Archives: 02/2016

Proposed Stricter OSHA Regulations on Airborne Silica Exposure Seem Needless

The U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) is soon set to release new exposure limits to air-borne silica dust. The rulemaking has been in the works for about three years with a final rule scheduled to be announced this year. The silica industry is not enthused.

Silica dust is known to cause respiratory illnesses (e.g., silicosis, lung cancer, other airways diseases) that may contribute to or lead directly to death when it is breathed in high enough concentrations over long enough time periods.

OSHA explains that exposure to respirable silica “occurs in operations involving cutting, sawing, drilling and crushing of concrete, brick, block and other stone products and in operations using sand products, such as in glass manufacturing, foundries and sand blasting.”

OSHA’s proposal, generally, is to lower the existing permissible exposure limits (adopted in 1971) by about 50%, dropping them from around 0.1mg/m3  to 0.05mg/m3 (specific details here). OSHA explains:

The agency currently enforces 40-year-old permissible exposure limits (PELs) for crystalline silica in general industry, construction and shipyards that are outdated, inconsistent between industries and do not adequately protect worker health. The proposed rule brings protections into the 21st century.

And, as the government likes to claim with all of its regulations, the added restrictions will save lots of lives, and in doing so, will save lots of money:

OSHA estimates that the proposed rule will save nearly 700 lives and prevent 1,600 new cases of silicosis per year once the full effects of the rule are realized.

The proposed rule is estimated to provide average net benefits of about $2.8 to $4.7 billion annually over the next 60 years.

Interestingly, a visit to the Centers for Disease Control in search of deaths from silica inhalation produces this chart graphing silicosis mortality over time. The numbers have dropped considerably over the past 40+ years, and by 2010 had fallen to about 100 or so deaths per year (U.S. residents over the age of 15) attributed to silicosis as either the underlying or contributing cause.

Figure 1. Silicosis: Number of deaths, crude and age-adjusted death rates, U.S. residents age 15 and over, 1968–2010 (Source: CDC).

Figure 1. Silicosis: Number of deaths, crude and age-adjusted death rates, U.S. residents age 15 and over, 1968–2010 (Source: CDC).

The CDC data shows that silicosis deaths have been declining and although the decline has slowed, it continues to drop while under the current OSHA guidelines. And further, the 100 or so deaths that are occurring annually are several times less than the annual number of deaths that OSHA predicts will be saved by the new regulations. That’s a pretty neat trick—the new regs are going to save several times more lives than are actually lost!

Will Senate Use Energy Bill to Weaken FHA Mortgages?

As I recall from my time in the Senate, there’s nothing like an energy bill to attract misguided proposals.  This week the Senate begins consideration of S.2012 — the Energy Policy Modernization Act of 2015.  Among the almost two hundred filed amendments is a proposal (Amendment #3042) from former real estate broker, Senator Isakson, to mandate that the Federal Housing Administration (FHA) reduce the quality of its loans in order to encourage more efficient energy use.

The two most concerning aspects of Amdt 3042 are 1) it would allow “estimated energy savings” to be used to increase the allowable debt-to-income (DTI) ratios for the loan and; 2) require “that the estimated energy savings…be added to the appraised value…”

These changes might not be so bad in the abstract but when combined with existing FHA standards, they set the borrower up for failure and leave the taxpayer holding the bag. Let’s recall that borrowers can already get a FHA mortgage at a loan to value (LTV) of 96.5%, and that’s assuming an accurate appraisal.  If borrowers were required to put 20 percent down, then this amendment would be a minor problem, but under existing standards, borrowers would mostly likely leave the table with an LTV over 100%, that is already underwater before they’ve even moved in.  Did Congress learn nothing from the crisis?

The increase in DTI might not matter if FHA did not already allow a DTI as high as 43% of income.  Under Amdt 3042 borrowers could easily leave the closing table devoting over half their income to their mortgage.  Again, did Congress learn nothing from the crisis?

To illustrate that the intent of the proposal is to have the taxpayer take more risk, Amdt 3042 actually prohibits FHA from imposing any standards that would offset this risk.  If these new loans perform worse, as one would expect, FHA cannot put them back to the lenders.   And let’s not forget FHA allows the borrower to have a credit history deep in the subprime range.  So you could have a subprime borrower, say FICO down to 580, LTV > 100% and DTI > 43% - what could go wrong?

If indeed energy savings actually increased the value of the home, that would be reflected in the price.  There would be no need to mandate such.  Not only does this proposal weaken FHA standards, and expose the taxpayer to greater risk, it takes us further down the path of an already politicized housing policy, where instead of relying on market prices, values are dictated by Soviet-style bureaucratic guesswork.

End America’s Busted Nation-Building in Afghanistan

Afghanistan is a bust. The Taliban is expanding its control. The number of “security incidents” was up a fifth in the last months of 2015 over the previous year. Popular confidence is at its lowest level in a decade. U.S. military officers now speak of a “goal line” defense of Kabul.

While the deadly geopolitical game is not yet over, it is hard to see how the current regime can survive without Washington’s continued combat support. The nation-building mission always was Quixotic.

Indeed, the latest report from the Special Inspector General for Afghanistan Reconstruction shows how far this Central Asian land was and remains from developed status. And how ineffective U.S. aid programs have been in transforming it.

While Afghanistan enjoyed some boom years in the flood of Western cash, the foreign money also inflamed the problem of corruption. The Stockholm International Peace Research Institute explained: “The significant amount of aid and vast international military spending post-2001 has re-ingrained a culture of aid-rentierism: the Afghan elite competes internally for political rents from the international community.”

