Lawrence Person's BattleSwarm Blog

Construction projects are undertaken within a legal and regulatory system that presents persistent, costly obstacles, while projects are being overseen by agencies who lack the resources and in some cases even the expertise to manage them.

Sepulveda’s numerous lawsuits and stakeholder conflicts are an example of a phenomenon that can be traced back to the passage of the National Environmental Policy Act (NEPA) in 1969. NEPA mandates developers to provide environmental impact statements before they can obtain the permits necessary for construction on huge swathes of infrastructure.

Shortly following the passage of NEPA, California’s then-governor Ronald Reagan signed the California Environmental Quality Act (CEQA) into law, which required additional environmental impact analysis. Unlike NEPA, it requires adopting all feasible measures to mitigate these impacts. Interest groups wield CEQA and NEPA like weapons. One study found that 85 percent of CEQA lawsuits were filed by groups with no history of environmental advocacy. The NIMBY attitude of these groups has crippled the ability of California to build anything. As California Governor Gavin Newsom succinctly put it, “NIMBYism is destroying the state.”

It is also destroying the U.S.’s ability to build nationally. The economist Eli Dourado reported in The New York Times that “per-mile spending on the Interstate System of Highways tripled between the 1960’s and 1980’s.” This directly correlates with the passage of NEPA. If anything, the problem has gotten worse over time. Projects receiving funding through the $837 billion stimulus plan passed by Congress in the aftermath of the financial crises were subject to over 192,000 NEPA reviews.

The NEPA/CEQA process incentivizes the public agencies to seek what is often termed a “bulletproof” environmental compliance document to head off future legal challenges. This takes time, with the average EIS taking 4.5 years to complete. Some have taken longer than a decade. A cottage industry of consultants is devoted to completing these documents, earning themselves millions in fees.

The NEPA consultants are just one of the numerous types of consultants that benefit from the way we build. Most infrastructure in the U.S. is built through a huge number of state and local agencies: for example, there are 51,000 community water systems alone in the U.S. This decentralized structure makes it much more difficult to develop the depth of expertise needed to manage the complexities posed by megaprojects. Often, the multiple public agencies that are involved with projects also have overlapping authorities, creating bureaucratic delays and slowing decision making.

The expertise problem is compounded by the fact that agencies are often staffed with a workforce of people either just at the beginning of their careers or near the end of them. Those at the beginning tend to leave if they are ambitious, which leaves senior positions in the hands of agency lifers. Because of this dynamic, and the fact that it is not economically feasible to have the wide range of expertise needed in-house, public agencies employ engineering consulting firms. These firms fill a valuable niche. If you are building a complex project—say, a long-span bridge or a desalination plant—you want advice from someone who has designed and built dozens of them. The problem arises when you become too dependent on such advice.

The High-Speed Rail project was undermined by such a failure. At its peak, the agency responsible for the project, the California High-Speed Rail Authority, had fewer than 30 permanent employees managing the $105 billion project. Instead of hiring staff, the Authority relied heavily on outside consultants. These consultants were well paid, with the primary consultant compensation for HSR at $427,000 per engineer, compared with the Authority’s in-house cost of $131,000 per engineer. This structure creates a principal-agent problem where they are incentivized to maximize their billable hours. As a California State Auditor assessment of the project noted, consultants “may not always have the state’s best interest as their primary motivation.”

This lack of in-house institutional expertise leads to bad decision-making. Bent Flyvbjerg, a professor at Oxford University who has written extensively about megaprojects summarized the problem when asked about California’s HSR project: “If you depend on consultants to know what you are doing then you are in real trouble…a good balance is where the owners are not outsourcing all the knowledge. A bad balance guarantees a bad outcome.”

The pitfalls of this lack of balance appeared before large parts of the project began. In 2014, Dragados, the contractor for a 63-mile section of the HSR, proposed radical design changes that they projected could save $300 million. The fact that Dragados’s bid was $500 million lower than its competitors and that it rested upon a design concept that had not been thoroughly vetted should have caused alarm. As a senior engineer who worked on the original environmental compliance document for HSR and reviewed the concepts told the Los Angeles Times, “it is mind-boggling they would entertain some of the things that Dragados proposed.”

Dragados’s approach may have been driven by the fact it didn’t have the experience of its competitors; it had never built a rail project in the U.S. before and needed an edge to be selected. It was a measured risk because it knew there were ways to limit its financial exposure if its design ideas didn’t work. A Los Angeles Times investigation of the project in 2021 found Dragados had issued 273 change orders for additional payment and had completed less than 50 percent of its planned work four years after its section was supposed to be complete. Its design ideas had been almost completely abandoned as unworkable and Dragados’s section of the work was $800 million over budget.

