Not So Free Speech

October 25, 2020

By Steve Stofka

In doing some research on lobbying for an Environmental Economics class, I learned that the environment is the third area of concern after money and health (CFRP: Top Issues, n.d.). Lobbying is a tug of war, a battle of interests. It is a messy but essential component of a democratic society with a guarantee of free speech. Affected businesses complain that they are overburdened. Environmental groups complain that progress is too slow. Elected representatives depend on the controversy for campaign contributions.

Would we achieve more effective solutions if we abandoned lobbying, free speech, democracy and appointed a king? Yes, but for how long? We hope to make decisions today that have a positive impact on our children and grandchildren. That task is made more difficult when we are constrained by legislation and judicial precedent crafted by past generations with different concerns.

There is a conflict of interests not only between the regulators and regulated, but within each of those parties. Agency employees may be loyal to their agency more than the law, to their own careers, job satisfaction or ideology. Political appointees who head an agency may have an opposite philosophy to the career employees who work at the agency. Mr. Trump has a habit of putting a fox in charge of the henhouse.

The regulated include businesses who put the immediate interests of their executives above the long-term interests of either their customers or their stockholders if company practices incur long-term environmental liabilities.

Legislators reach consensus by using vague language then delegate its interpretation to an executive agency and the courts. The U.S. has adopted a judicial model of regulation which encourages both sides to obscure rather than clarify the underlying issues. This process tends to exaggerate the differences over scientific and economic issues rather than generate a consensus position that the agency can accept as reliable. The deliberate vagueness of the law’s text refutes the claim of some Supreme Court justices that they can reach an objective interpretation of a law by using a “textualist” approach.

The drafting of agency regulations invites lobbying. Rules may be published in obscure bulletins where they get the attention not of the general public but lobbyists, private industry affected by the regulations and environmental groups targeted toward those issues.

In every year, the pharmaceutical industry outspends all other industry groups by a large margin. Included in the price for prescription drugs that you and I pay is a lobbying fee so that the pharmaceutical industry can protect the profits they make from their customers.

In 2018, the oil and gas industry alone spent $125M tax deductible dollars lobbying Congress on various issues (CFRP:Industries, n.d) That same year, two of the top environmental groups, the National Resource Defense Council and the Environmental Defense Fund, collected almost $400M (Charity Navigator, n.d.), most of which was not deductible by ordinary folks after changes in the 2017 tax law. Some economists have suggested that lobbying expenses be excluded as business deductions. The government has an obligation to respect free speech; it does not have to subsidize that speech.

Lobbying for the development of alternative energy sources has not only increased their share of energy but focused attention and investment on cleaner sources of carbon-based fuels for power plants. Long resistant to wind and solar power, Texans have adopted wind turbines with enthusiasm. Drill, baby, drill, and set the foundations for those turbines. Attitudes can change.

Many clamor for a property right when there is money to be made but want no responsibility when a mess must be cleaned up. Under an 1872 mining law, the government still leases mining claims for 19th century prices. After the land had been dug up and desecrated by leaching fields, owners of smaller mines claimed bankruptcy and abandoned the properties. Mining locations are included in Superfund sites, toxic areas that are expensive to restore. To this day, large mining companies like BHP and Anglo-American lobby Congress for legislation that will reduce their long-term liability for site restoration.

In this country, private companies and individuals direct much of the production and resource use. Lobbying is ineffective but essential in a democracy. It works to the good, for the bad, and yes, it is ugly.



Photo by Sharon McCutcheon on Unsplash

Center for Responsive Politics (CFRP). (n.d.). Top Issues. Retrieved October 23, 2020, from The top three environmental issues had a combined number of 3419 Lobbyists: Energy & Superfund – 1571, Natural Resources – 1068, Clean Air and Water – 780.

Center for Responsive Politics (CFRP). (n.d.). Industries. Retrieved October 23, 2020, from

Charity Navigator. (n.d.). Your Guide to Intelligent Giving: National Resources Defense Council. Retrieved October 23, 2020, from  $182M in revenue in 2018.

Charity Navigator. (n.d.). Your Guide to Intelligent Giving: Environmental Defense Fund. Retrieved October 23, 2020, from $207M in revenue in 2018.

