Category Archives: Economy

Something Stinks About This Tax Proposal

Posted on April 30, 2012 by Peter Galuszka| 12 Comments

By Peter Galuszka

Pick a number. Any number.

Could 49,000 jobs be created? How about 44.000 jobs? It could be 77,000 jobs, or maybe as few as 900 jobs. These are the all-over-the-board possibilities suggested by the grandly-named Thomas Jefferson Institute for Public Policy in Springfield, which touts itself as a non-partisan think tank, when, in fact, it is a conservative business lobby.

They have a new study, praised by fellow blogger Jim Bacon, that supposedly would restructure taxes in Virginia in ways to warm the hearts of Gov. Robert F. McDonnell and Lt. Gob. Bill “The Jobs Guy” Bolling. The study suggests somehow changing the states sales tax, while expanding it or not expanding it to ”exempt” sectors. The nut of the study is the elimination of three state business taxes that have been around for years – the Business Professional Occupation Licensing tax, the Machine and Tool tax and the Merchants Capital Tax.

Getting rid of these nettlesome taxes has long been a mission of the state’s business lobby. “There is no net tax increase suggested in this study,” writes TJ Institute president Michael Thompson. The study, however,  seems to suggest that eliminating the three business taxes would cost localities $834.1 million that somehow would come from somewhere else.

I gather the make-up money would come by sticking the poor and middle class with extra sales taxes in areas now “exempt from sales taxes.” The states sales tax is now 5 percent but for some exempt foodstuffs, it is only 2.5 percent. The Thompson study doesn’t say exactly which “exempt” sales taxes would be eliminating (although it presumably would be enough to make up $834 million). It does suggest lowering the sales tax overall, but its target numbers vary and there’s little discussion about which and what exactly.

The more bizarre points of the report are the “nine” scenarios that offer a gobble-dee-gook of combinations. Most of the report makes little sense, but it makes bold jobs growth predictions. “Jobs created” range from 900 to 77,000. There is no clear cut analysis of how these out-of-the-dark jobs numbers come from.

Thompson claims he worked with two outside groups to come at his analysis. One is from Chmura Economics and Analytics, a Richmond-based forecasting firm, hired by the TJ Institute  to study various sales tax exemptions. Its head, Chris Chmura is a reputable, former Fed economist, but if her analysis is solid, there is no way of telling in Thompson’s report.

The voodoo economics seems to come from the so-called Beacon Hill Institute of Suffolk University in the Boston area. The fiscally conservative and politically-charged think tank apparently did the “pick a number” jobs creation numbers crunching. The institute itself is suspect. It gets funding from the arch-conservative Coors beer empire that is famous for finding ways to diminish the rights of gay people. Its findings are under constant attack by Massachusetts labor unions and the Massachusetts Taxpayers Foundation, a watchdog group.

The Thomas Jefferson Institute, in my book, is likewise suspect. It is populated by right-wing lobbyists and not respected economists. In the past, it has touted the supposed benefits of offshore oil drilling in Virginia and cited the projections of an Old Dominion University professor who later told The Wall Street Journal that his estimates were informal and not to be taken seriously.

It is too bad that Bacon’s Rebellion has been hooked by this TJ report without thinking it through.

 

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Posted in 2012, Budget, Children and families, Consumer protection, Economic development, Economy, Energy, Finance, Gay rights, Governance reform, Money in politics, Politics, Poverty & income gap, Race and race relations, Regulation, Taxes, The Economy

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Austerity, Recession and Staving off Boomergeddon

Posted on April 26, 2012 by James A. Bacon| 30 Comments

A year and a half ago, I went out on a limb and predicted that the budget austerity plan implemented by the newly elected Conservative Party in the United Kingdom would pay off. While chopping down the size of the budget deficit would act as a Keynesian-style depressant on the economy, I hoped that re-establishing credible budget discipline would reinvigorate private investment and help the U.K. economy skirt a recession. The results of the English experiment, I suggested would serve as an economic model for the United States to either emulate or avoid.

