The Decline of Fact-Based News


I’ve been a relentless critic of the mainstream media, which I believe is infected with a liberal bias and has done great damage to this country with its one-sided narratives. But at least the media’s ideological biases are tempered by a journalistic ethos that stresses the need for objectivity, checking “the other side” of the story, and ascertaining the facts. The media may be guilty of cherry picking the evidence, but rarely do reporters make stuff up from whole cloth.

The media’s ability to live up to its journalistic credo is increasingly in jeopardy. According to Elaine C. Kamarck and Ashley Gabriele with the Brookings Institution, total newsroom employment has declined from 43,000 nationally in 1978 (when I was embarking upon my journalistic career) to 32,900 by 2015 — a decline of 26% — even as society was becoming more complex. There still is serious journalism going on, but much of it resides behind paywalls accessible only to elite audiences that can afford the hefty subscriptions.

Meanwhile, the general public relies less upon traditional gumshoe-journalism outlets for their “news” and more upon digital content increasingly imbued with entertainment, such as Jon Stewart’s “The Daily Show” or Rush Limbaugh’s talk radio show. Even those programs, as biased as they are, are at least tethered to reality by a reliance upon video and news clips generated by the mainstream media for source material.

What is especially concerning is the proliferation of unmediated content on email and social media. I can’t count the number of right-wing rants about Obama’s faked birth certificate or some other paranoid obsession that some gullible correspondent has forwarded to me. Distorted information and outrageous lies propagate on the left wing of the ideological spectrum as well.

Social media has accelerated the metabolism of rumor-mongering to a speed faster even than email, often with profoundly negative consequences. A recent comment by Spike Lee, who is promoting a new movie about the epidemic of gun violence in Chicago, struck a chord. Gangsters respond to unfiltered, unmediated Instagram, Twitter and Facebook posts “not by typing something on their phones but by bang, bang, bang,” Lee told CNN’s Anderson Cooper.

With email and social media, people create insular networks of like-minded people who rarely question one another’s biases and assumptions. There are no fact-checking intermediaries in social media. The nature of social, cultural, economic and political reality is so complex that anyone can put a plausible-sounding but profoundly wrong spin on just about any issue. Everyone believes what they want to believe, and society schisms into mutually uncomprehending factions.

I don’t see how it ends well.


Could the Clean Power Plan Double Virginia’s Electric Rates?

coal_powerby James A. Bacon

The Clean Power Plan for reducing carbon dioxide emissions in the nation’s electric power plants could drive up Virginia’s electric rates by as much as 14% per year (non-compounded) on average between 2022 and 2033, according to a new report published by the American Coalition for Clean Coal Electricity (ACCCE). The worst single year could see rates increase by 20%.

“States should be braced to pay higher costs,” said Laura Sheehan, senior vice president for communications for ACCCE, an outspoken opponent of the Clean Power Plan. “Consumers only lose in the Clean Power Plan.” (The state-by-state breakdown can be seen here.)

The ACCCE state numbers reflect the highest of five compliance scenarios explored by NERA Consulting, which used a “state-of-the-art energy/economy model” to assess the impact of the plan. By forcing states to implement their own state-level plans to reach aggressive CO2 reduction goals, the Obama administration is effectively forcing the shut-down of dozens of coal-fired plants around the country in favor of natural gas, solar power and wind power.

The impact is significantly higher than the State Corporation Commission’s estimate last year that rates for Dominion Virginia Power, Virginia’s dominant utility, could increase by 22% in total, not to mention the Environmental Protection Agency’s (EPA) forecast that rate increases would be so modest that, when energy efficiency initiatives were included, rate payers actually would see an 8% reduction in their electric bills.

ACCCE gave two main reasons why its forecast is so much higher than the EPA’s. First, it thinks that the EPA is under-estimating the cost of achieving energy-efficiency savings. Second, ACCCE assumes more coal plants will be retired as a result of the plan than EPA does.

