Bacon's Rebellion

Everyone knows that Virginia’s redistricting process is an abomination: an occasion for back-room deals in which the power brokers reward their friends, punish their enemies, protect incumbents, split municipalities between multiple representatives and effectively disenfranchise swaths of the electorate.

But let’s see you do better. The Bipartisan Advisory Commission on Redistricting, chaired by Bob Holsworth, was tasked with developing principles for Virginia’s 2010 redistricting process and found itself juggling oft-conflicting goals of: (1) creating equally sized districts and (2) maintaining compactness, while (3) not splitting cities and counties or (4) diluting African-American votes. It ain’t easy. But the commission’s efforts did yield a new electoral map for Congress that Virginians can take pride in. Above is the first of three options presented. (The 3rd District is the state’s minority-majority district.)

It’s nice to be proven right. I make a lot of predictions on this blog but most will not be proven right or wrong for many years, by which time everyone (including, probably, me) will have forgotten I ever made them. But once in a while a prediction comes true within my gnat-like memory span, allowing me an opportunity to gloat.

Such is the case with the news reported by the Wall Street Journal that malls in the nation’s largest 80 metro areas hit their highest vacancy rates since 1990 in the first quarter of 2011, and could reach 11% later this year for strip malls and regional shopping centers. Now, I was hardly the only one to observe that the recession would severely impair retail sales and put a dent in retail vacancies, so I cannot claim any special prescience on that score. But only a few observers of the retail scene (Ed Risse was another) went out on a limb and predicted that the vacancies would hit hardest on the metropolitan periphery.

Lo and behold, the Journal reports:

Holy conservative! Richmond’s ruling elite is having a train wreck with the McDonnell Administration.

Dana Milbank knows how to skewer pandering politicians of both political Clans.

Milbank does it by using their own words. On 6 April Milbank did a fine job on the blue eyed wunderkind from the southern part of Wisconsin, Paul Ryan, Chair of the House of Representatives Budget Committee in “Paul Ryan picks a fight.” (WaPo 6 April 2011)

At a press conference wunderkind Ryan referred to the House Budget Committee’s proposed federal budget proposal as a ‘cause,’ not a ‘budget.’

Ryan is on a crusade to support his ‘cause.’ That is not bad per se, unless as is the case here, it is a very BAD cause.

Ryan is on a crusade to save his congressional seat and pave the way to ‘higher office.’

Ryan is on a crusade to save his and other Clan member’s campaign supporters.

Ryan’s crusade is fanning the Anger of Ignorance and contributing to Intentional Ignorance.

Ryan’s crusade sounds a lot like the rhetoric of another pretty young fellow from the central part of Virginia: Choirboy Cantor. Mr. Bacon did not vote for Cantor. For the record, EMR would not have voted for him either. EMR would have written in James A. Bacon unless there was a AntiPartisan candidate… but that is another story.

Ryan in on a mission, a cause.

That cause is not in the best interest of the vast majority of the citizens of the US. It is a hard turn away from democracy and from preserving a market economy to allocate resources and fairly distribute total costs of human activities.

Ryan, and those he speaks for, hope to squeeze a few more years out of the current trajectory but they do not understand the full context of THE CURRENT TRAJECTORY.

No one in their right mind thinks the federal Agencies should spend as much money as they do.

No one in their right mind thinks that the Federal Agencies should spend the citizens resources on all the things that resource is spent on.

That said;

No one in their right mind thinks the place to start is to shut down the government (‘starve the beast’) or cut taxes for those at the top of the Ziggurat.

First, both Clans – and everyone else in the US – must understand and publicly admit that it will cost FAR more than anyone is now paying to maintain anything like the quality of life that has been enjoyed during the Age of Gluttony.

