We can all hope that the presidential election goes off without major hitches and that a winner emerges through the normal process of counting ballots. But even if nothing nefarious happens, close races in key states may not allow us to know a winner on Election Day, or even the next day. The pandemic has led to changes in election administration that have led to an unprecedented number of absentee and mail-in ballots, which in some states don’t get counted until polls close on regular in-person voting. Even if everything goes smoothly, recounts may be triggered, either automatic or at the request of the losing side, according to state law. And then, of course, the results may not be beyond what lawyers call “the margin of litigation.” Here’s a sketch of what we can expect to see.
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Maritime Protectionism Raises the Cost of Offshore Wind
Amidst mounting pressure to mitigate climate change, one source of energy receiving increased attention in the United States is offshore wind. Having already experienced considerable growth in Europe (albeit with considerable amounts of government largesse), industry backers claim it is now poised for takeoff in this country. Standing in the way of that vision, however, are a number of government-imposed obstacles, perhaps foremost of which is the Jones Act.
Passed in 1920, the Jones Act restricts waterborne transportation between two U.S. points to vessels that are U.S.-built, U.S.-flagged and mostly owned and crewed by Americans. Not surprisingly, this has major implications for the offshore wind industry.
To build offshore wind farms most efficiently requires the use of specially designed ships called wind turbine installation vessels (WTIVs). Ideally, a WTIV would load wind turbine parts in a U.S. port (i.e. a U.S. point) and then transport them to an offshore location (another U.S. point) for installation. But there’s just one problem: no such Jones Act-compliant vessels exist. Of the world’s fifteen WTIVs, none meet any of the law’s requirements.
![Wind turbine installation vessel](/sites/cato.org/files/styles/pubs_2x/public/2020-10/WTIV.jpg?itok=QjfOYi6h)
Constructing such a vessel to comply with the Jones Act is anything but straightforward. First a U.S. shipyard with the available capacity must be found to build it. With the largest U.S. commercial shipyards busy filling government contracts, that’s no easy task. After an available shipyard is found, construction of the WTIV is sure to cost a pretty penny. According to a study prepared for the Department of Energy (DoE), building such a vessel in a protected, inefficient U.S. shipyard will cost 60 to 200 percent more than in Asia.
For perspective, a WTIV ordered by Japanese firm Shimizu last year to handle the latest generation of offshore wind turbines has a reported price tag of $465 million. Increasing that amount by 60–200 percent would mean hundreds of millions of dollars in extra costs, with a conceivable final price tag of over $1 billion.
For a single vessel.
Fortunately, workarounds do exist. But they come at the price of reduced efficiency. To construct the Block Island Wind Farm (one of only two offshore wind farms in the United States), the project used a foreign WTIV, the Brave Tern, which remained offshore while the needed wind turbine parts were transported to it from a nearby port using Jones Act-compliant vessels. But using more vessels means added cost and complications, including the risk of damaging turbine parts as they are transferred at sea from the transport vessel to the WTIV.
An even more extreme approach was used by a small-scale offshore wind project built off the coast of Virginia Beach earlier this year. The WTIV used for the project, the Luxembourg-flagged Vole au vent, loaded wind turbine parts in the Canadian port of Halifax, Nova Scotia and then sailed to Virginia, thus making it an international voyage not subject to the Jones Act. After it had exhausted its supply of turbine parts, the ship was forced to make a second trip back to Halifax to obtain additional components before sailing yet again to Virginia to complete the installation.
All that time at sea sailing back and forth means higher costs. These specialized, highly sought after vessels command charter rates that can exceed $200,000 per day.
But the cost of U.S. maritime protectionism goes far beyond a lack of Jones Act-compliant WTIVs. Building and maintaining offshore wind farms requires not just installation ships, but a whole range of specialized vessels subject to the Jones Act and related laws. Service operation vessels (SOVs) that house skilled technicians to service the wind turbines, for example, are subject to the Passenger Vessel Services Act of 1886 (PVSA). Like its cousin the Jones Act, the PVSA requires the use of U.S.-built vessels. According to industry observers, constructing these SOVs in U.S. shipyards will be at least 80 percent more expensive than building the vessels overseas, with an estimated price tag of $80 million. Smaller crew transfer vessels have been estimated to be 20 percent more expensive as a result of U.S.-build requirements.
It all adds up. According to the aforementioned DoE study, just the extra expense of building a WTIV in a U.S. shipyard to comply with the Jones Act is likely to add an extra $20–40 million per 100 turbines installed. Others say U.S. maritime protectionist laws will result in prices up to 50 percent more per kilowatt-hour than in Europe. For those interested in expanding wind energy in the United States, this is a major impediment to its success.
