Posts Tagged ‘disasters’

Letters from America, take six: Flirting with disaster.

datePosted on 12:46, September 7th, 2017 by Pablo

The theme of the week in the US is “flirting with disaster.” Trump did well on his return to Texas for a second time after Hurricane Harvey–he looked a bit more presidential and at least went to the affected areas to hand out relief packages and hug displaced babies (of color, to boot!). Upon his return to DC his decision to repeal DACA, the so-called “Dreamers Act” (which gave limited legal protection to foreign born children without criminal recrods who were brought to the US by their parents) has enough support in Congress to see it upheld and replaced within the six month time frame Trump has specified for its implementation (although like everything else Trump does, the court challenges are already being filed). So for first time in months Trump had a week devoid of major scandal, crisis or controversy.

But now Hurricane Irma is headed to South Florida after hitting the Leeward Islands, including the US Virgin Islands and Puerto Rico (a US territory with a population of 3.4 million). The Dominican Republic, Haiti and Cuba are in its path before it is predicted to make a direct hit on the larger Miami area (with a population of 6.7 million). It remains to be seen what Trump’s response to this storm will be given the heavily Hispanic demographic in the impact areas and the fact that he did not carry South Florida in last year’s elections (unlike SE Texas where Harvey hit). He might order full scale federal help given that even Mar el Lago will be affected, but so far he has done nothing and left it to the territories and states to deal with emergency prep.

Irma is stronger than Harvey, being a full fledged category 5 storm with sustained winds of 185 miles per hour and gusts to 225 mph (nearly 300 kilometers per hour) and a storm surge of up to 30 feet. Harvey was a Category 3 storm when it made landfall and turned into a rainbomb, but neither in terms of winds or surge is it comparable to the punch that Irma is packing. Like SE Texas, South Florida is low lying (and even below sea level in some places), so the catastrophic potential is huge. The number of people who could be affected in the Florida, Puerto Rico and the island territories is more than double that of those impacted by Harvey, and the demands for recovery assistance both in US territories as well as foreign neighbors will be astronomical.

So Hurricane Irma will be a big test for Trump. He ordered US$ 7.5 billion in federal disaster relief to Texas for Harvey recovery efforts (a drop in the bucket of what is estimated to be a 150 billion dollar recovery cost), but that will now need to be increased exponentially for Irma recovery efforts even in the face of GOP misgivings about disaster relief spending. Recall that the Texas congressional delegation opposed federal relief for the Mid Atlantic areas affected by Hurricane Sandy a few years ago, but are now clamoring for federal help (Ted Cruz and John Conrnyn come to mind). More generally, many Republican congresspeople are loathe to increase the US debt ceiling in order to fund recovery efforts outside their own districts, something that Treasury Secretary Mnuchin claims is an abosolute necessity (and a direct betrayal of Trump’s campaign promise to reduce the US debt ceiling). Faced with GOP opposition, Trump has sided with congressional Democrats in calling for a temporary elevation of the debt ceiling in order to finance disaster relief (a Faustian bargain if there ever was one,), much to the annoyance of GOP leaders such as House Speaker Paul Ryan. In view of these differences it will be interesting to see how the Republican majority in Congress reacts to pleas from Florida and US territories for federal receover aid, but what is certain is that the debate over it will be contentious at best.

Almost unnoticed in Washington amid all the hurricane news is the fact that another major disaster is unfolding in the US west. Nearly 60 large scale wildfires  covering hundreds of thousands of acres are burning in seven Western states, and both property and lives have been lost in them. Although the region is drought- and hence fire-prone and therefore has signficant deployable fire-fighting resources at the state and federal level (e.g. via the US Park Service and other branches of the Departments of Interior and Homeland Security), budget cuts have reduced the federal ability to contribute to fighting simultaneous large fires, some of which have reached the outskirts of major cities such as Los Angeles. With no end to the fire season in sight and seevral of these conflagrations still out of control, the possibility exists that a fire disaster can be declared this year. If that happens the arguments about natural disaster recovery funding will only get more intense and partisan.

And then there is North Korea. The test of what the DPRK claims is a thermonuclear or hydrogen bomb is a significant step forward in its nuclear testing program. Unlike more primitive fission or “atomic” bombs, these type of munitions are used by all of the major nuclear weapons states save India. The shape of the warhead that Kim Jung-un is seen posing with in photos appears to be similar to a US mid 60s-mid 70s Teller-Ulam  “peanut” design. Hydrogen bombs are two-phased fission-fusion devices that do not need advanced triggers because of their plutonium (or sometimes U-235) primary fission cores, which are more easily “ignited” by conventional high explosives (Pu-239 is used in both the primary and secondary sequences, although the bulk of the thermonuclear explosion comes from ignition of the U-238 “tamper” surrounding the Pu-239 “sparkplug” in the secondary sequence). The size of the prototype shown in DPRK propaganda photos demonstrates that it can fit into the nose cone of their recently tested ICBM (which seems to be a Chinese knock-off similar to Pakistani designs). So they have made a quantum leap towards having a lauchable weapon.

