Bacon's Rebellion

  • What’s McDonnell Up To With Transportation?

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    Peter Galuszka

    By Peter Galuszka

    The McDonnell Administration is  taking a chain saw to policies that promote smarter, more efficient growth by axing  reforms to make neighborhoods connected and pushing design contracts that fast-track road construction and discourage public input.

    Such are the conclusions drawn from two blog postings by David Alpert of Greater Greater Washington and Jim Bacon, publisher of this blog.

    They detail how Gov. Robert F. McDonnell and Transportation Secretary Sean Connaughton are throttling reform-minded policies that recently put Virginia at the forefront of good planning. They are using the Commonwealth Transportation Board (CTB),  a 17-member panel appointed by the governor, as the spearhead to push their ideas on how subdivisions and roads should be built.

    According to the Alpert blog, the CTB recently got rid of policies enacted in 2009 that would encourage to build new subdivisions that connect easily to secondary and primary roads. Up until then, planning in Virginia was of the usual 1950s model that erected countless cul de sacs without only a few roads outside the development.

    The result forced people into a lifestyle dominated by automobiles that wasted time and gasoline as residents traveled to shop or work and caused more trouble for emergency workers such as police, fire or ambulance drivers trying to respond to a crisis.

    Under former Gov. Tim Kaine, the CTB changed the rules in a way that put Virginia ahead of other states in planning concepts by adopting the connectivity policy. The CTB under McDonnell and Connaughton recently dumped the 2009 reforms. Why? My guess is to boost the interests of developers since McDonnell wants to be identified as “pro-business.”

    The Bacon post is an investigative look at the controversial bypass of U.S. 29 in Charlottesville. His work was funded in part by the Piedmont Environmental Council but they did not edit the article. Bypass proposals have been contentious because they would tend to exacerbate traffic congestion on what is already the most crowded road in the university city. Business interests, notably manufacturers in cities such as Lynchburg and Danville, want the bypass to improve truck deliveries.

    Connaughton’s goal is hastening development of the bypass. So, he pushed a “design-build” contract that is opposed to the way the state usually does construction project. In “design-build,” the contractor is also the designer and designs parts of the project as works goes along. The practice was once considered unethical by professional associations but it is has become widely adopted throughout the country. It can save money and quicken a project’s completion, but it can also lead to overruns and tends to limit public say about how a project looks.

    The CTB bought the “design build” idea for the bypass, but according to the Bacon report, Connaughton did not mention that engineers at his own Department of Transportation had serious doubts about the $244 million cost estimates, believing they would run much higher. Their concerns were not reflected in information given to the board which approved the project.

    The two excellent blog postings raise serious questions about exactly what McDonnell and Connaughton are doing. The state has just raised billions on the bond market for highway construction and is floating ideas for public-private roads such as a replacement for U.S. 460 in southeastern Virginia.

    Connaughton is steamrolling the U.S. 460 highway just as he is on the U.S. 29 bypass. His concept took a hit recently when The Virginian-Pilot reported that a group of Tidewater politicians and business executives lobbied Connaughton to slow down on the road from Suffolk to Petersburg in favor of a third crossing in Hampton Roads, which they believe will do more to alleviate the water-locked region’s notorious congestion. Conaughton responded that the third crossing will cost twice as much as his pet road. There are problems with either plan. A third crossing would only dump traffic on clogged Interstate 64. Replacing U.S. 460 would create more exurban sprawl west of Suffolk, which has been the state’s fastest-growing city.

    Playing it both ways as free-spenders and cost cutters, McDonnell and Connaughton are refusing to provide funding for the D.C. Metro Silver Line Phase II project which would help alleviate traffic congestion. And, Connaughton has shown his bare-knuckles management style by firing nearly the entire board of the Virginia Ports Authority in one quick putsch.

    McDonnell, however, doesn’t have that much time in office left. What’s behind all of this?

  • The Wonk Salon, November 7, 2011

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    James A. Bacon

    Firearms Flow from States with Weak Gun Laws to States with Stronger Gun Laws
    National Bureau of Economic Research
    Gun-tracing data shows that guns flow from states with weak gun-control laws to states with stronger laws, creating cross-state externalities — a finding that strengthens the case for tighter federal regulation.

