Category Archives: Poverty & income gap

Pell Grants: Soaking Taxpayers and Creating Debt Slaves?

pell_loansby James A. Bacon

Earlier this month the Hechinger Report found that a large percentage of the beneficiaries of federal Pell grants to students from low-income families never graduate. The study also found that the federal government, despite spending $300 billion on the program since 2000, doesn’t keep track. The feds have doubled their commitment to the program since the 2007-2008 school year with absolutely no idea of what results they are getting.

Uncle Sam may be flying blind, but Virginia is not. The Commonwealth has been collecting the data for years and reports the results for every public and private university in the state, reports the VLDS (Virginia Longitudinal Data System newsletter. According to Tod Massa with the State Council for Higher Education for Virginia, “Virginia knows more about the success of students in all the Title IV financial aid programs, which are not ours, than the federal government does.”

Pell grants for low-income students provide awards of up to $5,775 per student. Graduation rates for Pell recipients in Virginia can be seen here.

For all first-time, full-time college students entering a Virginia institution in the 2001 school year, 60.3% graduated within five years compared to 43.4% for Pell recipients. The graduation rate varied widely between institutions, however. The more elite the institution, the higher the graduation rate. For instance the Pell graduation rate within five years at the University of Virginia was 85% for freshmen enrolled in 2001, while it was 20% at Norfolk State University. (View data for individual institutions here.)

The disparity in graduation rates raises the question of whether the program is inducing poor students to attend college when they have no business doing so, either because they are unprepared for college-level work or because they struggle to pay the tuition, fees, room and board. A nearly $6,000 grant covers about a third or fourth of what it costs to attend a public university in Virginia. It would be interesting to know how many Pell recipients end up taking out student loans. It would be even more interesting to know how many Pell recipients end up saddled with student debt without the degree credential that would help them pay it off.

Virginia has the data to undertake such an analysis. The fact that the U.S. Department of Education does not is just disgraceful. It’s not often that a government wealth-distribution scheme can both squander your tax dollars and propel thousands  of would-be beneficiaries into debt slavery.

— JAB

Amherst Ordinance Violates Basic Human Right

ex-conby James A. Bacon

I have little sympathy for criminals. I don’t buy into the Officer Krupke school of thought that people “are depraved on account of they’re deprived.” And I’m all in favor in getting tough on crime. But I also believe that once a criminal has served his sentence , government policy should be geared to making it easier, not harder, for him to find a job and reintegrate into society.

Employers are understandably reluctant to hire ex-cons for certain types of jobs, with the consequence that many employment opportunities in government, health care, education and finance are off limits. For some felons, the only employment opportunity is creating one’s own job.

But now comes Amherst  County, enacting an ordinance in May, that allows the Commissioner of Revenue to “withdraw the privilege of doing business or exercising a trade, profession, occupation, vocation, calling or activity by revoking a business license” for anyone convicted of a felony or crime of moral turpitude.

As Eugene Volokh, a California law school professor observes, “This isn’t limited to particular job categories and particular criminal histories (e.g., barring people with child sex abuse records from working in day care centers, barring people with recent DUIs from driving trucks, and so on). If the Commissioner wishes, anyone with the specified kind of conviction could essentially be disqualified from pretty much any job in the County.”

“This sort of discretionary control over people’s lives is not how a free country should work,” writes Volokh.

I agree whole-heartedly. Indeed, I would go further. The idea expressed in the Amherst County ordinance that the right to self-employment is a “privilege” revocable by government is reprehensible in a free society. The ability to freely sell one’s labor and/or skills in the marketplace is, or should be, a foundational human right. I can’t imagine what the Amherst board supervisors were thinking when they enacted this ordinance, but they need to repeal it immediately. And if they don’t, some one needs to file a legal challenge. This is an embarrassment.

(Hat tip: Tim Wise)

Want Social Justice? Create Jobs.

