Bacon's Rebellion

  • The Ugly Ain’t Over Yet, Not by a Longshot

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    James A. Bacon

    Building on EMR’s previous post, I bring to the attention of Bacon’s Rebellion readers a Congressional Oversight Report, published February, “Commercial Real Estate Losses and the Risk to Financial Stability.” The executive summary states the problem so pithily that I quote from it directly:

    Between 2010 and 2014, about $1.4 trillion in commercial real estate loans will reach the end of their terms. Nearly half are at present “underwater” – that is, the borrower owes more than the underlying property is currently worth. Commercial property values have fallen more than 40 percent since the beginning of 2007. Increased vacancy rates, which now range from eight percent for multifamily housing to 18 percent for office buildings, and falling rents, which have declined 40 percent for office space and 33 percent for retail space, have exerted a powerful downward pressure on the value of commercial properties.

    The largest commercial real estate loan losses are projected for 2011 and beyond; losses at banks alone could range as high as $200-$300 billion. The stress tests conducted last year for 19 major financial institutions examined their capital reserves only through the end of 2010. Even more significantly, small and mid-sized banks were never subjected to any exercise comparable to the stress tests, despite the fact that small and mid-sized banks are proportionately even more exposed than their larger counterparts to commercial real estate loan losses.

    A significant wave of commercial mortgage defaults would trigger economic damage that could touch the lives of nearly every American. Empty office complexes, hotels, and retail stores could lead directly to lost jobs. Foreclosures on apartment complexes could push families out of their residences, even if they had never missed a rent payment. Banks that suffer, or are afraid of suffering, commercial mortgage losses could grow even more reluctant to lend, which could in turn further reduce access to credit for more businesses and families and accelerate a negative economic cycle.

    That’s just commercial real estate. We haven’t even begun to talk about the coming wave of defaults in Alt-A or Option ARMs in the residential market that could be as disastrous as the collapse of the sub-prime market. It looks like we’re in for another round of deflation in real estate prices. Then, there’s the continuing de-leveraging of the American consumer generally.

    Property tax revenues… down. Sales tax revenues… down. Municipal governments will be in a world of hurt for some time to come. My sympathy goes to anyone living in one of Virginia’s “fast-growth” counties because that’s where most of the damage will be located.

  • WSH, WL — THE SHAPE OF THE HOUSING CRISIS

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    James A. Bacon

    The 12 March front page headline in WaPo says it all:

    “Foreclosure wave threatens stability of housing market.”

    Do not wait for a journalist to package the contemporary condition of the housing market for you. Go to Realtor.com and check out what has happened this week in your Village, your Neighborhood, your Cluster or even your Dooryard. In just the last few days the picture has changed dramatically.

    The snow has melted? Daylight Savings Time starts tomorrow? A week until Spring arrives? Who knows the catalyst?

    Whatever it is, houses that have been off the market – or have not been listed in years – are flooding back and many are $100K below what they and similar dwellings were listed for just a few months ago.

    There appears to be a rush to move foreclosures, do short sales and get out of underwater dwellings, especially the WSH, WL dwellings.

    If one looks at the national scene, Virginia and especially the National Capital SubRegion (Washington MSA is a passable surrogate) SHOULD be better positioned than most vis a vis employment / unemployment, foreclosures and dwelling prices.

    Those who applied an analysis of Radial Bands (a tool of Regional Metrics) to get a handle on the housing market / foreclosure patterns will not be surprise at the spacial distribution but most will be shocked at the scope of the value loss.

    On 11 March CNN had a story that was similar the WaPo story a day later. CNN painted a more rosie picture in the headline and the first few paragraphs but came clean later in the story. The reader comments were very pointed. For example: “How can you distort the truth just to save your real estate ad revenue…” Sounds like they had read THE ESTATES MATRIX… (Today’s WaPo Real Estate section was four pages and the feature story was how to do a short sale.)

    The other shoe – commercial real estate – is about to drop. Insiders have been saying for a year that April of 2010 will be the month.

    And now the REALLY scarey news:

    On Friday WaPo headlined: “No rush to restructure Fannie, Freddie; Who wants to topple the housing giants? Politics, shaky economy make it an unsavory task for Obama, analysts say.”

    Well yes, but until there is a Fundamental Transformation – including rational location criteria for residential lending – the problem will only grow worse.

    As much as Groveton, rightly, beats on the Clown Show in Richmond, let us not forget the Super Clown Show in the Federal District.

    As EMR has argued in these posts for six years:

    WSH, WL.

    (For those just coming in, WSH, WL means Wrong Size House, Wrong Location. See TRILO-G – PART SIX – Chapter 22 – Without Shelter: The Affordable and Accessible Housing Crisis. Also keyword search ‘affordable and accessible’ in Chapters 46, 47 & 48. )

    EMR

  • Is It Amateur Hour? Or Worse?

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    James A. Bacon


    It was such a strange scene, I had to pinch myself. Here at Virginia Commonwealth University, in the middle of Richmond, that “hotbed of civil rest” about a thousand students held signs touting “Keep Your Gospel Off My Gonads” and other slogans as they listened to a professor note how the father of computer science was openly gay.

    How did sleepy VCU in staid old Richmond become a 60s flashback so quickly?
    The immediate reason, of course, was Ken Cuccinelli, Virginia’s new and highly volatile attorney general, who seized upon the failure of a state Senate bill to expand protection to state gay workers and issued a sweeping legal opinion to public colleges that their anti-discrimination policies regarding sexual orientation were no longer valid.
    Very quickly, Virginia became the object of derision nationally, not to mention a farce on “the Daily Show” national TV comedy, Gov. Bob McDonnell, the state’s new governor who put gays on the same level as “fornicators” in a master’s thesis he wrote in the 1980s, quickly backpedaled. He overrode Cuccinelli at a dramatic press conference and issued a toothless “declaration” that the state would not tolerate discrimination against gay state workers.
    Of course, McDonnell could have put such a declaration in an executive order as former Govs. Mark Warner and Time Kaine, both moderate Democrats, did. Then it would have actually had some bite. But McDonnell touched off the controversy by kicking the anti-gay matter to the General Assembly, knowing it would die quickly.
    Such antics smack of “Amateur Hour.” Even the Richmond Times-Dispatch, which predictably ran a front page photo of McDonnell at his press conference in a phony, dramatic pose reminiscent of George Washington or other brave American patriot, editorialized that this whole mess is a shame.
    To me, it raises two big questions:
    (1) Don’t Cuccinelli and McDonnell understand what damage they have done to Virginia with this half-assed grandstanding? Most state colleges have anti-discrimination policies protecting gays. There are good reasons to do so. To accomplish their missions, colleges must be open and diverse. Plus, if they don’t have such anti-discrimination policies, they won’t qualify for untold thousands of dollars in private foundation and grant money which state clearly that the money won’t go to homophobic college systems. The American Association of University Professors says that Cuccinelli’s opinion is “outrageous” and “chilling” since it would make the state college system a pariah when it tries to recruit top academic talent. And after Virginia has added some luster to its reputation as a good place to live and do business, the Old Dominion suddenly is the butt of jokes on the Comedy Channel, which carries a hell of a lot of weight in terms of national image.
    (2) Who’s running the store? Both McDonnell and Cuccinelli are cut from the same cloth. They are die-hard, right wing social conservatives who want to cash in on the backlash against Barack Obama as he struggles to chart a course after the disastrous George W. Bush years. McDonnell ran a smart campaign by downplaying the extreme views of his political past. The rumor was that he was trying to keep Cuccinelli on a tight leash. But what’s the real deal here? Are we looking at Good Cop, Bad Cop? Do we really buy McDonnell’s excuse that he has had to rein in
    “Cooch” when he was the one that set the whole thing up in the first place?
    Meanwhile, McDonnell has extended lots of corporate welfare offers to get Northrop Grumman to locate in Virginia, even though he has trashed the firm for its trouble technology contract with the state and has threatened to drive the defense contractor away with these homophobic policies.
    With the General Assembly nearly over, what do we have to show for it? Millions of dollars for education and many jobs have been cut. But we spent a lot of time arguing over whether some pistol-toting cowboy can bring his loaded .44 into a bar. State parks closed. Highway bathrooms opened. Offshore oil OK, if any when it is explored and even if no major oil firm has expressed any interest in it. I don’t know where putting toll booths on the southern entrances to Interstates 85 and 95 went, but it reminds me of Mel Brooks erecting a toll booth in the middle of the desert in the comedy “Blazing Saddles.” As Slim Pickens says, “Any of you guys got any quarters?”
    So, we are left with two rather frightening questions. Is the McDonnell gang simply incompetent? Or is there a much broader agenda?
    Take heart, though. I was truly impressed with the kids at VCU. With people like them, we’ll survive this.
    Peter Galuszka

