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Landrieu needs to demonstrate effectiveness on oil bill

We’ve heard enough claims from Sen. Mary Landrieu about her presumed contributions to Louisiana. The stalled oil extraction bill in Congress offers her a perfect opportunity to show, after a decade in the Senate, that she really does have some influence and that she can do something for the state other than raise the taxes of its citizens, vote against qualified nominees to the judiciary, try to squelch the economy with oppressive labor regulation, detract from flood control efforts, and subverting elections.

At present, Congress cannot agree upon two versions of legislation that promises to increase U.S energy independence dramatically, a byproduct of which would provide money to Louisiana for coastal protection. The House bill, authored by Rep. Bobby Jindal, would be much more generous to the states and more likely to allow for production of more oil. The Senate, however, seems resolute in letting out a more modest version. Senate Democrats are the driving force behind the intransigence.

We must understand one root cause of these Democrats’ opposition to the superior House version, H.R. 4761, stems from their devotion to an environmentalist agenda born of a distrust of free markets. The U.S. is the only oil producing country in the world that restricts drilling off its shores, despite the almost nonexistent environmental damage that oil spills, much less the normal drilling activities, do; 85 percent currently is off-limits. That tightens supply, driving up prices.

Landrieu should argue with her colleagues that not only would opening these areas (East and West coasts plus Florida) drive down prices to consumers, states could benefit because they will keep a much higher proportion of revenues generated 100 miles out that currently (with Louisiana reaping the greatest gains). If they followed Louisiana’s lead, that money could be used for coastal restoration. Thus, more drilling would help, rather than harm, the environment.

Senate Democrats also oppose it because it would reduce potential monies coming into the federal treasury relative to the Senate version (especially since Jindal’s bill applies retroactively in the royalty payments). They love big government and the control it has over people’s lives so much that they cannot stand to give away anything in their quest to fund it.


Better ideas needed to pay off LA insurance debt

In an apparent reversal from her view at the end of the last legislative session, Gov. Kathleen Blanco appears like she’s closing the barn door on another escaped horse, ready to chase after it. That option may be the best of a bad deal for Louisiana.

Whether through bad luck (because it had existed for such a short period of time and had not been able to build up reserves) or because its rates were kept artificially low, or both, the state-owned insurer of last resort, Louisiana Citizens Property Insurance Corporation took a beating over the 2005 hurricane disasters, running up a deficit of $825 million that had to be financed by debt to pay off claims. Current law mandates that assessments to cover this, if they don’t come out of the pockets of Citizens policyholders, come out of the pockets of every home policyholder in the state. (For an excellent explanation of how this came about, read this from state Rep. Tim Burns.)

At the conclusion of the 2006 session, some lawmakers moved to take $50 million out the newly-created state fund for emergency operations to lighten the burden of the payers a little. Blanco’s legislative leaders negated that tactic, although a provision did get in place to remove as much as that amount from the fund if it’s unspent by the end of the fiscal year.

But now it seems Blanco may be changing her mind, after various other ideas to deal with the payback have been floated such as creating a risk pool to draw from (which is substantially the situation as it now exists) to using federal recovery money (Blanco’s crew says recovery needs are too great to do that) to getting into a compact with other states to spread out the risk and payback (which other lower-risk states would laugh at). In effect, it will slightly reduce the hit for almost everybody but will otherwise punish a few.

This is because, like it or not, in some way almost every state resident pays for insurance. Owners of mortgaged property must pay it; renters pay it as part of their rent. Only those who own homes free and clear and are crazy enough not to insure the property were going to avoid paying under present law.

Taking any projected state surplus (and it’s uncertain that there will be a surplus yet) and using it to pay off part of the debt is a kind of fee placed on the citizenry because, otherwise, these funds could have been returned to them or used to provide other services (hopefully, needed ones in an efficient manner). It also avoids the real question of responsibility, which ultimately lies with those who chose to live in high-risk areas but paid below-market rates.

That Citizens’ rates have shot up reflects only the future expected risk, now perhaps better adjusted to reality, of the properties it insures. Unfortunately, that doesn’t address its past sins of artificially low rates, which otherwise will be born disproportionately by other state residents and policyholders.

Unless the state begins to think creatively about this. For example, the state could plow into this cause some nonrecurring capital outlay surplus-recognized money (they are, after all, building houses) instead of building reservoirs that do nothing for economic development. Or maybe build fewer livestock barns? Do these things and a lot of the debt could be paid off in just a few years without any assessments to unrelated parties.

Yes, and given it’s Blanco, her fellow Democrats in charge of the Legislature, and just a general surplus of good-old-boy types in state government, I’d have a greater chance of flapping my arms and flying to the moon that this occurring. Get out your wallets, Louisiana, one way or another you’re about to pay up for another populist mistake.