Citizens and their Organizations have been enjoying the Era of Mass OverConsumption. Federal, state and municipal Agencies – along with Enterprises, Institutions and Households – have been living off Natural Capital. That Natural Capital – energy of course, but also top soil, potable water, fresh air and everything else the environment provides–is running low and half the human population is in active pursuit of far more than they have been getting. See ENOUGH? (Forthcoming)

The fundamental flaw in this “starve the beast, budget for the 1960s” approach is that to meet Core Agency responsibilities it will require FAR MORE RESOURCES than are now being applied to PUBLIC health, safety and welfare.

The infrastructure that is needed to support an advanced civilization is falling apart.

It is not just roadways and bridges, it is water and sewer lines,too Communications networks over burdened to support Mass OverConsumption and the waste of time.

Airplanes are popping open and diving out of the sky. Every existing nuclear facility is near obsolescence. Coal is more dangerous to humans (in deaths per megawatt) that nuclear. Any strategy to supply as much energy consumption per capita for all humans as is now consumed by citizens of the US will trigger an economic and physical disaster.

And then there are the basics needed to support even a New Bronze Age: Water, Food and Shelter.

Fresh and sea water is growing more contaminated.

The food supply chain is long and unsafe by the standards humans have come to expect. Food costs are skyrocketing because energy is skyrocketing. Top soil continues to erode.

In shelter, Agencies and Enterprise have conspired to create the Wrong Size House in the Wrong Locations – exacerbating the Mobility and Access Crisis, creating the Affordable and Accessible Housing Crisis and compounding the Helter Skelter Crisis.

Health Care has higher costs and worse outcomes than in most other ‘developed’ nation-states. Mental Health Services are a discrase.

AND SHUTTING DOWN THE FEDERAL GOVERNMENT IS A ‘PRIORITY?’

Most efficient and effective way to achieve a sustainable trajectory is to evolve a Fundamental Transformation of settlement patterns.

However, as pointed out in TRILO-G, that will not happen until there is Fundamental Transformation of both the governance structure and the economic system.

As pointed out in the Section 1.4 of CITIZEN MEDIA, THE NEXT STEP, until reality is understood by a majority of citizens and the processes is underway to achieve those Fundamental Transformations, citizens of the US will be not be happy or safe.

Charades and Causes will not address the problems, causes make them worse.

Full disclosure:

When Groveton first started to sing the praises of Paul Ryan, EMR printed out Ryan’s “A Roadmap for America’s Future” May 2008 (H.R. 6110) and read it from cover to cover. We just dug it out, it was filed away under the title “Saving Public Ryan.” From himself.

“A Road Map for America’s Future” is an historical artifact. If this WAS a roadmap it was a guide for the late 1940s. Citizens needed a pep talk, lest they lose confidence and abandon the rebuilding of Europe and Japan and stop applying the innovations and technology that evolved from 1870 to 1950.

Since then citizens of the US have been sharpening the points. From 1950 to the mid 70s ‘everyone’ benefitted. Since then only those at the top of the Ziggurat.

Anytime since the wake up call of 1973, Ryan provides a roadmap to Lemmings Cliff.

Along the way the signs read: “Buy More and More”, “Spend More and More – On Credit”, “Consume, Grow and Expand – The Cancer Cell is our Hero,” “Drive Here, There and Everywhere”, “Exploit Whatever You Can”. “What Great Grandchildren?” The road led from “Morning in America” to “Go Shopping” and on to “Next Stop, The Cliff.”

This is not a partisan issue. This is not a political spectrum issue. This is a survival of Civilization as it has been known issue. See ENOUGH? (Forthcoming)

Humans cannot “grow” out of problems they have created. They must Balance consumption with conservation and Balance competition with cooperation. The true Conservatism.

Fundamental Transformation must start with each Household understanding their best interest – individually and collectively.

Understanding must grow to shape the future of Dooryards, Clusters, Villages and Communities. It does not start with shutting down the federal government or with cutting taxes on those at the top of the Ziggurat.

The federal Agencies must spend less, but far MORE must be spent than the current total being spent at federal, state and municipal scales to provide Core Agency health, safety and welfare priorities.

