Random Thoughts on Cryptomining and Arkansas Politics

First, to level-set, I want to be clear that I would never have voted for Act 851 of 2023 that was snuck through at the end of the session. It takes away what should be an obviously legitimate authority of local government. My view on preemption is that states should set a basic set of rules and that localities should be able to build on top of those regulations to respond to local concerns and local interests. I support politicians of either party that vote for good things and don’t vote for bad things. That’s not enough to animate a political movement, unfortunately.

And in particular, that is not how the Arkansas legislature generally feels about local democracy – over the years, they have preempted local decision-making authority in a variety of ways – often in response to local regulations in places represented by Democrats like Fayetteville or Little Rock.

So, it was no surprise to me when it sailed through.

I am a little surprised the extent to which the face-eating leopard caucus is surprised that the leopard ate their face. Senator King himself voted for SB202 in 2015 that retroactively prevented cities from enacting ordinances protecting LGBTQ individuals from discrimination. Pretty directly telling us that rural voters and their concerns matter more than urban ones. I think that matters a lot, because there’s no indication the GOP feels anything but enmity towards the areas Democrats represent and govern. Campaigning against the liberals and black people in Little Rock seems to actively help GOP candidates.

So second, I think political parties “are not organized to promote ideas but loose federations of machines for getting enough votes to enable their party to lay hands on the spoils.”

The hypocrisy, then, doesn’t bother me. I expect it. But in that light, I’m even more surprised that some people seem to think Democrats swooping in and helping GOP state representatives and state senators prevent themselves from being primaried would be good politics for Democrats.

For example, Democrats are why rural hospitals in Arkansas still exist, something that helps way more people in rural areas than changing cryptomining regulations would. I think that it actively undermined Democratic electoral chances here in Arkansas if anything. Does anyone else think differently? At least, I would like to see a more developed political argument than I have that isn’t just based on what would be the best policy. I’m not even convinced it would get them a headline anywhere but the Arkansas Times, much less to leading to my folks and their neighbors out in Okolona voting for them en masse.

On the substance, the concerns are real, but many are structural rather than specific to datamining in my view. What I mean is that only 10 to 20 percent of the water-usage we hear cited is directly used by miners. The other 80-90 percent is used in fossil fuel power plants to make sure our dino juice processors don’t die from heatstroke. I don’t know how much energy a cryptomine uses compared to a steel mill [i] or a lumber mill – partially because these things can vary wildly – but I do know the legislature likes burning coal, chopping trees, digging up metal and all other kinds of resource and energy intensive industries. And I know that our water infrastructure is bad, particularly in many areas of South Arkansas and the Delta. Those things are pressing issues we should address regardless. Narrowly tailoring something to crypto kicks the can down the road.

An accelerationist might even say it’s good to let the GOP put a strain on the water and energy infrastructure they’ve created and underfunded. If it’s because they sold their constituents out to big business – even better! Maybe the people in Eudora will finally get something when the rusty pipes burst in Bono, too.

I won’t go that far, but I at least want to think through what it means for Republicans to expect Democrats to save them like this. Did anyone even offer them anything, or were they expected to do it out of the goodness of their hearts? How often do politicians do that?

Well, Democrats usually prioritize country over party politics, so it is a good assumption.

During the Great Recession, our federal response was inadequate due to GOP intransigence and politicking, causing lengthened periods of high unemployment. They then used that economy to beat Democrats in subsequent House and Senate elections. But Democrats didn’t try to craft policies that cut out conservative states that were underfunding their automatic stabilizers like their UI systems, cutting people off SNAP prematurely, etc. Liberals are usually happy to save conservative voters from conservative politicians even though it doesn’t benefit them politically.

As I wrote for the Arkansas Times, a similar situation played out during the COVID-19 recession, where Democrats continued to subsidize individuals and state and local governments long after Republicans would have liked. That’s why the US has such a good economy compared to our OECD peers right now.

Republicans in states like Arkansas turned around and used this economic boost to cut taxes for the wealthy, underfunded public service budgets for the rest of us, and then campaign against big spending Dems on inflation.

This pattern definitely needs to be disrupted for the good of our political system. In some ways, you can see how this dynamic leads to J6 and the muted reaction our institutions have had to it. Sympathy for me but not for thee.

None of this is to say Arkansas Democrats have thought through things in these terms. I have no direct line of communication with anyone in the legislature anymore, so I couldn’t tell you either way, but I doubt it. Probably just want to go home.

But, for my taste, commentators and observers should either think more about our political system and what it incentivizes or focus more narrowly on what would be the optimal policy. We do everyone a disservice when we conflate the two.


[i] A rough calculation of BRSM’s energy use for making 3.3 million tons of steel annually would be in the terawatts, for example, and not so dissimilar from a cryptomine – roughly 5,000 kWh per ton produced is, I think, about 11 TWh or about 1/5 of the global energy use of cryptomining just for one steel mill. But check my math.

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