Bacon’s bottom line: In effect, ACCCE is saying that the Clean Power Plan single-handedly could increase Virginia electric rates by 150% over an 11-year period. That 150%-number represents the worst case of the five scenarios explored. I’m not knowledgeable enough to critique ACCCE’s econometric model but, given the plummeting costs of solar and wind power, I find that number highly implausible.

On the other hand, I find the Obama administration’s happy-face scenario that the EPA can shut down dozens of coal-fired plants and force-feed wind and solar into the nation’s electric power system without impact on rate payers to be a fantasy as well.

The ultimate impact of the Clean Power Plan is unknowable — humans just aren’t that good at economic forecasting. Moreover, everybody’s forecast is subject to bias. The Obama administration and allied environmental groups have a vested interest in minimizing the impact. ACCCE has a vested interest in exaggerating the impact. The SCC, charged with balancing the interests of the rate payers with reliability and environmental considerations, has the least overt bias, but even the commission has its blind spots. What the ACCCE study does accomplish is to broaden the range of potential outcomes.

Black Students Issue Demands to VCU

Black VCU students talking to President Michael Rao. Photo credit: Richmond Times-Dispatch.

Black VCU students talking to President Michael Rao. Photo credit: Richmond Times-Dispatch.

by James A. Bacon

With the occupation of the Virginia Commonwealth University president’s office by an estimated 30 African-American students yesterday, the national politics of racial polarization has come to Richmond. Expressing solidarity with the black students at the University of Missouri, the black VCU students say they feel alienated from campus life and abandoned by the university. Given the black anger sweeping the nation, it was just a matter of time.

Race relations are worse now than any time I can remember since the race riots of the ’60s and ’70s. The militancy of the “Black Lives Matter” movement has given rise to a scary backlash by white hate groups, as highlighted by the South Carolina church bombing and the arrest yesterday of two white Richmond-area men for plotting to shoot up or bomb synagogues or black churches. The inflammatory words and actions of one extreme justifies the inflammatory words and actions of the other. The difference is that white extremist groups remain despised and marginalized in our society, as they should be, while the “Black Lives Matter” movement and its offshoots has demonstrated that it can dethrone university presidents.

Because broad sectors of our society, especially our intellectual elites, confer legitimacy upon black militants like VCU’s student activists — giving sympathetic play to their demands in a way they never would for alienated whites — it is only reasonable to subject the militants’ demands to critical scrutiny.

Based on the Richmond Times-Dispatch article, the VCU students expressed three broad sets of demands: (1) They want to double the percentage of black professors at VCU by 2017, (2) they want more funding for cultural organizations and events on campus, and (3) they want VCU to create a “cultural competency” course, which all students must attend. Let’s deal with those one by one.

More black professors. Fifteen percent of the VCU student body is black, while VCU says that only five percent of the professors are black. Students “say it’s often difficult for them to deal with educators who don’t understand their cultural concerns or the experience driving their thoughts and world view.” VCU, they insist, needs to double the percentage of African-American faculty within two years.

The Chinese, Korean and Middle Eastern students at VCU don’t seem to have a problem with the faculty’s cultural experience different from their own, but that’s a side issue. There is a very practical problem with the students’ demand: There are not enough black professors to go around. According to the National Center for Education Statistics, blacks comprised only six percent of full-time instructional faculty in degree-granting institutions in 2013. Granted, that’s one percentage point more than at VCU, so it’s possible that VCU could hire more black faculty. But raising the percentage to 10% is all but impossible. Making the job even harder for VCU is the fact that the scarcity value of black professors gives them a real premium in the academic marketplace, meaning that more prestigious schools with greater resources are likely to outbid VCU.

Accomplishing the goal within two years is literally impossible, even if VCU could achieve the goal demanded by students of ensuring that at least one of three candidates interviewing for a faculty position is black. While it’s true that 7% of PhDs awarded in the United States these days (based upon 2007 data published by the Survey of Earned Doctorates Fact Sheet) goes to to blacks, the distribution of degrees is highly unbalanced: 38.4% of all black doctoral recipients earned a degree in education (double the average for whites), which suggests that VCU will have no trouble making or exceeding its quota for education school professors. But much smaller percentages earned degrees in engineering and the hard sciences, meaning it will be nearly impossible for VCU to consider black candidates for certain fields.