As offshore wind attracts increased attention there has been no shortage of politicians on both the federal and state levels eager to shower it with taxpayer dollars. They should instead focus their efforts on removing measures that hinder its growth. Repealing or reforming the Jones Act and PVSA would be an excellent starting point.
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Some Other Ballot Measures To Watch
Voters will face the usual wide array of state and local ballot measures tomorrow, and my colleagues have already done an excellent job reviewing many of the highlights. In particular, you should check out Chris Edwards’s posts on income, sales, and property tax measures, and who contributes, as well as on marijuana legalization measures under consideration in four states, Arizona, Montana, New Jersey, and South Dakota. Michael Tanner has looked at California measures related to poverty, including important votes on rent control and freelance work.
Amid a host of generally dispiriting propositions before San Francisco voters, Proposition H, backed by Mayor London Breed, makes for a bright spot. It is aimed at easing openings of storefront businesses and “would streamline the planning process and require that permits be processed within 30 days if the request already complies with zoning rules and the applicant is in a neighborhood commercial district.” Sharky Laguana, who heads the city’s small business commission, says it “is outrageous that it should take 16 months and $200,000 to open an ice cream store” in the city due to permitting hassles.
Also in California, statewide Proposition 16 would enable the reintroduction of racial preferences into state government and state universities, repealing Proposition 209, which voters adopted in 1996. A recent poll shows Prop 16 to be failing with voters by a margin of 37 to 50 percent, although the Yes side has vastly outspent the No and enjoys the support of virtually every establishment institution to make itself counted.
Kentucky’s Constitutional Amendment 1 would inscribe the crime-victims’-rights package known as Marsy’s Law into the state constitution. I’ve written about the problems with this set of laws, which can deprive accused persons of information needed to mount their criminal defense, block open access to information about crime that is legitimately important to the public and, in backwards and prejudicial fashion, designate some persons as crime victims before any legal process determines whether a crime has been committed against them. An extensive new investigation by USA Today and ProPublica confirms another warned-of problem with the laws, which is that they can work to shield the identities of police officers facing excessive-force claims who allege they were themselves aggressed against.
Voters in Massachusetts and Alaska will decide whether to adopt ranked choice voting (RCV), an innovation that has spread at the city level. This year, Maine will use the method in its closely contested election for U.S. Senate. For more on why RCV appeals to many libertarians, see my comments as part of a panel discussion hosted by advocacy group FairVote last week.
Washington, D.C.‘s Initiative 81 would assign lowest law enforcement priority to violations involving hallucinogenic mushrooms and related fungi. The liberty angle to one side, medical researchers are finding evidence that some agents in this class may have therapeutic applications in psychiatric and other settings. Jason Kuznicki wrote about the incoherence of the federal Schedule One classification of drugs, chemicals, and psychoactive substances.
In my own state of Maryland, where I’ve been a participant in charter revision processes at the county level, I’ve been critical of statewide Question One, which would free the legislature from some current constitutional constraints on its budget powers.
Decentralize Power to Unite the Nation
The problem with democracy is that after the election, half the country is going to feel as unhappy as this tortured fellow.
![s](/sites/cato.org/files/styles/pubs_2x/public/2020-11/monster%202.jpg?itok=esRFVys0)
Actually, the problem is not democracy. It is that the federal government has amassed such huge power over our lives that people get bitter when their side in the presidential race loses. Federal intervention in education, health care, housing, welfare, and many other economic and social areas has made people fear that the next president will impose policies they detest and view as harmful to their communities.
The rise in federal spending and regulatory power has deepened anger and partisan divisions by trying to force policy conformity on a very diverse country. The federal government tries to impose one‐size‐fits‐all policies on the nation when there is no national consensus.
Federalism expert John Kincaid noted regarding federal intervention into state and local affairs,
[It] is the root cause of polarization because it has nationalized so many issues, especially sensitive social and cultural issues such as abortion and education that were previously diffused across the fifty state political arenas. The cooperative federalism advanced by the nationalist school of federalism requires a national consensus on such issues, but there is no consensus. Requiring state electorates to implement sometimes hotly contested national policies appears to have considerably exacerbated national conflict in ways that threaten the institutional fiber of the republic.
As Washington has further encroached on properly state, local, and private activities over the decades, the share of people who trust the federal government has plunged from more than 60 percent in the 1960s to less than 20 percent today. Americans have grown less happy with the federal government even as the number of federal programs ostensibly created to serve them has increased.