    Public Transit as an Emission Reduction Strategy
    Victoria Transport Policy Institute
    Critics say transit is an energy-inefficient mode of transportation because it uses as much energy per passenger-mile as driving. But that critique does not consider how transit supports energy savings through transit-oriented development and transportation pricing reforms.

  • A New Metric for Gasoline Affordability

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    James A. Bacon

    by James A. Bacon

    Todd Litman, who runs the Victoria Transport Policy Institute, provides a fascinating metric for tracking the affordability of gasoline. Rather than looking at price alone, in his paper, “Changing Vehicle Travel Price Sensitivities,” he refines  the cost per gallon (litre, actually, he lives in Canada) of gasoline by adjusting for median wages and the fuel efficiency of the average automobile. The result: the number of miles traveled one can purchase with one hour of work time.

    The calculation works like this: In 1967 annual median income in the United States was $2,464, gasoline cost $0.33 per gallon, and vehicles averaged 12.4 miles per gallon. An hour of work could buy you enough gasoline to travel 46 miles. In 2000, median incomes were $22,346, gasoline cost $1.51 per gallon and vehicles averaged 17 miles per gallon, meaning that an hour of work could buy you enough gasoline to travel 126 miles.

    After peaking in the late 1990s, travel affordability has declined precipitously. Wages have stagnated, fuel economy has improved only marginally but gasoline prices have risen. In 2010, an average work-hour could purchase enough fuel to take you 83 miles.

    The chart at the top of this post shows the trend. The metric is important because it shows how gasoline became increasingly affordable in the decades of the 1980s and 1990s. Not surprisingly, the number of vehicle miles traveled increased dramatically over that time. Admittedly, the increase in travel would have been impossible without a significant increase in the number of road-miles, but the falling cost of travel was the driving force. As travel affordability has declined since 2000, vehicle miles traveled have dipped as well, as seen in the second chart.

    Three broad policy conclusions stem from this insight.

    (1) Mandating higher fuel economy for automobiles could be somewhat self defeating: By reducing the cost per mile of driving, mandates could encourage more driving.

    (2) Stagnant incomes and rising prices for gasoline suggest that the number of vehicle miles traveled in the state has plateaued as well. It is foolish to spend millions of dollars on road-building projects predicated upon extrapolations of past trends into the indefinite future.

    (3) Insofar as the state does commit to funding new transportation projects, we should be supporting the kind of infill and re-development that allows Virginians to drive less rather than perpetuating the sprawling development patterns of the 1980s, 1990s and 2000s.

  • The Politics of Interstate Interchange Funding

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    James A. Bacon

    The area around Celebrate Virginia. (Click on map for more legible image.)

    by James A. Bacon

    Here’s another proposed transportation project to watch closely: The Fredericksburg Area Metropolitan Planning Organization (FAMPO) has proposed building a new interchange on Interstate 95, estimated to cost $250 million to $300 million — or more, depending upon whom you believe — that would benefit the wealthy developers of the Celebrate Virginia project.

    William M. Beck, former mayor of Fredericksburg, has joined Ronald D. Utt, transportation scholar for the Heritage Foundation, to write a letter to Transportation Secretary Sean T. Connaughton urging him not to fund the interchange. “Under the circumstances,” they write, “a very costly project of modest, yet uncertain, benefits would seem to be an unlikely candidate for such scarce funds, and we hope you agree. Moreover, at a minimum of $300 million, the acceptance of the project would force the cancellation of many more worthy projects around the state and in the Fredericksburg area.”

    The rationale for the interchange is to relieve congestion on U.S. Route 3 by diverting traffic from Route 3, which is overloaded near its I-95 interchange, to a proposed, 3.5-mile toll road running from Route 3 near Gordon Road to its own intersection with I-95. As it so happens, the proposed route would zip right through Celebrate Virginia, a 2,500-acre tract owned by the Silver family, a major developer in the Fredericksburg area and Quantico guesstimated by Virginia Business magazine to be worth $750 million. The Silvers have invested millions of dollars in roads and other improvements at Celebrate Virginia through a Community Development Authority with the aim of creating an business/entertainment district that includes former Gov. L. Douglas Wilder’s ill-fated slavery museum as well as the highly controversial Kalahari water park, plans for which have been put on ice during the recession. At build-out, the Celebrate Virginia complex is expected to include more than 11 million square feet of commercial, residential and entertainment space.

