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Paper Companies' Windfall of Unintended Consequences
Jamie found a post on ScienceBlogs that serves as a stark example of the law of unintended consequences, as well as the ability of private industry to game a system of laws to their advantage. It seems that large paper companies stand to reap as much as $8 billion this year by doing the opposite of what an alternative-fuel bill intended. Here is the article from The Nation with more details and a mild reaction from a Congressional staffer. "[T]he United States government stands to pay out as much as $8 billion this year to the ten largest paper companies.... even though the money comes from a transportation bill whose manifest intent was to reduce dependence on fossil fuel, paper mills are adding diesel fuel to a process that requires none in order to qualify for the tax credit. In other words, we are paying the industry — handsomely — to use more fossil fuel. 'Which is,' as a Goldman Sachs report archly noted, the 'opposite of what lawmakers likely had in mind when the tax credit was established.'"
Incompetent lawmakers are incompetent.
is all over this!
It wasn't mentioned in the summary, but the tax credit was passed in 2005. So no one thinks the $8 billion is related to stimulus packages passed more recently.
No, those will cost us a lot more when companies figure out how to fraud them.
...this is why centrally planned aconomies don't work.
[FUCK BETA]
I'm just waiting to see how long it takes the banking industry to hop on board once they realize how much money they can make by producing all their sub-prime lending bailout paperwork on in-house paper with alternative fuel tax credits. Your tax dollars at work.
This is another example where the intention of the law doesn't mean anything, what is actually written and what that can be stretched to mean does.
If a law is supposed to have a specific intention, then it should be written just for that.
If I have nothing to hide, don't search me
In general, good intentions are overruled by individual and corporate greed and sneakyness.
The lawmakers may spend an hour thinking over the consequences of a bill, while the folks affected have all sorts of time and inclination to poke holes in the laws. Guess which side usually wins?
The intent of the law is to encourage the use of alternative fuels. Paper companies are already using alternative fuels both economically and efficiently. Taxing them, and distributing that money to less-efficient companies that are not currently using alternative fuels economically, discourages paper companies from existing, thereby punishing them for using alternative fuels.
Regardless, concentrating on bullshit like this, instead of seriously addressing the negative externalities of dependence on foreign fossil fuels, makes all of us worse off.
But I seriously can't fucking believe, that after eight years of the incompetent fucking clowns in the Bush administration, that anyone has the brass balls to try to justify, let alone suggest, more retarded, illegal bravado from the executive branch. You are a complete dumbfuck, just like the tools who passed this law in 2005, and the tools who are currently skullfucking the concept of market economics for their ill-conceived political agenda. This country has become a sad fucking joke. And idiots like you are the primary reason. By now, absolutely no one should give two dry shits what the average mouth-breathing American thinks about who or what is "evil" and what his president-god-king should do about it, since it's obvious that most of their heads are so far up their own asses that they couldn't find them with two hands and a GPS device.
"I assumed blithely that there were no elves out there in the darkness"
There is a limit to the amount of profit a car manufacturer on an individual car in the U.S. This only applies to basic passenger cars, not luxury cars or trucks. The answer? This is why the big 3 pushed trucks and SUV's so hard - which granted a large part of their customers wanted, but they largely ignored another large crowd that wanted small U.S. made economy cars. They produced crap instead, so we bought Japanese. Thank you Uncle Sam.
Some Americans With Disabilities Act rules apply only to companies of certain size, as in number of employees. Compliance is incredibly expensive in many cases. Some companies put the brakes on at a certain number of employees due to the expense of compliance sentencing said companies to stagnate growth at a certain size giving their mega corporation competitors an upper hand. Thank You Uncle Sam. The same can be said of certain FDA regulations and any other regulatory agency you can name.
My sister works for the Department of Agriculture. She writes checks to farmers to not grow crops.
Here's an idea:
KEEP THE FUCKING GOVERNMENT OUT OF IT
Unless something really needs regulating, leave it the hell alone. Food? Fine we need an FDA to make sure our food isn't nasty and contaminated. They probably overstep their usefulness in some cases, and under step it in others, but that's expected.
Yes, we do need an agency to keep track of Plutonium and Uranium. Just saying, yeah, track that.
We need an EPA - but it needs to know it's place.
ATF? We don't need that. It's a redundant agency originally created for tax purposes, not what they're doing now. It's also limiting freedom.
No government regulation usually helps huge companies by keeping the small competitors down. Create an agency to regulate an industry, then the companies buy the candidates they want and put them in the regulatory committees. The little guys can't do that.
The preceding post was not a Slashvertisement.
... call DOT and tell them to fill it with paper.....
