• CRESTFALLEN

    โ€œCrestfallenโ€ is the only way to describe the feeling.

    After ALL THE WORK on AntiPartisan action and AntiPartisanism, and then not get invited to the โ€œNo Labelsโ€ kick off on Monday at Columbia University!!

    There is no question about the need to stop Whack a Mole Politics and to stop Tossing Rocks at Empty Pigeonholes (TRAPE).

    Yes politics IS broken. It has been for at least three decades and becomes more broke with each passing campaign cycle.

    BUT how to fix politics?

    The โ€œFounding Leadersโ€ and the invited guests said all the right things…

    BUT WAIT:

    1,000 people in the audience?

    A slick web site already up?

    They have raised a million dollars BEFORE it was a public activity?

    The โ€œFounding Leadersโ€ are primarily agents and shills who have worked for the two dominate political Clans.

    The only โ€˜nameโ€™ from the Commonwealth has been described as the most craftily partisan politician in the large municipality where he lives and from which he was elected to congress and served as the chair of the Elephant Clan fund raising committee in the House.

    It was pointed out on another Blog that the ONLY โ€˜seniorโ€™ Elephant Clan personalities were FORMER office holders who recently lost a primary to the WingNut / Anger of Ignorance Crowd.

    You have to know โ€˜the systemโ€™ to dismantle โ€˜the systemโ€™ but is this just an attempt to preserve the 19th Century โ€˜Grand Old Two Party Systemโ€™?

    Is there a way forward that does not involve articulating an AGENDA?

    Does it make sense to just raise money to โ€˜protectโ€™ Clan candidates from Right WingNut and Left WingNut attacks?

    After all, the primary DRIVERS of civilizationโ€™s dysfunctions are:

    Unsustainable human settlement patterns,

    A governance structure that does match the economic, social and physical structure of contemporary society, and

    An economic system that lives on Mass OverConsumption, speculation and debt AND

    WAS ALL CREATED AND IMPLEMENTED WHEN THERE WAS A FUNCTIONING AND CIVIL TWO PARTY SYSTEM โ€“ 1950 to 1990.

    How will No Labels produce โ€œwhat citizens wantโ€ when the vast majority of citizens have no idea what the real options are or what would be in their best interest as individuals, for their Households or as members of the hundreds of โ€˜communitiesโ€™ (small โ€˜cโ€™) in which every citizen is trying to exist?

    The answer will be the Agenda No Labels articulates and how well they integrate those who do not care how โ€˜the systemโ€™ worked before it FAILED.

    Perhaps it was not such a bad thing not to be invited…

    EMR


  • What It Is; What It Ain’t

    Conservatives are all thumped up about regarding U.S. District Judge Henry Hudson’s declaring a critical part of Obamacare unconstitutional.

    But before they break out the champagne, they need to consider a few points:

    • The ruling deals only with that part of the health law that has the federal government requiring that all people buy health insurance. While Atty. Gen. Kenneth Cuccinelli won on this point, Hudson did not go along with the Cooch on striking down the law entirely or delaying its implementation until a higher court can rule on an appeal, which the Justice Department has already filed.
    • Two other federal judges have upheld the law, including one in Lynchburg. Both were appointed by a Democrat. Hudson is a Bush appointee.
    • Virginia is not the only state to challenge Obamacare. About 20 attorneys general are suing in Florida. While the Cooch scored some points, he’s just one of many conservatives who dislikes the law. Indeed, my old college roomate, an ecologist-turned-Republican who is a former congressman from New Hampshire, is against it.
    • The “Commerce Clause” aspect which is what Hudson is dwelling upon is a very elastic and flexible concept. It has been used this way and that for years. So while Hudson’s narrow ruling has interpreted the clause one way, it is quite possible an appeals judge might see it differently.

    My personal view is mixed. While I enthusiastically embrace health care reform, I do have some misgivings about being forced to buy something. Yet, I understand that one of the reasons why all need to buy health insurance is that productive tax payers get stuck with the emergency room or other bills of cheapskates who skimp on insurance until they are sick or injured.

