Economic links promote negotiation, deter war

A funny thing happened on the way to war.  It didn’t break out.

The Russian takeover of Crimea might have led to war in the last century, but it didn’t this time. 

After Kuwait, Iraq, and Afghanistan, many Americans may be just plain tired of going to war.  President Obama has laid out his policy defining when American forces should be deployed.  Ukraine does not fit, because the United States is not directly threatened.

At the same time, Europe has been reluctant to retaliate against Russia for its Crimean invasion.  Its attitude reflects the prime factor making major wars increasingly unlikely – economic interdependence.

Europe depends for about a third of its energy supply on oil and gas from Russia.  If it clamped down hard on Russian interests in Britain or Germany, it might face sharply reduced energy imports from Russia.  Protecting Crimea could make this spring in Europe pretty chilly.

But, as we often forget, dependence runs both ways.  Russia’s foreign currency earnings, making possible its purchases of essential goods from other countries and it foreign adventures, stem almost completely from its energy sales.  A commentator recently asked if anyone had seen any import stamped “Made in Russia.”

Though it has relatively little trade with Russia, even the U.S. is not completely immune.  While the tough talk and sanctions have shown American rejection of the Crimea caper, two American astronauts have been in the International Space Station, completely dependent on the Russians to return to Earth.

Probably the main reason the Crimean situation has not led to military confrontation also explains why direct big power conflict – World War III – has become so unlikely.  The economies of developed countries and, increasingly, of developing countries are so intertwined the cost of going to war is too high.

Because they can no longer use force without the risk of harming themselves, countries may appear weak by the standards of the past.  But, to some degree, their economic interdependence was planned, and otherwise it has seemed to be inevitable. And it was intended to reduce the risk of war.

After two World Wars grew out of European conflicts, especially between France and Germany, leaders in those countries decided to link their economies to the point where they and their neighbors would be unable to go to war against one another.

Starting with the coal and steel industries and only six countries, European integration now includes 28 countries and virtually all sectors of the economy.  Working with the European Parliament, an international commission now makes the rules governing the regional economy.

The result is today’s European Union.  While Europe is still far from politically unified, with nations retaining sovereignty, the economies of European countries are linked just about as closely as the economy of the United States.  A new war in Europe now seems impossible.

In fact, the recognition war is no longer possible has led Europe to limit military spending.  That frees public funds for more constructive purposes, but it also makes countries less able to use force and more likely to negotiate.

NATO is almost certainly incapable of really defending all of its member countries.

The world has changed a lot since the days of the two World Wars.  A corporation may do business in several countries.  Trade agreements have been negotiated to reduce barriers to the flow of goods.  Foreigners invest in businesses in countries they may never visit.

All of this has come to be called globalization.  It has its opponents, who believe giant corporations end up have more power than governments, resulting in poor labor conditions and few environmental safeguards.  They see the benefits flowing to the developed world with poorer countries left out.

These arguments may have some merit and, when true, call for countries and corporations to step back from policies exploiting others or imposing new costs.  But they miss one of best reasons for increased global interdependence: it makes war less possible.

The creation of bigger markets appears to promote prosperity.  As the poor countries adopt the mechanisms of globalization, they are moving out of the cellar.

The proof is that the Group of Eight, a club of major industrial nations, is giving way to the Group of 20, which includes countries climbing into greater prosperity.

Though Russia tried to belittle its exclusion from the Group of Eight and the prospect of losing energy markets in Europe, these economic measures appear may prove more effective than resorting to force.

Globalization and economic interdependence may not stir the blood like going to war, but they work better.

GOP moves to cut voter turnout across U.S.

Suppose you are the head of one of the two major American political parties, and elections are giving you a headache.

In five of the last six presidential elections, spanning almost a quarter century, the other party has won a nationwide majority of popular votes.  If you add up all the votes nationally in elections for the U.S. Senate or the House of Representatives, the other party has won a majority.

Perhaps even worse, national polls show that your party is much less popular than the other party and has been the second choice for several years.

To solve these problems, you come up with two possible solutions.  The first is to develop new policies to broaden the party’s appeal among voters.  The other is to find ways to reduce the number of voters who normally support the other party.  That’s called “voter suppression.”

In short, the way to make democracy work, at least for your party, is to have less of it.  Participation in voting in the United States is well below many other countries even without suppression, so the plan would be for an even more dismal voter turnout.

You are the head of the Republican Party.  And you have opted to find ways to make participation harder for some traditional Democratic Party voters – the poor and minorities.

Your policy focuses on those elections having the greatest effect on presidential and congressional outcomes.  You have discovered something the Democrats’ electoral strategy seems to have missed.