Photo credit: Buz and Ned's

Photo credit: Buz and Ned’s

by James A. Bacon

I’m all in favor of people earning higher wages. I want to live in a society in which people make enough from their labors to live on without government assistance. I just don’t think that mandating a minimum wage is the way to go about it, for all the reasons that foes of the minimum wage usually cite that don’t bear repeating here. A better way to increase wages is to (a) increase the number of jobs in the economy, which would (b) give employees more options, which would (c) prompt employers to offer better wages, benefits and working conditions in order to hang onto their workforce. Crank up the jobs machine, and the wages, benefits and working conditions will follow.

This forehead-smackingly obvious formula can be seen at work in Richmond’s restaurant community. After years of sub-par economic growth following the Great Recession, competition for skilled restaurant employees in the Richmond region is finally heating up. And guess what’s happening — restaurateurs are raising wages.

Thus, we read in the Richmond Times-Dispatch today that Buz Grossberg, owner of Buz and Ned’s Real Barbecue restaurants, is bumping the starting pay to $12.50 per hour for regular employees and to $8 per hour for servers working for tips. That’s up from $8 and $6 an hour respectively.

Grossberg acted for reasons both idealistic and pragmatic. “This has been on my mind a long time, even before it became current politics,” he said. “It’s just gotten worse and worse. It’s gotten hard for people to repay their bills and see their family without working multiple jobs. … How do you attract people and keep people who can’t afford to feed their family? Pay them a living wage.”

But why did he act on his conscience now? Turns out that it’s getting harder finding and retaining talent, particularly kitchen workers, in Richmond’s increasingly competitive and crowded restaurant scene, according to other restaurateurs quoted in the article. Said Grossberg: “The people who would typically work [in the restaurant industry] are going other places.” Paying higher wages will bring them back in.

Bacon’s bottom line: It’s basic supply-and-demand economics. If the economy creates jobs at a faster rate, wages will rise faster. And how do we create more jobs? Once place to start would be to re-think some of the job-killing policies we’ve enacted over the past 15 years, starting with Sarbanes-Oxley, Dodd-Frank, the Affordable Care Act, EPA regulatory overreach, higher taxes, regulation of the Internet and dozens of other initiatives that collectively have gummed up the economy and slowed growth to a crawl.

Defenders of the current regulatory regime tend to blame mysterious “economic forces” beyond their control. I’m old enough to remember those who claimed the “stagflation” of the 1970s likewise was due to some mysterious change in the nature of the economy rather than the policies of Richard “We’re All Keynesians Now” Nixon and Jimmy “Gas Rationing” Carter. Then along came policies that killed inflation, deregulated major industry sectors, cut taxes and enacted and real government spending cuts, precipitating nearly two decades of job creation. The surge in jobs in the 1980s and 1990s made the minimum wage irrelevant in many parts of the country because businesses were so desperate for labor that they were paying more than the minimum already.

I do feel badly for anyone trying to make a living on the minimum wage. But the answer isn’t more of the same “social justice” economics that have created our moribund economy and depressed wages. The best social justice program in the world is a strong job-creating economy.

Cutting Virginians No Slack: Colleges and Universities

tuition_hikes

Data source: State Council of Higher Education in Virginia

by James A. Bacon

The rocket-like ascent of college tuition in Virginia continues unabated, with tuition and fees across the state’s higher ed system averaging six percent in the 2015-2016 academic year, according to a new State Council of Higher Education in Virginia (SCHEV) report. That compares to an inflation rate of less than 1.0% between 2015 and 2014 and it outpaces the meager gains in average household income.

Prime offenders: Virginia’s elite universities, the University of Virginia and the College of William & Mary, continuing to parlay their pricing power into higher tuition and fees at a remarkably aggressive rate.

As always, the universities turn to the excuse that state budget cuts made them do it. And, as the SCHEV report makes clear, the past year was a budgetary roller coaster and General Fund support for higher ed was cut by $45 million in each year of the biennium, for a total of 2.1%. But that accounts for only one percentage point of the 6% increase this year. Inflation accounts for another percentage point. That still leaves an unjustifiable increase of 4%.

Meanwhile, the indentured servitude of America’s college-educated youth, especially those whose parents aren’t affluent enough to foot the bill, continues apace. Student debt is accumulating as rapidly as the national debt, now exceeding $1.3 trillion.