Well, as much as it pains me to say it, I was wrong. The U.K. slid back into a recession in the 1st quarter of 2012, shrinking 0.2% after contracting 0.3% the previous quarter. That’s extremely mild as far as recessions go, especially considering the weakness of the Euro-zone economy as a whole, but a recession it is.

Reports the Wall Street Journal: “Recession’s return will provide fresh ammunition to opponents of Chancellor of the Exchequer George Osborne’s austerity drive, an aggressive program of tax rises and spending cuts aimed at closing a persistent budget deficit that critics say will strangle growth.”

Now we have proof (as if it were needed): There is no easy way out of the fiscal dilemma that modern democratic welfare states have constructed for themselves. Re-establishing fiscal discipline will cause short-term economic pain that will register as immediate political pain. Conservatives may have enough time before they are required to hold another Parliamentary election that they can tough it out. But the United States political system, with its two-year electoral horizon, is not constituted to endure pain for long.

Democrats aren’t inclined to budgetary austerity in the first place, but the English example will only amplify their natural intransigence towards spending cuts. More worrisome, fears of recession will reinforce the Republicans’ political timidity. If you base your credibility as a ruling party upon the ability to generate jobs in the short term, you can’t handle the blow-back from a recession, not even a mild one.

If the Dems hold onto the presidency this fall, I don’t expect any serious deficit-fighting efforts other than taxing the rich. If the Republicans take over, I foresee only tepid measures to roll back the size and scope of government. I could be wrong. I certainly have been before! But with the U.K.’s example providing little cause for hope, I just don’t see the political will in this country to pull us back from Boomergeddon.

Update: Maybe we have a case “faux”sterity, not austerity, on our hands. According to this gold bug, U.K. borrowing and debt has increased 32% under the Tories. If this is a fair and accurate representation of the facts, it might explain why private-sector enthusiasm for the British experiment never kicked in.

– JAB

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The Drones in our Future

Posted on April 26, 2012 by Peter Galuszka| 7 Comments

By Peter Galuszka

The backyard of my house in the piney woods of southern Chesterfield County is shaped like a half moon surrounded by very tall and skinny loblollies and gum trees. It faces north and can be a good place for aircraft watching.

I live maybe 20 miles as the crow flies from Ft. Pickett, a Virginia National Guard base that is used by military and law enforcement agencies such as Navy SEALs, the Marines, Air Force and Army Special Forces, Canadians, Secret Service, the FBI and Virginia State Police. It’s fairly common to hear the distinctive sounds of military aircraft flying about, such as the muffled roar of Blackhawks, the vibrating thunder of Sea Stallions and, the less frequent “whup, whup” of the old, Vietnam-era Hueys.

So imagine my surprise a few weeks ago when I heard a chopper noise I couldn’t identify. I looked up and maybe 150 feet off the ground was a light grey helicopter that seemed to hover over my property. It was clearly marked “NAVY” and was the size of a ubiquitous civilian Sky Ranger but with one big difference: this aircraft had no cockpit and no pilot.

Weirded out, I went to Wikipedia and noted it was a Northrop Grumman MQ-8 Fire Scout, a drone helicopter that has been in naval service since 2002. Drone aircraft like this one have been the coming thing in aerial weaponry for some time. In the South Asia terrorism wars, they have been responsible for something like 1,700 or so deaths from 2004 to 2010. Of these, 87 were Taliban dead from drone strikes and 32 Al-Qaeda. The Military Channel is chockfull of drone missions from big jets to little model aircraft that a combat unit can toss into the air by hand to find out how many yards ahead their enemy is.

The drone could do much to reshape Virginia’s economy. The state has two major combat airbases, Langley Air Force Base in Hampton and Oceana Naval Air Station in Virginia Beach. For years, they have based the hottest combat aircraft from F-15 Eagles and F-14 Tomcats and more recently F-18 Hornets and F-22 Raptors.

Oceana is responsible for 11,000 jobs in Tidewater and is slated to receive the new F-35C Joint Strike Fighters starting around 2018. Yet there have been clouds forming over Oceana for some time now. Sprawl has grown up around the air base that was rural farmland back in World War II. Pilots have to get past apartment blocks and rows of high-rise tourist hotels to reach the Atlantic a few miles away.

