Bacon's Rebellion

  • FRINGE ISSUES

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    James A. Bacon

    In comments on Jim Bacon’s 7 November post “ Stupid Growth in Maryland” a frequent commentor makes a common error concerning the fundamental causes of human settlement pattern dysfunction.

    In the US of A, states are constrained by the federal constitution, however, within that framework states are free to ‘centrally plan’ or ‘delegate’ most powers that impact human settlement patterns – shelter, transport, utilities and distribution of land uses to list a few.

    The Home Rule and Dillon Rule debates concerns what municipal Agencies (counties, cities, districts, townships, villages, et. al.) can do, ABSENT specific guidance from the state.

    There are 50 variations of state control / delegation of powers but NONE of them result in functional settlement patterns at the Regional or SubRegional scales. (A second commentor did not read the original WaPo story which demonstrated that Montgomery County, MD was the site of stupid growth.)

    If one understands what they are looking at and takes into consideration the existence of specific infrastructure investments and some superficial municipal variations – e.g. five acre lifestyle zoning in Fairfax County, VA and a hobby farm / McMansion zone in Montgomery County, MD – from 50,000 feet:

    THERE IS NOT ONE WHIT OF DIFFERENCE IN SETTLEMENT PATTERNS.

    At the Cluster, Neighborhood and Village scales there are some differences(the Zentrum of Annapolis is Alpha Village scale). There are some components that MAY be a large as Community scale (the Zentrum of Savannah for example)but those are historical artifacts, not the result of intelligent settlement pattern guidance since Euclidean Zoning was embraced by the Supreme Court. (Every one of the Planned New Communities designed since 1965 has been disaggregated by the forces noted below.)

    The reason there is not one whit of difference between the settlement patterns in Maryland, Virginian, West Virginia, Pennsylvania, el. al. is that human settlement pattern is driven by far more profound forces than federal / state / municipal controls or politics.

    EMR wrote a book about those forces: The Shape of the Future. EMR is about to publish a second book titled TRILO-G that opens with a PART titled ROOTS OF THE HELTER SKELTER CRISIS.

    Thrashing around on the fridges of the central issues will only put off the time when citizens can start the process to establish a sustainable trajectory for civilization.

    Look for the light at the end of the tunnel.

    EMR

  • T.J. Becomes Governor

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    James A. Bacon

    In his victory speech, Virginia’s new governor-elect Bob McDonnell spoke of his pride at holding the same post as so many awe-inspiring political figures and symbols of American Freedom and Rights of Man such as Thomas Jefferson.

    As a non-Virginian who happens to live here, I am constantly amused by the mythology that white and mostly Virginian historians lay down about Jefferson and many others of his era. These folks are real warriors for rights, they claim, yet they were slaveholders. And when it is pointed out that many of the White Supremacy types, including Jefferson, crossed the sexual line with African-Americans, they shake their heads in disbelief.

    This is a fascinating issue since I am finally reading Annette Gordon-Reed’s brilliant history “The Hemingses of Monticello, an American Family,” which details the forbidden fruit of T.J.’s sexual relationship with a favored slave.

    Here’s one citation from the book about what was involved when T.J. was appointed governor of Virginia in 1779. He brought along quite a gathering of slave-servants:

    “Seventeen-year-old Robert Hemings drove the phaeton that brought Jefferson and his family the the capital in Williamsburg in 1779. His brothers Martin and James rode alongside on horseback. All three men were there to perform the same
    services they performed at Monticello — Martin, to be the butler for the governor’s household, and Robert and James to be Jefferson’s personal servants. Their half sisters Mary Hemings and Betty Brown were brought along as well. Mary was twenty-six by then the mother of Elizabeth Hemings’s first two grandchildren. Daniel Farley, who waseseven, and Molly, who was two. The Hemingses were joined by at least six other slaves; Jupiter and his wife Suckey, the cook John, and George and Ursula Granger and their son Isaac, who went by the name Jefferson.”

    I wonder how many McDonnell will be bringing along when he moves to Richmond?
    Peter Galuszka

  • Stupid Growth in Maryland

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    James A. Bacon

    I had the pleasure of visiting Annapolis, Md., a couple of weekends ago, a city I had not seen in maybe 20 years. After watching Navy trounce Wake Forest in football, my family and I spent the night at the Governor Calvert House across the street from the state capitol (see pic) and spent several hours the next morning wandering the streets of the historic district.

