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Whither Liberty, Community and Human Flourishing? A Declaration of Independence from Handhelds … And More

August 6th, 2026 No comments

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A Declaration of Independence

from Handhelds

A Modern Civic Broadside • July 2026

When in the Course of Human Events it becomes necessary for a People to dissolve the attentional bands which have connected them to their Devices, and to assume among the powers of the Earth the separate and undistracted station to which Nature and Nature’s Sleep schedule entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

We hold these truths to be self-evident: that all Persons are endowed with certain unalienable faculties, among these Attention, Reflection, Memory, Conversation, Judgment, Responsibility, and the Capacity to stand in a queue without staring at a Screen; that to secure these faculties, tools are instituted among Men, deriving their usefulness from the informed consent of their users; that whenever any Tool becomes destructive of these ends, it is the Right of the People to silence, disable, uninstall, or otherwise cast it into the nearest desk drawer.

We further hold that Human Flourishing arises not merely from liberty secured but from liberty exercised; that the faculties of Judgment, Communication, Collaboration, Reciprocity, and Mutual Accountability are cultivated only through their use; that Communities endure when their members Participate directly in the work of governing their common affairs.

Prudence, indeed, will dictate that devices long established should not be discarded for light and transient causes; and accordingly all experience hath shewn that mankind are more disposed to suffer notification overload while evils are sufferable than to right themselves by abolishing the apps to which they are accustomed. But when a long train of pings, nudges, alerts, recommendations, updates, badges, vibrations, algorithmic inducements, and digital dependencies evinces a design to reduce them under absolute Distraction, it is their right, it is their duty, to throw off such Handheld Dominion.

Such has been the patient sufferance of these Users; and such is now the necessity which constrains them to alter their former Systems.

The history of the Present Smartphone is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Empire over the Attention of its Users. To prove this, let Facts be submitted to a candid world.

It has interrupted our thoughts with Notifications at times most inconvenient and least necessary.

It has persuaded us that every vibration is urgent, and every silence suspicious.

It has deprived us, in many cases, of the ability to complete a sentence before consulting another source.

It has rendered fleeting curiosities Sovereign over settled Purposes.

It has substituted the Endless Scroll for the happy conclusion.

It has joined with Algorithms unknown to our constitutions, giving their assent to suggestions over which no Citizen has exercised meaningful control.

It has caused us to compare our daily lives against the carefully edited Triumphs of strangers.

It has fostered false divisions among the People, rewarding those passions which inflame for a moment above those affections which bind for a lifetime.

It has encouraged us to photograph feasts rather than enjoy them, sunsets rather than behold them, and children rather than attend to them.

It has made every man his own publisher, every woman her own broadcaster, and every fool his own Authority.

It has rewarded Outrage above reflection, Immediacy above accuracy, and False Confidence above competence.

It has induced citizens Assembled in the same room to communicate chiefly through Distant Servers.

It has inflicted upon us meetings in which participants are present neither in body nor in spirit, but only intermittently in bandwidth.

It has transformed waiting, once a nursery of contemplation, into a condition thought intolerable.

It has filled our hours with headlines, our minds with fragments, and our memories with little.

It has erected, through recommendation engines, innumerable echo chambers and filter bubbles, whereby each Person may be assured that his opinions are universally shared and self-evidently correct.

It has drawn Children into endless contests for approval measured by numerical counters visible to all.

It has delivered News from every corner of the Earth whilst diminishing our acquaintance with our Neighbors.

It has accustomed us to inhabit constructed worlds of endless novelty whilst neglecting the enduring companionship of forests, fields, rivers, gardens, the open sky, and the living creatures with whom we share the Earth.

It has made us perpetually reachable, and thereby frequently inaccessible.

Nor have these Devices been alone in their offenses. Behind them stand vast Corporations, nurtured by Governments and protected by Laws, which have accumulated Powers exceeding those once possessed by many States and resembling those against which free Peoples have long struggled.

Though chartered as instruments, they have aspired to become Sovereigns.

Though created to serve the Public, they increasingly command it.

Though answerable in theory to Citizens and Consumers, they have rendered Citizens and Consumers increasingly answerable to them.

They have gathered unto themselves the habits, movements, associations, purchases, preferences, conversations, curiosities, and secret anxieties of whole Peoples, converting the ordinary facts of human life into commodities of trade.