The principal-agent problem arises with union construction labor as well. Skilled union workers, such as electricians and carpenters, make solid hourly wages, but their pay really explodes with overtime. A 2011 study by the Real Estate Board of New York found that some union crane operators made up to $500,000 a year in pay. Union contracts mandate unnecessary positions as well, to the benefit of its members. The same study found 50 workers in unnecessary positions such as relief crane operators on the World Trade Center Project, including 14 unproductive employees making $400,000 a year at the project.

Similar statistics can be found on other projects; an investigation into the costs of the East Side Access rail project in New York, which cost nearly $3.5 billion for each new mile of track, found that only 700 of the 900 workers being paid on the project were needed. A TBM, which is largely run automatically and typically staffed with under 10 people, ostensibly had 25 or 26 people working on it. Because you can’t drill without a TBM, and you can’t build a high-rise without a crane operator, these union workers have inordinate power.

A common retort to the claim that union labor drives up costs is that other countries, especially in Europe, have both high union participation and lower project costs. But it is widely recognized in the industry that unions increase project labor costs by 20 to 25 percent on average in the U.S.

The fundamental problem isn’t unions per se, but rather the way that unions operate within parts of the U.S. system. The Netherlands has strong unions, but the Port of Rotterdam has been automated to an extent that has proven impossible in the U.S. due to union resistance. As the president of the International Longshoremen’s Association, Harold Dagget, recently put it, his union will “fight tooth and nail” against further automation in the U.S. Any attempt at real construction innovation runs into similar barriers at every level of the system. There are too many layers of permission needed to innovate, including groups whose interests run counter to innovation.

Innovation in physical work ultimately means substituting or complementing labor through technology to improve productivity. If your pay depends on overtime, you want inefficiency. The average dockworker at the Port of Los Angeles makes over $100,000 a year, largely due to overtime. The majority of foremen and managers earn more than $200,000, and the mariners who guide ships in and out of the port average nearly $450,000.

The result is that innovation is inhibited by both labor resistance and a decentralized government bureaucracy that has neither the incentives nor the capability of driving real change. Perhaps it should not be shocking that U.S. construction productivity has fallen by half since the 1960s according to research conducted by the consulting firm McKinsey.

Rent-seeking Uber Alles.

In San Francisco, Soros-funded DA Chesa Boudin has seen a flood of departures from his office due to his criminal justice reform policies.

Boudin campaigned on a platform to end mass incarceration, eliminate cash bail, and vowed to create a panel to review sentencing and potential wrongful convictions. Following his election in November 2019, Boudin announced he would deemphasize the prosecution of drug cases, so-called quality-of-life cases, and property offenses.

Under his watch, vehicle break-ins increased 100-750% in parts of the city between 2020 and 2021, with the number of reported vehicle thefts reaching 1,891 in May 2021—more than double the 923 reported in May 2020.

San Francisco also recorded one of the largest increases in burglaries among major cities last year, with a jump of 47 percent—a trend that has continued this year. Fatal and nonfatal shootings in the first six months of this year were up more than 100 percent from the year-earlier period, increasing to 119 from 58, the city’s police chief said at a July press conference.

More than 700 people died of drug overdoses in 2021 in the city, a record that is likely to be surpassed this year, according to the chief medical examiner.

Rudy Giuliani – the former Mayor of New York City whose claim to fame was a massive reduction in crime (and who’s traded barbs with Soros in the past), isn’t letting the billionaire off the hook.

“If there is one single person responsible for the record increases in murder and violence in America’s cities it’s George Soros,” Giuliani said in a Monday tweet.

“Major contributor to BLM, Antifa, Democrat Party, Biden, Harris and 40 or so pro Criminal DAs. The blood is on his hands,” he added.

Assistant State’s Attorney James Murphy described an understaffed office in turmoil in his email to colleagues, saying, “I cannot continue to work for an Administration I no longer respect.”

“I would love to continue to fight for the victims of crime and to continue to stand with each of you, especially in the face of the overwhelming crime that is crippling our communities,” Murphy wrote. “However, I can no longer work for this Administration. I have zero confidence in their leadership.”

Murphy, who could not be reached directly for comment, zeroed in on many of the issues that have made Foxx a target of opponents who argue she’s gone easy on some accused of violent crimes, as carjackings and gun violence have risen in the Chicago area.