    Historic Annapolis is a place that “works.” The historic houses are beautiful. The streetscapes are eminently walkable and visually appealing: At the terminus of many streets there are grand structures such as churches or government buildings like the magnificent capitol building. The street layout, arrayed around two main circles, are narrow but not excessively congested. The zoning code evidently permits the construction of new buildings, easily spotted by their drab, utilitarian architecture, but they are are built to scale with the surrounding buildings so they do not offend. And, then, of course, there is the waterfront with its marinas, boats and dockside restaurants.

    I was envious. There’s really nowhere like it in Virginia. What an exquisite spot to inspire the smart growth legislation that Maryland has enacted into law!

    If you read Ed Risse’s latest post, “Light at the End of the Tunnel,” however, you might guess where I’m heading. Especially if you took note of this quote, as I did, having recently seen the vivid truth of it:

    EMR is often quoted as having pointed out for 20 years that from 50,000 feet there is not a whit of real difference between the human settlement patterns in Maryland, vs in Virginia (or West Virginia) or North Carolina or Pennsylvania.

    My father, an old Navy grad, had warned us to take the U.S. 58/I-95 route home, even though it was a longer route as measured by miles. But fool that I was, I decided to take the “scenic” route back to Richmond along U.S. 301, bypassing the Washington Beltway with all of its hazards. It was Sunday afternoon — no rush hour. How bad could it be?

    Well, I can tell you that from a ground-level perspective, there’s not a whit of real difference either. U.S. 301 is a monstrosity. It suffers from every evil of “suburban sprawl” (by which I mean scattered, low-density, auto-centric human settlement patterns) that you can find in Virginia. Is this what Smart Growth hath wrought?

    A four-lane highway that once served as a useful inter-regional road connecting two state capitals has been transformed into a conduit for cul de sac neighborhoods, innumerable stop lights and endless expanses of strip shopping malls. All traffic in the disaggregated non-places such as Waldorf, Upper Marlboro and La Plata seemed to empty onto U.S. 301. What should have been an hour drive took at least two hours. I shudder to think what the road looks like in rush hour.

    Annapolis was founded in 1649 — 360 years ago. The downtown core remains a beautiful, vibrant place because successive generations of inhabitants have fallen in love with it, preserved it and invested in it. That’s what happens with places that “work.” The communities along U.S. 301 do not “work.” They are livable only as long as gasoline remains cheap. They appeal to no aesthetic sense. They will inspire no one to reinvest in them, they will run down, and they will become the slums of the late 21st century.

    I don’t call that Smart Growth. I suspect that most Smart Growth advocates themselves would disown U.S. 301. But whatever Maryland has done to create such a blight, we need to make sure we don’t copy it here in Virginia.

  • LIGHT AT THE END OF THE TUNNEL

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    James A. Bacon

    Now that Bacon’s Rebellion Blog has resolved the ‘Collapse of Agencies (aka, governments going broke’ problem) and solved the liberal vs conservative conundrum (as reflected in the off-year elections) let us return to the REAL determinant of the economic, social and physical future of civilization – functional and dysfunctional human settlement patterns.

    THERE IS A LIGHT AT THE END OF THE TUNNEL!

    But first notes on some back issues:

    EMR apologies that he did not have time to post on the Maryland Land use law (WaPo 2 November 2009 “Study call MD. Smart growth a flop.” This resulted in some off – topic posts in the “Could American Go Broke” post by Jim Bacon. More on that below.

    EMR also did not post responses to the comments on “THE EXACT COST OF DYSFUNCTION.”

    It takes time to sort out:

    A: Observations with which EMR agrees and for which there is not reason to respond,

    B: Broadsides, smokescreens and diversions that have already been covered, and

    C: The babbling of the 12.5 Percenters.

    We will cover those later but first:

    ABOUT THAT LIGHT:

    The following are the first few pages of a draft book review:

    READ IT NOW!!

    David Owen’s new book Green Metropolis: Why living Smaller, Living Closer, and Driving Less Are the Keys to Sustainability is an important book.

    It opens doors to information and understandings that citizens must embraces if they are to evolve functional and sustainable human settlement patterns.