    It could very well be that the only solution to this is socialized medicine with a one-payer system. We are perhaps the only advanced industrial country that doesn’t have one. I know several doctors on the front lines of health care who are sick to death of having to deal with for-profit (or even non-profit) insurance companies that game the managed care program set up three decades ago.

    The Dems have suffered a defeat, but it may not last. Meanwhile, I haven’t seen one clear new reform from the GOP or from the naysayers like Jim Bacon who somehow thinks that a medical concierge system might work (sure Jim, if you are rich).

    Peter Galuszka


  • Congratulations, Cooch!

    Attorney General Ken Cuccinelli racked up the biggest legal victory of his career yesterday when a federal judge ruled for Virginia in its legal challenge to the Patient Protection and Affordable Care Act (aka Obamacare). Wrote Federal Judge Henry E. Hudson on the provision that would compel Americans to purchase health insurance or pay a fine:

    Neither the Supreme Court nor any federal circuit court of appeals has extended Commerce Clause powers to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market. In doing so, enactment of the Minimum Essential Coverage Provision [the individual mandate] exceeds the Commerce Clause powers vested in Congress under Article 1.

    Score one not only for Cuccinelli but for the rollback of the leviathan state. If Hudson’s ruling is upheld by the U.S. Supreme Court, as it undoubtedly will be, an an important limit will be placed upon Congress’ power to regulate and coerce Americans any where, any time, for any reason. The ruling also undermines Obamacare’s effort to restructure the health insurance industry by forcing Americans to purchase insurance. With the blow to this critical piece of Obamacare’s financing, the entire scheme may unravel.

    The only good thing that can be said about Obamacare is that at least the Democrats tried to address runaway medical inflation and shrinking access to the health care system with their own legislative package. Their solution stinks, but they tried. Now that the Republicans have shot it down, let’s see if they come up with anything better.

  • Do You Believe Me Yet?

    For months now, I have been harping on the theme that Virginia faces a challenging fiscal future and that we need to start getting our financial affairs in order now. Two more straws in the wind…

    The combined unfunded liabilities of the Virginia Retirement System and other state-supported pension plans adds up to $17.6 billion, reports the Joint Legislative Audit and Review Commission. (Read the Times-Dispatch article here.) Contributions by state government and municipalities will have to increase significantly in the next budget biennium, said Tracey Smith, a JLARC analyst in a legislative hearing yesterday.

    Meanwhile, Virginia has borrowed $346 million from the federal government since October 2009 to pay unemployment benefits, and is projected to need another $613 million by April 2013. The money will have to come from the General Fund because the state’s unemployment trust fund is insolvent. (Read the Times-Dispatch reporting here.)

    Now, go back and re-read “A Glimpse of Boomergeddon in Virginia’s Future,” which cites a Senate Finance Committee analysis to the effect that Virginia will pay $594 million in interest payments in fiscal 2012 to finance its ever-growing debt. (It’s a short post, so you have no excuse for not reading it.)

    Gov. Bob McDonnell wants to borrow nearly $4 billion to fund road transportation projects? And he calls himself a fiscal conservative?

  • McDonnell Peddling the Transportation Policies of Yesteryear

    Gov. Bob McDonnell has announced a $4 billion transportation plan, most of which would be funded through borrowing. The justification for heaping on new state debt is that building now will prove to be cheaper than building in the future, when construction costs and financing costs rise in tandem with a recovering economy.

    I can see the logic, but I object to the plan on two grounds. First, I believe that human settlement patterns are undergoing a significant alteration — investment and population are flowing back toward the urban core (as reinforced in today’s Wall Street Journal, “Downtowns Get a Fresh Lease“). McDonnell wants to dump billions of dollars into transportation projects geared to the post-World War II paradigm of endlessly expanding the metropolitan frontier rather than the emerging paradigm of retrofitting what we’ve already built. Most of the money will be wasted. Furthermore, $4 billion is a drop in the bucket compared to our transportation needs. We need to conduct a fundamental re-thinking of our transportation policy — which projects we fund, and how we fund them — before putting the state billions of dollars into debt.

