Biden's DEI Strikes Again: Broadband Regulation May Seem Boring, But $42 Billion Is Always Interesting

Across the centuries, centralized power has sought to impose its will on people out in the provinces.  It’s a classic political science issue: the core vs. the periphery, and it usually involves the arrogance of core power. 

For instance, back in the 18th century, King George III and the Crown’s government in London tried to push around the 13 American Colonies—and we know what happened in 1776.  

Today, it’s Joe Biden, the “king” of a deep administrative state in Washington, D.C., seeking to micromanage the 50 states, in defiance of a law that Biden himself signed.  It’s the arrogance of power; all a part of the same long train of abuses and usurpations, from the 18th century to the 21st century. 

You see, over the last three years, the Bidenites have done what woke Naderites always do: They have piled on red tape, both to build their own bureaucratic empires and to help their activist allies, such as the trial lawyers. 

Happily, there’s been strong pushback from beyond the D.C. Beltway.  In two environmental cases, folks in West Virginia and Minnesota took on the Biden Environmental Protection Agency—and won in the Supreme Court.  In two other high court cases, real people defeated the Occupational Safety and Health Administration and the Centers for Disease Control.  

Oh, and conservatives in Nebraska won a SCOTUS victory on student loan forgiveness.  By “forgiveness” we mean the court disallowed transferring debt from former students to all taxpayers.  Yet the Biden administration has simply chosen not to lose.  Defiance, not compliance.  

On February 21, the president said that “MAGA Republicans” and “special interests” had challenged his student-loan forgiveness. “The Supreme Court blocked it,” he crowed, “but that didn’t stop me.” In the tart opinion of The Wall Street Journal, “He apparently thinks defying the law is a virtue.”  In fact, Biden has managed to wheedle “forgiveness” of $138 billion in student loans.  As an aside, we might ask: Should that $138 billion count as an in-kind contribution to the Biden-Harris re-election campaign?  Total student-loan debt, by the way, is $1.7 trillion, so we’ll have to see how much more the Bidenites can cadge away.

We could cite plenty of other issues where the administration is pushing, if not actually breaking, the law, from the border,to electric vehicles, to plastics, to artificial intelligence.   

But for the sake of brevity, let’s focus on just one issue where the centralized blue dot in D.C. intends to crush the surrounding red zone.  Telephone and cable regulation might seem arcane, and it is, even if the fine print of anything tends to be dull.  However, one top-line number ought to attract attention: $42 billon.  That head-turning sum comes from the infrastructure bill that President Biden signed into law in 2021. 

Within that multi-trillion-dollar total was the $42 billion; those funds are, in effect, a golden hammer to be wielded by the Crown of D.C.,  so as to pound the states into submission. 

Specifically, the National Telecommunications and Information Administration, a unit of the U.S. Department of Commerce, has been allocated $42.45 billion for its Broadband Equity, Access, and Deployment (BEAD) program.  If the word “equity,” when used by progressives, is starting to ring an alarm bell, good.  Because the “E” in BEAD has the same intention as the “E” in DEI.  

Broadband, getting everyone connected, is for sure, a good idea, although maybe spending $42 billion on it at a time when the federal government is already borrowing nearly $2 trillion a year isn’t the best idea.

In any case, broadband is happening.  In fact, it’s worth recalling the impressive internet gains made before anyone ever thought up BEAD.  The internet was at near zero four decades ago, and three decades ago, less than five percent of Americans used the net; today, more than 93 percent use it.  And as for internet access, that’s about 99 percent; it’s worth keeping in mind that not everyone chooses to be online.  As for broadband access, it’s over 90 percent. So maybe there’s not that much of a problem for BEAD, and its borrowed $42 billion, to actually solve.    

But if broadband is a problem that needs to be solved, Congress had a clear intent when it passed the infrastructure bill: the states, not BEAD, should take the lead.  The states are, after all, the proper and obvious “laboratories of democracy.”  The authors of the Constitution, including the Tenth Amendment, never knew about the internet, and yet they knew for sure that whatever the issue, it was best to let the locals have the first crack at the problem.  Out of such freedom, who knows what sort of innovation and creativity can emerge.   