On April 6, an F-18 crashed into some apartments and miraculously killed no one. In 1977, as a newspaper reporter, I saw the aftermath of an F-14 that wasn’t so lucky. It burst into flame as it took off and the pilot and radar officer, fearing they’d slam into a beachfront hotel, sacrificed their lives by turning their hurtling jet onto the tarmac. There wasn’t much left after the fire.

Oceana survived the latest BRAC review although there were attempts to move its instruction operations to more remote Eglin AFB in Florida. Most F-18 pilots get their basic instruction at a California airbase far away in the farmland valley of the central part of that state. Attempts by the Navy department to locate an Outlying Landing Field (OLF) for simulated carrier landings near Oceana in Northeastern North Carolina were shot down by local opposition which is being replicated at other proposed spots near Franklin.

One trend seems certain. Unmanned drones will continue to replace manned aircraft. As they do, the demands upon land-based crews and bases will be much less in terms of cost and local support. That’s good news for the defense budget but bad news for localities that have depended on air bases for jobs for decades. To be sure, Hampton Roads is less dependent upon the military economically than it has been. Drones, however, may not have the glamor of Tom Cruise in “Top Gun” but they hold many advantages.

There is plenty of debate about drones for other reasons. Left wing commentator Rachel Maddow, who is not exactly a military expert, has said that using drones rather than piloted aircraft raises ethical questions because it de-humanizes the effects U.S.-orchestrated combat has on others. Perhaps, but I am old enough to remember when equally pilotless ICBMs aimed at the Soviet Union replaced many piloted B-52s. They couldn’t be recalled once launched, but they would get the job done faster and more cheaply. Luckily they weren’t used.

Anyway, the MQ-8 Fire Scout over my backyard was something of a wake-up call. I guess I’ll be seeing a bit more of them.

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Posted in 2012, Budget, Economic development, Economy, Insurance, Science & Technology, The Economy, Transportation

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Who’s Paying for McDonnell’s Happy Talk TV Ads

Posted on April 25, 2012 by Peter Galuszka| 3 Comments

By Peter Galuszka

It’s hard to have your ego dunned.

Yet it’s happened to Virginia Gov. Robert F. McDonnell, who, according to the Quinnipiac University, lost five points in a popular poll thanks to his disastrous 2012 General Assembly session that brought the arrests of pro-abortion rights protestors on Capitol ground and a spate of national Bronx cheers on the Daily Show and Saturday Night Live.

McDonnell, anxious to get a VP bid, is paying $400,000 from fat cat political honchos for a series of television ads that are intended to set things right. We’ll see just how “positive” the Virginia is that Bob has developed. Presumably, we’ll see the other good things he has done, such as create jobs and manage our budget responsibly.

Never mind that a lot of those jobs come from Good Ole Uncle Sam who conservatives despise and that much of the budget progress is smoke and mirrors by withdrawing from one fund and putting it in another.

Even state Republicans who should be happy that one of their own is itching for such a high national profile and muttering that they sure could use that $400,000 in various and critically important political races this fall, according to The Washington Post.

Yet some folks, somewhere believe it is really important to make Bob look good just now.

Who are they? Let’s take a look. The $400K is coming from the Opportunity Virginia fund, a PAC for Bob. According to the Virginia Public Access Project, the fund isn’t exactly made up of little people tossing int heir dear dimes and dollars. It is fat cat money.

Some $25,000 comes from John A. Luke Jr., head of MeadWestvaco which recently relocated its headquarters from the Northeast to Richmond. Luke is so arrogant that he refuses to talk to the news media at all. He is former head of the National Manufacturers Association. Another is G. Gilmer Minor, powerman at a firm that distributes health goods in Richmond.