  • Back to the Dark Ages

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    James A. Bacon

    Just when you think Virginia’s finally entering the 21st century, it takes a major step backwards.
    Take gay rights. Much of the rest of the country has come to terms with gays and lesbians and is accommodating them not as sinful folk but worthy individuals who can make big contributions to society and its economy. This is especially important to create jobs after the disastrous 2007-2010 recession. Indeed, many modern corporations understand this and have internal policies to protect gays and offer them benefits similar to what they offer to married heterosexuals.
    So why, one wonders, is our so-called “jobs” governor, Bob McDonnell, getting away with throttling rights for state workers who happen to be gay? Unlike Govs. Mark Warner and Tim Kaine, the staunch social conservative and former graduate student at Pat Robertson’s university, which is hardly a bastion of tolerance, declined to include gays in an executive order forbidding discrimination against state workers.
    Instead, McDonnell punted the issue of gay rights to the General Assembly, where a bill to protect gay state workers introduced by Democrat Sen. Donald McEachin, was killed in a House committee after being approved by the Senate. (The GOP controls the House and the Democrats control the Senate).
    McDonnell is entitled to his personal views on gays which he spelled out in his infamous graduate student thesis at Regent University where he equated gays with sinful fornicators, as noted in a column by Michael Paul Williams of the Richmond Times Dispatch.
    Unfortunately for the “jobs” governor, others are watching. As I noted in a story I wrote for Style Weekly, Richard S. Madaleno, a Democratic state senator in Maryland who happens to be gay, wrote to the CEO of Northrop Grumman noting McDonnell’s views on homosexuals and urging him to select Maryland over Virginia since it is friendly to gays.
    Landing Northrop Grumman, already Virginia’s fifth largest employer, would be a feather in the cap for McDonnell since it would bring 300 high-paying jobs to Northern Virginia and further cement Virginia as a venue for defense contracting, which is a highly sustainable industrial sector during these days of layoffs and budget cuts.
    Northrop Grumman, like a number of large corporations, is much farther ahead of states such as Virginia when it comes to diversity. NG has strict anti-discrimination policies for gays and offers generous benefits to them. In fact, a number of big firms doing business in Virginia — about 18 — offer same sex benefits. About 32 out of 50 top firms have exactly the same anti-discrimination policies that McDonnell refused to put in his executive order.
    One reads a lot of pop sociology and urbanism in this post and, frankly, I often get sick of it. If I hear another tome about “clustering” by Michael Porter or another laud of the “Creative Class” by Richard Florida, I think I will be sick.
    But consider what Florida wrote about gays:

    “. . . the big new-ideas and cutting-edge industries that lead to sustained prosperity are more likely to exist where gay people feel welcome. Most centers of tech-based business growth also have the highest concentrations of gay couples. Conversely, major areas with relatively few gay couples tend to be slow- or no-growth places. Pittsburgh and Buffalo, which have low percentages of gay couples, were two of only three major regions to lose population from 1990 to 2000.”
    So, there you have it. Too bad we are being taken back to the Dark Ages when we need forward thinking.
    Peter Galuszka

  • CLIMATE CHANGE HEAT AND LIGHT

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    James A. Bacon

    EMR has NEVER been able to figure out why Jim Bacon gets SO upset about Anthropogenic Global Warming (AGW). He has his hands full getting out Bloomergeddon, why take on this windmill?

    Of course, in the end Jim is correct:

    The University of East Anglia scientist’s arrogance has not DISPROVED anything,

    This dispute will leave far more casualties than winners, and

    There are far more current, important challenges about which there is little controversy than there are resources to address them.

    In comments submitted on Jim’s post on the topic (“Cuccinelli is Right” – did not everyone know he was far right?) Larry and Waldo put the East Anglia controversy in perceptive – the helium balloon analogy is priceless.

    TMT and Larry do a nice job of sorting out the ‘right to sue’ issue.

    But Peter has the best (if not last) word:

    Why with all the other things going on is THIS a priority for any elected official in the Commonwealth?

    See for example this weekends’s WaPos on the economy, China, giving up on trying to stop radioactive shipments into the US of A… Those containers from Iran via Hong Kong will arrive in Hampton Roads, sue about that…

    Here is why all the heat over AGW:

    A lot of big money will be lost if something serious is done about reducing Green House Gases (GHG) – which most agree needs to be done to solve a lot of other problems including air and water pollution, the cost and security of energy supplies.

    So with Business-As-Usual money at stake, fire up the opinion tanks with some extra donations to take attention off the real issues.

    Here is something else to chew on. On 23 Feb WaPo published a nice colored Quake potential map and a story about the need to consider the 430 million humans now living in high risk areas – tens of millions of them poor.

    Sure enough, a quake hit Chile last night. There will be less loss of life than in Haiti but the cost will be in the Trillions.

    So what if the loss of ice caps (no one disagrees that glaciers and ice caps are shrinking – just how fast they are going) has a direct impact on the tectonic plates and THAT is triggering a rash of earth quakes. Just saying…

    The overarching goal must be to shift human Urban agglomerations away from locations, settlement patterns and cheap construction that makes humans and their economic, social and physical well being susceptible to fire, flood, hurricanes, quakes, etc.

    As the WaPo map shows, and as events of the past 50 years document, Urban settlement patterns are now vulnerable AND they are energy hogs and untransportable to boot.

    Here is a thought:

    Now that there is a major shift from Cap and Trade to Criteria for Energy Consumption Sectors to address GHG this is an opportunity to make clear the impact of human settlement patterns on energy, safety and happiness.

    Let us turn heat to light.

    EMR

  • Cuccinelli Is Right

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    James A. Bacon

    Attorney General Kenneth T. Cuccinelli is absolutely right to file a petition against the Environmental Protection Agency for attempting to regulate greenhouse gases, including carbon dixoide, by means of executive fiat. And he is absolutely right to cite the East Anglia email scandals as justification for questioning the so-called “science” underlying the Intergovernmental Panel on Climate Change report on global warming.

    Most Americans wouldn’t know it from relying upon such U.S. media luminaries as the New York Times, Washington Post and network television, but U.K. media news organizations, even the leftist Guardian, have been all over the East Anglia email story. The Labor government has initiated reviews and investigations to examine the integrity of the scientific process. Far from being a “mini-scandal,” as my friend Peter portrays it in the previous post, East Anglia is the tip of the iceberg of what could prove to be the greatest scientific scandal in modern history: the hijacking of science by politicians and ideologues for the purpose of reorganizing society according to their ideological tenets.

    As Cuccinelli pithily puts it, “It is political science, not real science.”

    Of course, Cuccinelli is himself a politician, and as Peter describes him, “a staunch social conservative” — and as we all know, social conservatives, most of whom who are Bible thumpers who don’t believe in Darwinian evolution, are anti-science. So, let’s not accept Cuccinelli’s appraisal of the significance of the East Anglia scandal. Let’s see what the U.K.-based Institute of Physics, which claims a worldwide membership of 36,000, has to say in a memorandum submitted to Parliament:

    The CRU e-mails as published on the internet provide prima facie evidence of determined and co-ordinated refusals to comply with honourable scientific traditions and freedom of information law. The principle that scientists should be willing to expose their ideas and results to independent testing and replication by others, which requires the open exchange of data, procedures and materials, is vital.