Bottom line: The under-representation of blacks in VCU’s faculty does not reflect “institutional racism” or “white privilege” but the paucity of African-American PhDs. The paucity of African-American PhDs does not represent discrimination against African-Americans in higher ed, a bastion of liberalism and politically correct thinking, but the lower percentage of African-Americans graduating from high school capable of doing PhD-level work.

More funding for cultural organizations. The activists say there is “no effort being made to foster a community for black students.”

Really? VCU’s website lists 621 student organizations, including these:

African & American Student Empowerment Project
Association of Black Social Workers
Black Art Student Empowerment
Black Awakening Choir
Black Graduate Student Association
Black Ice (hip hop dance group)
Black Student Law Association (BLSA)
Minority Legal Students of BLSA
National Association for the Advancement of Colored People
National Association of Black Accountants
National Association of Blacks in Criminal Justice
National Society of Black Engineers

And that doesn’t include the cultural organizations for African students generally, and Ethiopians, Sudanese and Eritrean students specifically.

VCU has no student organizations based on white racial/ethnic identity. I presume that organizations like the Ukelele Club, the Car Club and the Tae Kwon Do Club are open to all, regardless of racial/ethnic affiliation. If there aren’t enough options among the 621 organizations listed to plug into university life, there is nothing to prevent African-American students from starting new organizations, registering with the university, and applying for student government funds like every other organization does. What’s the problem here? Why is it someone else’s responsibility, and not that of the students themselves, to create the kind of community they want? Continue reading

Too Little Density, Too Much Road Surface

Millions of square feet of underutilized pavement cost millions of dollars per year to maintain.

Millions of square feet of underutilized pavement cost millions of dollars per year to maintain.

by James A. Bacon

It goes without saying that New Jersey is dissimilar from Virginia in many ways, so it’s hazardous extrapolating conclusions from one state to the other. But a new study about New Jersey roads co-authored by Smart Growth America and New Jersey Future implies that the Old Dominion could have saved hundreds of millions of dollars yearly in road maintenance expenses had higher-density development been allowed to occur instead of the scattered, low-density sprawl that characterized so much of the state’s growth after World War II.

Using a novel technique for estimating the surface area of road pavement per capita, researchers found that the most densely developed areas of New Jersey maintain about one-third the pavement surface per capita — about 130 square feet of road surface compared to 423 square feet — as the least densely developed parts of the state.

The conclusion is counter-intuitive. Cities seem to be chock-a-block with streets in a way that rural and suburban areas are not. The key is to look at the space devoted to roads on a per capita basis.

States the study, “The Fiscal Implications of Development Patterns: Roads in New Jersey“:

If for the same population and employment levels, New Jersey had directed development into a smaller land area with at minimum 10 people or jobs per acre (still not very dense — single-family homes on quarter-acres lots would meet the criteria), we estimate that the total area of road New Jersey and its municipalities need to maintain would have been reduced by 36 percent, or approximately 1.9 billion square feet. And assuming an average cost of $0.25 per square foot to maintain the roads, the result would have been a $470 million savings statewide every year.

The analysis draws two broad conclusions: (1) local road maintenance costs per capita decrease as activity density increases, and (2) low-density communities have the most to gain by permitting more density.

Bacon’s bottom line: To get a rough (very rough) idea of what a similar analysis would yield for Virginia, consider that the Old Dominion has about twice as many total lane miles as New Jersey (162,000 compared to 86,000) and that the Virginia Department of Transportation (VDOT) is budgeted to spend $2 billion a year in 2015 (including city and county street payments) on maintenance.

Of course, it’s impossible to go back and tear up the development of low-density areas of Virginia, so the study is academic to some degree. On the other hand, this kind of analysis should guide future investment. Just as Virginians today are paying for poor policy decisions made over the past five decades, future Virginians will pay for our decisions.