Comment removed based on user account deletion
Does anyone else feel like this is an episode of "The Office"?
It isn't so much that people want more (or less) regulation per se, they want good legislation. If you look at the situation described in the article, it was foreseeable and preventable and 100% caused by sloppy drafting. No wonder people fire up their conspiracy theories, the incompetency levels in goverment are simply beyond too far our imagination. This isn't necessary. There are plenty of smart people on the planet. High tier goverment jobs pay well. It should be perfectly possible to get ourselves a competent lawmaker or two.
It seems business as usual - transferring taxpayers money to corporations bottom line
You mean the kind of deregulation where a central entity whose management is appointed by the president determines the money supply and a lot of the interest rates?
We haven't had deregulated banking since 1913. All we did was change one regulatory regime to another, which arguably allowed more abuse.
-- Support a free market in the field of government
If I am not mistaken (IANAL), you cannot do something a law does not forbid if you go against the law's intent (at least in my country - Brazil - that's the way it works).
In the US it is the wording that counts. The intent is even easier for a court to manipulate than the interpretation of the wording.
If the government does not explicitly forbid something, it is permitted.
-- Support a free market in the field of government
Laws have bugs just like software. We don't stop writing useful software just because it may fail, we use bug tracking, debuggers, and bug fix releases. So, it's neither surprising nor avoidable that laws like this have unintended consequences. Lawmakers should simply have better turnaround times for fixing bugs in laws.
FTFS -- "It seems that large paper companies stand to reap as much as $8 billion this year by doing the opposite of what an alternative-fuel bill intended."
The road to hell was paved with good intentions. (can I say that on Easter Sunday?)
Welcome to the USA
Oh, really? Not according to the US government. http://www.epa.gov/climatechange/emissions/usinventoryreport.html Paper doesn't even show up, and all of the "industrial" processes (as opposed to home heating, electricity generation, and transportation) make up less than 7% of US emissions, so paper-making is barely a roundoff error. I'm not arguing that the paper companies aren't taking advantage of a loophole, but to suggest that this is having any meaningful impact on emissions one way or the other is ludicrous.
What was once true, is no longer so
The more they legislate, the more (supposedly) unintended consequences we get. If only they'd agree to be limited by the Constitution's enumerated powers - we'd get far fewer unintended consequences.
How about if we 1) term limit lawmakers, and 2) put mandatory sunset provisions on each law so that it automatically expires after 25 years?
What good would that do? For #1, we'd at least get some new blood in there once in a while. For #2, remember the telephone tax that was imposed to pay for the Spanish - American War, and was still in place 100 years later? Do we really want this law on the books in 100 years?
The first link is to a blog that adds nothing of value; it quotes several paragraphs from The Nation article itself but says essentially nothing.
This incident clearly proves that all legislation is evil, as well as all companies, and all paper. I am burning all my paper as we speak. Massive generalizations are always 100% correct and appropriate for all situations.
This page is International Paper's feedback form. Tell them how you feel about this.
In addition to that, let your Congressional representation know too--OK it's Congress, but it might help anyway.
Government's idea of a balanced budget: take money from the right pocket to balance...oh who am I kidding?
Only 8 billion? Oh come on. That's peanuts.
You have the oil industry being subsidised by half a trillion annually through the US military budget. You have the banks taking to the outright looting of the US treasury.
I mean... Wow.
Deleted
This is what happens when government intervenes in the market. Rules controlling a dynamic system need to be dynamic, adaptive and self-regulating. Rules imposed by government will never be.
I prefer a void in conversation to a vacuous one.
This is not the first time this law has run into such usage.
Some people did try to get that changed but there was too much interest in keeping it that way, from the companies doing it and from the various environmental group who want to stop petroleum usage.
...when the government messes in things not in its job description? Laws should have specific purposes with specific goals.
Sic gorgiamus allos subjectatos nunc
Interesting how lawmakers were stumbling all over themselves to immediately pass laws specifically targeted at people who were going to get less than $200 million in bonuses, but in this case, with far more money at stake, it merely needs to be "closely monitored".
Free energy (such as the "Joe Cell") has been available since the 1920's but has been suppressed by those in power for control over the populace, and money. One example of many. Take the Red Pill.
~ awaiting spiritual enlightenment ~
of the problems with our tax system and why the whole thing should be scrapped and rebuilt from the ground up.
Gaming the laws is as old as mankind. How about NOT passing laws that haven't gone through the same level of cursory inspection that is routinely given to newspaper editorials?
If a law is badly written, it will be abused.
The more complex a system is, the worse the abuse possibilities. That's true for an OS as well as a legal system. That's why all tax laws and subsidies regulations should have an expiration date, or not be passed altogether.