    This extends well beyond the CRU itself – most of the e-mails were exchanged with researchers in a number of other international institutions who are also involved in the formulation of the IPCC’s conclusions on climate change.

    The e-mails reveal doubts as to the reliability of some of the [temperature] reconstructions and raise questions as to the way in which they have been represented.

    The “mini-scandal” is growing. Numerous reports have surfaced, calling into question the accuracy of the IPCC report — most notoriously the claim that Himalayan glaciers would melt by 2035, which even the IPCC concedes represented a failure to live up to its own standards. If you rely upon the Washington Post for updates on the IPCC, you would read that “critics have found a few unsettling errors” due to typos and sloppy sourcing, with virtually no explanation of why the international body might feel compelled to restore public trust in its findings. You’d have to read the British press, such as this somewhat polemical column in the Telegraph, for an understanding of what is going on. By the way, has the Post or NY Times yet to seriously report on IPCC chairman Rajendra Pachauri’s conflicts of interest?

    Have the Post or the NY Times yet to report on the extraordinary concessions made by Climate Research Unit chief Phil Jones, who was at the heart of the East Anglia scandal, among others that: (1) there is still legitimate debate over whether the current warming period is unprecedented, as it is proclaimed to be, or whether the Medieval Warming Period was even warmer — gee, we thought those matters were “settled” — and (2) that the sources of the data (not the data itself) in the East Anglia database are “probably not as good as they should be.”

    Nor have the Post or NY Times yet to acknowledge concerns that the data in the U.S. databases at NASA and NOAA might not be as good as they should be. A recent report, “Surface Temperature Records: A Policy Driven Deception?” has documented how NOAA has systematically reduced the number of weather stations around the world from which to calculate average global temperatures, showing a bias toward eliminating stations in colder regions and substituting statistical interpolations. The authors do come across as polemical in their conclusions about the motives of the NOAA temperature record keepers, but their underlying case about the bias in the measurements has at least superficial merit worth a closer look. (David W. Schnare with the Thomas Jefferson Institute for Public Policy has taken a closer look at one weather station near Harrisonburg and concludes that NOAA’s statistical adjustments have doubled the actual observed warming.)

    Finally, there is the stubborn refusal of global temperatures to actually rise over the past 12 years. While the data can be explained away as the result of natural climatic fluctuations temporarily masking the inevitable rise, stable temperatures suggest that the broader trend is consistent only with the “low” range of temperature increases predicted by the climate models, and totally inconsistent with the alarmist scenarios.

    None of this is to say that anthropogenic global warming (AGW) has been “disproven,” or is a “hoax,” as the Rush Limbaugh crowd would maintain. What we should conclude from recent developments is that the case for AGW remains unproven. Any “consensus,” if it ever existed, rested upon faith in the integrity of contemporary temperature measurements, reconstructions of past temperatures through proxies like tree rings, and the integrity of the IPCC synthesis of the science. We can no longer have faith in those assumptions.

    Therefore, it is entirely reasonable for Ken Cuccinelli to suggest that the EPA is making an extra-constitutional power grab on the basis of unproven science.

    Warning to environmentalists: I expect that the overwhelming majority of environmentalists have become so attached to the AGW hypothesis that they will reject the recent round of criticisms out of hand. They have too much invested not to defend it to the death. But if the AGW hypothesis ever is discredited, they will go down with the sinking ship, and the entire environmental movement will be tarred. And that would be a tragedy. The world is full of proven environmental problems, too numerous to list here. While we certainly need to continue researching the dynamics of climate change, we should focus on fixing what we know is broken.

  • The Attorney General From East Anglia

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    James A. Bacon

    Lots of observers were skittish with the election victory in November of Attorney General Kenneth T. Cuccinelli II, a staunch social conservative unafraid to rattle cages. The Washington Post editorialized that he might prove an “embarrassment” for Virginia as did The Virginian-Pilot. More conservative editorial writers were delighted with him.
    Well, it hasn’t taken long. Straying a long ways from the typical confines of the Old Dominion, Cuccinelli has filed a petition against the U.S. Environmental Protection Agency, which after a decades-worth of study, has declared that six greenhouse gases coming from factories, cars and big electric plants pose a threat to the ecosystem and the public health.
    Of course, most of the world has little trouble with this and many governments have made such declarations. There are plenty of supporting scientific studies which would be the basis of some kind of international effort to curb greenhouse gases which have been found to promote global warming.
    Even big U.S. corporations such as power-generators Dominion, Duke Energy, and Excelon support some type of “cap and trade” restrictions because they (1) realize the scientific problems and reasons behind warming; (2) they want to avoid future lawsuits by shareholders and environmentalists armed with a preponderance of data about the human factor in global warming and (3) they might be able to do just as well, if not better, profit-wise by turning to newer types of technology that are more eco-friendly and less reliant upon dwindling global supplies of polluting hydrocarbons.
    So much for being long-sighted. A core element in the right wing wonk movement (CATO, A.E.I. The Thomas Jefferson Institute for Public Policy, which publishes a another version of Bacon’s Rebellion that is tightly censored for ideological purity), wants to diss global warming as much as it can. To discredit attempts to regulate greenhouse gases, it wants to pretend that human activity has nothing to do with such gases.
    This is where Cuccinelli comes in. Not only has he filed a petition against the EPA, he cites among his reasons for doing so, a mini-scandal at the U.K.’s University of East Anglia which last year suffered a kind of mini-Watergate that involved computer hacking and e-mails supposedly casting doubt about the scientific veracity of global warming. This is because the Intergovernmental Panel on Climate Change, the United Nation’s body supplying supporting data on global warming, makes big use of the East Anglia school, even though there are many other sources as well.
    Anti-warming ideologues such as Cuccinelli have leaped on the scandal as some kind of conclusive evidence that global warming is false. Whatever.
    Maybe someone should give Cuccinelli a world map and a copy of the U.S. Constitution. The last time I checked, The University of East Anglia is in the County of Norfolk, England, not the City of Norfolk, Va., in the U.S. Unfortunately, Cuccinelli’s legal venue does not extend to the County of Norfolk (although it does the City of Norfolk, Va.). Also, Cuccinelli’s legal authority does not extend to the EPA , which is a federal, not state, agency.
    Trying to make his case, Cuccinelli says that he is, by training, an engineer along with a lawyer, and that he knows that any reputable scientific findings must be verifiable by independent testing. True enough, but keep in mind that Cuccinelli is a mechanical, and not an environmental, engineer. In other words, he would have more credibility if he were talking about industrial processes or copying machines than the global environment.
    Of course, Cuccinelli’s play is purely political, not to mention ideological . It is part of grand strategy of the right wing arm of the GOP to promote a bunch of mini revolts at the state and local levels to raise awareness of pet projects such as dissing global warming, arming citizens to the eye-teeth and banning abortions. The targets are elections later this year and of course, beating Barack Obama in 2012.
    Cuccinelli’s ploy already has won praise from The Washington Times, the faltering Moonie newspaper that says Cuccinelli is “spot on.” But you have to worry that the other Washington newspaper might have it right — that Cuccinelli’s anti-global warming, anti-federal tantrum is an embarrassing sideshow for the citizens of the Old Dominion.
    It isn’t as if Virginia doesn’t have other more serious problems, such as jobs. So far the state’s GOP leadership has presented us with a weak mish-mash of jobs bills while screwing around with Cuccinelli’s petition and laws that that make it OK to bring a loaded handgun into a bar.
    Rumor is that even Gov. Bob McDonnell is trying to keep Cuccinelli on a shorter leash. But all of this makes Virginia look like some Southern backwater rather than a worthy player on the global scene.
    Peter Galuszka

  • Want to Create Jobs? Think Big.