I do quibble with the way the authors state their case: It says these savings could have been achieved had New Jersey “directed” development into denser development patterns. I don’t like the idea of government directing how and where people should live. But that doesn’t change the larger point that denser communities cost less per capita on road maintenance than low-density communities. The way to frame the issue in Virginia is this: Had local zoning policies not directed growth into low density areas, average population densities would be higher, less road would have been required, and maintenance costs would be lower.

Was $100,000 in Federal Research Grants Diverted to an Indian Community College?

Jagadish Shukla in his native village of Mirdha, in a 2003 New York Times photograph.

Jagadish Shukla (left) in his native village of Mirdha, in a 2003 New York Times photograph.

by James A. Bacon

George Mason University climate scientist Jagadish Shukla isn’t under congressional scrutiny just for paying himself handsomely with federal research funds over and above his university salary, he is also being questioned about donating $100,000 to his pet education charity in India.

Shukla attracted considerable notoriety as the lead author of a letter to President Obama urging a federal investigation into major energy corporations under the RICO statute for “knowingly deceiving the American people about climate change.” Climate skeptics quickly hit back by drawing attention to his pocketing of $250,000 in salary and compensation from GMU as well as $314,000 as president of the federally funded Institute for Global Environment and Society (IGES) in addition to paying his wife Anastasia Shukla $146,000 in IGES funds.

On October 1, Rep. Lamar Smith, R-Texas, chairman of the House Committee on Science, Space and Technology, mailed a letter asking Shukla and IGES to preserve a “full and complete record of relevant communications” should the committee request them. Smith followed up with another letter, dated October 19, to request documents relating to the alleged shifting of $100,000 in federal grant money to the Institute for Global Education Equality of Opportunity and Prosperity in 2014, which then allegedly transferred the funds “to a school in India that was apparently founded by Dr. Shukla.”

“It appears that grants provided to IGES are not serving the intended purpose of providing services to the public,” wrote Smith. “Instead, taxpayers appear to be picking up the tab for excessive salaries, nepotism, questionable money transfers, and political activity while receiving little or no benefit.”

“The public expects non-profit organizations that receive taxpayer money to exercise responsible stewardship of their tax dollars,” he continued. “As the Committee is charged with investigating waste and abuse in agencies under its jurisdiction, I have initiated this oversight regarding grants received by Dr. Shukla.”

The query by Congressional Republicans occurs against the backdrop of a highly partisan debate over climate change. For years, climate warriors have tried to discredit skeptics by linking them to giant fossil fuel companies, with the implication that their arguments were tainted by self interest. The latest iteration of that argument, advanced in books and newspaper articles, is that Exxon Mobil knew the dangers of man-made climate change years ago but misled the public in a manner similar to the way tobacco companies hid the link between smoking and cancer. Exxon Mobil has heatedly denied the charges, responding that journalists cherry picked facts to fit their narrative. The letter signed by Shukla and 19 other climate scientists, including five from GMU, urged the Obama administration to prosecute energy companies if they were found to be lying to the public. Since then, New York State Attorney General Eric Schneiderman has subpoenaed documents from the oil giant to determine if the company lied to the public.

Skeptics have countered by arguing that research by climate alarmists is biased by the endless quest for federal research grants. Given the capture of the federal bureaucracy by climate alarmists, they contend, only research supporting the prevailing orthodoxy gets funded. Through his non-profit vehicle, IGES, Shukla has been a major beneficiary of federal funding, which he has used to fine-tune computerized climate models for forecasting global warming. As Shukla’s handling of the grant illustrates, skeptics contend, climate scientists aren’t pure either; they, too, pursue their self interest.

IGES describes itself as a not-for-profit organization “dedicated to climate research in service of society.” The institute was established to “improve understanding and prediction of the variations of the Earth’s climate through scientific research on climate variability and climate predictability, and to share both the fruits of this research and the tools necessary to carry out this research with society as a whole.”