    A big drawback of Celebrate Virginia is its lack of direct access to I-95. Motorists must use the Route 3 exit to the south and drive through the heavily traveled Central Park retail district, also developed by the Silvers. The new interchange would greatly enhance the value of the property, and it should come as no surprise that the developer has been lobbying heavily to get it built.  In 2010, the Silver Companies helped FAMPO underwrite a consulting study to evaluate options. That plan, submitted in May 2010, proposed building the interchange and connecting to the toll road. Meanwhile, the Silvers have engaged Washington lobbying firm Alcade & Fay to pursue a federal earmark for the interchange and toll road.

    Although squeezing $300 million out of either the feds or the state is a tall order in the age of austerity, the developers can be assured at least of a respectful hearing. Patriarch Carl D. Silver, son Larry D. Silver, who now runs the companies from Boca Raton, Fla., and a host of enterprises they control have collectively donated  $465,000 to various PACs and political candidates in Virginia since 2004. Among the donations: $5,000 to Sean Connaughton when he was chairman of the Prince William County Board of Supervisors and $5,000 more when he ran for lieutenant governor; $90,000 to former Gov. Tim Kaine, his inaugural and his Moving Virginia Forward fund; and $62,500 to Gov. Mark Warner and his inauguration. Interestingly, in a quick scan of the different entities through which the Silvers funnel political donations, I could not identify any contributions to Gov. Bob McDonnell. (If someone spots something I missed, please let me know.)

    Write Beck and Utt: “The embrace of outsized corporate welfare projects flogged as investments that benefit us all, are as old as the Republic and were common in the great debate over government funding of canals during the administrations of Jefferson and Madison. Not much has changed since.”

  • The Wonk Salon, November 5, 2011

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    James A. Bacon

    Health Exchanges Violate State Sovereignty
    Goldwater Institute
    Obamacare promises to give states flexibility in implementing state health exchanges. In reality, the feds control the providers who get to participate, control the plans and benefits and force states to enforce the individual mandate.

    Report on the World’s First Social Investment Bonds
    Rand Corporation
    The United Kingdom has launched the world’s first experiment in Social Investment Bonds (SIBs).  A private financier pays the upfront cost of reforming prison inmates and pockets a share of the reduced cost to government if the programs are more effective than the alternative.

    Kids Beware, Longer Schools Days May Be Coming
    Wallace Foundation
    Six hours a day and 180 days a year is not enough time to provide the education that American children, especially disadvantaged children, need to learn what they need to learn.

    Education in an Age of Austerity
    American Enterprise Institute
    After decades of spending growth, educators had better get used to the idea of doing more with less. Federal stimulus spending is ending, state budgets are under  pressure and property tax revenues are down. Innovation and reform is the path ahead.

    Information Sharing and Child Development
    National Academy for State Health Policy
    The Better Child Care Health and Development learning collaborative supports healthy child development through care coordination and linkages among medical providers and community services programs.

  • The Wonk Salon, November 4, 2011

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    James A. Bacon

    The Local Influence on Prison Population Size
    Urban Institute
    Local governments have three main policy levers for affecting the number of inmates in their jails and prisons: sentencing, inmate transfer and release, and supervision violation response.

    Who Uses Tax Incentives for Economic Development?
    National Bureau of Economic Research
    Who uses taxes incentives? Losers, that’s who. Well, maybe that’s a little harsh. To be more exact: Municipalities with low incomes, high levels of political corruption and locations close to state borders.

    The Return of Concentrated Poverty
    Brookings Institution
    Not only is there more poverty in the land compared to 2000, but it’s getting more concentrated. A rare and welcome exception to that trend: Poverty got less concentrated in Hampton Roads.

    Higher Ed Disclosure Laws? Mwa ha ha! What Higher Ed Disclosure Laws?
    Education Sector
    Most colleges are not complying with a 2008 federal law that mandated more transparency, including the reporting of measures that track graduation rates for low-income students.

    Signals and Sensors Improve Bus Performance
    Center for Transportation Studies
    An experiment in Minnesota shows that a system using wireless technology and a new algorithm improves bus travel times.

