Bacon's Rebellion

Virginia’s major business lobbies appear to have modest legislative agendas as the 2008 General Assembly nears, and most items at the top of their lists are defensive.

Businesses are bracing for a rash of legislation relating to illegal immigration, reports Greg Edwards with the Times-Dispatch. The big three associations — the Virginia Chamber of Commerce, the Virginia Manufacturers Association and the Virginia Retail Merchants Association — are united in opposing efforts by lawmakers to solve the illegal immigration problem at the state or local level.

Immigration, they contend, is an issue that properly falls within the scope of the federal government. A patchwork of local and state immigration laws — some penalizing businesses who hire illegals — would lead to headaches. Said Brett Vassey, president of the VMA: “We don’t need employers to become [immigration] agents.”

Other business-related issues expected to arise in the 2008 session:

• Indoor smoking restrictions — the clean lung people will be active again this year, and business will be on the butt end of their initiatives.
• Workforce training — the business lobby is responding favorably to Gov. Timothy M. Kaine’s plan to consolidated diverse and fragmented training programs under the Virginia Community College System.
• Transportation — while most legislators are exhausted with the subject, a handful are proposing additional tax increases. Business still would like to see sustainable, long-term funding for new construction.

For those who have read PART I and PART II of “The Estates Matrix” and wonder why in PART IV we will make a strong case for Citizens and Households to establish a robust, well informed presence in The Fourth Estate:

Take a look at Richard Feldman’s Op Ed “A Gun Lobbyist’s Lament: The NRA’s Main Target? Its Members’ Checkbooks.”

My father was one of the gun owners who Mr. Feldman would like to represent. M. E. Risse died in 1963. I have his NRA life membership pin. Acquiring that membership was one of the most, and perhaps only, extravagance he (and my mother) allowed themselves in the last 30 years of his life.

EMR

Virginia can meet a legislative goal of cutting overall electric power usage by 10 percent over the coming 15 years, concludes a new study by the State Corporation Commission. The goal can be met by adopting market-based strategies such as “demand side management,” reports Garren Shipley with the Northern Virginia Daily.

The study spells out how conservation at periods of peak demand can lead to enormous economic efficiencies — reducing both fuel consumption and cutting costs. Writes Shipley:

Average demand in Virginia at any given time is about 13,000 megawatts, according to the report. But that number spikes by a factor of 2.5 during the hottest hours of the year. Because the grid has to be able to sustain the highest possible usage, utilities — and by extension their customers — wind up paying for a grid that can handle 32,500 megawatts all the time.

“These peak demands, which last for only about 100 hours per year, determine the required capacity of the utility infrastructure in Virginia,” the authors wrote. …

During a peak 28-hour demand period during August, the wholesale price of power paid by utility companies rose as high as $500 per megawatt-hour, according to the report. At its very peak, the price reached $1,000 per megawatt-hour. The average price is $57 per megawatt-hour.

The study, available here, makes a series of recommendations that would move Virginia towards a system that and equip and incentivize residential and commercial customers to shift electric consumption away from periods of peak demand.

The spat over the temporary-but-possibly-permanent hike in the auto registration fee that Jim noted is generating a lot of chatter. Now the Governor has waded into the fray, saying he’d like to make the temporary fee hike permanent, too.

Well, that’s just keen. However, as Jon Baliles discovered, Sen. Norment has made an offer to refund that extra dollar to at least one local resident. And, alert citizen that he is, Mr. Baliles takes matters a step further, offering a form letter you can use to ask the good Senator to refund your dollar personally:

Dear Senator Norment;

I heard about your kind offer to personally pay my $1 Jamestown fee on WRVA radio and I would kindly like to take you up on your offer.

Since the fee is no longer being used for the Jamestown celebrations which have since concluded, there is no reason to continue the fee. If you want to continue to collect extra $1 to fund tourism, then I might suggest you repeal the “Jamestown fee,” and raise the fee again on Virginia citizens straight up. Please don’t hide it behind a bygone event and now antiquated fee.