Louisiana blogosphere having impact on political news?

I’m a bit surprised that “old media” journalist Jeremy Alford didn’t go to the horse’s mouth when he wrote his latest piece wondering whether “new media” bloggers were having an impact on Louisiana political reporting – me (he admitted in a rare moment of weakness when truly bored that he reads this space sometimes). I write one (as one might gather, reading it right now) and I’m a political scientist and, as it turns out, I’m familiar with the work my colleagues in the profession that assess this very issue, on a theoretical level. But that’s why I started this enterprise, trying to fill in the gaps left by the mainstream media (that’s why it’s called “Between the Lines”), so I’ll fulfill my end here and now.

The payoff question is whether blogs make any significant difference in information disseminated about Louisiana politics. The generally accepted theory is that blogging, given that any single blog is read by only a tiny portion of the population (for example, I average about 92 hits a posting day here and almost as many on the mirror of this blog at PoliticsLa, and have a mailing list of just little over a dozen, meaning about 175 direct readers a typical posting day), follows a two-step communication process. In this instance, they are read by elites (disproportionately, as I can tell by posted comments, e-mail messages, and the names on my mailing list) who actively engage in politics, who then fan that information out.

In fact, it becomes circular to some degree because much of what is blogged about comes initially from mainstream media reports – it’s just that the blogs may give a different opinion on it or alert readers to a story’s connection with others. Rarely do they provide original information of which the media is totally unaware or which it might be unwilling to disseminate.


State to pay needless fines to make politicians look good

Once again, Louisiana elected officials have played politics to cover up for their incompetence. Once again, Louisiana citizens will have to pay for their mistakes.

These officials cry foul that the federal government isn’t allowing for the state to have enough time to “audit” bills sent by the Federal Emergency Management Agency. Never mind that FEMA has granted multiple extensions to the state. Never mind that other affected states were quite satisfied with FEMA’s paperwork and paid their bills on time. They avoided all penalties; Louisiana is facing daily fines that may well cost millions of dollars before it gets it act together.

The excuse is that Louisiana wants to make sure the money is being spent “wisely.” The state acceded to the standard regime that the federal government will pay for the bulk of acceptable recovery costs for the hurricane disasters of 2005, but which means the state must chip in some as well. What this action covers up is that if Democrat Gov. Kathleen Blanco and the Democrat-run legislature had been more interested in serving the state that playing politics to begin with, payment and any potential auditing could have been accomplished long ago.

Instead, because (by way of examples) politicians didn’t want to disrupt existing political fiefdoms regarding flood control, or because they spent so much time weakening ballot security, or because they spent a ludicrously long interval coming up with a workable housing reimbursement plan, and on and on, that Louisiana was months behind other affected states. There was wasted so much time and effort on these things which could have left plenty of time to audit (which in any event is not possible under federal law yet was tolerated and even facilitated by FEMA) and to allocate the money for the bills long ago, not in a rushed fashion towards the end of June.

Even more laughable, the state claims this is necessary to avoid the possibility of paying for “$300 hammers.” Incredulous, because of the hypocrisy behind it all: this was the same state that, for example, blew $375 per voter, ten times the normal cost, on an “outreach” program that it was not required to do but chose to do because Democrats thought it could gain them electoral advantage in New Orleans elections, and, potentially, in future elections. Or that it gives away nearly $100 million a year which a simple realigning of health care expenditures would save? As wasteful as the federal government can be, to have Louisiana officials complain about waste when they sanction it themselves gives us a new way to understand the concept of “pot, meet kettle.”

They don’t even understand how it all works in an attempt to explain away their bungling. State Rep. John Alario, intimately involved in money matters as chairman of the House Appropriations Committee, attempts to cover up for it by saying “I’m sure our treasurer invested the money we set aside for paying these bills. It will be interesting to see how much we’ve earned on our money. Hopefully, it will offset what FEMA is charging us.”

But it can’t by federal law. As John Hill reported: “[I]t is specifically illegal for states to earn money off federal grants. The federal hurricane funds are ‘draw-down funds,’ which means the money stays in the federal treasury until the state has spent it; the money passes through in electronic format rather quickly.”

Besides, what was stopping the state from paying the bills up front, and then after the audit, requesting reimbursement? If it were serious about the enterprise, that’s how it would have been handled.

In short, given the past history of the state’s elected officials and its bureaucratic performance, and their obvious lack of understanding of the whole process, it’s hard to take serious the state’s claim it’s trying to be thrifty. Making much more sense is this whole operation is a smokescreen to make its politicians look good, to disguise the fact they’ve once again failed their constituents and are making the citizenry pay for their stupidity.