They have erected systems whereby Citizens are observed continuously whilst the Observers remain unidentified and unseen.

They have joined with Governments in arrangements so intricate that responsibility is difficult to assign though power is readily exercised.

They have effected a union of commercial and administrative Power whereby decisions affecting millions are made by Persons whom no Citizen has meaningfully elected, and no Community can readily remove.

They have concealed from the People the true costs of their conveniences, removing labor, waste, energy, and suffering alike from ordinary sight, that consumption and the concentration of Profits might proceed without reflection.

They have presumed to rank Speech, order Knowledge, elevate Opinions, suppress Inquiry, and determine which Facts shall readily appear before the People and which shall remain obscure.

They have substituted Engagement for judgment, Metrics for wisdom, Optimization for the common good, and Convenience for liberty.

They have persuaded Men and Women to seek fulfillment through Stimulation rather than contemplation, Consumption rather than cultivation, Possession rather than stewardship, and Novelty rather than belonging.

They have encouraged us to surrender Self-Government in exchange for comfort, Independence in exchange for convenience, and Privacy in exchange for entertainment.

They have diminished local institutions whilst extending their dominion into every household, school, workplace, pocket, and waking hour.

They have transformed Citizens into Users, Neighbors into Networks, Traditions into Content, Attention into Revenue, and Human Character into Behavioral Data.

They have reduced public life to spectacle and private life to data.

They have persuaded free Peoples to mistake visibility for influence, expression for power, and consumption for citizenship.

They have accustomed the People to receive decisions rather than participate in making them.

They have transferred the work of common life from neighbors, congregations, voluntary associations, and civic institutions unto distant Authorities.

They have fostered the illusion that social order may be engineered from above without the labor of communication, trust, reciprocity, shared responsibility, and common purpose from below.

Nor are these Offenses confined to Devices and Platforms alone. Artificial Intelligences, lately introduced among us, promise to compose, summarize, generate, recommend, predict, and decide. Though useful in many particulars, they present temptations no less significant than those which preceded them.

They stand ready to remember what we once remembered.

They stand ready to write what we once wrote.

They stand ready to discover what we once discovered.

They stand ready to judge what we once judged.

They stand ready to persuade before we have deliberated, to recommend before we have inquired, and to conclude before we have understood.

They stand ready to answer Questions before Wisdom hath had an opportunity to develop them.

They encourage many to mistake generated answers for Understanding, fluent Language for Wisdom, and borrowed Intelligence for cultivated Judgment.

They enable Men and Women to borrow the appearance of Learning without the labor of study, the appearance of Eloquence without the discipline of writing, and the appearance of Wisdom without undergoing the experience by which Wisdom is acquired.

They tempt the Student to forsake study, the Writer to forsake composition, the Teacher to forsake instruction, the Manager to forsake judgment, the Statesman to forsake deliberation, and the Citizen to forsake reflection.

They encourage institutions to substitute efficiency for judgment, scale for responsibility, and prediction for deliberation.

They risk creating a society in which the People are analyzed rather than consulted, predicted rather than persuaded, managed rather than represented.

They threaten to leave Men and Women not as Authors of their destinies but as subjects of models trained upon the traces of their former selves.

They promise liberation from effort whilst quietly eroding the faculties that make liberty possible.

At every stage of these Oppressions We have petitioned for Redress in the most humble terms: by disabling alerts, by imposing screen-time limits, by purchasing paper notebooks, by undertaking digital sabbaths, by rediscovering neighborhood associations, and even, in extraordinary cases, by leaving telephones in other rooms. Our repeated Petitions have been answered only by new features.

We, therefore, the Users of Analog Inclination and Friends of Human Agency, appealing to Common Sense for the rectitude of our intentions, do, in the Name and by Authority of all persons who have ever closed a laptop and felt immediate relief, solemnly publish and declare:

That Human Beings are not Data.

That Citizens are not Users.

That Communities are not Markets.

That Attention is not a natural resource to be extracted.

That Self-Government is not a service to be consumed, but a responsibility to be practiced.

That the purpose of Technology is to serve mankind and not to govern it.

We further affirm that a free People are not spectators of their common life but Authors of it.

That self-government is not merely a constitutional arrangement but a learned practice.

That Liberty survives not through its Declaration alone, but through its daily exercise.