If there is a consolation to this dismal news, according to WalletHub, one of the nation’s leading purveyors of listicles, Virginia students are less debt-ridden than the national average. Compiling metrics on the percentage of students with debt, the average size of that debt, debt as a percentage of income, post-college employment rates and delinquent loans, Virginia’s college students rank 6th best off in the country. That is a testimony to the fact that, relatively speaking, Virginia institutions of higher ed are less rapaciously exploitative  than their peers in other states. (Yes, that’s the sound of one hand clapping.)

Conserving Energy, Helping the Poor

Marjorie_Wilson

Marjorie Wilson

by James A. Bacon

Marjorie Wilson has lived in the same 1,000-square-foot bungalow on Texas Street in the City of Richmond since 1953. Two sons and a grand-daughter share the residence with her but it isn’t easy keeping up with the bills, including the electric bill, which averages about $120 per month.

“We’d talked about insulating the attic years ago,” says daughter Diane Campbell, who helps look after her mother. But they never found the money to get the job done.

volunteer_work2

Project:HOMES volunteers pump insulation into the walls of the Wilsons’ house.

The family hit an energy conservation bonanza this year, though, when it qualified for improvements by Project:HOMES, a non-profit enterprise that makes home improvements for the poor, elderly and disabled throughout Central Virginia. Combining federal weatherization money, Dominion Virginia Power EnergyShare funds and volunteer labor, Project:HOMES was able to insulate the attic and walls, plug air-infiltration gaps, wrap the hot water heater and pipes and install LED lights for about $4,000, says CEO Lee Householder.

The goal is to shave 30% off the Wilsons’ electric bill. If the project meets expectations, that will amount to savings of about $40 per month on average or $480 per year. That’s a pretty good return on a $4,000 investment.

The Wilsons’ house was featured yesterday in one of three events held around the state marking the re-launch of Dominion’s EnergyShare program. The Richmond event was attended by Dominion Virginia Power President Paul Koonce and Richmond Mayor Dwight Jones. Governor Terry McAuliffe was the headliner at the Northern Virginia event, while Lieutenant Governor Ralph Northam led off in Hampton Roads. The McAuliffe administration had pushed hard for an expansion of EnergyShare this spring when lawmakers crafted legislation in response to the Environmental Protection Agency’s crackdown on CO2 emissions from electric power plants.

Dominion has committed to spend $57 million on the program over the next five years, including $15 million that will be recouped from rate payers and $42 million to be contributed by the company itself. The $42 million, in effect, will come from shareholders of parent company Dominion Resources, said Katharine M. Bond, director of public policy. Those sums do not include additional funds contributed by Dominion customers, employees and others.

The program, said Koonce in remarks at the Richmond event, is the result of “a bipartisan effort to expand energy efficiency.” There is a broad political consensus that Virginia will have to aggressively pursue energy conservation in order to meet the strict CO2 emission goals of the Clean Power Plan.

There has been considerable debate about the merits of weatherization programs since the Obama administration’s 2009 economic stimulus plan. Government auditors found the $5 billion lavished on weatherization was riddled with waste and fraud. And in Dominion’s own analysis of alternatives for CO2 reduction, the “Income and and Age Qualifying Home Improvement Program” was judged to have the second highest cost per megawatt hour, exceeded only by off-shore wind energy. The cost of $236 per megawatt hour compares to the voltage conservation program, costing $38 per megawatt hour, or the residential appliance recycling program, costing $55 per megawatt hour, according to Dominion’s 2015 Integrated Resource Plan.

However, EnergyShare is more than a conservation program. It is designed to help the poor, elderly and disabled pay their electric bills, which explains its broad political appeal.

In its earlier incarnation, EnergyShare helped Virginians keep the lights on and also paid for weatherization. The big design change in the program is linking financial assistance with weatherization. If a customer faces a choice between paying an electric bill or a medical bill, the problem likely is not a one-time event; it is probably a chronic one. Weatherization creates a permanent reduction in a poor family’s electric bill. “That linkage has not been part of the equation before,” says Bond. Continue reading

Alpha Natural Resources: Running Wrong

Alpha miners in Southwest Virginia (Photo by Scott Elmquist)

Alpha miners in Southwest Virginia
(Photo by Scott Elmquist)

 By Peter Galuszka

Four years ago, coal titan Alpha Natural Resources, one of Virginia’s biggest political donors, was riding high.