    Not since Jane Jacobs published The Death and Life of Great American Cities in 1961 has there been a more important, powerful and accessible new source of information and understanding concerning functional human settlement patterns. Given the enormous impact of Jacob’s work – a recent poll of planning and development professionals found Jacobs the number one ALL TIME urban thinker – those are big shoes to fill. See End Note One

    There is no question of the importance of Owen’s work. Phil Langdon calls the book “riveting and fiercely intelligent. At the same time, Jonathan Yardley says the book is “cool, understated and witty” – in other words, NOT an EMR tome.

    Owens overarching thesis is that human settlement patterns control the future course of civilization because per capita energy and goods consumption is directly related the pattern and density of land use at the Alpha Community and SubRegional scales. As you might guess Owen does not use those words but that is what he means. More on that later.

    Owens examines both embedded energy and Embodied Efficiency, he documents the impact of fossil fuel consumption and the over dependence on Autonomobiles – as the book’s subtitle suggests. In the course of just 324 pages Owen touches on most of the topics that EMR covers in nearly 3,400 in The Shape of the Future and TRILO-G.

    EMR agrees with almost all of Owen’s observations but EMR is not sure all of them can be supported as stated. Owen’s main thesis concerning per capital consumption was first published in the New Yorker five years ago much of his other work has appeared there as well. In that context his world SHOULD have been well fact checked. Only time will tell with a book as important as this. See End Note Two

    What is most impressive is that Owen NAILS many misconceptions and stupidities that underlie Myths and conventional wisdom. These misconceptions and Myths are relied on by citizens when they make the decisions in the voting booth and in the marketplace. These decisions drive dysfunctional human settlement pattern. These are the Myths that perpetuate the Helter Skelter Crisis and result in an unsustainable trajectory of contemporary civilization by any rational measure.

    The book documents clearly that it is not just ‘freeways,’ ByPasses, ‘free’ parking, strip centers, Big Boxes, subdivision monocultures, greedy speculators, inept or corrupt governance practitioners, monopoly Enterprises and subservient Enterprise owned MainStream Media that drive settlement pattern dysfunction. It is also not just the genetic proclivities underlying the human obsessions with physical separation and short grass that generate dysfunctional human settlement patterns.

    Owen demonstrates that AS CURRENTLY DESIGNED AND IMPLEMENTED the drivers of dysfunction also include:

    • Fuel efficient vehicles,
    • Simple living and recycling,
    • Green buildings in bad locations (especially those with LEED certifications)
    • Many conservation initiatives such as conservation easements, agricultural and forestall districts and green infrastructure.
    • Roadway improvements and congestion mitigation,
    • Commuter rail, light rail, trolley and bus rapid transit systems (including even the BRT in Curitiba),
    • Radial extensions of heavy rail such as METRO, and
    • New Urbanist projects in dysfunctional locations

    Owen is not saying these drivers of dysfunctional are inherently bad but that as currently implemented, these ‘solutions’ CREATE AND SUPPORT dysfunctional human settlement patterns that are unsustainable. He documents why these activities are bad for ‘the environment’ and why they stand in the way of achieving a sustainable trajectory for civilization.

    In his review of Supercapitalism, EMR predicted the book would not be a runaway best seller and that the author, Robert Reich, would not be popular with most economists and governance practitioners. That prediction has clearly come to pass. The same fate is in store for Owen and Green Metropolis with those who have been plowing the fields that are explored in the book.

    For example, Owen will not be popular with MainStream Environmental Institutions nor with the Green Washers who advertise in MainStream Media. He cooly dismantles common green myths and puts a bright light on Green Greed. For this reason citizens appreciation of the content of Owens book is even more important.

    STOP

    Stop yapping about not having time to read another book. Stop pounding the key board about why you disagree with this or that point in a review of the book. Do not bother to bop around the Internet looking for quotes that will turn out to be irrelevant. Just READ the BOOK.

    But first readers need to be aware of the fact that between 40 and 60 percent of the citizens who have expressed concern with the impact of dysfunctional human settlement patterns will NOT agree with Owen on first reading. And of course, the 12.5 Percenters will be apoplectic. The same thing happened with Jane Jacobs. EMR knows this, he was there. See End Note 3

    Many readers will be turned off by one or more of the four tragic flaws that cloud the book. That does not mean Owen is not right. Most WILL come to agree with Owen (as they now do with Jacobs) but only after they take the time to understood the book – its strengths and its limitations.
    The question is: Will citizens understand the importance of the message and take action in the voting booth and in the marketplace before it is too late?