A few of other names at Opportunity Virginia likewise stick out. Smithfield Foods, which has had a lot of environmental issues over the years with its hog operations, gave $25,000. Wal-Mart, now in the middle of a huge bribery scandal in Mexico, gave $25,000. Lastly, Baxter F. Phillips Jr., an executive at coal producer Alpha Natural Resources in Bristol, gave $10,000. Phillips had been CEO of the notorious Massey Energy firm after renegade CEO Don Blankenship was forced to retire in Dec, 2010 and then the firm was acquired by Alpha. Phillips served in top positions for years at Massey, which has been skewered for the way it ran Upper Big Branch coal mine in Montcoal, W.Va. in April 2010 and where 29 miners were killed in a blast that formal reports blame on Massey’s horrendous management.

So as Bob garnishes his image at the expense of his party, it might be worth remembering who is paying for the upbeat TV ads.

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ALEC, the Tea Party and the Feral GOP

Posted on April 19, 2012 by Peter Galuszka| 5 Comments

House Speaker William J. Howell

By Peter Galuszka

Virginia’s conservatives have gone through a spasm of controversy as they struggle to find their message. They desperately need to balance their ideas of fiscal discipline and limited government with a wide spectrum of unrelated hard-right social issues.

The clearest evidence yet of the quandary for their soul involves the American Legislative Exchange Council (ALEC), which has just backed away from pushing “Stand Your Ground” laws that were involved in the shooting of a young African-American from Florida, Trayvon Martin.

ALEC had been a cozy, four-decades-old group of deep-pocketed corporations and lobbyists that ghostwrote template-style laws for state legislatures around the country to boost the conservative agenda of cutting taxes and government spending and cater to the business community’s desire for few regulations. For a long while, it seemed like a gigantic Chamber of Commerce funded by big corporate names such as Coca-Cola, Wal-Mart and Johnson & Johnson to push business-friendly laws.

But as the Tea Party movement gained steam in 2010, its disparate elements pushed right-wing social issues that ended up alienating many and polarized legislatures, including Virginia’s General Assembly. That spilled over into ALEC, which ended up pushing voter ID laws designed to take voting power away from minorities when there was no real issue over identity fraud and suck up to the gun lobby by pushing the idea that if one feels under attack, he or she may whip out a firearm and blow away an assailant without much legal consequence.

Incredibly, Virginia taxpayers have shelled out $231,000 over the past decade so legislators, mostly Republicans, can go to ALEC confabs and learn what the latest is in conservative designer legislation. A big player is House Speaker William J. Howell (R-Stafford), who, according to The Washington Post, made 60 percent of his publicly funded trips to ALEC meetings.

The unexpected fury over the  Trayvon Martin shooting involving a Stand Your Ground law blew everyone’s cover. It had the entire cossetted ALEC world tossed on its head. Firms such as Coca-Cola, Mars, Wendy’s and Kraft, all of which are consumer products firms whose billions debate on a positive public image bailed on ALEC. The constant deluge of the Trayvon shooting was very bad for their business. Now ALEC says it is dumping social issues and sticking to economic ones.

Howell didn’t seem to know what to do. He attacked left-leaning critics such as “ProgressVa” and had the bad taste and judgment to personally insult Anna Scholl, the head of ProgressVA at a press conference, demeaning her intelligence by saying he needed to speak to her only in monosyllables. Howell, usually more stately than that, soon issued a public apology to Scholl.

What’s revealing about Howell’s tantrum, however, is how it shows that mainstream conservatives really don’t know what to do with the social radicals in their movement. For years, they’ve enjoyed the upscale, closed-door demeanor of ALEC meetings until the Tea Party types shook everything up. It was fine, everyday work bashing unions and trying to cut taxes for companies and the rich. Yet they became spooked by what ended up being a weak, ephemeral and loosely organized group that they went freak-out if not totally feral.

Big business interests figured it out faster and with the exceptions of firms such as Wal-Mart, they bailed on ALEC. This shows that a lot of the GOP stalwarts in Virginia and nationally have feet of clay. They are not sure of their agenda, as their unimpressive primary run so far has shown. Locally, they have let social right-wingers hijack this year’s General Assembly with issues that had been decided decades ago, such as women’s right to abortions and gay rights. Real work important to the Commonwealth didn’t get done. Because of the distractions, it took four tries to get a (bad) $85 billion budget passed.

