Tag Archives: James A. Bacon

The Movement Grows

City living -- not just for liberals anymore.

City living — not just for liberals anymore.

Political and philosophical conservatives in the United States are far more likely to live in rural areas or suburbs than in the city  – and that augurs ill for the conservative movement and for America, observes Michael Hendrix, in the inaugural guest blog post in a new blog, “New Urbs.”

Cities are the centers of wealth creation and cultural influence in the modern world. By concentrating disproportionately in small towns and rural homesteads, conservatives isolate themselves from the institutions that dominate the country. “If conservatives feel like they’re on the outside looking in on culture-making now, just wait a decade or so—it’ll get worse,” Hendrix writes. “Both for our culture’s sake and our own, conservatives should learn to stop worrying and love the city.”

If Hendrix’s contribution is any indication, New Urbs is likely to make a lively contribution to the small but growing ranks of conservatives who advocate development of more compact, urbane, fiscally sustainable communities.

The blog is an initiative of The American Conservative. Explains Associate Editor Jonathan Coppage:

This is an emerging discussion on the right, and we’re excited to take a leading role in pushing it forward. Talk of conservative reform can only get so far before it accounts for the actual ways in which people live. Transit, development, zoning codes all shape our culture, and are ripe for conservative engagement. Conservatives have too often neglected cities to their own disadvantage. We aim to fix that.

Keep it coming!

Update: I just came across by a great essay by Matt Lewis (a denizen of Alexandria) explaining why New Urbanism (an urban design movement which bears much in common with Smart Growth) “isn’t just for liberals.” Conservatives, he argues, should embrace it, too.

– JAB

Tim Kaine Versus the Mole People

mole peopleThe Silver Line extending the Washington Metro to Tysons is scheduled to open Saturday, and people are getting excited about the impending event. Mass transit supporters are hailing the momentous achievement, which provides the impetus to transform Virginia’s largest business district into a more balanced, livable and walkable community. Indeed, there is much to celebrate.

But others are lamenting the plundering of Dulles Toll Road commuters to pay for much of the project, especially the soon-to-start second phase to Washington Dulles International Airport and beyond. Critics have ample grounds for their bitterness. The Silver Line constitutes a massive wealth-redistribution scheme. Riders and property owners enjoying windfalls in property values will pay for only a fraction of the cost of building and operating the system.

Some day, someone will write a book about the Silver Line project and the extraordinary political maneuvering it took to make it happen. When he (or she) does, they’ll find a treasure trove of source material in the Library of Virginia. The state library is archiving 1.3 million emails generated by Governor Tim Kaine and members of his administration. The Kaine Email Project is making those emails searchable and accessible online.

Out of the Box, the Library of Virginia blog, is highlighting correspondence regarding selected topics, including the furor over whether to build the Silver Line under ground or above ground where it ran through Tysons. The controversy was covered heavily by the press but the Kaine Email Project gives a closer look at Kaine’s decision-making process. In a quick and superficial perusal, I didn’t find any great surprises here — Kaine was a pretty straightforward guy — but the emails do show whom he communicated with as he worked his way through the controversy.

This email dated Dec. 12, 2006, and addressed to Chief of Staff Bill Leighty, Transportation Secretary Pierce Homer, Communications Director Delacey Skinner and Counselor to the Governor Larry Roberts, provides some color.

Yesterday in our leadership meeting, we talked about the rumor that the [Federal Transit Administration] would send me a letter saying “the choice not to pursue the tunnel was yours alone and we had nothing to do with it.” Last night, Lin Holton gave me a letter circulating in Northern Virginia. The Tysons Tunnel group asked William Coleman — former Secretary of Transportation under Nixon and Ford — to write a letter that seems to suggest that the tunnel or no tunnel decision was not the FTA’s but the Governor’s. This may be the rumored letter — or it may give a hint of what a forthcoming FTA letter would say. I will give the letter to Delacey — she can provide copies to you.

At some point, we will be asked for some statement on the whole thing. Just to have a statement ready if and when we need it — for a press response or for a letter to the Mole People or someone else — I thought I would put into my own words a quick narrative of the process up to this point, trying to be diplomatic and not heedlessly hack anyone off (i.e., Congress people, Fairfax, FTA, etc.)