    The second reason to object to borrowing more money is that Virginia is already testing the outer limits of its borrowing capacity at a time we need to be shoring up our finances, not borrowing more. State and municipal finances will grow more precarious with each passing year, a fact that will be only partially masked by the anemic economic rebound the country is experiencing.

    Virginia faces many long-term challenges: (1) runaway Medicaid costs, (2) weak growth in sales and property tax revenues, and (3) declining largesse from the federal government. To that list of problems, which I have blogged about previously, let me add one more: a long-term rise in interest rates. Permit me to quote myself from the “Boomergeddon” blog at some length:

    If the economy picks up steam, U.S. interest rates will rise. Even the Obama administration expects 10-year Treasury bonds to reach 5.3% in several years, up from 3.2% Monday, propelling interest payments on the national debt from roughly $200 billion yearly to $800 billion by 2020. If the sovereign debt contagion spills out of Europe, U.S. Treasury rates will rise even higher as investors charge a risk premium. Now comes [the McKinsey Global Institute in a report, “Farewell to Cheap Capital“] arguing that a third force โ€” increased global investment and shrinking global savings โ€” will lead to yet higher interest rates over the next two decades. States the report:

    “Nominal and real interest rates are currently at 30-year lows, but both are likely to rise in coming years. If real long-term interest rates were to return to their 40-year average, they would rise by about 150 basis points from the level seen in the fall of 2010, as we write this report. And they may start moving up within five years.”

    There has been a decades-long glut of capital as the mature economies of industrialized economies experienced slower growth and declining investment, McKinsey contends. Saving rates have dipped, too, especially in the U.S., but not enough to offset the weaker demand for investment capital. Meanwhile, developing countries, China especially, began saving phenomenal amounts of money as their economies took off. This global shift in the supply and demand of capital โ€” not just Federal Reserve monkeying with interest rates โ€” contributed to the global credit bubble of the mid-2000s.

    Now the tide is turning, the report argues. China, India and other developing countries are embarking upon a massive wave of capital investment, much of it driven by infrastructure spending as their societies urbanize. The demand for new roads, rail lines, ports, water and power systems, schools, hospitals and other public infrastructure will reach a fever pitch not seen since the rebuilding of Europe after World War II. McKinsey also predicts massive growth in residential real estate investment to provide better housing for the emerging middle class, as well as strong growth in productive capacity. Global investment could increase from $11 trillion annual today to $24 trillion annually by 2030 (measured in constant 2005 dollars), or from 23.7% of global GDP in 2008 to more than 25% by 2030.

    The surging demand for capital will not be matched by a commensurate increase in savings. The worldโ€™s largest economies are fast aging, and larger retired populations will draw national savings down, not build them up. The shift will be most dramatic in China, where the government is encouraging people to consume more and the one-child policy will lead within a couple of decades to a lopsided demographic profile of too many retirees and too few young workers entering the workforce.

    The shift in the global supply of and demand for capital will likely push up long-term interest rates. And that will present businesses, consumers, investors and governments with very different challenges in the next 30 years.

    Consumers are moving in the right direction โ€” theyโ€™re sloughing off debt. Corporations are saving more, too, if one counts share repurchases as a return of cash to shareholders. But governments are stuck with deep structural deficits. With the national debt as large as it is, roughly 90% of GDP, the U.S. budget is extraordinarily sensitive to increases in interest rates. If economic growth picks back up, the sovereign debt contagion spreads and McKinseyโ€™s looming global capital shortage materializes on schedule, the U.S. could easily see 8% interest rates on its 10-year bonds by 2020. That would boost budget deficits by $500 billion yearly or more above current forecasts โ€” about the same amount we spend today on all discretionary domestic spending.

    In that case, interest rates โ€” not spending, not tax rates โ€” will become the prime driver of U.S. budget deficits.

    We cannot revert to the comfortable nostrums of yesteryear. The real estate bust and ensuing financial crisis of 2007-2008 created a massive discontinuity. The old economic and financial order is passing away. Our public policies must adapt to the new, emerging order, or Virginia will be swept away in the coming cataclysm of Boomergeddon.