In its 2014 Form 990 filing, IGES listed a $100,000 grant among its expenses, although it did not specify to whom the money was given. The Smith letter suggested that the recipient was the Institute for Global Education, Equality of Opportunity, and Prosperity. That group, which lists Anastasia (Anne) Shukla as its secretary, describes its mission as alleviating poverty, educating the public about the sources of poverty, establishing an education center in Washington, D.C., and “supporting Gandhi College in the Ballia district of Indian to provide education and training to poor rural students, especially women.” Continue reading

Surfing the Data Tsunami

You can either ride the wave...

You can either ride the wave…

by James A. Bacon

Data Crush is coming, and it gives us a once-in-a-lifetime opportunity to transform aging and decrepit institutions, designed for the mid-20th century. As futurist Chris Surdak argues in the previous post, the “digital trinity” — mobile computing, social media and advanced analytics — is sweeping all before it. Digital-driven innovation is outpacing the ability of our ossified structure of government, laws and regulation to keep up. Insofar as antiquated institutions are failing us, this is a good thing. But Surdak, an evangelist for the digital future, warns that every silver cloud has a dark lining.

Either you're riding the wave, or you're crushed by it.

…or be crushed by it.

Insurance companies have the capacity to collect, store and analyze unprecedented volumes of data. At present, they utilize their own data to advance limited aims such as negotiating rates with hospitals and configuring networks of low-cost providers. Soon they will supplement internal data with social media and other sources to gain insights into sociological and behaviorial  dimensions of healthcare, and then with masses of data from fitness trackers such as FitBit and Jawbone that record pulse, blood pressure, and blood chemistry metrics like glucose levels. While these technologies raise privacy concerns aplenty, consumers seem more than willing to barter away their rights in exchange for the benefits provided by these technologies. By the time politicians and lobbyists begin to grapple with these issues, Surdak argues, entire industries will be disintermediated and transformed.

Virginia can either ride the wave or let it wash over us. We can either anticipate the data crush and seek to guide it in socially positive ways, or we can accept whatever comes.

Right now Virginia’s political system is locked in a 20th-century, zero-sum debate over how to allocate the costs of health care — should Virginia expand Medicaid? Should we scrap the Certificate of Public Need regulatory process for hospitals? Almost no one is thinking about how to make the system work more efficiently to drive down costs and improve incomes in a way that would benefit everyone. (When I say “almost no one,” I have to acknowledge exceptions like Del. John O’Bannon, R-Henrico, a prime mover behind Virginia’s all-payer database, and former Virginia Secretary of Technology Aneesh Chopra, co-founder of Hunch Analytics, which applies Big Data to the educational and health care sectors.)

To my knowledge, no other state is taking the lead in thinking about the public policy implications of the Data Crush. No other state is trying to visualize the future, much less to grapple with the legal and ethical issues created by the tidal wave, much less how to ride the wave and re-shape first the insurance industry and then, leveraging the power of insurance, the health delivery system. Remember, despite the intrusion of the Affordable Care Act into the health insurance marketplace, private health insurance is still regulated by the states. Virginia still controls its destiny for private insurance.

Yes, the health care system is mired in the quicksand of subsidies, cross-subsidies and over-regulation that makes it hopelessly wasteful and unresponsive. But the Data Crush is inexorable. The potential exists to create powerful win-win-win social outcomes. Let us take advantage of this opportunity if we can.

How the Digital Trinity is Transforming Health Insurance

surdakby Christopher Surdak, JD

In his recent post, “The Politics of Big Data,” my friend and colleague Jim Bacon asked some pertinent questions regarding how our government, and our society at-large, can put data to use for the common good. In a fairly short discourse Jim hit on a range of explosive topics, from privacy, data sovereignty, property rights, Universal Service, government regulation and legislation, universal health care, Obamacare and Medicare/Medicaid, predictive analytics and preventative medicine, and more. Each of these could fill a book in their own right; I should know, as I’m working on those books right now!

Of all of the issues raised by this discussion, the one that immediately came to mind was that of the use of our individual data to support the effective delivery of healthcare. As I have written and spoken of extensively in the recent past, healthcare stands to be the industry most disrupted by the application of Big Data in the coming decade. (Indeed, I’m keynoting a discussion on exactly this disruption at the American Health Information Management Association information governance conference this week.) In no other industry is so much valuable information put to so little use, for so little gain, at so much cost, thereby leading to suffering, the waste of human life, and the ineffective expenditure of so much treasure.

