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Metallurgical engineer, troublemaker....

Cost of Lies Rising – Has the Threshold of Pain Been Reached?

Has MITA's Spending Now Slammed Into Its Members' Financial Limits?

liar-liar-pants-on-fireMITA (Michigan Infrastructure & Transportation Association) just added $ 205,000 to the SafeRoadsYes! war chest yesterday.  Not much when you consider that they have already lavished $ 5.19 million on SRY. The Detroit Regional Chamber‘s ‘Powering the Economy’ PAC political committee, on the other hand, went one better and added $ 250,000 to the SafeRoadsYes! war chest yesterday. Dwarfs their $ 125,000 in contributions during the regular reporting period. The Detroit Regional Chamber contribution far exceeds the $ 17,105 DRC reportedly had on hand only a few days ago. Someone has given Powering the Economy a lot of money this week, but we won’t be privileged to know whom for three months. Both of these contributions were made to SRY on April 27th, three days after the closing date for the SafeRoadsYes! pre-special general report.SRY Late Contribution Report - 2015-04-28

SafeRoadsYes! has evidently burned through the $ 8 million plus they received in contributions during the regular reporting period and is now heading towards a $ 9 million cash burn.  Hard to tell how much SRY have spent with any exactitude, the latest figures from April 24th show expenditures of $ 7.212 million.  But they had a balance of $ 843,482 on that date which is presumably gone or going quickly.  Expect more thrilling stunts and stimulating advertising in any event.  Their war chest just got reloaded.

The paltry late contribution from MITA, taken together with the outsized contribution from the Detroit Regional Chamber, suggests that MITA is scraping the bottom of their member’s bank accounts.  Or that they are employing a new form of campaign contribution concealment, feeding contributions through DRC’s Powering the Economy so contributors’ identities won’t be reported until after the election.  Their servants in Michigan’s media reported the outsized involvement of road constructors in pushing Proposal 1 this week and it hasn’t played well with the voting public.

Will the Proposal 1 fight decapitalize Michigan’s road constructors?  Will they raise their bids to recoup their political expenditures, further draining Michigan’s road funding?  Are MITA and DRC gaming Michigan’s campaign finance laws to avoid any further embarrassing disclosures?  Or have we just found out what $ 1.2 billion in additional annual contracts are really worth in profits to Michigan’s road constructors?

You Betcha! (11)Nuh Uh.(0)

Proposal 1 Liars Club Expands

Crushed School Bus
Not willing to be out lied by their frenemies in Michigan’s business community, the Laborers’ International Union of North America (LIUNA) created an entirely bogus propaganda by crushing an old school bus with a piece of bridge, complete with guard rail.  It will be a featured propaganda for their ‘Getting Schooled in Infrastructure’ tour which commenced in Flint today.  You are allowed to speculate on their altruistic motives.

Note the ‘white shirt’ law enforcement officer congratulating these union pranksters. Saginaw County Sheriff William L. Federspiel with a new dye job?  The same Sheriff who bailed on this year’s Ann Arbor Hash Bash at the last minute?  His ‘honor students’ in Saginaw took a breather so the good Sheriff could visit the only county in Michigan with a higher murder rate?  Oh, I forgot, he doesn’t want any of his sensitive deputies exposed to the horrors of Saginaw, the city.  Unless they can ride around in an MRAP.  How much damage does an MRAP do to our roads, might you ask?

You can bet dollars to donuts he won’t sic a motor carrier officer on this illegal, unsecured load.  Under any other circumstances, a trucker hauling this load around Michigan would get an impressive collection of ‘green stamps’ and an overnight stay in the crowbar hotel.  An opportunity to try on Federspiel’s natty new black and white jail attire.  Who said political convenience doesn’t tip the scales of justice in Michigan?

Favoritism never crosses the mind of our Michigan leaders. Too busy engaging in media opportunism.

You Betcha! (21)Nuh Uh.(0)

Today’s Mystery

SafeRoadsYes! Has A Phantom Contributor

Mystery Money

Today was the deadline for the last campaign finance filings with the Michigan Secretary of State before the May 5th vote on Proposal 1. SafeRoadsYes! filed five late contribution reports and a pre-special general report. Contributions supporting Proposal 1 now exceed $ 8 million and, as you might expect, the roster of SafeRoadsYes! contributors reads like a Michigan road constructors’ directory. SafeRoadsYes! expenditures now exceed $ 7.2 million, and SafeRoadsYes! still has more than $ 843,000 yet to be spent.  Of course there may be massive contributions yet to be made which would not be reported until after the election.