Fantasy: http://ferrisfantasy.blogspot.com/
So maybe when we record a law, we should also record the context, and the law should only be upheld if the context is the same the next time it is applied, and that should be up to the judge and jury as well.
Twinstiq, game news
The was meant to give a tax credit to alternative fuels.
The paper industry didn't qualify without adding petrol. Sounds like a bug in the law to me.
The paper industry added petrol, and they get their tax credit.
Complex laws are like programming code: you can stare at it all you want to try to find bugs, but until you actually run it in real conditions, you won't know for sure what will happen.
Table-ized A.I.
I don't see what the fuss is all about. Haven't any of you noticed how the govt. achieves control ?
By allowing the companies to claim tax credits on the diesel fuel, they are conditioning those companies to expect an income from the govt. Once they get used to that income they will come to rely on it. When the Govt. wants to introduce a new regulation, they can squeeze the firm using the financial hold they already have.
Shock horror, like it's never happened before. Whether you think the Govt. should act like this is down to you, the voter. Personally, if I'm to have a Govt. at all, then I would prefer it to have teeth, otherwise it wouldn't have the power to effect the changes I desire.
... as for the reason this happens and will happen again and again.
Send your spendthrift head of state this
That this story is seen as anything but flame-bait
Yeah, I get it.. companies have been taking advantage of loop-holes and getting tax credits they don't deserve.. News ?? ... Oh wait, there is a new administration, and the latest slashgroupthink is that the new administration is for the corporations and out to screw us, because they want to drop a case against the old administration.. rather than legally fight for policies that they didn't implement... So let's just look really hard and see if there isn't anything else we can't prove our well informed theories of this administrations industrial complex leanings
This tax thing not the new administrations latest attempt to screw you.. that was done a couple years ago.. and hey you got a little spittle there.. might want to get yourself a handkerchief.
waiting for ad.doubleclick.net
No Dunder-Mifflin jokes yet? ...
I got nothin'. That's what she said.
I tried to look for information about the composition of black liquid. One page gives an example, 78% organic and 22% inorganic. The wikipedia page about black liquid mentions that it is burned in kraft pulp mills in order to recover "cooking chemicals" (sodium hydroxide and sodium sulfide).
So when they add diesel to this black liquid they are adding it to a mixture that may have significant (1/5) amount of inorganic stuff. The relevant section of the law about alternative fuels does not seem to recognise this kind of mixture.
Why is this article tagged with "democrats"? If you RTFA, you'll note that the tax credit was passed in 2005 and signed by G.W. Bush. In 2005 it was the Republicans that controlled congress.
It would help if the members of Congress actually read the laws they are passing. Sadly, this does not happen in more than 80% of the cases -- and in the last 3 or 4 major "bailout" and "recovery" bills, the legislation did not even arrive in time for them to look at before a vote. That didn't stop the clowns though!
Where is the public outrage -- disregarding the 100 or so demonstrators we've heard about -- over the largest bilking in human history? THIS is why the Founding Fathers limited federal power in the Constitution, which those whose are sworn to uphold it manage to ignore with increasing regularity.
If the company does tricks to cheat the system, just take away the benefits on the other side. (Transportation and keeping foreign paper out from the market).
Leslie Satenstein Montreal Quebec Canada
All hail the Republicans! (Especially Ron Paul)
Our nation, our society, our economy is too sprawling and complex for 300 something representatives in one town to be meddling with in such deep and far reaching ways with unpredictable consequences. The Federal Government is great for national defense, nothing else. Everything else should be handled at the state level. In fact, it is handled at the state level but with restrictions of federal beauracracy. Which makes more sense? Sending tax-dollars to the Feds who then turn around and send the money to the states to carry out the social and regulatory programs OR sending tax-dollars to your state to carry out the social and regulatory programs your state needs the way your state needs it. Without big-brother monitoring and police-state powers, the Fed will always screw up. Why do we look to the Fed to solve all of our problems? Because our States are powerless. Why are the States powerless? Because the Feds get our tax-dollars...Because the Feds have taken the power from the States. When did this happen? American Civil War and the New Deal set the precedences and it has spiraled out of control ever since. Slavery and racism are wrong, so I'm glad the Civil War happened the way it did. The New Deal was necessary, but should have happened at the state level. Perhaps that just wasn't possible at the time. Will there be abuse and corruption at the state level? Will there be mistakes and blunders at the state level? Yes, but those errors will be noticed and dealt with more swiftly and appropriately at the state level.