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    James A. Bacon

    The Republicans in Virginia’s House of Delegates have passed a lot of bills to promote “jobs and opportunity” this year — at least 34 by my count, based on a compendium of bills approved by the House on the House Speaker’s website. The best that can be said is that, if enacted into law, most of them wouldn’t do too much damage. A number use the old ploy of exempting favored groups from assorted taxes, which is a bad thing because the state tax code has too many exemptions already, but for the most part they are inoffensive.

    But it is difficult to imagine these narrow-bore bills having much impact on Virginia employment. In the long run, the best way to increase employment and economic opportunity are by making sure the commonwealth does a good job of performing core functions and services, keeping taxes low and getting the hell out of the way. If legislators really want to promote jobs and opportunities, here are some general strategies they should pursue that require no expansion in the scope of government.

    Build knowledge clusters. Companies are more competitive, more likely to grow faster and more likely to spin off new enterprises when they belong to a strong knowledge cluster, usually focused on a specific industry. Most of the knowledge resides in the companies themselves, but some of it resides in academic institutions, research centers, not-for-profit organizations and the legal and financial professions. Knowledge concentrations lead to greater innovation and higher levels of productivity, and they attract outside capital investment. Government is not particularly adept at creating knowledge clusters, but it when such clusters already exist, government can act as a catalyst to get key players organized and acting in the common interest, and it can play an important role by supporting community college and higher ed programs to create a stream of graduates possessing skills relevant to the clusters.

    In my day job, I have worked with the state of North Carolina, which has played a role in creating the North Carolina Aerospace Alliance, and with metro Atlanta, which, with the state of Georgia, is actively promoting a digital entertainment industry. Virginia has numerous knowledge clusters, too, but I don’t see the state doing anything substantive to promote any of them.

    Reform human settlement patterns. You don’t have to buy into the “smart growth” vision to acknowledge the need to reform Virginia’s scattered, disconnected, low-density human settlement patterns. Just think resource scarcity. Our human settlement patterns have evolved during an age charactrerized by energy abundance and a profligate use of natural resources. While the Global Financial Crisis has temporarily obscured the fact by depressing energy and commodity prices, we are moving to a new plateau of higher energy and resource prices. (Don’t believe me? The 2.4 billion inhabitants of China and India do.) We need to evolve more compact, better connected communities that consume less energy and fewer raw materials. We don’t need to employ social engineering to reform human settlement patterns. We simply need to (a) devise funding mechanisms for transportation and public services that require households and enterprises to pay their location-variable costs, and (b) scrap the antiquated zoning codes that lock existing development patterns into place.

    Want to promote job creation? More efficient human settlement patterns will provide cost savings for households, enterprises and municipal government.

    Overhaul the health care system. Virginia Republicans rightfully regarded Obamacare as a monstrosity that would have increased the role of government and transferred wealth without addressing the underlying causes of escalating healthcare costs. Unfortunately, the Republican proposals, though relatively harmless, would have little effect. If they could just grit their teeth and admit it, Obamacare did contain a few good ideas, most particularly: measuring medical outcomes, disseminating best practices, and increasing transparency. There is nothing inherently “socialistic” or “big-governmentish” about these ideas.

    There is no reason that Virginia needs to wait for the federal government to reform the state health care system. A good place to start would be to convene all major stakeholders — hospitals, doctors, health plans, employers, consumers — and expand upon the state’s existing but tepid data collection measures. Key goals would be to measure medical outcomes, allow health plans and providers to access the data to improve quality and reduce costs, and share the data with consumers so they could select providers on the basis of value (i.e. the best trade-off of price and quality). As measured by the Dartmouth Atlas, Virginia’s health care sector already delivers the best value anywhere on the East Coast. But there is huge room for improvement. We should aspire to be lead the country.

    Want to create jobs? How about having a healthcare system that provides top quality care at half the cost of anywhere else in the country?

  • A NOTE ON GOVERNANCE STRUCTURE

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    James A. Bacon

    In the 16 February post on the Affordable and Accessible Housing Crisis Groveton said:

    “I want a smaller national government, a much smaller state government and a much larger local government.”

    As EMR noted in a comment on that post:

    “Groveton is RIGHT but there are two Vocabulary problems with his statement. We will get to that in a new post coming up…”

    The first Vocabulary problem is the use of the term ‘local.’

    See discussion of the Core Confusing Words in The Shape of the Future. ‘Local” is perhaps the most confusing of those words.

    Groveton’s ‘local’ government has twice as many citizens as EMR’s home ‘state’ – Montana has two Senators and a Representative – and is 183 times as large as EMR’s current municipal government – which has done a great job of keeping our street plowed since the 18th of December.

    Another problem is the use of the term ‘larger.’

    NO ONE wants what jumps to mind (the neural linguistic image / framework) when they hear the words “large government’ aka ‘Big Government’ – not even the most well meaning Progressive.

    What is needed is:

    Far more levels of governance Agencies – at and below the Regional scale – one level of Agency for each of the organic components of human settlement, AND

    Far more citizens ACTIVELY involved in Agencies and in Agency activities – but as citizens and volunteers, NOT as employees. It starts with the direct democracy at the Cluster scale as EMR has articulated for 20 years.

    The fundamental principle of human interaction is the Golden Rule.

    The fundamental principle of governance is allocation of responsibility to the correct level (and levels) of Agency:

    Level of impact equals level of control.

    (Shared impact requires SHARED control – NOT higher level UBER ALLES.)

    One other observation:

    Groveton makes a good point about the idiocy of continuing to place importance on the boundaries drawn up even before the current governance structure was created.

    For this reason the whole idea of ‘state’ is outdated and needs, and EMR repeats time and again, to evolve to a structure of New Urban Regions – the fundamental building block of contemporary Urban civilization – and MegaRegions. Much more in TRILO-G.

    From recent communication with colleague on the need for Fundamental Transformation of governance:

    One of the basic requirements of achieving a sustainable trajectory for civilization is Fundamental Transformation of governance structure. That means evolving a governance structure that reflects the organic structure of human settlement. The 3.5 level governance structure was outdated in 1770 and has just gotten worse decade by decade.

    It is not possible to pretend that the 18th century economic, social and physical reality which the current governance structure was intended to serve still exists. The evolution from clans to tribes to city-states to empires to nation-states did not freeze in 1770. Economic, social and physical relationships and reality have continued to evolve even if governance structure and the Vocabulary used to describe governance and human settlement patterns did not.

    The transformation from agrarian society to an Urban society has made the current 3.5 level system and the Vocabulary used to describe it obsolete.

    In 1800 about 95 percent of the population derived economic support from agrarian activities.

    In 2000 about 95 percent of the population derives economic support from Urban / Non-Agrarian activities.

    In 1800 ‘society’ was controlled by a few literate citizens and it took those citizens or their ideas three days to get from Charlottesville to Georgetown.

    In 2000 it takes two hours for almost any citizen to get from one of those places to the other.

    Most of the travelers are literate.

    In addition, their ideas, images and money can move 120 miles or 12,000 miles in nano seconds.

    In 1800 most of the occupants of the several states could only dream of acquiring what the few at the top of the Ziggurat had AND most at the bottom did not know what those at the top actually had.

    In 2000 with instant communications, advertising and entertainment there are immediate “I want (deserve) that too” demands / expectations.

    Just 40 years ago those at the bottom of the Ziggurat could expect to earn a living wage that was perhaps 1 / 100th of those at the top of the Ziggurat.

    Now the chance of getting a job is less certain and the Wealth Gap is much wider and growing. See Supercapitalism concerning the magnitude of the Wealth Gap problem and trajectory of the widening gulf.

    With dwindling Natural Capital and a widening Wealth Gap there is the potential of widespread unrest. The threat of weapons of mass destruction is real and current.

    Clearly it is time to embrace the need for Fundamental Transformation

    Also see analysis of Green Metropolis (post of 20 November 2009) which provides an overview of the importance of Vocabulary – especially the use of ‘city” – and the need for a comprehensive Conceptual Framework.

    EMR

  • AFFORDABLE AND ACCESSIBLE HOUSING, AGAIN — DIGGING THE HOLE DEEPER

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    James A. Bacon

    The Affordable and Accessible Housing Crisis that directly and indirectly impacts all citizens continues to get worse. Ignorance about the root causes is making the potential for recovery less likely with each passing day.

