Bacon's Rebellion

We have read posts filed periodically on this blog by a co-blogger (I won’t mention any names but his initials are PG) about the “xenophobic” motives behind the “wicked brew of discriminatory laws” enacted by the “Know Nothings” of Prince William County. Chief among the ordinances passed back in 2007 and 2008 was a provision that required county police to inquire into the immigration status of people detained for a violation of state or local law.

The question of how to deal with undocumented workers in Prince William County flared into a heated controversy that not only outraged PG but attracted national attention. With the passage of three years, emotions have settled down. It is now appropriate to ask, how did things work out?

As it happens, the Center for Survey Research, a unit of the Weldon Cooper Center for the University of Virginia, has just published an exhaustive analysis at the request of the Prince William County Police Department, which funded the study. The report, “Evaluation Study of Prince William County Police Illegal Immigration Enforcement Policy,” provides a nuanced picture that will provide ammunition for both sides of the debate. But proponents of the policy are most likely to feel vindicated. (See the PowerPoint summary here.)

The seven authors concluded that the policy was “smoothly implemented” and the county experienced few of the dire consequences — overzealous enforcement by police, a flood of litigation — of which opponents warned. Hispanics were not subjected to a wave of invidious racial profiling. Of the roughly 3,000 suspected illegals checked by police between March 2008 and June 2010, 99% were confirmed to be illegal.

Moreover, the policy had a modestly beneficial effect on the crime rate. In 2009 illegals accounted for for 8% of the arrests for rape, 3% for robbery, 9% for aggravated assault, and 6% for larceny. The biggest impact was on arrests for public drunkenness, 22.4% of which involved illegals. Overall, crime rates trended down slightly in 2008 as compared to 2007. A modest decline in violent crimes departed from the experience of other municipalities in the Washington, D.C. region.

The numbers do not bear out the prejudices of those who painted illegals as especially inclined toward criminality. But neither do they support claims that undocumented workers are more likely to be law-abiding than native-born citizens.

The study could document no financial savings to Prince William taxpayers, undermining one of the claims that agitated the send-the-illegals-home movement. The number of English-as-Second-Language students leveled off but did not decline. Most other services are federally regulated or funded, and most are denied to illegal immigrants by federal law or county ordinance.

As for public nuisances, the experience was a mixed bag. Prince William experienced a dramatic decline in the number of complaints about parking in overcrowded properties — down 38% — and less loitering at day labor sites. Yet weed/tall grass violations doubled between 2006 and 2008.

To me, the most interesting finding came from polling data that tracked Hispanics’ attitudes toward the county police and the county generally. The percentage of Hispanic respondants who had a favorable view of Prince William’s quality of life and expressed trust in county government took a nose dive between 2007 and 2008, clearly reflecting the fears engendered by the controversy and the wave of accusations that the new policies were motivated by xenophobia, dislike of “brown people,” hostility to Hispanics and so on.

What is remarkable is how strongly the opinions of Hispanics have bounced back. In 2010, Hispanics were more likely than blacks and others (presumably whites and Asians) to “want to live in PWC 5 years from now.” Admittedly, Hispanics don’t feel as favorably about the county as they did before the controversy erupted, when their views were more positive than those of whites or blacks by an ever higher margin.

The UVa researchers concluded that “it IS possible for a local government to have an impact on its illegal immigration experience.” Hispanics, for the most part, have gotten over the controversy. Maybe the rest of us should, too.

Virginia will pay an estimated $594 million in 2012 to service its $9 billion in tax-supported debt. That will make interest payments the sixth largest category of expenditure in the General Fund budget, behind public education, Medicaid, higher education, corrrections and the car tax rebate.

And those numbers do not include debt on transportation projects, or the money “borrowed” from the Virginia Retirement System.

The analysis comes from a 30-page reported prepared by the Senate Finance Committee staff for presentation to the committee during a November 18 retreat in Staunton. Reports Jim Nolan with the Times-Dispatch:

John W. Forbes II, state secretary of finance under former Virginia Gov. Jim Gilmore, has been sentenced to 10 years in prison after pleading guilty to federal wire fraud charges. It is by far the biggest scandal involving a state cabinet-level official in years.

