On recycling

Mar 14 2010

While visiting one of my regular reads, I came across a summary of what’s wrong with our continued national fetish for recycling.

Having extensive experience in the waste industry, I’ve never been a fan of consumer (curbside) recycling. It’s a completely different business than the trash business.

The trash business is simple – fee for service. You pay someone to come and pick up your trash. They take it away and either burn it or bury it. Fee for service.

Recycling, as it’s done today? Not so simple – it’s a commodity play, basically a bet that they can pick up your allegedly recyclable cast-offs, and a market will exist in which the person who picked them up can sell them (after cleanup/aggregation/processing) for more than it cost to perform the collection, separation, and processing.

A very different business from trash collection. And as I used to say back when I was in the waste business, if someone wanted to be in that commodity business, more power to them, but I couldn’t understand the idiocy by which municipalities asserted common ground between that business and recycling. I was further dismayed to find that trash companies took the bait and accepted this absurd bastardization of their business. There’s at least one former company in the industry (Browning Ferris Industries, now a fully-digested part of Allied Waste, which is itself now a fully digested part of Republic Waste), a true blue-chipper, and a great company in its time, which was utterly undone by the idiocy of pretending that recycling was the business it was in.

Why the idiocy? Because of the actions of a misdirected board, the chairman of which, former EPA administrator William Ruckelshaus, decided BFI should pretend to save the world, while destroying the business at which it actually excelled. He did some good things while in that slot – breaking the back of organized crime in the New York market is one of those. I can think of no others, and his actions ultimately killed the company’s ability to operate as a viable standalone entity. His recycling mantra was the murder weapon.

I was reminded of all of this from the Ace of Spades post previously mentioned. From it, I traversed a link to the interesting Sippican Cottage website. (be sure to read his “About Me” snippet). And from that link, a reminder of the several-years-old Penn & Teller “Bullshit” segment on the idiocy of recycling, notwithstanding the fervor of the idiots who believe in its value, below.



Lots of things make sense to recycle. Oddly enough though, virtually every one of those things happens to be an individual aluminum can. Almost everything else is a waste of time and effort, on both economic and environmental grounds. Curbside recycling, outside of aluminum cans, is counterproductive make-work, worth nothing other than the psychic self-stimulation it provides to misinformed consumers and maladjusted recycling coordinators. We’re not now, nor have we ever been, running out of landfill space, and landfills are now and remain the most effective and safe way to deal with the nation’s garbage.

Other things will come along which can rationally be used to reduce volume going into landfills, but when they do, it’ll be because there’s an economically justifiable method for recapturing value from the items that would otherwise be buried in the ground. Mechanically separating waste streams, while hoping that the market for the resulting commodities doesn’t crash while you’re baling them up and praying for an opportunity to sell them, has a flaw in it:

As with any human activity, if you can’t find an economic justification to do it, with only a very few exceptions, you shouldn’t be doing it.



Nice to see, again, that the system works

Jul 29 2008

Or, to be more correct, at least part of the system. Some of the time.

First, there was the Emperor AG and Premier Governor of New York, Eliot Spitzer, getting his, and a reasonable person could hope he’s got still more coming to him, given the pompous hypocrisy of the crusades on which he embarked before his fall.

Today’s news, however, on Alaska’s Ted Stevens, is equally satisfying to read. Charged with public corruption, and seemingly certain to be found guilty given the brazen and entitled nature with which he sought the spoils of his office, the only shame here might be that, at 86 years old, he’s unlikely to be incarcerated for the term he deserves, if at all. He’s been a national joke, most recently at least, for the Bridge to Nowhere pork fiasco, and his indictment cements his status as an embarrassment to Alaskans, Republicans, the Senate, and Americans.

Most people think that there’s a general presumption of innocence in America, but that’s only true within the court system, and in the issues that surround the court. I’m happy to report that my odds of serving on any jury of Mr. Stevens’ peers are zero, and I’m neither the judge nor the prosecutor in his case, so I owe him no such presumption.

He’s dirty, and the only thing better than having him indicted and removed from office would be to step back forty years, and take he and all other grandees of his sort out of the political process entirely. Glad-handing thieves, selling the citizens’ best interests for their personal aggrandizement, are among the lowest forms of life in America.



Alternative investments, & the joy of being situationally correct

Aug 27 2007

Back on May 21, 2007, I saw an article that I almost, almost thought worthy enough of derision that it justified a post. For reasons that now escape me, I decided otherwise at the time. However, as sometimes occurs, it’s again become current, so I’ll revisit.