In the meantime, the federal government has done what it so often does: it has gummed things up.  As of March 2024, as we approach the third anniversary of the infrastructure bill, a grand total of one state has seen its BEAD program approved by the feds. 

If we drill down to just a single state, Virginia, we see it was allocated $1.5 billion in BEAD money.  But here’s the catch: the BEAD-crats want to tell Virginia, and its Republican governor, Glenn Youngkin, precisely how to spend that money, because, of course, in their royal view, the central Crown knows best.  Notably, in its dictate, BEAD demanded that Virginia lay out, in advance, the “exact price or formula” for its broadband plans.  If Virginia doesn’t bow down, then BEAD could withhold the $1.5 billion, or dribble it out at a pace only a bureaucrat could love; the government just eye-dropped $18 million.  So Virginia can’t be a laboratory of democracy; instead, BEAD will be a citadel of autocracy.  

But there’s just one thing: That 2021 infrastructure bill prohibits federal rate regulation, it’s at Sec.60102(h)(5)(D)NTIA for those who wish to see for themselves.  In the words of the R Street Institute, the administration is showing a “blatant disregard for Congressional intent in its attempts to impose price controls on broadband internet access service.”  

The Free State Foundation’s Andrew Long adds a further useful point: “Competitive forces are ideally suited to the task of driving prices to their optimal levels. A heavy regulatory hand, by contrast, tends to clumsily set prices too low, thereby disincentivizing entry and innovation, or too high, thereby discouraging adoption.” 

Yes, that’s the danger: BEAD and the rest of the federal government will so tangle up broadband in red tape that it won’t expand—it might even contract, as the money is used up by consultants, lawyers, environmental impact statements, etc.  (This is the same Biden Administration, after all, that has managed to turn a simple rehab of D.C.’s Union Station into a two-decade crawl and managed to build just seven electric vehicle charging stations—just a bit shy of the 500,000 it says it will get with its $7.5 billion “investment.”)

Given that sort of sclerosis, what will happen with BEAD and Virginia—and to all the other states?  Some pieces of good news: Sen. Eric Schmitt (R-MO) has been trying to chip away at its costs.  And at a recent conference in Washington held by the Free State Foundation, Sen. Ted Cruz (R-TX) blasted the Biden administration's attempts at "Orwellian control.” 

For a longer perspective, we might think on the events of 250 years ago.  In 1774, when the King’s Crown still ruled America, the dot-heads in London promulgated the Coercive Acts (their term), meant to crush the colonies.  For their part, the American patriots rejected being coerced; they called them the Intolerable Acts—and the rest is history. 

A quarter-millennium later, Americans out in the states are much stronger relative to the arbitrary dot-power of Biden’s Crown.  For starters, we have the Constitution, which decentralizes power.  Moreover, we have plenty of legal and peaceful ways of registering protest and securing justice.  Notably, this year we have elections in which we can replace BEAD-y zealots with trust-the-people leaders who wish to see broadband develop, but, even more, wish to see freedom protected. 

 

Yes to broadband, but always, Liberty First.

The Secret of Directional Investing

To know the trend, spot the trend, or shape the trend is to make money.

The trend is your friend—investors know that. But the biggest money comes from the biggest events. The more delta, the more alpha.

In that spirit, The Secret of Directional Investing offers a new way of thinking about investing, steeped in culture and history. Focusing on megatrends--most obviously. the Red-Blue rumble--this book points out ways to profit from an understanding of two kinds of trends: those that can be spotted, and those that can be shaped. There’s money in both. The Romans weren’t kidding when they said, Audentes Fortuna luvat—Fortune favors the bold. The Secret of Directional Investing is a bold look at investments and potential investments.

Amazon link here.

Pledges for Good Action: The Arizona Case Study

 Tenth in a series 

Having outlined the theory of our case—politicians should make specific pledges on policy issues, and like-minded voters should reward them for it, making the whole transaction as tight as possible—let’s apply it to a specific policy issue: water desalination.  And let’s go to a specific state where abundant water is desperately needed: Arizona.  

The Grand Canyon state, having seen its population grow ten-fold in the last 70 years, should have more fresh water.  Given the generally arid nature of the Southwest, that almost certainly requires mass desalination—perhaps desalinated seawater being piped in from Mexico, as has been suggested (the assumption being that California, which has been reluctant to desalinate water from the Pacific, would for sure never permit a trans-state pipeline). Arizona is hot and dry and growing--so of course it should have  more fresh water.  And lots of it.  