It’s fascinating to see Kaine grappling with rumors, responding to the circulation of letters by advocacy groups and referring to “Mole People.” Is that what he called the tunnel zealots? Pretty funny.

– JAB

The Happy Map

Just one more happiness post, and I’ll quit for now. This map comes from the study mentioned two posts below, “Unhappy Cities,” by Edward L. Glaeser, Joshua D. Gottlieb, and Oren Ziv, published by the National Bureau of Economic Research. happy_map When viewed as a geographic phenomenon, happiness appears to be associated with the Southeastern and Inter-Mountain states. Glaeser et all examine a variety of economic and demographic variables to explain the differences and find some weak correlations but don’t come up with any compelling conclusions. One variable the authors did rule out was income inequality — it doesn’t explain life satisfaction at all. I wonder if the geographic differences are cultural. Could there be a link between happiness and friendliness? – JAB

More Happiness

In celebration of the widespread happiness in Virginia, I’m posting all the “Happy” videos from around Virginia that I could find. If I’ve missed one, let me know and I’ll add it! – JAB

The RVA Happy video:

The Fredericksburg Happy video:

The Lynchburg Happy video:

The Virginia Beach Happy video:

A Hampton Roads Happy video:

The Bel Air Woodbridge Happy video:

I didn’t realize until compiling this post that Happy videos are an international phenomenon. They are infectiously fun to watch — a great way to waste a work-week morning. Beside videos celebrating happy cities, you can find happy Virginia State University, Virginia Union University, Henrico Doctors’ Hospitals, Meadowbrook High School, NBC-12 News, Virginia Tech Muslim videos and probably a whole lot more.

By the way, Pharrell Williams, composer-performer of Happy, grew up in Virginia Beach. Here is is on CBS Sunday Morning talking about growing up in the color-blind suburbs. You gotta love this guy — you can see why he’s the one who created the Happy song!

(Hat tip to LarryG for sharing the Fredericksburg video.)

Happy!

We bitch and moan a lot on Bacon’s Rebellion about the failings of our fair state, but the Old Dominion must be doing something right. Researchers at the University of British Columbia and Harvard University found that residents of Virginia metropolitan areas are the happiest in the country based on self-reported survey data on subjective well-being gathered by the Centers for Disease Control and Prevention.

Dig this! Richmond-Petersburg ranked No. 1 in happiness of all metros with more than one million people. I can vouch for that. I love my home town and I’m darned happy here. It isn’t perfect — as anyone who reads this blog will discover in short order — but it’s a great place to live.

Number two on the list of large metros — Hampton Roads! How awesome is that?

Number three — Washington, which, of course, includes the Northern Virginia suburbs. The traffic is awful, but everything else must be great!

Now for the pièce de résistance — among smaller metros, Charlottesville ranked highest in reported happiness.

That’s a clean sweep, folks! Who needs “Best States for Business” when you’ve got the happiest citizens?

– JAB

Fully Funded? Not Even Close

stock prices2by James A. Bacon

Earlier this month the Virginia Retirement System (VRS) announced that it had generated a 15.7% return on its investment portfolio over the previous year, bringing its total assets to $66.1 billion. It’s always good news when the pension fund for 600,000 state and local employees and retirees goes up, not down. That’s money that state and local governments won’t have to extract from taxpayers.

But pension-fund investing is a game for the long haul, and Jeff Schapiro raises interesting questions in his column in the Times-Dispatch today. Did a decision after the 2007 stock market crash to shift some assets away from stocks and bonds into “alternative” investments like hedge funds leave more than $6 billion on the table?

Schapiro quotes Ed Burton, a former VRS chairman, who criticized the investment strategy, which had the effect of moving from a portfolio of 70% stocks/30% bonds to a more complex scheme equivalent to 65% stocks/35% bonds. As a consequence, the VRS benefited less from the Obama-era bull market in stocks than it could have. It also paid millions of dollars in higher fees charged by hedge fund managers.

While the VRS had a strong year last year, over the past three years its returns have averaged a more modest 8.6%.