    It is popular to publish rapid fire second editions – The Earth is Flat and The Earth is Flat Updated and Expanded, Freakonomics and SuperFrekonomics, etc. – and this book cries out for a second edition soon.

    To guide and inform that second edition, Green Metropolis deserves immediate in-depth discussion and debate. It will be counterproductive to launch Blogesque broadsides such as: “Owen does not understand X” or “This is just another attack on Y.” Comments will be most productive if they are in a format such as: “On page X, Owen says Y, I believe he is wrong (or more constructively, it would be more productive to state this differently) because of Z.”

    What are the four tragic flaws?

    1. Inconsistent use of commonly misunderstood words (Vocabulary)

    2. Lack of an overarching Conceptual Framework that leads to a failure to quantify or precisely describe impacts in term of recognizable and consistently defined components of human settlement

    3. Failure to understand the power of a rational and fair allocation of location-variable costs – this in spite of Owen identifying and articulating many of those costs

    4. Silence concerning alternative settlement patterns with which the majority of citizens – specifically, those who are not attracted to the Zentra of large New Urban Regions – would feel comfortable. There are building forms and settlement patterns that would achieve most of the benefits Owen outlines without scaring citizens with the “Manhattan” image. This is especially true for small urban enclaves in the Countryside and well as for nearly 95 percent of the land within the Clear Edges around the Cores of New Urban Regions.

    Before further exploring Owens book, is useful to explore these tragic flaws:

    To be continued…

    BACK TO THOSE CLEAN-UP NOTES:

    Thoughts on “THE EXACT COST OF DYSFUNCTION.”

    At 3:03 PM on 39 Oct Larry Gross said:

    “Well I thought the last sentence in the WaPo article was the $64 that I’m not sure that EMR answered.”

    ” The question is how do you accommodate that growth in a way that doesn’t exacerbate the problems created by the way we’ve grown until now?”

    Come on Larry, you know that is EXACTLY the ‘question’ EMR has been addressing for four decades. If you would just try to understand instead of trying to defend your own past location decisions. No one is not going to single you out and make you pay for your misunderstandings retroactively just because you admit them now. You will see how easy it is to understand the truth once you see that light at the end of the tunnel.

    Let us turn the “$64 question” into the $64 Trillion answer:

    “The answer is that citizens can accommodate all the rationally sustainable future urban growth in every New Urban Region by evolving functional patterns and densities AND reducing the total area of urban land uses.”

    In the 2003 Shaping the Future Seminar it was demonstrated that most citizens would have better quality places to live and work on half the currently urbanized area in the National Capital Subregion by creating the patterns and densities of land use that the market documents are most desirable.

    The REAL question is how do you keep speculation and excess profits from driving up the cost of shelter (aka, workforce housing), goods and services for those at the bottom of the Ziggurat who are needed to created a Balance and a Critical Mass of the organic components of human settlement both inside and outside the Clear Edge.

    At 9:14 AM on 31 October 2009 Larry G said:

    “on the wider scope… goods will continue to be made in far away places.. and moved by huge container ship to the US and stocked at giant distribution centers which will supply just-in-time inventory replenishment not only at Wal*Mart SuperStores but even smaller scale almost mom-pop stores – any store that uses a point-of-sale scanner tied to a computer network that in turn talks to that giant distribution center.”

    EMR chuckled when he read this after having just seen the latest half a million pound E-coli recall of hamburger from ‘Fairbank Farms’ (nee, Industrial MegaFood). Community labs, Larry. Rational allocation of energy and location-variable costs will mean fewer huge container ships, fewer giant distribution centers and very little of it by truck. The future will not be an extrapolation of the past.

    It is really easy to make fun of people if you misquote them. Like shooting fish in a rain barrel.
    At 10:36 PM Groveton posted a comment which is annotated below:

    “Dr. Risse’s writings have a great deal of environmental, urban planning and macro architectural content.”

    [Is ‘macro architecture’ a Grovetonism and does it mean the same thing as the commonly used term ‘urban design.’ If ‘macro architecture’ means ‘urban design’ EMR pleads guilty.]

    “However, they are generally light on economics and political reality.”

    [That depends on ones definition of economic and political “reality.” Most rational folk’s view will change when they see the light at the end of the tunnel.]

    “The concept of small self-contained hamlets where people walk to work, live and shop is not realistic in the United States over the next 50 years.”