The case also raises questions about a state entity that is supposed to use money obtained in a massive 1998 lawsuit settlement against four major tobacco companies for the public good.

That entity with the long-winded title of the Virginia Tobacco Indemnification and Community Revitalization Commission has so far distributed $728.7 million for do-good projects in the tobacco belt stretching from the economically hard-hit counties in Southside and Southwest Virginia. It also has paid out $288.3 million to state tobacco growers on the theory that they need help to weather the decrease in tobacco sales following a slew of health-related lawsuits and the end of a 1938 federal program that artificially propped up tobacco prices.

Forbes, who was the state’s top financial official from May 2001 until January 2002, also served on the tobacco commission’s board. In June 2001, he won a $5 million grant from the commission to set up the Literary Foundation of Virginia. Designed to promote adult literacy, the program apparently did little other than provide $1 million in salaries for Forbes and his spouse and help them buy a million-dollar house.

“You not only betrayed the citizens of the commonwealth, but also the governor that appointed you,” U.S. District Judge Henry E. Hudson told Forbes as he passed down the 10-year sentence in Richmond on Nov. 23.

But one has to ask what the real purpose of the tobacco commission is. It has done some useful work in helping small businesses grow and narrowing the digital divide in poor counties dealing with declines in the tobacco, textile and furniture sectors.

But why do tobacco farmers need nearly $300 million in aid? They had been living off federal largess for decades, namely, from a Depression-era program that kept tobacco prices artificially high by having the federal government restrict tobacco growing and sales.

After years of protection by a Congress controlled in part by Southern Democrats, the program created “allotments” allowing tobacco growing in areas of only about four acres. These units could be bequeathed to survivors and kept tobacco prices at levels perhaps several times higher than that of far more useful crops such as corn and soybeans.

I reported on the program for BusinessWeek back in the 1990s in my home area of Beaufort County, N.C. where I started reporting on tobacco in the early 1970s. One farmer had ammassed allotments of 30 acres and he paid more than a milllion dollars on the crop, thanks to the system. It was far more than what he got from other crops. The support program has since come to an end.

Virginia officials thought that tobacco farmers, who grow a deadly product, deserved more. So, one of the tobacco commission’s first activities was sending allotment holders checks for simply having an allotment. Some got up to $12,000.

A check of the allotment holders’ addresses that we did some years back at Virginia Business magazine showed that in some counties many holders didn’t even live in Virginia. In Brunswick County, about 28 percent didn’t live in Virginia, but in cities such as Philadelphia, Baltimore and Las Vegas. On Halifax County’s list, one holder lived on the Gold Coast of downtown Chicago.

All got checks from the commission’s $2.1 billion war chest. Another $1.7 billion went to the state’s general fund to be spent as the state saw fit. Although the tobacco settlement — Virginia’s share was $4.2 billion — was intended to be used to convince people not to smoke, only a tiny portion of Virginia’s payout has been used for this purpose.

This shows, once again, how much tobacco reigns as King of Virginia, despite the corruption it seems to generate.

Peter Galuszka

It has been some time since EMR visited the issue of MainStream Media (Enterprise Media) and THE ESTATES MATRIX. Among the four major projects on-going at SYNERGY one focuses on Citizen Media – the media serving the interests of the New Fourth Estate – citizens / Households.

FIFTH ESTATE OR FIFTH WHEEL

A recent discussion on Citizen Media turned up reference to ‘the fifth estate.’ It turns out that there are many voices in the ‘fifth estate’ dialogue. A quick survey revels that the ‘discussion’ of a ‘fifth estate’ appears to be among those who have not yet come to grips with the reality that the Old Fourth Estate, knighted by Edmond Burke in 1837, is dead and gone.

True believers in ‘Journalism’ cling to the delusion that the Old Fourth Estate lives on. In this context, they need a pigeon hole for the non-Enterprise ‘news and entertainment’ activity found in the electromagnetic environment – thus ‘the fifth estate’ handle.

