Category Archives: Economy

Fracking the Mother of Presidents

fracking rigBy Peter Galuszka

Controversial hydraulic fracking appears to becoming a distinct possibility in areas south and east of Fredericksburg on land that is famed for its bucolic and watery splendors along with being the birthplaces of such historical figures as George Washington, James Monroe and Robert E. Lee.

After several years of exploring and buying up 84,000 acres worth of leases from Carolina to Westmoreland Counties, a Dallas-based company that uses a post office box as its headquarters address participated in the first-ever public discussion of what its plans may be.

According to the Free-Lance Star, the meeting was put together by King George County Supervisor Rudy Brabo to air concerns and hear plans of Shore Exploration and Production Co., which is based in Dallas and has offices in Bowling Green. Its headquarters address is registered with the State Corporation Commission as P.O. Box 38101 in Dallas.

About 100 people attended the meeting April 14, but judging from the newspaper’s account, not many questions were answered. Participants repeatedly asked Shore CEO Ed DeJarnette what his plans were regarding fracking and who would be responsible for damages if something went wrong.

DeJarnette responded that his firm is merely buying up leases and is looking to sell them to other gas drillers and operators. The state’s Department of Mines, Minerals and Energy issues permits one at a time and is responsible for enforcing them, he said.

Hydraulic fracking and horizontal drilling have touched off a revolution in the American energy industry in recent years, particularly in the Marcellus Shale gas formations that stretch in the Appalachians from New York State to southwest Virginia. The methods have also been used to reach rich shale oil deposits in North Dakota and other western states.

Fracking has been used as a drilling process for years according to media accounts and authors such as Gregory Zuckerman whose recent book “The Frackers” covers the process’s increasingly widespread use in the past several years.

Among concerns are that the toxic chemicals mixed with water and then pumped hundreds of feet underground could eventually ruin groundwater serving streams and wells. Other concerns are that the inevitable “flowback” in drilling will require surface ponds to handle toxic waste. In places such as Pennsylvania and West Virginia where fracking is permitted, quiet country areas are badly disturbed by the roar of diesel generators at drilling sites and from trucks that are constantly delivering drilling supplies. Methane can leak from drilling rigs, further complicating global warming issues, and flash fires can be problems. Fracking can also consume great amounts of water which often has to be trucked in.

On the plus side, holders of mineral leases can receive great sums in royalties and various taxes and other payments can boost local tax coffers. Natural gas is cleaner and less deadly source of energy than coal, plays a big role in electricity power generation in the Mid-Atlantic.

At the King George meeting, DeJarnette told the audience that he preferred using nitrogen as an element in fracking rather than water, but there were few details in the newspaper story.

While providing scarce details on who would actually handle the drilling, how it would be done and who would be responsible for damages, DeJarnette repeatedly emphasized the monetary benefits and jobs fracking would bring.

If it proceeds, fracking in the Taylorsville Basin would likely be confined to Virginia, which is more business-friendly than Maryland where the basin also extends. The field stretches across the Potomac River into Charles, St. Mary’s, Calvert and Anne Arundel Counties but Maryland has a moratorium on fracking until it can be studied further.

DeJarnette says he wants drilling to start by late this year or in 2015. Major oil firms explored the Northern Neck area and found some evidence of oil and gas deposits there in the 1980s.

Rethinking Online Classes at U.Va.

President Sullivan

President Sullivan

By Peter Galuszka

Just two years after the University of Virginia weathered a crisis and the short-lived resignation of its president for supposedly not embracing online education fast enough, Mr. Jefferson’s school is taking a cautious approach about Web-based courses.

This is a good thing, despite the excitement over having thousands of distant students sign up for MOOCs, or large scale college online courses, and expect to instantly log on to all the good things universities offer with supposedly few of the negatives.

Although U.Va. does participate in offering online courses through Coursera, they are not for college credit and Virginia is not following the example of Georgia Tech which is offering an entire degree program via the net.

The Daily Progress reports that U.Va. administrators and professors are worried that it is too easy for unseen students to cheat on the courses – an important consideration due to U.Va.’s strict honor code. Other problems are the high dropout rate of MOOCs and the fact that they may be best suited for introductory courses because professorial classroom involvement is important for more advanced ones.