  • THE REAGAN SHOW

    ………….

    Note:

    AZA held his annual holiday party at his SoHo loft Friday evening. Most of the team was there, MSM had to regret due to his leadership on the Marcellus Shale Hydrofracking. The host asked guests to bring suggestions for refining Observerโ€™s 7 Dec humorous comment posted on โ€œLies About Federal Workersโ€ concerning โ€œThe Truman Show.โ€ After much discussion, the team voted 7 to 6 (some wanted to toss rocks and whack moles) to request that EMR post the revised version. Observer participated and hearty endorses the refinements.

    ………….

    As intelligent as many of Dr. Baconโ€™s insights are, he may have who is shielding what from whom bass-ackwards:

    Bacon claims that โ€˜The Political Classโ€™ in the National Capital SubRegion is โ€˜insulatedโ€™ from the issues facing citizens and Organizations in the rest of the nation-state.

    That seems to be incorrect:

    โ€œThe rest of the nationโ€ has been intentionally insulated from reality, not the other way around.

    Many believe that what Bacon calls โ€œThe Political Classโ€ is really โ€œThe Business-As-Usual Classโ€ (aka ,The BAU Class).

    The BAU Class is a vast Agency / Enterprise / Institution Complex (aka, conspiracy) that includes:

    1. Governance practitioners in the Agencies at the federal, state and municipal scales โ€“ especially pandering politicians and those who work for them

    2. Entrepreneurs in Enterprises that depend on Mass OverConsumption to raise THEIR boats, THEIR stock, THEIR McMansions…

    3. Leaders of Institutions (political parties, PACs, think tanks, etc.) that depend on the flow of money from Agencies, Enterprises and from those citizens and Households at the top of food chain. Many Institution-supporting entities feed money to Institutions to preserve the status quo because they see no reason to derail their gravy train.

    So the real story is that the BAU Class has INSULATED the citizens and Organizations across the nation โ€“ and across the Planet โ€“ from reality. The reality of finite limits and the pitfalls of jingoism, partisan bickering, xenophobia, the Wealth Gap and YES, deficits are unrecognized. In fact ignorance is glorified in the name of patriotism and freedom.

    Citizens collectively have no idea how to address the objectives and strategies they should be concerned with โ€“ especially the overarching goal:

    Achieving an economic, social and physical trajectory that is sustainable.

    Instead there is The Anger of Ignorance protests, Whack a Mole politics with all sides Tossing Rocks at Empty Pigeonholes (TRAPE).

    The BAU Class is standing in the way of the information that citizens need to make intelligent decisions in the voting booth and in the marketplace. PROPERTY DYNAMICS is one path to follow but even information on this core interest of the vast majority of Households is being distorted and swept under the rug. Thus the need for Citizen Media.

    Without their consent, most citizens are now cast members in a continent-wide, real-time, tragedy โ€œThe Reagan Show.โ€ What exists for most is an updated โ€œThe Truman Storyโ€ that has portrays the life of Reagan Everyman in place of Truman Burbank.

    It was the great communicator himself that convinced citizens that they could have it all because it was Morning in America. Everyone could thrive in Seaside or Celebration โ€“ technicolor versions of โ€œPleasantville.โ€ They could all live where they wanted, drive what they wanted, spend what they wanted. The ever-growing economy, driven by the gracious and altruistic spending of the rich. would raise all boats.

    It was Reagan who tossed a wet blanket on the flickering candle of intelligence that was ignited by understanding of what the 1973 OPEC Oil Embargo REALLY meant.

    For AZA

    (Note: a number of other ideas surfaced at AZAโ€™s fete โ€“ The existence of The Spacial Bipolar Disorder, and others โ€“ that will be included in the survey of Citizen Media, forthcoming.)


  • Bob’s Right: Build Those Roads

    Fellow blog readers and Baconauts. Please help me with this.

