Bacon's Rebellion

Oh double democratic hockey sticks! Former DPVA chair Paul Goldman dissed Byrne back in 2002. Holy cow! Has the Democratic LG seat been sold down the James River!
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https://www.baconsrebellion.com/Issues/11-11-02/Gilmore

Goldman wrote:
“They call me Governor Gridlock! Who gave me that name, that guy Goldman with the big mouth? He put the “Tax Governor” tag on Baliles, desperate to save Wilder’s bacon. He was right: it was otherwise sure defeat for Wilder, just like it was for Beyer when he waffled on taxes against me.
No, it wasn’t Goldman, he ain’t smart enough to think of the Gridlock thing. He got lucky with Wilder. No, it was Leslie Byrne, the senator from Fairfax.
She is worse than Panny Rhodes, the former delegate from Richmond I helped redistrict out of her General Assembly seat as punishment for opposing me. Come to think, I did the same thing to Leslie Byrne, too! We redistricted her out of her Senate seat for the 2003 election.
That will teach her to call me Governor Gridlock. Leslie, baby, think of that while being stuck in traffic up here! You will have plenty of extra time!”

Since Tuesday, Kilgore is having the darnedest time figuring out where he wants to be in the political spectrum. He can’t run on the Right after the shellacking laid on Grover Norquist’s candidates. He can’t run as a centrist, because that aligns him with Mark Warner. And the ‘liberal’ slots are already taken. And now this–get him off script for two seconds and he makes the biggest blunder of his campaign–he ducks and runs on Russ Potts–and the second biggest–he says on the record, in public, that Potts can’t win. If I were Potts, I’d be on the first plane to Vegas. Surely a fortune awaits anyone with that kind of luck.

Washington Post columnist Marc Fisher apparently was deluged with anti-Russ Potts comments prior to his online chat today. Fisher had written a piece on Tuesday that crossed the line from opinion journalism to hagiography.

This question and response went to the heart of media’s role:

Saltville, Va.: Why don’t you just admit upfront that Russ Potts makes good copy and that you aren’t going to disturb this endless trove of sound bytes by looking too closely at the man’s flip-flops, his motivation, or the depth of his positions?

Marc Fisher: Potts certainly wins something of a bye because he is crusty, outspoken, fun and has little chance of winning. So if his function is to keep the other candidates’ feet to the fire on issues they’d rather not address, then, yes, he is likely to win less scrutiny than Kilgore and Kaine will get. But if he starts showing himself to be a real contender, then he’d get the same sort of close and vigorous coverage that the Dem and the Repo will get.

Now we know–unless you might win, you get a pass if you’re a “media darling.”

In an editorial today, The Wall Street Journal has come up with a more optimistic interpretation of Tuesday’s primary election results than I did. American elections are so rigged in favor of the incumbent, the WSJ notes, that any ejection of entrenched office holders is significant. In that light, the low-tax movement made significant progress:

The most vocal of those pro-tax incumbents was so embattled that he withdrew from the race. Another was trounced, two-to-one, by a twentysomething political neophyte. Two others barely won, and in the statewide contest to select the GOP’s Lieutenant Governor and Attorney General nominees, the tax hike defenders were upset up anti-tax challengers. Several other tax-raising Republicans beat back challenges more comfortably, but we suspect that they also got the voter message.

The WSJ also raised the issue, little remarked upon by Virginia’s own commentariat, of Virginia’s massive surplus:

GOP taxpayers had reason to be upset because they now know the $1.4 billion tax increase was sold under false pretenses. Democratic Governor Mark Warner–who had won in 2001 on a no-new-taxes-pledge–argued that it was necessary to balance the state budget even as the reviving economy was creating a new revenue surge. This year Virginia is sitting on a $1.5 billion surplus thanks to a 14% rise in tax revenues.

I don’t sense that the mounting surplus played much of a factor in the primary races. I rarely heard it mentioned. But that doesn’t change the fact that Virginia voters ought to be furious at those who raised taxes unnecessarily.

I am totally dumbfounded by today’s Tyler Whitley story in the Richmond Times-Dispatch: “Kilgore refuses to debate Potts.” I guess the Kilgore campaign knows what it is doing, but it’s hard for me to understand why they were willing to revive the debate ducking charge, the performance anxiety issue, and give more free publicity to Russ Potts.