These views raise questions after all the hype about MOOCs, including many posts on the blog. A special irony is that just two year’s ago, U.Va.’s highly capable and popular President Theresa Sullivan was forced to resign in Board of Visitors putsch led by chairman Helen Dragas supposedly because of her lack of enthusiasm in embracing new technologies.

One well-known blogger wrote a gushy lead paragraph on a posting stating that “Helen Drags gets it.” Err, maybe not, because Sullivan was reinstated after a huge outcry within the U.Va. community and after major, negative world media coverage.

Elsewhere, MOOCs do seem to be gaining some traction. One at the University of North Carolina at Chapel Hill noted that a Tar Heel course got 30,000 sign ups on-line.

But a University of Pennsylvania study showed that of 16 open online courses the school offered, fewer than half of all registrants even watched the first lecture.

So, it seems that MOOCs are going through a period of adjustment. And, they are politically charged since many conservatives, still angry over social changes in the 1960s and 1970s, see MOOCs as a way to overcome what they view as the overweening political bias of cossetted universities.

As the Daily Tarheel at UNC reports: “Rob Schofield,, director of research and policy development for the left-leaning think tank N.C. Policy Watch, said though MOOCs have many positive aspects, there are drawbacks.

“This problem is especially worrisome in the current political environment in which far-right politicians are doing everything they can to de-fund public schools and universities and turn them into on-the-cheap education factories,” he said.

Luckily for the Old Dominion, the University of Virginia is evaluating MOOCs with its eyes open.

The Richmond Elite’s Bizarre Self Image

richmond-times-dispatchBy Peter Galuszka

If one wants to know one source of Richmond’s malaise, she or he need look no further than the pages of the Richmond Times Dispatch, the mouthpiece of the city’s elite. This is especially true when one reads this morning’s edition. The inadvertent revelations about the city and what is wrong with its leadership are stunning.

Some background. Last week, Style Weekly, an alternative newspaper in the city, published a hard-hitting cover story taking a ground-up view of just how awful and neglected the city’s school buildings and system are. The coverage is very much contrary to the image Richmond’s “leadership” wants to sell about the city.

As the schools are mismanaged and families are abused, the Richmond elite, and the RTD’s editors are pushing other pet projects such as building a new baseball stadium in historic Shockoe Bottom to replace a crumbling one elsewhere and a chamber of commerce trip to Tampa by 159 “leaders” to learn how another city works.

Full disclosure: I am a contributing editor at Style but had no input to the school story. I did file two blog postings about the schools story and received a number of highly insightful comments by readers. The basic problem, as several put it, is that  the schools are a mess is that the middle class has moved to the suburbs, the upper class sends its children to private schools and many of those left aren’t in a position to join the debate are have much influence. One out of every four people living in the city is poor.

The TD’s coverage today is a wonderful blueprint about exactly what is wrong with the elite’s thinking. Examples:

  • The front page features a catch-up story featuring short 125 word essays written by seven city council members and nine school board members. Three council members, Reva Trammell, Michelle R. Mosby and Cynthia Newbill – didn’t respond, perhaps wisely. The story states that judging from the responses, “momentum is building” for “substantive change.” The council, the school board and the mayor are working together. Mind you, this is not based on any real reporting—such as shoe leather in the school halls. Instead, one gets to read what the leadership responsible for the horrific problems thinks about them – sort of like interviewing the foxes after they raid the chicken coop. An added extra: the RTD claims it sent out its questionnaires before Style published its story, sort of like backdating stock options.
  • Flip to the “Commentary” section and a piece by John W. Martin, CEO and president of the “Southeastern Institute of Research in Richmond and frequent opinions contributor to the TD. His piece is basically an extended apology for proposing a new stadium in the middle of the blooded ground of the country’s second-largest slave market – standard stuff. Especially bizarre is the art. It is a cartoon drawing of what appears to be an interracial couple happily walking near what could be a combined slave memorial ballpark. The man is white, blond, wears a Richmond polo shirt and is flipping a baseball. His arm is around an African-American woman in sports togs and carrying designer shopping bags. In front is an apparently mixed-race child in a Flying Squirrels baseball cap happily holding out his glove to catch the ball from dad. The effect is downright creepy. It insults the intelligence of the readers and hits a very sensitive raw nerve, given Richmond’s sad history of race relations and the TD’s historic support of segregation five decades ago when it really mattered.
  • Let’s move to the Op-ed page where there is piece by Nancy Bagranoff, dean of the University of Richmond business school and upcoming chair of the Greater Richmond Chamber of Commerce. She was part of the chamber’s trip to Tampa to “learn” how they do it (while Richmond’s school buildings crumble). Her important takeaways seem to be that Tampa puts lights on its bridges, that it is a big port city, the region has distinctive personalities and that there are some universities there. Her conclusion: “I fell love with Tampa during out visit, but “I’m still married to Richmond.” Now that is extremely helpful.
  • Lastly, there is an impenetrable story by TD publisher Thomas A. Silvestri about several fictitious people discussing Tampa. Unsure of the point, I read the endline bio of Silvestri. It says he used to head the chamber and did not go on the Tampa trip because he’s been there before.