Why is this so? Why is our health system so sickly when compared to that of other countries? Why does healthcare seem to extract so little value from information, when compared to other industries? Is it from too much government regulation, or too little? Is it from the influence of commercial special interests such as the payers, or the professional special interests of practitioners, such as the AMA? Is it because our technologies cannot meet our needs, or is it because we are not prepared to accept the implications of those technologies? I would argue that all of these factors are at play in this discussion; that all of the ranting that accompanied Jim’s post were all equally spot on, and all completely off the mark.

All of these positions are equally accurate, and equally pointless in the real world. Whether healthcare providers put patient data to work for the common good or their own good is irrelevant; it will be put to work in any event, with significant unintended and extremely disruptive consequences. Whether special interests or patients will benefit from the use of data is not open to question. The answer is: both will. Whether or not our privacy will be sacrificed or not is also a pointless question; of course it will. And finally, whether or not we will willingly give up our privacy in order to gain these benefits from our data is a further pointless question; we already have.

Disruption in Insurance: The Canary in the Coal Mine for Healthcare

The best example I can give of what WILL happen in healthcare over the next decade, equally in Virginia as with the other 49 states, can be seen in what is rapidly taking over the insurance industry across the country. Insurance is an old-school, highly-regulated, data- and money-intensive industry. Insurers have both access to massive amounts of very private information on all of us, and intense motivation for putting that data to use. The potential for profit, and hence abuse, is exceedingly large.

But, the motivation for using our data isn’t necessarily nefarious. Insurers look at each of us to determine our risk profiles so that they can both make money (that is, remain solvent so their checks to benefactors or debt holders don’t bounce) and provide coverage to all segments of the population at affordable prices (or at least the perception of affordability).

The regulatory framework that governs the insurance industry is well over a century old. It is state-based, state-enforced, and is designed to provide universal coverage to people from all walks of life. If you drive a twenty-year-old pickup truck, you probably pay proportionately less than someone who drives a new European sports sedan. If you’re a 60-year-old who smokes a pack a day and loves Miller Time, you’re likely to pay more for your life insurance than a 24-year-old jogger and yoga nut. Our regulatory framework has been designed to try to make insurance available and fair for all, and to ensure that insurers remain profitable, but not excessively-so.

Despite all of this, insurance is going through a fundamental, massively disruptive, and permanent transformation right before our eyes. This transformation is being driven by what I call the Digital Trinity of mobility, social media and advanced analytics. These three technologies trends are completely transforming how we live, work, play, and interact with our world, and they are causing enormous unintended consequences across our entire society. These changes are comprehensive, and old-school, hard-line, heavily regulated industries such as insurance are the MOST likely to be disrupted, rather than the least likely.

To see these disruptions consider this. Car insurers have deployed smartphone apps that allow them to track the driving behaviors of their customers in real-time, turn by turn. These apps keep track of how fast you accelerate, how hard you brake, how fast you drive down the residential streets of your neighborhood, and whether or not you text or talk while driving. These apps create huge amounts of extremely sensitive data, they are massively invasive of your privacy, they provide an enormous source of information for discriminating against you in setting your insurance rates; and they are massively popular.

If I told you three years ago that car insurance companies soon would be tracking all of this information on the drivers that they cover, you might think I was crazy. If I then told you that customers would sign up for such apps by the tens or hundreds of thousands, in order to gain a discount in their rates, you’d probably think I was certifiable. Americans are voluntarily giving up extremely intimate details on their behavior, surrendering their Constitutionally inalienable rights, and opening themselves up to all manner of government and commercial scrutiny in order to save 15% on their car insurance? Yes they are, in droves. You may think this sounds crazy, and you’d be right.