    [If this was a comment addressed to Claude Lewenz, it would have some validity because of the parameters that Claude insists on in his Alternative Villages.” ‘Small self-contained hamlets’ does not describe something EMR advocates although there are already some that exist in special circumstances.]

    “However, better development patterns in the suburbs with extensive mass transit between the suburbs and the urban center is realistic.”

    [Use of the Core Confusing Word ‘suburbs’ makes this statement unintelligible.]

    Now we turn to that story on Maryland’s smart growth (no caps deserved here) story noted above. This is a great case of “EMR told you so.” Back in the 70s when the outlines of the controls that were adopted in the 90s were first discussed, EMR, then a member of the Board of the Maryland Environmental Trust (similar function to Virginia’s Outdoors Foundation) said it would not work.

    EMR is often quoted as having pointed out for 20 years that from 50,000 feet there is not a whit of real difference between the human settlement patterns in Maryland, vs in Virginia (or West Virginia) or North Carolina or Pennsylvania, or…

    Larry G. reinforces this point with his reference to house seekers driving until they get past the jurisdictions that require smart growth.

    In the “Could America Go Broke?” post Accurate tries to tie EMR’s work to Halle Neustadt. That is even more foolish that Groveton’s silly pigeonhole paragraph.

    First, Accurate needs to stop believing everything Randal O’Tool tells him. The next thing he knows Randal will tell him that he will be free of oppressive government if he just walks out in front of that next light rail train … It might be called Randal Koolade.

    The book on Halle Neustadt that Accurate cited ( “The Ideal Communist City”) was written in 1968. At the time the general configuration of this Planned New Community was not that different from similar projects in Sweden and Great Britain.

    EMR has not been to Halle Neustadt but he has stayed several nights in similar places behind the Iron Curtain and they were dreadful. But lets keep Halle Neustadt in perspective. The Halle Neustadt design process was started in 1958. Check out some projects, large and small that were started then in the US of A in that timeframe – some have been cleared, some are still driving dysfunction. See “Interstate Crime” and “Timberfence Truth or Consequences.”

    Thanks to the Internet anyone can take a virtual tour of Halle Neustadt – you can also send a package from the FedEx / Kinkos store. The photo tour suggests that last week Halle Neustadt is a lot better place than, not just the places like housing developments and expressways that have been torn down in the US of A, but Halle Neustadt is a lot better place than where tens of thousands live and work in Detroit.

    When designed, Halle Neustadt was a lot like many post WW II Planned New Communities in Sweden and Great Britain. It might have become something like Nordvest Zentrum in Frankfort AM but for the fact it was in East Germany, not West Germany. It would not have been perfect, but not an unmitigated disaster either. Had Halle Neustadt not been in East Germany it might have evolves so fewer would want to leave when they had the opportunity.

    However, good or bad, EMR was not involved in the design or construction of Halle Neustadt and does not hold it out as a model.

    Accurate is right about one thing: The reason there is a lot of dumb growth is that many citizens ‘prefer it’ – so long as they do not have to pay the full cost, there is cheap energy, etc.

    Green Metropolis is place to start to learn what it would mean to pay the full cost.

    Read the book.

    More later.

    EMR

  • BACON IS RIGHT

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    James A. Bacon

    Jim Bacon is very right:

    The nation-state scale Agencies – driven by the “leadership” of both political clans – are driving the US of A’s economy towards Collapse as defined by Jared Diamond.

    The Great Recession was triggered by greed. The underlying problems are Wrong Size House in Wrong Location – thanks to Fanny and Freddie – dysfunctional settlement patterns – thanks to Autonomobiles – and burning through Natural Capital to pay the debt generated by Mass OverConsumption in this dysfunctional context.

    NO ONE is willing to be honest and tell voters (citizens) that ‘policies’ to encourage hyper – growth and hyper – consumption including the subsidies to the US of A’s global competitors to produce cheap goods – is the collective responsibility of all citizens and that the solution is for all citizens to change their behavior. Ride the Tiger one more turn around the election cycle.

    Now we have the nation-state scale Agencies dumping more stimulus money on the underlying causes of The Great Recession – more money for Wrong Size House in Wrong Location, more bail-outs for Fanny and Freddie, more help for those who have seen their jobs shipped overseas and who have not been told they need to find something else to do and more help for auto makers who have insisted on making the wrong size vehicle to support (no, require) dysfunctional settlement patterns.

