Joe Epstein

Joe Epstein

President Obama nixed the Keystone and Dakota pipelines, arguing that allowing them would undercut American leadership in weaning from carbon-based energy.

On January 17th, President Trump signed executive orders to move the pipeline projects forward, boasting about creating tens of thousands jobs and that only U.S.-made steel and steel pipe would be used.

Trump’s “buy only-American-steel” declaration could actually doom the Keystone project before it begins.

About 40-50 percent of the Keystone pipe is already made, mostly from foreign steel. About 230 miles of it has been stockpiled along the North Dakota portion of its route since 2011.

Little known is that a large part of the steel used in the pipe is from Evraz, a Russian company that has plants in the U.S. and is owned by Roman Abramovich, a Russian oligarch, close ally of Vladimir Putin, and a Trump family friend.

The Buy American provision could also face legal push back and be challenged at the World Trade Organization, whose rules require equal treatment of imported and domestic goods.

Trump must realize that you can?t renegotiate the origin of pipe that has already been bought and made by foreign companies.

Evraz’s participation takes on added significance because of suspected Russian meddling in the 2016 election and the murky ties among Trump, Putin and Russia’s oligarchical business sector.

There is a lot support in the U.S. for finishing the pipelines and for creating a trillion-dollar infrastructure mandate. But finishing Keystone’s remaining 700 miles becomes difficult at best if only domestically sourced steel may be used.

I know from personal experience that the Federal Government rules governing “Made in America” are stringent and only allow the use of steel mined and melted in the U.S. If there is any hope to use American-made steel and enforce a Buy America policy as Trump claims he will do, then the definition must be changed to include steel melted abroad and finished in the U.S.

With a Perspective, I’m Joe Epstein.

Joe Epstein is a past president of the Commonwealth Club of California and a San Francisco-based merchant of foreign and domestic steel.

Joe Epstein

Like most people, I thought cable cars were just for tourists. Little did I know that commuting to work by cable, as many San Franciscans refer to cable cars, can put a spring in your step that can last all day.

I recently moved just one block from the original cable car barn and roundhouse at Washington and Mason. I quickly became a cable car junkie. I suppose I took a more serious look at the mechanics of my new commute on the city's cable car system than most San Franciscans. I toured the barn and roundhouse. I wanted to get a sense of the mechanics of the grips and brakes that engaged the constantly moving cable. I saw the large wooden reels that hold the new cables, and one of the largest mechanical cable spools, similar to what is used on aerial ski lifts, that pull the cable underground through miles of hills and city streets.

Tony Bennett had it right when he sang about leaving your heart in San Francisco, "to be where little cable cars climb halfway to the stars.'  Every day, I thank my stars that I am one of the lucky few to have this opportunity. I climb aboard at California and Mason Streets, just two blocks from where Andrew Hallidie, the builder of the first cable car line, first tested the system on Clay and Jones in 1873. I can be in my office, coffee cup in hand, in 10 minutes.

Hallidie moved to the U.S. in 1852 from England. His father had the first patent for the manufacture of wire rope. Young Andrew found uses for wire rope in the mines of the California Gold Country and in the construction of suspension bridges. By the late 1800s, the technology was in place for pulling cable cars. It was simply uphill from there as small electric streetcar companies and horse drawn street car lines were folded into an expanding system of cable powered cars.

My daily commute has allowed me to know some of the gripmen. One of them told me that working on a cable car is the most sought after job that Muni has to offer.  

It is no small irony that I have moved to the nation's hub of high tech innovation, and yet my life has been made eminently better and more efficient by a 19th century invention.

With a Perspective, I'm Joe Epstein.

Joe Epstein is president of a steel trading and supply company in San Francisco.

JoeEpstein200x200

The days of simply playing ball with your friends is over and the age of the youth sports industrial complex featuring pay-to-play leagues is here. Club sports is where adults make a living putting on tournaments for 7 to 15-year-olds, and parents pay good money for the right to join the team. Club sports are a for-profit venture with coaches making money from the skills of 7 and 10-year-olds. My granddaughter is a water polo player and a member of a nationally recognized club sport team. She's traveled as far as Michigan for tournaments, escorted by her parents.

Club sports manifest the age of the special child and the parent who believes their kid playing little league is beneath them. Make no mistake; little league baseball has suffered at the hands of the folks who peddle dreams to the parents of the preteen set. Local independent teams, most of them touting the supposed benefits of year-round play, skim top players out of neighborhood little leagues. And then, five years down the line when little Johnny decides to trade his bat and glove for a skateboard and a piercing, his parents can scream and yell at the travel ball coach who ruined baseball for their child by taking their money and not playing him.

High school sports teams perhaps suffer the most, as some of the best players are recruited away. Some club sport coaches even discourage their players away from their high school teams for fear of getting injured. School administrators don't resist as budgets for after school sports are diminishing.

