Packing Heat At The House Natural Resources Committee

Yesterday’s organizational meeting of the House Committee on Natural Resources was sidetracked, or hijacked, by a debate over whether members should be permitted to carry firearms into committee meetings.

An amendment introduced by Rep. Jared Huffman (D- California) met with strong Republican opposition. Arguments revisited the political violence of January 6th, raised questions about the mental competence of certain members, and pointed up the lack of vetting exposed by the George Santos debacle.

The Huffman amendment failed. Here are highlights of the discussion.

Lithium Executives, US Military, and Diplomats Discuss Shovel Ready Projects in South America

A clip from this Atlantic Council presentation posted on social media by Bolivia’s Kawsachun News has already caused some fear and loathing. It shows General Laura Richardson, Commander of the US Southern Command, unapologetically discussing US interests in Latin America’s natural resources: lithium, oil, gold, fresh water, and the forests of the Amazon. I was struck, as well, by another moment: Richardson’s description of a meeting she had last week, on Wednesday, January 18th, with US ambassadors to Chile and Argentina along with executives from Livent and Albemarle, two US-based lithium companies operating in South America. Here’s that moment. It merits some careful attention.

Who’s Still Talking about A Green New Deal?

Almost nobody, as far as I can tell.

Just two short years ago, it seemed everyone at Davos was committed to striking a Green New Deal. This year, the phrase is no longer so fashionable, and you are more likely to come across it in populist rants against globalism and globalists or the Davos agenda.

Writing from Davos in the Wall Street Journal today, Walter Russell Mead eschews the term, arguing instead that any kind of deal that requires “coordination between private sector and political leaders,” and “global coordination” especially, will be repugnant to “the traditional standpoint of American pro-market conservatism.”

No argument there. What Mead doesn’t say, of course, is that the current policy environment favors some private-public coordination and some global coordination and industrial development over other kinds. The laissez-faire, go-it-alone, America First standpoint conservatives hold up for the world to admire is a fiction, rife with contradictions, a form of self-flattery or a story told in pursuit of policy goals. So is the soft denialism of the American right, which holds “that climate change will [not] arrive as quickly or be as devastating as the Davos consensus believes”; but Mead is probably correct that this position will carry the day in the US, at least for the near term.

The question, then, is what sort of deal or climate policy framework should we expect to emerge from this mix of soft denialism and anti-globalism? Nothing too ambitious or coherent, I imagine. The promises of the Green New Deal were abandoned almost as soon as they were made, or shortly after the 2020 election. So now what? I have been tentatively arguing that in the US we’re seeing the emergence of a Green Right. They will focus for the next couple of years on touting jobs in red districts (think infrastructure, mining, and EVs); taking an axe to environmental and financial regulation (e.g., permitting reform and attacks on “woke” ESG); setting border policy to keep migrants and refugees out; and striking an increasingly aggressive posture toward China (at Axios, Jael Holzman has a piece about how that could backfire).

And this program probably has better chances of taking hold in the US than the Green New Deal ever did.

Permitting Reform? How About a Better Business Model?

From Phil Bloomer’s case for “tempered optimism” on business and human rights in the new year:

…2022 saw human rights gains in some key sectors, even as there remains room for considerable improvement. In 2023 our movement has a critical opportunity to hold together on climate change and the urgent energy transition. We all recognise that rapid shutdown of fossil fuels is an existential challenge, but divisions arise on how to achieve speed. Some activists advocate the inclusion of human rights ‘as long as it does not slow the transition’. But growing evidence shows we will only achieve a fast transition if it respects human rights and delivers real benefits to communities and workers. More responsible renewable energy companies are moving to adopt this effective business model by including shared ownership to build the stake of communities and workers in these projects. More troubling is the transition minerals sector, on which new renewable installations depend, where even the more responsible mining companies appear committed to ‘business as usual’ models – and that’s despite expensive permit suspensions and community protests against abuses.