As documented in THE ESTATES MATRIX, most of the Old Fourth Estate was SOLD OFF decades ago. That is not a bad thing unless those involved do not understand what happened.

This segment of the Old Fourth Estate is now part of the New Second Estate (Enterprises) and is known as Enterprise Media (aka, MainStream Media).

Some of the Old Fourth Estate – largely supported by First-Family-of-Journalism-Philanthropy – is now part of the New Third Estate (Institutions). It is a major component of what is known as ‘The Alternative Media.’ The Alternative Media shares the Institution Media sphere with, among others, the spinners and flacks of the Think Tank Media and the Partisan Politics Media. It is hard to tell them apart because they ALL drape themselves in the white robes of ‘Journalism’ and they frequently put on a crown labeled ‘freedom’ or ‘truth’ – but almost never ‘science.’

There is also New First Estate (Agencies) Media. Staff and consultants produce mountains of reports, data, studies, legislation and opinions for all three branches at the three current levels of Agency activity.

Finally, there is the New Fourth Estate (citizen / Household) media. This is a vast seething vat of fact, fantasy, emotion, ego and confusion facilitated by computing equipment and distributed by electronic communications and cheap paper.

The idea that the ‘journalism-based’ media is still a legitimate ‘fourth estate’ that is trying to provide citizens / Households with the information they need to make intelligent decisions in the voting booth and in the marketplace is preposterous. See THE ESTATES MATRIX

The idea that, beyond this ghost of estates past, there is a ‘fifth estate’ with the leverage, power, influence, impact or stature akin to Agencies, Enterprises or Institutions is preposterous squared.
If one is looking for a ‘new fifth estate’ that has economic, social and physical clout in the real world comparable to the Estates of the Realm (1304 to 1775) from which the current Four Estates emerged, the most logical candidates would be PACs and lobbyists. Or perhaps terrorists? How about the Communist Capitalist?

The yapping crowd of Bloggers and Tweeters having an Estate of their own? Please!!

ED BURKE WAS WRONG

The delusions concerning a media fourth estate and now a fifth estate is rooted in the mistake that Edmond Burke made in 1837 declaring News Media to be the Fourth Estate in the first place.

The early 1800s WAS a time when a new Estate was emerging in Europe – it came along after the Civil War in the US. But this new Estate was ‘citizens,’ not ‘media.’ The rise of citizens as an Estate reflected the tectonic plate shift that disassembled the Old First Estate and the Old Second Estate in 1775. See End Note One.

The Media of the 18th, 19th and 20th century DID represent citizens and Households – for a while. That was because citizens bought the media product – literally – to get news – the information they needed to make the transition from an agrarian society to an Urban society.

As citizens became more educated and more prosperous – the ‘rise of the Middle Class (which is also gone, see THE ESTATES MATRIX) – more and more of them voted and more and more of them could afford to buy stuff. The influence of citizens / Households grew and thus so did the influence of the media.

But as media outlets gained influence they also made money and that attracted the New Second Estate. When the founders of the First Families of Journalism got tired, and the next generation got lazy, almost all the old line media outlets sold out to Enterprises. Those that did not sell out, morphed to become stockholder / balance sheet accountable Enterprises. This allowed First Family of Journalism members could get their money out of the media activity without an outright sale.

Most of the NEW media outlets have been started and / or agglomerated by Enterprises because it required capital to get into and stay in a field dominated by Enterprises. (Electronic media allowed some entities that did not generate much cash flow to exist but that is another story for another time.)

This is not ‘good’ or ‘bad’ it is a fact.

‘Journalist’ and the schools of journalism and the journalism foundations supported by First-Family-of-Journalism-Philanthropy have not yet come to grips with the reality that Enterprise Media cannot not REALLY support the ethics and goals of ‘Journalism.’

Morally and legally, Enterprise Media answers first to the stockholders. If the owners of a media outlet have goals other than maximizing profit, they are by definition an Institution and the owners are not stockholders. See Robert Reich on the impossibility to serve two goals in Supercapitalism.