  • In the Dark

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    James A. Bacon

    The McDonnell administration omitted critical information from its presentation last summer when seeking the Commonwealth Transportation Board’s approval to fund the controversial Charlottesville bypass.

    by James A. Bacon

    On July 20 James Utterback, the Culpeper District administrator for the Virginia Department of Transportation, had the job of briefing the Commonwealth Transportation Board about the controversial Charlottesville Bypass. Flashing PowerPoint slides upon an overhead screen, he walked board members through the complexities of a project that had languished on the books for most of 20 years until the McDonnell administration had assigned it a top priority.

    The official cost estimate for the Charlottesville Bypass. (Click on chart for more legible image.)

    Utterback summarized the long, tortured history of the project.  He described how the 6-mile bypass would fit into the state’s long-range plans for U.S. 29 as a major highway for the movement of freight. He delved into a chart showing that the project would require $197.4 million to complete, including $118 million for construction plus millions for right-of-way acquisition and engineering, bringing the total cost to $244 million. (Click on image above for details.) And he displayed a rendering of the U.S. 29 corridor north of Charlottesville in which the bypass tied into U.S. 29 and U.S. 250 with interchange ramps. 

    After a lengthy public hearing in which dozens of Charlottesville residents and even a few from Lynchburg had driven to Richmond to let the board know what they thought, the CTB overwhelmingly approved the project.

    As it turns out, there were some very important things that Utterback did not mention in his scripted presentation. He did not tell the CTB, for instance, that central office engineers inside the Virginia Department of Transportation thought that construction could cost $100 million or more than the official estimate. He neglected to say that VDOT engineers were considering significant changes to the highway design to bring the cost down. Finally, he failed to mention that VDOT would not build the project using a “design-bid-build” process, doing the final design in-house as was customary, but as a “design-build,” which meant contracting out the final design to the winning construction team.

    In other words, the McDonnell administration omitted highly germane information — that the design and cost estimates of the project were uncertain and in flux — when it asked the CTB to approve the $197 million allocation.

    Would it have changed the outcome if VDOT had told the complete story about the cost and design uncertainties? One can only speculate. But it certainly would have strengthened the case of the bypass skeptics. At the very least, asks Dennis Rooker, an Albemarle County supervisor who played a leading role in opposing the bypass, “Wouldn’t it have been more honest to go to the CTB and say, ‘Here are our internal cost estimates, and we’re going to try to bring it in at a lower cost?’”

    James E. Rich, Culpeper district representative to the CTB, had even stronger words. “Deliberately providing incomplete information would prevent the board from fulfilling its statutory responsibilities to the commonwealth and to taxpayers.” If the omissions were shown to be deliberate, he said, “there should be consequences.”

    VDOT’s internal discussions were laid bare in documents obtained through a Freedom of Information Act request filed by the Charlottesville Albemarle Transportation Coalition, a self-described “local citizens group.” The organization works closely with, but is not formally affiliated with, the Piedmont Environmental Council and the Southern Environmental Law Center, which have actively opposed the bypass. (Full disclosure: The PEC sponsors Bacon’s Rebellion’s coverage of transportation and land use issues but keeps an arm’s-length distance from our reporting.) The treasure trove of emails and other documents sheds light on project uncertainties and risks that Gov. Bob McDonnell’s transportation team did not discuss publicly until after the project was a done deal.

    Roughly one month ago, Bacon’s Rebellion submitted a list of detailed questions to VDOT seeking to clarify or confirm points arising from the documents and to solicit any additional information that would place the department’s actions in context. Lou Hatter, public affairs manager for the Culpeper district, replied that Commissioner Gregory A. Whirley had already addressed those questions when he spoke about the Charlottesville Bypass at the Commonwealth Transportation Board meeting on September 21 and when I interviewed him shortly afterwards. Said Hatter: “The information Mr. Whirley provided stands as the Department’s response to your questions.”

    Two days before publication, Bacon’s Rebellion submitted relevant passages of this article to show the case we were making and the documentation behind it, offering VDOT one more chance to respond. Hatter thanked me for the communication but declined to comment. (more…)

  • The Wonk Salon, November 3, 2011

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    James A. Bacon

    The Strategic Importance of Advanced Manufacturing
    Third Way
    Advanced manufacturing sustains millions of jobs and is a key source of innovation, productivity and exports. How do we encourage more of it? By setting up government programs to stimulate more R&D and capital investment.

    Economic Development Tax Credits Don’t Do Much for Job Creation
    Show-Me Institute
    Tax credits are a favorite economic-development tool for state and local governments. But the economics literature says that the employment benefits are minimal.