It is time to put the Tea Party in its place and get past it. The Republicans are paying a huge price and will probably lose the presidential election if they continue. Meanwhile, the Democrats, who have stood on the sidelines snickering at the GOP melee, need to get engaged and shut down this social nonsense once and for all.

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Posted in 2012, Abortion, Budget, Children and families, Courts and law, Crime and corrections, Demographics, Economic development, Economy, Education (higher ed), Energy, Entitlements, Environment, Finance, Gay rights, Gun rights, Immigration, Insurance, Labor & workforce, Media, Money in politics, Politics, Public safety & health, Race and race relations, Taxes, Transportation

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“Young Gun” Cantor Gets Tiresome

Posted on April 17, 2012 by Peter Galuszka| 3 Comments

By Peter Galuszka

What a difference nine months makes. Last summer, Boy Wonder Eric Cantor, the U.S. house majority leader from Henrico County, was riding high politically.

If he wasn’t snubbing President Barack Obama in meetings over the need to raise the debt ceiling, he was racing to get ahead of the Tea Party parade despite his thoroughly Main Street credentials. With another even more luminous Boy Wonder, U.S. Rep. Paul Ryan, was giving himself into a makeover as a youthful leading light of the New Conservatism.

To underscore that dynamism, cantering Cantor co-wrote, with Ryan and another young Republican congressman, the book “Young Guns,” an ego-saturated tome that draws on 1960s cowboy shows to set him up as a brave gunslinger defending budget discipline righteousness in a saloonful of drunken hacks and slutty Miss Kittys.

But today Boy Wonder has trouble on several fronts. According to Jeff Shapiro, the Times Dispatch columnist, Cantor is pissing off his fellow Republicans with his overweening self-centered nature and shameless attempts to replace Speaker of the House John Boehner.

Cantor dipped into his own Super PAC (curiously named the Every Republican is Crucial Political Action Committee or ERIC-PAC) to buck up an unknown Illinois congressman against a GOP elder in a primary race. Trying, once again, to posture as a budget hawk, he’s gone against the popular U.S. Export-Import Bank which helps fund exports of small and large corporations alike. And, his local allure has backfired so much that his guy lost in a Henrico County commonwealth’s attorney race.

If this weren’t enough, the editorial page of The New York Times has taken apart one of Young Eric’s pet legislative efforts – one that lets “small business” owners deduct up to 20 percent of their business income.

That sounds all well and good since small business is every pols’ flavor of the month. But the Times points out a few little discrepancies – namely, what is a “small business” exactly?

According to Cantor, a small business is one with less than 500 employees. That can include “multi-million-dollar partnerships and corporations.” Businesses this size, the Times says,  aren’t really the big job creators politicians claim they are.

If you really want to get to jobs creation, you have to go down to businesses that have 50 employees or less. Endeavors this size have created one third of all new jobs in the past 20 years. So what does Cantor’s bill mean? According to the Times, it is a thinly-veiled attempt to give the rich, whom Cantor loves to represent, yet another tax break.

Many politicians might get away with such slick actions. The trouble with Cantor is that his persona comes off as that of Eddie Haskell, the cloying jerk of 1950s TV fame, according to New York magazine. Given the way his district runs through red zones, however, it’s likely Eddie (or Eric) will be with us a while longer.

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Corey Stewart’s Racist Baggage

Posted on April 13, 2012 by Peter Galuszka| 8 Comments

By Peter Galuszka

Corey A. Stewart, the scourge of “illegal” immigrants and standard-holder of good old fashioned American values, is now running for lieutenant governor on the Republican ticket in 2013.

News reports of his recent announcement were predictably bland – comments in the right-wing blogosphere even more so – despite the fact that Stewart is one of the most divisive, if not downright racist, politicians in recent Virginia history.

As a member of the Board of Supervisors of Prince William County since 2003, Stewart is famous for his movement to require county police to profile anyone they suspected of being illegal immigrants if they were stopped. This law was obviously aimed at brown-skinned Latinos. Similar legal requirements were later adopted statewide in Arizona and Alabama, bringing the U.S. global derision.