    Steven Pearlstein in today’s WaPo says it best:

    “… what they’re proposing to do is to spend a lot of money that they don’t have in ways that won’t work to help too many people who are neither desperate nor deserving.”

    He is talking about jobs but it applies to shelter, transport, banks, and the economy in general. The WaPo editorial nails the shelter problem.

    A “bonus question” al la Larry G:

    After the last two weeks, is there ANYONE who now believes the NY Stock Exchange is not just a gambling venue?

    There is a light at the end of the tunnel but will enough citizens see it before it is too late?

    EMR

  • WARREN’S “ALL IN” BET

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    James A. Bacon

    THERE IS A LOT OF TALK ABOUT WARREN BUFFETT’S BIG BET ON BNSF AND THE FUTURE OF THE US OF A.

    What is MUCH more important is what he DID NOT bet on:

    Warren DID NOT bet on Autonomobiles – and there are a lot of them for sale.

    Warren DID NOT bet on Airlines – and all of them are hurting.

    Autonomobiles and Airlines are hurting and transcontinental rail has potential for the reasons EMR spells out in TIMBERFENCE TRUTH OR CONSEQUENCES.

    Perhaps Warren has seen the light at the end of the tunnel?

    EMR grew up 200 feet from the main line of the northernmost of the three transcontinental routes that Warren now controls – The Great Northern, one of the two reasons for the “N” in BNSF.

    When in the seventh grade, the strawberries EMR picked by 2 PM in the Northern Rocky Mountain Urban Support Region rode those rails and were on Minneapolis – St. Paul New Urban Region (nee Minneapolis – St. Paul Industrial Center in the early 50s) in time to put on breakfast tables while they were still fresh.

    Just-in-time delivery is not the exclusive province of airplanes and trucks.

    Now if:

    Warren turns his attention to the settlement patterns in the BNSF terminal areas, and

    Works to evolve multi-functional transfer points near the Clear Edges around the Core of New Urban Regions that provide across the platform transfer of GOODS from transcontinental rail to shared-vehicle systems,

    And that system delivers GOODS at night to Community and Village scale distribution centers,

    We will know Warren has seen the light at the end of the tunnel.

    EMR

  • Bacon’s Latest Jeremiad: A Response

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    James A. Bacon

    Years from now, in the midst of the worst financial meltdown ever, Jim Bacon must want to know that somewhere, somehow, a graduate student poring over old tomes came across his articles about the fiscal sky falling. You heard it here first!
    Jim is right about a few things in his latest missive about America going broke. Inflation could indeed be a threat given all of the deficit spending that has been going on the both the Bush and Obama Administrations.
    In the former, we ended up with huge bills for a war in Iraq based on faulty intelligence and then for panicky bailouts of huge banks and car companies. In the latter situation, the causes were the lack of effective regulation and the Bushies being asleep at the switch. Obama is struggling to deal with the resulting messes and he’s fair game for criticism about his effectiveness or lack of it so far.
    Typical of conservatives, Jim ignores Bush and blames Obama. But there is another point. Bacon bases his article on economics columnist Robert Samuelson who notes some of the same thing that Bacon has noted — namely the danger of the increasing rate of debt as a part of GDP. But Jim claims Samuelson backs his claims but if you read Samuelson he does only to a point. He actually states that odds are against a wealthy state having to face a horrible downturn after being deprived of international or domestic credit to ease the debt burden. In other words, Bacon is only giving you part of Samuelson’s argument.
    Second problem: Jim sees the bundle of yarn starting to get untwined with Japan. Maybe, but it’s a big maybe and Jim ignores recent history when Japan’s biggest problem with a decade-long slump was deflation, not inflation.
    For those with nothing better to do, here’s part of a blog I did earlier this year for CBS Interactive:
    Now it’s Japan’s turn and it is a story more of serious missteps rather than successes.

    Most everyone knows that after decades of trend-setting growth, Japan badly stumbled in the late 1980s. The 1990s became the “Lost Decade” as Japan dealt with deflation, bank failures, recession and its ossified keiretsu economic structure that worked well in the 1960s and 1970s but had become badly outdated.

    Its genesis involved a number of issues, including competing regulation by the Ministry of Finance and the Bank of Japan, ineffective financial liberalization, a real estate bubble, and a buying spree of foreign assets. What had been a low interest monetary policy came to a jolting halt when the Bank of Japan slammed on the brakes by raising interest rates in 1990.