As Barnie Day has pointed out, this is a three way race now. It only takes 34% to win. Why Kilgore won’t honor the widely accepted 15% threshold for third party participation in debates is beyond me. Potts isn’t near that number now, but the Kilgore position, plus all the recent fawning press Potts has received, might get him there … and beyond.

The first step out of the gate after the primary does not appear to be a sure-footed one.

The study by the Joint Center for Housing at Harvard (and MIT, that is why it is “joint”) that Jim Bacon noted in the 14 June posting “Housing Bubble Watch…” was also covered by WaPo. Their spin is that the Joint Center does not see any sign of the housing bubble bursting yet BASED ON 2004 DATA. (“No Slowdown in Housing Market Seen, Report Says.” 13 June 2005)

That is good news for housing speculators, you made it to 31 December 2004. Of course it is now nearly half-way through 2005…

A review of the report confirms many of the negative trends outlined in “The Shelter Crisis,” 23 May 2005 at db4.dev.baconsrebellion.com and adds some new factoids.

The WaPo story on the Joint Center report offers no guidance on when the bubble might break. Far more important, there is not even any discussion of the much greater negative impact of not having a housing bust. If housing prices (aka, the cost of shelter) do not come back into the realm of reason for the vast majority of citizens, the economies of prosperous regions are in for a major “readjustment.”

The next question is what will be the overarching impact of a slow fizzle of the housing balloon as predicted by Janszen of Always On noted in today’s post by Jim. No doubt there will be an effort to stem the bust but will it work? The real issue is: would a fizzle save the economies of the regions that now have “More, Better Jobs?” Those Creative folks can move in a hurry.

EMR

Eric Janszen, a columnist with Always On, offers a less dire scenario than I do for the collapse of the housing bubble. Rather than popping like the stock market bubble, he suggests, the housing bubble will slowly deflate — over 10 to 15 years. Why will it take so long? Because “the government will step in with all manner of supports and bailouts along the way, similar to those that created the bubble in the first place.”

Janszen sees a series of stages in the deflation as home buyers engage in denial and slowly lose confidence, as marginal home buyers realize that they’d way underestimated the true cost of home ownership, as distress sales pick up and, finally, 10 years into the downturn, as “real estate [becomes] widely regarded as a terrible, ‘can’t win’ investment. McMansions will be subdivided for rental as multi-family homes.”

Read his scenario here.

This quote comes from The Washington Post’s round-up on the primaries:

“The races are somewhat a test case of how viable this anti-tax movement can be,” said Mark J. Rozell, a professor of public policy at George Mason University and co-editor of “The New Politics of the Old South: An Introduction to Southern Politics.” “If we judge them by the criterion of winning primaries, we ultimately may judge them failures after tonight. If the criterion is their ability to foster debate and send a signal to incumbents, they might be considered successful.”

Did the low-tax movement foster debate? Did the challengers send a signal to incumbents? I fear not. My sense is that the pro-tax forces in the General Assembly will feel emboldened to push more aggressively for transportation-related taxes in 2006 with little fear of a voter backlash.

So much for the anti-tax revolt. Actually, it wasn’t even a revolt — it was more of a listless disorder, easily quelled. Voters, clearly, were not fired up about the issue. Turn-out was incredibly low. Only one of six challengers campaigning under the anti-tax banner, Chris Craddock, defeated an incumbent, Del. Gary Reese, R-Fairfax. George Fitch, always a long shot, garnered only 17.5 percent of the vote in his run against Jerry Kilgore.

There were morcels of consolation for those of us who believe that a low/moderate tax structure and efficient, high-performance government is a prerequisite for Virginia’s long term economic competitiveness and prosperity.