    I was just getting over Barack Obama’s surrender to the conservatives on tax cuts when I opened this morning’s newspaper and learned that Republican Gov. Bob McDonnell is really a Keynesian and is willing to blow out the state’s troubled debt obligations to get roads for which two of his previous fund-raising schemes have failed.

    And to think that just two Sunday’s ago, the Right Rev. James A. Bacon was delivering another one of his stern sermons that Virginia will pay an estimated $594 million in 2012 to service its $9 billion tax-supported debt. According to our deficit watchdog, Virginians are paying more to service debt than ever before and the state “cannot afford this nonsense any more.”

    Here’s the new nonsense: McDonnell will ask the state to spend $400 million immediately on roads and bridges while borrowing another $2.9 billion over the next three years for more transportation needs. Of this, some $150 million will come from last year’s budget surplus and $250 million that an audit revealed the Virginia Department of Transportation has already had.

    McDonnell’s justification and that of his transportation chief Sean Connaughton is that construction costs and bond financing is cheaper than it has been in decades and there are bargains to be had.

    Actually, I tend to side with them on this. Virginia’s roads needs are significant if the state is to continue to position itself for growth not just tomorrow but over the coming years and decades.

    Building roads now will mean more jobs now, not some years down the pike. You can’t completely toss John Maynard Keynes out with the baby’s bathwater, anyway. He does make sense.

    The proposals would create a state infrastructure bank with $400 in surplus and other funds. That’s not a bad idea since many countries around the world have created similar institutions to fund transportation needs. Changes in state bond laws would also be needed.

    While I like the idea of stopping moaning about deficits and debts and getting on with projects that create jobs and could enhance the state’s chances for prosperity down the road, there is some concern about McDonnell’s topsey- turvey policy-making. I am not all that concerned about the “New Fru” tut-tutters like the Right Rev. Bacon. If you listen to them, nothing would ever get done besides a bunch of hand wringing.

    But McDonnell’s two previous plans to boost transportation funding — privatizing ABC stores and offshore oil drilling — are kaput. What’s happened is that Connaughton, one of the few serious pros in McDonnell’s administration, has convinced Bob to get off the dime. These inconsistencies are worrying and still show that McDonnell’s is a second-stringer when it comes to governing.

    In any event, I see the news as welcome.

    Peter Galuszka


  • Obama’s Smart Move in Banning Drilling

    The moaning was loud when President Barack Obama last week banned oil drilling offshore of the East Coast until 2017.

    Politicians from Democratic Sen. Mark Warner to Republicans such as Congressman Eric Cantor and Gov. Bob McDonnell decried the move.

    “It demonstrates a complete lack of confidence in (industry’s) ability to fix the problems experienced in the gulf spill, and no confidence in the ability of the U.S. government to better plan for and react to offshore emergencies,” McDonnell cited angrily in a statement. The governor has seen his grand plans to push with offshore drilling to help fund Virginia’s massive transportation problems squashed more than once.

    Obama’s decision, of course, comes after the Deepwater Horizon disaster this past spring and summer which was the worst environmental predicament ever faced in the U.S. Some Virginians had hoped for a 2012 lease sale to exploit oil reserves that may or may not be out there.

    Now comes the Wall Street Journal, not exactly an environmentalist rag, with a front page story that there has been a rash of close calls with offshore oil rigs over the past two years after decades of improving safety records. The Journal reviewed the records of the countries with the most experience with offshore drilling. The United Kingdom saw a 39 percent increase in serious incidents involving North Sea rigs. Australia likewise saw a spike including a near blowout such as the Deepwater Horizon situation. Norway say a 48 percent spike in incidents since 2008.

    How come? The Journal says that there’s a mad rush to deep, offshore drilling because oil from shallow water areas is running out. Yet there aren’t enough experienced workers to handle the extra difficulties of drilling a mile or so down. The demand for profits and spotty enforcement also complicate deep water drilling.

    Experts say that that disasters such as Deepwater Horizon are “low probability” but “high consequence.” “This accident was bound to happen,” says Nancy Leveson, an expert at the Massachusetts Institute of Technology who has studied the BP Deepwater mess.