Note: some passages excerpted from comments I posted on a private discussion board

America Thirsts

October 18, 2020

By Steve Stofka

“America First” was a rallying cry of the 2016 Trump campaign but the isolationist sentiment and the name go deep into our country’s past. It is more fundamentalist than conservative, gathering its supporters from the far right. An America First Committee formed in 1940 as an opposition movement to America’s involvement in World War 2. After Pearl Harbor, it was disbanded, but an America First Party fielded a fundamentalist candidate in the 1944 election.

Was Mr. Trump the first to adopt the slogan for an election campaign? No. Both Woodrow Wilson and Warren G. Harding used the phrase a century ago. The journalist and 2000 Presidential candidate Pat Buchanan ran under the banner of the Reform Party. Known for his isolationist stance even when he worked in the Nixon administration, he famously – or infamously – cost Al Gore the election in the 2000 election. Because of his placement on the ballot next to Al Gore’s name, many voters who had voted Democratic incorrectly marked Buchanan on their ticket.

Russia and China would prefer that America stay out of world affairs. Our intelligence agencies have confirmed that Russia is actively working to re-elect Trump. When pulled the U.S. out of the Iran treaty, that left Vladimir Putin holding the major foreign influence in that country.

While China has had its difficulties with Mr. Trump’s erratic trade policies, they prefer someone who pays more attention to his poll numbers and the daily fluctuations in the stock market. Both countries needed an American president with little experience of international politics; someone who does not read his intelligence briefing book; someone who uses a large sharpie to sign his name because he doesn’t write much but his name. While Mr. Trump stumps around on the stage of American politics, Russia and China gain more influence daily. He has become America’s vulnerable spot in global affairs.

Mr. Trump’s business philosophy is not isolationist; he owes hundreds of millions to Deutsche Bank. He owns a golf resort in Scotland and has tried to build a hotel in Russia. This week he joked – I think it was a joke – that he might have to leave the country if he loses the election. He might do so to avoid the many legal proceedings against him for election fraud, financial fraud, and securities fraud. Perhaps he will build a golf course or a hotel in Russia, where Mr. Putin will protect him from extradition.

Americans thirst as they line up at early voting polling places. They thirst for someone less headstrong, someone more mannered and less combative, someone who reads, someone who prepares, someone who takes the job of President seriously. Americans thirst.



Photo by Aaron Burden on Unsplash

Dirty Laundry

October 11, 2020

By Steve Stofka

On Friday, the New York Times released more of Donald Trump‘s tax records (Craig, Mcintire & Buettner, 2020). They reveal a money laundering scheme that Mr. Trump used to fund his 2016 campaign. In the closing months of the campaign, few Republican donors wanted to bankroll his bid for the Presidency, and he was short of funds.

The train to Vegas. In the aftermath of the 2008 financial crisis, Democratic Senate Leader Harry Reid tried to put together a project for a commuter train from California to Las Vegas. When the entire project was done, residents of the L.A. area would be able to take a train to Las Vegas instead of making the arduous drive via the I-10 and I-15 freeways. Anyone who has driven this route on a Friday can swear that it evokes Chris Rea’s song The Road to Hell.

By the time the project funding was put together five years later, Republicans controlled the House and several of their leaders rejected the idea. One was Jeff Sessions, the ranking member of the Senate Budget Committee and later Mr. Trump’s Attorney General; the other was Paul Ryan, the head of the House Budget Committee. They insisted that the project be built using American products; it couldn’t be done. Germany, Japan and China have become the global leaders in train manufacturing.  

Vegas real estate tycoons, including Mr. Trump and his Vegas partner Phil Ruffin, would have benefitted greatly from the train traffic. The likelihood of such a project would be revitalized if Mr. Trump were President. Out came the checkbooks and the big Republican “whales” from Vegas, including Sheldon Adelson and Steve Wynn, contributed to the Trump campaign. His partner, Phil Ruffin, routed money through a shell company to Mr. Trump who used it to fund his campaign.

Although a court would have to decide, some of the campaign contributions were probably illegal. If Mr. Trump is elected again this year, he will shield himself from any prosecution and he would probably help protect others from adverse legal proceedings.

On Saturday, the newspaper was releasing still more evidence that Mr. Trump has used the Presidency to rescue his failing company from a heavy debt load. His hotels were already struggling before the Covid virus swept the world this year. Each new revelation indicates that Mr. Trump has built a house of cards like the Ponzi scheme built by Bernie Madoff, the former head of NASDAQ.