Yet, this is exactly what is going on right now. Innovators such as Progressive Insurance started these behavior-tracking apps, providing discounts to drivers who demonstrate good behaviors. These apps have been so successful, that now all insurers are scrambling to deploy similar apps with similar capabilities, while they still have time. Continue reading

Why Is GMU Stonewalling?

stone_wallby James A. Bacon

Two months ago, Jagadish Shukla, a George Mason University professor, was one of twenty climate scientists to affix their signatures to a letter calling for a federal investigation into “corporations and other organizations that have knowingly deceived the American people about the risks of climate change.” It was imperative, stated the letter, that “these misdeeds be stopped as soon as possible so that America and the world can get on with the critically important business of finding effective ways to restabilize the Earth’s climate.”

Outraged by the assault on free speech, climate skeptics brought to light some troubling facts about Shukla’s activities. Not only did Shukla take in $250,000 in salary and compensation from GMU, he paid himself $314,000 in 2014 as president of the Institute for Global Environment and Society (IGES), the recipient of generous federal grants, and that doesn’t include the $146,000 salary paid to his wife Anastasia Shukla.

A month ago, the controversy jumped from the Internet to the political realm when Congress got involved. Rep. Lamar Smith, R-Texas, sent a letter informing Shukla that it was “foreseeable” that the Committee on Science, Space, and Technology would investigate him, along with IGES, for using science-research monies provided by taxpayers while participating in partisan political activity. Although Shukla later stated that he signed the letter in a personal capacity, he did identify himself as a GMU professor, and he did post the letter on the IGES website.

The Smith letter asked Shukla/IGES to preserve a “full and complete record of relevant communications” should the Committee decide to request documents. The request encompassed all e-mail, electronic documents, and datacreated since January 1, 2009. The congressman also asked Shukla to exercise reasonable efforts to notify employees, former employees, contractors and third parties to do the same.

Shukla is a high-profile member of the GMU faculty, whose combined salary/compensation exceeds that of GMU’s president and makes him among the highest-paid professors at the university, if not the highest paid. If you’re looking for a local hook on this story, Shukla serves on Governor Terry McAuliffe’s Climate Change and Resiliency Update Commission, which is making recommendations to the governor regarding state climate change-related policy.

While the Congressional committee seems to be focused on Shukla, I would suggest that certain questions should be put to his employer, George Mason University.

  • What is GMU’s policy regarding faculty drawing salaries from outside organizations?
  • Did Shukla disclose to GMU that he and his wife were drawing salaries from IGES?
  • Did GMU review the arrangement to ensure that it complied with the university’s disclosure requirements, conflict-of-interest guidelines and other rules?
  • Has GMU been alerted to the congressional request for Shukla and IGES employees to preserve all electronic documents?
  • Do any such documents reside on GMU servers, and what measures, if any, has GMU put into place to ensure that the documents are preserved?
  • Has GMU “lawyered up”? Has Shukla “lawyered up?” If so, is GMU covering Shukla’s legal expenses?

Let’s crowd source this bad boy!

Contacting three separate people on the university’s communications team over the past three weeks, I have tried repeatedly to get answers from GMU. I received no answer from two spokepersons, and a non-responsive email response from a third. Clearly, GMU is stonewalling. To get answers of any kind, I apparently have no choice but to file FOIA requests. I expect that GMU will maintain that certain correspondence is privileged, either because it pertains to “employee” matters or “legal” matters. I get only one shot at this, and I want to make sure I craft the FOIA request correctly.

I would invite readers to crowd-source this story. If you dig up something worthwhile through Internet research, or if you have suggestions on how to word the FOIA request, let me know in the comments.

Virginia Hospital Profits Surged 11% in 2014

hospital_profitsSpeaking of government-coddled industries…. Virginia’s hospitals increased annual profits 10.7% in 2014 compared to the year before, according to the most recent data compiled by the Virginia Health Information data and reported by the Thomas Jefferson Institute for Public Policy (TJI).

“Hospitals campaign for Medicaid expansion, and want to maintain the state’s control over how hospitals and doctors can invest in new equipment and additional patient beds under the current Certificate of Public Need (COPN) law, saying their financial situation is so precarious that they need these programs to survive,” said Michael Thompson, president of the TJI. “But the financial numbers from the hospitals themselves seem to tell a different story.”