The issue remains as to whether they have the re-entry trajectories down so as to not burn up the nosecone and/or booster at too steep an angle, and whether the US and allied missile defense are up to the task of intercepting the booster before re-entry or upon re-entry on a flatter trajectory slope. Since the DPRK will have only one warhead on the booster (as opposed to the multi-warheaded nature of MARV’d and MIRV’d strategic strike missles deployed by the US, UK and Russia), a successful intercept can push the DPRK back both operationally as well as politically (since it will take some time to mount and fire another warhead, and that will likely not be allowed to happen because a launch in anger makes the DPRK vulnerable to a retaliatory response, be it conventional or not).

The more important question is whether, upon intelligence showing preparations of a live nuclear missile launch, the US will trigger (most likely conventional) pre-emptive strikes against DPRK missile launch facilities, or whether it will wait until a “live” launch is confirmed (which reduces the time avaliable for a response but which can allow more accurate tracking and intercept by ABM defenses such as the recently deployed Terminal High Altitude Area Defense (THAAD) systems, and which provides data for early detection of the trajectory of future launches, should they occur). Either way, the result will be war between, at a minimum, the DPRK, ROK and the US, with more states such as Japan likely to get drawn in because of direct engagement or alliance commitments. And then of course, there is China.

It is an open question as to where the DPRK got its warhead design. But Pakistan comes to mind simply because it already has nuclear weapons and has a history of clandestine nuclear weapons design and parts proliferation. That poses some thorny diplomatic and security questions for those who have tried to engage Pakistan in the effort to have it moderate its behaviour on a number of fronts.

In the face of a DPRK willingness to launch, the US has very few options left short of pre-emption and or interception upon launch. Trump as usual has backed himself into a corner by tweeting that “the time for talking is over,” and the response from China and Russia to his demands for stronger sanctions has been equivocal at best. Trump’s barking at South Korea for its alleged policies of “appeasement” vis a vis the  DPRK are not only factually incorrect but alarming to regional allies, since the ROK has been anything but appeasing even while urging bi- and multi-lateral talks with the DPRK on a regular basis. Secretary of Defense Mattis and the Joint Chiefs of Staff have emphasised that the US is not interested in annihilating the DPRK, but they and the rest of the foreign policy establishment have not dropped the long-standing demand for regime change and reunification under ROK rule, which is simply a non starter from the DPRK point of view. So the walls are closing in on non-military options.

The threat to stop all trade with countries that trade with the DPRK is an idle one given the negative impact on the US economy that such an action would entail (particularly in the case of China), but smaller DPRK trading partners (perhaps including NZ, which purportedly has small backdoor dealings with it), could suffer as a result. The big issue is whether China will put the squeeze on the DPRK in light of recent developments. So far, other than rhetorical condemning of the test and the clear embarrassment it feels at having been ignored by its client when it came to not going forward with the nuclear test, it has shown a relcutance to do so. The Russians flat out refuse to cooperate in any increased sanctions regime. So the US is left with few cards to play short of the military ace in the hole.

In sum, the US is flirtng with disaster on several fronts, three natural and one man made. How Trump handles them is going to impact his standing before Congress and of course have an impact on domestic support as well as international relations. Options on all fronts seem limited and the consequences dire, both for him politically as well as those affected by his decisions. The moment is one where, as Machiavelli noted,successful handling of  the viccisitudes of fortuna (fate) requires the commitment of leadership virtu (virtue).

When it comes to leadership virtue, Trump has so far displayed none. It remains to be seen if the tests now before him will uncover what has never been seen before.

Addendum: Here is an interview that I did with Selwyn Manning of eveningreport.co.nz as part of a video series that parallels/complements the written series here.

Public Goods and Private Bads.

datePosted on 11:14, October 20th, 2011 by Pablo

Much has been written about the difference between public goods and private goods, including issues of fungibility versus liquidity in the allocation of each (public goods are fungible rather than liquid, private goods can be both. Fungible means that something of worth can only be replaced in-kind, in a largely 1:1 transaction. Non- fungible or liquid means that the item can be exchanged for something else of different worth/value)). Less attention has been devoted to the issue of public and private bads, including the responsibility of the state in addressing each. In light of the disasters that have befallen NZ in the last year, it is worth pondering the latter.

