interviews
Water and the American West
by Richard Frank
October 25, 2021
This interview with Richard Frank, professor of environmental practice at the UC Davis School of Law and Director of the California Environmental Law and Policy Center, was conducted and condensed by franknews.
frank | Can you tell me a little bit about the story of water and how it's tied to the West, and to California in particular?
Richard | A friend of mine who's a Court of Appeals Justice here in California wrote an opinion on a water law dispute and started it with the quote, "the history of California is written on its waters." And I think that the point is true of the entire American West.
Water policy and legal issues are inextricably tied to the development of the Western United States; water is the limiting factor in so many ways to settlement, to economic development, to prosperity, and to the environment and environmental preservation.
Can you talk about the difference between groundwater and surface water– and the policies that regulate each?
There are really two types of water when it comes to human consumption. There's surface water: that is the water that is transmitted by lakes, rivers, and streams. Then there is groundwater, and a substantial amount of water that Americans and the American West rely on is groundwater. That is water that is stored in groundwater aquifers, which are naturally occurring groundwater basins. Both groundwater and surface water are critical to the American West and its economy and its culture.
Traditionally a couple of things are important to note, first of all, water is finite. Second, water gets allocated in the Western United States generally at the state level. There's a limited federal role. Primarily, policy decisions about who gets how much water for what purpose are made state by state.
I think allocation is really interesting in that it's more state-level than federal. How was water and the allocation of water in California designed? Is it a public-private combination? What goes on in terms of the infrastructure of water?
Another very good question. The answer is it depends. Most of our water infrastructure is public in nature.
Again, in the American West, the regulation of water rights is generally done at the state level, but the federal government, historically, has a major water footprint in the American West because it has been federal dollars and federal design and management that really controlled much of the major water infrastructure in the American West — you know, Hoover Dam, and the complex system of dams and reservoirs on the Colorado River in California, with the Central Valley Project that was built and managed by the federal government with Shasta Dam on the upper Sacramento River as the centerpiece of that project. But we also have a California State Water Project, the key facility being the Oroville Dam and reservoir on the Southern River that is managed by state water managers. If we were starting over, that kind of parallel system would make no particular engineering or operational sense.
But, we are captive to our history.
And then you have these massive systems of aqueducts and canals that move water from one place to another throughout the American West. They are particularly responsible for moving water from surface water storage facilities to population centers. In the last 50 to 75 years, these population centers have really expanded dramatically, so you need massive infrastructure to deliver water from those storage facilities, the dams, and reservoirs, which generally are located in remote areas to the population centers. So it takes a lot of time and energy to transport the water, from where it is captured and stored to where it is needed for human use.
California has faced continuous drought – what measures is the state taking now to manage water?
Just to frame the issue a little bit — we have, as I mentioned, a growing population in the American Southwest at a time when the amount of available water is shrinking due to drought and due to the impacts of climate change. We have growing human demand for residential and commercial purposes and at the same time, we have a shrinking water supply. That is a huge looming crisis.
And it is beginning to play out in real-time. You see that playing out in real-time. For example, several different states and Mexico rely on Colorado River flows based on an allocation system that was created in the 1920s, which is overly optimistic about the amount of available water. From the 1920s until now, that water supply has decreased, and decreased, and decreased. Now you have interstate agreements, and in the case of Mexico, international agreements that allocate the finite Colorado river water supplies based on faulty, now obsolete, information. It is a real problem.
What measures do you take now, knowing this information?
If you look at the US Drought Monitor, it is obvious the problem is not limited to the Colorado River. We are in a mega-drought, so cutbacks are being imposed by federal and state water agencies to encourage agricultural, urban, and commercial water users to cut their water use and, and stretch finite supplies as much as possible through conservation efforts.
In California, we have the State Water Resources Control Board, the state water regulator in California, and they have issued curtailment orders. Meaning, they have told water rights holders, many of whom have had those water rights for over a hundred years, that, for the first time, the water that they feel they are entitled to, is not available. Local water districts are also issuing water conservation mandates; the San Francisco water department is doing that, in Los Angeles, the metropolitan water district, is urging urban users to curtail their efforts.