As this study discusses, the solution is to decentralize power by ending federal programs in state and local policy areas. Polls show that large majorities of Americans prefer state rather than federal control over education, housing, transportation, welfare, healthcare, and other activities.
Growing federal power has undermined democracy, community, diversity, and political goodwill. It is a cancer on American governance, and in the years ahead there will be no suspension of partisan anger unless federal power is reduced. It may seem paradoxical, but the way to unite the nation and bring Americans together is to disunite power and disperse it out of Washington.
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SCOTUS Decides That Inhumane Treatment of a Prisoner Violated “Clearly Established Law”
Qualified immunity is a judicial doctrine that protects public officials from liability when they violate people’s constitutional rights, unless those rights were “clearly established” at the time of their violation. Since the Supreme Court invented this “clearly established law” standard in 1982, it has issued 32 qualified immunity decisions, and only twice found that a defendant’s conduct actually violated “clearly established law” (and these two cases were decided nearly two decades ago). Thus, the practical effect of the Court’s decisions has been to make “clearly established law” more and more difficult for plaintiffs to show; today, many lower courts effectively require plaintiffs to find a prior case with nearly identical facts before they will hold that the law was clearly established.
But this morning, for the first time in sixteen years, the Supreme Court issued a qualified immunity decision in which it held that the defendants’ actions violated “clearly established law.” The case is Taylor v. Riojas, in which the Fifth Circuit upheld a grant of immunity to prison officials who subjected Trent Taylor to horrific and inhumane prison conditions. Taylor was kept for several days in a cell that was covered floor to ceiling with the feces of the previous occupant, and where feces was packed into the water faucets, preventing him from drinking. He was then moved to a second cell, which was kept at freezing temperatures, and where a clogged drain on the floor caused raw sewage to flood the cell, forcing him to sleep in sewage. The prison officials were well aware of these conditions, and at one point laughed that Taylor was “going to have a long weekend.” Notwithstanding this obviously inhumane treatment, the Fifth Circuit granted immunity to these officials, because while “the law was clear that prisoners couldn’t be housed in cells teeming with human waste for months on end,” it had not previously held that confinement in human waste for six days violated the Constitution.
Taylor filed a cert petition asking for the Supreme Court to reverse, and also to reconsider the doctrine of qualified immunity entirely. Cato, on behalf of both itself and a vast cross-ideological alliance of public policy groups, filed an amicus brief in support of Taylor’s petition. While the Court did not agree to take up this fundamental underlying question, it did summarily reverse the Fifth Circuit’s decision and remanded the case. In its per curiam opinion, the Court recognized that “no reasonable correctional officer could have concluded that, under the extreme circumstances of this case, it was constitutionally permissible to house Taylor in such deplorably unsanitary conditions for such an extended period of time.” In other words, because this constitutional violation was so egregious and obvious, it was unnecessary for Taylor to identify a prior case with functionally identical facts to demonstrate that the defendants violated his clearly established rights.
Qualified immunity is an inherently unlawful and unjust doctrine, and it should be abolished entirely. But if the Supreme Court is unwilling to reconsider qualified immunity in full, it is encouraging at least that the Justices are cutting back on the worst excesses of the doctrine, and reaffirming the principle announced sixteen years ago in Hope v. Pelzer, that sufficiently obvious constitutional violations do not require cases exactly on point to hold that the law was clearly established.
Why Bother Assessing the U.S.-China Phase One Trade Deal, Anyway?
Of course, the Trump administration is going to exaggerate claims about the success of its “Phase One” trade deal with China. That’s no surprise. And, of course, Trump’s detractors won’t let the administration get away with such claims. Exposing Trump’s trade follies—“tariffs are taxes,” “tariffs haven’t brought back supply chains or manufacturing jobs,” “farmers have been pummeled,” “trade wars are neither good nor easy to win”—is just too much fun to resist.
But, at some point—like now, for instance—the unity we pro-trade, pro-globalization voices find in our opposition to Trump’s trade policy must give way to a serious debate about what, exactly, trade policy toward China should look like after Trump. Unless the Biden folks are considering some form of continuation of Trump’s Phase One deal—a devastatingly bad idea that Biden should disavow—there is little purpose (other than rubbing Trump’s nose in it) in demonstrating how the objectives have not been met.
It’s easy to criticize policies you don’t like, but much harder to move from favored policy generalities to specifics. We need to start putting some meat on the bones of those general slogans—aspirational statements like “we must work with allies,” “restore U.S. leadership,” and “reform the World Trade Organization”—that have been bandied about as placeholders for specific, realistic policy objectives, strategies, and tactics.
