Unrestricting Employees

While most of us have been distracted by such minor kerfuffles such as whether the president should be impeached, the real world continues to move forward. My friend, Julie Janofsky, relayed to me that Maryland has now, by statute, declared that non-competition covenants entered into by lower paid employees are not enforceable.

The statute, Md. Labor Law Art. § 3-716, makes such provisions unenforceable with respect to employees making $15 or less an hour or $31,200 a year or less. Customer lists and other proprietary information remain protected.

In 2016, the Obama Administration issued a “Call for Action,” urging states to render such provisions unenforceable. Needless to say, the Trump Administration did not join in encouraging such legislative action.

Here, as it is still often the case, Justice Brandeis, dissenting, got it right:

It is one of the happy incidents of the federal system that a single courageous State may, if its citizens choose, serve as a laboratory.

New State Ice Co. v. Liebmann, 285 US 262, 311 (1932).

Latest Immigration Ruling Setback for Trump Administration

I’ve posted the ruling by Judge Dolly Gee of the U.S.D.C. for the Central District of California in Flores v. Barr. That case deals with the Trump Administration’s attempt to overturn the settlement agreement reach in 1997 dealing with the manner in which the INS may detain immigrants who are minors.

The Court enjoined the Trump Administration’s regulations, which would have abrogated the settlement agreement, and granted the plaintiffs’ motion to enforce the agreement. The concluding paragraph of the opinion sets forth the nub of the legal issue:

The blessing or the curse – depending on one’s vantage point – of a binding contract is its certitude. The Flores Agreement is a binding contract and a consent decree. It is a final, binding judgment that was never appealed. It is a creature of the parties’ own contractual agreements and is analyzed as a contract for purposes of enforcement. Defendants cannot simply ignore the dictates of the consent decree merely because they no longer agree with its approach as a matter of policy. The proper procedure for seeking relief from a consent decree is a Rule 60(b) motion by which a party must demonstrate that a change in law or facts renders compliance either illegal, impossible, or inequitable. Relief may also come from a change in law through Congressional action. Having failed to obtain such relief, defendants cannot simply impose their will by promulgating regulations that abrogate the consent decree’s most basic tenets. That violates the rule of law. And that this Court cannot permit.

Slip op. at 24.

An important point to note with respect to all district court opinions blocking Trump Administration actions from this point on. There’s only a little over thirteen months until November, 2020. Many of these cases will not be heard by the Supreme Court by January 20, 2021. Thus, if these district court opinions withstand review by the relevant circuit courts, a new administration can protect the rulings merely by failing to seek Supreme Court review or, if review has been sought by an outgoing Trump (or Pence) Administration, withdrawing the appeal in the Supreme Court.

Finally, I note that while Judge Gee’s ruling has been reported on by the mainstream media, this is the first link to the opinion other than via PACER. Another illustration of the value of the RBC.

Corruption of the Bureaucracy Watch

The Washington Post had a great story which reported that:

Neil Jacobs, the acting head of the National Oceanic and Atmospheric Administration, sent an all-staff email Friday afternoon in an apparent effort to repair damage from an unusual Sept. 6 statement that sided with President Trump rather than agency weather forecasters.

I have obtained a copy of the email and have posted it here. It states that:

Scientific integrity is at the heart of NOAA’s mission and culture, and is essential for maintaining the public’s trust.

Of course, for the government to function properly, all of its component parts must act with integrity. Thus, the NOAA story is but a subpart of the much larger story of a broad-based attempt by the Trump Administration to undermine the integrity of the federal bureaucracy by the Trump Administration.

Going forward, I will attempt to focus on similar examples of this corruption. One question that I would pose to those contributors to the RBC who are from the UK: Is the bureaucracy there under a similar attack? If it either is or were presented with similar pressures, is it institutionally more resistant?

Financing hydrogen iron

A wonkish plan for problem industries in the energy transition.

We know how to make the electricity supply renewable. We know how to make land transport electric. Both are on track. But there are four problem industries where things are not so clear.

These estimates are not all for the same year and not strictly comparable, but they are good enough to make the point that to reach net zero emissions, the four sectors (together 20% of global fossil emissions) cannot be ignored.

The challenges are distinct but they have common features.

  1. Very plausible technological pathways exist to decarbonise. But these are not mature, and for the moment they are far more expensive than BAU.
  2. There is no guarantee or strong expectation that technical progress will ever eliminate the cost barrier, in contrast to electricity and land vehicles.
  3. The industries are typical of modern capitalism: they are international and oligopolistic, with a lot of trade, a handful of large companies, and a myriad of small ones.
  4. Their products and services rarely have plausible substitutes. (We shall see later on why this matters).

Points 1 and 2 mean that the issue for public policy is not R&D (pace all the Democratic presidential hopefuls) but early deployment.

Recall how we got to cheap wind, solar and batteries. It wasn’t a carbon tax, since that does not exist anywhere in the pure form. Partial cap-and-trade exists in the EU, but it has only just started to bite, after giveaway initial allocations. It was done by subsidies for early deployment to create economies of learning and scale:

  • In the USA, tax breaks for wind, solar, and electric cars; renewable obligations at state level.
  • In Europe and China, tax breaks, subsidies, and regulatory privileges for electric cars.
  • FITs and ringfenced auctions for wind and solar generation in Germany, other European countries, China and India.