Tougher times have not increased honesty. In its latest quarterly report, SIGAR noted that a recent Afghan task force “reportedly found that millions of dollars were being embezzled while Afghanistan pays for numerous nonexistent ‘ghost’ schools, ‘ghost’ teachers, and ‘ghost’ students.”

Even worse, the same practice apparently afflicts the security forces. SIGAR cited an Associated Press investigation: “In that report, a provincial council member estimated 40% of the security forces in Helmand do not exist, while a former provincial deputy police chief said the actual number was ‘nowhere near’ the 31,000 police on the registers, and an Afghan official estimated the total ANDSF number at around 120,000—less than half the reported 322,638.”

Security never has been good during the conflict. Today it is worse than ever.

Explained SIGAR: “The Taliban now controls more territory than at any time since 2001. Vicious and repeated attacks in Kabul this quarter shook confidence in the national-unity government. A year after the Coalition handed responsibility for Afghan security to the Afghan National Defense and Security Forces (ANDSF), American and British forces were compelled on several occasions to support ANDSF troops in combat against the Taliban.”

Yet the failure of U.S. aid programs reaches well beyond insecurity. Despite pouring $113.1 billion into Afghanistan, Washington has surprisingly few sustainable, long-term benefits to show for it.

Washington Must Start Persuading Beijing about North Korea

Secretary John Kerry went to Beijing to again lecture his hosts about the need for China to pressure North Korea over the latter’s nuclear program. As expected, his mission failed. The Xi government again proved unwilling to threaten the survival of the Kim dynasty.

Immediately after Pyongyang’s fourth nuclear test Kerry attacked Beijing’s policy: it “has not worked and we cannot continue business as usual.” Even before Kerry arrived the PRC made clear it disagreed. “The origin and crux of the nuclear issue on the Korean Peninsula has never been China,” said a Ministry of Foreign Affairs spokeswoman: “The key to solving the problem is not China.”

While he was in Beijing she cited the behavior of other parties as “one major reason why the denuclearization process on the peninsula has run into difficulties.” Beijing officialdom has shown plenty of irritation with the Democratic People’s Republic of Korea, but China has demonstrated it has yet to be convinced to destroy its own ally and strengthen America’s position in Northeast Asia.

Kerry made the best of an embarrassing situation when he announced that the two sides agreed to an “accelerated effort” by the UN Security Council to approve a “strong resolution that introduces significant new measures” against the DPRK. No one should hold their breath as to the nature of those “measures,” however.

What the President Should Do: End U.S. Support for the War in Yemen

Possibly the strangest foreign policy decision the Obama administration has made was their decision to support the Saudi-led war in Yemen. The White House has made quiet counterterrorism operations a key plank of its foreign policy agenda, and the administration includes a number of officials best known for their work on human rights issues, most notably Samantha Power. As such, the President’s decision to supply logistical, intelligence and targeting support for the Saudi-led coalition’s military campaign – a campaign which has been horrifically damaging to human rights inside Yemen, as well as detrimental to U.S. counterterrorism goals – was deeply surprising.

Less surprising was the fact that the conflict has turned into a disastrous quagmire. Yemen was already arguably a failed state when the intervention began in April 2015. The power transition negotiated in the aftermath of the Arab Spring was weak and failing, with Yemen’s perpetual insurgencies worsening the situation. Since the intervention began, the United Nations estimates that over 21 million Yemenis have been deprived of life’s basic necessities. Thousands have been killed. Even more concerning, United Nations monitors reported to the Security Council that they believed the Saudi-led coalition may be guilty of crimes against humanity for its indiscriminate air strikes on civilians.

Strategically, the coalition has made few gains. Despite the terrible loss of life, the coalition has stalled south of the capital, Sanaa. Further advances will be exceedingly difficult. At the same time, Al Qaeda inside Yemen has grown in strength and size, benefitting from the conflict, and even presenting itself as a viable partner for the Saudi coalition. It is hard to see how U.S. strategic interests - counterterrorism, human rights, or even regional stability – are being served by this conflict.

Happy Birthday, Gabriel Roth

Gabriel Roth, who turns 90 years young today, is a rock star among transportation economists, and a special inspiration for those of us who support reducing the federal government’s role in transportation. According to his C.V., Roth earned degrees in engineering from London’s Imperial College in 1948 and economics from Cambridge in 1954.

In 1959, he began research into improved road pricing systems. This led to his appointment to a Ministry of Transport commission that published a 1964 report advocating pricing congested roads in order to end that congestion.

In 1966, the Institute for Economic Affairs published his paper, A Self-Financing Road System, which argued that user fees should pay for all roads, and not just be used to relieve congestion. Roads should be expanded, Roth noted, wherever user fees exceeded the cost of providing a particular road, but not elsewhere.

In 1967, Roth moved to the United States to work for the World Bank, where he did road pricing studies for many developing countries and cities, including Bangkok, Manila, and Singapore. After leaving the World Bank in 1987, he continued to work as a consultant until 2000, among other things helping design the Dulles Toll Road and writing Roads in a Market Economy, a book published in 1996.

Since then, he has been a regular participant in transportation conferences, meetings, and hearings. He edited a 2006 book, Street Smart, co-authored a 2008 paper showing how electronic tolling could be done without invading people’s privacy, and made a presentation about tolling at the 2010 American Dream conference.

My home state of Oregon is now experimenting with mileage-based user fees, and I’m one of the volunteers in this experiment. If it goes well, we may see the realization of Roth’s ideas before he turns 100.

I hope to see Gabe on my next trip to DC. I know I’ll be able to find him by looking for the nearest transportation conference.