It was spending $7.1 billion to buy Massey Energy, a renegade coal firm based in Richmond that had compiled an extraordinary record for safety and environmental violations and fines. Its management practices culminated in a huge mine blast on April 5, 2010 that killed 29 miners in West Virginia, according to three investigations.

Bristol-based Alpha, founded in 2002, had coveted Massey’s rich troves of metallurgical and steam coal as the industry was undergoing a boom phase. It would get about 1,400 Massey workers to add to its workforce of 6,600 but would have to retrain them in safety procedures through Alpha’s “Running Right” program.

Now, four years later, Alpha is in a fight for its life. Its stock – trading at a paltry 55 cents per share — has been delisted by the New York Stock Exchange. After months of layoffs, the firm is preparing for a bankruptcy filing. It is negotiating with its loan holders and senior bondholders to help restructure its debt.

Alpha is the victim of a severe downturn in the coal industry as cheap natural gas from hydraulic fracturing drilling has flooded the market and become a favorite of electric utilities. Alpha had banked on Masset’s huge reserves of met coal to sustain it, but global economic strife, especially in China, has dramatically cut demand for steel. Some claim there is a “War on Coal” in the form of tough new regulations, although others claim the real reason is that coal can’t face competition from other fuel sources.

Alpha’s big fall has big implications for Virginia in several arenas:

(1) Alpha is one of the largest political donors in the state, favoring Republicans. In recent years, it has spent $2,256,617 on GOP politicians and PACS, notably on such influential politicians and Jerry Kilgore and Tommy Norment, according to the Virginia Public Access Project. It also has spent $626,558 on Democrats.

In 2014-2015, it was the ninth largest donor in the state. Dominion was ahead among corporations, but Alpha beat out such top drawer bankrollers as Altria, Comcast and Verizon. The question now is whether a bankruptcy trustee will allow Alpha to continue its funding efforts.

(2) How will Alpha handle its pension and other benefits for its workers? If it goes bankrupt, it will be in the same company as Patriot Coal which is in bankruptcy for the second time in the past several years. Patriot was spun off by Peabody, the nation’s largest coal producer, which wanted to get out of the troubled Central Appalachian market to concentrate on more profitable coalfields in Wyoming’s Powder River Basin and the Midwest.

Critics say that Patriot was a shell firm set up by Peabody so it could skip out of paying health, pension and other benefits to the retired workers it used to employ. The United Mine Workers of America has criticized a Patriot plan to pay its top five executives $6.4 million as it reorganizes its finances.

(3) Coal firms that have large surface mines, as Alpha does, may not be able to meet the financial requirements to clean up the pits as required by law. Alpha has used mountaintop removal practices in the Appalachians in which hundreds of feet of mountains are ripped apart by explosives and huge drag lines to get at coal. They also have mines in Wyoming that also involve removing millions of tons of overburden.

Like many coal firms, Alpha has used “self-bonding” practices to guarantee mine reclamation. In this, the companies use their finances as insurance that they will clean up. If not, they must post cash. Wyoming has given Alpha until Aug. 24 to prove it has $411 million for reclamation.

(4) The health problems of coalfield residents continue unabated. According to a Newsweek report, Kentucky has more cancer rates than any other state. Tobacco smoking as a lot to do with it, but so does exposure to carcinogenic compounds that are released into the environment by mountaintop removal. This also affects people living in Virginia and West Virginia. In 2014, Alpha was fined $27.5 million by federal regulators for illegal discharges of toxic materials into hundreds of streams. It also must pay $200 million to clean up the streams.

The trials of coal companies mean bad news for Virginia and its sister states whose residents living near shut-down mines will still be at risk from them. As more go bust or bankrupt, the bill for their destructive practices will have to borne by someone else.

After digging out the Appalachians for about 150 years, the coal firms have never left coalfield residents well off. Despite its coal riches, Kentucky ranks 45th in the country for wealth. King Coal could have helped alleviate that earlier, but is in a much more difficult position to do much now. Everyday folks with be the ones paying for their legacy.