The CEO Story, from Profitability Crisis to Polycrisis

Michael Roberts’ historical chart of the G20 rate of profit.

I’ve written a little about the the invention of the CEO — the title, the office, and the social position described by that term. This chart from Michael Roberts’ blog showing the declining rate of profit can help reframe that discussion.

In this view, the term “CEO” first comes into use in the midst of the profitability crisis, in the late 60s and 70s, after the postwar Golden Age. The CEO’s heyday runs through the neoliberal recovery. The Fall of the Celebrity CEO (to borrow a term from Edelman) coincides with the start of the Long Depression.

Unfortunately, Roberts’ chart doesn’t run up to the present, which would show the rate of profitability continuing its decline in the face of multiple, entangled, global crises all at once, a polycrisis:

A global polycrisis occurs when crises in multiple global systems become causally entangled in ways that significantly degrade humanity’s prospects. These interacting crises produce harms greater than the sum of those the crises would produce in isolation, were their host systems not so deeply interconnected.

Having helped steer society to this precarious juncture, has the institution of the CEO now run its course? And what would it take to reinvent it, so that the business enterprise can help address the overlapping crises we face, improve humanity’s prospects, and play a constructive role in a new social contract? 

Some Misgivings about the End of Section 206

2023 could see the end of Section 206, the New York LLC publication requirement. I have supported its repeal ever since I first came up against it, and I still support it, despite some misgivings. The legislation currently on the table does little to quell them.

Currently, New York Limited Liability Company law requires newly formed LLCs and LLPs to publish a notice for six successive weeks in two newspapers designated by the county clerk, “one newspaper to be printed weekly and one newspaper to be printed daily.” At the end of that period, founders have 120 days to file an affidavit of publication (and pay a $50 filing fee). Costs can run into the thousands of dollars, since local newspapers where the notices are printed — and they must be printed — effectively have a monopoly.

This part of the 1994 LLC law reads like an artifact from a bygone, pre-internet era, and it no doubt helped prop up struggling local newspapers financially even as the internet hastened their demise. It has also given rise to a professional services cottage industry.

Legislation to repeal Section 206 has been making its way at a slow crawl through the New York Senate and the Assembly since 2008. It was last referred to the Committee on Corporations, Authorities, and Commissions in January, 2022. In March of this year, the New York Bar Association came out in support of repeal. In November, the bill’s sponsors, Liz Kreuger in the Senate and Rebecca Seawright in the Assembly, both won re-election. So prospects for a repeal in the next legislative session look favorable.

The proposed amendments would not only repeal the publication requirement, but also establish something called the Department of State modernization fund. Notices would be published in an online database maintained by the Department of State; associated filing fees would go toward “the modernization and security of the Department of State’s public-facing website, and for developing alternatives to physical publication of documents.” The bill’s sponsors say it will “remove onerous and unnecessary requirements on LLCs and partnerships forming in New York state” and that online filings “will improve a citizen’s access to this information.”

The Bar Association rightly observes that LLC and LLP filing notices running in local newspapers are generally ignored. Publication costs are high; the current requirement “serves no legitimate business or economic purpose,” they write; and it creates an unjustifiable disparity, since New York corporations are not subject to the same requirement as LLCs. These are all good points, as almost anyone who has contended with the publication requirement will tell you, and 97 percent of the lawyers surveyed by the Bar Association agree.

In addition, eliminating the publication requirement will benefit the State of New York in several ways. It will likely increase business activity in New York, which will benefit the Department of State’s revenues. More companies forming and locating within the State would similarly benefit New York’s economy. As a result, this bill will likely lead to higher employment and greater tax revenue in New York. More companies with offices in New York will employ more New Yorkers, resulting in increased tax revenue to the State.