    The problem with people such as McDonnell and Cantor, and to some extent Warner, is that never seem to go beyond consulting with oil lobbyists when it comes to the dangers of drilling off Virginia. Or, they use data without much thought. McDonnell, for instance, has cited the supposed economic benefits from drilling according to an Old Dominion University report. But the author of that report says it was a quickie job and shouldn’t be taken seriously.

    Virginia has a lot to lose in the event of an offshore rig disaster. Other industries (real ones) affected include seafood, commercial shipping and the military, all of which have questioned the need for drilling when it isn’t even clear the reserves are out there.

    At least Obama has the sense to slow down the parade to offshore drilling.

    Peter Galuszka


  • Lies About Federal Workers

    A certain Bacon’s Rebellion blogger whose initials are “JAB” has just written a book called “Boomergeddon” in which he takes a strong libertarian/conservative /Cato viewpoint to try and scare us into believing that the end is near because of government spending.

    And while I dare not name this individual because it would deeply embarrass him, I feel it necessary to post this column (in part because he came after me on immigration) but I do it feel it necessary to bring to the attention of the BR reading public the obfuscations, if not down-right lies, with which we have been presented.

    If you read this individual’s book “Boomergeddon” who will be treated to a total trash of the federal worker and Washington. The author says such things as “the Imperial City is well insulated from the travails of the general economy.” He claims that while private sector Americans suffered with layoffs and losses, the number of federal workers exploded. The average pay, the author claims, is about $71 K compared with $40K for the average schmo.

    The author does note that federal workers do, on average make less than those in the private sectors. But if we believe his logic (and/or baloney) we are supposed to accept that the national policy of the U.S. is in hostage to a bunch of self-serving, over-paid zealots who all voted to Obama and want to bring us socialism that they control.

    Which is why today’s Washington Post is so interesting. Max Stier, president and CEO of the non-profit Partnership for Public Service, writes about the “Five Myths about Federal Workers.” A few highlights:
    • Fed workers make at least 24 percent less than private sector ones.
    • “Conservative think tanks such as the Cato Institute” (from which much of “Boomergeddon’s” data is drawn) claim otherwise, but they comparing apples an oranges, i.e. the pay of a small practice doc in Iowa as compared to a federal cancer researcher leading 50 people at NIH.
    • The federal workforce is not bigger than ever. Less the postal service, it is about 2.1 million or slightly smaller than it was in 1967 even while the nation’s population has grown much more.
    • You can fire federal workers.
    • Not all feds are paper pushers who die to vote for Obama. Some do real work and have won Nobel Prizes.
    • Barack Obama’s unfortunate federal pay freeze won’t do much to cure budget ills. The savings just ain’t there. Just don’t believe the JABs.

    My advice? Be careful of people who go over the top in using A-bomb bursts as book cover art to make their point. They are selling a tissue of lies.

    Peter Galuszka


  • Quote of the Day: Neal Peirce

    From Peirce’s column on Citiwire.net:

    Citiesโ€™ revenues will plunge sharply as property taxes, in their first year of recession-impacted reassessments, get set to decline deeply in 2011. Local government fiscal shortfalls may total $83 billion, which the League of Cities estimates may force up to 500,000 staff reductions. Basic city services will shrink. Infrastructure projects will get cancelled or postponed.

    These are hard times for Americaโ€™s local governments. Economists may declare the Great Recession is โ€œover,โ€ but localities see a different picture. The federal stimulus monies that helped so many of them balance their budgets runs out December 31. So does Washingtonโ€™s two-year old โ€œBuild Americaโ€ bond program, which has made local infrastructure borrowing more affordable.

    State and municpal governments face nothing but hardship in the years ahead. It’s time for fundamental change, not the usual short-term 3%-budget-cuts-across-the-board belt tightening. If we fail to rise to the occasion, we face a future of entropy and decay.


  • Prince William Policy Vindicated?

    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.


  • Will Richmonders Subsidize JetBlue?

    It never ceases to amaze how Richmond’s business elite, while espousing free markets, are at heart state capitalists, sort of like Lee Kwan Yew of Singapore.