The costs of FITs have been large in the past, though the cumulative liability (in Germany for instance) has now almost stopped growing as the few surviving FITs are near market rates. Well worth it of course, especially if you aren’t a German consumer.

The same principle holds for our four problem industries. Carbon taxes are politically toxic, and a coordination nightmare in globalised industries. So what’s the workable second-best kludge?

I’d like to float a possible solution. I’ll take steel as the example. The principle extends to the others ceteris paribus.

!

Weekend Book Recommendation: Tales from the Society for the Preservation of Preposterous Absurdity

If we cannot help, we may at least hinder

I have written here before of my love for books that employ a bonkers narrator to deliver absurdist humor, and I have another gem of that cut to recommend this week. A perfectly ludicrous set of adventures are related in this collection by the is-he-a-genius-or-has-he-just-gone-spare Dr. Martin Smotheringdale, President of the Society for the Preservation of Preposterous Absurdity. Smotheringdale introduces the reader to a strange society via a series of investigations into mysterious problems, which through diligent effort he usually manages to make worse.

The hilarious stories in this book are reminiscent of Douglas Adams in being suffused with high-end scientific nonsense, from quantum kittens to a clowder of Schrodinger cats to black hole spaghetti makers. This reflects the day job of the author, Professor Shane Darke, an eminent addiction researcher whose work I have cited on many occasions (including in this interview by my fellow RBCer, Harold Pollack).

Each tale include many drolleries line by line that made me laugh out loud, and the collection is greater than the sum of those parts because the comic inventions build on each other: the poor chap who has his ears reversed in the first tale, the Perpetual Irritation Machine, and the Hypercube, among other off-the-wall concoctions, return for well-timed bows in the tales that follow after the stories that introduce them to the reader. And the best story in the book — The Ghosts of Gridley Gorge — is a joke within a meta-joke that is as brilliantly constructed as anything Evelyn Waugh, Lewis Carroll, or Punch magazine, ever pulled off.

On top of all that, it’s a good buy, just five bucks on a Kindle or 10 to 15 dollars in paperback depending where you look. You can find it at many on line booksellers including Amazon and Barnes & Noble.

Annals of weird infographics

A Norwegian consultancy comes up with a bafflingly cute one.

This chart, or whatever you want to call it, is from a report on the global energy transition by the big Norwegian consultancy DNV-GL. It’s not wrong or misleading so much as baffling. A new type of Tufte failure, perhaps. For their next effort, I suggest adding animated Teletubbies skiing down the mountaintops.

Happy Birthday to . . . .

Every August 27, I celebrate a birthday. Yes, August 27 is my birthday. But the birthday I always celebrate is that of Lyndon Johnson.

For progressives, particularly of my generation, LBJ evokes sharp and conflicting emotions. After all, most of us cut our political teeth opposing the war in Vietnam. Johnson ginned up support for the war effort by lying to the American public, both about the immediate causes (e.g., the Gulf of Tonkin “attack”) and the overarching political stakes (e.g., the alleged falling dominoes). As a consequence, Americans were pitted one against the other to a degree not seen, perhaps, since the Civil War.

But unlike other flawed presidents (Trump comes all too readily to mind), LBJ attempted to bring out the best in America. In that sense, he was clearly a legitimate political heir of Franklin Roosevelt. He changed America for the better by pushing through Medicare, serious gun control, the Voting Rights Act, and the Civil Rights Act. While he didn’t spearhead its passage, the Immigration and Nationality Act of 1965, that removed national quotas, was enacted. He signed the Public Broadcasting Act and set up the National Endowment for the Arts and National Endowment for the Humanities. Today, all Americans are the beneficiaries of his legacy.

I doubt whether anyone who is under the age of, say, 55 can fully appreciate the extent or the intensity of the differences among Americans that the Vietnam War precipitated. The divisions among Americans today are really not as charged. After all, in LBJ’s day, support for his foreign policy world view was widely shared across the political spectrum, albeit perhaps, not evenly. That is clearly not the case currently. Now, support for the wide ranging demagoguery of Donald Trump is limited to a fairly narrow ethnic and economic segment of American society.

Trump intentionally attempts to divide Americans along racial, ethnic, and religious lines. While racial politics and frictions were clearly in play when LBJ was president, he did not attempt to exploit those fault lines. For instance, the urban riots from 1965-1968 tested the mettle of LBJ’s character. It would have been easy for him to fall prey to, say, the racism which at that point began to infect the Republican Party. We should not forget that it was then that the GOP began the program of racist division called the Southern Strategy. Today, fifty years later, we now see the full poisonous flower of that program. But that was not LBJ’s path.

No, LBJ kept his balance. Today, in the diversity that is America, we reap the benefits of what we can only call his wisdom. So on this day, let us invert Mark Anthony and remember that sometimes it is the good that men do that lives after them and that, with the passage of time, we should inter the evil with their bones.

Happy Birthday Lyndon.