Friday, April 20, 2007

Open Letter: 2007 Vermont Legislative Session

Dear Representatives and Senators,

I am writing today to express my hope that you will strongly support efforts in the Vermont legislature to address the important and potentially catastrophic issues of Global Warming and Peak Oil. Though the two issues are different in focus, they both have to do with the over-use of fossil fuels by industrial nations such as the United States. While actions by Vermont alone will do very little in and of themselves to reduce global fossil fuel consumption and carbon emissions, strong leadership by our wonderful state could allow other states and countries to follow, and is the moral thing to do regardless of actions elsewhere.

Below is a non-comprehensive list of policies I hope you pursue in the legislature this year.

Electricity Generation and Transmission

  • Encourage building of large-scale wind generation projects by reducing regulation
  • Support the license renewal of Vermont Yankee as a state policy
  • Support programs encouraging the development of a “smart” electrical grid which would allow for time-of-day pricing, and appliances that could communicate with this grid

Household Conservation

  • Enact requirements that new homes meet the highest standard for energy efficiency
  • Support programs for weatherization of older homes through loans and grants
  • Support programs for re-purchasing old and inefficient refrigerators

Transportation Conservation

  • Enact a graduated annual vehicle registration fee based on fuel consumption or engine displacement on both light and medium duty vehicles (up to 11,000 lbs)
  • Relax pollution standards on automotive diesel engines under 2.0L in displacement from California to Federal standards
  • Provide further support for the freight rail network through funding of capital projects which resolve speed, clearance, and weight issues, and which help develop more intermodal terminals

Land Use Planning

  • Enact policies that further discourage the conversion of cropland to residential developments

Please contact me if you have any questions about the important issues of Global Warming or Peak Oil. I look forward to seeing concrete progress from Montpelier this year.

Thank you for your time.

Open Letter: Housing Bubble Bailout

Dear Congressmen and Senators,

I am writing today to express my concern over various proposals being floated that would bail out homeowners who have taken out risky or inappropriate loans in the past few years. I am strongly opposed to any kind of bailout. Bailing out people for reasons other than 'acts of God' is bad policy because doing so creates a 'moral hazard'. A moral hazard teaches people that poor decisions do not have negative consequences, which of course is completely wrong.

The modern practice of American homeownership has existed for several decades. Part of that practice has been the broadly-held knowledge that a household should not buy a home that costs more than 3.5 times the household's annual income. Unfortunately, due to the Federal Reserve holding interest rates too low for too long following the 2001 recession, and due to an under-regulated mortgage industry 'innovating' by creating a wide array of very risky new 'products', a great number of households have purchased homes that they would not be able to afford under normal and more rational circumstances. The two unique factors temporarily lowered the down-payment and initial cash flow required to purchase a home, and allowed some households to purchase homes far more expensive than the 3.5 multiplier rule would otherwise dictate. These lower requirements enabled housing prices to be bid up artificially, and created the current housing bubble. As the two special circumstances disappear, housing prices will come down.

I encourage you to use your office to investigate fraudulent and deceptive business practices in the mortgage industry, as well as the wider real estate industry. There are plenty of reports of appraisers inflating home values, real estate agents pressuring appraisers to do so, agents and mortgage brokers encouraging borrowers to lie on their loan applications, and so on. Proper investigation and oversight of the real estate and mortgage industries is needed, especially since the current administration has not done so. I encourage you to create ways for homeowners who have been victims of fraud and deception to seek appropriate compensation.

However, bailing out homeowners would set a bad precedent, as well as keeping housing prices artificially high. The majority of homeowners have made good financial decisions, and bailing out the minority who made bad decisions would be unfair and inappropriate. That means many homeowners who have made bad decisions will suffer, along with holders of risky mortgage bonds. Financial loss must be the price of making bad financial decisions, otherwise there would be no reason to make good financial decisions. Inaction during widespread financial losses is certainly not a vote-winner, but you were elected to provide quality leadership for this country. The appropriate leadership now would be to make sure the unique factors that enabled the housing bubble do not re-occur, and to investigate fraudulent and deceptive practices in the real estate industry. I am confident you will make the correct choice.

Thank you for your time.

Thursday, April 19, 2007

Excerpt from "The End of Oil"

I'm slowly working through Paul Roberts' The End of Oil: On the Edge of a Perilous New World (Amazon, Powell's) and I came across a passage so good I had to share it.

In this context, it is hardly surprising that the Bush administration's energy policy has been so lopsidedly slanted towards oil. Whereas many energy experts, particularly those in the left-of-center advocacy community, saw 9/11 as a prime opportunity to renew the effort to move away from oil altogether, the Bush administration drew the opposite lesson. For Bush, the lesson to be learned about energy insecurity was not that the West should use less energy as it did in the early 1980s, but that the West should be willing to make energy more secure and less unpredictable, as American had tried to do during the first Gulf War. During that war, rather than simply retreating into a defensive energy policy, the West had taken a bolder, more muscular approach and had simply removed the threat to price stability.
Insanity, pure and simple. I opposed the first Gulf War because I thought that America had no business fighting a war over oil, and argued afterwards for an increased tax on gas so that we wouldn't have get involved in a war for oil again. Was I ever proven right, and how.

Saturday, April 14, 2007


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