Growing up in Oakland, I played in the police athletic league. The cops picked us up in a paddy wagon on the corners where my friends and i lived. They dumped us off at any number of dirt baseball diamonds in Oakland. The coaches were volunteers. The equipment was donated by sponsors. After our games, we found our own way home.

I fear we are raising a generation that can't handle failure because they've been conditioned to believe they are too good to fail. Parents may someday look back and regret the choice to not have their son or daughter play little league or police athletic league where everyone makes the team and gets a chance to play and to improve their skills.

With a Perspective, this is Joe Epstein.

Joe Epstein is president of a steel trading and supply company in San Francisco.

JoeEpstein200x200

Last December, my wife and I walked the New York Highline, a 1.5 mile elevated park and public space in lower Manhattan.  The Highline was converted from an abandoned elevated rail line. It was exhilarating to see a dilapidated structure that had been repurposed as a vibrant public park. We were taken by the incredible views of lower Manhattan and the Hudson River and the number of New Yorkers and tourists who were enjoying the art installations, the open air cafes and the gardens.

This inspired transformation is the culmination of a public-private partnership. The right-of-way was donated by the CSX railroad. The improvements were financed by a grant of $150 million from the City of New York. It is now being maintained by Friends of the Highline, a non-profit organization.

We have the same opportunity here in the Bay Area to save an iconic historic structure and transform it to a vibrant elevated park and public space. Taking a cue from the Highline, we could use the abandoned eastern span of the Bay Bridge as a grand elevated walkway, with gardens and displays of sculpture and other arts.

In 2009, an extensive study to save the bridge was submitted to the Metropolitan Transportation Commission. A Cal Trans spokesman called this a “pipe dream” and stated that “we won’t leave it up for the same reason we are taking it down. That is there is a real chance this bridge segment won’t stand up in a quake and the cost to maintain it is prohibitive.”

A structural engineer told me that once vehicle traffic is removed from the bridge, seismic safety should no longer be an issue while the ongoing maintenance is a serious unknown that would require extensive study.

A grassroots effort started the process in New York of preserving the Highline with support from business. In the Bay Area, it would take a similar effort to accomplish a “Save the Bridge” movement. The Bay Area Council, with its reservoir of talented business leaders, could be the catalyst for such an ambitious project.

This is a unique moment in time. Before we sacrifice the old bridge to the wrecking ball, we should seriously consider repurposing this structure into a magnificent venue as a gift to the citizens of the Bay Area.

With a Perspective, I’m Joe Epstein.

Joe Epstein is a past president of the Commonwealth Club of Californnia and former steel company executive.

JoeEpstein200x200

Tom Friedman coined the term, “The World is Flat” to describe the world as a level playing field where all competitors have an equal opportunity. Friedman’s thesis is only partly true. Technology allows workers and machines from different countries to talk to one another creating an equalization of the global economy. But in a world where creating jobs is job one, the world is definitely not flat. Americans are losing jobs at an astounding rate.

The primary culprit is China. In 2002, China was admitted into the WTO. It was thought, indeed hoped, that the rising U.S. trade deficit with China would decrease. Well, the exact opposite has occurred. An average of 350,000 jobs, mostly in manufacturing, have been lost annually in the new millennium. Simply put, the promised benefits of trade liberalization with China have not been fulfilled.

Here’s why. First, China continues to print currency which lowers its value against the dollar. This encourages a large bilateral trade surplus and is a subsidy of Chinese products in the staggering amount of 40 percent. Next, China suppresses labor rights. Estimates are that wages would be 47 percent to 85 percent higher. And finally China directly subsidizes export production.

As an importer of Chinese steel products, one of my suppliers was assessed anti-dumping duties of over 177 percent when it sold in the US, far below its cost of manufacturing.

Friedman might wish to avoid offending our Chinese trading partners but the president and Congress should not. The Senate has taken up the issue of sanctions against China and other currency manipulators . The Chinese have responded angrily calling it a boost for Obama’s political agenda, asking Senators to “rationally understand Sino-U.S. trade cooperation.”

Americans are screaming for more jobs. One answer is to have a weaker dollar. If China stops manipulating its currency and lets it float, we will achieve this, and avoid a global trade war. This is the best and fairest solution.

With a Perspective, I’m Joe Epstein.

JoeEpstein200x200

The U.S. unemployment rate is 9.1 percent. The stock market has seen better days, and American consumers are barely spending.

But if you look at the balance sheets of many U.S. companies, you might be surprised at how healthy they look. According to a recent moody’s report, U.S. non-financial companies held $1.2 trillion in corporate cash at the end of 2010, up 11 percent from the previous year. But instead of using that money to hire workers, companies are stashing the cash.

I first became aware of this stash and burn philosophy in 1998, the year I sold my company. In my new position, I was encouraged to make radical internal and external efficiencies, a euphemism for reducing the work force and getting more work from a smaller staff. The new owners called this improved productivity.