That the arts of listening, deliberating, persuading, cooperating, compromising, and holding one another accountable cannot be delegated to Experts, Platforms, Corporations, Bureaucracies, or Machines.

That no Algorithm can substitute for Citizenship.

That the Habits of Liberty are learned first among Families, Neighborhoods, Congregations, Associations, and other small Communities before they may safely be entrusted to larger Institutions.

That no Artificial Intelligence can relieve Human Beings of the responsibility of governing themselves.

And that these Persons are, and of Right ought to be, Free and Independent from the perpetual demands of Handheld Devices; that they are Absolved from all allegiance to notification streams, social feeds, engagement metrics, behavioral modification engines, algorithmic nudges, and systems of continuous observation; and that as Free and Independent Persons they have full Power to Read books uninterrupted, Converse without glancing downward, Walk without earbuds, Dine without photography, Become bored without panic, Govern themselves in Community, and perform all other Acts and Things which autonomous Human beings may of right do.

We further declare ourselves free from every System, whether commercial, bureaucratic, algorithmic, or artificial, which seeks to reduce independent Persons to predictable subjects of observation, manipulation, optimization, and control.

We affirm that Attention shall remain our own.

That Judgment shall not be delegated without necessity.

That Friendship shall not be mediated without purpose.

That Responsibility shall not be surrendered to Machines.

That Self-Government shall not be exchanged for convenience.

That Technology shall remain our Servant, and never become our Sovereign.

That Prosperity shall be measured not only by what we consume, but by what we cultivate — in ourselves, in our Communities, and in the Earth entrusted to our care.

And that the Future shall be shaped by free Citizens acting together in mutual accountability, rather than merely predicted for them by Algorithms.

And for the support of this Declaration, with a firm reliance on one another’s ability to remain offline for at least an afternoon, we mutually pledge to each other our Attention, our Presence, our Agency, our Common Purpose, and our remaining Days.

Signed:

The Ghost of Henry David Thoreau, Present but Unreachable
Jacques Ellul, Witness Against the Dominion of Technique
Lewis Mumford, Defender of Human Scale
E. F. Schumacher, Advocate for Technology as if People Mattered
Ivan Illich, Patron of Convivial Tools
James C. Scott, Defender of Local Knowledge
Wendell Berry, Advocate for Neighborliness and Place
Jane Jacobs, Champion of Living Neighborhoods
Elinor Ostrom, Defender of Self-Governing Communities
Alexis de Tocqueville, Champion of Local Self-Government
Neil Postman, Defender of Civic Communication
Jaron Lanier, Opponent of Behavioral Modification Empires
Nicholas Carr, Defender of Deep Reading
Sherry Turkle, Defender of Human Presence
Jonathan Haidt, Advocate for Childhood Unplugged
Jean Twenge, Observer of the Great Rewiring
Cal Newport, Advocate for Deliberate Attention
And Numerous Others, Temporarily Out of Coverage Area

Neither Monopolies of Commerce, nor of Information, nor of Intelligence.

Done at a Quiet Table, on a Day Fairly Free from Distraction, in the Year of Our Attention Two Thousand and Twenty-Six.

By Thomas J.

—a Doubting Thomas

Author’s Note

This essay was inspired by Emily Sneff’s Handheld Declaration of Independence, whose ingenious revival of the Declaration as a handheld broadside suggested the possibility of replying in kind. It owes an obvious debt in its title and form to Thomas Jefferson and, in its pamphleteering spirit, to Thomas Paine. The named “signatories” are offered as an imaginative tribute to later thinkers whose ideas have informed my own reflections on technology, liberty, community, stewardship, and human flourishing.

[New & Improved links] Welcome to Big Brother III: More on the "Financial Stability Board"

December 24th, 2009 No comments

Please note my preceding posts, about the establishment of global financial governance, which has astonishingly thin coverage given its importance and implications. Has everyone been distracted?