Investment strategy can can be argued back and forth forever without ever resolving anything. Maybe the VRS board made the right decision, maybe it didn’t. But there’s a bigger issue that Virginians need to be thinking about. Markets go up and markets go down. For the past few years, aided by an expansionist Federal Reserve Board policy, markets have gone up. Perhaps stocks and bonds will depart from 300 years of history and never go down again. But a prudent man wouldn’t bet on it.

The VRS assumes that it can generate annualized investment returns of 7% for years to come. That assumption is actually more conservative than the investment returns assumed by many states, so the VRS board deserves credit for that. But the Commonwealth of Virginia’s assertion that the VRS will be “fully funded” by the 2018-2020 biennial budget is exceedingly fragile. For starters, the state’s definition of “fully funded” is 80% or more of what the actuaries say is needed to meet pension obligations, as Erik Johnston, director of government affairs at the Virginia Association of Counties, pointed out Monday at the annual conference of the Virginia Chapter of the American Planning Association.

I wonder if the bank would be happy with 80% of my mortgage payment?

The other question is what happens when the Federal Reserve Board reverses years of monetary stimulus, as it has indicated it will do. Everyone agrees that interest rates will go up. But nobody knows how much. That will depend in part upon the strength of the economy — stronger growth will drive up demand for credit and push interest rates higher.

When interest rates go up, the market value of bonds go down. The 30-year bull market in bonds will come to an end. A bear market in bonds also puts pressure on stock multiples (price-earnings ratios), which move inversely with interest rates. It is hard to see how any money manager can replicate the performance of the past few years. All it takes is a few years of sub-7% returns and the VRS goal of “fulling funding” the pension slips farther and farther into the horizon.

Hey, everything may work out just hunky dory. The VRS may be totally vindicated. But there is considerable risk that it will not. Nobody knows the future but we do know one thing: Each percentage point that the VRS falls short of its ROI goals for a $66 billion portfolio translates into a $660 million obligation for state and local government.

How Planners Can Rescue Virginia from the Fiscal Abyss

This is a copy of a speech that I presented to the Virginia Chapter of the American Planners Association Monday, with extemporaneous amendments and digressions deleted. — JAB

Thank you very much, it’s a pleasure to be here. Urban planning is a fascinating discipline. As my old friend Ed Risse likes to say, urban planning isn’t rocket science – it’s much more complex. Planners synthesize a wide variety of variables that interact in unpredictable, even chaotic, ways. In my estimation, you don’t get nearly enough respect and appreciation for what you do

OK, enough with the flattery. Let’s get down to business.

toastThis is you. You’re toast. Unless you change the way you do things, you and the local governments across Virginia you represent are totally cooked. … Here’s what I’m going to do today. I’m going to tell you why you’re toast. And then I’m going to tell you how to dig your government out of the fiscal abyss, earning you the love and admiration of your fellow citizens.

Why You’re Toast

old_people2Here’s the first reason you’re in trouble — old people. Or, more precisely, retired government old people. Virginia can’t seem to catch up to its pension obligations. The state says the Virginia Retirement System is on schedule to be fully funded by 2018-2020. But the state’s defines 80% funded as “fully funded,” which leaves a lot of wiggle room. The VRS also assumes that it can generate 7%-per-year annual returns on its $66 billion portfolio. For each 1% it falls short of that assumption, state and local government must make up the difference with $660 million. As long as the Federal Reserve Board pursues a near-zero interest rate policy, depressing investment returns everywhere, that will be exceedingly difficult. A lot of very smart people think 5% or 6% returns are more realistic. In all probability, pension obligations will continue to be a long-term burden on localities.

potholesSecond, the infrastructure Ponzi scheme — that’s Chuck Marohn’s coinage, not mine — is catching up with us. For decades, state and local government built roads and infrastructure, typically with federal assistance, proffers or impact fees with no thought to full life-cycle costs. State and local governments have assumed responsibility for maintaining and replacing this infrastructure. Well, the life cycle done cycled, and the bill is coming due. We’re finding that we built more infrastructure than we can afford to maintain at current tax rates, leaving very little for new construction.