One company that agrees is the Howard Hughes Corporation (HHC), which is now mostly in the real estate development biz.  In 2021, HHC announced that it had spent $600 million to purchased 37,000 acres of land west of Phoenix to build a “city of the future.”  However, in November 2022, something at least somewhat unexpected happened: the Democrat won the gubernatorial election, and, in addition, a Democrat won the attorney general post.  So a long spell, more than a decade, of Republican control of both offices was broken.  This partisan switch changed the dynamic of policymaking in the state.  Suddenly, the Arizona’s Groundwater Management Act of 1980 came back into prominence.  

As a result, real estate developers, including HHC, were suddenly on the backfoot.  As The Wall Street Journal reported in December 2022, “The Arizona Department of Water Resources is currently conducting a study of an underground basin to determine whether the groundwater supply is adequate to support the planned population for 100 years.”  Yes, that’s how the law reads, but we can immediately see the problem: What’s foreseeable in a hundred years?  Answer: maybe death and taxes.   But virtually everything changes, especially if technology is involved.  

Arizona state senate president Warren Peterson was both arch and incisive in his commentary on the groundwater bill: “Why is it 100 years? Why isn’t it 105 years — why isn’t it 95 years? California’s (rule) is 25 years … You don’t go to the gas station and buy 100 years of gas.”  And in the future, will cars run on gasoline?  Or perhaps hydrogen?  Or perhaps batteries?  Or something different altogether?  It’s hard to answer such questions looking 10 years ahead, let alone 100. 

Yet here we are: a law written decades ago by trendy limits-to-growth-types—the governor back in 1980, was the late Bruce Babbitt, a Jimmy Carter-ish green—is now being invoked for the same purpose: to limit growth.  Many things have changed, technologically, and yet attitudinally, the Malthusian dead hand still has its grip on Arizona's throat.  

We should all be assured HHC is not without political resources, and so, in fact, at least some of the project is going forward.  But what’s needed for the sake of HHC and all the people of Arizona, including future residents—is a clear-cut vision of more water.  The abundance that comes from the ocean as well as, of course, the fertile human mind. 

So how to secure such abundance?  For starters, Arizona needs a better political framework for growth.  And that means a rethinking of repressive, growth-inhibiting laws.  Notably, the pro-abundance forces need a mandate.  A mandate, of course, from the voters.  And if the voters grant it, then they, in turn, have a right to insist that the mandate—which could be rendered as a pledge—be fulfilled.  That’s the essence of the idea advanced in the previous nine installments: politicians should take pledges on specific policies, and if the voters agree to support the policies, then a contract, of a moral kind, is established.  The contract might not be binding in a legal sense, but it can be binding in a political sense.  So woe to him who breaks it, as was the case with George H.W. Bush, who famously broke his “read my lips” contract in 1990, and was defeated, badly, in 1992. 

Beyond the bad faith of political promisers, there’s the further complexity of the parties as they are constituted.  That is, they are so large, and so old that they have become “barnacled” with myriad interests and positions.   There are historical and perhaps legitimate reasons for every position, and yet the cumulative effect is that the parties are hardly “pure plays.”  That is, if one votes for the Democrat, or the Republican, chances are that the party will be so “bundled” on so many issues that it will be difficult, perhaps even impossible, to suss out a clear position on a single issue.  Once again, this is the nature of pluralism—people have different positions and priorities.  Yet our purpose in this series, Securing Elections and Good Governance, is to seek to “hack,” in a good way, the parties so that they can get better at identifying, making, and keeping promises.  That's the way to improve politics: Tighten the connection between a politician's pledge and the actual follow-through: Make one follow the other, automatically.  So the parties will be less messy bundles and more clean pledge machines, for the sake of making a best offer to the voters. If the voters accept the offer, then the party follows through.  

In our time, Arizona’s new Democratic governor, Katie Hobbs, has sought to avoid the water issue: on the one hand, she doesn’t want to get in a fight with the greens who are so powerful in the Democratic Party, on the other hand, she doesn’t want to get in the way of growth.  So she says that the state “plenty of water,” and leaves it at that.  Plainly, Arizona does not. 