I know $1 is not much to you but it is symbolic to me, and I sincerely appreciate your efforts to repay me for as long as the current law remains on the books.

Regards,

So rather than signing an online petition (though I suppose it can’t hurt), just send Sen. Norment an invoice directly.

He’ll be happy to accommodate you, I’m sure.

To Larry Gross:

You often make observations or ask questions that raise important issues so I try to respond to them when I have the opportunity. (See Postscript) In the comments following “Freight Rail: The Robust Transport Mode” you commented:

“I have to admit that what I get out of EMR’s logic seems to be that we should not be buying light bulbs from China but instead (from) a local industry…

and that world trade of goods is inherently wasteful and the correct answer is to produce goods locally [NB: “local” and thus “locally” is a Core Confusing Word – produce goods (and services) Regionally] instead of importing them from afar…

If so.. it’s a pretty provocative concept and like Peter … I’d be bamfoozled…. so.. either I don’t understand or EMR’s ideas about land-use extend to commerce/trade/economics, etc.”

Larry, I am sorry to bamfoozle you! Here is a simple answer:

If all the location-variable costs were fairly allocated and citizens were really serious about maintaining (?recreating? / ?really creating for the first time?) a democracy with a market economy, then it would be less expensive and serve the overarching goal of a sustainable trajectory for contemporary civilization to buy the light bulbs made in the Region, rather than the ones made in China.

There is a relatively simple reason for this:

Trade vs Import Replacement.

In a nutshell Trade benefits those at the top of the economic food chain while Import Replacement benefits everyone in the “place” where commerce is focused. At this point we call this “place” a “Region.”

Benefiting the majority of those in any Region is a prerequisite for commerce in creating and sustaining a democracy with a market economy.

Since most economists are supported directly or indirectly by the denizens and agents of Trade, you have to dig a bit to understand the importance of this distinction.

A good place to start is Jane Jacobs’ book The Economy of Cities (1969 ). Since the book was not written by a card-carrying economist it is not often cited. (Planners do not often cite her Life and Death of Great American Cities either :>)

As we point out in The Shape of the Future Chapter 19 Box 2 – “Evolution of the Marketplace” – Jacobs’ book establishes a framework for considering Trade vs Import Replacement. (As we also point out in Chapter 3 Box 3, our only problem with her book is the use of “cities” in the title. Think how much more useful her book had been if it were titled “The Economy of Regions.”)

What one calls a “place” is very important. Over the past 8,000 years the “place” that has benefited from Trade has morphed from:

The compound of the chief / trader in a trading Village; to

The favored sector of the earliest “cities” (Ur, Choga Mami, Tell Brak, Hama, et. al.); to

The well-to-do quarter of the capital of the trading empire; to

The Zentrum of the most successful trading city-state; to

The financial districts in the urban agglomerations of the nation states with the large economies and / or control of scarce resources.

A pattern of Trade and Import Replacement can be seen in:

The earliest Neolithic Trading Villages

Pre Classical (Bronze Age) Mediterranean commerce Ugarit, Ulu Burum, Kommos, et. al.

Classical commerce of Greeks, Phoenicians and Romans

Mediaeval commerce between 400 and 1400

Colonial commerce between 1400 and 1950

Nation-state commerce between 1750 and 2000

Global and multi-national trading bloc commerce between 1960 and present

Over this period Trade primarily benefited those who controlled Trade.

However, in these same time frames the citizens who benefited the most were those who live and work in and / or were served by “places” that worked to focus economic activity on Import Replacement.

We will not bore you with the details but I am convinced that the same pattern could be found in the emerging cultures in Mesoamerica, the Pacific Coast of South America, Africa and elsewhere (including the “Mound Builders” of the Mississippi / Missouri River Valley and the Southeast) if their cultures had not been wiped out by guns, germs and steel. Hat tip to Jared Diamond. (I too went to Jared’s.)