1. Craddock did win. His position on taxes: “Tax hikes are always budget cuts for families. They stifle our economy, make our businesses less competitive, and encourage wasteful government spending. Virginia must first eliminate government waste, which the Wilder Commission estimates at over $1.2 billion. ” (Unfortunately, young Craddock has a lot to learn when it comes to applying his anti-tax philosophy to improving Virginia’s transportation system. His proposals simply entail raising funds from arcane sources to plow into Business As Usual programs.)
2. Challenger Steve Chapman polled well. Despite bad publicity entailing traffic tickets, his dead dog and allegedly illegal voter registration in the district, Chapman won 45.2 percent of the vote against Del. Harry Parrish, R-Manassas. Parrish is 83 years old. If Chapman gets his personal act together, he might have a good shot at unseating the aging incumbent in two years.
3. Challenger Shaun Kenney registered 44.7 percent of the vote against incumbent Robert Orrock, R-Spotsylvania. That’s a very respectable tally, considering Kenney’s youth, political inexperience and disadvantage in fund raising. Kenney may well have a future in Virginia politics if he sticks to it.
4. George Fitch won only 17.5 percent of the vote, but it’s not as if he were running against a pro-tax hike candidate. Kilgore has often stressed his opposition, in the abstract, to higher taxes. He just doesn’t come across as very strong or empassioned on the issue.

Now it’s time for the low-tax movement to shift gears. We simply have to do a better job of articulating our case: Lower taxes preserve the middle class’ standard of living, they are good for economic growth, and there are abundant opportunities to cut state spending while preserving core state programs.

The latest warning comes from the “State of the Nation’s Housing 2005” report released Monday by Harvard University’s Joint Center for Housing Studies, as reported by SmartMoney.com. The bubble in prices is most acute in California, southern Florida and New York, the article says, but graphic information in the article indicates that the surge in housing costs in Washington, D.C. is comparable to those in New York (as measured by the dollar increases in monthly mortgage payments in 2003 to 2004).

A big problem, notes the report, “is the disparity between the residential home and rental markets. The after tax cost of owning now exceeds the cost of renting a comparable home by 28% nationally, and by much more in certain areas of the country, according to the report. In 2003, it cost 23% more to own than rent a comparable home.”

There are solid fundamentals underpinning the market in metro Washington, including strong job and income growth. But bubbles always start where the fundamentals are sound, and then escalate beyond all reason. Local governments across Northern Virginia had better batten down the hatches. The storm is coming.

I strolled into the Tuckahoe Elementary School in Henrico County around 9:15 a.m. to exercise the mother of all civic rights and vote. There were no lines. Voting took about two minutes. One poll attendant said that only 120 people had voted so far, compared to 500 or more during the presidential election at the same point in time. The turn-out, it appears, will be as light as the experts have been predicting. The winners in the hotly contested primaries will be not be those who garner wide support but those who motivate a loyal core of supporters.

One thing I learned a long time ago, however, was never to predict the outcome of elections, so you’ll see no such forecasts from me.

Once again we find that tax revenues are surging in Virginia. A front-page graphic in The Wall Street Journal this morning notes that Virginia revenues so far are running 14.9 percent ahead of last year — exceeding the national average of 9.5 percent by a hefty margin. That amounts to 9.03 billion for the first three quarters of the fiscal year.

Actually, the WSJ’s numbers, based on only nine months of results, are a tad low. Says Finance Secretary John Bennett in his latest revenue report, based on 11 months: “Through May, revenues have grown 15.2 percent above the same period last year — substantially ahead of the forecast of 10.3 percent.”

Readers may recall the justification for raising taxes. Gov. Warner and his allies in the state senate warned of a long-term “structural” budget deficit in state finances. Now we’re facing the opposite problem, a long-term “structural” surplus. Last year the General Assembly found ways to spend nearly all of that surplus. The one saving grace was that legislators devoted most of the money to one-time uses that would not add to the state’s programmatic overhead. It will be interesting to see if they can resist the temptation in 2006, when the surplus recurs–bigger than ever–to crank up the spending machine.

The massive surplus is an embarrassment to Virginia’s political class, which would prefer to sweep it under the rug. But voters (those few who bother to go to the polls) should remember the budget surplus when they cast their ballots. The citizenry needs to chastise incumbents who panicked in 2004 and voted for a tax increase that many warned then was not needed, and, in retrospect, is even more clearly not needed now.

Margarett Edds, senior political writer for the Virginian-Pilot, can’t seem to understand the fuss about state and local taxes. In her column (requires registration) this morning, she writes:

Scan the political ads now clogging the airwaves, and you’d swear Virginians care about one thing: low taxes. Channel flipping during one segment of the nightly news last week, I caught barely a mention of education. The environment? Nary a word. Ditto for transportation and rising health care costs. But in the advertising run-up to Tuesday’s nominating primaries for statewide offices and the House of Delegates, the “T” word was everywhere.