So now, looking ahead, what are the chances that such a contract on water desalination can be executed in Arizona?  We can start with a look at the recent context.  Where was the desalination issue in the past?  Answer: It simply wasn’t prominent.  In Arizona, Republicans were somewhat in favor of desal, and yet it was hardly a top issue for them in 2022.  And in any case, as we have seen, the Democrat, Hobbs, won won the governorship that year. 

To actually get the Arizona desal project built will enormous amounts of what physicists call activation energy.  And energy comes from elections. 

Most likely, we need another election--and probably more than one--to break the legal logjam on desalination, as with so many other growth issues.  But let’s start with the election in front of us: the Arizona senatorial election, to be held this November.  The incumbent senator, Kyrsten Sinema, a Democrat-turned-independent, has supported desalination as an option, but it seems fair to say that she hasn’t made a big deal of it; one scans the news in vain for signs of recent action.  In the meantime, the likely Democratic nominee, Rep. Ruben Gallego, is more of a progressive green; he wants to tax water usage, revoke well-drilling permits, and generally figure out ways to ration the scarcity—ideas very much out of the Babbitt-Carter playbook.  

To be blunt about it, Democrats just don’t seem to be that in to desalination.  Instead, green ideology predominates.  

So now what of the likely Republican nominee this year, Kari Lake?  Lake, of course, lost to Hobbs in the high-profile 2022 gubernatorial election.  In that election, she supported desalination, but it was hardly front-and-center for her campaign.  However, this time around, she is emphasizing the issue: 

Kari Lake will make the development and construction of a system to deliver a new source of fresh water to Arizona and the West one of her major priorities. Kari knows there are multiple options that need to be explored, and the time to do so is now. 

Lake continues, diving into specifics:

First, we need to form an engineering working group in partnership with the states, U.S. Army Corp of Engineers, Bureau of Reclamation, Bureau of Land Management, and other appropriate agencies to examine engineering possibilities and challenges for each of the various options, to include desalination, river pipelining, and any other viable options to increase fresh water supply and availability throughout the Mountain West and Southwest.

This is good clear thinking, offering real hope that Lake will make a difference on the desalination issue if she wins.  And that's good news for Arizonans who worry about jobs and incomes and well-being.  To be sure, even if she is elected, Lake will be one of just two senators from Arizona, and one of 100 in the Senate, and yet if she seeks a strong mandate on desal and wins, that will send a message: the voters care about this issue.  And that could echo far beyond Arizona.  Which, in turn, would make it likely that Arizona could achieve the larger consensus for action that any single state needs.   

We could help this process along.  How so?  For starters, by offering Lake opportunities, including venues, to amplify her desalination message.  Any blue-collar worker, for example, should support desal for the jobs it will create.  And homeowners should support it because it would allow for the amenities--including lawn sprinklers and swimming pools--that make life better.   And HHC should love it.  

But the larger argument of this series is this: This process should be formalized. And further boosted by technology.  That's where real strength comes from: Building a structure.  

It's great that Kari Lake has taken a strong pro-desal position in Arizona.  But history tells us that we need more than one individual, however victorious and sincere.  You need a movement.  That's why political parties, and political machines, were created in the first place, and it should come as no surprise that every so often they need to be reinvented.  That's what this whole series is about: reinventing electoral politics, mindful of the granular potential of CRM, AI, and all the rest.

So in Arizona and in other states, there could be a clear Desalination Faction that is so committed to desal that it becomes a force on its own to be dealt with: issuing reports and report cards, interviewing candidates, making endorsements.  And then, crucially, delivering its votes to the chosen candidates and parties.  That's the secret sauce of this whole idea: Our group can deliver votes. You can see them, meet them, and count them, in advance of the balloting, during the balloting, and after the balloting.  This is how power is wielded and measured, and this is also how vote fraud is defeated. 

It's possible to see this Desalination Faction as a constituent within the Republican Party, as is mostly the case with Grover Norquist's Americans for Tax Reform.  But it's also possible to see it as an element within both parties, as was the case with pro-Israel voters, at least until very recently.  Or it could be some sort of free-floating entity.  The main point, again, is that it's entirely devoted to desal as an issue: doing it, protecting it, expanding it, and so on.  