    The Impact of Globalization on New York
    Center for an Urban Future / SUNY Levin Institute
    No state has benefited more, and suffered more, from globalization than New York. Manhattan has prospered while Albany and Rochester have fared better than most. But the manufacturing sector of the rest of New York has been hollowed out.

    State Debt and Liabilities: $4 Trillion and Counting
    State Budget Solutions
    When you tote up official state debt, pension obligations and other long-term liabilities, aggregate state indebtedness now exceeds $4 trillion. Among the 50 states in less-bad shape are Utah, South Dakota, Virginia, Wyoming and Idaho.

    Inside the Nation’s Education Report Card
    Education Sector
    Everything you wanted to know about the National Assessment of Educational Progress but were afraid to ask.

  • Art for Economic Development’s Sake

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    James A. Bacon

    Artists as Percentage of State Workforce. Click on map for more legible image.

    by James A. Bacon

    Forget about art for art’s sake. Let’s talk about art for economic development’s sake.

    A couple of days ago I lauded the City of Richmond’s efforts to create a downtown arts district. (See “Richmond’s Wine-and-Brie Path to Community Development.”) I was thinking mainly in terms of the effect that a cluster of artists would have in improving the region’s quality of life, making Richmond city a fun — dare I say it, even a cool  — place to live. It turns out that I may have sold the arts district short by neglecting to observe that artists also make decent money and contribute to innovation.

    A research update to a study by the National Endowment for the Arts, “Artists in the Workforce: 1990-2005,” suggests that artists aren’t all of the starving variety. Indeed, the median wage/salary for artists — a group ranging from architects, producers and writers on the high end to dancers, photographers and “other” entertainers on the bottom — averages out to be $43,230. That’s 10% higher than the average wage.

    Artists are highly entrepreneurial: they are 3.5 times more likely than the total United States workforce to be self-employed. They also are better educated — more than half have a bachelor’s degree. However, they also are less likely to have full-year or full-time employment, which accounts for their having lower median incomes than workers with similar education levels.

    Not surprisingly, New York and California have among the largest concentrations of artists in the country, although the top honors goes to Washington, D.C., with 3.1% of the population. (That’s “artist,” not “con artist.”) The home state of Broadway counts 2.3% of its residents as artists, while artists comprise 2% of the workforce in LaLa Land. Virginia lags the national average: only 1.3% of its workers are classified as artists. Virginia stands out artistically speaking only in one way: It has a high concentration of writers and authors. (Ironically, Virginia ranks way below average in the book publishing occupational cluster.) Richmond, for what it’s worth, has a high concentration of dancers.

    As economic geographer Richard Florida has observed, artists are a key component of the “creative class” that contributes disproportionately to innovation and entrepreneurial activity. In the case of Richmond, the artistic cluster seems to be tied closely to the advertising/marketing industry segment. We’re not talking “high tech” here — a will ‘o the wisp for a region like Richmond.  But encouraging the growth of Richmond’s artistic community strikes me as a sound economic development strategy that builds upon existing assets (the Martin Agency, the Virginia Museum of Fine Arts, the VCU arts department) and contributes to the growth of a robust creative class.

  • The Wonk Salon, November 2, 2011

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    James A. Bacon

    Thirty-four Referenda this Year
    National Association of State Budget Officers
    It’s an off-year for elections so there are only 34 ballot measures in nine states this year, down from 160 last year. The referenda range from voting on slot machines in Maine to approving/rejecting an Ohio law limiting collective bargaining.

    Implementing Common Core State Standards
    National Governors Association
    Forty-four states serving 80% of the nation’s K-12 school population have adopted new common core standards in English/language arts and mathematics. But policy makers can do more.

    How States Can Support Creativity and Innovation
    Southern Growth Policies Board
    Innovation is the only way to climb out of the current economic malaise. States can stimulate innovation by establishing venture funds, hiring world-class researchers, establishing R&D tax credits, promoting STEM teaching careers and undertaking other measures.

    Healthy Americans, Health Economy
    Trust for America’s Health
    Healthy Americans are more productive at work. States and communities around the country are partnering with business to encourage employees and their families to make healthier choices.

    Best Start LA off to a Slow Start
    Urban Institute
    Best Start LA is designed to strength the capacity of families to raise children and the capacity of communities to support families. In other words, it takes a village. But this program seems to be having trouble getting off the ground.