Urban economic activity starts with Trade but must transition to Import Replacement to be sustainable. That is especially true as humans begin to push the limits of the exploitable resources (the price of oil continues up) and the reality that finite resources can be exhausted becomes apparent. See Jim Bacon’s post on “The End of Cheap Gasoline” of 19 November 2007.
The US of A fought a Revolutionary War and a Civil War over aspects of Trade vs Income Replacement. The causes of the two World Wars and the Cold War can be traced to resource allocation and control of commerce.

As the World becomes more “Flat” and civilization becomes more urban, the importance of the “place” and location grows and so does the pattern of human settlement.

The fundamental building block of contemporary civilization is the New Urban Region. The New Urban Region and the urban agglomerations in Urban Support Regions must move to transition from Trade to Income Replacement.

Cost of communication and information transfer and storage are going down and the real cost of Mobility and Access – if all the location-variable costs are fairly allocated – is going up at an accelerating rate.

In this context, Democracy and a market economy depend on Income Replacement.

This is why it is so important to understand the roles of the four Estates – The Agency Estate, the Enterprise Estate, The Institution Estate and the Citizen / Household Estate. This is the topic of our most recent Backgrounder which is being presented in four PARTs in the last two and next two columns.

POSTSCRIPT

We has originally intended to post this material as a comment on the “Freight Rail: The Robust Transportation Mode” of 10 December. The comment by EMR to which Larry Gross responded to was in that string.

However, upon further review…

EMR’s original comment was prompted by the facts that:

We believe that it is wildly premature to write off interRegional Passenger Rail for reasons stated in our previously comments in the original string.

We believe it is unwise to promote the views of a denizen of the Enterprise Estate as the view that should guide the Agency, Institution and Citizen / Household Estates. What is good for General Motors is not necessarily good for the US of A and that goes for Norfolk Southern as well for reasons we have noted in our response to Peter Galuszka. We hope Peter has the time to read these comments with care.

As happened with the comments that followed the “End of Cheap Gasoline” post the comments moved from a discussion of transportation alternatives to speculation about settlement pattern alternatives. Many of these comments are driven by three Myths we will be exploring in a future column.

For all these reasons (and the fact if buried at the end of 60 plus comments Larry would not see an answer) it seemed best to start over with an answer to Larry.

By the way Larry, I will get to your TAZ questions in due course. We will admit to being a bit put off by your asking if we had ever heard of TAZs :>) We just addressed the NUR / USR question.

EMR

Pepco is doing it in Washington, D.C. Why isn’t Dominion doing it in Northern Virginia — and the rest of its service territory, for that matter? From today’s Washington Post:

Pepco is about to start sending personal e-mail messages to Jonathan and Lauren Schwabish every few hours that could determine when they do the dishes, wash the baby’s clothes or turn on the air conditioner.

The couple will learn when the price of electricity for their old Capitol Hill home will spike the next day because Washington’s winter chill or its steamy summer is nudging up the demand for power.

If they wait to turn on the washing machine or they turn off the air conditioner when the sun beats down, they’ll be rewarded with a credit on their utility bill that could reach hundreds of dollars a year. Other D.C. residents have agreed to pay rates eight times the average if they use their appliances at peak times but rates well below it at off-peak hours, as part of a pilot program starting next month.

“Lexus lanes” are coming to the electricity grid. Energy conservation programs that died when the power market switched from regulation to competition are back, but with new technology and aggressive demands from government regulators facing anger over rising prices.

Just as long-awaited high-occupancy toll lanes will charge drivers a fee to travel at rush hours, electricity customers will pay more when the grid is congested and less when it’s not.

Ranked by absolute numbers, high-tech employment is growing fastest in Northern Virginia, but ranked in percentage terms, it’s growing fastest in Central Virginia (Richmond and Charlottesville), according to the 4th quarter Regional Scorecard for Virginia’s High-Technology Industries.