So this could be the template for new issues-based constituencies on a wide spectrum of issues. The parties could thus be composed of single-issue activists, always fighting (peacefully, legally) to make sure they get what they want, while forming coalitions to make sure they get a majority.  That's how you not only win an election for your candidate, but win elections, plural, for your cause. 

Want to Restore Election Integrity? End the Secret Ballot

 

Ninth in a series

Vote fraud is an issue that will never go away, and for good reason--there's plenty of vote fraud: from both parties, in virtually any year, in virtually any election.  The Heritage Foundation provides a good resource here.  So what to do?  Make a tight linkage between the voter and the vote.  That might seem controversial, in light of the general sense that the ballot should be secret.  But let's ask ourselves: Do most people wish to let you know for whom they voted?  Sure.  And can big data companies (Silicon Valley, credit card cos, cell phone providers) already pretty much intuit how you voted?  Sure.  And what of the NSA?  Ditto.   So anybody who really wants to know, already knows.   So the secret ballot provides the space for fraud, more than it provides the sanctity of privacy.   And of course, Republicans, notably, are generally eager to see some sort of mandatory ID check for voting.  We can observe: the more the verification, the more the likelihood that voting intention will be known. 

With these realities in mind, I published this for The Daily Caller in January 2023. 

There's no need to mandatorily end the secret ballot.  We can leave the question to the discretion of each voter. However, it must be said that if the ballot is anonymous, then it can't be audited.   In the final analysis--or in any sort of recount--there needs to be a firm linkage: the voter and the vote.  If there isn't, then anything can happen. 

Still, as for your voting intention, you might expect to have a right to privacy.  In theory.  But here’s the thing: If you’re online, you don’t in practice.   Back in 1999, Scott McNealy, then-CEO of Sun Microsystems, told reporters that concerns over privacy were a “red herring”—that is, a fake thing to worry about. “You have zero privacy,”  McNealy advised, “Get over it.” McNealy’s words caused a storm, but let’s ask ourselves: Has the situation gotten better in the past quarter-century?  Have the algorithms gotten smarter?  Does Google know what you’re looking for as soon as you start typing?  Does Siri or Amazon Echo seem to be listening, even when you haven’t asked it to?  Are you relying on GPS and a mapping app to guide you places?  If so, then you’re an open book. 

To be sure, there are plenty of apps that help with privacy.   And millions of Americans use these, often with good success.  But here’s the thing: They still know all about you.  Between the government—those 87,000 new IRS agents will be put to good use—the banks, credit card companies, social media companies, and the app makers themselves, They (with a capital “T”) keep close tabs on all of us.  So if we vote, They can probably figure out who we voted for.  

And of course, with mail-in ballots, it’s not hard to know who voted for whom—the authorities can just look at the return address, even if they might have to peek a bit to see the “X.” 

So it’s a paradoxical situation: They know who we voted for, but we can’t prove who we voted for, because the balloting itself is officially anonymous.  So maybe They are cheating, but unless we can catch them in the act, we can’t prove it.  It’s in that gap—when the cat’s away—that the vote-fraud mice can play.  To put the matter even more bluntly, if the voter doesn’t stand by his or her vote, someone else might wish to stand there, in his or her stead.  

Securitization and Elections

 Eighth in a Series 

Securitization and Elections 

In installment three of this series, "Securing Elections and Good Governance," we considered the intellectual revolution that occurred in another game of numbers: baseball.  That is, the influence of Allan Roth, Bill James, Billy Beane, and all the other Sabremetricians, summed up in the popular culture by the book-turned-movie Moneyball. 

Now let’s look at another instance of numbers rethinking that can be applied to politics: Wall Street-style securitization.  Investopedia defines it thusly: “Securitization pools or groups debt into portfolios.”  The site adds, “Issuers create marketable financial instruments by merging various financial assets into tranches.” 

 

Okay, so securitization pools dollars (or other currency or asset-class) with an eye toward making the product as liquid and nimble as possible.   And so how might votes be analogous?  Here’s how. 