I don't find this as evil/bad as most of slasdhdot does. Why? Because I make use of the Earned Income Tax Credit. Raise your hand if you make use of that or any other government handouts? Now, when you go to your tax person or use your tax software, do you try to find every means possible to reduce your taxes or get money back? Damn straight that's what we all do! How can I possibly complain because others try to do the same?
Does it make a damn bit of difference if they are an educational group, a religious group, a business group, or a nonprofit group? Nope.
This is just complaining. It's like complaining that the sun is bright, hot, and produces tons of energy. Yeap, and there ain't anything we can about it either.
Actually, I don't think that the paper industry will be "punished" or allow this thing to be reduced. Didn't you read the sentence that the entire paper industry was in trouble? Well, finding a nice federal tax income will help that problem. There is nothing more dangerous than allowing a government agency/law to be established. Once it is there; it'll only be expanded.
Good regulation is what prevents financial organizations from becoming too leveraged.
You are missing his point. Good regulation would prevent banks from becoming "leveraged" in the first place. What we have is not even regulation. It is legitimized fraud.
Consider this. I tell you that I will hold onto your money for you, even offering you a bit of interest, and that you can come and get it at any time as long as you withdraw less than $1000 a day. Sound like a deal? Okay, so you give me $15,000. I immediately turn around and loan out your money on a 36 month note for a new truck.
You come back fifteen times over the next six months and try to withdraw $1000 each time. The first time, I might be able to cover your withdrawal from the loan payments I've received. The next few times, I'm paying you from my own money while I repossess the truck. But unfortunately, the truck dropped in value by half the minute it was driven off the lot. So, even after I re-sell the truck and give you all of my own money, I can only cover up to about $10,000 of what I owe you.
And that's pretty much the situation we're in with banking in America right now. Why do you think the car companies are lining up for bankruptcy along with the failed mortgage lenders? No amount of additional regulation can continue to hide the fact that loaning out demand-deposits (at any leverage ratio) on long-term notes should rightly constitute fraud. And, for far too long, banks have been making bad loans to irresponsible consumers to purchase items that aren't worth half of what they pay for them.
"I assumed blithely that there were no elves out there in the darkness"
Hmm, International Paper is announcing earnings on April 30th. One would have to guess that those earnings will be higher than previously predicted as these checks have just started rolling in.
the solution for this is for the president to order the IRS to withhold these payouts
it would be illegal to withhold payments specified by law... you're stuck with the law as written until someone changes it.
The law as written also does not give the president the power to fire GM's CEO. But that didn't stop him, did it?
That that is is that that that that is not is not.
The lawmakers can't even get a simple green-energy incentive right; what further evidence do you need that they must not be allowed to get anywhere near your healthcare?
That that is is that that that that is not is not.
perhaps i'm wrong about how all this works, even after rtfa, but hasn't the paper industry been efficient in an energy sense for some time? assuming that it's okay to reward industries for efficiency (which is arguable, but it's what the bill does), shouldn't paper be rewarded for having been efficient all along?
fwiw, a similar situation is happening right now in l.a. with water (albeit with penalties instead of rewards). people are being penalized during drought conditions for not reducing their water usage. those who have been conserving all along have a hard time reducing and get penalized.
but we need to use the non-profit business model to replace the major players in insurance and healthcare, transportation and construction, and energy, and other forms of production and especially entertainment.
You can't start small in insurance, and healthcare is regulated to a fare thee well. But you're welcome to start your own entertainment company, for example, and run it as a co-op. Make good products, and I'll even buy them.
cause they'd all be controlled instead by the people who use what they produce, as well as the strict rules for how a non-profit can operate;
I buy a few books from Barnes & Noble every month. That doesn't mean I have time to learn how to run a book store so my vote would be any use.
their business charters wouldn't allow them to function as selfish entities!
Non for profits can be selfish, they just aren't designated as such. For example, they can't pay their shareholders dividends. But they can pay their managers a huge salary.
it also allows for the easy adoption of sustainable practices throughout our world society...
Imagine you work in a co-op that manufactures cars, and you figure a way to make cars that is more sustainable, but would drive income down. Do you and your co-workers vote and decide to drive income down and take less money home every month, or do you vote to keep things as they are? Remember, you still want to be able to buy stuff.
I'm not saying co-ops can't work. They obviously work very well for certain things. But the reason we don't see co-ops everywhere is that customers often don't have the time and energy to manage their suppliers. I don't see how you get rid of that issue. Workers co-ops could work better, because workers know more about the company - but it office politics would be even worse than it is now.
You're welcome to prove me wrong. Whatever work you do, you could do it in a co-op. I'll be happy to be a customer if it is something I need to buy, and it is better than what for profit companies make.
-- Support a free market in the field of government