So, there you have it folks. Instead of real reporting, you have Richmond’s elite, some of whom are responsible for the problems, interviewing themselves. And that is a big reason why the city is in such a huge mess.

“Where Is the Closest Tiki Bar?”

tiki_barBy Peter Galuszka

Often times, blog commenters really hit the nail on the head. This is the case with “Virginiagal2” who responded to my blog post earlier this week that Richmond’s schools are decrepit and crumbling, as Style Weekly detailed in a recent cover story.

They note that Richmond’s elite has done little for its public schools while chasing higher-profile and extraneous projects such as a summer training camp for the Washington Redskins and a new baseball stadium for the Minor League AA Flying Squirrels.

Schools? What schools?

Blog posts also note that NFL football star Russell Wilson, a Richmonder, stayed at private Collegiate school after his father saw academics as more important than sports and blunted maneuvers by Richmond public schools to recruit Wilson during his school years.

Part of the problem, as Virginiagal2 notes, is that Richmond’s select and self-appointed “leadership” ignores the city’s serious problems while they embark another pointless road trip to another city, typically in the sunny South, to gather ideas on how they should proceed with their (how to describe?) “leadership.”

Just a week or so ago, about 160 of Richmond’s “leaders” were bopping around Tampa, sampling its eateries and noting the watery views. The biggest cheerleader for these junkets is The Richmond Times-Dispatch, which is very much a propaganda organ of the area’s chamber of commerce. Its publisher Thomas A. Silvestri was chamber chair a few years back yet few commented on the potential conflict of interest. On the Tampa trip, the editor of the editorial pages wrote a supposedly cute series of reports in a “postcard” (ha-ha) style about the Tampa trip. Here’s one tidbit:

“About 160 Richmonders will spend three days sipping from Tampa’s version of youth’s fabled fountain. Where oh where is the closest tiki bar?”

I couldn’t have said that better myself. Next, I’d like to copy what Virginiagal2 had to say in response to my blog. She absolutely nails it:

“The cost of sending a kid to Collegiate is beyond a lot of young families. What do you think those Richmond families value the most – a sports team that has around 5,000 people attend games, or a good safe public school for their kids? The RTD has been shilling for the stadium for months – when’s the last time the RTD advocated for money for better city schools? Do you ever remember them encouraging businesses to partner with city schools? Advocate for vouchers, yes – advocate for baseball, yes – improve the overall public schools, no.

‘nuf said.

Is Blackwater Successor in Ukraine?

blackwaterBy Peter Galuszka

A private security company with ties to Virginia and northeastern North Carolina has been linked to rising tensions between Ukraine and Russia that some fear could turn into war.

The Russian Foreign Ministry issued a statement April 8 saying that a security firm named “Greystone” that is tied historically to the defunct and controversial Blackwater special security operations company has sent “about 150” mercenaries to Ukraine disguised as a military unit called “Falcon.”

A spokeswoman for Greystone denied to ABC news that the firm was involved with Ukraine while other news outlets were told the firm had no comment.

Greystone is registered in Bermuda, according to ABC. It was at one time linked to Blackwater although its ties to Xe Services and Academi which succeeded Blackwater after its demise are unclear.