MGM Grand Casino and FireKeepers Casino contributed $ 50,000 each, presumably to curry favor with the Lansing power elites. BlueCross/Blue Shield and the Michigan Township Association each threw in $ 100,000 which was picked from your pockets by ObamaCare and your property taxes, respectively. Dick DeVos, after having his stooge knife Representative Gamrat for not supporting Proposal 1, got in late with a $ 50,000 contribution from his Alticor investment group.

Powering the Economy SRY Late Contribution Report 4-24-15There is one phantom entity in the SafeRoadsYes! late contribution reports which is worth investigating. An organization called ‘Powering the Economy’ gave $ 75,000 on 22 April. The problem here? ‘Powering the Economy’ doesn’t exist in either the Michigan LARA corporate database or the Secretary of State’s searchable PAC database. So who are they?

Best guess, the merry screw ups at the Detroit Regional Chamber have created a new ballot question PAC to replace their recently terminated – and heavily cited – ‘Detroit Regional Chamber PAC II‘ ballot question PAC. DRC PAC II earned eighteen citations from the SoS since 2013 for filing screw ups. DRC PAC II filed a dissolution notice on 02 April and paid the $ 875.00 dissolution fee on 07 April. ‘Powering the Economy’ has the same address as the Detroit Regional Chamber, One Woodward Avenue in Detroit – which used to be known as the MichCon or ANR Building before Dan Gilbert bought it. And DRC has trademarked ‘Powering the Economy’ as one of their signature catch phrases.

Somebody is ignoring Michigan’s campaign finance laws. Not just ignoring them, trampling them. But this has been a routine practice during the Proposal 1 proponents’ campaign. Our Attorney General is supposed to enforce these laws, but he hasn’t been exactly active on this front despite Schuette ostensibly opposing Proposal 1. So all we can do at this late date is tell you about another scam behind Proposal 1 and let you spike this dragon at the ballot box. Sweet revenge is $ 9 million of your opponents’ money down the drain. Vote May 5th.

You Betcha! (20)Nuh Uh.(0)

When It Becomes Serious, You Have To Lie

TRIP Boosts Their Lies 109% to Get Your Vote

dozer-money

The proponents of Proposal 1 never envisaged the losing position they now occupy two weeks before the vote, so their media shills have resurrected the titillating lies projections of a road builders’ organization called TRIP to bolster their case. Here are the most visceral quotes from Michigan’s two largest newspapers, demonstrating their well-honed propaganda skills:

Detroit Free Press

“Michigan’s poor roads threaten to derail its economic recovery, according to a new report by a national transportation research group.”

“The report says that 38% of Michigan roads are now in poor condition, up from 23% in 2006. It also found that 45% were listed in fair condition and 17% were listed as good.”

“The report estimates that Michigan motorists pay an average of $686 in increased operating costs, including vehicle repairs, because of the state’s poor roads.”

Detroit News

“By 2025, the share of major roads in poor condition is projected to increase to 53 percent,” TRIP said in its report. “Keeping roads in good condition by performing minor maintenance is far more cost-effective than waiting until roads are in fair or poor condition when it becomes far more costly to make needed repairs.”

“According to TRIP, driving on rough roads costs Michigan motorists a total of $4.8 billion each year in the form of extra vehicle operating costs, representing an average cost of $686 annually per motorist.”

”That’s the conclusion of a report released Monday by TRIP, a Washington-based nonprofit organization that researches, evaluates and distributes information on surface transportation issues.

The Detroit Free Press only identified TRIP as “a national nonprofit transportation research group” in this pivotal story.  They were a little more candid in a previous story, so they can’t claim not to know what TRIP is.  The Detroit News identification of TRIP was every bit as dishonest.  Only our ‘newer’ media is more truthful, if still not entirely accurate:

Mlive.com

“The annual TRIP study, conducted by a national research group funded by transportation industry interests, pegs the yearly cost at $686 per Michigan motorist.”