Anyone who does not acknowledge this is just trying to ride the tiger one more hour, one more mile, to get one more perk.

Those willing to hack at federal programs before establishing a path for MegaRegions, Regions (See Mr. Bacon’s 5 April post on the Brookings Regional proposal — metro’s rule), SubRegions, Communities, Villages, Neighborhood and Cluster governance is putting all citizens and their future at risk. See ENOUGH? (Forthcoming)

EMR

Why Colleges Grow Fat while Students Starve
Center for College Affordability & Productivity
Colleges and universities capture the economic value of increased financial aid, so tuition and fees remain as unaffordable as ever. (See related Bacon’s Rebellion blog post below.)

The cost of higher education remains unaffordable to so many students because colleges and universities “capture” the benefits of financial aid (federal grants, veterans benefits, state grants and private grants) by increasing tuition and fees, argues a recent report, “How College Pricing Undermines Financial Aid,” issued by the Center for College Affordability and Productivity.

The authors identify a little appreciated mechanism that enable colleges and universities to charge what the market will bear: They possess information that players in other industries do not. They know how much their customers (students) can realistically afford to pay and how much external aid they receive from third parties. Armed with that information, they know how much they can increase tuition or lower their own grant aid without losing market share.

As prestige-maximizing institutions, universities are driven to increase spending. “Competition between institutions is driven by academic reputation,” the authors write. “Due to this persistent uncertainty, each institution must signal quality through expensive proxy signals, such as the quality of their students, research, facilities, or athletic teams. If an individual institution forgoes capturing increased financial aid dollars, it cannot compete; its status will decline as will its ability to attract good students. This behavior is reinforced by the fact that students and their parents associate high cost with high quality. … Higher education is engaged in an expenditure ―arms race that thwarts policies to increase public access and redistributes wealth to higher education insiders.”

Where does the money go? The authors cite the falling productivity and rising compensation for faculty as a major driver of costs. Over the past three decades, the faculty-wage component of cost per student rose by 33% among public institutions and 72% for private. At the same time, student-faculty ratios declined by 25% and 28% respectively. Evidence from other sources suggests that institutions of higher ed have experienced considerable administrative bloat as well.

There is reason to believe that Virginia’s institutions of higher education do deliver more bang for the educational buck than public institutions in other states. Yet tuition and fees are soaring here in Virginia as well. The usual college gambit is to blame insufficient state funding — which will take a big hit in FY 2012. But that excuse is wearing thin.

An Aussie organization called the Institute for Economics and Peace, publisher of the Global Peace Index, has now rolled out a American version, the United States Peace Index, that ranks the 50 states by their “peacefulness.” There are “hundreds of billions of dollars” of potential economic benefits associated with domestic tranquility, asserts the Institute, if only Americans would only get with the program and become more like Canadians.

The Old Dominion may strike Virginians as a fairly peaceable state, given the fact that 2009 crime statistics rank it 7th in the country (as in 7th lowest) in the category of violent crimes per 100,000 people. Yet the commonwealth ranks only 25th nationally for peacefulness under the Institute’s methodology.

What’s that? It turns out that there’s more to “peacefulness” than a proclivity to avoid shooting and stabbing one’s neighbors. The methodology for compiling the Institute’s index also includes the number of murders — a legitimate metric, in my book, in which Virginia fares rather badly. But it also uses metrics of dubious value, such as the number of incarcerations per 10,000 people, the number of police per 10,000 people and the “availability” of small arms. And it turns out that Virginia has more police and puts more of its criminals in jail than many other states.

What? To my feeble mind, peacefulness should reflect actual conditions — freedom from murders and violent crime. But apparently that’s not sufficient. Is there a social justice aspect to this — incarcerating criminals is a negative, even if it means they aren’t committing mayhem? Hiring more police to arrest criminals and ward off crime is a negative… because it’s evocative of a police state? Someone please help me here.