    The lack of Affordable and Accessible Housing to meet the needs of most of the Households in the economic and social Ziggurat – the three dimensional manifestation of contemporary, Urban society – is a critical and growing problem.

    The latest indicator of shelter dysfunction? The 14 February WaPo front page headline: “Refinancing Unavailable for Many Borrowers. Millions Shut Out of Best Rates, Depressed Home Values, Poor Credit, High Debt Hurt Chances.”

    The authors get the problem right but not the cause or the cure.

    As readers of The Shape of the Future, EMR’s columns and posts and now TRILO-G know, there are three interconnected, overarching Crises preventing humans from achieving a sustainable trajectory for Urban civilization:

    • The Mobility and Access Crisis,
    • The Affordable and Accessible Housing Crisis, and
    • The Helter Skelter Crisis.

    None of these overlapping Crises can be solve without solving all three. More important, none can be solved without:

    • Fundamental Transformation of human settlement patterns,
    • Fundamental Transformation of governance structure, and
    • Fundamental Transformation of the economic system.

    Articulation of the third Transformation evolved between the time The Shape of the Future was completed in 2000 and completion of TRILO-G in 2010. The Dot Com Bust, the mid-2000’s consumption / housing Boom and The Great Recession document the need for this Fundamental Transformation. The other two Crises are explored in The Shape of the Future.

    Readers of EMR’s work also know that the effort to expand home ownership since 1920 without regard to location of dwellings is to blame for creating and recently exacerbating the Affordable and Accessible Housing Crisis. Over the last decade the Crisis has been characterized as: Wrong Size House in the Wrong Location.

    Over-washing the many prior contributing causes of The Affordable and Accessible Housing Crisis is the fact that Fannie and Freddie completely divorced the ability to get a loan from the intrinsic Value of the dwelling.

    Early FHA and VA programs – and many state and municipal shelter programs – had spacial / locational and quality standards at the Unit, Dooryard and Cluster scales. There also evolved between 1925 and 1975 a professional consensus on how Clusters could best be agglomerated into functional Neighborhoods, Villages and Communities.

    Driven by the greed-inspired securitization that leveraged money ‘invested’ in housing, Fannie and Freddie abandoned any shred of a nexus between size, location and Value.

    In this context the cost (with a small ‘c’) is what a buyer pays as distinct from the full, true Cost (with a Capital ‘C’) that reflects a full allocation of the location-variable expenses at all six scales of human economic, social and physical activity below the New Urban Region (or Urban Support Region) scale.

    ‘Value’ in this context is based on the location of the dwelling and the relationship of that location to the other activities that are necessary to support a quality life in contemporary Urban society. When cost is lowered by intentional and unintentional subsidy, the Value is masked by the housing consumption bubbles.

    Because residential land uses (and directly supporting Services – activities of Agencies, Enterprises and Institutions) make up 70 to 80 percent of the built environment, the flood of location-blind money transformed not just housing location but human settlement patterns at the Regional and MegaRegional scales over the past four decades.

    The build environment takes up about 1.5 percent of the land area in the US of A. This hard core of buildings and pavement has been scattered across 30 percent of the total landscape and most of the accessible landscape. See PART FOUR – THE USE AND MANAGEMENT OF LAND in TRILO-G.

    This scatteration has blurred the identity and crippled the functions of both Urbansides and Countrysides. Thirty percent of the land area WAS six times the area that would be required for Urban land uses at MINIMUM functional settlement patterns – even with cheap energy.

    Now that the sources of cheap energy have been exhausted, Urban settlement may be scattered across ten times the area required for sustainable habitation. See David Owen’s Green Metropolis and EMR’s review of that book “Read It Now” in Chapter 50 of TRILO-G. (An earlier version of this review can be found at www.baconsrebellion.blogspot.com of 20 November 2009.)

    To keep the BIG picture in mind, this irrational, subsidized and unsustainable scatteration of the daily human activities carried out by 95 percent of the population:

    1) Cannot be served by Large, Private vehicles (the Mobility and Access Crisis)

    2) Is the root cause of the Affordable and Accessible Housing Crisis

    3) Results in vast Mass OverConsumption of resources – especially energy – that cannot be supported by any known economic system, and

    4) Is the primary catalyst for in the disintegration of the social fabric in contemporary Urban society.

    The total of these four realities IS The Helter Skelter Crisis.

    Few disagree that the housing bubble – created by decades of misguided attempts to expand home ownership without regard to the commutative impact or the total cost – triggered a credit / financial Collapse termed The Great Recession. To grasp the profound level of ‘leadership’ ignorance , recall that in 2006 the recently reappointed chair of the Fed asked “What bubble?”

    The rolling impact of The Great Recession and the reality that a growing population of humans – with rising expectations and a widening wealth gap – inhabit a finite planet with finite resources is not a pleasant prospect. In an era of instantaneous communications and weapons of mass destruction these factors cloud the future of civilization as it has been experienced in recent decades by those at the top of the Ziggurat.

    Society is running of fumes. Political clans are doing their best to deny the role they played and are stonewalling any meaningful change, much less Fundamental Transformations.

    The 14 February WaPo story makes it very clear that there is a huge problem in the area of shelter but fails to make it clear that the root cause of the Affordable and Accessible Housing Crisis was divorcing the cost of housing from the Value of housing.

    As pointed out in THE ESTATES MATRIX – PART TWO of TRILO-G, MainStream Media consistently fails to explore the impact of settlement patterns because to do so would undermine the short-term profitability of the Enterprise that owns the media outlet.

    Even those who should know – appraisers, lenders, buyers and the entire ‘real estate’ industry – are adrift. They do not have an overarching Conceptual Framework with which to comprehend human settlement patterns AND they refuse to even consider adopting a more robust Vocabulary with which to articulate a comprehensive Conceptual Framework

    The general perceptions about the location of foreclosures is a perfect example. For most, the geography of foreclosures is similar to the ethereal, Myth besotted fog that clouded medieval minds concerning the cause of human diseases such at the Black Death. This same fog clouds minds concerning the importance of spacial distribution of human activities and human interactions.

    Buying a smart phone or an iPad will not solve the problem. Neither will making dwellings easier to buy without regard to their size, location and relationship of the dwelling to all the activities necessary to create a quality life for the Urban humans who occupy the dwelling.

    AND NOW THIS:

    Again on WaPo page one for 16 February:

    “U.S. Hopes Foreign Money Can Boost Housing Market [Wrong Size House in Wrong Location], [Foreign] Governments Took A Hit When the Boom Went Bust. Will They Return?; U.S. Looks Abroad to Fill a Housing-Finance Void”.)

    Hoping other nation-states will make a bad situation worse must be one of the last sign posts on the way to the cliff.