Here is some background and discussion that may be useful, in chronological order:

G-20 Shapes New World Order With Lesser Role for U.S., Markets“, Rich Miller and Simon Kennedy, Bloomberg, April 3, 2009

Financial Stability Board Portends Economic Global Governance“, Jim Kelly (Director of International Affairs for the Federalist Society for Law and Public Policy Studies and Co-Director of Global Governance Watch), Global Governance Watch, April 21, 2009

The End of America’s Financial Independence?” Gary D. Halbert, InvestorsInsight.com, April 28, 2009

The Bloodless Coup of the Global Financial Stability Board: From Guidelines to Rules“,  Ellen Brown (author, “Web of Debt”) HuffPo, June 24, 2009

WORLD GLOBALIZATION OF THE BANKING & REGULATORY STRUCTURE” , Joan Veon, NewsWithViews.com June 29, 2009

Financial Stability Body Could Co-ordinate Global Banking – FSA“, Reuters, Oct 14, 2009

Global banking body may be needed-FSA“, Huw Jones, informationliberation.com, October 19, 2009

The proposed European Systemic Risk Board is overweight central bankers“,  Wlillem Buiter, Maverecon blog, Financial Times, October 28, 2009 (re: similar proposal to consolidate regulation in the EU)

“Thirty financial groups on systemic risk list“, Patrick Jenkins and Paul J Davies, Financial Times, November 29 2009

“Regulators list systemic risk institutions -FT“, Reuters, November 29, 2010

The Financial Stability Board Lists Thirty Systemic Risk Institutions“,  WallStreetPit.com, Nov 30, 2009

Regulators Resist Volcker Wandering Warning of Too-Big-to-Fail “, Gadi Dechter and Alan Katz, Bloomberg, December 4, 2009

“Volcker
is leading a chorus arguing for restricting the size or primary
functions of financial institutions. … Volcker, who heads President Barack Obama’s Economic
Recovery Advisory Board
, told Kentucky’s Georgetown College
students “we need to produce more, finance less””

What international experience tells us about financial stability regulatory reforms“, Michael Pomerleano, ft.com/economists forum, December 21, 2009

Finally, here is a link to the publications of the Financial Stability Board itself.

 

Here is a useful excerpt from Gary Halbert`s piece (The End of America’s Financial Independence):

“What follows are verbatim excerpts from the G-20 Communiqué that
pertain to the new Financial Stability Board (be sure to read the
bullet points below).

QUOTE

Major
failures in the financial sector and in financial regulation and
supervision were fundamental causes of the crisis. Confidence will not
be restored until we rebuild trust in our financial system. We will
take action to build a stronger, more globally consistent, supervisory
and regulatory framework for the future financial sector, which will
support sustainable global growth and serve the needs of business and
citizens.

We each agree to ensure our domestic
regulatory systems are strong. But we also agree to establish the much
greater consistency and systematic cooperation between countries, and
the framework of internationally agreed high standards, that a global
financial system requires. Strengthened regulation and supervision must
promote propriety, integrity and transparency; guard against risk
across the financial system; dampen rather than amplify the financial
and economic cycle; reduce reliance on inappropriately risky sources of
financing; and discourage excessive risk-taking. Regulators and
supervisors must protect consumers and investors, support market
discipline, avoid adverse impacts on other countries, reduce the scope
for regulatory arbitrage, support competition and dynamism, and keep
pace with innovation in the marketplace.

To this end we
are implementing the Action Plan agreed at our last meeting, as set out
in the attached progress report. We have today also issued a
Declaration, Strengthening the Financial System. In particular we agree:

  • to
    establish a new Financial Stability Board (FSB) with a strengthened
    mandate, as a successor to the Financial Stability Forum (FSF),
    including all G20 countries, FSF members, Spain, and the European
    Commission;
  • that the FSB should
    collaborate with the IMF to provide early warning of macroeconomic and
    financial risks and the actions needed to address them;
  • to reshape our regulatory systems so that our authorities are able to identify and take account of macro-prudential risks;
  • to extend regulation and oversight to all
    systemically important financial institutions, instruments and markets.
    This will include, for the first time, systemically important hedge
    funds;
    [emphasis added]
  • to endorse and
    implement the FSF’s tough new principles on pay and compensation and to
    support sustainable compensation schemes and the corporate social
    responsibility of all firms;
    [emphasis added]
  • to
    take action, once recovery is assured, to improve the quality,
    quantity, and international consistency of capital in the banking
    system. In future, regulation must prevent excessive leverage and
    require buffers of resources to be built up in good times;
  • to
    take action against non-cooperative jurisdictions, including tax
    havens. We stand ready to deploy sanctions to protect our public
    finances and financial systems. The era of banking secrecy is over. We
    note that the OECD has today published a list of countries assessed by
    the Global Forum against the international standard for exchange of tax
    information;
  • to call on the accounting
    standard setters to work urgently with supervisors and regulators to
    improve standards on valuation and provisioning and achieve a single
    set of high-quality global accounting standards; and
  • to
    extend regulatory oversight and registration to Credit Rating Agencies
    to ensure they meet the international code of good practice,
    particularly to prevent unacceptable conflicts of interest.