One immediate effect of Stewart’s 2007 initiative was that Hispanic immigrants started fleeing the county in droves regardless of whether their papers were entirely in order or not. Stewart claims that his move caused violent crime to drop 37 percent in the largely white and wealthy suburb of Washington, D.C. chock-a-block with federal jobs and cul-de-sac homes. More informed individuals, such as Steven Camarota, research director of Center for Immigration Studies, says the link between violent crime and illegal immigration is a lot more tenuous.

Among the negative fallout from Stewart’s xenophobic grandstanding was that it pit white-skinned against dark-skinned and haves against have nots. The lead-in to the law and the aftermath brought on some very ugly scenes that drew to the soul and conscience of what had been a rather quiet, growing county.

For an idea of just how rancid Stewart’s ideas were, check out the short, award-winning film 9500Liberty by Annabel Park and Eric Byler. The 2010 documentary runs less than five minutes or so, but shows Americana at its worst. In one famous scene, an elderly white man screams at Park and Byler to “speak English” and get legal. In response, Park, who was born in South Korea, is a naturalized American citizen and studied at Boston University and Oxford, produces her U.S. passport and flashes it in his face.

Even the chief of the county police has big trouble with Stewart’s law, which Stewart later tried to expand to the rest of Virginia in his “Rule of Law” campaign. My memory of Stewart is in October 2010 at the “Virginia TeaParty Patriots Convention” in Richmond manning a little booth trying to dish out anti-immigrant ideas. He seemed to be ignored amidst the hubbub of deficit hawks, Patrick Henry re-enactors in Colonial garb and gun fanatics packing Glocks and Colt 45s in Velcro holsters.

In any event, bashing immigrants has gone out of style at least for now. The reason is the economy. Fewer undocumented foreigners are coming here because jobs are nil. Ironically, Hispanic construction workers had been flocking to Prince William about 10 years ago to help serve the demand for badly-planned cookie cutter houses, including McMansions.

When the housing market tanked, some stayed, weren’t quite legal and their brown skins became more evident to the white folks when they were shopping at the county’s many strip malls. In an odd way, it’s a bit like Arizona which had been run by dark-skinned Native Americans and Spanish for centuries and was not even a state until 1912. Then, around the 1960s, flocks of retirees of more northern European ancestry showed up. Suddenly, Arizona became “American” and had to be protected.

For his lieutenant governor’s campaign, Stewart seems to have dropped the immigrant bashing because it has gone out of style. Instead, he says, he weathered the recession by not raising taxes in Prince William but investing in roads and “public safety’ (code word for immigrant bashing?) and cutting $143 million from the county budget.

He says:  “Prince William County is a model for how to implement good conservative principles. Taxes are down, crime is down, and growth is up. I am going to bring to the Office of Lieutenant Governor the same conservative principles that I have led Prince William County with over the past 6 years.”

Naturally, he fails to mention that many of those new jobs come out of the federal budget, but no matter. The bigger point is that Stewart is going to have to come to terms sooner or later with the impact of immigration on economic growth now that recovery seems in the air. That will raise the immigration issue yet again.

Even the Wall Street Journal notes on its editorial pages today that too much visa protectionism is hurting the U.S. India is about to file a complaint with the World Trade Organization against a 2010 U.S. law that hikes fees for visas for highly skilled workers from India. Meanwhile, rejections of  H-1B and L-IB visa applications for well-qualified foreign workers are considerably up.

One wonders what Stewart, who is casting himself as  yet another “jobs” Republican, thinks about this. One thing he might be sure of. Some darker-skinned foreigners with PhD.s in highly technical fields that many Americans lack may think twice about moving to Prince William County, or maybe even the Old Dominion if he wins his state race.

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Dulles Rail: “Good Night, John Boy”

Posted on April 12, 2012 by Peter Galuszka| 23 Comments

By Peter Galuszka

The convoluted schemes of Virginia state politicians to avoid paying for rail service to Dulles International Airport are as frustrating as they are self-defeating and unfair.