The Ironies of Virginia’s Growing Diversity

Midlothian’s New Grand Mart taps state’s growing diversity

 By Peter Galuszka

Suddenly immigration is popping up as a major issue in Virginia and the nation.

Virginia Beach has been dubbed a “sanctuary city” for undocumented aliens by Fox News and conservative Websites. GOP presidential hopeful Donald Trump is scarfing up poll number hikes by calling Mexicans trying to enter the U.S. illegally “rapists” and proposing an expensive new wall project to block off the southern border. Pro-Confederate flag advocates are pushing back against anti-flag moves, but they can’t escape the reality they are conjuring up  old visions of white supremacy, not their version of respectable Southern “heritage.”

So, if you’d like to look at it, here’s a piece I wrote for The Washington Post in today’s newspaper. When I visited a new, international food store called New Grand Mart in Midlothian near Richmond, I was impressed by how large it was and how many people from diverse backgrounds were there.

Looking further, I found one study noting that Virginia is drawing new groups of higher-income residents of Asian and Hispanic descent. In the suburbs, African-Americans are doing well, too.

The Center for Opportunity Urbanism ranked 52 cities as offering the best opportunities for diverse groups. One might assume D.C. and Northern Virginia would rank well, and they do. More surprising was that Richmond and Virginia Beach rank in the top 10 in such areas as income and home ownership. True, mostly black inner city Richmond has a 26 percent poverty rate but it seems to be a different story elsewhere.

Stephen Farnsworth of the University of Mary Washington says that economic prosperity and jobs that had been concentrated in the D.C. area, much of it federal, has been spread elsewhere throughout the state. It may not be a coincidence that New Grand Mart was started in Northern Virginia by Korean-Americans who undertook research. It revealed that the Richmond area was a rich diversity market waiting to be tapped. They were impressed and expanded there.

Other areas that do well in the study are Atlanta, Raleigh, N.C. and ones in Texas, which show a trend of job creation in the South and Southwest outpacing economic centers in the Northeast, Midwest and in parts of the West. Another story in today’s Post shows that there are more mostly-black classrooms in Northern cities than in the South. The piece balances out the intense reevaluation of Southern history now underway. A lot of the bad stuff seems to have ended long ago, but somehow similar attitudes remain in cities like Detroit and New York.

This progress is indeed interesting since old-fashioned American xenophobia is rearing itself again.

In Virginia, the long-term political impact will be profound as newer groups prosper. They may not be as inclined as whites to embrace Virginia’s peculiar brand of exceptionalism, such as their emotional mythology of Robert E. Lee and Thomas Jefferson. Their interest in them might be more dispassionately historical.

And, as the numbers of wealthier people from diverse backgrounds grow, they may be less willing to keep their heads down when faced with immigrant bashing. That’s what people of Hispanic descent did in 2007 and 2008 when Prince Williams County went through an ugly phase of crackdowns on supposed illegals. They could strike back with their own political campaigns.

Whether they will be blue or red remains to be seen. It’s not a given that they’d be Democratic-leaning. Farnsworth notes, however, that as more diverse people move to metropolitan suburbs, whites in more rural, lower-income places may become more reactionary out of fear. Hard-working and better-educated newcomers might be out-classing them in job hunts, so they might vote for politicians warning of a yellow or brown peril.

In any case, New Grand Mart presages a very crucial and positive trend in Virginia. It shows the irony of the hard right echo chamber peddling stories designed to inflame hatred and racism, such as the one about Virginia Beach being a “sanctuary” for illegals. In fact, the city is attracting exactly the  well-educated and hard-working newcomers of diverse backgrounds upon whom it can rest its future.

But we’re in an age of bloated billionaires with helmet hairdos and no military experience claiming that former Republican presidential candidate John McCain, a shot-down Navy pilot who spent five years in a brutal North Vietnamese prison, is not a hero. If Virginia can ignore such time-wasters and embrace diversity, it will be a better place.