There is no question that journalism is a profession and there IS a great Journalism in the sky. Journalism (capital ‘J’) is guided by principles that benefit all four Estates. However, medicine is a profession, law is a profession, plumbing is a profession,… One does not see doctors, lawyers and plumbers calling themselves an Estate.

CITIZEN MEDIA

Because citizen / Households (The New Fourth Estate) are not getting the information they need to make intelligent decisions in the voting booth and in the marketplace, there is a desperate need for Citizen Media – media serving the Fourth Estate.

If one doubts that, check out The Anger of Ignorance that can be found in Enterprise Media and especially in Institutional Media.

In the view of SYNERGY, the only way citizens will get the information they need is to have their own Estate-serving media. The challenges for Citizen Media are:

1. Generating a process to gather, analyze, vet and present data / information related to the scales and range of interest of citizens that effectively involves journalists and the principles of Journalism. Journalism IS important, just not AS important as journalists tell each other.

2. Successfully involving volunteers in the gathering, analysis, vetting and distribution of information and in facilitating the cross-platform, cross-generation and cross-socioeconomic self-identification to reach a clear majority of citizens in any Alpha Community.

Volunteers are essential because that is the only way any Organization (in this case an Institution serving citizen communication needs) can afford to operate, AND

Because it is the only way to generate a sufficient level of awareness, interest, understanding and action across multiple scales and multiple topics to achieve the goal of proving the information needed for citizen to make intelligent decisions in the marketplace and in the voting booth. Survival of civilization depends on achieving those goals. (See PROPERTY DYNAMICS and the potential of understanding THE CURRENT TRAJ
ECTORY.) AND

Because advertising as a source of supporting the media is dying. Citizens do not believe advertising. Advertising driven Mass OverConsumption has led to debt, hardship and disintegration of a stable society.

Much of The Great Recession’s overhang is due to the failure of advertising to ‘stimulate.’ That is a good thing because there is a dwindling supply of resources to satisfy that stimulated consumption. See THE CURRENT TRAJECTORY for documentation that the Invisible Hand is far ahead of the ‘leaders.’

3. Establishing a clear understanding of the components of human settlement. That requires a comprehensive Conceptual Framework and a robust Vocabulary to articulate that Framework.

These tools are necessary so that citizens can identify where they are and where they want and need to go – literally. Where IS my Dooryard, Cluster, Neighborhood, Village, Community, SubRegion, New Urban Region – or what ever one chooses to call them.

Citizens and the media that support them must have this understanding so they can sort out what is important information, what is interesting information and what is entertainment and hype. See PRIMER

Without a comprehensive Conceptual Framework and a robust Vocabulary, citizens and their Households are adrift. Due to Geographic Illiteracy and Spacial Ignorance they do not even know they are lost.

It will be a while before most journalists understand this but until they do, citizens will continue to flounder without the information they need to make decisions in their own economic, social and physical best interest.

CITIZEN MEDIA IN CONTEXT: THE BOTTOM LINE

Observer recently posted a comment on “A Serious Proposal for Restoring Fiscal Sanity” (14 Nov 2010) concerning a discussion of legislative process and the role of / need for super majorities. The observation can be found in End Note Two. Observer ended the comment with this observation:

“…even these changes will make little difference – in fact they will not happen – until citizens have better information upon which to make decisions in the voting booth and in the marketplace that reflect citizen / Household best interests.”

In fact citizens cannot make well informed decisions on their own best interest on ANY topic until they have a reliable source of sound information.

That is true for Fundamental Transformation of human settlement patters,

That is true for Fundamental Transformation of governance structure (the topic Observer was addressing)

That is true for Fundamental Transformation of the economic system.

Without a reliable source of sound information democracy and market economies are not possible or as noted in “The Bottom Line in 500 Words”:

On a small planet with Global economic, social and physical interconnections, GROSS INEQUITY at the Community-, SubRegional-, Regional-, MegaRegional- and continental-scales OR between ethnic and religious groups is NOT sustainable.