accotinkThird, after years of delay, serious storm water regulations are kicking in. Local governments bear responsibility for fixing broken rivers and streams like Accotink Creek, showed here. (Yeah, that’s a creek. It’s having a bad day.) Best guess: These regs will cost Virginia another $15 billion. But no one really knows. And it may just be the tip of the iceberg. I recently talked to Ellen Dunham-Jones, author of “Retrofitting Suburbia,” and she noted that a lot of the storm water infrastructure that developers built in the ‘50s and ‘60s is crumbling. The developers are long gone. Someone’s going to have to fix that, too. Guess who?

property_taxMeanwhile, the largest source of discretionary local tax dollars – real estate property tax revenues – is stagnating. According to the Demand Institute, residential real estate prices in Virginia will increase only 7% through 2018 – the third worst performance of any state in the nation. Don’t count on magically rising property tax revenues to bail you out.

In fact, the tax situation is worse than it looks. Demand for commercial real estate is dismal, too. Consider what’s happening to the retail sector. We’re going from this…

shopping_centerTo this..

amazon_warehouse

Every Amazon.com distribution center represents dozens if not hundreds of chain stores closing. It means more vacant store fronts, more deserted malls, less new retail development. Continue reading

Maps of the Day: Condition of Virginia Roads and Bridges

Citing data provided by the White House as President Barack Obama makes the case for more federal transportation funding, the Wall Street Journal has produced these interactive maps showing how the condition of roads and bridges varies widely by state. Virginia’s roads are in relatively good shape (only 12% rated poor) but its bridges are dicey (26% rated structurally deficient or functionally obsolete).

Hat tip: Tim Wise

Chart of the Day: Virginia’s Aging Population

aging

This graph comparing Virginia’s age between 1980 and 2013 comes from Luke Juday’s latest post over on the Stat Chat blog, published by the demographics shop the Weldon Cooper Center for Public Service. I urge you to check out the opening chart in his post to see an animation of the changes year by year. It’s fascinating to watch the bulging Baby Boomer generation crawling up the age ladder.

I would love to see a projection of Virginia’s demographic profile over the next 20 years. We would see the big Boomer blob move up, out of the workforce and into retirement age. The implications of that massive shift cannot be over-estimated. Virginia’s working-age population won’t be increasing in size — indeed, it probably will begin shrinking within a decade. Extrapolate that trend nationally, and you’ll understand why the Congressional Budget Office (CBO) maintains that the structural U.S. budget deficit — “only” $583 billion this year, according to the Obama administration’s updated forecast, will march relentlessly higher within a few years as the growing ranks of seniors put increasing stress on the Medicare, Medicaid and Social Security programs.

America still faces a Boomergeddon scenario, although we may have bought ourselves a few years’ grace. The CBO thinks that the slowdown in the growth rate of medical spending experienced since the 2007-2008 recession is a lasting phenomenon and will slightly bend the spending curve downward — enough to keep the Medicare Part A trust fund solvent through 2030. In February, the non-partisan budget shop had projected that the trust fund would run out of money in 2025, reports the Wall Street Journal.

The good news is that Congress has five more years to dither and procrastinate about reforming Medicare. The bad news is that Congress probably will take full advantage of that five years before making hard choices.

– JAB

Is the End of America’s Culture Wars in Sight?

Lind

Michael Lind

by James A. Bacon

Have the Culture Wars peaked? Is the national debate over God, Gays and Guns on the downward slide? Michael Lind, a conservative thinker and cofounder of The New America Foundation, thinks the end is foreseeable. Just as the Civil War didn’t end after Gettysburg — the Confederate states still had a lot of fight left in them — the controversy over abortion, gay rights and gun rights will generate headlines for years to come. But there isn’t much doubt who will win the war.

Look at the views of the Millennial Generation and you can see which way popular sentiment is heading. Millennials are far less likely than their elders to say religion plays an important role in their lives, and they are more likely to define themselves as social liberals. They are less likely to own guns and more likely to support gun control. They are the only demographic cohort in which a majority — 70% — support gay marriage.