Blackwater was founded by Erik Prince, a former Navy SEAL, in Moyock, N.C., near the Virginia border.  It hired former special forces military and used a swampy tract for training. The Moyock operations is close to a Navy facility at Dam Neck in Virginia Beach which is the base for the SEALs’ Team Six that tracked down and killed terrorist Osama bin Laden.

Blackwater was hired by the Bush Administration to handle security for officials and other duties in Iraq. Employees of the Blackwater firm were involved in the shooting of 17 people in Baghdad in 2007 and the firm was later banned from U.S. government work after a slew of problems in Iraq, Sudan and other countries.. During the controversy, it changed its name to Xe Services and then again to Academi, which has its headquarters in McLean. Prince has left the company.

Greystone, ABC reports, was formed as a sister company of Blackwater to handle security matters for foreign clients while Blackwater concentrated on U.S. government contracts.

The Russian government started accusing both Blackwater and Greystone of being involved in Ukraine last month although U.S. officials have denied it. Tensions have risen after Ukraine’s pro-Russian president was ousted and Russia seized Crimea. Russia has thousands of troops massed on the Ukrainian border.

Another footnote in this strange tale: a director of Academi is retired Navy admiral Bobby Ray Inman, who is a former head of the National Security Agency, a deputy director of the CIA and a former head of naval intelligence. Inman also had been a director of as the last board chairman of then-Richmond-based Massey Energy, which was forced to be sold to Alpha Natural Resources after a deadly explosion at a West Virginia coal mine.

I’m not making this up.

Richmond’s Huge and Hidden Problem

The Seahawk's Wilson

The Seahawk’s Wilson

 By Peter Galuszka

There’s been plenty of image-building on this blog site in favor of what is perceived to be a “new” Richmond.

In this view, the former Capital of the Confederacy famous for its gentile white elite and, unfortunately, race politics, is being transformed to a major draw for talented young people and active retirees with plenty of diversity. Some evidence bears this out, such as the wealth of arts and culture and increasing upscale apartment rentals in the city.

The image is being pushed along by Richmond Mayor Dwight Jones who wants to anchor his downtown drive by placing a controversial baseball stadium in Shockoe Bottom. There is plenty of angst about his idea given that the city has other, more pressing concerns. They include its 26 percent poverty rate and the fact that the mostly white suburban counties seem to be moving farther from the Richmond sphere of influence.

There’s yet another big and unaddressed problem that may spell the ultimate fate of the city. Its school system is decrepit, as two recent stories in Style Weekly to which I contribute, point out.

One is a deeply reported cover story this week by Tom Nash that takes readers on a horrifying tour of several Richmond schools. Thompson Middle School has ceiling that ooze gunk. Diluted tar falls in classrooms. Fairfield Court Elementary needs a new roof. A tile fell on a student but the fix is $90,000 or one fifth of the district’s school budget for the year. Tom reveals more problems at Carver Elementary and Armstrong High, among others.

Most of Richmond’s school buildings are more than 60 years old. Dana Bedden, the system’s new superintendent, says school buildings are the worst he’s ever seen and that includes a stint in the District of Columbia. Reports say that $26 million is needed just this year to make a corrective dent in the problem.

Another Style story of note is an opinion piece by Carol A.O. Wolf, a former journalist and school board member. It was published in February, just after the Seattle Seahawks crushed the Denver Broncos in the Superbowl. The star was Seahawk quarterback Russell Wilson who grew up in Richmond.

Wilson’s dad placed him at Collegiate, a highly regarded private school in the West End. The Sporting News reported that when Wilson was a ninth grader at Collegiate, Richmond public schools started angling to recruit him to play ball for them. Dad said no. According to him, “I didn’t put Russell in Collegiate for sports, I put Russell in Collegiate to get the best education he could get.”

So much for Richmond’s public schools. It’s really too bad, as well, that the public school system is so neglected and that the mayor and other opinion makers are ignoring huge municipal problems in favor of top-down development like the new baseball stadium of questionable value.

The New West: Leaving Richmond Behind

Old Chesterfield bumper sticker mocks one from Henrico

Old Chesterfield bumper sticker mocks one from Henrico

By Peter Galuszka

This story may seem a contrarian piece when it comes to smart growth and exurban sprawl but so be it.