And then agriculture. Agricultural users — farmers and ranchers — have had to get water rights in many cases through the federal government, as the federal government is the operator of these water projects. They have contracts with water users, individual farmers, ranchers, or districts, and they are now issuing curtailment orders. They're saying, we know you contracted for X amount of water for this calendar year, but we are telling you because of the drought shortages we don't have that water to supply. Our reservoirs are low at Lake Shasta or at the Oroville Dam.
When you drive from San Francisco to LA on the five, you see a lot of signage from the agricultural farming community about water. There's apparently some frustration about this. What are the other options for them?
About 80% of all human consumed water goes to agriculture. That is by far the biggest component of water use, as opposed to 20% used for urban and commercial, and industrial purposes.
Over the years, ranchers and farmers, and agricultural water districts assumed that the water would always be there — as we all do.
And the farmers and ranchers have, in hindsight, exacerbated the problem by bringing more and more land into production. You see on those drives between San Francisco and Los Angeles, particularly in the San Joaquin Valley, all these orchards are being planted. Orchards are more lucrative crops than row crops — cotton, alfalfa, and rice. But, if you are growing a row crop, you can leave the land fallow in times of drought.
We don't have to plant. If the water stopped there, or if it's too expensive to get, it may make economic sense, but if you have an orchard or a vineyard it's a high value, those are high value crops, you don't have that operational flexibility and they need to be irrigated in wet years and in dry years. Now, you see these orchards, which were only planted a few years ago, are now being uprooted because the farmers realized that they don't have the water necessary to keep those vineyards and orchards alive. For ranchers, the same thing is true with their herds. They don’t have enough water for their livestock.
The water shortage has never been drier than it is right now. Farmers and ranchers are being deprived of water that they traditionally believed was theirs and they're very understandably, very unhappy about it. They see it as a threat to their livelihood and to the livelihood of the folks who work for them. Their anger and frustration are to be expected, but it's nobody's fault.
To say, as some farmers do, that it is mismanagement by state and federal government officials, I think is overly simplistic and misplaced in the face of a mega-drought. Everybody's going to have to sacrifice. Everybody's going to have to be more efficient in how they use water. All sectors are going to need to be more efficient with the water that does exist.
Looking at this percentage breakdown of water use – is it actually important for individual users to change their water habits?
Well, every little bit helps. When you're talking about homeowners, about 70% of urban water use is for outdoor irrigation. So we're talking parks and cemeteries and golf courses and folks' yards. You know, that used to be considered part of that American dream and the California dream — you would have a big lawn in front of your house and behind your house. Truth be told, that has never made much sense in an arid environment. That's where the water savings in urban areas is critical in the way it really involves aesthetics rather than critical human needs, like water for drinking and bathing and sanitation purposes. There is a growing movement away from big lawns, and away from the type of landscaping that you see in the Eastern US — there is no drought in the Eastern United States. As Hurricane Ida and other recent storms have shown, the problem is too much water, or rather than too little in most of the Eastern United States. So it really is a tale of two countries.
We just need to recognize that the American West is an arid region. It has always been an arid region, we can't make the desert bloom with water that doesn't exist. We need to be more efficient in how we allocate those water supplies. And it seems to me in an urban area, the best way to conserve and most effective way is to reduce urban landscaping, which is the major component of urban water use.
You also write about water markets and making them better – for those who don’t know, what is the water market?
Water markets, that is, the voluntary transfer of water between water users, is more robust in some other Western states. Again Arizona and New Mexico come to mind. California somewhat surprisingly is behind the curve. We are in the dark ages compared to other states. Water markets are kind of anecdotal. There is not much of a statewide system. It is done at the local level, through individual transactions without much oversight and without much transparency. And I have concerns about all of those things.
I believe conceptually watermarks are a way to stretch scarce, finite water resources to make water use more efficient. I can, for example, allow farmers or ranchers to sell water to urban uses or commercial usage or factories in times of drought.
Farmers sometimes can make more money by farming water, than they can by farming crops.
There are efficiencies to be gained here.
The problem in my view is really one of transparency. The water markets are not publicly regulated, and some of the people who are engaging in water transactions like it that way, frankly, they want to operate under the radar.
In my opinion, water markets need to be overseen by a public entity rather than private or nonprofit entities. We need oversight and transparency, so that folks like you and myself can follow the markets to see who's selling water to whom, for what purpose, and make sure that those water transfers serve the public interests and not just the private interests.