Higher Ed as Engine of Social Injustice

tuition_hikesby James A. Bacon

College tuitions have soared over the past several decades, and so have federal grants and subsidized student loans. Many observers of the higher ed scene believe that easy credit has been a driving force behind the tuition hikes: The more Uncle Sam subsidizes student participation in higher education, the greater the pricing power exerted by colleges and universities. But correlation does not necessarily equal causality. Proof that escalating college loans enables tuition hikes has been hard to come by.

Three economists working for the Federal Reserve Bank of New York think they have found the proof. In a new paper, “Credit Supply and the Rise in College Tuition,” the authors note that federal loan programs have accounted for 90% of all student loan originations since the 2009-2010 school year, and 75% to 80% in the preceding years. Drawing from three separate Department of Education data sets, they show how closely tuition increases track changes in federal lending policy.

When we control for all forms of aid, we find that each additional Pell Grant dollar to an institution leads to a roughly 55 cent increase in sticker price tuition. For subsidized loans, we find a somewhat larger passthrough effect of about 70%. We also find a loading of tuition on unsubsidized loans of 30 percent. All of these effects are highly significant.

Note: To the best of my knowledge, the Federal Reserve Board of New York is not funded by the Koch Brothers or affiliated with the Tea Party.

Bacon’s bottom line: While increased federal support has made it somewhat easier for students to finance their college educations through borrowing, the higher ed establishment captures the majority of the funds. Little of the money has gone to hire more professors, increase faculty pay or otherwise improve the quality of education. Most of it has paid for bloated administrations. Meanwhile, outstanding student-loan debt has skyrocketed to more than a trillion dollars, creating a new class of indentured servants.

This is the hardest evidence yet that one of America’s most ideologically liberal institutional complexes, higher education, is also one of the most exploitative. Colleges and universities talk a good game about social justice, but in the end, they put their institutional prerogatives first.  In the end, higher education has become a powerful engine of social injustice.

(Hat tip: Tim Wise)

Capitalism Triumphs Again!

RAM clinic, Pikesville Ky., June 2011. Photo by Scott Elmquist

RAM clinic, Pikesville Ky., June 2011.
Photo by Scott Elmquist

By Peter Galuszka

If there were any questions about just how capitalism has failed, one need look no farther than Wise County, where, this week, hundreds, if not thousands, of people will line up for free medical care.

The event is ably noted in The Washington Post this Sunday by a young opinion writer named Matt Skeens who lives in Coeburn in the coalfields of southwestern Virginia.

This week, the Remote Area Medical clinic will come to the Wise County fairgrounds to offer free medical and dental care to anyone who needs it.

You might ask yourself a question: why do so many people in one of the parts of the United States that is fantastically wealthy with natural resources need free medical care? Where is the magic of capitalism so often lauded on this blog?

A few insights from Mr. Skeens:

“Local representatives of Southwest Virginia will travel to the fairgrounds to stand on a coal bucket and assure us they’re fighting against President Obama and the ‘war on coal.’ These politicians won’t mention that with their votes to block Medicaid expansion, they ensured that the lines at RAM won’t be getting any shorter. But hating Obama in these parts is good politickin.”

Skeens runs through a list of mountain folk who can’t afford health care. One is a breast cancer survivor who hasn’t had a screenings in years. His grandfather, a retired electrician and coal miner, had also camped out at RAM clinics to get help.

Odd that this is the way I found neighboring West Virginia when I moved there with my family from suburban Washington, D.C. in 1962. Just as it was then, the riches that should have helped pay for local medical care went out of state. Much of the coal left by railcar or barge. Now, natural gas released by hydraulic fracking will find its way to fast-growing Southeastern cities or perhaps overseas thanks to new proposed pipelines such as a $5 billion project pitched in part by Dominion Resources.

While I have never been to the Wise County RAM clinic, I did happen to drop by one in Pikesville, Ky., a coalfield area that is one is Kentucky’s poorest county. It is not far from Wise. I was busy researching a book on Richmond-based Massey Energy, a renegade coal firm, in June 2011.

Photographer Scott Elmquist and I were on our way from Kentucky to an anti-strip mining rally in West Virginia when we noticed the RAM signs. More than 1,000 people had started lining up at the doors around 1:30 a.m. at the local high school.