The key is not presidential or congressional elections.  The most important elections to control who votes are for the state legislatures and governors.  If you can win control in the states, you can impose the rules governing voting in national elections.

In some states with a pattern of discrimination, especially against African-Americans, the Voting Rights Act used to require them to get approval from the U.S. Department of Justice before changing voting rules.  The Supreme Court threw out that requirement.

The GOP has stepped up its efforts to make voting more difficult for people likely to support the Democrats, the New York Times reports.

In the last decade, the Republicans claimed new measures were need to prevent fraud – ineligible people voting.  The method of choice was better voter identification.

New laws require voters to show photo identification and increasingly a second document like a passport or birth certificate proving American citizenship.  Many poor people, traditional Democratic supporters, do not have either and getting them may be difficult.

When evidence showed virtually no voting fraud, the focus shifted to simply making access to voting more difficult.  Registration and voting on the same day, proven in Maine and elsewhere to produce higher participation, is being eliminated in some states.

States under GOP control have reduced the length of early voting periods.  They have made applying for an absentee ballot more difficult and cut the number of polling places.

There are 23 states with a Republican governor and legislature, meaning they can readily change voting laws.  In 2013, eight tightened voting rules.

Discrimination against minority voters appears to be growing again.  Right after the Supreme Court decision, some states moved to adopt plans previously denied federal approval.

The other piece of GOP election strategy is the redrawing of congressional district lines every ten years.  Republican-controlled state legislatures pack as many Democrats as possible into as few districts as possible to leave the GOP the rest of the seats.

With all the talk about political deadlock and who will run for president in 2016, most of these changes escape public notice.  When people vote for state legislators, they almost never see the national implication of their choices.

The Republicans may be doing nothing illegal.  The Democrats seem to have been too passive at a national level in working against the GOP effort to influence elections by voter suppression.

Nationally, the Democrats could make it more of a campaign issue.  While suppression has not been a problem in Maine, people in any state favoring participation should understand their votes are devalued when other states distort national election results by limiting voting.

There are now 14 states where the Democrats control both the legislature and the governorship.  Perhaps the GOP has already written them off, but the Democrats there could use reverse tactics to increase participation and draw better district boundaries.

Beyond trying to counter voter suppression, if the Democrats fail to develop outreach programs to help the poor and minorities register and vote, the GOP strategy could have the long-lasting effect of protecting its hold onto power.   

“Shockingly stupid” electric policy threatens consumers

When the head of a major electric company says today’s policies are “shockingly stupid,” we probably should pay attention.

At the premier annual energy summit, David Crain, CEO of NRG, a company owning more generators than are in all of New England, said, “Think how shockingly stupid it is to build a 21^st-century electric system based on 120 million wooden poles.”

Crain believes people will buy less power, making less use of the electric system.  They use power more efficiently, and more electricity will come more from “distributed generation,” small units serving individuals and local areas.

Not everybody agrees with Crain, but his warning cannot be ignored.  And the market is showing some of what he forecasts is already happening.

All electric utilities own wires.  Customers pay their wires charge for each kilowatthour – the unit of electricity – they use.  If customers use less electricity and utility revenues fall, the wires companies still want to cover the cost of their wires.

Beyond cost recovery, most utilities also collect a profit from their customers.  The state grants electric utilities monopolies, and regulators allow them to set their rates to achieve a specific level of profit.  Most other companies get neither break.

Utilities seek to protect their profits by “decoupling,” which separates their profits from all other wires charges.  In other words, they get to collect the same amount of money to pay to their shareholders even if their wires are used less.  That pushes up their rates, because the profit is spread over fewer kilowatthours.

A utility can make up shortfalls in its revenues to pay for the wires and profits by raising the rates paid by all customers.  Across-the-board increases mean customers who have not cut their usage pay some of the costs left behind by those cutting their purchases.

Or the utility can argue customers cutting their usage may still occasionally place demands on the system, so they alone ought to pay higher rates serving as a sort of insurance premium.  That’s what Central Maine Power is now proposing.

At some point, that approach could encourage some customers to completely drop off the system.

If utilities risk losing sales, their investors will want even higher returns on their investment, pushing rates up.  Fearing rate increases, customers will be discouraged from cutting their purchases of power from the grid.

That looks like a lose-lose situation.  The utilities have a financial obligation to their investors, so they look to customers to pay more.  Customers feel cheated of the promise of efficiency and distributed generation if rate increases are their reward.

Regulators are supposed to strike a balance.  But, in New England, they done just the opposite, piling on wires costs and boosting utility profits, supposedly to get more renewables to the market. 

Customers who want the utility to maintain its wires for their possible use when needed should pay for this insurance.  Perhaps smart meters can help make how they pay more fair.