There have been a number of stories in the New York Times and the Wall Street Journal and the Salt Lake City Tribune about efforts in some parts to privatize water transfer. Hedge fund managers are buying and selling water, as a means of profiting. And it strikes me that when you're talking about an essential public resource — and in California, it is embedded in the law that public water is an inherently public resource, that water is owned by the public and it can be used for private purposes, but it is an inherently public resource — the idea of commoditizing water through the private, opaque markets is very troublesome to me. I think it represents a very dangerous trend and one that needs to be corrected and avoided.
Why is California so behind?
There's no good reason for it. It's largely inexplicable that since the state was created on September 9th, 1860, we've been fighting over water. In the 19th century, it was miners versus farmers ranchers. In the 20th century, with the growth of urban communities, the evolution of California into one of the most populous states with 40 million Californians, it has been a struggle between urban and agricultural uses of water.
In the second half of the 20th century, there was a recognition that some component of water had to be left in streams to protect ecosystems, landscape, and wildlife, including the threatened and endangered wildlife. That suggestion has made agricultural users in California angry. You will see those signs that allude to the idea that food and farming are more important than environmental values. I don't happen to believe that's true. I believe both are critically important to our society. But the advocates for the environment have a proverbial seat at the water table. So that's another demand for water allocation that exists.
Do you maintain optimism?
Yes. I think it's human nature to look on the bright side. I try to do that through research scholarships and teaching. There are models for how we can do this better in the United States. Israel and Saudi Arabia and Singapore are far more efficient with their water policies and efforts. Australia went through a severe megadrought. They came out of it a few years ago, but they used that opportunity to dramatically reform their water allocation systems. That's an additional model. I think most people would agree in hindsight that their previous system was antiquated, and not able to meet the challenges of climate change and the growing water shortage in some parts of the world.
Here in the United States, we can learn from those efforts. There are also some ways to expand the water supply. Desalination for one. Again, Singapore and Saudi Arabia have led the world in terms of removing the salt content from ocean water and increasing water supply that way. In Carlsbad, California, north of San Diego, we have the biggest desalination plant in the United States right now, and that is currently satisfying a significant component of the San Diego metropolitan areas’ water needs. It's more expensive than other water supplies, but the technology is getting more refined, so the cost of desalinated water is coming down at a time when other water supplies, due to shortages and the workings of the free market are going up.
At some point, they're going to meet or get closer. Unlike some of my environmental colleagues, I think desalination is an important part of the equation.
In a proposal that came up in the recall election, one of the candidates was talking about how we just need to build a canal from the Mississippi River to California to take care of all our problems. That ignores political problems associated with that effort, as well as the massive infrastructure costs that would be required to build and maintain a major aqueduct for 2000 miles from the Mississippi to California. That's just not going to happen. Some of those pie in the sky thoughts of how we expand the water supply, I think, are unrealistic.
interviews
The Poor Subsidize the Giving of the Rich
by Michael Mechanic
May 31, 2021
This interview with Michael Mechanic, senior editor at Mother Jones and author of the new book, Jackpot, was conducted and condensed by franknews.
frank | How did you start writing Jackpot?
Michael | Obviously, we are in a strange time in America. It has been called the “Second Gilded Age.” Economic inequality is at staggering levels right now, the gap between rich and poor has grown immensely, and a lot of it is the result of longstanding economic policies.
A couple of decades ago, I had the idea to write a book called Jackpot that would profile different lottery winners, but that was never really workable. First, lottery winners won’t talk to you—they tend to go completely off the public radar. I also realized you’d end up with a lot of repetition, a lot of the same kinds of stories. A more interesting take would be to expand the idea of a “jackpot.” A lottery jackpot is dumb luck—most of us don't expect we're going to get rich by having money just fall in our lap. Instead, we think maybe we’ll start a company, or some kind of fund, or get in on a big IPO, or invest in some other asset that soars in value. I mean, that's how people tend to get rich pretty quickly in America—unless they inherit, which is another type of jackpot.
I let the Jackpot idea incubate for a long, long time, and I’m glad I did, because the book came out right when everything was coming to a head — we had a pandemic, political mayhem, nationwide protests over racial equity, and just startling inequality. The pandemic came about 80 percent of the way into my reporting. And for the very wealthy, it turned out to be just a speed bump. The billionaires did more than okay. They made a ton of money from it. So, the book really came about at this key moment, and it’s incredibly timely now.