It was packed inside. A Louisville dental school had sent more than 50 dental chairs that lined the basketball court. Some of the patients said they were caught in a bind: they had jobs but didn’t have enough health coverage and couldn’t pay for what they needed.

Since then, there’s been some good news. Unlike Virginia, whose legislature has stubbornly refused to expand Medicaid to 400,000 residents who need it (supposedly in a move to tighten federal spending), Kentucky expanded Medicaid last year. Now, 375,000 more people have health insurance.

Not so in Virginia. People continue to suffer while those with comfortable lives laud the miraculous benefits of capitalism.

Memories of a Klan Rally

KlanersBy Peter Galuszka

I was looking through a some old clips today and spotted this Golden Oldie that ran in the Jan. 30, 2000 edition of BusinessWeek magazine where I worked for about 15 years. Bloomberg now owns rights to it and I hope they don’t mind me re-running it.

Mindful of the lofty rhetoric one reads on this blog about being Southern and symbols, I thought this might be an interesting read about how nothing is sacred. Not the Confederate Flag. Not even Stonewall Jackson.

It also shows how little things change. The flag and statues of Confederate generals are still flashpoint issues and people like GOP presidential candidate hopeful Donald Trump are running around making offensive statements about Mexican immigrants. (For the record, the late U.S. Sen. Robert Byrd of West Virginia had been a Klan member early in his life and he later renounced his membership).

The Ku Klux Klan rally I covered was on Nov. 6, 1999.

Here goes:

Letter From West Virginia

The High Price of a Klan Rally

Studying me solemnly from across his desk, Thomas A. Keeley sighs and says in his West Virginia twang: “I have to take care of my people.” I kid Tom that he sounds like the sheriff who was battling coal-company thugs in the 1988 movie Matewan. Tom grins. He puts up with me, since we go back 35 years–to grade school here in Clarksburg, a town of 18,000 nestled in the hills of central West Virginia. Today, Tom, as president of the Harrison County Commission, is the county’s top elected official, and I’ve come to find out how he intends to take care of “his people” in what could be one of the biggest crises Clarksburg has ever faced.

In two days, the Knights of the White Kamellia, one of 55 units of the Ku Klux Klan, will hold a rally on the front steps of the Harrison County Courthouse in downtown Clarksburg. The Klan picked the spot because of its dramatic statue of Confederate General Thomas J. “Stonewall” Jackson, born in Clarksburg in 1824. The Klan figures that Stonewall, riding north against the Yankees, will make a dandy prop for its November rally. So will the 70 state troopers, city police, and county deputies who will be providing the security. The Klan believes that the police presence not only will make it appear to be an oppressed group but will also increase the media coverage.

The city-county expense for the Clarksburg rally will be about $50,000–pin money compared with what 40 cities spent in 1999 hosting the Klan. Security at Cleveland’s August rally ran $600,000, although only 21 Klansmen showed up. But Harrison County is in the heart of the Appalachian poverty belt, and it desperately needs the money for other things. The hamlet of Marshville, for example, badly needs help, since its groundwater has been polluted by coal mines. “It’s costing us a lot of money to accommodate a bunch of white-trash bigots, and you can quote me on that,” says Tom, leaning back in his rumpled suit.

But he doesn’t have much choice. Not only is the Klan making noise, but a far more dangerous ultra-right-wing group is also active locally: the Mountaineer Militia, a cabal of heavily armed survivalists ready to fight what they consider excessive federal power. Militia members from the Clarksburg area hatched an Oklahoma City-style plot in 1996 to bomb the new $200 million FBI fingerprinting center in Clarksburg. The installation employs 3,000. After the FBI infiltrated the group, five men were convicted or pleaded guilty to explosives charges; one was convicted of selling blueprints of the center.

IDENTITY CRISIS. Taking a cue from New York Mayor Rudolph Giuliani, who has also had to deal with a Klan demonstration, Tom is forbidding the wearing of masks at the rally, figuring that fewer Klansmen will show up if they are not able to keep their identity secret. At this point, nobody is sure who they are. The only known Klansman is Cletus Norris, who wrote Tom the letter announcing the rally, using a post office box in Grafton, 20 miles to the east. Norris is a former road worker, once employed by the city. The next day, as I drive to Grafton in search of Norris, I try to recall if the Klan had been active when I lived here back in the 1960s.