This, from the Austin American Statesman:

A panic attack move into private equity?
By Robert Elder | Monday, May 21, 2007, 02:07 PM

Writing in the May 18 issue of Grant’s Interest Rate Observer, Dallas investor and state of Texas pension official Frederick “Shad” Rowe tees off on the leaders of the Teacher Retirement System of Texas pension fund.

Rowe examines the Texas teacher fund’s recently announced plans to move massive amounts of its holdings into private equity and out of publicly traded stocks. The strategy strikes him as the investment equivalent of a panic attack.

(Rowe notes that the Texas Pension Review board, which he chairs, has no authority over TRS investment strategy and that he’s writing as a private citizen.)

Rowe writes that the teacher fund is trying to juice returns by moving into so-called alternative investments (hedge funds, buyout firms, hard assets such as timber, toll roads) a little late in the game. Maybe even just in time for the private equity bubble to pop and the very stocks the teacher fund is selling to rise in value.

Please ignore for a moment the fact that private equity and hedge funds are not the same thing – Rowe’s core point, I think, was that high return comes with high risk. Big shock, that. But it appeared, in May, not to have occurred to the managers of TRS. I don’t know whether TRS had gotten around to the absurd reallocation plans they announced at the time, increasing allotment to alternative investments from 3% to 35%. But Mr Rowe had the opportunity to weigh in again on the subject in a story from today’s WSJ:

Pension Managers Rethink
Their Love of Hedge Funds

By CRAIG KARMIN
August 27, 2007; Page C1

Many public pension funds in recent years have become eager to invest in hedge funds. Now, some are getting cold feet.

Pension-fund managers from Louisiana to Ohio are saying they may slow their push into these funds after the recent losses suffered at big hedge funds — including ones run by Goldman Sachs Group Inc. and AQR Capital Management — have reinforced some of the risks.

Indeed, one critic suggests that pensions would be foolish to keep pursuing hedge funds. “It’s like planning a vacation to an exotic land, and finding out that there’s an outbreak of bubonic plague,” says Frederick Rowe, chairman of the Texas Pension Review Board, which provides oversight of Texas public pension funds.

I’m not certain which is more admirable – consistency, correctness, or the fact he avoided doing an overt Icky Shuffle and rubbing their nose in it. But in any event, Mr Rowe was stating the obvious back in May, all the while not claiming there was anything inherently wrong with hedge funds or their doppelgangers in the alternative investment universe, just that the TRS was clearly not thinking things through in their sudden mania for the flavor of the month.

Good for him, and, I guess, good for the teachers covered by the TRS. I have no dog in the race, but I hope the managers of the TRS paid attention back in May, for the sake of their beneficiaries.



Non-Campaigning

May 12 2007

Friday evening, Reuters had a short story entitled “New York mayor goes to Texas, outlines energy plan“. In it, New York Mayor Michael Bloomberg had yet another chance to claim he’s not running in the 2008 presidential campaign.

And of course he isn’t. However, barring some true oddity, I think he will be, before the end of June.

Why? Well, that’s the easy part – nobody in Texas, at least nobody I know in Texas, was dying to hear the Mayor’s view of the nation’s energy plan. Because he knows nothing about it? Hardly – I’m sure he’s given it a good bit of thought, and he appears to have some interesting ideas, among the less practical ones. Because he has precisely zero control over it, including his lack of a bully pulpit from which to influence policy credibly on the matter, he has no national platform, as NYC Mayor, from which to insist his views be considered.

His Houston visit was politicking, pure and simple. Of course, he’s a politician, and that’s what politicians do. Except for Michael Bloomberg, that is. His Honor spent the entirety of his first term and the bulk, so far, of his second staying singularly focused on the needs of the voters who put him into office. Within the remit of his New York duties, he’s even proposed energy, conservation, and environmental policies that are quite far-reaching. From an April 26 story in The Economist:

…the mayor, Michael Bloomberg, has turned deficits into surpluses. He has also managed to make New Yorkers live healthier lives, banning smoking and trans-fats. Now, he has set his sights on the city’s long-term sustainability.

The mayor is proposing 127 new initiatives dealing with land, air, water, energy and transport. His proposals include introducing molluscs into the city’s waterways as natural bio-filters, adding bicycle lanes and hastening the cleaning and rezoning of 7,600 acres (3,100 hectares) of contaminated land.