All citizens must have the opportunity to prosper based on effort, ability and acceptance of responsibility for their actions – individual and collective. Success cannot be based on gambling, happenstance and inheritance or on inequitable distribution of resources and opportunity.

Avoiding Collapse of civilization as-it-has-evolved and the survival for Homo sapiens comes down to understanding that:

In a ‘flat’ world with:

1. wide-spread literacy,

2. Instant communications / information dissemination, and

3. Wide distribution of weapons of mass destruction / massive stockpiles of weapons of conventional destruction / ubiquitous access to weapons of inter-personal destruction:

There is no alternative but to make Fundamental Transformations of governance structure. These transformations can facilitate evolution of Fundamental Transformation of humans settlement patterns and of economic systems. These three Transformations are imperative if citizens are to achieve a sustainable trajectory for their civilization.

The question remains:

Will the genetic proclivities toward competition, acquisition, consumption and xenophobia that got Homo sapiens to this point in their evolution prevent the emergence of an Urban society with a sustainable trajectory?

EMR

END NOTES

1. A Note of clarification on THE ESTATES MATRIX – PART TWO of TRILO-G.

It is well documented that the evolution of the Estates of the Realm evolved in different ways in different empires, kingdoms and principalities up until 1775. Depending on who held the most cards at a particular time in a specific location the sphere labeled First Estate (Nobility OR Clergy) and Second Estate (Clergy OR Nobility) varied. In THE ESTATES MATRIX it is assumed that Nobility is the First Estate and Clergy the Second Estate. That makes the transitions after 1775 easier to explain. The Nobility is replaced by Agencies (Of the people, by the people) as the First Estate and the former nobility became a class within the Third Estate (Institution). The Clergy slipped from being the Second Estate to become a part of the Third Estates (Institution) and is replaced by Enterprises as the Second Estate reflecting the rise of Capitalism and Urbanization.

2. Observers comment on the legislative process and the requirement for super majorities to pass legislation in “A Serious Proposal for Restoring Fiscal Sanity” 14 Nov 2010:

“To several of us (perhaps a majority?) much in this string of comments is pointless.

“The comments are trapped under a number of dangerous assumptions:

“First they are trapped under the false assumption that it makes sense to have only three levels of governance (Agency) that correspond to the late 18th century agrarian society model – municipal, state and federal. New levels of Agency must evolve to reflect economic, social and physical reality.

“Second it is trapped in 14th century idea the highest level of governance has the final say on EVERYTHING. In this context, the only plurality threshold that counts is at the federal level.

“Third it is trapped in the assumption every decision needs to have the same plurality threshold – the same for setting speed limits and for doubling the debt limit.

“Fourth it is trapped in the assumption that once passed every law is good FOREVER. Scaled sunset provisions should apply to all legislation, to all regulation and TO most judicial decisions. “Is this STILL the right thing to be doing??”

“And even these changes will make little difference – in fact they will not happen – until citizens have better information upon which to make decisions in the voting booth and in the marketplace about citizen / Household best interests.

“Professor Risse is working on a note re ‘the new fifth estate’ that may touch on this.

Observer

General Motors, long considered by some as a hopeless dinosaur, seems to be embarking on an historic comeback. It launched an Initial Public Offering of new stock for the first time in 18 months and on the first day of trading, shares were up nearly 7 percent.

Soon-to-be House Majority Leader Eric Cantor promises to bring a results-oriented approach to governing in Washington, reports Tyler Whitley with the Times-Dispatch.

“This will not be a spring of 100 days or 100 hours, but rather a long march, requiring top-to-bottom reform, focused on producing results in three key areas,” he said: cutting spending, shrinking the size of government, and removing the cloud of uncertainty hanging over the private sector.

He’s talking the talk. Let’s hope he walks the walk.

Virginians can rest assured that there are at least two serious budget cutters in Washington, D.C.: Erskine Bowles and Alan Simpson, co-chairs of the National Commission on Fiscal Responsibility and Reform. Their draft budget-balancing plan issued Wednesday gores so many oxen and butchers so many sacred cows that the Chicago Board of Trade would be well advised to suspend trading on cattle futures.

