Why the President can Fire the CEO of the TVA


I just read a story about the Tennessee Valley Authority (TVA) and the fact President Trump fired its CEO and one board member. My first reaction was, what what what? How can a political entity fire the CEO of the TVA? It turns out the TVA is owned by the Federal Government although it receives no tax dollars and acts almost exclusively just like a private company. So, my second question is, what what what?

Where is my Time Travel Hat? I have to get to the bottom of this immediately. Did I leave it in the freezer again? No. In the tax document drawer? No. Ah, there it is in the Gloomhaven Box, how did it get there? Oh well, let’s see, still fits, spin three times, fancy colors, bright lights, dizzy spell, and, where am I?

Is that President Franklin Roosevelt over there? What is he saying, selfish purposes, let’s listen in: Never shall the federal government part with its sovereignty or with its control of its power resources while I’m president of the United States. Hmm, so he’s upset that public utilities are charging high prices. He wants the government to be in charge of electricity generation. Look at all the people applauding him including Republican Senator George Norris who just blocked Henry Ford from building a private dam and utility to modernize the Tennessee Valley.

I can’t believe I’m actually watching President Roosevelt signing the TVA Act which legally prevents competition in the valley. Only the government can build power plants and dams. Oh, I see, look there, in the back room, the politicians know the dams are going to flood out tens of thousands of residents, Native American sacred sites, so they are giving TVA Eminent Domain powers to simply kick people off who refuse to sell. Smart!

Oh, look there, is that Barry Goldwater and Ronald Reagan lambasting the power of the TVA and the fact government controls it instead of private industry, it sure is. Look there, they have their own police force! A net income of $1.12 billion in 2018. They’ve been profitable since 1977.

Uh oh, energy running low, flashing lights, and I’m back home. Whew. Another successful trip. What did we learn? The government shouldn’t own industries like the TVA for a number of reasons, one of them is politicians will feel free to intervene in business decisions for which they should have no authority whatsoever.

Why does President Trump have the authority to fire the CEO of the TVA? Because the government created a monopoly and crushed any chance for private industry competition.

How does the Supreme Court justify this Socialism? The Commerce Clause which allows the regulation of streams to keep them navigable and the War Powers Act because electricity is sometimes used in the creation of munitions. Seriously? I ask. Seriously?

Tom Liberman

No Shoppers, No Stores

Retail Foot TrafficWarning – Warning – Warning! Boring economic blog ahead.

I just finished what I think is a great article about how foot traffic at retail stores is dropping dramatically and how less retail space is opening each year in the United States.

Great news? For the doomsayers it means that Americans have no money and aren’t doing any shopping. I take an entirely different view. Firstly, Americans aren’t going to the store nearly as often because they can do most of their shopping online. That much is pretty obvious and is a trend that has been going on for a number years. The second thing I think it means is that Americans are more wary of going deeply into debt to purchase things.

The most recent economic crisis made us wary, just like it made those who survived the Great Depression big savers. For too long the government has encouraged us, nay, bribed us to spend, spend, spend.

From 1946 to 1973 the US economy grew by an average of 3.8% a year and median household income grew by 2.1% a year. The children of the Great Depression died and their children grew up expecting an expanding economy that would go on forever.

Since 1973 the economy has grown at an average rate of 2.7% a year and median household income has grown by 0.3% per year. Even these number were largely propped up by your tax dollars in the form of “Stimulus”. It started under President Reagan, the Democratically controlled House, and a Senate controlled by Republicans from 1981 to 1987. They managed to triple our national debt trying to stave off economic recession.

It’s been nothing but the same since. Ever increasing national debt in the pursuit of economic growth to match the post World War II era. That’s not my point today. My point today is that it just might be possible that Americans are voluntarily tightening their belts!

I know the naysayers will claim we are still in a depression, the unemployment numbers are higher than they seem. It’s funny, when a republican is President it’s my democrat friends who claim the numbers are rigged but when it’s a democrat in the White House it’s my republican friends who make the exact same argument. Thus you gain a little glimpse into the life of an Independent.

The reality is the numbers are rigged, but they are the same number so they are useful as comparison tools. The equations are largely unchanged, and if they show the economy is growing and the deficit is shrinking, it is doing so in comparison to numbers from previous years.

I can also judge by personal stories of friends in various businesses. Things are going much better, for virtually everyone I know, than they were in four years ago. Not that I think the policies of the democrats or republicans are to be credited or blamed, it’s more of a natural cyclical event.

So, if the economy is growing, certainly not booming, why are retailers not building, why are shoppers not shopping? Online spending is up immensely but not quite enough to cover the losses of the retail brick and mortar stores.