Some of his provisions are even more ambitious. He plans to cut the city’s greenhouse gas emissions by 30% in part by improving the efficiency of power plants. To pay for this, a $2.50 monthly surcharge will go on electricity bills. He argues that by spending $30 a year until 2015, every household will save $240 a year after that. This bid for energy conservation would be the broadest attack on climate change ever undertaken by an American city.

(ellipses mine)

Serious stuff, in other words. However, it’s stuff that, New York City being what it is, can be implemented in New York City without needing validation or support from elsewhere in the US. Therefore, his newfound focus on opinionating, in Houston as well as what I presume will be future national venues, would seem to have nothing to do with his ambitious plans for his own city.

And there’s nothing wrong with that, I’d add. Contradictions between what he says and what he appears to be doing aren’t my point here, not least because I see no contradictions. Let’s look at what he’s said on the matter of his supposed candidacy, from the Reuters article:

“I’ve said repeatedly I am not a candidate for president of the United States. I plan to serve out my 965 days left to go” as mayor, he said at a press conference after his speech

“I am not” clearly isn’t the same as “I will not be”, and of course he plans to serve out his remaining 965 days (from May 11, 2007) as mayor, because he hasn’t formally started a run for, and has no guarantee of achieving, the nomination of his party for president in 2008.

So, since this isn’t an epistle about his (imaginary) squishiness regarding his plans for higher political office, what is it? Two things, actually.

First, an armchair critique of his energy plan, which plan is also summarized in the Reuters piece:

His proposals, offered up at the center of the nation’s energy industry, included increased offshore drilling for oil and gas and the construction of more nuclear plants.

He also pushed for development of more wind power and for government to encourage investment in clean energy sources.

Bloomberg said current federal ethanol policies made little sense because they promote production of corn-based ethanol over the more efficient sugar-based fuel.

He also threw out increases in government-mandate fuel efficiency standards, and the alternative of fluorescent bulbs over incandescent, stating that:

“If we do, Americans would save 120 million tons of carbon dioxide emissions and $14 billion every year,” he said.

Which could be true, I guess, even though I don’t know whether he attributes those savings to the bulb change, the CAFE change, or both. No quibble here with the ideas, at least.

Of his other plans, increased offshore drilling for oil and gas and the construction of more nuclear power plants seem to make good sense, to the extent they’re coupled with reasonable attempts to become more energy efficient in addition to becoming more energy self-sufficient.

His thoughts on ethanol are great, as far as they go – focusing on sugar-based ethanol production as opposed to corn-based is an excellent choice, for several reasons. Sugar can be turned into ethanol far more efficiently, and shifting emphasis to sugar would go a long way toward opening up some of the grotesquely protected agricultural markets in the US. As covered in the May 10 Economist story “Insatiable”, the currently planned renewal of the farm bill, a once-every-five-years affirmation of welfare for farmers, the supports envisioned for “corn, wheat, rice and other favored crops” are slated to drop from $7.5 billion all the way down to $7 billion. Big deal. This is in addition to “just under $44 billion a year on other kinds of subsidies to poor farmers, including food stamps, school lunches and so forth”, for which no meaningful changes are planned.

That’s only part of the trouble, though – in addition to price supports, the government, at the behest of US farm conglomerates, maintains punishing tariffs on sugar imports, which limits the impact of one of Brazil’s best exports on the US market. From the April 12 Economist Survey of Brazil:

The showcase is ethanol. Brazil’s variety, based on sugar cane, is cheaper than anyone else’s and has encouraged a lot of innovation beyond the basic commodity. “With biofuels we’re suddenly at the forefront,” says Fernando Reinach of Votorantim Novos Negócios, which runs a venture-capital fund that invests in ethanol technology.

Contrast this with US, primarily corn-based, ethanol products, also via The Economist, on April 4:

Farmers love it because it provides a new source of subsidy. Hawks love it because it offers the possibility that America may wean itself off Middle Eastern oil. The automotive industry loves it, because it reckons that switching to a green fuel will take the global-warming heat off cars. The oil industry loves it because the use of ethanol as a fuel additive means it is business as usual, at least for the time being. Politicians love it because by subsidising it they can please all those constituencies. Taxpayers seem not to have noticed that they are footing the bill.

But corn-based ethanol, the sort produced in America, is neither cheap nor green. It requires almost as much energy to produce (more, say some studies) as it releases when it is burned. And the subsidies on it cost taxpayers, according to the International Institute for Sustainable Development, somewhere between $5.5 billion and $7.3 billion a year.