  • They Attack By Night

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    Peter Galuszka

    By Peter Galuszka

    It may go without saying that propaganda campaigns
    only tell part of the story.

    So it was in Richmond’s downtown Kanawha Plaza where a small band of “Occupy Richmond,” an offshoot of the national protest movement, had been camping since Oct. 15. This little group was protesting abuse of democracy and financial power not far from the capital city’s tall office buildings with their banks and law firms and lobbyist offices.

    Mayor Dwight Jones ventured out to the makeshift camp to chat with the protestors and invite them to continue a conversation. Members of the state’s conservative movement, notably the Tea Party, were quick to complain. They got airtime on Fox News and blogger attention on sites such as this one by complaining that the lefties in the city (read African-Americans) were coddling the Occupy people while the Tea Party had been charged $10,000 for a rally. They sent the city a bill for a refund.

    Things were not as they seemed. The city struck in the wee morning hours of Halloween. The tip off vanguard was a number of dump trucks that parked near the encampment. Then city police, augmented by Virginia State Police, appeared, some on horseback.

    The protestors were given a chance to leave or face charges of trespassing and being in a park after hours.  Some left. Others didn’t. The phalanx marched. Nine were arrested. Of Tuesday four were still being held in jail without bond. The camp areas were power-washed.

    So where’s the big news flash on Fox? Millions of Fox viewers will be left with the impression that Richmond is soft on lefties. Where’s the update on my fellow blogger Norm Leahy’s postings? His right-wing audience is probably still nodding in agreement about how the Establishment is two-faced about handling political parties.

    But then so is Mayor Jones who ends up as the villain of this tale. If anyone is two-faced, it is he.

  • Danger, Will Robinson: Metro Traffic Projected to Decline

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    James A. Bacon

    Metro station at Ronald Reagan Washington National Airport

    The Washington Metropolitan Area Transit Authority (WMATA)  is projecting a decline in ridership of as much as 5% in the next budget year. If Congress fails to extend Stimulus Act subsidies for federal employees, reports the Washington Examiner, ridership could dip another 2.8%.

    An WMATA spokesman blames a switch to manually operated trains in the wake of the deadly Fort Totten crash in 2009, which has slowed service. Furthermore, extensive track work has led to delays and closed stations. A maintenance backlog also has resulted in broken or rehabbed escalators. And don’t forget the impact of a fare increase and prolonged unemployment. It all adds up to a projected loss of $12 million in rail revenue — $28 million if the federally funded transit subsidy expires.

    In related news, WMATA’s budget forecasts indicate that the opening of Phase 1 of the Rail-to-Dulles project could run three months late, with a start date of Spring 2014, and that ridership will amount to 14.4 million in the first year — down from the official forecast of 15.3 million. So reports the Examiner.

    So, how much will Metro rail subsidies cost the commonwealth and its participating jurisdictions? According to Metro’s 2012 Budget Book, in FY 2012, Metro rail will require $149 million in operating subsidies. Virginia jurisdictions’ share will be $37.4 million. Plus, Virginia state and local governments will cough up an extra $110.2 million for capital improvements. (Fairfax County’s contribution should swell when Phase 1 of Rail-to-Dulles comes on line.)

    Here’s my worry: Metro Rail is a critical part of the metropolitan Washington transportation infrastructure but it relies heavily upon local government funding to cover operating expenses and capital maintenance. What happens if the federal government actually starts cutting spending (as opposed to pushing spending cuts into the indefinite future), workers get laid off, contracting work dries up and local tax revenues decline? Will the WMATA board curtail capital expenditures to alleviate local governments’ fiscal pain? If so, will maintenance suffer? If it does, will that hurt ridership? Will declining ridership bite into revenues, all in a vicious cycle?

    I’m not sure we have a fiscal formula that’s sustainable through the hard times that are bound to come. But we’re doubling down with the commitment to Rail to Dulles. I’m getting the heebie-jeebies just thinking about it.

    — JAB

  • The Wonk Salon, November 1, 2011

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    James A. Bacon

    A Modest Proposition: Treat College Students as Customers
    Center for American Progress
    Too many students fail to graduate from college, and among those who do, too many fail to acquire marketable skills. It’s a wild and crazy idea, but maybe colleges should make students their central focus.