Part of this phenomenon may be attributed to corporate greed, but more likely, it is a complex new-age environment caused by the need to compete globally as well as the efficiencies created by an explosion of cost-effective software. I don’t think corporations are skimping on employment, they are simply creating more ways to be efficient. Also, more profits are coming from offshore business and U.S. companies are becoming less dependent on a U.S. workforce. These profits are staying overseas and are not coming home to fuel expansion in the U.S.

Allowing the Bush tax cuts to expire at the end of 2012 and replacing them with tax cuts to the middle class will fuel consumer demand, help companies grow and subsequently drive employment. Also, Congress should enact tax modifications that will allow U.S. companies to repatriate their profits and bring the cash home.

In an ideal world, it would be wonderful to see corporate executives exhibit a strong social conscience and hire workers as part of a jobs program. Economist Milton Friedman spoke to the issue of a corporate social conscience 40 years ago, and made this point. A corporate executive is the agent of the shareholders who own the company, and their primary responsibility is to them.

Until corporations start investing their cash at home, the U.S. jobs picture has a bleak outlook in both the short and long term.

With a Perspective, this is Joe Epstein.

JoeEpstein200x200

After months of bumbling, UC Berkeley administrators axed intercollegiate baseball. Budget and compliance with federal gender equity requirements were the reasons stated.     

Despite heroic efforts by many of the Cal’s Baseball Alumni to find enough money, most of it from their own pockets, it just wasn’t enough to keep it alive, one of the finest traditions in Cal sports.
 
I was on the freshman squad in 1957, when the varsity won the College World Series, so I take this personally — and so should you.
 
The classroom and the lab aren’t the only places to get and education. Sports promotes health and well-being, builds character and fosters life-long friendships for fans and athletes alike. I know, it did it for me.

Cal’s baseball program was born in 1892, Orval Overall was the first of the 53 Bears to make it to the Big Show. He was followed by the likes of the former Giant Jeff Kent, a five-time All Star, four-time Silver Slugger and the National League’s Most Valuable player in 2000. Sam Chapmen, Jackie Jensen, Earl Robinson, Andy Messersmith and Darren Lewis are others.
 
Cal’s legendary coach from 1930-1954 Clint Evans is credited with the idea of a College World Series. It was at the first College World Series, in 1947, that a Cal team swept the Yale University Squad, including first baseman George H.W. Bush.

Cal’s conference, the Pac 10, has won far more College World Series than any other conference. Cal’s success on the field has lagged lately thanks to the low budgets and fewer scholarships, but its tradition has never faded.

What happens to an athletic program often signals a university’s overall health, the soundness of its administration as well as the color of its bottom line. If Cal has to cut baseball maybe it’s time to take a long, hard look at every aspect of the University’s operation. 

In 1957, after Cal’s second World Series win, I never would have believed that I would be writing the team’s obituary 54 years later.

With a Perspective, I’m Joe Epstein.

JoeEpstein200x200

Two years ago, U.S. officials proposed trimming the federal deficit by selling assets like roads and airports, and then leasing them back. Now, California’s leaders have hit upon the same bad idea.

Governor Schwarzenegger and the Legislature want to pare the state’s $25 billion deficit by selling 11 office buildings for $1.2 billion and then leasing them back. This fiscal sleight of hand is a bad idea and will saddle our next generation with untold costs.

According to the non-partisan Legislative Analyst’s Office, the state would receive money up front from the sale of the buildings, then lease them back for 35 years. The net cost to  the state would be $1.4 billion.

This is like taking out a mortgage on your home, and paying 10 and a quarter percent interest. At the end of 35 years, the loan is paid off and you still don’t own your house. If you want to stay, you have to pay rent for the privilege of leasing back your own home.

But there is still hope that sanity will prevail. The properties sale could be blocked. According to Joe Cotchett, an attorney representing two former state employees in a lawsuit to stop the sale, “this represesnts an unprecedented transfer of taxpayer-owned property to private investors.”

The complaint also questions the secrecy surrounding the state’s choice of buyers. This raises serious concerns about the identity of the new owners of these critical facilities. The two plaintiffs are former Los Angeles state building authority employees who were fired after opposing the sale-leaseback proposal.

The court must act soon. Escrow on the sale closes December 15th. What’s more, nobody’s told us how much of the sale price will be paid out to brokers and investment bankers as fees and commissions. Just a few days ago, there were reports that the part-time mayor of Santa Ana, Miguel Pulido, admitted that he would receive $500,000 for what he called a “success fee” to help arrange for the sale of the buildings. Pulido said he was acting as a private citizen in this matter.

I fear the governor will leave California in much worse shape than when he took office — with 11 of its irreplaceable properties in private hands, and future generations saddled with a huge cost burden from this real estate blunder.

With a Perspective, i’m Joe Epstein.