It’s certainly possible I’m wrong and that Americans are not becoming more frugal but it’s undeniable that we’re staying home to do our shopping. This is something I’ve spoken about in before. Read that blog to understand why I think it’s such a great thing, I won’t reiterate here.

So, when I hear fewer shopping malls are opening, when I hear that foot traffic in existing malls is way down, well, it brings a smile to my face. Then again, I’m an introvert. See you online!

Tom Liberman
Sword and Sorcery fantasy with a Libertarian Twist
Current Release: The Sword of Water (buy it, read it, write a review, buy it again!)
Next Release: The Spear of the Hunt

Science Rocks

Science Week – Computers

ScienceI don’t think anyone takes computers for granted these days so there isn’t a lot of sense in telling everyone how important they are in the world. Instead I want to talk about how they, more than any politician, altered the economic landscape of the United States and mention of few of the most important names in the field. It’s important to understand why computer technology kept the U.S. as the world’s leading economy and why we are now, once again, in some danger of losing that power.

So my loyal followers, dig into your closets, find that oft used Time Travel cap, and place it firmly upon your head as we go … back … back … back to 1971.

Computers have been around for quite some time with even the ancients using calculating machines. I’m skipping past the fascinating stories of Hero of Alexandria, Wilhelm Shickard,  Charles Xavier Thomas, Ryoichio Yazu,  Joseph Marie Jacquard, Charles Babbage, Herman Hollerith, Arthur Pollen, and Konrad Zuse among a host of others. If you’ve time and inclination these are all interesting stories. However, I’m skipping ahead a bit.

In 1971 Intel developed the microprocessor for a Japanese computer company based on an invention of Robert Dennard. What I think is important here is that a U.S. company built it for a Japanese company. At this time Japan’s economy was growing while the U.S. was beginning a period of stagnation. Japanese cars were flooding the market and American consumers rightly found them to be superior to home built vehicles. Technology from Asia was beginning a flow that continues to this day with China leading the way.

Then in 1975 a little machine called the Altair 8800 was introduced and a group of young Americans began to play with it.  A couple of young fellows named Paul Allen and Bill Gates wrote something called a BASIC Interpreter for it. Two other young guys, Steve Jobs and Steve Wozniak began to work on their own versions of home computers.

Now, I’m going to leave aside all the name dropping and get back to the economics of computers and how they changed the landscape of U.S. power. By the late 1970’s there was a feeling that the U.S. was losing it’s place as the preeminent economy in the world. Gasoline embargoes and the rise of Asian technological advances contributed to a perception that probably had some merit if was overblown.

Computers changed all that. With companies like Microsoft, Apple, a reinvigorated IBM, Hewlett Packard, Xerox, Commodore, and a host of others suddenly pumping huge sums of money into the economy and paying massive tax bills our economy grew at an astonishing rate. The link between economic growth and technical achievement is strong. However, the boost we gained from computers is waning as it does with all new technology. There are some arguments that this boost was less than others throughout history.

With new technology our living standards improve dramatically, our work week declines, our free time increases, and our buying power increases. I think many of these things are directly attributable to the rise of computers and their related technologies.

The lesson I take from all this is that if we want to continue to improve our lives then we need to continue to invest in emerging technologies and particularly reward entrepreneurship. Too much of late I see Crony Capitalism and regulations designed to empower the established businesses at the expense of the small innovators.

This is a core message of Ayn Rand and Objectivism. If the big companies squeezed out Microsoft, Apple and others with regulations and government intervention our lives would have suffered. The individual achiever must be allowed to innovate and achieve and then we all benefit.

In my opinion, the next new technology is alternate energy. If we continue to invest heavily in subsidies for oil we will fall behind other nations researching nuclear, wind, solar, wave, thermal and other sources of power. If this happens will will lose our place as the most powerful economy in the world. I’ll take that topic on in more detail soon.

For now I simply want to say thank you to all the men and women who bring me computer technology! Gentlemen, Ladies, thank you! Maybe you can take the time to head down into the little cave where your IT staff resides eating donuts and making fun of the technologically illiterate. Ignore the odors, the dank depression, the wild eyed maniac drooling in the corner, and any other strange things you might see, pop your head in with a cheery smile and say, “Thanks!” Then get out of there while you still can!

Tell me what you think in the comments. Like, Tweet, Stumble, Pinterest, PlusOne, and otherwise share with your friends if you think this is worthwhile subject matter.

Tom Liberman
Sword and Sorcery fantasy with a Libertarian Twist