“TRIP findings have long been cited by road funding advocates, including Gov. Rick Snyder.”

TRIP obligingly released a raft of new lies in a series of press releases on Michigan roads at the Detroit Regional Chamber (a kindred IRS 501(c)(6) organization, more on this below the fold) on Monday. These stories are an update to TRIP’s January 2014 lies which we covered in January. The comparable examples of TRIP’s 2014 lies (since removed from the web) are:

  • An inadequate transportation system costs Michigan residents a total of $7.7 billion every year
  • Driving on rough roads costs Michigan motorists a total of $2.3 billion annually in extra vehicle operating costs
  • Driving on rough roads costs the average Detroit urban area motorist $536 annually in extra vehicle operating costs
  • Driving on rough roads costs the average Michigan motorist $357 annually in extra vehicle operating costs

TRIP’s 2015 report on Michigan annual excessive vehicle costs is a $ 2.5 billion (or $ 329 per motorist) increase above their 2014 lies projections.  A 109% increase above their 2014 lies.  Far beyond any assessment of the 2014 to 2015 deterioration of road & bridge conditions in Michigan – even the totally bogus PASER ratings.  Since the $ 2.3 billion (or $ 357 per motorist) 2014 TRIP number didn’t move you to vote for Proposal 1, the new and improved $ 4.8 billion (or $ 686 per motorist) lie is expected to change your mind on Proposal 1.  They think you are that dumb.

So is TRIP a “nonprofit transportation research organization”? Sounds like an independent, credible source – right? Do the adjectives ‘nonprofit’ and ‘research’ give you a high level of confidence in their pronouncements?  Does ‘organization’ or ‘group’ give you the impression that hundreds of researchers are assessing road conditions across the country?  Perhaps you should dig a little deeper than our lazy, lying media scribes.

You Betcha! (17)Nuh Uh.(0)

Michigan’s February Unemployment Rate Redux

When You Fiddle Data Series, Fiddle All The Correlated Data Series

George Orwell-During Times of Universal Deceit
Remember the startling unemployment announcement from the Michigan Department of Management, Technology, and Budget (DTMB) last month?

  • That Michigan’s February 2015 seasonally adjusted (SA) U-3 unemployment rate had dropped to 5.9% from January’s 6.3%?
  • That the 5.9% February 2015 SA U-3 unemployment rate was down 1.9% from Michigan’s 7.8% February 2014 SA rate?
  • That 88,000 more ‘seasonally adjusted’ Michiganders were working in February 2015 than one year earlier?
  • That the not seasonally adjusted (NSA) 12 month increase in Michigan employment was even better at 101,000?

Well, there is a little problem with these goal-seeked, U.S. Bureau of Labor Statistics (BLS) X-13ARIMA-SEAT massaged unemployment statistics. They simply are not true.

You Betcha! (13)Nuh Uh.(0)

Clash of Titans, A Right Plan of Action

RightMI Counterattacks!
Part IV – A Right Plan of Action

So how should average middle class Michiganders engage in this electricity debate? What should they demand in the 2015 legislation on electricity? Can they prevent the titans from looting their family budgets?

First and foremost, Michiganders should demand an end to hybrid deregulation. All electricity consumers should be under the same regulatory scheme, with equal options to escape. No favoritism. This aligns the interests of politically potent, large electricity consumers with those of the average Michigander. This creates an effective counterbalance to the political power of the utilities; political power purchased with your electricity payments. Even full regulation is preferable to our current hybrid deregulation scheme.

Michiganders should further demand full deregulation of our electricity market. As regulated entities, utilities have a ‘cost plus’ mindset which relentlessly drives prices higher. Regulatory bodies limit themselves to dampening this drive for higher prices, but do not drive efficiencies which would genuinely control energy costs. Competition-driven efficiencies are very important to Michigan’s economy, which still has a significant, energy-intensive industrial base. Also Michigan’s utilities have not demonstrated any special competence operating their electrical power stations, so competition in the supply of electricity will promote best practices there and lower costs as well. Ultimately, a deregulated grid properly managed is more tolerant of supply shocks because more actors will be supplying the electricity.
wind turbine fire close-up
The RPS should not be renewed at any level. Renewables should not be forcibly subsidized by any ratepayers, overtly or covertly. The current PA 295 regulatory scheme has residential electricity consumers subsidizing renewables through skyrocketing rates, while large consumers escape this burden.  As renewable energy sources become cost effective, they will be welcomed by all parties.