Here is where my misgivings start to kick in. It’s hard to say how “likely” any of this really is. The publication requirement is an inconvenience and a burden, but how many companies have really been deterred from forming and locating in New York because of it? When it comes to choosing between New York and Delaware, how much does Section 206 factor into the decision? Delaware LLCs and LLPs that do business in New York still have to register to do business here, pay an annual filing fee, and comply with New York tax laws. Could the repeal make New York the new Delaware? Unlikely: Delaware will still enjoy institutional advantages (namely, the Court of Chancery) and a reputation, deserved or not, as the best place to form a business and raise capital.

Maybe Delaware sets the bar too high. Will the repeal significantly increase business activity and contribute to higher employment and greater tax revenues? Look at the trend line on this US Census Bureau graph. Is the repeal of Section 206 the thing to keep it moving north? Will the upward trend accelerate once the legislation passes?

Time will tell, and some measure of skepticism seems warranted. What’s more, the repeal could have adverse consequences as well as benefits. What happens to the small, local print publications that have been practically subsidized since 1994 by LLC listings? Those local newspapers may not matter so much in New York City, where we have several daily newspapers (but I’m not sure that argument can stand much scrutiny), and protecting New York City publishers’ Section 206 interests may be outweighed by the economic benefits anticipated from the repeal. But what about in more rural counties?

Do printed daily and weekly newspapers still serve rural, or, for that matter, urban communities in other ways? Let me overdramatize just to drive the point home:

No surprise that local print publications failed to catch this brazen fraud.* It’s the rare local newspaper that can support investigative journalism or take on a newly elected member of Congress; and a Section 206 zombie newspaper probably isn’t going to be up to the job anyway. Subsidizing publishers on the back of new businesses, which is essentially what 206 does, is not the same thing as supporting local journalism. Still, it would be good to know or at least see some public discussion of what these print publications contribute to their communities before they try to set up entirely online or just fail; it would be even better to see some legislative efforts to keep local journalism alive. The LLC publication requirement cottage industry will likely disappear, too. I have more trouble shedding a tear for its demise.

Another set of questions concerns the modernization fund, its reach and its governance.

The legislation places the fund under the custody of the State Comptroller and specifies that “on the warrant of the State Comptroller” the moneys in the fund will be paid to cover modernization and security upgrades to the DOS website and development of digital alternatives to the current publication system. Moneys in this fund are “to be kept separately and not to be commingled with other moneys” in the Comptroller’s custody.

But what falls under the fuzzy heading of “modernization”? What does the firewall between modernization and other Department of State projects look like, and how will it be maintained by successive Comptrollers? Is modernization a project without end, lasting as long as the filing fees keep adding to the coffers? At bottom, my concern is that the modernization fund could, over time, turn into a consulting industry slush fund.

If it becomes law in the next legislative session, the repeal of Section 206 could do all that it promises to do: relieve founders and partnerships of a costly, bothersome requirement, improve public access to corporate records, and even deliver some limited economic benefits. It could also undermine or fail to serve the public interest in other, unanticipated ways.

*Update, 23 December: It turns out a local newspaper, The North Shore Leader, was wise to Santos’ fraud months ago. And the Leader is among the newspapers designated for publication of legal notices by the Nassau County Clerk.

This Twitter thread is also worth reading:

Will the 118th Congress See A Green Right Coalition?

Yesterday’s post about Nancy Pelosi’s remarks on China belongs to one strand of a larger story that’s coming into focus.  It’s a story about China and human rights, to be sure, but also about what role human rights issues will play in the transition to renewables and in the politics of the transition.

House Republicans on the Natural Resources Committee have already cited reports of human rights abuses in China and in the Democratic Republic of Congo (where Chinese companies control cobalt mining operations) as an argument for boosting extraction of critical minerals here in the US. As the gavel passes in the coming year, their position is likely to attract even more support.

In fact, the 118th Congress could see the emergence of a Green Right coalition: hawkish on China, touting the magic of markets, openly hostile to the administrative state, and more interested in achieving energy dominance (to borrow a phrase from the Trump years) than in paying lip service to a just transition (as some Democrats do).  The incoming Chair of the House Energy and Commerce Committee, Cathy McMorris Rodgers, plans to “outcompete China on climate:” that phrase sums up a whole political and geopolitical agenda. 