Yet first, of course, a preface: Nothing here is speaking of buying, or selling, or otherwise illegally transacting over votes.  Nobody here is talking about paying people to vote, or not to vote.  Instead, what’s being described here is a way of thinking about how voters vote, and how their votes can be most influential.  All this at the legal and transparent behest of the voters themselves, with whatever legitimate assist--and importuning--from other political players, including activists and parties.  All with the goal of a more honest and responsive system.  

For instance, in installment four we considered how the voters could choose to hold themselves accountable, and in installment six we looked at specific pledges on policy.  Nothing crooked or corrupt here, just honest thinking about how voters can organize themselves to achieve maximum individual and collective influence.    

So now we can add the Wall Street element, because Wall Street, going back four decades, pioneered the idea of securitizing (also known as collateralizing) mortgages and other instruments.  (Yes, this was a topic treated upon by the same Michael Lewis; long before Moneyball, he published Liar’s Poker.)

Once we know we have a bloc of votes, we know we have something consequential.  And yes, it’s valuable to someone, most obviously, the candidate(s) in the race who wish to win.  But also, of course, interest groups and factions of various kinds.  

Suppose we have identified a bloc, or a tranche, of 10,000 people in a district (or other constituency, including a state or a nation), who feel really strongly about an issue.   They are, to use a familiar phrase, single-issue voters. That issue (taxes, a la Grover Norquist, is one such issue, another issue is abortion, pro or con, and there are myriad others) is likely not the only issue the bloc cares about, but it is pre-eminent.  So if the political candidate is on the right side of that issue as the voting bloc defines it, it’s reasonable that the bloc will go with that candidate.  It’s simple politicking: We agree: vote for me.

What’s evolved are the mechanisms by which that voting bloc can be identified, and tended, and mobilized.  And that mobilization can take on forms both old and new.  For instance, if voters were to agree to vote as a bloc, that would greatly enhance their power, in the same way that the electoral college enhances the power of a given state.  If, say, Georgia votes 51:49 in a presidential election, that narrow margin is exaggerated by the electoral college to be 16 electoral votes for the winner, and zero for the loser.  This all-or-nothing voting is a well recognized phenomenon in political science; it's the sort of power that team play--even among a team of rivals--can exert. 

As we have discussed, and will discuss, vote blocs can be identified using all manner of digital tools, from social media (which is always happy to sell data on its users) to customer relationship management (CRM) software to, perhaps blockchain-y smart contracts.  Plus, of course, whatever emerges from AI.  

Once again, no technological development should obviate the basic constitutional principles of free, fair, and uncorrupt elections, and yet the voters may choose to avail themselves of new technology.  And so, for example, CRM could be used to manage a pledge--such that voters having taken the pledge might feel a psychic obligation to vote with their freely chosen fellows.   This is teamwork in action.  Nothing coercive or crooked, but there's nothing wrong with camaraderie and cohesion.   So this is the sort of power-bloc-ing that could be extended from the electoral college to more common elections, including primaries: the winning candidate gets the benefit of the bloc.  

These days, a good campaign has a good handle on its base voters; the challenge is then two-fold: making sure they all vote, and making sure that the total is enough to win.  Enter the new tech and the sense of the larger political market.  

Here’s where thinking of blocs, or tranches, comes to mind: What does it take to make a bloc really good, or not so good, or bad?  How does one “grade” it?  By voting reliability or propensity?  By ease of being able to pivot, from one issue, or one personality, to another?   Sophisticated analysis will soon enough come up with a rating system that covers all these variables (already has, in fact, in many ways, albeit mostly hidden behind proprietary siloed).   And when that happens, the market for advertisers and other interested parties will become fully liquid.  As in, an interested party—say, again, a group interested in taxes, or abortion, or just about anything—will see that there’s an “AAA” bloc of votes in X district.  That bloc might be big enough to affect a party primary, or perhaps even a general election.  Because, as we saw in the previous installment, there is a lot of money in politics. 

So because of all these millions, billions, and trillions, a marketplace will emerge.   Once again, it’s all transparent, not just to “investors,” but to stakeholders and scrutinizers.  All federal and other regulations would still apply.  It’s just now that we’ve created a new way of thinking about trading money and votes, based on the honest and ethical interest and self-interest of the voters, as individuals and as a group.