Bacon’s bottom line: I don’t begrudge strong profits — profits are necessary for a functioning market-based economy. But these are monopoly/oligopoly profits. I do begrudge monopoly profits gained by throttling the competition. Like the higher ed system (see previous post), Virginia’s hospital sector has prospered through rent seeking.

There are two ways to go from here. One is to increase the government role as mediator between hospitals, patients and health care funders in divvying up the revenue pie — a zero-sum game. The other is to evolve toward a market system based upon competition, productivity and innovation that drives down costs and improves outcomes — a winning formula for all.

If General Assembly Republicans want to thwart Medicaid expansion next year — as they rightly should, on fiscal grounds — they need to paint a vision for a market-based health care system. I’ve seen baby steps in that direction like the All-Payer Claims Database. But we’ve got a long way to go. Where’s the vision? Do Republicans offer more than, “Repeal Obamacare,” and “Just say no to Medicaid expansion?”

To win the war of ideas, you…. need ideas. The Dems have bad ideas. But bad ideas trump zero ideas. C’mon, Republicans, up your game.

Update: The Virginia Hospital and Healthcare Association has responded to the TJI report. While the overall industry remains profitable, states the VHHA, many local hospitals, mostly rural, are unprofitable. Among rural providers 17 of 37 operated in the red in 2013. Meanwhile,”the financial  challenges that produce negative operating margins are real and worsening.” See the full response here.

The Tragic Political Economy of Higher Ed

Lynchburg College President Garren. Photo credit: Wall Street Journal

Lynchburg College President Kenneth Garren. Photo credit: Wall Street Journal

by James A. Bacon

Lynchburg College President Kenneth Garren was sipping wine at a reception last year when he bumped into Senator Mark Warner. He button-holed the senator and urged him to oppose an Obama administration plan to create a ratings system for U.S. colleges and universities. Two months later, under pressure from Garren and other Virginia college presidents, Warner declared his opposition to the plan, reports the Wall Street Journal today.

The higher education system has emerged as one of the most effective lobbying forces in Washington, spending more than $73 million yearly on lobbying and employing more than 1,000 lobbyists — more than any other industry in the nation save drug manufacturing and technology, the WSJ says.

Moreover, with a presence in every state and every congressional district, higher ed can mobilize enormous grassroots support. Rep. Robert Goodlatte, R-Roanoke, told the Journal that he received a letter opposing the Obama plan from every school in Virginia, and he met with several college presidents on the matter.

Federal loans and grants to college students now runs at $134 billion a year, making higher ed one of the biggest recipients of federal assistance of any industry in the country. With student debt surging way past the $1 trillion mark and student defaults climbing into the billions, the Obama administration, like administrations before it, has pushed for more transparency and accountability in higher ed by publishing data to allow students and parents to make more intelligent consumer decisions.

The higher ed lobby defeated Obama’s plan to rate colleges, although the administration did end up publishing significant data without the ratings. Colleges have opposed such transparency and accountability measures on the grounds of protecting student privacy or the impossibility of making fair comparisons between colleges serving different market niches. Government should not be in charge of weighing the factors that go into determining colleges’ performance, the industry says.

The colleges’ arguments have some merit, but they overlook the obvious: He who pays the piper calls the tune. When Uncle Sam supports the industry through $134 billion yearly in tuition assistance (not to mention billions in research grants), Uncle Sam will want a say in how that money is spent.

While much of the rest of the country has stagnated economically over the past 15 years, higher ed has been a growth sector entirely due to federal largess. But costs have ballooned, tuitions have soared and a generation of students is hobbling its future with debt. Higher ed doesn’t want to give up the money or to be held accountable to its students, and the federal government can’t afford to dole out billions without a measure of accountability, so conflict is inevitable.

As the federal leviathan seeks to impose its will, the industry mobilizes to defend itself, and yet another sector is sucked into the rent-seeking maw of Washington politics. Higher ed, a bastion of economic privilege, is fighting to maintain that privilege. The sector is morphing into another special interest like all the others