentally impact the memo's accuracy."  Note that there is no mention that they dispute any of the facts actually contained in the memo; instead the concern is supposedly over "omissions" of additional facts, which may or may not provide context.  More on that later.  Meanwhile, news reports about FBI maneuvering prior to the release further indicated that the Bureau was mainly trying to get the White House to redact the names of various officials that appear in the document.  Whoa!  A couple of points:

• In any private business a subordinate who set about to undermine the boss on a matter that is the boss's decision to make, and of this importance, and in this kind of hugely public way, would last about 1.47 nanoseconds before getting fired.  Whatever you might think of the importance of FBI "independence" -- and even if you think that the FBI has some kind of right to seize the prosecutorial discretion function from the President in defiance of the Constitution -- it can't be OK for these subordinate officials to stab the boss in the back like this and think there should be no consequences.  It's not the FBI's decision whether a document should or should not be declassified, and indeed they have no explicit role in declassification at all.  It is the President's decision and his alone.  If they have a view of the matter, there is only one right thing to do, which is to make your case to the boss.  And then abide by his decision.  And if you don't like his decision, quit.  You have no right to your job, and you don't have to work for the President if you don't like him.  But as long as you work at the FBI, you work for the President, whether you like it or not.
• And then look at the list of names that they wanted redacted.  No little guys here.  It's all the very top brass of Justice and the FBI from the late Obama administration (excepting Lynch, whose name does not appear).  You already know all the names except for maybe one:  Comey and McCabe from the FBI (I guess we now know why McCabe suddenly disappeared); then-DAG Yates, then-Acting DAG Dana Boente, and last-but-not-least Rod Rosenstein.  Who do these people think they are to try to conceal their involvement in this from the public?

Now to the memo itself.  We've basically known since CNN reported it last April that the Clinton/DNC-financed Steele Dossier was used as at least part of the application for a FISA warrant to spy on the Trump campaign.  That is now confirmed.  But now there's considerably more detail.  To me, the most important new points are (1) the very senior DOJ and FBI officials knew that the Steele Dossier was paid for by the DNC and Clinton, but did not disclose that in the FISA application that they signed, (2) Steele's main contact at DOJ was Associate DAG Bruce Ohr, whose wife worked for Fusion GPS, but these facts were also concealed in the FISA applications, and (3) the head of the FBI's counter-intelligence division admitted to the Committee that the verification of the Dossier was in its "infancy" at the time of the initial FISA application.  So the top Obama-appointed brass all knew that they were getting a FISA warrant to spy on the opposition political campaign in a presidential election in its final weeks based on unverified information paid for as opposition research by their side.  Does anybody see any problem with that?

OK, back to you, FBI.  What facts could possibly be out there that would be "material omissions" that would "fundamentally impact the memo's accuracy"?  For example, maybe it's possible that there could be other information that was in the FISA application and was also part of the basis on which the warrant was obtained.  So?  If the Steele Dossier was not necessary to the application, it would not have been included.  Therefore, it must have been viewed as necessary by the people making the application -- Comey and Yates in the first instance.

And how about the endless cries for prosecution of President Trump for "obstruction" over the firing of Comey?  Now we know that Comey was the guy who signed the improper and deceptive initial FISA application.  If that isn't grounds to fire him, I can't think of what would be.

And finally, how about Rod Rosenstein?  The depth of his implication in the improper conduct at issue is not clear from this memo.  The inference would be that he signed off not on the initial application, but on a subsequent renewal that must have occurred after the campaign was over, and probably after Trump was President.  But, was Rosenstein in on the initial application in any way?  And even if he wasn't, did he make the corrections to the renewal application he signed to inform the FISA court of the provenance of the Steele Dossier and of its lack of verification by the FBI?  Obviously, these questions are highly relevant, with Rosenstein now purporting to be "overseeing" an investigation by Mueller of the President himself, involving this very same subject matter.

According to Axios earlier today, President Trump was asked in light of the memo "if he still had confidence in Rosenstein."  Trump responded, "You figure that one out."  I think I have figured it out.  What do you think?  Would you have confidence in him?