    Teachers Paid 52% above Fair Market Value
    Heritage Foundation
    True, teachers get paid less than other college grads — but they tend to have fewer marketable skills. Given the value of their pensions, retirement health care and job security, their total compensation is 52% higher on average.

    Eat Taxes, Fat Boy!
    Tax Foundation
    The newest tax-raising craze in the 50 states: taxing sugar on the grounds of reducing obesity. Seventeen states now tax candy at a higher rate than other groceries, and four states collect a tax on sodas. Just one problem: Adolescents offset calories from sodas and sweets with calories from other sources.

  • Richmond’s Wine-and-Brie Path to Community Revitalization

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    James A. Bacon

    by James A. Bacon

    First Fridays Art Walk in downtown Richmond has a long way to go before it reaches the iconic status of, say, Miami’s South Beach or San Antonio’s canal walk, but it is increasingly defining the City of Richmond and, by extension, the Richmond metropolitan area. The art walk arose spontaneously a decade ago from the initiative of several art gallery owners to drum up business by instituting an art-world parallel to a Friday night pub crawl. People came in trickles, then in streams and now in droves. The monthly event has expanded to theaters and performing arts, restaurants and boutiques along the once-moribund Broad Street corridor, drawing from all walks of life. There’s so much activity that the city has had to get involved to regulate sidewalk vendors, enforce noise ordinances and clamp down on petty street crime.

    The idea for First Fridays Art Walk didn’t emerge from some consultant’s study,  Chamber of Commerce brain storming session or an idea-seeking delegation to another city. It arose from ground-up civic entrepreneurship and the unique tastes and sensibilities of the region.

    Richmond is one of the few Top 50 cities in the country without a major league sports team. We do have a AA team baseball team, the Flying Squirrels, and people do seem to like them. But we couldn’t get our act together to keep the AAA Richmond Braves, much less attract a big-league team. And if we don’t figure out how to finance renovation of the Diamond baseball stadium, we could lose the Squirrels. But we have one heck of an arts scene. In the Virginia Museum of Fine Arts, we can boast of the finest regional art museums in the country. At Virginia Commonwealth University, we have one of the highest ranked university art programs in the country. If we can’t aspire to being big league in the sports world, perhaps we can aspire to become big league in the arts world.

    In that spirit, City Councilman Charles R. Samuels has introduced an ordinance to create the Historic Broad Streets Arts District spanning 27 blocks in downtown. The proposal would qualify theaters, galleries, museums, dance studios, music halls and historical sites for special benefits such as participation in the city’s revolving loan program, tax exemptions and marketing/promotion dollars, according to the Times-Dispatch. The councilman’s heart is in the right place — better for the city to provide modest support to the arts than to spend multi-millions renovating a baseball stadium. But, as much as I love the idea of a turbo-charged arts district, I think he may be going overboard.

    Permit me to draw a distinction between different types of assistance that a city can offer. The most important assistance is enforcing ordinances to maintain public order and tranquility. Street vendors are getting out of hand? Fine, license them. Bands and boom boxes are too loud? Fine, enforce the noise ordinance. Petty thieves are picking pockets? Fine, assign a few police to patrol the streets. The city can do things like enforce parking ordinances, chase off the prostitutes and clean up the trash the next day. That’s the basic function of government, and the City of Richmond appears to be doing a good job.

    The second thing a city can do is get out of the way. For example, it can relax zoning codes that prevent artists or business owners from living in loft space above studios, galleries, shops and restaurants. It can prioritize building permit applications and inspections for entrepreneurs who are renovating old buildings. Both of ideas are part of Samuels’ package.

    The third thing a city can do is to actively help. Samuels proposes subsidies both direct (city appropriations for marketing) and indirect (reduced or waived fees from the city’s revolving loan program, a non-profit exemption from the city’s 7% admissions tax, and a temporary exemption of the business-license tax for arts-related businesses).

    That’s where I get nervous. I believe that government’s job is to create a level playing field for everyone, not to pick winners and losers. What if the city had favored some other use of downtown ten years ago? Would the Arts Walk ever have taken off? On the other hand, none of Samuels’ ideas should be terribly expensive and they can be easily reversed if they get out of hand — not like issuing $50 million in municipal bonds, say, to rebuild the baseball stadium, an action that cannot be undone.