Ethanol made from sugar cane, by contrast, is good. It produces far more energy than is needed to grow it, and Brazil—the main producer of sugar ethanol—has plenty of land available on which to grow sugar without necessarily reducing food production or encroaching on rainforests. Other developing countries with tropical climates, such as India, the Philippines and even Cuba, could prosper by producing sugar ethanol and selling it to rich Americans to fuel their cars.

Long story made only slightly longer, focusing a bit on sugar-based ethanol seems like a half-measure. Focusing a lot on it, by increasing its use in US ethanol production, reducing subsidies for corn-based ethanol, and fully opening the incoming market for sugar-based product would be a full measure that made solid sense. Doing all that, plus focusing on cellulosic ethanol, made from wood, shrubs, and agricultural waste, would be like hitting the trifecta.

His other mildly objectionable idea is that of having the government “encourage investment in clean energy sources”, which has had dubious knock-on effects in both the past and present, using the current corn-based ethanol craze as one of many examples.

Overall, his energy plan probably rates a solid B, if not a B+.

The other purpose for this now-longer-than-planned screed is to wonder whether both Mr. Bloomberg and the voting public wouldn’t be well served by a bit of political Mau Mau.

Picture this: Bloomberg is a Republican in name only, and no, I’m not using that term in a derogatory fashion. Back when he was a Democrat, to the best of my knowledge, he could adequately have been described as a Democrat in name only, too.

He’s a capable politician, and a capable executive in charge of a large and complex polity. (Please ignore, for the purpose of this analysis, his nannyish actions on smoking and trans-fats, well-intentioned as I’m sure they were) These attributes seem far more interesting than some clap-on/clap-off political party affiliation. And as a result, the presumption that he would or should run in the race for the Republican presidential nomination strikes me as anything but a foregone conclusion.

Further picture this: A presidential race between Rudy Giuliani and Michael Bloomberg. They have some of their views in common with one another, not least, this (also from Reuters piece):

…when told Giuliani said in his Houston appearance that managing New York City was the best preparation for being president, a smiling Bloomberg agreed.

“I think he couldn’t be more right. And I could not have said it better myself,” he said.

I’m not actively rooting for such a match-up, mind you, and if such a race were to happen, I have no idea which candidate I’d prefer. But I do think it would be interesting, and could result, all other things being equal, in one of the cleanest presidential campaigns in memory.



Aggressive pursuits, legal and otherwise

Apr 9 2007

If you happened to pick up a copy of today’s issue of USA Today, you could find a story entitled “Katrina claims stagger corps“. You could find the same thing if, as happened to me, you saw it on a newswire, and thus didn’t have to trouble yourself with purchasing the paper, with its sometimes-difficult-to-stomach format and voice. (n.b. – not it’s opinion voice, but the clipped, short attention span voice they seem to choose for their stories, often resulting in news that, while it’s neither more nor less accurate than anywhere else, didn’t get the name “McNews” for nothing)

The story’s key points are a bit breathtaking – New Orleans is seeking $77 billion in restitution and Louisiana’s attorney general wants $200 billion.

New Orleans and Louisiana, swamped when the city’s storm protections failed during Hurricane Katrina, demand the federal government pay a damage bill that is more than double the entire cost of the massive Gulf Coast rebuilding effort.

So many claims have been filed against the U.S. Army Corps of Engineers that the agency needs at least another month even to tally the floor-to-ceiling stacks, spokesman Vic Harris says.

{…}

Those two alone are more than double the $110 billion Congress approved for Florida and the Gulf Coast after Katrina and two other hurricanes struck in 2005.

(ellipsis mine) Ouch.

The story, having specifically listed the amounts above sought by New Orleans and the state itself, goes on to elaborate:

New Orleans and Louisiana seek broad requests for costs after Katrina but don’t list specific damages.

The great thing about suing for damages, from a defendant’s point of view, is that the damages do have to be enumerated. In addition, any mitigation already provided will have to be taken into account, and surely the federal government’s $110 billion so far approved must have contained some funds which have been applied against such damages.

There’s also the sticky matter of shared responsibility. Particularly in the case of New Orleans, the actions taken and omitted by Mayor Nagin and his government in the aftermath of the hurricane would imply competence at some small fraction of anything the Corps might have exhibited. In any event, it’s going to be a royal mess to sort out.

Luckily, there’s an attorney involved, so don’t you worry; this should all end up right as rain:

Homeowners could seek damages of an additional $200 billion or more, says Jerrold Parker, a lawyer whose firm is trying to organize a class-action suit against the corps.