    EMR

  • The Rain in Spain

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    James A. Bacon

    A steady refrain on this blog is a kind of Protestant guilt trip about deficit spending (see Boomergeddon). We are supposedly responsible for our own lives and destinies and we have failed miserably because we listened to irresponsible liberal dogma from the likes of Barack Obama and we are so covered with government debt that our lives and futures are ruined. Can we be redeemed? Can we be washed in the blood of the lamb?
    At least that’s the dogma du jour and it is all over the place from the Teabaggers to the “fair and balanced” coverage of Fox News to, of course, “Boomergeddon” on Bacon’s Rebellion.
    Problem is, dogma du jour is often not only wrong, it is short-lived. Consider my experience in 1989. I had been elevated to a middle-level editor at BusinessWeek (back when it was a real magazine) after a tour in the Soviet Union. One of my more droll colleagues took me aside and explained to me: “Look, we cover basically three types of stories here — the Yellow Peril,. Europe 92 and the Death of Communism.”
    That summed things up rather neatly. The ruling brass on the 39th floor of the midtown Manhattan skyscraper liked stories shilling that the Japanese were overtaking us, Europeans were right to unify in 1992 and how the USSR and China were doddering. Another dogma we were supposed to follow was cheerleading for the Thatcher-Reagan concepts of globalization which, in their view, was a triumph of muscular Anglo-American decency, capitalism and democracy.
    Of course, a lot of this was bunk. The Yellow Peril quickly slunk away after Japan entered a decade of disastrous economic deflation. The Soviet Union did implode but Chinese Communism appears to be stronger than ever. By backing the New York City and academic elites in their globalization theories, we sold out millions of American workers from Danville, Va. to Kannapolis, N.C. to Detroit.
    And now, there’s lots of criticism that our feeble economic recovery is endangered by those free-spending Euroweenies who, of course, deserve what they get because they are arrogant socialists!
    Maybe but maybe not. Paul Krugman has an interesting column in this morning’s New York Times suggesting that things are a bit more complicated. The problem now is that some of the weaker European economies, notably Spain’s and Greece’s, are tottering and they could drag down the struggling European Union which would put the qui-bosh on our own recovery. That’s one reason the stock market has been jittery recently after a health, nearly-year-long run up.
    The Boomergeddon types will, of course, trot out their Sunday church sermons about deficit spending. But Krugman says it’s a bit more complicated than that. His argument? The pressures result from pushing Europe into the 1992 unification and single, Euro currency before it was really ready.
    Take Spain. The nation was actually a healthy spender (debt was about 43 percent of GDP) and was chugging along nicely. Then the single currency made it easier for bigger economies such as Germany’s, to take advantage of the sunny, Spanish beaches and invest lots of bubble money into resorts and tapas bars. So, when Germany’s economy hit the wall, it took down Spain’s.
    In earlier years, had it been a truly independent country, Spain could have wiggled out of the mess by devaluing its currency. But it can’t set things right because it is tied to the Euro. It can’t affect a change in the Euro’s value as a sovereign nation. Deficits, Krugman argues, have little to do with it.
    Bacon and his Baconauts, of course, will retort that Greece, the other villain in this picture, does have a big deficit problem and they are right. But my point is that things are more complicated and simply trotting out that Old Time Deficit Religion has limits. Besides, when you are in the economic dumps, you spend, which is another thing the Baconauts do not understand, but that’s fodder for another post.
    Peter Galuszka

  • Virginia: Pretty Darn Satisfied

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    James A. Bacon

    In the previous post, EMR referred to International Living’s quality-of-life ranking, in which the U.S. scored only No. 7. Not bad, but not exactly consistent with the mantra of many that “We’re No. 1!”

    As it happens, Gallup has just produced a “well-being” ranking for the 50 U.S. states (though using a different methodology). What I find interesting is that most Americans are satisfied with the quality of life that their state offers. There is some variation between states, but that variation falls within a relatively narrow range of 82.3% (North Dakota) and 69.0% (Nevada) in terms of percent satisfied.

    Virginia falls within the “high” range of satisfaction and, indeed, is the only state east of the Mississippi River to do so. We are an outlier — most states with high well being are clustered among the northwestern plains and mountain states. The least satisfied, not surprisingly, are characterized by high unemployment and/or high poverty. Yet Gallup notes that the correlation between economic outlook and satisfaction is far from perfect. Remarkably, even as the recession deepened last year, satisfaction levels improved modestly across much of the country.

    What factors contribute to satisfaction? Gallup sheds little light. One strength of the U.S., I would suggest, is the high degree of mobility that allows people that don’t like where they live to pick up and move. The nation is sufficiently diverse in terms of climate, terrain and culture that you have to be a real misfit not to find a place you’re comfortable with.

    Why does Virginia — the 12th most satisfied state in the nation with the seventh highest quality of life in the world — fare so well? Note that we score only a hair higher than Maryland, so the Mid-Atlantic location may be a contributor. (But please note it’s not proximity to Washington, D.C., which has a significantly lower satisfaction rating. We also score significantly higher than our neighbors to the south, in North Carolina.)

    If only Gallup were conversant with the concept of human settlement patterns. It would be most interesting to poll readers by human settlement type — farm, rural, village, small town, large metro area, and various densities and varieties of urbanization. I suspect that human settlement patterns would score high as a variable affecting peoples’ satisfaction with where they live.

  • MORE ON HAITI

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    James A. Bacon

    Before the comments on “Haiti’s Last Chance” (5 Feb 10) were deflected into the dysfunctional governance structure quagmire, Larry G. asked:

    “well in the case of Haiti, we think their GDP is too low – for the resources they have. That’s the implication, right?”

    “You’ve got two countries on the same island with about the same resources but one of them the GDP is four time higher.”

    “right?”

    Discussion of the Haitian earthquake makes it PAINFULLY clear how hard it is for almost everyone to focus on the magnitude of Fundamental Transformation necessary to achieve a sustainable trajectory for civilization.

    Almost everyone hopes that reality will go away, and that they can just retreat into the cocoon of illusion and Myth spun by the political clansmen and promoted by advertising and the lobbing of Business-As-Usual Tiger Riders who benefit from Mass OverConsumption.

    Larry G. who demonstrates clear thinking and good instincts on many topics, obviously misses the point of the original post and most of the prior comments, including his own. Groveton who often exhibits a broad base of experience and insight searches for fly specks in the pepper. Comparing earthquake faults in California with ones in Haiti?

    Perhaps everyone needs to refresh themselves on the two overarching principles Jared Diamond distilled from an examination of diverse societal disasters in Collapse. See “Collapse, An Appreciation” 8 August 2005. Understanding Guns, Germs and Steel will also help.

    As Jim Bacon points out, in the original Haiti string, Diamond specifically mentions the ecological disaster that is Haiti and the difference in remaining resources and ecological buffers that distinguish Haiti from The Dominican Republic. (For an interesting perspective, see Kent Mountford’s “Nation’s fortunes often grow, fall along with their forest resources” in the February issue of Bay Journal.)

    The impact of Spain’s ‘management’ of its colonies and the abandonment of Haiti by France made ‘all the difference.’ France’s other major Caribbean colonial venture turned out much better. Martinique / Guadalupe is a ‘Department’ of France, a relationship that is similar to Statehood for Hawaii but profoundly different from the US of A’s relationship with Puerto Rico.

    By the way, France is also AGAIN this year, the worlds best place for humans to live according to Living’s Quality of Life Index. As readers of The Shape of the Future know, EMR has reservations about such surveys but there is substance and continuity in this one. It focuses on parameters that those in the middle of the Ziggurat are concerned with, not the Architectural Digest crowd or the 12.5 Percenters.

    The US of A is seventh best country in which to live and losing ground. It is behind France, Australia, Switzerland, Germany, New Zealand and Luxembourg in that order. This in spite of having per capita expenditure of energy and other key resources that is twice or three times the consumption rate of some of the other nation-states. In addition, the US of A has some indicators of citizen well being much farther down the list than seventh – happiness, health care and infant mortality for starters.

    In fact, the Seventh place ranking is a residual impact of having consumed so much Natural Capital in the past 150 year (much of it translated into the glory of prior GDP growth) and the illusions spread by advertising, entertainment and media about ‘the good life’ experienced by those depicted.

    Just so Larry understands:

    “well in the case of Haiti, we think their GDP is too low – for the resources they have. That’s the implication right?”

    No, No, No.

    GDP is a rear view mirror measure of citizen well being. Humans must evolve A NEW METRIC OF CITIZEN WELL BEING – PART FIVE of TRILO-G.

    “You’ve got two countries on the same island with about the same resources but one of them the GDP is four time higher.”

    No, No, No.

    The two quasi-nation-states ARE on the same island – and so in 1492 had similar potential – but they do NOT have the same economic, social or physical resources.

    “right?”

    WRONG

    The official body count is 211,000 and now Bill has worked himself into the hospital.

    Bill: Take care of yourself BUT DO NOT SCREW UP

    EMR

  • Can the Marlboro Man Save Our Budget?