… Good government means finding the right balance between taxes and services. It doesn’t take more than a half-hour before the television set to know that with the present crop of Virginia candidates, the emphasis is out of whack.

Imagine that. Virginians like keeping the money they earn. Selfish bastards. Where could such stinginess come from? Could it stem from the $1.4 billion in tax increases in the current biennial budget? Could it rise from the relentlessly rising property taxes that homeowners are paying across most of the Commonwealth? Could it reflect the fact that grandees from Senate Finance Chair John Chichester to Virginian-Pilot columnists are lecturing Virginians that they still aren’t paying enough taxes in a push for $1 billion-a-year (or more) tax increase for transportation funding in 2006?

Edds thinks there’s a problem when politicians “overemphasize low taxes.” I’d give her point of view a bit more credence if she occasionally wrote about strategies for taking the costs out of government — not cutting programs, but squeezing costs through process reforms, land use reforms, re-engineering, restructuring, whatever. But I don’t see much of that. It takes an effort to identify ways to cut spending and make programs run more efficiently. Any pea brain can raise taxes.

Today’s issue of The Washington Post has stories and graphics in three places about rebuilding the Woodrow Wilson Bridge.

The heroic quotes, striking photos and detailed graphics are very 21st century. A reading of Collapse: How Societies Choose to Fail or Succeed by Jared Diamond calls to mind a different perspective. One wonders if the same exhilaration and sense of purpose was not felt by those carving the moai on Easter Island, building the Mayan temples at Tikal or erecting the statue of Ozymandias memorialized by Percy Bysshe Shelly.

After all, few believe that rebuilding the Wilson Bridge or any other transport facility without Fundamental Change in human settlement patterns will make regional traffic congestion any less onerous in 2011, 2015 or 2050. See “Self Delusion and Fraud,” 7 June 2005 at db4.dev.baconsrebellion.com

EMR

Monday, June 13th, Governor Mark Mollycoddle will speak at the Communities in Schools of Virginia, Education Policy Luncheon at the Richmond Marriot. The theme of the luncheon is “Ten years into the SOLs, where does Virginia go from here?”

Question is, will the Governor report to the media that Virginia gets barely a passing grade? The Washington Post described a ‘Standards of Learning’ report card in which Virginia gets a D+.

A Report Card With Rare Meaning

That’s not a passing grade for His Excellency, and an uninspiring presidential candidate… Unless, the D+ stands for Howard DEAN, Monica DIXON or Mollycoddle DECEPTION plus.

Parents Across Virginia United to Reform SOLs, recently wrote: “… Essentially, the report card compares the state’s testing results with NAEP results. The further apart those results fall, the lower the grade. For example, in VA, we reported that 70% of our 8th graders were proficient in reading (i.e., they passed the 8th grade reading SOL test). NAEP, a nationally administered test, reported that only 36% of Virginia 8th graders were proficient readers. Additionally, NAEP reports 31% of our 8th graders are proficient in math while Virginia reports that 78% are proficient. While some folks suggest that the NAEP proficiency levels (and the Virginia SOL levels, for that matter) are off base, I think it is pretty apparent that the rising SOL pass rates are not mirrored on the NAEP results, especially reading results. Math results are a little more unclear. While NAEP math results show gains for Virginia (and the nation), they also show that Virginia has excluded higher and higher numbers of kids from NAEP testing and now has one of the highest levels of exclusion (about 10%) in the nation. Excluding students who may test poorly can boost results.

Keep in mind that this report card does not look at actual proficiency rates, only how the proficiency rates on one set of tests (NAEP) compares to another set of tests (SOLs). Of course, we’ve been keeping you informed for several years about how results on SOLs compares to results on other measures. I’ll be updating the website soon on the achievement effects of the SOLs. Suffice it to say that we don’t think other measures of achievement mirror the (adjusted and tweaked) gains on the SOL pass rates.”

NAEP results at http://nces.ed.gov/nationsreportcard/states

For more information about PAVURSOL, visit: http://www.solreform.com/

~ the blue dog