The most ludicrous metric is “availability” of small arms. It doesn’t matter if people actually bear the arms, much less if they actually use them against one another. Simple access to small arms is presumed to be a negative.

Well, I suppose if Virginians were truly peaceful folk, they would have low crime rates like the inhabitants of Maine, New Hampshire and Vermont. I don’t know if it’s because the compilers were foreigners and not attuned to regional differences or just because they had their goody-two-shoes blinders on but they go to great lengths to correlate peacefulness with “significant socio-economic correlations” with such factors as educational achievement, infant mortality, teen pregnancy, poverty and the like. What they don’t explore is the connection between peacefulness and race/ethnicity.

As it turns out, the most peaceful states in the country happen to be among the whitest states, as in low percentages of African-Americans, Hispanics and even Asians. But they don’t have just any old kind of white people. They have white people from the New England Yankee tradition and white people of Scandinavian heritage. These states do not have large percentages of Scotch-Irish white people, or white people of Southern redneck lineage, both of which have long traditions of violence. I would argue that cultural traditions of peacefulness and a social homogeneity that preserves those traditions explain a whole lot more than anything that the peacenik Institute touched upon.

States with peaceful populations have lower crime along with low rates of incarceration and small police forces because people behave themselves. Maine Yankees and Minnesota Swedes, like Canadians, are different from most Americans. The rest of us, well, we need more police and bigger jails to take the bad guys out of circulation. Considering the recalcitrant raw material we have to work with — us — I think Virginia does pretty darn well in maintaining the peace. We should have ranked higher.

More Poor in Virginia
The Commonwealth Institute
The recession pushed thousands of Virginians into poverty — college graduates were hardest hit.

Breaking the “Whole School” Model
American Enterprise Institute
America’s centralized, one-size-fits-all schools are so 20th century. The future is in virtual schooling and customized education.

Medicaid Expansion and Physician Supply
Robert Wood Johnson Foundation
What happens when Obamacare expands the insured population by tens of millions of Americans? Poor people will have insurance — they just won’t have doctors.

A commonly used measure of the tax burden is the average tax revenue a state and its localities collect per resident. But that’s not the same as the amount of taxes that residents actually pay. How can that be?

Mark Robyn with the Tax Foundation provides the explanation in a new analysis: “Some states have special sources of revenue, such as oil taxes and large tourist industries, which are easily exported to residents of other states. Also, some taxes are naturally exported through no effort of state lawmakers. For instance, since the burden of corporate taxes ultimately falls upon customers, shareholders and employees, who are all located in many different states, the burden of taxes on corporations is naturally exported.”

“It turns out a quarter of the average taxpayer’s tax burden originates in states where he or she doesn’t reside.” Thus, Alaska ranks No. 1 nationally in “taxes collected” as a percentage of residents’ income (21%) but 50 in terms of “taxes paid” by residents (6.3%) thanks to its taxes on the petroleum industry.

How does Virginia stand? We’re in the opposite situation from Alaska — apparently, Virginians “export” very few of their taxes. Viewed by conventional measures, we are a low tax state. Using 2009 numbers, we rank No. 45 in state taxes collected as a percentage of residents’ income (8.9%). But we are a moderate/low-tax state, ranking 33, when measured by taxes paid by residents as a percentage of their income (9.1%).

Virginia is one of only eight states (by my quick eyeball count) in which taxes paid per resident exceeds taxes collected. Other states have figured out something that we haven’t. At least we can be thankful we aren’t New Jersey whose “taxes collected” rank it as the 7th highest-tax state but “taxes paid” ranks it the No. 1 most highly taxed state in the country.

The implication of this analysis is that Virginians are shouldering the burden of their own state-local taxes — and chipping in, through what they spend on gasoline, tourism and goods and services produced by out-of-state corporations, significant sums to other states. Maybe Gov. Bob McDonnell’s idea to put Interstate polling booths on the state line isn’t such a bad idea after all! (Actually it is an atrocious idea, but for other reasons. It would stick out-of-staters with a bigger share of the cost of running Virginia state government.)