If Mr. Trump loses the election, he will face a legal and financial reckoning that he has delayed for the four years of his Presidency. His erratic and belligerent behavior may be partly in desperation. His former attorney, Michael Cohen, commented that if Mr. Trump were still his client, he would recommend that Mr. Trump resign the Presidency before his term is out, then arrange for Mr. Pence, his Vice-President, to issue him a pardon for any pending Federal crimes.

Mr. Trump is the first presidential candidate to “self-fund” his campaign and be successful. Surely, lawmakers on both sides of the aisle have learned a lesson. Are we a better country if a person can buy the Presidency? I think not.



Photo by Sahand Hoseini on Unsplash

Craig, S., Mcintire, M., & Buettner, R. (2020, October 09). Trump’s Taxes Show He Engineered a Sudden Windfall in 2016. Retrieved October 11, 2020, from

An Explosion of Events

October 4, 2020

by Steve Stofka

This has been a week of surprises. Sunday night, the NY Times released the details of President Trump’s tax documents which he has sought to keep hidden under the pretense that an IRS audit prevents him from doing so. We learned that Mr. Trump’s wealth is a ruse, like that of Bernie Madoff. We discovered the reason for the IRS audit: a $72 million refund that Mr. Trump was paid in 2009 under a dubious interpretation of rules in the Recovery Act following the 2008 financial crisis.

The report contains many instances of rule bending if not outright fraud. It serves as an example of why Republicans have repeatedly cut funding for the IRS. With fewer people, the IRS is unable to monitor the shenanigans of Mr. Trump and his accountants.

The last two decades have seen the largest accounting scandals, and most of them happened while Republicans controlled the majority if not all of the federal government. Enron, Tyco and Health South in the early 2000s were just the prelude to the 2008 financial crisis. The Enron scandal exposed the misdeeds of one of the largest accounting firms in the world, Arthur Anderson, who was forced to surrender their license in 2002. During these past twenty years, Republicans have consistently fought to undermine the mission of all government monitoring, to bend the rules in favor of large industry. Mr. Trump called us working stiffs suckers for paying taxes.

On Tuesday’s debate between both Presidential candidates, Mr. Trump’s interruptions broke debate protocol and the rules he had agreed to. That’s not a surprise. He is a notorious cheater at golf and has a motor mouth. He is an entertainer, not a statesman or a gentleman. The surprise was that Mr. Biden met the verbal assault without fluster. Afflicted with stuttering since he was a child, Mr. Biden has learned to speak with deliberation, a common strategy taught to stutterers. Kids around the country, watch Mr. Biden. This is how you stand up to bullies.

The announcement late Thursday night that Mr. Trump had tested positive for Covid surprised those of us who wondered how the disease had not caught up to the President, who has played the tough guy and pooh-poohed caution. Mr. Trump has several comorbidities, his physician said, without being specific. A lack of prudence might be one of them. Several hours later, Mr. Trump was taken to Walter Reed hospital out of “an abundance of caution.” With a month left before the election, Mr. Trump had a busy election schedule, which is up in the air for the next two weeks, at least. More on that at the end of this post.

The surprise in Friday’s monthly hiring report was the weak job recovery. The employment population ratio is 56.6%, significantly down from 61% in February, before Covid. In February, 1.5 people working supported each person not working, including children. Now it is 1.3 people supporting each person not working.

The growing debt of the Federal government has relieved some of the burden on workers, because, in times of crisis, the rest of the world wants to buy U.S. Treasuries. State and local governments are squeezed. Governments laid off 216,000 workers in September. Who will they turn to except the Federal government? Senate Republican Leader Mitch McConnell balks at aid to the states, particularly the “blue” states.

In the past weeks, airlines and other industries have been announcing permanent layoffs. Older people may be taking early retirement. The four industries that have not suffered during this crisis are utilities, consumer staples, technology and health care. The effect of tech on the stock market has been dramatic. The SP500, weighted by market cap, is up 7% since January. An evenly weighted SP500 index is down 17%. That reflects a general economic misery.  

The week was still not done. On Saturday, we learned that the President had known earlier that he had Covid. He met with prominent Republicans and did not tell them he had the disease. Former NJ governor and campaign advisor Chris Christie has now tested positive for the disease. Mr. Christie is younger but is obese, the chief co-morbidity leading to death. Kellyanne Conway, Mr. Trump’s White House advisor, has also tested positive. The White House is doing a trace of all people who came into contact with Mr. Trump. He hates his enemies, but he doesn’t spare his friends either.


Photo by Jens Johnsson on Unsplash