If environmental wackos want their own electricity to come from RPS renewables, let them pay the full cost including base load backup costs. Most renewable sources are intermittent and require expensive base load backup capacity for periods where they cannot generate electricity. The Midwest Independent Transmission System Operator (MISO) historical record shows that Michigan wind power, by far the most significant current RPS component (883 turbines, about 58% of RPS power), was only available 31.5% of the time (termed ‘capacity factor’) during 2011 and 2012. During two months, July and August of 2011, wind was available only available 16% of the time. Most evaluations of the cost effectiveness of wind and solar generation pointedly neglect the costs of base load backup capacity to keep the lights on.  Essentially, wind power capacity has to be backed up by 100% of its rated capacity with fossil-fueled base load capacity to prevent blackouts during zero wind periods, so why bother install wind power (or solar, for that matter) in the first place?  Ratepayers subjected to RPS get to pay the capital costs for twice the generating capacity they actually need.

You Betcha! (15)Nuh Uh.(1)

Clash of Titans, Viewed from Below

King Kong 1
Part III – Clash of Titans, Viewed from Below

Fortunately, the greed political acumen of DTE and CMS Energy is coming to your rescue. Both utilities are seeking full reregulation of Michigan’s electricity market. They are issuing thinly veiled threats about brownouts ‘reliability’ of supply unless Michigan forces the fortunate 10% back into our utilities’ waiting arms. And with President Obama’s hobbling of coal-fired power stations ramping up, they actually have a point. So the fortunate 10% will have to seriously reengage in Michigan’s electricity rate debate or their electricity costs will skyrocket.

The environmental wackos haven’t been idle either. The new model, term limited, Governor Snyder has evidently made up with our ur-RINO and is now endorsing a 40% RPS by 2040. To keep Michigan’s serfs in line – and avoid impeachment – he is specifically not calling for this to be a mandate, rather calling it a ‘goal’. Coming from Michigan’s Governor, this is a distinction without a practical difference. Snyder appoints the three MPSC commissioners who oversee electricity policy and MPSC operates under the aegis of LARA. Think Governor Duggan, Snyder’s designated successor, will change this policy? Other Michigan politicians are splitting the difference, proposing RPS mandates intermediate between 10% and 40%.

You Betcha! (14)Nuh Uh.(0)

Clash of Titans, EPA Wrecks the Electricity Grid

Feds Step In, Things Get Much Worse

godzilla electrical lines 2
Part II

Things may have quieted down in Michigan after Proposal 3’s demise in 2012, but President Obama’s EPA were furiously developing their ‘War on Coal’ to dramatically increase the cost reduce pollution of electricity generation. The Mercury and Air Toxics (MATs, also known as MACT) rule requires scrubbers on all coal-fired power plants nationally, costing something north of $ 1 million per steam boiler. The Cross State Air Pollution Rule (CSAPR) requires Michigan coal-fired power plants to reduce their thermal efficiency during peak summertime generating periods to reduce oxides of nitrogen at a yet to be determined cost.

In 2014, EPA’s ‘Cooling Water Intake Structures’ rule finally went into effect after a decade of legal wrangling, requiring that Michigan’s electrical utilities take some very expensive steps over 8 years to protect the Great Lakes’ beloved zebra mussel and round goby populations.

At the end of 2014, EPA imposed newly restrictive rules on the disposal of coal combustion residuals (CCRs), commonly known as coal ash, from coal-fired power plants. Almost unique in the history of Federal regulation, EPA admitted in their final CCR rule that it had a negative cost-benefit ratio. Fly ash, the most abundant CCR, is actually a remedy for the alkali-silica reaction (ASR) which causes premature failure of many MDoT concrete structures. So EPA managed to simultaneously increase Michigan’s cost of electricity generation and reduce the lifespan of our roads and bridges. An Obama ‘two fer’.

EPA expects to finalize its ‘Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category’ in September 2015. Known by the acronyms SEEG or ELG, these rules will change the way all electrical power stations handle cooling, process, and steam condensate water. These rules cover all steam powered turbine operations, but will most severely affect coal-fired power stations whose MATs required scrubbers and CCR required ash handling systems will generate a lot of waste water.