If you think we must “work with allies” to try to rein in some of Beijing’s objectionable behavior, then the success or failure of the Phase One trade deal is irrelevant. The deal must be terminated, period. Why? Because the deal sanctions discrimination against European, Japanese, Korean, Canadian, Australian, Indian, and all other countries’ exporters. It is an arrangement that formally puts U.S. suppliers on a more favorable footing with Chinese buyers—that is, with the Chinese government. Working with allies requires a globalist, not a nationalist approach.
How can we effectively “work with allies” to discipline China’s behavior while, at the same time, expecting those allies to accept being squeezed out of the China market by our bilateral trade deal? We can’t because the trade deal is the antithesis of working with allies. If the United States and the European Union are going to have any chance of showing a united front against a Chinese government that has succeeded over the years in driving wedge’s between the western powers, the Phase One deal—that ill-conceived edifice of America-first nationalism—cannot stand. So why measure and make such a big deal about progress or the lack thereof…unless Biden’s team is contemplating continuity?
If you think the United States should “show leadership” or “lead on trade,” as the tweets echo ad nauseum without elaborating on exactly where to lead, then U.S. policymakers and opinion leaders should eschew and speak out against these kinds of discriminatory, managed trade deals. Otherwise, U.S. leadership will continue to set bad examples, encouraging other countries to emulate our transactional, bilateral, deal cutting. We should want the United States to lead on trade, but in a liberalizing, non-discriminatory direction. Right, Joe?
If you consider the Trump administration’s assault on the World Trade Organization—its strangling of the Appellate Body, threats to withdraw, and refusal to endorse a new Director General—to be terrible mistakes and believe the United States should commit to reforming the World Trade Organization, then you must regard the U.S.-China trade war and the Phase One trade deal, both conducted in violation of the rules of the WTO, as ongoing impediments to reform.
Whether the Phase One trade deal has lived up to its objectives is, arguably, a question of empirical interest at most—unless Biden’s team is considering some form of continuation. Of course that choice would short-circuit the general goals of working with allies, showing leadership, and reforming the WTO.
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Selling Nostalgia
Back in July when I first assessed the Trump administration’s plan to turn Kodak into a pharmaceutical company via a $765 million taxpayer loan, I was skeptical. Since that time, the government’s plan to revive the historically-mismanaged company has collapsed due to a toxic combination of poor planning and execution (and some questionable stock trades) — all delightfully documented in a new episode of the Slate’s “Tales of Modern Capitalism.” The whole podcast is worth your time, but it’s the finale which shows why we should be skeptical — of not only the Kodak transaction itself but also the trendy rush among American policymakers to embrace industrial policy more broadly:
There is a reasonable explanation for most of Kodak’s behavior, but the optics of executives and board members loading up on shares ahead of a clearly market moving announcement, even if they thought there was a lot of doubt about whether that announcement would happen until the last minute, the optics of a beaten up company trying to present itself as the answer to one of America’s great strategic problems. All of that adds up to the picture of a pretty shabby industrial policy. And I don’t think that it is yet proven that it was dirtier than that. But I think it is a reminder that when governments and businesses try to come together, it’s often rushed, it’s often poorly thought through, and there’s often a whiff of crony capitalism.
In the end, what happened here might have been less about some deeply nefarious plot and more about typical low level government corruption, maybe mixed with Donald Trump’s characteristic knee jerk affinity for a once glamorous American brand, one that, by the way, also happened to be a big sponsor of The Apprentice.
I think the fact is every American is familiar with the Kodak brand. Even now, decades after we’ll put away our film cameras, it still has a power that’s far larger than its commercial clout. And so it’s an interesting idea that you can take this great American brand, which isn’t a great American business anymore, and turn it into a great American business again.
Back in its 20th century heyday, at the height of its success, Kodak wasn’t really selling cameras in film. It was selling nostalgia. All its ads were about how important it is to capture a good feeling and make a hard copy of it before it inevitably disappears, which makes it fitting that the company itself is now banking on nostalgia to save it. Eastman Kodak has very little going for it as an industrial enterprise at this point. What it has is the nostalgia its name evokes. Any recovery for the company will almost certainly be dependent on Americans fond memories of the brand at its peak. No wonder Kodak wants to invite us to dust off that old photo album and relive the great times we spent together.
Politicians and pundits embrace a similar nostalgia when they dream of using subsidies and protectionism to recreate the industrial economy that existed in America during Kodak’s prime. But while nostalgia may make for great advertising and good politics, today’s Kodak shows why it makes for bad policy — especially when it’s financed by tomorrow’s taxpayers.