So where does AntiPartisanism stand after the mid-term elections?

Well first, based on the comments from Jim B and Groveton to the ONE MORE DAY post, plus those heard from via other channels, six Bacon’s Rebellion ‘regulars’ followed Rule One or Rule Two of the AntiPartisan Voters Guide. Not bad for a start.

However, something much more important came up in the dialogue following ONE MORE DAY. Mr. Bacon’s observed that his vote was often cancelled out by that of his wife.

That observation is tremendously important!

It is important, not just because it also happens in many other Households about which EMR has direct knowledge, it is important because it indicates what is wrong with partisan political activity in general.

Mr. and Mrs. Bacon obviously can come to agreement on a number of major issues that impact the existence of, and what is in the best interest of, the Bacon Household, but not on Clan politics.

The contention at SYNERGY is that humans are running out of the surplus natural capital that in the past has allowed citizens the luxury of relying on COMPETITION ALONE to allocate resources.

As noted in the current Beta Draft of PRIMER:

………..

PRIMER can also be seen in a larger context:

For the last two centuries the citizens and their Organizations in the US have been propelled by a philosophy of consumption:

Consumption is good and more consumption is better.

This ethic is based on the illusion that the US was blessed with infinite resources and unlimited ‘opportunity.’ This is the mantra popularized and politicized of Andrew Jackson. It has been reinforced by the Myth that UberGrowth driven prosperity raises all boats.

In the context of these illusions, Mass OverConsumption has been seen as ‘progress.’ This is spite of a long tradition of pointing out the practical and moral shortcomings of these perspectives. For example see The Waste Makers by Vance Packard and The Cultural Contradictions of Capitalism by Daniel Bell. More recently, see Deep Economy by Bill McKibben which includes a complete disembowelment of The Moral Consequences of Growth by Benjamin M. Friedman. Also see the sources cited in Chapters 6, 7, 10 and 23 of THE SHAPE OF THE FUTURE and Chapter 24 “Greed, Excess, Ignorance, Myths, Entitlements, Windfalls and Subsidies” in PART SEVEN of TRILO-G.

Now, the US, the First World and the planet are beginning to embrace the reality of FINITE limits to human consumption. In many nation-states humans are already be in Overshoot. Peak Petroleum is a reality but so are diminishing stores of other limited resources such as some metals, ‘rare earths’ and fossil water.

Leading indicators of natural system resilience – e.g. biological diversity and climate – are growing more negative. Supposedly ‘renewable’ resources – fisheries, top soil, potable surface water and rechargeable water tables, timber and other natural systems upon which humans rely are in decline and some are beyond the point of restoration without grave hardship to those that rely on the dwindling resource base. The fantasy of importing resources from the Moon and beyond is the last gasp of irrationality.

At a minimum, in the future ALL resources will cost more because they will be harder to recover and to renew. The end of cheap energy to drive a technologically-advanced civilization is the bellwether.

Equally important is the PACE of human activity. It is not just the rate of consumption but the frenetic pace of activity – productive and anti-productive that is of concern. This includes the pursuit of entertainment that robs citizens of the time and energy to make rational decisions in the voting booth and in the marketplace. This hyper activity acts as a driver of societal dysfunction.

It is not just MORE AND MORE, but MORE AND MORE, FASTER AND FASTER that has been seen as an excuse for Business-As-Usual ‘growth’ and Mass OverConsumption. For a splendid exposition of this reality, see the feature length movie Home at http://www.youtube.com/watch?v=jqxENMKaeCU (Thank You Groveton!)

………

Page 1 of the 7 November Outlook section of WaPo has a clever do-it-yourself Elephant / Donkey reconciliation exercise: Fold the page and ‘discover’ “Compromise,” “Harmony,” “Unity,” “Middle Ground” and, a SYNERGY favorite “Balance.”