You Betcha! (17)Nuh Uh.(0)

Clash of Titans Coming to Michigan

After Proposal 1, After Plan B, Electricity Front and Center

godzilla-biollante
Part I: Background

Later this year, Michigan’s electrical utilities are expected to satisfy the 10% Renewable Portfolio Standard (RPS) requirements of PA 295 of 2008. Partial reregulation of electricity in Michigan under the same PA 295 of 2008 denied choice of supplier on 90% of electricity consumption, while exempting large, politically potent, electricity consumers. At the same time, the U.S. EPA is progressively tightening their noose around the neck of the coal industry with an array of ever more restrictive regulations upon coal-fired power plants. A political clash of titans is looming in Michigan.

Taken together, these circumstances will trigger a wild four-way donnybrook pitting electrical utilities, electricity consumers, and environmental wackos against one another later this year. But this is only three parties, so why do you say four-way? Large industrial consumers have substantially escaped the consequences of PA 295, while smaller Michigan consumers – including residential consumers – have experienced the fifth highest rate of electricity cost increases in the nation. These two electricity consuming groups’ interests do not coincide.

You Betcha! (14)Nuh Uh.(0)

February Michigan Unemployment 5.9% – Really?

Philadelphia Federal Reserve Bank Questions BLS State Level Employment Data Revisions

Philadelphia Fed Website 2015-04-06

Kurt Weiss at the Michigan Department of Technology, Management, and Budget (DTMB) reported on March 25th that Michigan’s February 2015 seasonally adjusted unemployment rate dropped to 5.9% from January’s 6.3% figure. This was followed on April 2nd by the DTMB release of non seasonal adjusted employment data for February 2015. This quite large one month drop is great news for Michigan workers, if it indeed reflects our labor market. But does it?

Twelve Month Discrepancies Between Seasonally Adjusted and Unadjusted Data Differentials

The DTMB Michigan non seasonally adjusted (NSA) employment report for February 2015, at the bottom of page 6, showed that Michigan’s civilian labor force declined by 33,000 workers over the twelve preceding months. But the seasonally adjusted (SA) employment report for February 2015 at the top of page 2 showed that Michigan’s civilian labor force increased by 7,000 workers over the same twelve months. The growth of Michiganders employed over the same twelve month period also shows a 5,000 worker NSA/SA discrepancy: 101,000 not seasonally adjusted versus 96,000 seasonally adjusted. And the shrinkage of Michigan’s unemployed worker population over the same twelve month period shows a 46,000 worker NSA/SA discrepancy: 134,000 not seasonally adjusted versus 88,000 seasonally adjusted.

Valid seasonal corrections should produce twelve month differentials which agree with comparable item non seasonally adjusted differentials over the same twelve month period. Here we have a 0.85% discrepancy in Michigan’s total civilian labor force, a 0.1% discrepancy in civilian employment over the same twelve month period, and a 12.5% discrepancy in the shrinkage of Michigan’s unemployed worker population over the same twelve month period.

How did this happen?

The DTMB turns its employment data over to the U.S. Department of Labor’s Bureau of Labor Statistics for X-13ARIMA-SEAT seasonal adjustment. BLS also adjusts underlying data periodically for changes in the Michigan population estimates of the U.S. Census. The two (SA and NSA) February 2015 DTMB employment reports both reflect substantial BLS revisions undertaken in early 2015. A note at the top of page 2 in the DTMB February 2015 SA employment report:

Note: The data in this release reflects recently revised historical estimates. Seasonally adjusted labor force estimates for 1976-2014 for Michigan and 1990-2014 for the Detroit-Warren-Dearborn MSA were revised. Previous published data should be replaced with this new series. In addition, seasonally adjusted payroll job data was revised for 2010-2014. For newly revised data, please contact DTMB at 313-456-3090.

The DTMB February 2015 NSA employment report bears a similar note on its first page noting that it was also subjected to substantial revisions.

So Michigan’s employment data has been subjected to substantial revisions at BLS which produce seasonal adjustments that do not cross check against comparable item non seasonally adjusted data over the most recent 12 month period.

You Betcha! (16)Nuh Uh.(0)