Murphy wrote that he first started thinking about leaving the office early in 2021 with Foxx’s involvement in the passage of the SAFE-T Act, a wide-ranging law that aims to reform the state’s approach to criminal justice, including by narrowing the definition of who can be charged with first-degree murder.

DeSantis has suspended State Attorney Andrew Warren for ‘picking and choosing which laws to enforce based on his personal agenda,’ and has appointed Susan Lopez as his replacement during the suspension.

Warren, who had served the Thirteenth Judicial Circuit, has most recently refused to follow state policy criminalizing abortion in the wake of the Supreme Court’s decision to overturn Roe v. Wade – and repeatedly refused to enforce laws cracking down on child sex-change surgeries, according to DeSantis.

The liberal state attorney also declined to prosecute 67 protesters arrested in George Floyd demonstrations, and said in 2017 that he would only pursue the death penalty “in the very worst cases,” and not where “mental illness played a role.”

“We are suspending Soros-backed 13th circuit state attorney Andrew Warren for neglecting his duties as he pledges not to uphold the laws of the state,” DeSantis’ office said in a statement, per Fox News.

Update: DeSantis sent state police to physically remove Warren from his office, “with access only to retrieve his personal belongings, and (ii) to ensure that no files, papers, documents, notes, records, computers, or removable storage media are removed from the Office of the State Attorney…”

PayPal has reportedly unfrozen Moms for Liberty’s account funds after Florida Gov. Ron DeSantis announced his state would crack down on woke banking.

Payment platform PayPal allowed grassroots, anti-woke education group Moms for Liberty to access its funds after DeSantis’s new initiative against woke banking, Florida’s Voice reported. Moms for Liberty co-founder Tina Descovich reportedly told Florida’s Voice that her organization had been using PayPal for more than a year before the platform censored the group.

Descovich reportedly said that many Moms for Liberty donors give monthly and automatically through PayPal. The payment processor not only stopped these donor payments but froze $4,500 belonging to Moms for Liberty, and prohibited any transfer of the money out of the account, according to Florida’s Voice. PayPal subsequently reversed its block by unfreezing the funds.

PayPal notified Descovich that Moms for Liberty’s accounts were initially frozen during DeSantis’s July 15 speech at the Moms for Liberty National Summit, according to Florida’s Voice. The funds were unfrozen after DeSantis announced his initiative against woke banking.

(Hat tip: Stephen Green at Instapundit.)

The world is facing serious food and energy shortages as an outgrowth of the war in Ukraine and supply-chain shortages. Farmers are working to solve these problems, but we need help from the federal government if we are going to have any chance of success.

That’s why national corn grower leaders recently called on the Biden administration to address regulatory overreach.

That call comes after the U.S. Environmental Protection Agency recently revised its atrazine registration, a move that could restrict access to a critical crop protection tool that has been well tested and shown to be safe for use. Farmers fear that new requirements will impose arduous new restrictions and mitigation measures on the herbicide, limiting how much of the product they use.

The atrazine decision comes on the heels of a development involving the herbicide glyphosate. In June, the U.S. Supreme Court refused to hear a case decided by a lower court from California, leaving in place a ruling that supports the claim that glyphosate use causes cancer – even as the EPA has repeatedly affirmed that the widely sold and well-studied herbicide is not carcinogenic.

The Supreme Court’s decision came after the solicitor general in the Biden administration submitted an amicus brief advising the court against hearing the case.

As a result, the door is now open for states to create a patchwork of regulations governing herbicide use, which will increase costs as manufacturers must now jump through hoops in every state, on top of making compliance difficult for the users of these products.

Farmers in Iowa and across the country have also experienced major fertilizer price hikes and shortages over the last year, thanks in part to steps taken by the U.S. International Trade Commission to impose tariffs on fertilizers. Thankfully, ITC recently voted against adding tariffs on nitrogen fertilizers. But tariffs on phosphorous fertilizers from Morocco remain in place, driving up input prices for growers.

A new report found that more than 75% of ships will not meet the International Maritime Organization’s (IMO) new Environmental social and corporate governance (ESG) index aimed at decarbonizing the industry. This means that many ship owners will be forced to slow ships down to reduce emissions but doing so could deepen the global food and energy crisis by reducing available ship capacity.

“IMO decarbonization targets will cause ships to slow down delaying food shipments and people will starve,” a global security analyst told gCaptain. “How many people will die as a result of the IMO’s ESG efforts is unknown at this time. I don’t think most shipowners even understand the severity of the EEXI threat but it could be millions of lives.”