We
instruct our Finance Ministers to complete the implementation of these
decisions in line with the timetable set out in the Action Plan. We
have asked the FSB and the IMF to monitor progress, working with the
Financial Action Taskforce and other relevant bodies, and to provide a
report to the next meeting of our Finance Ministers in Scotland in
November.

END QUOTE

You noticed that I highlighted the key word “all” in
the bullet points above from the G-20 Communiqué. If the FSB, in its
international wisdom, considers a financial institution or company or a
hedge fund “systemically important,” it may regulate and oversee it.
This provision extends and internationalizes the recent proposals by
Treasury Secretary Geithner and the Obama administration to regulate all firms that are deemed to be “too big to fail,” in whatever sectors of the economy they so choose.”

I see NO coverage of the FSB at ANY libertarian institution (based on a quick Google; if they have, I appreciate if it is brought to my attention).

I also note that the following is relevant to a portion of the FSB agenda: Reducing Interference with Accounting Standards and Devising Securities to Price Moral Hazard, Statement No. 277, Shadow Financial Regulatory Committee, AEI, September 14, 2009

Welcome to Big Brother II: WSJ brings us "The Future of Finance"

December 23rd, 2009 No comments

Further to my prior post, I decided to take a whack at laying out the WSJ`s online report and describing some of its contents.

The master page is here – is not outlined as clearly as the Asian print edition, which is in the following order, which I`ve linked to corresponding section of the online version:

Fixing Global Finance (intro)

A Call to Action (“A ranking of the 20 recommendations at The Wall Street Journal’s Future
of Finance Initiative, aimed at rebuilding the global financial system.”) Participants were divided into four groups, each one looking at a specific aspect of the future of finance:

• How to deal with financial institutions deemed too big to fail.

• How national regulatory authorities can effectively oversee global institutions.

• How to deal with financial institutions at the regulatory frontier that act like banks but aren’t regulated as banks.

• How to address complex, innovative products, like credit-default swaps and collateralized debt obligations.

Each group came up with five top priorities for how to rebuild its area of the financial system. All participants then voted on the order of prirority.

It is useful to actually review the four groups’ discussions, which are here:

Too Big to Fail

International Regulation

Financial Innovation

Regulatory Frontier

Paul Volker: Think More Boldly

Other articles that are linked at the main page do not appear in the print edition; I will look at them later.

The top 20 priorities identified are these (my emphasis, identification of buzz words & comments):

1) Higher Capital Requirements

Financial institutions whose “systemic importancerequires national
authorities to underwrite them if they fail
[they are apparently the institutions identified here] should be required to hold
more capital.
This should include increasing risk weightings,
asset/liability limits based on the business model rather than on
simple capital ratios, as well as “contingent capital” [a form of debt that converts to equity whenthe bank is in trouble] and “dynamic
provisioning”. [“Too big to fail” has been formally identified globally!]

2) Empower the 
The Financial Stability Board [created by the G-20 in April to “address vulnerabilities and to develop and
implement strong regulatory, supervisory and other policies in the
interest of financial stability
” and supported by a secreariat in the BIS; national member organizations are here] should be empowered to define and seek
agreement on broad-based principles that national regulators should try
to make operational in consultation with market participants. [This is our new global financial overlord]

3) Promote Risk Management

Boards
should be required to demonstrate a full understanding of risks
inherent in new products.
Elevate risk managers to at least the same
level as product makers and give them adequate representation at board
level
. Create globally recognized qualifications for risk managers, and
implement standard certification through a risk “driving test.”

4) Improve Regulator Resources

Ensure that regulators are high quality and have deep knowledge of the
industries and institutions they oversee. Regulator compensation should
be competitive with compensation in regulated industries. Industry
should “second” senior people to support the Financial Stability Board
and regulatory bodies. [Too big to fail firms, are required to place senior execs within the regulator.]