    That touched of a recession lasting lasted eight years, rendering worthless about half of all loans made by Japanese banks. Since many of those loans involved artificially high real estate and dodgy stock market plays, the economy was further whipsawed. Banks such as Hoikkaido Takushoku and Yamaichi Securities Company failed and two other big banks, Long Term Credit Bank and Nippon Credit were eventually nationalized.

    Japanese officials tried some familiar remedies, such as creating its own version of a “bridge” or “bad” bank to soak up toxic assets. But the consensus is that Japan made a series of missteps that are themselves instructive:

    Japanese officials took too long to understand and attempt to rescue their financial system.

    The central bank took too long to address deflation issues.

    A fiscal stimulus attempt was cut off in 1997 when taxes were hiked.

    Japan took an entire decade — from 1988 to 1998 — to start cleaning up and recapitalize its banks.

    Japanese officials waited until 2003, an incredibly long period, to force banks to submit to audits and identify bad debts.

    Peter Galuszka


  • Could America Go Broke?

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    James A. Bacon

    That’s the question that Washington Post columnist Robert Samuelson asks in today’s column. The very idea of the likes of the United States, Japan or Great Britain defaulting on their sovereign debt once seemed preposterous, he writes. It still seems far fetched. But it’s not so far fetched that people haven’t begun asking whether it’s possible.

    Samuelson makes much the same case that I have:

    The Congressional Budget Office reckons the Obama administration’s planned budgets would increase the debt-to-GDP ratio from 41 percent in 2008 to 82 percent in 2019. Higher interest rates would aggravate the debt burden. Anticipating higher rates, the CBO estimates annual interest payments on the federal debt at $799 billion in 2019, up from $170 billion in 2009. Even the size of exposed debt is unclear; adding Fannie Mae’s and Freddie Mac’s debts (effectively guaranteed by the government) to Treasury debt would raise the total sharply.

    What happens, he asks, if interest rates turn sharply higher? That’s my point exactly, and I shall cite academic research in a forthcoming post buttressing my contention that the current global capital surplus will become a capital shortage as Baby Boomers retire and draw down their savings. Savings rates across the globe will tumble, and interest rates will climb.

    Samuelson does raise an interesting question: How deeply into debt is it possible for an advanced economy to go before investors lose all faith in its ability to repay? He cites the example of Japan, which is running a 2009 budget deficit equivalent to 10% of gross domestic product. The national debt is approaching 200% of the national economy. Yet Japanese investors have snapped up 94% of the debt, and interest rates on government bonds have actually fallen. If the U.S. can sustain comparable levels of deficits and debt, there may be a lot more ruin left in us than I think.

    It’s a point worth debating. But my hunch is that when the financial cataclysm comes, it will be global in nature. The great unraveling might well start in Japan and, in our globally interconnected economy, shock waves will transmit from one over-indebted nation to another with startling rapidity. There won’t be much warning. A better question would be, “Could the world go broke?”

    We’re running out of time to prepare ourselves for the day of reckoning. Have fun, Bob McDonnell!

  • THE EXACT COST OF DYSFUNCTION

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    James A. Bacon

    Want to know the cost of dysfunctional human settlement patterns and the Agency costs of creating them?

    For Tysons Corner try $20 Billion over the next two decades. And that does not include the direct and indirect costs of citizens living and working in Greater Tysons Corner.

    Not to worry, it will never happen because of The Great Recession, but it gives anyone who understands the difference between functional and dysfunctional settlement patterns a great yardstick.

    How do you get that total?

    Well if a Functional Station-Area Strategy for Tysons Corner had been created, most of the cost ($5 Billion) of the METRO extension could have been captured from the increase in value due to station platform proximity – especially the use of land that is in the Rights-of-way that citizens already own.

    (Yes, there would have been a deflation of the value in land at the outer fringes of the station- areas but that WAS – it is gone now – speculative value based on the willingness of Agencies to kick in the $20 Billion.)

    And in addition to that $5 Billion, with a Functional Station-Area Strategy most of the estimated $15 Billion in infrastructure “improvements” – primarily to support Large, Private vehicles – would not be required or would be covered by those who profit from the enhanced Mobility and Access that METRO brings. (See today’s WaPo Page 1B: “Tysons will need $15 Billion – ‘with a B”)

    But for The Great Recession these pipedreams might come to pass. In that case citizens could only hope that the members of AICP, AIA, ABA would pass the hat and pay the $20 Billion bill. They might ask their client land owners to make a contribution.