“Ships have to attain EEXI approval once in a lifetime, by the first periodical survey in 2023 at the latest.” The certification is currently voluntary, but banks and insurers may force ships to comply or be cut off. (Hat tip: Sarah Hoyt at Instapundit.)

In 2016, the Obama administration’s Department of Health and Human Services issued a rule that would have forced doctors across the country to assist in transitioning patients out of their biological sex, regardless of a provider’s medical opinion or conscience objections.

“A provider specializing in gynecological services that previously declined to provide a medically necessary hysterectomy for a transgender man,” for example, “would have to revise its policy to provide the procedure for transgender individuals in the same manner it provides the procedure for other individuals.”

The rule left no room for religious physicians or institutions to breathe, instead menacing them with draconian fines, were they not to toe the controversial new line.

In stepped the Becket Fund for Religious Liberty, which swiftly secured a preliminary injunction in federal court that stopped the rule from going into effect, on the grounds that it violated the Administrative Procedure Act, and likely violated the Religious Freedom Restoration Act. It was a decision later confirmed in 2019, and made permanent by a 2021 ruling.

On August 4, however, Becket attorney Luke Goodrich, who has been working on the case since the Obama-era rule was first issued, will march back into the courtroom, having been dragged back in by the Biden administration and Secretary of Health and Human Services Xavier Becerra.

“They say that our lawsuit was only about the 2016 rule. . . . They say, ‘well, all you were challenging was the 2016 rule, and you won that, but now we’re using a different rule or a different rationale for imposing the same requirement on you, and so you have to file a new lawsuit,’” explained Goodrich.

Under the Biden administration’s theory, the Affordable Care Act provides the administration with “all the authority” it needs “to punish groups that don’t perform gender transitions and abortions,” Goodrich told National Review. The 2016 rule also included language that Becket alleges would force religious institutions to perform abortions.

Remember how Republicans said ObamaCare would endanger religious liberty and the MSM dismissed their concerns? Just like “If you like your doctor, you can keep your doctor.”

According to Goodrich, “the merits are completely resolved and haven’t been appealed; the fight on appeal is about the scope of relief.” He described an effort to work around a losing legal argument by burdening religious objectors and opening up new fronts of battle.

“They want religious organizations to have to play Whac-A-Mole every time the government violates the Religious Freedom Restoration Act, and they want a ruling that will leave them free to keep violating religious liberty every time they shuffle the same legal requirement from one volume of the Federal Register to another,” he said.

That strategy is observable in the proposal of yet another, even broader rule — modeled after the 2016 one — issued by Becerra, who has made his political brand on waging one ruthless culture war after another.

As attorney general of California, Becerra sought to punish independent journalists who exposed Planned Parenthood’s sale of fetal remains harvested during abortions. The Los Angeles Times editorial board described his decision to charge those involved with felonies “disturbing,” and the progressive Mother Jones called it “chilling.”

He also happily enforced a plainly unconstitutional California statute requiring pro-life crisis pregnancy centers to provide pro-abortion materials to patrons, and, as a member of the U.S. House of Representatives, voted against legislation that would allow providers not to perform abortions without fear of government reprisal.

The Mickey Mouse company, headquartered in Burbank, has lost about 35% of its value this year versus a nearly 15% loss for the broader index. As a result, tens of millions of Americans who hold Disney stock either directly or indirectly as part of passive index funds have seen their finances take a hit at the worst possible time as inflation spirals out of control.

Disney’s poor financial performance is a product of its own making. In recent months, the company has aggressively waded into controversial cultural issues such as gender identity, making it clear it is putting politics over its shareholders and customers. Disney is a prime example of the threat posed to shareholders and the broader economy of “woke” capitalism. Its story should serve as a cautionary tale for other companies looking to follow in its footsteps.

Disney has all but admitted it’s leveraging its prized position as a top children’s content creator to push a divisive cultural agenda. In March, Disney’s president of content told employees the company plans to have at least 50% of its regular characters come from “underrepresented groups.” Another top producer boasted about Disney’s “not-at-all-secret gay agenda,” including “adding queerness” to children’s programming. Yet another senior executive promised that Disney would implement a “tracker” to ensure programs contain enough “canonical trans characters.”

We’re getting a look at what this woke agenda looks like in practice. An upcoming episode of Disney’s new children’s show “Baymax!” features a transgender man buying menstrual pads. “I always get the ones with wings,” says the “man” wearing a shirt with the transgender flag. Disney is also abolishing the words “boys” and “girls” at its theme parks.