Just a few days ago, it seemed that the General Assembly would consider adding $300 million to extend Metrorail to Dulles on the Silver Line when the legislature meets to approve an $85 billion budget April 18.

Thanks in part to last minute opposition by Democratic deal-maker State Senator Charles J. Colgan of Prince William County, the $300 million went “puff.” No deal. No money.

The $300 million cut underscores what seems to be Richmond’s ancient philosophy on expanding Dulles Rail: stick as much of the cost as possible on taxpayers and tollpayers in Northern Virginia.

Days after the $300 million in state funds for Dulles Rail disappeared, the Board of Supervisors of Fairfax County confirmed its buy-in for Phase Two of the Dulles Rail project, whose ultimate costs will top $2.7 billion. The county says that while it is looking for alternate funding sources, it may pay up to $965 million for the project. About $730 million – or 80 percent – will be paid for by “voluntary” special tax districts created by landowners.

Once again, Northern Virginia, which provides more state tax revenue than any other region of the Old Dominion, gets stuck with most of the bill for Dulles Rail. That is the criticism of the Coalition for Smarter Growth which was quick to note the bizarre budget cut. They point out that, at the same time, the administration of Gov. Robert F. McDonnell is proposing at least $750 million in state funding for a new superhighway near U.S. 460 in the rural peanut country of Southeast Virginia and diverting $200 million for a controversial bypass in Charlottesville.

It’s hard to fathom why providing Dulles rail with state money is such anathema. The new U.S. 460 tollroad project, for instance, raises many questions. It is being billed as a necessity for Virginia’s economic future since the port of Hampton Roads needs better transportation access to handle bigger, deeper-draft cargo ships when the Panama Canal is expanded in 2014.

Yet, Norfolk Southern railway which serves the port has already finished a $321 million public-private project to raise mountain tunnels to handle more double-stack rail shipments from Hampton Roads to the Midwest. The chief executive of the Panama Canal Authority says that thanks to rail improvements, Hampton Roads is already prepared to handle the expanded trade the canal project will bring. If he’s right, then why is there urgency for the new road?

There have been other peculiar impediments to the state paying for Dulles rail, such as Knee-jerk anti-unionism. Right-wing Atty. Gen. Kenneth Cuccinelli and others are crying foul at any attempt by the airports authority to use the a similar but somewhat tougher project labor agreement that helped move Phase One forward. A more deep-rooted issue is Virginia’s traditional philosophy, dating back to the one-party system of Harry F. Byrd 100 years ago, that public projects must be funded on a “pay as you go” basis.

That might have worked for building a two-lane bridge in bucolic Virginia when TV’s John Boy Walton, attired in bib overalls, might have been around. Today, the fact remains that Washington is the only capital in the advanced industrialized world not to have public rail service to its leading international airport.

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Closely Watched Trains

Posted on April 10, 2012 by Peter Galuszka| 4 Comments

By Peter Galuszka

A few weeks ago, I was making another trip to the area near Matewan, W.Va., a small, historic town of red brick buildings a stone’s throw across the Tug Fork River from Kentucky. Matewan is noted for its coalfield labor strife caught dramatically in John Sayles superb 1987 movie of the same name and is the locus for part of a book I’ve been researching for the past 18 months.

There isn’t much hotel space available in the Tug Fork Valley. At times, I’ve had to stay dozens of miles away in Eastern Kentucky.  When available, I prefer a bed and breakfast right in the middle of Matewan and just steps from where Sid Hatfield, the town police chief, shot it out with rent-a-thugs from the Baldwin-Felts Detective Agency in 1920 (yes, Big Money was into privatization even then).

Aside from seasonal all-terrain vehicle enthusiasts, the only big noise in Matewan is the Norfolk Southern. The original mainline of the old Norfolk & Western runs just behind the bed and breakfast. First you hear an odd whir, then a diesel horn blast and then your world shakes. Trains run anytime, day and night. It was the route of the fancy red and black Powhatan Arrow passenger train from Norfolk to Cincinnati. Now what you see are endless coal trains and hot shot containers racing their East Coast to Midwest route. Most recently, I have seen jumbo-sized, extra-tall coal hoppers whip past.