If the two adult voters in the Bacon Household can come to consensus on a wide array of decisions but not on partisan politics, the fault lies in the concept of two party competition being a rational way to determine the public interest in the 21st century.

That is a very important indicator!!

EMR

(From today’s Washington Times, online edition):

As the old saying goes, be careful what you pray for: The gods just may grant you your wish. Republicans fervently hoped for a return to power, and the political furies granted them their biggest win in six decades. Now the GOP must make good on its promises to cut spending, reduce deficits and stabilize the national debt.

Here’s the big question that no one asked during the campaign season: How much fiscal consolidation in the form of spending cuts and/or tax increases must Congress enact to put the nation back on a financially sustainable course?

In its Pledge to America, the GOP House leadership vowed to roll back government spending “to pre-stimulus, pre-bailout levels,” thus saving $100 billion in the first year alone and “putting us on a path to begin paying down the debt.”

Putting us on a path to paying down the debt? Whoever composed that line must have stayed up way too late and taken way too much No-Doz. It’s blather. Rolling back spending $100 billion a year won’t accomplish anything.

In the 10-year forecast submitted with the midyear review of the fiscal 2011 budget, President Obama already assumes a $75 billion reduction in discretionary spending between 2011 and 2012, thanks to resumed economic growth, reduced unemployment and reduced entitlement payouts to the poor.

House Republicans might respond that the pledge also promises to put a “hard cap” on domestic discretionary spending to limit federal spending on an annual basis. Yet Mr. Obama, in his State of the Union address, already vowed to impose a three-year freeze on discretionary domestic spending. In his 10-year forecast, he sees such spending topping out at $533 billion in 2011 (the current fiscal year) declining to $459 billion in 2014, and rising slowly to $529 billion over the next six years.

In other words, House Republicans swore in their pledge to accomplish little more than Mr. Obama already has committed to deliver. (Read more.)

Meredith Whitney is on the warpath against out-of-control state spending. The banking analyst warns today in the Wall Street Journal that a wave of municipal defaults and indiscriminate bond selling will prompt the next big federal bailout. Indeed, she writes, the bailout has already begun.

More than 20% of California’s debt issurance in 2009 and 30% in 2010 to date has been subsidized by the federal Build America Bonds program, in which Uncle Sam covers 35% of the interest paid by the bonds. The BABs have subsidized an even higher percentage of bonds issued by Illinois and Nevada.

But debt subsidies are the tip of the iceberg. Writes Whitney:

General federal government transfers to states now stand at the highest levels on record. Traditionally, state revenues were primarily comprised of sales, personal and corporate income taxes. Over the years, however, federal government transfers have subsidized business-as-usual state spending not covered by state tax collections. Today more than 28% of state funding comes from federal government transfers, the highest contribution on record.

Get this: New York state expenditures represented 250% of its tax creceipts over the past decade. The figure for the 15 largest states by GDP was 220%. “Clearly,” says Whitney, “states have been spending at unsustainable levels without facing immediate consequences due to federal transfer payments and other temporary factors.”

Doo doo, as the saying goes, rolls downhill. Local governments depend upon state government transfers for 33% of their funding. If the federal government has to cut aid to states, the states will likely cut aid to localities. Expect a huge uproar from entrenched political interests when the house of cards collapses.

That day is not far off. States are staring at the second consecutive year of $200 billion budget shortfalls. Says Whitney: “Rainy day funds are depleted, pension-fund contributions are already at record lows, and almost all of the major federal government subsidy programs will run out in June 2011.”

One of the early tests of the new Congress will be whether or not to bail out the states and municipalities. If Congress refuses to act, we could see that wave of state and municipal bankruptcies. If Congress buckles, it opens up giant barrel of moral hazard.

Virginia’s General Assembly has hardly covered itself with glory when it comes to spending, but it has been less reckless than most states. We don’t need a bailout. And our elected representatives should not vote to approve bailouts for states that are chronically undisciplined and profligate. I’ll be following this issue closely, and I won’t be the only one. If any Virginia congressmen vote to bail out other states, they can expect one heck of a voter backlash.