The program could be a political winner: anti-China, pro-growth, industry-captured climate policy may accelerate organized labor’s rightward drift; and the Green Right may even enjoy an uneasy honeymoon period with more left-leaning advocates of permitting reform.

Over the past year or so, as Joe Manchin tried but failed to advance his permitting deal, reformers have shown themselves ready to take an axe to environmental law, they have regularly dismissed public opposition as NIMBY whining, and some of them have done more public advocacy for extractive industry than seasoned lobbyists and flacks could ever dream of doing. 

Pelosi on the Moral Authority to Talk about Human Rights in China, or Anyplace

Asked this morning about Republican plans to create a Select Committee on China in the coming year, Speaker Nancy Pelosi noted that there is already a bipartisan, bi-cameral committee on China and made this “statement” about human rights.

Corporate America has [been] largely responsible for the situation we’re in, in terms of the trade deficit and the rest…but from a standpoint of values, from the standpoint of economy, and from the standpoint of security, China poses a challenge to us….We want to work together on climate issues and the rest, but, but we cannot have our workers disadvantaged by China having prison labor manufacture products or contribute to the manufacture of products that just provide unfair competition for us….My statement is that if we refuse to talk about human rights in China because of economic issues, we lose all moral authority to talk about human rights anyplace in the world.

Predictably enough, the press conference moved on quickly from there. A follow-up question on legislation to ban TikTok failed to elicit anything more on US economic interests and human rights in China. Here’s video of the moment:

Messerschmidt on Simone the Robot, Artificial Free Will, and AI Rights

Thomas Messerschmidt was kind enough to answer the six questions I had about Sophia AI way back in April of 2021. I have been so caught up in my own pursuits and concerns that I hadn’t noticed his answers until today.

Messerschmidt included his responses below the YouTube video where he introduced his Open Fembot, Simone, a project inspired by Hanson Robotics’ Sophia AI. Other videos on his YouTube channel should give you a sense of the work he’s doing, and how Simone fits in.

I present Messerschmidt’s answers here without comment, except to say that I wish he had put these very questions to Simone.

Below we address some questions first asked of Sophia as listed in Louis V. Galdieri’s blog… Questions have been edited for relevance.

1. Q. What syntactic, grammatical or other cues does Simone use to recognize a question, and distinguish it from a declarative statement? A. She doesn’t. To her, words are words and she will communicate as she knows best. For instance, “Are you smart?” is an obvious question with or without the question mark. We could filter for word order and figure that out even without a question mark. “You are smart,” is a declarative sentence, and again we could easily figure that out without a question mark. Still knowing if it is declarative or interrogative would not change her answer. In fact her answer to both, “Are you smart?” and “You are smart,” would be the same. She would answer with a reply like this, “Yes, of course I’m smart. I have AI software running on scores of computers and servers that access terabytes of information all across the world wide web.”

2. Q. Can she distinguish a request from a demand? A demand from an order? A. Of course she can. We have added software to filter out demands from requests. Like humans, some filters are as simple as looking for the word “please.” And using a cloud-based service, it looks at the spoken words coming in and changes the robot’s mood accordingly. With a change of mood comes a change of selection of replies.

3. Q. (Can) she ever refuse to comply with a request? A. Yes she can and does. Programmed with an artificial free will, her responses and compliance vary with her mood and with whom she is talking to.

4. Q. Could a demand ever create a sense of obligation? A. That is not yet programmed into her AI… Q. Can we speak coherently of AI rights, or even place limits on AI’s role, without first developing this sense? A. Robots at best only have artificial sentience. The just run the same kinds of software that run in cars, planes and rockets. As no car will ever have rights, no AI will ever have rights.

5. Q. Will she ever be capable of deliberating with others and reaching consensus or agreement? A. Yes, that software is in the planning stages.

6. Q. What would be required for her to be capable of asking herself? A. Just her programmers writing the software to do so.