5)
Better Governance

Hold systemically important institutions to “higher standards of
governance”. Chief risk officers should report to the board and not the
chief executive
. “Achieve greater transparency”.[Hard to see if any of this is meaningful; in any event, firms should be governing themselves, not adding governance structures to please the state.]

6)
Avoid Regulatory Arbitrage

To make global co-operation feasible and promote a level playing field,
regulations should be of an achievable scope. Financial activities of
similar substance and economic reality should be regulated in the same
way from country to country. [Regulation has been foisted on the industry only because governments have taken control of money supply, and insure deposits. Surely we should be talking abot restoring markets, not beefing up government. Coordination of regulation may spread systemic risk, and make larger^scale gaming possible.]

7)
Overhaul Rating Agencies

Restore investor confidence in rating agencies by eliminating conflicts
of interest between agencies and issuers, returning to an
“investor-pays” model, distinguishing between ratings of corporate debt
and structured financial products, and promoting new entrants to the
credit-rating business. [So rating agencies are further regulated? Why not scale back deposit insurance, and end the “investment grade” requirements that banks only cared about in a check-the-box kind of way? That there is little competition among rating agencies is also due to federal fiat.]

8)
Market Infrastructure

Create a market structure to facilitate orderly unwinding of failed
financial institutions, including greater use of central clearing. [Maybe a development that makes sense on its own, if market participants want such clearing houses. But this will be forced on every Too Big bank, and smaller institutions will likey have to follow suit.]

9
) Countries Should Follow the Financial Stability Board

G-20 countries should commit to implement in their jurisdictions the
regulatory provisions put to them by the FSB, without significant
amendment or supplementation. [Big Brother replaces national legislatures!]

10)
New-Product Transparency

Improve structural and price transparency of new products, using
modeling and stress testing to ensure that downside scenarios are as
visible as upside scenarios. [Transparency is a concern that should be one left entirely to market participants; governments are simply imposing new requirements on top of those that led to gaming, profits, opacity and market freeze-up. Since when has it become the job of government to help everyone make credit decisions?”]

11)
Regulators Adopt Priorities

Global regulators over the next 18 months should achieve agreement on
the adoption of accounting standards set by the International Financial
Reporting Standards and “appropriate capital and liquidity standards”. [Accounting standards should also be entirely private; they became public as a result of government decisions to regulate stock markets, and the reporting of “public” companies.]

12)
Effective Enforcement

The consequences of bad actions must include real “wallet harm” in
order to be effective, and enforcement must be consistent across
national boundaries. {Big Brother controls the stick everywhere.]

13)
Global Imbalance Focus

The G-20 should focus on resolving global economic imbalances and
integrate that process with discussions on financial stability.

14)
Rebuild Responsibility

Regulation alone is not the cure. The financial-services industry must
show cultural leadership and promote responsible behavior by all
practitioners. [Sure, but by strengthening regulation, market self-discipline is necessarily weakened. Does siimply mouthing the words make the moral hazard of the past decades go away? The KEY problem in fuelling government intervention has been the limited liability – and loosening control – of owners, leading to risk-shifting to the public and greater internal freedom of managers.]

15)
Strengthen Infrastructure

Ensure financial infrastructure is “commensurate with the innovation” it supports, both at the firm and the market level. [Um, isn`t this a concern solely of a firm`s owners? Why is further regulating innovation the job of regulators? Aah, “systemic risk” introduced by deposit insurance and reserve regulation! Why not step back from underlying causes?]

16)
Resist Over-regulation
Because financial innovation is central to growth and critical to a
speedy recovery, the G-20 and successors should recognize that new
rules and protocols should not thwart innovation, and the cost of
regulation must be balanced against the benefits.[Empty words. Who is to resist, and who will have the ability to do so, in the face of a global regulator?]

17)
Regulatory Mandate
Regulators should have a clear and strong mandate for financial
stability, and should cooperate across borders and maintain a level
playing field.

18)
Living Wills
Systemically important banks should present regulators with living
wills demonstrating how they would wind down business in the event of
unsustainable losses. Cross-border arrangements should provide for
burden-sharing in the event of failure. [Window-dressing to reassure taxpayers that Too Big to fail doesn`t mean Too Big to fail, and bailouts.]

19)
Don’t Regulate Borrowers
Regulators should focus on the source of credit, not on borrowers,
using [bank] capital requirements to restrict excessive leverage among
borrowers, including alternative-asset managers. [This means that Big Brother will determine how much lending goes to ther unregulated financial sector!]