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    James A. Bacon


    Since revenues and taxes are on just about everyone’s minds these days, new ideas are always welcome. Here at Bacon’s Rebellion, all kinds of strategies have been pushed, including some rather complex ones such as a per-mile gas tax.

    Why not consider the most obvious tax of all — tobacco. Anti-smoking lobby the Campaign for Tobacco Free Kids is using the revenue crisis in the U.S. and among the states, including Virginia, as a vehicle to push a buck a pack increase for federal and state cigarette taxes.
    Doing so would raise $9.1 billion for the federal budget. In Virginia, it could add $317.7 million to the state which faces a two-year deficit of $4.2 billion, Tobacco Free Kids says. It could help 65,1000 children choose not to smoke, help 34,100 adults to quit and help prevent 29,800 premature deaths, the Campaign says. Some $1.4 billion in health care costs could be saved — no small amount in a crisis-charged health reform climate.
    According to Bloomberg, Virginia already has the 49th lowest taxes per pack — 30 cents. The state average is $1.34 a pack.
    But the Old Dominion loves its leaf and Philip Morris USA and parent firm Altria, wield a lot of clout especially since their headquarters vamoosed from New York City to Richmond a few years back. Besides its new HQ in the old Reynolds Metals building in Henrico County, Philip Morris USA’s last remaining cigarette production facility is just south of downtown Richmond where it employs about 6,000. PM USA has closed other facilities in Louisville and Cabarrus County, N.C.
    The tobacco giant is a major contributor both to Virginia political campaign coffers and to numerous charities, which have suffered a great deal in the recession. Tobacco, however, is pretty much recession proof. In 2009, during the worst recession since the Great Depression, Altria saw sales rise 21.7 percent to $23.5 billion. Net earnings were $3.2 billion. These healthy figures come despite the fact that the number of American smokers is declining, thanks to health concerns.
    So, if the General Assembly and Gov. Bob McDonnell are really serious about dealing with the state’s budget crisis, maybe they should take a serious look at this obvious new source of revenue. But will they, given Altria’s clout?
    Not that long ago, the answer would have been a flat “no.” But the state has recently taken a more sensible and modern approach. During the Gov. Tim Kaine administration, the legislature actually passed a law banning smoking in most restaurants.
    Such limits do work. Take me. When I was a high school kid in the 1960s, cigarettes were so accepted that my high school had cigarette machines. I started smoking, Marlboros no less, when I was about 16. I stopped in my early 30s until I was posted as a journalist in Moscow. The intensity of that assignment, plus the presence of so many smokers, encouraged me to take up the habit again. The only reason I stopped was that my next post was in a Manhattan skyscraper way up 39 floors. New York City rules forbade workplace smoking, so if I wanted a smoke, I’d have to go down two banks of elevators to the street. Too much hassle. I quit.
    Of course Philip Morris USA is going to be against any new tax hikes, saying they’ve just been through one. But the firm is always trying to have it both ways. Its Web site urges viewers not to use its products. Yet it keeps making them. It wants regulation by the Food and Drug Administration while its competitors don’t. By getting FDA oversight, Philip Morris would be pretty much locked into its leading market positions.
    PM may be willing to play these logic games. But if the General Assembly wants to get taxes and improve the public’s health, cigarette taxes might make sense. They make more sense than McDonnell’s ideas of burdening North Carolinians with extra tolls on Interstates 85 and 95 if they want to drive north into Virginia or banking on offshore oil royalties from largely unexplored fields that won’t be available, if they exist, for about another decade.
    Peter Galuszka

  • HAITI’S LAND CHANCE

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    James A. Bacon

    The first draft of this Post was titled “Oh Haiti! How We Have Failed You.”

    The first draft was also much longer but we added the references below to document US of A actions vis a vis Haiti since 1804.

    Then something happened that has the potential to reverse 206 years of calmity.

    Before we get to the good news, a few facts and a bit of background:

    Haiti, the second European colony to stage a ‘successful’ revolution in the Western Hemisphere has been a pitiful economic, social and physical doormat of a nation-state for over two centuries.

    Now, the planet is ending 150 years of glutenous resource Mass OverConsumption. This will leave Haiti – and other neglected and overpopulated nation-states – to compete with until-recently rich and powerful Regions for increasingly scarce and expensive resources, goods and services.

    The data is crystal clear:

    Haiti was a basket case BEFORE the January 2010 earthquake.

    History is also crystal clear:

    Haiti is a basket case because of the criminal acts of its ‘leaders’ and because leaders of other nation-states turned their back on the Haitian people. These ‘leaders’ have failed over and over to do the ethical thing as opposed to what would benefit them the most in the short term. They failed to deliver on their own promises. The US of A, the biggest, richest neighbor has been one of the worst offenders – intentionally and unintentionally. See “Why does Haiti suffer so much?” Elizabeth McAlister CNN 18 Jan 2010 and “Troubled History: Haiti and US” Vanessa Buschschluter BBC News 16 Jan 2010.

    In the 60s National Geographic ran a story with a title something like “Haiti – West Africa in the West Indies.” Then and now, only in Africa and on scattered islands in the South Pacific can one find the poverty, depravation and intentional neglect of obligations comparable to that with which Haitians have suffered.

    And then the earthquake…

    Why does EMR care? He is embarrassed by the US of A’s record in Haiti. On what does he base this? He has been there AND he has read the history.

    EMR was only there once, but what but what a trip and what a lasting impression! [For a recently updated sketch of the April 1968 trip see Attachment One.] Many who have visited Haiti and most who understand Haiti’s history have the similar reactions to the US of A’s role.

    In the limited number of days the party spent in Haiti, EMR did not get far outside of Port-au-Prince on the ground. But the group had a Cessna 206 and plenty of fuel so coming and going from Puerto Rico they got a good look at the Countryside.

    EMR has a 35 mm record of the settlement pattern – the charming architectural gems in the Urbanside and physical abuse of the environment in the Countryside. The appalling deforestation and erosion was evident in April of 1968. For the first time, it was easy for one trained in ecosystems to visualize how the glutenous appetite of the Roman Empire for wood, fuel, food and other resources had led to the deforestation and desertification of much of North Africa and the Middle East. It was spread out like a roadmap to Collapse on half of a potentially verdant Caribbean Island.

    Haiti is not just an economic and social basket case. The citizens have been forced to mine the Natural Capital (aka, the environment) to survive and there is not much left. Google Earth confirms that in spite of best efforts, the trajectory has been down since 1968.

    Of all the things that the US of A has done as a nation-state outside its borders, the treatment of the citizens of Haiti is what EMR is least proud of as a citizen. From 1804 on the US of A hardly ever did the right thing. In spite of millions of hours by thousands of well-intended volunteers, and the work of many Haitians – in the US of A and in their homeland, the wrongs of Agencies, Enterprises and Institutions has not been righted.

    Every time another tragedy of governance surfaces, it dredges up memories of what the US of A has done: Sending in the military and promising to make things better but then not delivering.

    Photos of Port-au-Prince in ruins hit EMR hard – like the photos of New Orleans after Katrina. Unlike New Orleans and the Louisiana low country, EMR had no role in analyzing or suggesting a way to avoid disaster. Until last month, EMR was not even aware that Port-au-Prince was near a earthquake fault. However, a lot of others did and they published warning after warning.

    As we noted last month in an Email to the friend who was the pilot on the 1968 Haiti trip: “The news from Haiti is disturbing on many levels. In a way, it is Katrina all over again. With Haiti, it is empathy and outrage at incompetence but without the direct connection created by the effort to solve the problem.” See “Down Memory Lane with Katrina” 5 September 2005 and “A Second Stroll with Katrina” 4 September 2007.

    Now the good news:

    An item on CNN.com on 3 February – the lead was that the death toll from the earth quake was now over 200,000 – reported that Bill Clinton has been given an expanded role to oversee Haiti relief and rebuilding for the UN.

    As readers of The Shape of the Future know, EMR is no fan of Bill Clinton’s administration vis a vis human settlement patterns and resource consumption. His administration looks good primarily for balancing the budget and in comparison to the administration the followed Clinton / Gore.