This helps explains why the pressure for educational spending did not relent in Virginia over the past decade. I’d like to know what the demographers predict for the decade ahead. (The map comes from “America’s Diverse Future: Initial Glimpses of the U.S. Population from the 2010 Census” from the Brookings Institution.)

Metropolitan regions are the driving economic entities of the 21st century, supplanting the states and, given the gridlock in Washington, D.C., perhaps even the federal government. Who says? Not only our own Ed Risse, who has long contended that “New Urban Regions” are the fundamental economic building block of modern civilization, but Bruce Katz and Jennifer Bradley with the Brookings Institution.

Katz and Bradley have outlined their thinking in an article, “Metro Connection,” published in Democracy Journal, which everyone interested in regional economic development needs to read. I don’t agree with many of their activist-government proposals, but I do believe they have captured a critical reality that very few Virginia policy makers have integrated into their thinking, and their essay does confront readers with the vital question, how should states redefine relationships with their metropolitan regions, and how can states make them more economically competitive in a global arena?

“In the global economy,” their argument goes, “metros matter more than states.” Metropolitan regions are the crucibles where value-added economic activity and innovation take place. Metro regions are where industry clusters arise, allowing major corporations, vendors, suppliers, academia and other key players to interact and innovate. Metro also regions account for a disproportionate amount of exports and wealth creation.

Trouble is, metros don’t have a place in the federal or state constitutions. They are economic and social entities, not legal or political ones. Economic and political power need to be aligned. “We need a new way of thinking about governance and the economy that accounts for the economic power, informal structure, and diversity of America’s metros,” the authors write. What they advocate is “home rule turned on its head, with metros driving state priorities and investments, rather than states deigning to grant localities some independent powers.”

This is what I mean by “fundamental change” in governance structure. Virginia needs to rewrite its constitution to allow its New Urban Regions to create a metropolitan level of government. The idea would not be to create new powers for government, but to redistribute power, as Ed so often argues, to the level of impact.

So far, I’m with Katz and Bradley 100%. Then they veer in an unfortunate direction. They see the states taking over from a gridlocked Washington, D.C., as drivers of economic policy. Instead of investing in subsidies and tax breaks to lure business (they’re right, a bad idea), states should be investing — even issuing bonds — to help turn key industry clusters into export powerhouses (unfortunately, an equally bad idea). They see robust state government leading the economic transformation that the federal government no longer seems capable of doing.

In Bacon world, state, regional and municipal governments would focus on those key functions that only they can fulfill, performing these jobs as efficiently as cost effectively as they can. From an economic perspective, that means ensuring that citizens acquire the education and skills they need to compete in a global marketplace, developing the infrastructure needed to support economic activity, and keeping taxes as low as is feasible. Towards those ends, states, regions and municipalities must reform the regulatory and funding structures that have perpetuated Virginia’s dysfunctional human settlement patterns. More efficient land uses and transportation systems will make everyone more economically competitive, not just a select few beneficiaries of industrial policy, and will create more livable regions that attract the human capital that feeds innovation.

But never mind all that. The critical first step is to recognize the economic primacy of the metro (or New Urban Region) and begin the conversation on how to align governance with economic realities. A productive debate on the proper role of government in building regional economies will ensue.

Welfare Use by Immigrant Households with Children: A Look at Cash, Medicaid, Housing, and Food Programs
Center for Immigration Studies
It’s pretty simple, really: Immigrants are poorer than native Americans. Poor people use more welfare. Ergo, Immigrants use more welfare.

A New State of the States
Brookings Institution
It’s time for states to rethink their purpose. In the 20th century, they were laboratories for democracy. In the 21st, their role is to support metropolitan regions.

Public Sector Compensation: Correcting the Economic Policy Institute, Again
Heritage Foundation
The Economic Policy Institute gets it wrong. Public employees do get higher compensation than their private-sector counterparts — nearly 30% more.