    The latest ripple: the business community has organized $600,000 in public money to go to a “Save Low Fares Richmond” campaign to keep carriers such as cheap fare carriers as JetBlue and AirTran from continuing to bolt from the capital city’s anemic airport.

    Now comes the latest twist. JetBlue has the chutzpah to ask Greater Richmond to pay subsidies so that JetBlue will restart its now discontinued flights from Richmond to JFK Airport in New York. The carrier ended the flights in November because of low ridership. You heard that right — if Richmonders want cheap air service, the public will have to come up with millions of dollars to bankroll a private air carrier.

    Richmond’s “behind-the-scenes” business elite such as Kim Scheeler, president and CEO of the Greater Richmond Chamber of Commerce, says he wants to sit down and talk with JetBlue whose CEO pitched the goofy subsidy idea. “If someone asked me to raise X million dollars, I’d be hard-pressed to do it, just because of the economy”

    Just because of the economy? Whatever happened to the free market which all these denizens of Adam Smith say brings out the best, the most creative, the most robust ideas? Naturally, the Richmond Times-Dispatch floated the idea as its lead story on its front page to prepare the public for local and regional subsidies.

    After all, its publisher, Thomas A. Silvestri, is also chairman of the Richmond Chamber and loves to work behind the scenes out of public view being a “Leader” and making decisions about public money. If the public has something to say, they can write a letter to the editor or attend one of Silvestri’s gong shows called “Public Square” which is another gimmick to make the public believe they are getting information and their voices are heard. From Silvestri’s point of view, it is a lot cheaper to hold these Oprah shows than hire real reporters to do real reporting given Media General’s penchant for valuing profit margins over public service.

    The giant hypocrisy here is that the Richmond business elite and the politicians they back, such as soon to be House Majority Leader Eric Cantor, are all rock-ribbed, free market Republicans. We get to hear lots of speeches of how capitalism and the survival of the fittest is the best way to go.

    Until it hurts their travel budgets, that is. Air travel in Richmond has been hitting major turbulence. The business elite expanded Richmond International Airport with more than $250 million in new terminals and parking lots. During the go-go economy of George W. Bush, low fare air carriers entered the Richmond market and broke the stranglehold on high prices demanded by U.S. Airways and Delta.

    All was well for a few years. You could fly for a couple of hundred bucks instead of a cool thousand. But then the Bush economy blew up. In Richmond, chip-maker Qimonda shut down because of world chip trends. Bad management folded mass retailer Circuit City. The financial mess imploded LandAmerica. Racked by health-related lawsuits, Philip Morris split itself up into separate domestic and international firms. The former doesn’t travel as much because Philip Morris USA has consolidated cigarette making in Richmond after shutting plants in North Carolina in Kentucky. The international company makes higher tar and nicotine products for unsuspecting foreigners out of Switzerland.

    This is a long winded way of saying that the free market economy, at least in Richmond, knocked the legs out of the rationale for low priced carriers.

    In response, our free market local leadership is considering going the statist route, sort of like the USSR’s former Aeroflot or Lee Kuan Yew’s Singapore Airlines — government subsidies to help out business. They make the same arguments for higher speed rail, which will cost billions of dollars just so executives can zip to D.C.’s Union Station in 90 minutes rather than fight Interstate 95 traffic. And, supposed free market champions like Cantor work behind the scenes to get those government subsidies.

    Another irony is that years ago, before 1978 airline deregulation, airlines had to serve secondary markets like Richmond. The government had some say over airfares. Our “Leadership” is very much against government reg (Cantor is always talking about “getting the government off our back.”) Yet, Richmond’s current predicament is very much a result of dereg and now some out there expect the public to pay subsidies to airlines. The logic here is so skewed it is painful to contemplate.

    Somehow, the public seems left out of the deal-making. But they can always go to a Public Square.

    Peter Galuszka


  • A Glimpse of Boomergeddon in Virginia’s Future

    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:

    The report paints a picture of a commonwealth that is in deeper debt than it has ever been — to the point where it cannot borrow any more money if it wishes to stay within a self-imposed debt capacity cap of 5 percent of annual tax revenues.