Instead of charging for wires service by the kilowatthour delivered, as is usually done today, utilities could charge for the maximum demand by each customer, as shown on the new meter.  The customer would pay for the highest amount of wires used each year instead of the amount of power flowing on the lines

That could encourage customers to try to use the grid even less, especially at peak usage times when power costs are high, promoting conservation and distributed generation.  But it might send us into the same spiral of less usage leading to higher rates. 

Maybe it’s time to change the nature of the electric industry.

The country has already made one big change.  Though electric service is a vital necessity, Congress decided that it could be supplied by non-utilities, taking their own risk on building power plants, rather than utilities and their customers taking that risk.

We are no longer stuck with the same old way of generating power.  Should we be stuck now with the same old way of transmitting it?

Today we face a situation just like having customers pay for buggy whips, even though we now have automobiles.  The buggy whip makers had to either change their business or quit.

Electric utilities could get into the unregulated businesses of selling distributed generation or efficiency services.  They would have to move away from their current all-wires business model.

Change is essential unless regulators expect to have people pay more and more for less and less, thus preserving the traditional utility at its customers’ expense. 

Young adult voters pose problems for GOP

When political conservatives met last weekend in Washington, a split in their ranks emerged.  Younger activists urged the right wing to focus on economic issues and downplay opposition to same sex marriage and marijuana legislation. 

That divide is concrete evidence of a newly reported break between younger and older adults, not limited to conservatives.

The widely respected Pew Research Center, a nonpartisan, independent organization, found through its surveys the so-called Millennial generation, young adults between 18 and 33, has different views from older adults.

Young American adults are less connected to political parties or formal religion than their elders.  They are big users of social media, marry late or not at all, distrust others and carry big debt.

They are better educated than any young Americans have ever been, but they suffer greater economic hardships than others in the past few decades.  The recent recession hit them hard.

This group is more racially diverse than any before in American history.  About 43 percent are nonwhite as is about half of all newborns in the country.

Most Millennials are political independents and not formally aligned with either the Republicans or Democrats.  Only 31 percent of them think there’s a great deal of difference between the parties.  Those with party affiliation are Democrats by a big majority.

They are less likely to affiliate with any religion and or to say they believe in God.

They have a different life style.  Only 26 percent of Millennials are married.  When they were the same age, 65 percent of the Silent generation, those now 69 and over, were married.

Don’t all young people go through this stage and then grow wiser with age?  Pew says that’s not the case, because on identical matters, the Millennials hold different attitudes from those held by older adults when they were as young.  And the older people seem to have held onto many attitudes they had when they were youthful.

How do all these findings translate politically?

The country is changing, not merely going through a growing-up phase.  And that change can have a huge effect on American politics.  The Pew report may not be good news for Republicans.

Political polls have shown Millennials vote “strikingly Democratic,” Pew reports.  They hold “liberal views on many political and social issues, ranging from a belief in an activist government to support for same-sex marriage and marijuana legislation,” according to Pew.

The Census Bureau projects a majority of Americans will be nonwhite in less than 30 years.  As this group ages and adds their children to the population, their views are expected to count more in voting.

Current GOP opposition to resolving the immigration problem, mainly a Hispanic issue, could cost the Republicans in elections as early as this year.

In short, if the Republican Party cannot find a way to appeal to younger nonwhites, it risks losing power to the Democrats.  In solidly Republican Texas, for example, voting analysts expect that Hispanics there will be numerous enough in the next ten years to turn power over to the Democrats.

These days, in many parts of the country, the GOP bases its political domination on social issues having a religious basis.  Opposition to same-sex marriage and abortion, so-called “wedge issues,” have helped it gain political victories.

If the Millennials take their attitudes into later life, which Pew appears to see as possible, faith-based issues may count for less among the voting public.  Such a shift could weaken GOP support. 

The young conservatives at last weekend’s annual conservative conference complained these social issues highlight what conservatives oppose, when they should be talking more about positive policies.

Young adults, not only conservatives, are favorable to business, traditionally linked to the GOP.  If the Republicans emphasize economic issues more and stress social concerns correspondingly less, they may be able to capture support from Millennials.

Despite its low trust of others and the economic worries of many of its members, the generation of young adults is more optimistic about the future of the country than were the Boomers (now 50 to 68) when they were the same age.

And Boomers have become more conservative over time, so it is possible than Millennials will as well.  But the racial mix and more difficult economic conditions of today’s young adults might produce a much different result.

Millennials are about a quarter of all adults.  While Maine has the highest median age in the country, the percentage of Millennials among the adult population is only slightly less than in the country as a whole.