Back in 1969, road planners in Richmond came up with an idea for a superhighway, Route 288,  that would span the iconic James River and connect the far western suburban areas of Henrico and Chesterfield Counties, then primarily pine forests or dairy farms. The idea seemed to be to ring Richmond with a Washington-style Beltway and push growth farther away from the center city.

The scheme ran against some curious local snobbery – that of whether one lived on the north or south side of the James. The smug north side, of course, encompassed Richmond and its white ruling elite although many of them had moved to the West End or beyond to escape integration of schools.

Those living on the south side of the river were considered inferior, trailer park folk  whose uncouth views were more in synch with the Southside area of Virginia near the North Carolina border. Dixie would not mix easily with the assumed gentility of the Richmond folk, although southsiders had to drive to Richmond to see a doctor or do serious shopping.

Flash forward 45 years. Route 288 was finished about 10 years ago and despite the 2008 economic crash, it is quietly establishing its own upset of economic and cultural change and growth. It is linking Short Pump and its office parks and restaurants with upscale subdivisions in Chesterfield that boast of the highest income zip codes in the Richmond area. Capital One employees live at Foxfire. I explore this phenomenon in cover stories I wrote this month for the Chesterfield Monthly and the Henrico Monthly.

As George Hoffer, a transportation expert at the University of Richmond told me: “The West End and southwestern Chesterfield were going to grow independently. Then the highway did what public transportation can’t do. It provided links and created markets that didn’t exist before.”

And, as corporate relocations draw in more high-income workers from other areas, the old cultural biases are eroding. The newbies want convenience and could care less about Richmond’s ancient vanity about which side of the James one resides. Schools on either side of the river are comparable in quality, tests scores show. The north has more jobs and the south more houses, but that will shift over time.

Therein lies the rub. You have created a thriving exurban corridor that really doesn’t relate to the various and worthy land use ideals such as minimizing car traffic and creating bike trails. The most significant thing is that this outer corridor completely bypasses inner Richmond, its perpetual squabbling over over issues like a baseball stadium and its onerous 26 percent poverty levels. It doesn’t mean that the city is doomed to decay. Signs show more young people and retirees moving there. Unfortunately, however, low income ghettoes are stuck in a cycle of no jobs and inadequate transportation and the efforts of Richmond Mayor Dwight Jones haven’t produced many solutions.

The 288 phenomenon also is evidence that the cul-de sac ideals are not quite dead yet. Locating somewhere has long ceased being about white flight. The newcomers to the “New West”  include many people of color for whom Richmond’s racial animosities are more of an historical footnote. They may drive in to enjoy the city’s eateries and museums but choose not to live there and are hardly obsessed by what happened years ago.

So, Smart Growthers, you had better take notice. In some cases, the center city concepts you espouse are irrelevant.

Why Five Ex-Attorneys General Are So Wrong

mcdonnells arraignedBy Peter Galuszka

The practice of law in Virginia is supposed to be an honorable profession.

The state, which produced such orators as Patrick Henry and Thomas Jefferson, loves its lawyers perhaps much more than individuals who actually create or do something of value. It could be why the state has so many of them.

This makes a filing in the McDonnell corruption case by five former attorneys general all the more despicable. The bunch includes both parties and is made up of Andrew P. Miller, J. Marshall Coleman, Mary Sue Terry, Stephen D. Rosenthal and Mark L. Earley.

They want corruption charges thrown out against former Gov. Robert F. McDonnell, who, with his wife, has been indicted on 14 federal corruption charges. Their trial, expected in July, will explore charges they misused their position to help a dietary supplement maker who showered them with more than $165,000 in personal gifts and loans.

The five attorneys general claim that there is no clear evidence the McDonnells did anything wrong. Odd, but I thought lawyers knew enough not to try and bias a case that has been through the indictment and arraignment phase and is due for trial but then I didn’t go to law school.

Their other reason is actually more upsetting. Their filing claims that future governors might be reluctant to invite state business leaders on foreign trade missions or to host campaign donors at the governors mansion, according to The Washington Post.

Huh? I don’t see the connection. Of course, governor’s can host trade missions. They can invite people to the Executive Mansion. It’s just that, in the process, the governors can’t reasonably be OK with accepting a $6,500 Rolex from the head of Kia Motors or a special loan for his failing beach houses from the local rep of Rolls Royce North America.