    The state has stacked on loads of new debt since 2007, including the three largest debt authorizations in the state’s history: $3.2 billion for transportation (parts of which were deemed unconstitutional), $2.8 billion for a capital improvement program, and $1.4 billion for capital construction projects in eduction.

    Virginia cannot afford this nonsense anymore. Federal aid to localities under the “stimulus” bill is coming to an end. Medicaid burdens continue to mount. The economy, especially the housing sector, will continue to lag and tax revenues will remain depressed. Legislators simply must adapt to the new fiscal reality… or they will face the same treatment at the polls next year meted out to federal officials in November.


  • Tobacco Patch Corruption

    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


  • MORE ON THE ROLE OF CITIZEN MEDIA

    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 โ€“ the media serving the interests of the New Fourth Estate โ€“ citizens / Households.

    FIFTH ESTATE OR FIFTH WHEEL

    A recent discussion on Citizen Media turned up reference to โ€˜the fifth estate.โ€™ It turns out that there are many voices in the โ€˜fifth estateโ€™ dialogue. A quick survey revels that the โ€˜discussionโ€™ of a โ€˜fifth estateโ€™ 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 โ€˜Journalismโ€™ cling to the delusion that the Old Fourth Estate lives on. In this context, they need a pigeon hole for the non-Enterprise โ€˜news and entertainmentโ€™ activity found in the electromagnetic environment โ€“ thus โ€˜the fifth estateโ€™ 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 โ€“ largely supported by First-Family-of-Journalism-Philanthropy โ€“ is now part of the New Third Estate (Institutions). It is a major component of what is known as โ€˜The Alternative Media.โ€™ 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 โ€˜Journalismโ€™ and they frequently put on a crown labeled โ€˜freedomโ€™ or โ€˜truthโ€™ โ€“ but almost never โ€˜science.โ€™

    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 โ€˜journalism-basedโ€™ media is still a legitimate โ€˜fourth estateโ€™ 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 โ€˜fifth estateโ€™ with the leverage, power, influence, impact or stature akin to Agencies, Enterprises or Institutions is preposterous squared.
    If one is looking for a โ€˜new fifth estateโ€™ 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 โ€“ it came along after the Civil War in the US. But this new Estate was โ€˜citizens,โ€™ not โ€˜media.โ€™ 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 โ€“ for a while. That was because citizens bought the media product โ€“ literally โ€“ to get news โ€“ the information they needed to make the transition from an agrarian society to an Urban society.

    As citizens became more educated and more prosperous โ€“ the โ€˜rise of the Middle Class (which is also gone, see THE ESTATES MATRIX) โ€“ 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 โ€˜goodโ€™ or โ€˜badโ€™ it is a fact.

    โ€˜Journalistโ€™ 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 โ€˜Journalism.โ€™

    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 โ€˜Jโ€™) 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 โ€“ 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 Recessionโ€™s overhang is due to the failure of advertising to โ€˜stimulate.โ€™ 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 โ€˜leaders.โ€™

    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 โ€“ literally. Where IS my Dooryard, Cluster, Neighborhood, Village, Community, SubRegion, New Urban Region โ€“ 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 โ€œA Serious Proposal for Restoring Fiscal Sanityโ€ (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:

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

    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 โ€œThe Bottom Line in 500 Wordsโ€:

    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 โ€“ 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 โ€˜flatโ€™ 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 โ€“ 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 โ€œA Serious Proposal for Restoring Fiscal Sanityโ€ 14 Nov 2010:

    โ€œTo several of us (perhaps a majority?) much in this string of comments is pointless.

    โ€œThe comments are trapped under a number of dangerous assumptions:

    โ€œFirst 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 โ€“ municipal, state and federal. New levels of Agency must evolve to reflect economic, social and physical reality.

    โ€œSecond 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.

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

    โ€œFourth 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. โ€œIs this STILL the right thing to be doing??โ€

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

    โ€œProfessor Risse is working on a note re โ€˜the new fifth estateโ€™ that may touch on this.

    Observer