Where Does Governor Hochul Stand On Climate?
Congestion pricing, back-to-the-office, and cryptocurrency mining are all climate issues, first and foremost.
Governor Kathy Hochul is hedging her stance on critical issues related to the climate, at a time when New York residents need to know where she stands.
Congestion Pricing and Back-Into-The-Office
A moderate (at the best), Huchul has recently indicated that congestion pricing for New York City is not on the agenda at present, saying at the recent debate with Congressman Tom Suozzi and Public Advocate Jumaane Williams:
"I support congestion pricing, but we've been in negotiations with the federal government that has the say on the next step and they have now put some other, I'll call them other hurdles in the way that we have to overcome," Hochul said.
But governor Hochul's answer was probably music to the ears of business leaders who fear that congestion pricing will make it more difficult to convince their employees to give up telecommuting and come back to Midtown offices.
"Could you tell us how long congestion pricing is going to be delayed in New York?" [CBS reporter Marcia] Kramer asked.
"I don't have the answer. I don't think it's going to be before the end of this year," Hochul said.
The deferral of congestion pricing and the push to get workers commuting back into New York City are both extremely short-sighted. It may turn out to be positive for her election prospects — since residents of the state are very conscious of any costs related to driving — and so punting congestion pricing to the end of the year defuses the situation, but this comes at the cost of increased emissions in the City for an unknown length of time.
Boosting for the return of commuting for NYC knowledge workers is based on short-sighted aims to get workers spending for MTA fares, meals, and City income taxes, but many projections show that workers are making commitments to distributed work, and are not likely to be returning to 5-day per week commuting.
In a recent article for The River, I wrote about research from leading economists that shows former commuters are moving beyond conventional commuting range, out to the edge of ‘The Donut’, and therefore are unlikely to accept the status quo pandemic. But just on first principles, people shouldn’t be commuting to offices in a warming world: we need to reject that model of business economics, and as quickly as possible.
Governor Hochul should step up to the challenge, prepare New York State for a changed future, and adopt policies to hasten the transition to a future with far less commuting in it. About which we aren’t hearing very much, at all, from this administration.
Cryptocurrency Mining
There are powerful interests that oppose recent efforts by New York lawmakers to pass a two-year moratorium on cryptocurrency mining permits, and they are seeking to get Governor Hochul to veto the recently passed bill that seeks to do so.
First of all, crypto mining is not an ‘industry’, in any conventional sense. Paul Krugman made the case earlier this week that crypto is basically a mechanism for fraud:
Last week the Federal Trade Commission reported that “cryptocurrency is quickly becoming the payment of choice for many scammers,” accounting for “about one of every four dollars reported lost to fraud.” Given how small a role cryptocurrency plays in ordinary transactions, that’s impressive.
He goes on to compare crypto to U.S. banks generating their own currencies before the Civil War:
As a number of analysts have pointed out, stablecoins may seem high-tech and futuristic, but what they most resemble are 19th-century banks, specifically U.S. banks during the “free banking” era before the Civil War, when paper currency was issued by largely unregulated private institutions. Many of these banks failed, in some cases due to fraud but mostly due to bad investments.
Now, some modern economists defend the free banking era. Perhaps not surprisingly, free-banking defenders, like crypto enthusiasts, tend to have a libertarian bent; the most ardent defenders of free banking are associated with right-wing think tanks that have also promoted environmental denialism and opposed measures against Covid-19. Still, during the free-banking era, private currencies did indeed circulate and function as mediums of exchange.
Arguably, however, that was because there were no better alternatives: greenbacks — dollar notes issued by the U.S. Treasury — didn’t yet exist. Today greenbacks and government-insured bank deposits do exist, so stablecoins play almost no role in ordinary business transactions. What purpose, then, do these assets serve?
You can ask the same question about crypto in general. I’ve been in a number of meetings in which skeptics ask, as politely as they can, what cryptocurrencies do that can’t be done more easily with more conventional means of payment. They also ask why, if crypto is the future, Bitcoin — which was introduced in 2009(!) — has yet to find any significant real-world uses. In my experience, the answers are always word salad devoid of concrete examples.
OK, criminals seems to find crypto useful; a recent Reuters investigation found that over the past five years the crypto exchange Binance has laundered at least $2.35 billion in illicit funds. But where are the legitimate applications?
Yet suggesting that crypto makes no sense runs up against the incredulity factor. At their peak last November, cryptocurrencies were worth almost $3 trillion; early investors made huge profits. Famous business schools offer blockchain courses; mayors compete over who can make their cities most crypto-friendly.
It sounds extreme and implausible to suggest that an asset class that has become so large, whose promoters have acquired so much political influence, could lack any real value — that it is a house built not on sand, but on nothing at all.
U.S. states, like Kentucky and Illinois, have rolled out the welcome mat for crypto miners, talking about job creation and tax revenue, while avoiding the elephant in the room. Crypto ‘mining’ doesn’t mine anything. It instead uses large amounts of energy — either drawn from the grid or ‘behind the meter’ in older, inefficient, repurposed electrical plants — to generate crypto tokens, which are sold in crypto markets. But as Krugman points out, they aren’t really better than sovereign currencies — like the U.S. dollar — for any conventional transfer of value. They seem to be only good for criminals and hucksters.
Why would New York want to allocate crypto mining licenses at all, given that our supposed policy direction is to decrease energy use dramatically? Again, there are only short-term rationales offered, like supposed job creation and tax revenues.
Governor Hochul seems to be tapdancing around the issue, and her administration is receiving campaign funding from crypto supporters as reported by the New York Times:
Ms. Hochul’s campaign has already received $40,000 from Ashton Soniat, the chief executive of Coinmint, which has a crypto-mining operation on the grounds of a former aluminum plant in Massena, N.Y., a small town northeast of Niagara Falls.
A far larger political gift has gone to Ms. Hochul’s lieutenant governor, Antonio Delgado, who is facing two primary challengers this month. A super PAC, backed by the founder of FTX, a major cryptocurrency exchange, has spent roughly $1 million on digital ads in the last few weeks in support of his campaign, according to state filings.
[…]
The firm is also paying $12,000 a month to a consulting firm, Hinman Straub, to lobby the state government on cryptocurrency regulations, according to state records. Sam Bankman-Fried, the founder of FTX, said in a statement that the company had applied for a trust charter to operate in New York and has been engaged in conversations with regulators about its application.
The governor, a moderate Democrat facing a primary election on June 28, has been noncommittal on whether she would sign the bill, a priority of environmental activists and the party’s left flank. Ms. Hochul likely won’t have to make a decision until Dec. 31.
“We’ll be looking at all the bills very, very closely,” Ms. Hochul said during a news conference in Manhattan on Tuesday. “We have a lot of work to do over the next six months.”
Again, the governor is kicking the can down the road until after the primary, and perhaps the fall election, instead of taking a principled stand, now. Short-termism, not principled governance.