Were there things that surprised you about the wealth gap?
America kind of woke up to its great wealth disparities in 2011, amid Occupy Wall Street and the aftermath of the Great Recession. That’s when the 1 percent vs 99 percent parlance came into being, even though it now feels like it has been around forever.
For 10 years now, these ideas have been at the forefront of political speech, with Elizabeth Warren and Bernie Sanders running for president and talking about how allowing billionaires to exist is immoral. And we’ve been hearing lots of statistics, but when you really dig deep, the situation is crazier than you ever imagined. For example, the least wealthy 40 percent of Americans, collectively, have no wealth at all. Literally none. But the devil is in the details, and the details include the nuts and bolts of how these statistics came to pass — things most people are unaware of simply because we don't inhabit these worlds.
For example, in estate planning, there are trusts called Walton GRATs (grantor retained annuity trusts), that let you pass along billions of dollars to your heirs without paying any inheritance taxes. Republicans are always trying to repeal estate taxes, but the fact is a lot of people are barely paying their estate taxes as is; there are other ways to shuttle money to future generations.
The degree to which wealthy people are able to do this was a surprise to me, and it came about because Congress made a mistake and never bothered to fix it. And everyone in that world now uses these trusts, which were declared legal in 2000. Facebook executives Mark Zuckerberg, Sheryl Sandberg, and Dustin Moskovitz, all used these trusts to pass crazy amounts of money to their heirs.
Here’s another fun detail — when I set out, I didn't really understand how regressive sales taxes are.
That’s because items that don’t get taxed are used more by the wealthy. You are not taxed if you buy a box at a Warriors’ game, or opera tickets. But everyday consumables are taxed, so the poor are spending a greater portion of their income. Here’s a funny example: if you buy a bottle of Two Buck Chuck at Trader Joe's, you pay the same tax as the billionaire pays on a $2,000 bottle of Chateau Latour. Because they tax alcohol by volume, not price!
Did you find the infrastructure and tax system in America particularly lenient towards the ultra-wealthy? Was there any comparison to what happens outside of the United States in terms of billionaires?
I focused mainly on America, because if I had expanded the book to include the world, I probably never would have finished. But I did look at differing attitudes about economic mobility and so forth. I cite people like Alexis de Tocqueville, Andrew Carnegie, and Horatio Alger to show how deep these attitudes go in America. We have long considered ourselves this classless, egalitarian society.
And while some people still claim that’s true, well, of course, it isn’t. It is quite demonstrably nonsense.
Leave it to Hollywood to instill a narrative so strong that the poor feel upset at threatening the wealthy.
There was a funny quote I put in the book that was from Bono of U2. He’s Irish. He was talking to Larry King, and he said, “In the United States, you look at the guy that lives in the mansion on the hill, and you think, ‘You know, one day, if I work really hard, I could live in that mansion.’ In Ireland, people look up at the guy in the mansion on the hill and go, ‘One day, I'm going to get that bastard."
You have argued that the ultra-wealthy make the world worse, not better. Do you have opinions on how wealthy people see their role in civil society and their efforts to participate on a large scale?
I mean, there's a lot to chew on there. Most very wealthy people view themselves as good people. They say they want to do good, and yet they give away their money at a rate at which there is no sacrifice for them.
They might care deeply about some particular cause and want to help. But I mean, think about even the people who've been given the most willingly and generously. Last year, MacKenzie Scott gave away a total of nearly $6 billion. She didn't start a big foundation to exist in perpetuity. She basically got a bunch of people to help her research and figure out which organizations were doing important work, and then funded them without strings attached. It was unrestricted giving, which nonprofits really need. It is also important to give money towards the organizations that are trying to actually create some opportunity and level the playing field, more or less, including some that are doing political action to try and make the tax code fairer. You seldom see that. Most big philanthropy it about giving back to one’s alma mater or towards curing a particular type of cancer that runs in someone's family or funding a new wing in a hospital or museum. These gifts often go to institutions that already have huge endowments and that cater to the wealthy — these aren’t hospitals serving undocumented immigrants.