“Just looking at the place, it’s clear that there’s tremendous damage,” he says. “The fact is, everyone knew the protections were inadequate.”

{…}

The corps must either pay or reject each of the claims. Those whose claims are rejected can take the agency to court. Parker says his firm represents more than 3,000 people who want to sue.

(ellipsis, again, mine) For the record, “Just looking at the place, it’s clear that there’s tremendous damage” doesn’t count as “enumeration of damages”. He also presumes, of course, that his 3,000 clients’ claims and the contingent fees he hopes to glom from them are all in addition to the generous amounts sought by the various government agencies. This doesn’t even pass the “red face test“, let alone the “giggle test“.

Left undiscussed in the story is the rationale by which the government and its agencies are liable for failing to provide absolute and flawless protection for flooding in, say, New Orleans.

A city that lies “5-10 feet below sea level“. On the same page linked just left, you will see that…

The Army Corps of Engineers verifies that the New Orleans area has 325 miles of Congressionally authorized hurricane protection including: Westbank (66 miles); New Orleans to Venice, La. (87 miles); LaRose, La to Golden Meadow, La. (40 miles); Grande Isle, La. (7 miles); Lake Pontchartrain and vicinity (125 miles).

…but Mother Nature doesn’t pay much attention to the Army Corps, let alone (just like the rest of us) to Congress.

Bad things happen to good cities. They also happen to New Orleans, which is not now, nor has it been in the past, a “good city”. It’s a truly unique city, and a very interesting one, but neither of those connotes goodness. While less, or at least differently, so than in the past, due to the effects of the hurricane, it’s still a bit of a cesspool.

It’s cops are notoriously and blatantly corrupt. They’ve had more than their fair share of murderers wearing the uniform, too. And, aside from the murder, that’s just the cops – the elected politicians are no better. William Jefferson, he of the refrigerated cash, is a stellar example of this breed, but hardly the only one.

But it doesn’t stop there. From the Autumn, 2005 issue of the City Journal:

The second job is less obvious. New Orleans’s immutable civic shame, before and after Katrina, is not racism, poverty, or inequality, but murder—a culture of murder so vicious and so pervasive that it terrorizes and numbs the whole city.

In 2003, New Orleans’s murder rate was nearly eight times the national average—and since then, murder has increased. In 2002 and 2003, New Orleans had the highest per capita city homicide rate in the United States, with 59 people killed per year per 100,000 citizens—compared to New York City’s seven. New Orleans is a New York with nearly 5,000 murders a year—an unlivable place. The city’s economy has sputtered over the past generation partly because local and state officials have failed to do the most elementary job of government: to secure the personal safety of citizens.

And then there’s the race card, described in the same article:

In the aftermath of the storm, hand-wringers wondered why they hadn’t noticed before that so many American blacks live in Third World conditions—supposedly only because they’re black. CNN’s Wolf Blitzer voiced white America’s knee-jerk best: “You simply get chills every time you see these poor individuals. . . . So many of these people, almost all of them that we see, are so poor, and they are so black,” he mused on the air.

But Americans didn’t notice this before because it’s not true. Despite the president’s rhetoric, and despite those indelible images from the Superdome and the Convention Center, New Orleans is just as much a black success story as a black failure story.

Yes, New Orleans has a 28 percent poverty rate, and yes, New Orleans is 67 percent black. But nearly two-thirds of New Orleans’s blacks aren’t poor.

Yes, it’s true that nearly 25 percent of New Orleans’s families live on less than $15,000 a year, according to the 2000 Census. But 19 percent of New York’s families live on less than $15,000—and it’s much more expensive for poor people to live in New York, making them poorer.

New Orleans itself, its attorneys, and their clients, even more so than the state of Louisiana, appear to be trying to make their myriad problems those of all their fellow U.S. citizens. Simultaneously claiming poverty and race-based neglect from the federal government along with dismay at how wretched the city is now, ignoring that it’s pretty much always been wretched, they’re going for the gusto.

Or trying to.

It seems unlikely that, once the mess of layered claims, some bogus, some inflated, and some already addressed by insurance or other government single- double- or triple-handouts, is parsed, the extent of damage related to the breach of the levee system might be anywhere near crystal clear.

Add to that the absurdity of expecting guarantees from anyone, government or not, of protection against the weather, it becomes easier to hazard a guess as to what the outcome of this might be. I expect that the Army Corps, and by extension, all U.S. taxpayers, will be absolved of the imaginary financial responsibility that the plaintiffs in these cases are trying to foist off onto us.