Posts Tagged ‘government policy


A Bailout from Hypocrisy

The hypocrisy of Senator Christopher Dodd amazes me. Why?

The president joined politicians such as Senator Christopher Dodd, who today called for using “every possible legal means to get the money back.” The bonus pool for 2008 by New York City financial companies was the sixth-largest ever amid record losses in the securities industry, State Comptroller Thomas DiNapoli said in a report yesterday. (link)

So what’s the big deal?

It’s been over seven months since it was revealed that Senate Banking Committee chairman Christopher Dodd (D., Conn.) got a sweetheart deal on his Washington, D.C., townhouse directly from Angelo Mozilo, the CEO of troubled subprime-mortgage lender Countrywide Financial. Participating in the “Friends of Angelo” program saved Dodd about $75,000 on his mortgage, and raised more than a few eyebrows about whether Dodd should be accepting such hefty gifts from entities he’s tasked with overseeing and regulating. (link)

To be clear, Dodd wants all those naughty Wall Street peeps to give back their bonuse, but I see nothing in the news about him offering to make up the $75,000 break he received from a company involved directly in the current economic mess.

I believe we should be asking hard questions asked about Wall Street bonuses paid out in 2008, particularly if they were paid with tax dollars. However, I find it tacky that one individual who is doing so sees nothing wrong with receiving what amounts to a questionable bonus.

If we’re truly suffering from a “crisis of confidence,” according to Dodd, then how do his actions help counteract that confidence? Don’t talk to me about how Wall Street should behave when it’s still unclear whether your hands are any cleaner.

Change Congress Makes Sense

Dodd’s case is neither unusual nor limited to either political party. What makes this situation so frustrating is the lack of transparency. One of the reasons I’m enchanted (yes, enchanted) with Larry Lessig’s Change Congress movement is it’s position “that politicians should work for the people, not special interests.” You can’t get much more transparent. Even more powerful is its acknowledgment that the system itself has to be reformed in order for change to happen.

Currently, Change Congress is calling for a donor strike and they’ve hit the $500,000 mark:

“I’m pledging not to donate to any federal candidate unless they support legislation making congressional elections citizen-funded, not special-interest funded.”

This language gives me confidence in the potential for my government to be better than it is today. Dodd calling for “every possible legal means” does not instill confidence because his actions bely the words. Whether you agree with President Obama’s agenda, one piece that we can all get behind, regardless of affiliation, is that things need to change. What are you doing to effect that change?


Building Highways the Hard Way

476897084_0f66d1ef97Perusing post-holiday news, I came across two stories that highlight my frustration with status quo thinking. The first story focuses on a federal commission charged with exploring an increase in the gas tax or raising funds for road upkeep via mileage:

Motorists are driving less and buying less gasoline, which means fuel taxes aren’t raising enough money to keep pace with the cost of road, bridge and transit programs.

A federal commission created by Congress to find a way to make up the growing revenue shortfall in the program that funds highway repairs and construction is talking about increasing federal gas and diesel taxes…According to a draft of the financing commission’s recommendations, the nation needs to move to a new system that taxes motorists according to how much they use roads. While details have not been worked out, such a system would mean equipping every car and truck with a device that uses global positioning satellites and transponders to record how many miles the vehicle has been driven, and perhaps the type of roads and time of day. (link)

The second story deals with a proposed solution to raise road funds in Oregon also based on mileage:

Oregon is among a growing number of states exploring ways to tax drivers based on the number of miles they drive instead of how much gas they use, even going so far as to install GPS monitoring devices in 300 vehicles. The idea first emerged nearly 10 years ago as Oregon lawmakers worried that fuel-efficient cars such as gas-electric hybrids could pose a threat to road upkeep, which is paid for largely with gasoline taxes. (link)

Oh, the Irony.

In case you missed it, the people in charge are essentially trying to figure out how to fix shortfalls in their funding because their citizens actually paid attention to the pleas (or got tired of shelling out money) to drive less and conserve fuel. Even more entertaining is the concern stated explicitly by Oregon lawmakers that more fuel efficient cars pose a threat to road upkeep because they don’t require as many trips to the pump, lessening their owners’ contributions via the gas tax.

From an economic standpoint, I’m unsure why the option of people paying for the roads they use, without installing a government-owned monitoring device, isn’t a viable option that balances the burden while meeting the funding needs. Whether through the use of toll roads or paying a yearly fee to have a pass for traveling on Interstates, there are other ways to make roads pays for themselves.

From a logical standpoint, either the argument for raising the fuel tax or for taxing mileage fails to make sense based on the current mantra to drive less and to lower fuel consumption. In addition, the notion that people who choose to purchase more fuel-efficient vehicles are “getting away” with something is ludicrous. Again, these people listened to those who called for smarter vehicle purchases. Now the powers that be are surprised that their call to action has had a chain reaction. However, their arguments fail to address an underlying imbalance in either proposed system of raising the gas tax or taxing mileage.

When Other Option Don’t Exist

As the proponents of such measures argue, the overall number of people driving has dropped and thus fuel consumption, lowering the amount of funds available for roads and the like. In theory, the people who are still driving, particularly during price spikes, are doing so because they have to. This group includes long-distance truckers, people who work outside of mass transit systems, and farmers to name a few. Taking the example to the next step, the government wants these individuals and entities to pay more for being on the roads, making up the difference for those who did as asked and stayed home because they could or rode the bus.

Roads Paying for Themselves

Every person that drives a car must pay some related fee (e.g., vehicle registration, car insurance, etc.) to operate a vehicle legally, regardless of how much they drive. Even if I become the little old lady who only drives to the store and back, I still have to pay those related costs to operate a vehicle. I believe you can implement a similar program for roads.

People could be charged for access to specific roads, regardless of how much they’re on them in the same way that we must pay the set amount for vehicle fees regardless of how often we drive our cars. Such a system also has the attractive feature of not requiring a government-installed device to track usage, helping protect driver privacy. Also, just like you can get a ticket for expired registration or lack of insurance, you could be ticketed for not paying to be on that road.

Before you start shouting that this solution is no more fair than the other proposed systems, consider this: such an option offers the flexibility to set up a tiered system that breaks roads into different categories. Such a system could be designed to take into account the needs of people who only travel locally versus those who travel nationally or high-traffic roads in urban areas versus a small town grid. By default, those who don’t own a vehicle won’t have to pay for using the roads. Instead, if needed, their contributions could came through an additional charge on a bus or metro pass.

You Need to Eventually Get the Carrot

Regardless of the end solution, one thing is clear: you can’t ask something of people and then essentially punish them for doing what you asked. At some point, they’ll stop supporting your efforts. Why do governments believe they are exempt from this reality?

How do you think we could do it better?

Image courtesy of Thomas Hawk

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July 2019
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