It is stunning that the five attorneys general are caught up in “the Virginia Way” of having hardly any controls on gift giving and spending that everything is OK. They also can’t seem to move beyond the conceit that  anyone who occupies the governor’s chair must naturally be an honest gentleman or gentlewoman.

This kind of thinking helps explain nothing substantive has been done to reform the state’s ethics laws. I can give you five reasons why.

An Ex-Coal Baron’s Strange Movie

Blankenship

Blankenship

By Peter Galuszka

Almost four years after 29 miners employed by then Richmond-based Massey Energy were killed in a West Virginia mine explosion, its former chief executive under federal investigation for widespread safety violations has come forward with an apparently self-funded “documentary” proclaiming his innocence.

Donald Blankenship released the film “Upper Big Branch, Never Again” this week which reiterates his claims that he and the firm were innocent of wrongdoing and that an unexpected flood of natural gas and meddling by federal regulators caused the blast.

Three investigations have cited Blankenship and Massey for a culture of cost-cutting  and ignoring safety problems. So far, four former Massey employees have been imprisoned for related convictions.

The strange, 51-minute film brought immediate demands for its retraction by U.S. Sen. Joe Manchin of West Virginia who claims he did not know of Blankenship’s involvement when was interviewed for the film  being played on YouTube. Manchin is shown making what seem to be supportive statements of coal in general and, presumably, Blankenship.

The film also features interviews with E. Morgan Massey, a retired Massey executive who lives in Richmond. Another is University of Utah mining professor named Tom Hethmon who has told National Public Radio that he was also misled about the film and wants nothing to do with it.

The movie was made by a Chesapeake –based firm called Adroit Films whose officials have refused to tell reporters who funded the production.

In the film, Blankenship, Massey and Stanley Suboleski, a former Massey director who lives in Chesterfield County, repeat earlier claims that the explosion at the Upper Big Branch mine in Montcoal, W.Va. on April 5, 2010 was caused by an unexpected flood of natural gas. The explosion was affected by what Blankenship claims were wrong-headed demands by the federal Mine Safety and Health Administration to change the ventilation system which stretches for more than seven miles underground.

An MSHA probe along with one ordered by Manchin when he was state governor claim that the blast was caused when badly-maintained mining equipment hit a pocket of gas that touched off a huge coal dust explosion. The company was required but failed to keep highly combustible coal dust at bay by spraying mine shafts with powdered limestone, investigators say.

After he was forced out as Massey’s CEO in 2010 and the company was sold in 2011 for $7 billion to Alpha Natural Resources of Bristol, Blankenship kept a low profile.  He stirred to life about a year ago when he launched a website offering his views that coal is overregulated and that global warming is a hoax.He is also well-known for his staunchly anti-labor views and his support for mountaintop removal mining methods that are highly destructive of watersheds, wildlife and landscapes.

The film also shows footage of President Barack Obama as if to suggest a connection between him and the mine blast. At the time, Obama had been in office for a little more than a year. In other words, if he mangled the coal industry, he did so in a remarkably short period of time. The film also revives “War on Coal” footage shot during the 2012 presidential campaign. It tends to suggest that the coal mined at Upper Big Branch was used to generate electricity for America’s benefit when, in fact, all of it was of a metallurgical variety bound for export to foreign steel mills.

Another odd aspect of the film is why Manchin would agree to an interview with filmmakers he did not know. When I was researching my 2012 book “Thunder on the Mountain: Death at Massey and the Dirty Secrets Behind Big Coal” (St. Martin’s Press), I could only talk to Manchin and other elected officials at public events, although Massey, Suboleski and other former company officials spoke with me at length. Blankenship declined to be interviewed.

Federal prosecutors in West Virginia say that their ongoing probe may extend to top officers and directors of the defunct firm. It is unclear why Blankenship made the movie now.

Full Disclosure: I have been interviewed and have acted as an unpaid consultant for an upcoming documentary  titled “Blood on the Mountain” produced by Evening Star Productions.

Trickle-Down Economics Revealed

Who's laughing now?