In the Deep South at that time, the Klan was bombing black churches and killing civil-rights workers. But from what I remember, not much happened here. Besides, Klansmen in these parts traditionally weren’t so much antiblack (there were few blacks here) as anti-Catholic. That was in reaction to the Italian immigrants who streamed into the area in the 1800s to build the Baltimore & Ohio’s main line to St. Louis, taking jobs away from Protestant backwoods types. The animosity was resolved naturally over the years as boy met girl and both defied ethnic hostility. Today, largely due to intermarriage, 40% of local folk are of Italian descent.

As luck would have it, driving down a Grafton street, I spot a parked gray Dodge pickup with bumper stickers bearing Confederate flags and the slogan, “Racial Purity Equals American Security.” Bingo! I walk up the crumbling concrete stairs to a yellow clapboard house and knock on the door. A slim man with a reddish-blond beard answers. “I am the Grand Dragon,” confirms Cletus Norris. He invites me to sit in the warm autumn sun on the front porch of his parents’ house. The experience is unnerving because for an hour, this 33-year-old is talking softly, pleasantly, almost seductively, but is expounding truly hateful ideas. At one point, Norris asks gently, “You aren’t Jewish, are you?” I reply: “No, but I am Catholic.” Norris says: “That’s O.K.”

A Klansman for five years, Norris claims his group is peaceful and interested only in protecting white rights. “Our rally,” Norris reassures me, “will set a lot of minds at ease. They’ll listen to us and see that we’re just normal Christian men.” Their agenda? “By the year 2040, we will be outnumbered by the combined nonwhite races of this country, and whites won’t get a fair shake.” The message is spreading through cyberspace. “We have some people in Europe and Australia, thanks to the Internet,” he says, as he hushes a dog barking inside the house. Norris insists he doesn’t hate blacks, only “race-mixing.” As for Mexicans, the border to the south should be closed. And Jews? “Christ didn’t have one good thing to say about the Jews.”

Later, I contact Mark Potok, editor of The Intelligence Report of the Southern Poverty Law Center, a Montgomery (Ala.) nonprofit that tracks hate groups. He says Klan membership is static at about 5,000, but that 200,000 belong to other hate groups: Membership in those groups is increasing 25% a year.

PEPPER GAS. The following day–rally day–the police are nervous. Clarksburg looks as if it’s occupied by an invading army. Police vehicles include a bomb disposal truck. There are SWAT teams wearing black Wehrmacht-style helmets and face masks. “If things really get out of hand,” says policeman J.P. Walker says at a press briefing, “you’ll hear a siren, and then you’ve got 10 seconds until the pepper gas goes off.” The rally site has three fenced-in pens–one for Klan supporters, one for the press, and one for protesters. Participants must go through detectors, and attendees can’t bring in anything more than a car key.

Right on time, Norris, head up and confident-looking, dressed in white robe, leads the Klan parade out of the courthouse onto the front plaza, right past Stonewall. He is followed by eight Klansmen and two Klanswomen in brightly colored robes and hoods–no masks. About 150 protesters and 20 supporters shout insults at each other. “This country will go down the tubes,” shouts Norris, but he is barely heard above the noise because Tom won’t allow loudspeakers. When a rumor sweeps the crowd that one Klanswoman is a local English teacher (which turns out to be false), she yells good-naturedly: “There’ll be a test Monday morning.”

After two hours without incident and only one arrest–for disorderly conduct–the Klanspeople are escorted to a city parking lot, where they get into three cars, with Missouri, Ohio, and Virginia plates. Norris announces that a rally the next day in Fairmont, 20 miles north, has been canceled. Is that because the mayor refuses to provide security, I ask? “No, we just don’t want to make a nuisance of ourselves,” Norris says. The irony of that is not lost on one police officer. As he waves to the departing caravan, he mutters: “Goodbye, you sons of bitches–and to think I had seats on the 50-yard line at the West Virginia-Virginia Tech game today.”

By Peter Galuszka; Edited by Sandra Dallas