One of my pet peeves is how the high cost of college tuition is creating a new debtor class in America. An outfit called the Project on Student Debt, which publishes data on the indebtedness of students at colleges and universities around the country, allows us to put numbers on the problem.

As it turns out, 57% of all 2009 Virginia graduates carried college-related debt; their average debt load was $19,918.

The percentage of public-university students with debt ranged from a low of 34% at VMI and UVa to a high of 81% at ODU. Debts tend to be higher at private institutions where tuitions are even higher.

Some of those students will enjoy a significant increase in their earning power thanks to the useful skills they learned in college. Others, who partied and boozed their way through school, will wind up with a useless credential. They would have been better off studying computer tech at community college. Of the many, many frauds perpetrated upon the American people, the myth that “everyone ought to go to college” — even if it means racking up $20,000 in debt — is one of the most pervasive and pernicious.

(Hat tip to Virginia Tomorrow.)

It is a strange world that we live in. There is an entire website devoted to bacon haiku, including this:

“No, Mr. Bacon,
“I expect you to sizzle”
Bacon, James Bacon

I have no idea who served as the inspiration for this poetry. There are many James Bacons, some disreputable, some nefarious, some dangerous, and a few who are solid members of the bourgeoisie such as myself.

But, clearly, I need to spend less time fooling around with the Internet.

I return to the idea propounded by my favorite left-wing blogger (see “The Song of the Uninsured Musician“) that free-market conservatives have offered no alternatives to the dysfunctional status quo or to leftist solutions such as Obamacare or universal care. I offered a fairly detailed analysis in my book, “Boomergeddon,” that describes a path to market-driven health reform, but who am I? I don’t have a Ph.D. or M.D. at the end of my name.

But Scott W. Atlas, M.D., does. This senior fellow at the Hoover Institution and editor of “Reforming America’s Health Care System,” lays out a broad brush-stroke approach to health reform that comes tantalizingly close to my own prescriptions. Hoover has run an excerpt from his book on its website, which you can read here. Here are Atlas’ remedies:

(1) Increase competition in health care insurance by allowing cross-state purchasing so people can shop at competitive prices in a national market “for the insurance they actually want to buy,” not the insurance their employer wants to offer. Government can cut the price of insurance by breaking down anti-competitive barriers “that result in shocking variations on the order of several multiples” among states in prices for equivalent coverage.

One specific measure: Allow small businesses to band together in trade associations to purchase coverage for their employees. If regulated by the Employee Retirement Income Security Act of 1974 (ERISA), these associations would be exempt from state insurance mandates and regulations. Which brings us to…

(2) Put an end to state insurance coverage mandates. “How about letting patients themselves decide what kind of coverage and benefits they want for their families?”

(3) Force transparency on the system so Americans can make informed value-conscious decisions on the basis of the price and quality of their providers. Writes Atlas: “The lack of patient demand for price information has allowed hospitals and doctors to cloak their price structure in a shroud of mystery and avoid public view. A powerful role of the government could be to require posting of prices for medical procedures and services, as well as qualifications of doctors. Information is power, and price visibility is essential to induce competition.”

(One of the few legitimate goals of government: Creating conditions like price transparency that allow markets to function properly.)

(4) Expand consumer choice by increasing, instead of restricting, the availability of insurance, and simplifying, rather than complicating, the rules and regulations of lower-cost plans. Why not permit people to buy high-deductible plans for catastrophic coverage with health savings accounts?

(5) Make health insurance portable. Why should health insurance be tied to one’s employment? “The essential portability of insurance — truly owned and designed by American consumers — eliminates the fear of job loss and exposure to financial disaster by loss of coverage and creates a huge new group of value-seeking shoppers for insurance.” While you’re at it, change Medicare and Medicaid to voucher programs.

(6) Fix the medical liability system. Defensive medicine accounts for up to 6% of total health care costs.

Badda boom! Badda bing!