Who’s laughing now?

by James A. Bacon

A generation ago, liberals mocked the so-called “trickle-down economics” of the Reagan administration, the idea that creating wealth for the rich would trickle down to the less affluent by way of expanded economic activity. While Reagan himself never used that term, his economic philosophy of tax cuts, tax-code reform and restrained federal spending did work as advertised. The 1980s were a period of great prosperity in which all income groups and ethnicities shared. The irony is that the trickle-down economics is a label more aptly applied to the policies of President Barack Obama. During O’s five years in office, the rich have gotten richer while the poor have fed on scraps. But you’ll never hear the term “trickle down” applied to Obama’s monetary policies.

There are many winners from the low interest rate policy implemented by the Federal Reserve Board with the full support of the Obama administration — most of them wealthy. One group is the “millionaires and billionaires” who benefit from rising stock and bond prices. Another is the owners of mortgages who have refinanced their debt at lower interest rates, in many cases saving hundreds of dollars a month. Needless to say, those with the highest incomes who can afford the most expensive houses benefit the most. The biggest beneficiary, of course, is the federal government, the world’s largest debtor, which saves on the order of $200 billion to $300 billion a year in interest payments on its $17 trillion debt. Finally, there is a modest trickle-down effect in the form of job creation in interest rate-sensitive industries like construction.

Of course, there are many losers, too — a mega-narrative that has gone largely unreported by the mainstream media. One group of losers is small business, which finds it more difficult to gain access to capital (it’s easier for banks to lend to the government). Another group consists of state and local governments whose retirement funds no longer generate the returns they were several years ago and now face chronic fiscal stress as they struggle to make up the difference. Fifteen years ago, for example, the Virginia pension system was fully funded. Today, even after major structural reforms, Virginia and its local governments still owe billions.

Then there are the little guys, especially the Baby Boomers who accumulated modest nest eggs to help support them in retirement. I have fulminated on this topic on and off since writing “Boomergeddon,” frustrated that the issue has drawn so little attention. But a Bloomberg News article published today in the Times-Dispatch (sorry, can’t find the link) shows the full dimension of the problem. Some key points:

A 65-year-old who wanted to pay for retirement with annuities tied to bonds needed 24% more wealth in 2013 than in 2005. National Bureau of economic Research President James Potera calculated in a research paper released in February. …

U.S. Treasury yields are at least 2 percentage points less than what they would be otherwise because of the Fed’s low-rate policies and stimulus programs, said William Ford, former Atlanta Fed president who wrote a 2011 paper estimating the impact on savers of monetary easing. That reduces their income by at least $280 billion annually, his analysis shows.

“The cost of low interest rates are being ignored,” Ford said. “It is killing savers, elderly savers who are living on life savings that have been conservatively invested.”

The Fed is engineering one of the greatest wealth transfers in American history — from the working-class and middle-class to the rich. The stock market has never been higher. Wall Street is doing better than ever. Bankers are still getting their big bonuses. And the little guys with meager savings are watching their pathetic little nest eggs lose value as inflation exceeds the income they can generate.

The extraordinary thing is that Obama then turns around and castigates the economic system for inequalities in wealth — the very same inequalities that he and former Fed Chairman Ben Bernanke (it’s too early to pin any blame on Janet Yellen yet) did to aggravate. Rather than undo the harm he has inflicted, Obama ask Americans to entrust him with even more power to “help” the poor and downtrodden. What I find mind-boggling is that this is not the delusion of a single man — it’s that liberals and leftists have so uniformly and gullibly bought into the delusion. They have become apologists for the very evil, income inequality, that they decry.

I suppose that’s inevitable. The political class always gravitates to “solutions” that entail the accumulation of more power for the political class. In Virginia, liberals’ idea is to expand the Medicaid entitlement, paid for the federal government with borrowed money. Why not? It’s “free” money. But it’s really not. Every billion dollars borrowed by the federal government requires more financial repression and more wealth transfer from savers to favored classes of borrowers, the foremost of which is the U.S. government. The favored classes do not include the poor and middle-class who rack up credit card debt, typically charges around 13% to 15%.

Liberals prattle about “social justice” and lobby for distractions like a higher minimum wage (which raises pay for some and destroys jobs for others) while aiding and abetting the trickle-down economics that leaves America’s less well-off with crumbs. The hypocrisy is almost too much to bear.