What’s the point of this travelogue? The extra-sized cars are the point. Nearly two years ago, Norfolk Southern completed a $321 million project using private and public money to raise tunnels in West Virginia and southwestern Virginia. The low ceilings had forced east-west,double-stack trains to spend an extra day going through Pennsylvania or Tennessee. Not anymore.

In fact, the so-called Heartland Corridor project means that Hampton Roads is uniquely qualified to take advantage of the larger, deeper-drawing container ships that are expected to boost trade when the Panama Canal expansion is completed in a couple of years.

That, at least, is the opinion of Alberto Aleman Zubieta, chief executive officer of the Panama Canal Authority. Zubieta worries, as many do, that U.S.East and Gulf Coast ports just aren’t ready for the new Panama Canal trade, except for Hampton Roads. “Norfolk is ready,” he was quoted as saying. “Rail has been modernized between Norfolk and Chicago; they understand the benefit of getting cargo to its destination.”

So, if Hampton Roads is already the beneficiary of a major rail improvement project that is now ready to handle Panamax cargo, then why all the hullabaloo over a $1.8 billion public-private project to expand U.S. 460? The expansion from Suffolk to Petersburg would relieve clogged Interstate 64 on the other side of the James River and would offer an extra emergency escape route should a major hurricane show up.

But the big reason for the project, enthusiastically backed by Gov. Robert F. McDonnell and his Transportation Secretary Sean Connaughton, is that Hampton Roads desperately needs transportation access to handle all the new trade coming with the Panama Canal is expanded.

Yet if you listen to Zubieta, the project is in place. Finito. Even if you wanted to expand distribution and manufacturing centers in Southeastern Virginia, why couldn’t you do it with rail spur lines coming from the NS mainland that neatly parallels the existing U.S. 460? A number of distribution centers already use the rail line, including a Food Lion warehouse near Petersburg.

The road project has lots of problems. Its backers admit that tolls won’t pay for it. Some kind of industrial authority would have to be created with new factory or warehouse owners kicking in payments to make it work.

What about the already existing rail line? Why doesn’t someone bring that up? Doesn’t it make the expensive road project unnecessary? Or is there some under-the-table log-rolling going on that we don’t know about?

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Another “F” for Transparency

Posted on April 5, 2012 by Peter Galuszka| 1 Comment

By Peter Galuszka

Imagine learning that a court date or a city council meeting is to be held in two days. You show up at the door, only to be told by a guard that admittance is by invitation only. You will have to leave.

That, in essence, is how the administration of Virginia Gov. Robert F. McDonnell seems to be handling public access regarding the hottest environmental issue the Old Dominion now faces: uranium mining.

McDonnell initially drew widespread criticism for having closed sessions for a state government group planning to recommend by next year whether to end Virginia’s nearly three decades’ long ban on uranium mining. The governor then promised that some of the meetings will be open.

On April 4, his people held a meeting to discuss must that issue in Richmond. Yet the meeting sounded a very sour note.

Only two days’ notice was given that it would be held. Most of the public was not invited. A handful of select environmentalists, such as the Roanoke River Basin Association, near where the uranium may be mined, were invited.

The meeting should not have been limited to a “pre-selected audience,” Megan Rhyne, executive director of the Virginia Coalition for Open Government, a non-profit group, was quoted as saying. She did praise McDonnell for at least having the meeting.

Perhaps, but the entire modus operandi of the McDonnell Administration gravitates towards closed door sessions with lots of lobbyists and big-time political contributors in tow.

And Virginia’s tendency towards closed-door politics is nothing new. The State Integrity Investigation, a collaboration of the Center for Public Integrity, Public Radio International and Global Integrity rated Virginia “F” for transparency, along with seven other states, including North Dakota, Michigan, South Carolina, Maine, Wyoming, South Dakota and Georgia. Five states rated highest, including New Jersey and California.

It seems the concept of government openness is still a new one to the McDonnell Administration.

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