The Pike River mine disaster is an example of a private bad. It was human caused, being the result of bad management decisions and poor safety standards within the mine, and affected its employees and profits. However, its impact on the public good was minimal. Even so, lax mine inspection regulations contributed to the explosion and loss of life, which is a public bad because state inaction facilitated the collective tragedy, and the adverse economic impact of the mine’s closure on the local community is also a public bad because it negatively impacts on the community through no fault of their own. The question is, what role does the state have, other than the policing in the aftermath of the event, in addressing the public bad aspects of the disaster?

The Christchurch earthquakes are clearly a public bad. The combined into a prolonged natural disaster, largely unforeseen. The government mobilised resources to address the aftermath, efforts that are still ongoing. But is there a private bad element to the quake? Did shoddy construction contribute to the loss of life and property? Were regulatory loopholes exploited that exacerbated the impact of the quakes, and if so, what is the state’s role in rectifying those areas in which standards and procedures were skirted. Is it a matter for the industries involved to resolve privately? What happens when private insurers renege on coverage or attempt to minimise payouts? Does the state have a responsibility to cover the difference in the public interest? Or is that purely a private matter?

The Rena shipwreck is most interesting because it clearly combines the two forms of bad. It started out as a private bad caused, apparently, by gross human error. National’s response was predictable: it waited for the parties to the contract of the vessel to negotiate a response. And waited. After four days of calm weather and no private response, a storm blew through and began to break the ship apart, spilling part of its load and fuel from ruptured fuel lines. When leaked oil and containers began to hit Bay of Plenty beaches, the disaster became a public bad, at which time the government belatedly intervened, mostly in a support rather than in a leadership role. This is due to its continued preference for the contracting parties to assume the responsibilities incumbent upon them for having caused a private bad with public ramifications. Meanwhile the environmental impact of the wreck continues to grow, with the costs of the clean up rising and the negative economic impact on local businesses likely to be significant in the measure that the spill is not contained promptly and the clean up process stretches into months. 

In other words, a private bad caused a public bad with private bad implications. Since the National government believes in the primacy of the market and private sector, it has left the bulk of the response to the parties involved, and called for volunteerism (another private act) in its approach to cleaning the beaches.

All of this is quite predictable. The quest for privatisation of the public sphere over the last two decades has reduced the concept of public goods and bads while expanding that of private goods and bads. Left to their own devices in a deregulated public space, private actors will minimize costs and increase risks in the pursuit of profitability. Should an accident such as Pike River or Rena occur, the payouts involved are considered to be acceptable given that they will be less than the costs of compliance in a tightly regulated commercial environment. The calculation is that the costs of occasional “one-offs” (which are not) will be less than the costs of ongoing regulatory compliance. In coal mining and shipping, accidents are not occasional happenstances but regular occurrences so the industries involved are have prepared accordingly (by establishing contingency funds for such events). The difference is that when a private bad becomes a public bad, they have limited contractual responsibility in addressing the latter. It is up to the state to recoup the costs of the public side of the bad incurred, which means taxpayers will have to foot the bill for the legal expenses involved in the court cases taken against the private parties responsible. In some cases–Pike River looks to be one–the state will do nothing of the sort because the public bad aspects are considered to be small, incidental, and not worth prosecution.

It appears that in the rush to privatise sight was lost on the potential public bad caused by private bads. Commercial de-regulation in the pursuit of competitiveness and trade ignores the fact that the private parties in contractual relationships with each other are not, by definition, responsible for the public good. As such, the public bad potential of a private bad event is discounted, in part because private parties know that governments will be loathe to charge them the full costs of a public bad response less they  be seen as anti-business. In an age when the private sector rules over the public interest, few governments will be courageous enough to incur the wrath of major commercial actors regardless of the latter’s responsibility in causing a public bad.

The problem is compounded by the hollowing out of state regulatory agencies, particularly in their operational capabilities as well as their policy scope. Insufficient regulatory enforcement (such as it is) due to reductions in state regulatory agency workforces, combined with reductions in quick response assets in agencies responsible for disaster relief and mitigation, force the state to contract out the latter in an environment made riskier by de-regulation. Since the skill sets required for disaster relief are often very specialised and limited, given the geographic and logistical difficulties presented by specific scenarios in the time-sensitive context in which the public bad occurs, this places private actors with such skills in a de facto monopoly position over the response in their areas of expertise. This allows them to extract monopoly rather than market rents from the state when contracting such assignments.

The private bad-focused approach can be seen as short-sighted in the measure that de-regulation facilitates private actor irresponsibility, which in turn leads to higher costs for the state in the event that a private bad becomes a public bad. Seen another way, robust state regulation of private industries with potentially injurious public consequences may in fact be more of a cost-savings over the long-run given the inevitability of private sector accidents that negatively impact on the public good.

This is the crux of the matter, and it is the one that should be reflected upon when issues of off-shore drilling, mining, nuclear energy and other private industrial ventures with potentially public bad implications are discussed.