And none of that is a substitute for the role of government. You hear rich people say, “the government makes a lousy charity, why would I give my money to the government?” My argument would be that the government isn’t a charity. That is not its role. The government is supposed to be a backstop to help the larger public thrive and to prevent people from falling into despair and poverty—and to reign in unbridled power at the top, but they’ve done a terrible job at the latter.
Every society sets its own rules. I argue that our tax code is a moral document. It's an expression of our priorities as a society.
I mean, look, everyone works hard. Hard work alone does not ensure success. You need to work hard to do really well, but that’s not nearly enough – and it helps when you’re born into the right family, the right city, the right –
The right zip code so you can go to a decent public school.
Well, that gets to another thing about charity. Public schools in rich areas are well endowed. There are foundations set up in wealth havens like Woodside and Ross, California. A lot of their public schools are much like private schools because wealthy parents create these foundations that pay for supplies and extracurriculars and good teacher-to-student ratios. And because wealthy families get a charitable deduction when they give generously to their school foundations, these public schools are actually subsidized by poorer communities.
When you allow people to accumulate great sums of money, and then actually subsidize their charitable giving, you're actually handing them a great deal of power to make decisions that affect all of us, based on their own personal interests, with practically no public accountability.
Do you think we’ll ever stop ascribing such virtue to wealthy people?
I don't know. Lately, we've seen some attitudes changing. That is partly because of books like, Winners Take All. There is a growing awareness in the philanthropic community that not all philanthropy is good; in fact, some of it is actually damaging and a lot of it is self-serving.
I just finished Empire of Pain, that new book about the Sacklers, the family behind the OxyContin fiasco. It was just astounding the degree to which the Sacklers used philanthropy to enhance their power and status. They were able to keep themselves out of prison because of the high-level connections they cultivated. When prosecutors were prepared to indict family members on felony charges and had a pretty airtight case, the Sacklers hired people with high-level connections in the Justice Department to put the kibosh on it. Philanthropy was yet another business proposition for them — they weren’t giving because they were nice.
You mentioned Anand Giridharadas and I know his work, and I think it has a certain reach, but our culture is still reverent to the wealthy. Do you think the culture will break?
It's a hard question to answer. I can only tell you what I wish would happen, but I don’t know that the things that I see in America give me much hope.
The final chapter of my book ends on a fairly hopeful note, and I sort of struggled with that. Here we are at the nexus of racial reckoning and political changes and a pandemic laying bare the inequality in our society.
There's a contingent of people whose eyes have been opened, that actually are doing substantial things to check their privilege, you could say, and putting their fortunes and efforts towards things that could help change the unfair structure of our society.
But then, you know, I look at all these people supporting the big lie of election fraud, and denying what we can see with our very eyes—when I see people put those kinds of blinders on, it doesn't give me a lot of faith that our society will be changing that much, or that quickly.
I'm not sure there really was a reckoning.
That's a fair point. There certainly was for some people. But will it last?
I mean, you’ve got people like Darren Walker, president of the Ford Foundation, who are trying to push the charitable world in a new direction, but you also have people like the Kochs who do their best to subvert the will of the people, and who are giving a ton of money to push the myth of free enterprise — there is really no such thing in America. Our government subsidizes fossil fuels — the Kochs’ core business — more than it subsidies green energy.
Have you seen effective giving of excessive wealth?
Well, sure. But just as we have a liberal/conservative divide, we also have a divide between wealthy and non-wealthy in terms of our values. We see wealth-related differences in voting patterns among Democratic members of Congress. The wealthier they are, the less likely they are to vote for bills that would reduce income inequality, things like raising the minimum wage or increasing taxes on the highest earners. And when researchers ask regular people about their political preferences, there's a clear gap between what the wealthy want and what the public wants.
I didn't want to write a polemical book, one that says rich people are bad. I don’t think they are implicitly better or worse than anyone else. We all tend to act in our self-interest, and it’s just that we have a system that particularly rewards the self-interests of the very wealthy. So I approached them with an open mind. I wanted to understand their worldviews and their problems—and these problems are very real. Wealth can make some personal problems a lot worse, and create other problems—especially with relationships and family and the ability to trust others—that most of us don’t experience. Anecdotally, you hear that a lot of billionaires are actually pretty miserable, and I think I can understand why.