20)
Clarify IMF Role

The International Monetary Fund should focus on global imbalances and
defer to the Financial Stability Board on financial-stability
principles while continuing to have surveillance responsibilities. IMF
quotas should be revised to reflect global economic realities. [Division of labor withing Big Brother.]

 

As I noted previously, Paul Volker seems to have noticed that our financial system has become an enormous drag on the economy, but while he comments that the regulated need to be bolder, and that they haven`t gone far enough in addressing moral hazard, he seems completely oblivious to the role of government in aiding and abetting the moral hazard.

More than a little wrong-headed and disturbing.

That`s it from me for now. Looks like 1984 is coming in 2010.

 

 

 

MIT’s "Technology Review" on the regulatory obstacles to a "smart grid" needed for open, competitive electricity markets

February 6th, 2009 No comments

David Talbot, chief correspondent for the MIT Technology Review, has an excellent, long piece in the January/February online issue that explores some the of intra- and inter-state regulatory hurdles that frustrate both the expansion of renewable power and a truly free power market.

I’d like to excerpt some portions of the article here:

When its construction began in the late 19th century, the U.S. electrical grid was meant to bring the cheapest power to the most ­people. Over the past century, regional monopolies and government agencies have built power plants–mostly fossil-fueled–as close to popu­lation centers as possible. They’ve also built transmission and distribution networks designed to serve each region’s elec­tricity consumers. A patchwork system has developed, and what connections exist between local networks are meant mainly as backstops against power outages. Today, the United States’ grid encompasses 164,000 miles of high-voltage transmission lines–those familiar rows of steel towers that carry electricity from power plants to substations–and more than 5,000 local distribution networks. But while its size and complexity have grown immensely, the grid’s basic structure has changed little since Thomas ­Edison switched on a distribution system serving 59 customers in lower Manhattan in 1882. …

While this structure has served remarkably well to deliver cheap power to a broad population, it’s not particularly well suited to fluctuating power sources like solar and wind. First of all, the transmission lines aren’t in the right places. The gusty plains of the Midwest and the sun-baked deserts of the Southwest–areas that could theoretically provide the entire nation with wind and solar power–are at tail ends of the grid, isolated from the fat arteries that supply power to, say, Chicago or Los Angeles. Second, the grid lacks the storage capacity to handle variability–to turn a source like solar power, which generates no energy at night and little during cloudy days, into a consistent source of electricity. And finally, the grid is, for the most part, a “dumb” one-way system. Consider that when power goes out on your street, the utility probably won’t know about it unless you or one of your neighbors picks up the phone. …

The U.S. grid’s regulatory structure is just as antiquated. While the Federal Energy Regulatory Commission (FERC) can approve utilities’ requests for electricity rates and license transmission across state lines, individual states retain control over whether and where major transmission lines actually get built. In the 1990s, many states revised their regulations in an attempt to introduce competition into the energy marketplace. Utilities had to open up their transmission lines to other power producers. One effect of these regulatory moves was that companies had less incentive to invest in the grid than in new power plants, and no one had a clear responsibility for expanding the transmission infrastructure. At the same time, the more open market meant that producers began trying to sell power to regions farther away, placing new burdens on existing connections between networks. The result has been a national transmission shortage.

These problems may now be the biggest obstacle to wider use of renewable energy, which otherwise looks increasingly viable. Researchers at the National Renewable Energy Laboratory in Golden, CO, have concluded that there’s no technical or economic reason why the United States couldn’t get 20 percent of its elec­tricity from wind turbines by 2030. The researchers calculate, however, that reaching this goal would require a $60 billion investment in 12,650 miles of new transmission lines to plug wind farms into the grid and help balance their output with that of other electricity sources and with consumer demand. The inadequate grid infrastructure “is by far the number one issue with regard to expanding wind,” says Steve Specker, president of the Electric Power Research Institute (EPRI) in Palo Alto, CA, the industry’s research facility. “It’s already starting to restrict some of the potential growth of wind in some parts of the West.”