As liberal Millennials replace conservatives from the G.I. Generation and the Silent Generation, will political power swing decisively to the Democratic Party? Not necessarily, writes Lind in “The Coming Realignment,” an essay in The Breakthrough. But there will be a massive shift in the fissures dividing the nation. How that will play out in terms of partisan politics is difficult to predict but rest assured that the Republican Party, a coalition of disparate and often fractious groups, will reinvent itself.

Lind analyzes contemporary U.S. politics along two great dividing lines: economics (free markets, regulation, inequality of wealth) and culture (guns, God and gays). Democrats represent the economic and cultural liberals; Republicans represent the economic and cultural conservatives. But there are many economic liberals/social conservatives (often called populists) and economic conservatives/social liberals (often labeled Libertarians) who don’t fall easily in either camp. As the social conservatives are slowly eased out of the picture, Lind argues, political coalitions will reorganize around two new poles: Liberaltarians and Populiberals.

Liberaltarian, a term already in use, describes “a broad camp including neoliberal Democrats skeptical of government in the economic sphere along with libertarian Republicans and independents who recognize the need for more government than libertarian ideologues believe to be legitimate.”

Populiberal, Lind’s coinage, describes “social liberals who share the liberal social values of liberaltarians, but who tend to be more egalitarian and to favor a greater role for the government in matters like social insurance, business-labor relations, and redistribution of income.”

Lind then boldly suggests that these two new coalitions will align themselves geographically between “Densitarian” and “Posturbia.” By Densitaria, he refers to the higher-density urban precincts, both downtowns and suburban villages, where higher-income Americans increasingly prefer to reside along with the service class that caters to their needs. Posturbia is comprised of lower-density suburbs and rural areas where the working and middle classes live. Residents of Densitaria and Posturbia will tend to disagree about the nature of the social safety net (should it be tailored to the needs of the most vulnerable, or should it structured more like universal social insurance?), the tax structure (soak the rich?) and the nanny state (using government power to combat obesity).

Though fascinating, Lind’s argument is not entirely convincing. He is entirely correct that the national sentiment is becoming more liberal on some Culture War issues, most notably gay rights. But I don’t believe the needle has moved much on abortion. And, as medical science advances, I think we will see entirely new ethical dilemmas arise. It won’t be long before genetic engineering allows people to create “designer kids” or before the use of manufactured limbs, hearts and organs on the one hand and the rise of robots imbued with Artificial Intelligence raises questions of what it means to be human. It is not hard to predict a growing revulsion against what some deem to be progress. Some of that revulsion may be religion-based, but much of it could be secular.

One additional point: Millennials are culturally liberal now. But will they stay liberal when they get married, settle down and have kids? Look what happened to the Baby Boomers. Who would have thought in 1968 that a majority of the generation would wind up voting Republican in 2012?

Still, I think Lind is right about some things. The shift toward equal rights for gays is likely to be permanent and, within a decade, no longer will be controversial. I also think Lind is right that the last remnants of racial prejudice are dying out with the passing of the older generations. As young “people of color” see race as less and less of a factor affecting their lives, they will be less attached to the Democratic Party and more open to appeals by Republicans.

In my spare time, I am working on a novel set in 2075. I’ve spent a lot of time thinking what the United States will look like in 60 years. I’ve concluded that the world is so complex and the interactions of technology, economics, politics and culture so impossible to predict that the future is unknowable. With that caveat, I postulate the break-up of the Republican Party into two entities — the Enterprise Party (which is economically conservative and culturally liberal) and the Faith Nation (which is first and foremost culturally conservative). In my scenario, the Enterprise Party hives off some people who call themselves Democrats today, and the Democratic Party shifts so far to the populist-redistributionist left that it rebrands itself as the Social Democratic Party. (In my novel, the Social Democrats predominate. I guess you could call it a dystopia!)

Such idle speculation aside, America has seen dramatic political realignments before, and it will see them again. Lind makes a provocative case and he identifies key dynamics that will influence the outcome. Popular dissatisfaction with Americans political institutions is so intense today that it’s hard to believe that the current two-party duopoly can long continue in its current form. Lind’s essay is as good a place as any to start thinking about what comes next.