    But there is more to this story that most know. Only recently did it become general knowledge that Bill and Hillary spent their honeymoon in Haiti in 1975. From the descriptions of their trip they must have had some of the same experiences that our party had in 1968. These experiences are also similar to what others have experienced. Further, the details of what Clinton tried to do in Haiti while president – although largely thwarted by the elephant clan – are encouraging.

    The bottom line is Bill Clinton has a chance to do the right thing. There is no other person on the planet who has the experience, the stature and the connections to pull off setting Haiti on a sustainable trajectory.

    Perhaps best of all, Bill does not need to be home at 6 because his wife wants to go to the Country club. She has more on her plate that any Secretary of State since Cordell Hull.

    So many past failures in Haiti…

    We have five little words for Clinton:

    Do NOT screw up Bill.

    You and you alone have the ability and the position to do the people of Haiti right. You have the power to eclipse thousands of broken promises and the billions of wasted dollars.

    You can move beyond your and our collective prior transgressions and stand beside George W. And Abe L. as a president who did truly great things for the US of A. In this case – and in these times – it is perhaps more important to help others than to provide aid to the citizens of the US of A. Citizens of the US of A have, by-in-large, created the economic and environmental quagmire in which they now find themselves. “We have met the enemy…”

    On a flatten but very bumpy earth, UN action that establishes a sustainable trajectory for Haiti may be the most important accomplishment that we can expect anywhere from anyone.

    It is an accomplishment that can set the standard for not just UN aide but for self-help by citizens of the until-recently rich Regions.

    Do NOT screw up Bill, with the planets resources dwindling, this is Haiti’s last chance.

    And perhaps citizen’s last chance to understand the components of a sustainable trajectory for civilization.

    EMR

    ATTACHMENT ONE

    May 1968 / Updated through January 2010

    Haiti was impacted in diverse ways by the Castro’s Cuban revolution in 1959. By the mid 60s, Haiti was in desperate need of hard currency. The dictatorship of President for Life Francois Duvalier (Papa Doc) was getting more and more bad press. It was time for an image change. In the late 60s, Papa Doc acquiesced to the advice of his son-in-law who had recently returned from exile in France: He moved to lift restrictions on, and encourage expansion of, tourism.

    A spruce up program was started, selected tour ships were allowed to dock, Air France started scheduled flights from Montreal, limited Pan Am service was reestablished.

    In the late 60s EMR was working as a consulting planner for the Puerto Rican Planning Board and taking every opportunity available to learn about the Caribbean. Within weeks of an announcement in the San Juan Star that tourists could now visit in private airplanes he was on the way. EMR and two fellow planners, one with a commercial pilot’s licence, rented a Cessna 206 ( N4892F) and took off in April of 1968 for a few days in Port-au-Prince.

    It turned out to be the most memorable and eventful of the score of similar trips the group took to islands in the Carribean. Between 1967 and 2000, EMR spent time on most of the islands between the Mona Passage and Tobago. What he learned in Haiti helped inform his travels, his work and his ownership or land in the Eastern Caribbean.

    The flight from Puerto Rico to Haiti was uneventful but the appalling deforestation and erosion was evident from the time we crossed the Dominican Republic border.

    The landing in Port-au-Prince WAS eventful.

    Not having a map of the Region, we first approached the runway of what turned out to be a military airport east of Port-au-Prince’s commercial airport.

    That brought frantic instructions from the control tower – which we had contacted upon entering Haitian airspace: “Do not try to land there, Areoport Francois Duvalier International is ahead of you several miles with the large white terminal building.” Later we recalled that expat rebels had tried to bomb the military airport with a World War II B-26 just weeks before. Good thing they did not have itchy fingers on the anti-aircraft guns.

    On landing at the correct airport (now Areoport Toussaint Louverture International – in 1968, EVERYTHING was “Francois Duvalier …. something or other”) we found the Cessna’s landing wheel brakes were not working. After just barely getting off the main runway in time to avoid being run over the by-weekly DC-9 Air France flight, EMR jumped out of the plane on the taxiway and rode on the tail to keep the tail wheel on the ground so that the pilot could rev up the prop and use the rudder to steer the Cessna to a safe place to stop. More frantic instructions from the control tower. “Get back in the airplane! You are not allowed out of the airplane on the runways… Repeat …”

    At the time we believed – and still do – that we were the first private plane to land in Haiti after years of prohibition against small aircraft. After an unauspicious opening act it was good that we had the telegram authorizing our entry form the Ministry of Tourism.

    We were met on the tarmac by a young Haitian Air Force Lieutenant who was assigned as our guide and chaperon. He also had a copy of the telegram and after looking at our passports, waived further processing. Well spoken and polite, he quickly figured out that the five adults and two children dressed in baggy shorts and armed with cameras were not be a threat to national security.

    Five adults and two children under six years old in a six passenger plane? One of Jim Bacon’s Nanny State social workers would see cause to take children out of a household if parents exposed children to such dangers. The two children turned out to be a passport to places not otherwise open to visitors.

    The Lieutenant arranged for an ‘agent’ (“Cowboy”) to oversee getting the brakes fixed, filling the tanks with fuel and guarding Cessna during our visit. Cowboy was armed – as were many “officials” we encountered – with a well worn pearl handled Colt 45. The guard slept at night under the tail of the plane during our stay. When we returned to the airport the gas tanks were full and the brakes seemed to work.

    Who in their right mind would get in a plane and fry over mountains and open ocean following an aircraft maintenance procedure such as that? That is another story.

    Our chaperon also arranged for a driver and car. The drivers name was Francois, of course. The Lieutenant was to accompany us on our travels but the seven of us left no room in Francois’ old four door sedan so the Lieutenant, having assured himself we were not a threat took some time off.

    We saw all the places tourist’s usually visited and a lot more. As we would drive from site to site we would see something of interest. Often Francois would caution against going there. We almost always ignored his advice and scored a number of interesting encounters. A dramatic but peaceful encounter with the Ton Ton Macoute in charge of the charcoal dock for example. We took long walks down streets lined with trees and delightful architecture and full of people but devoid of cars. Later we found the same person showing up in picture after picture – apparently the Lieutenant was not the only one paid to keep track of our activities.

    We had read “The Ugly American” before moving to Puerto Rico and did our best to avoid the tourist stereotype. Graham Greene’s “The Comedians” was recently published and a topic of discussion in Haiti. Following our visit we read Haitian history and still do from time to time – most recently “Haiti 1959: The Year That Changed Everything” (2007)

    The party stayed at the Hotel Plaza, visited Hotel Olafson and passed by Hotel Montana. Hotel Montana has been the subject of much press after the quake because so much (too much?) of the international rescue effort was focused on rescuing expats at the hotel. In 1968 the Olafson was THE place as it was when Graham Greene stayed there in 1956 while Hotel Montana was still just a curiosity – a place called “Montana” in Haiti?!

    We also had a reliable source to provide accurate data on the level of poverty, depravation and corruption. This is complicated so follow carefully: The pilots wife’s sister had a college roommate who married a senior staffer at Care. Somehow we made contact and got their perspective on Haiti. The Care staffer’s name was Van Damme according to a notation on a 35 mm slide. He was, as you might guess Dutch, Americans were not trusted in Haiti even in aide jobs.

    For a dirt poor urban Region, the streets were remarkably clean. There was no trash, no tin cans, no litter. Every resource was used. What was liter in San Juan as used in Port-au-Prince. If it was burnable it was fuel, if it was organic, it was fed to the pigs, if it was metal it was turned into lanterns and utensils.

    What impressed us most – and what impresses almost everyone who visits Haiti – is the indomitable spirit and innate friendliness of the people. Put away the camera and they were eager to talk. They were well informed and articulate.

    Also interesting was the artistic ability of many citizens. We left Haiti with all the artifacts and decor items that we could afford and that the 2006 would hold along with 7 passengers. We tried to buy directly from the artists and artisans who make the goods.

Now Available

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

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

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

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