    Whatever the final fate of the ordinance, it places the city’s priorities in the right place. The Arts Walk makes a fine fit with other grass roots institutions like the James River Writers Festival and the VCU French Film Festival. I’m a wine-and-brie kind of guy, and I’m happy for Richmond to carve out its defining niche as a wine-and-brie kind of town.

  • Work Ethic, the Welfare State and the Income Gap

    Posted on

    by

    James A. Bacon

    by James A. Bacon

    Once again, Bacon sallies forth into the debate over the rising income gap… The latest piece to catch my eye is a new paper, “The Swedish Model Reassessed: Affluence Despite the Welfare State,” by a Finn, Nima Sanandaji, and published by the Helsinki-based Libera Foundation (which, as far as I know, is not funded by the Koch brothers, although you never know for sure, because they do have a global reach!)

    Sweden is American lefties’ favorite country because it is living proof that the socialist welfare state works. The Swedes, for all their high taxes and wealth redistribution, have maintained a high standard of living. However, Sanandaji argues that the Swedish model worked briefly only because it was living off the prosperity created by decades of entrepreneurial, wealth-creating capitalism, a strong work ethic and a value structure that inhibited Swedes from gaming the system.

    By the early 1970s, the socialist welfare state reached its apogee — and economic growth slowed dramatically. By the 1990s, the Swedes realized the system wasn’t working and embarked upon a dramatic about-face. While taxes remain high and the labor market rigid, Sweden enjoys among the greatest economic freedoms of any country in the world. The private sector is highly competitive and globalized, school vouchers create competition between schools, the national pension system has been partially privatized and tax rates have been cut. As a result, economic growth has rebounded.

    The most intriguing aspect of Sanandaji’s paper is the emphasis given to social norms. Until recently, Sweden was one of the most homogenous societies on the planet. “For a long time, the religious, cultural and economic systems in Sweden fostered strong norms related to work and responsibility,” he writes. “Since the norms relating to work and responsibility were so hard, Swedish citizens did not usually try to avoid taxes or misuse generous public support systems.”

    But as Swedes came to feel increasingly entitled to generous government benefits, those norms declined. In 1981-84, almost 82% of Swedes said that “claiming government benefits to which you are not entitled is never justifiable.” In a 1999-2004 survey, the percentage had declined to 55%. Since the partial rollback of the welfare state, that sentiment has moved back up to 61%.

    Sanandaji cites Swedish scholar Assar Lindbeck’s theory on the self-destructive dynamics of the welfare state: Welfare erodes norms relating to work and responsibility. As dependence upon welfare state institutions increase, the work ethic declines… and dependency increases.

    Now, let’s bring that back to the ongoing discussion over the income gap in the United States. We are approaching nearly a half century of the Great Society. We’ve had two or three generations of Americans born into welfare-state dependence. Has there been erosion in the work ethic? Many would say that, yes, the work ethic is weaker across the board, affecting all strata of society. (I know how hard my wife and I try to instil a work ethic in our 13-year-old son — trust me, it’s hard work!) But I would hypothesize, subject to empirical verification, that the erosion of the work ethic has been most acute among those raised in the multi-generational culture of poverty, e.g., a culture of welfare dependence. Insofar as the lowest-income Americans regard financial support from the government as a right and entitlement, they feel less motivated to make the sacrifices needed to acquire an education, work hard and find better jobs and make more money.

    If the bottom 20% of American tax filers are earning no more in inflation-adjusted dollars than they were 30 years ago, it’s not because America’s market-based economy is inherently biased against the poor. (The crony-capitalist system that we are embracing may favor the rich, but that’s a different issue.) Tragically, the disparity in income is used to justify even more of the wealth redistribution schemes that helped create that disparity. But the redistributionist schemes will only perpetuate the culture of dependency and poverty.

Now Available

Book cover of 'Dust Mites: A Second American Revolution' by James A. Bacon, featuring astronauts planting a flag with a blue and white emblem on a lunar landscape, with Earth visible in the background.
For sale on Amazon.com

The year: 2075. The American colonies on the Moon are getting restless under Washington’s tyrannical rule….

This second edition of “Dust Mites” has a snazzy new cover, includes helpful lunar maps, and is 5,000 words tighter than the original. The sequel, “Trogs,” is scheduled for publication this summer.

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