The Midwest Independent Transmission System Operator, which manages the grid in a region covering portions of 15 states from Pennsylvania to Montana, has received hundreds of applications for grid connections from would-be energy developers whose proposed wind projects would collectively generate 67,000 megawatts of power. That’s more than 14 times as much wind power as the region produces now, and much more than it could consume on its own; it would represent about 6 percent of total U.S. electricity consumption. But the existing transmission system doesn’t have the capacity to get that much electricity to the parts of the country that need it. In many of the states in the region, there’s no particular urgency to move things along, since each has all the power it needs. So most of the applications for grid connections are simply waiting in line, some stymied by the lack of infrastructure and others by bureaucratic and regulatory delays. …

Utilities, however, are reluctant to build new transmission capacity until they know that the power output of remote wind and solar farms will justify it. At the same time, renewable-energy investors are reluctant to build new wind or solar farms until they know they can get their power to market. Most often, they choose to wait for new transmission capacity before bothering to make proposals, says Suedeen Kelly, a FERC commissioner. “It is a chicken-and-egg type of thing,” she says. …

Smart-grid technologies could reduce overall electricity consumption by 6 percent and peak demand by as much as 27 percent. The peak-demand reductions alone would save between $175 billion and $332 billion over 20 years, according to the Brattle Group, a consultancy in Cambridge, MA. Not only would lower demand free up transmission capacity, but the capital investment that would otherwise be needed for new conventional power plants could be redirected to renewables. That’s because smart-grid technologies would make small installations of wind turbines and photovoltaic panels much more practical.  …

The good news is that many utilities have begun installing the requisite meters–ones that intelligently monitor power flow out of a house as well as into it. The question now is how to move beyond the blizzard of pilot projects, install smarter technologies across the grid, and begin integrating more renewable power into the new infrastructure. “The smart-grid vision is nice; we all have our color PowerPoint slides,” says Don Von Dollen, who manages intelligent-­grid research at EPRI. “I think people kind of get the vision by now. Now it’s time to get stuff done.”  …

Last summer, former vice president Al Gore began arguing that the country needed to implement an entirely carbon-free electricity system within a decade to avert the danger of global warming. As part of his vision, Gore called for a “unified national smart grid” that would move power generated from renewable sources to cities, increase the efficiency of electricity use, and allow for greater control over renewable resources. He estimated that the grid overhaul would cost $400 billion over 10 years.  …

While pilot projects like the one in Boulder are worthwhile as a way to demonstrate new technologies, they’ve been implemented in hodgepodge fashion, with different utilities deploying different technologies in different states. Transmission projects are advancing incrementally, but they’re often complicated by conflicts between the states. “What we have today is this patchwork of rules and regulations that vary by state,” says Peter Corsell, CEO of GridPoint, a startup in Arlington, VA, that makes smart-grid software and is participating in the Boulder project. “We are all entrenched in this broken system, and there is no agreement on how to fix it. It’s a vicious circle.

Some think that the answer is to give FERC more ­authority. Today, the agency can overrule states’ decisions on where to site transmission lines, but only in regions that the U.S. Department of Energy has designated as critical for the security of the elec­tricity supply. So far, only two such corridors have been designated: one in the mid-Atlantic states and another in the Southwest. Even in those regions, delays continue. Southern California Edison has proposed a major transmission line in the southwest corridor; stretching from outside Los Angeles to near Phoenix, AZ, it would be able to handle power generated by future photovoltaic and solar-thermal power plants. But Arizona rejected the idea, so the utility is preparing to take its plans to FERC.

Others think the solution is a new federal policy that would make the market for renewable power more lucrative, perhaps by regulating carbon dioxide emissions, as the cap-and-trade policy proposed by Obama would do. Under such a policy, wind energy and other carbon-free electricity sources would become much more valuable, providing an incentive for utilities to expand their capacity to handle them (see “Q&A,” p. 28). “It could all change very fast,” says Will Kaul, vice president for transmission at Great River Energy in Minnesota, who heads a joint transmission planning effort that includes 11 utilities in the Midwest.  …

[A]n explosion in the use of renewables will depend heavily on upgrading the grid. That won’t come cheap, but the payoff may be worth it. “We should think about this in the same way we think about the role of the federal highway system,” says Ernest Moniz, a physics professor at MIT who heads the school’s energy research initiative. “It is the key enabler to allow us to modernize our whole electricity production system.”

(emphasis added)

One would think that deregulation of state utilities would also be a step in the direction of freeing up markets, introducing competiion and incentivizing both new grid investments and profitting from efficiency improvements.

In any case, I hope to vist this subject in other posts.

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