    Fair allocation of these location-variable costs will only happen after contributing to dysfunctional human settlement patterns becomes a crime against humanity.

    Please do NOT ask: What is a “Functional Station-Area Strategy”? Just go back and read the 8 September 2008 column “A Picture is Worth a Thousand Lies,” the 20 plus or minus columns on Tysons Corner and the Dulles corridor that proceeded that column and the referenced material SYNERGY has been producing since 1984.

    On a more positive note, for those who wonder about why ‘family’ has become a Core Confusing Word with respect to human settlement pattern and why SYNERGY now uses ‘Household’ as in Single Household Attached Dwelling, see “Single living surges across D.C. region” in Wednesday’s WaPo. (At least WaPo editors did not capitalize ‘region.’)

    And one more note on Vocabulary and Core Confusing Words: The new “Save-us-money-and-pretend-we-are-doing-readers-a-service WaPo redo includes a new section called “local living.” It deals with issues related to the local planet (aka, Earth), the local nation-state (aka, US of A), the local region (sometimes the Northeast MegaRegion, sometimes the Washington-Baltimore New Urban Region, sometimes the Virginia SubRegion, sometimes … you get the idea. And then there is the confusion of municipal Agency with ‘community.’)

    An indirect crime against humanity.

    EMR

  • McDonnell’s Smart Campaign

    Posted on

    by

    James A. Bacon

    Although it’s not a dead certainty, it sure seems that Bob McDonnell will be Virginia’s next governor. Despite the revelation of a graduate master’s thesis that makes him look Cro-Magnon, McDonnell has run a virtually error-free campaign while his opponent, Creigh Deeds, has had disconnect after disconnect.

    Personally, little of what McDonnell stands for or has proposed is appealing, but Deeds hasn’t come up with much on the policy front at all. This could be a turning point since the Democrats have trounced the state GOP since 2001. Republicans have put in such a bad showing that the state voted Democratic for president for the first time since 1964.

    But there appears to be a shift in favor of the GOP and it is important to start reading the tea leaves. A helpful place to start is today’s lede story in The Washington Post. The article shows how the GOP has finally figured out how to play in Virginia.
    Northern Virginia is key especially since it represents a huge demographic and economic change in the Old Dominion. As the tech industry took off there in the 1990s followed by a big ramp-up in defense spending post 9/11, NOVA has seen a big influx of smart, well-educated people from all across the country, if not the world.

    They don’t know of all the mossbacks in either party who have hamstrung Virginia for years with the usual sells that are anti-tax, anti-government, pro-gun, anti-abortion and anti-regulation. What used to work int he state, namely, a lot of rural yahoos controlling much of the action, has shifted.
    The Post, which has endorsed Deeds editorially, helps explain how McDonnell, despite his baggage of social conservatism and the fact that he’ll probably lose NOVA anyway, is one GOPer who has finally gotten it.
    McDonnell has abandoned strident social issues by praising Obama where it helps, i.e. on the Nobel Prize while simultaneously taking advantage of Obama’s current decline in polls. He has shunned the approaches that doomed the McCain-Palin campaign, going so far as to ask “Rogue” Sarah to steer clear of Virginia. Smart move. The last thing he needs is having the ‘I can see Russia” woman who abandoned her governorship insulting the intelligence of key voters he badly needs.
    All of this is designed to play in NOVA-land and, as the Post states, get rid of the out-dated mentality that conservatives should just plan on what they can get south of Occoquan and hope for the best in NOVA.

    McDonnell also seems to be winning, to some extent, among minorities. He’s appealed to Latinos while just a couple of years ago, Virginia Republicans had launched and ugly, racist war on so-called “illegals” to try to win attention of disaffected whites. That backfired badly. And, the fact that McDonnell has picked up the support of BET heiress Sheila Johnson speaks to his inroads with African-Americans.
    This could be the traction that the GOP needs to recast itself with younger, smarter conservatives. One could include in this category House Minority Whip Eric Cantor who is gaining a lot of air time on talk shows. Don’t get me wrong, a lot of Cantor says is bunk and he is in the pocket of big institutions such as managed care companies. Yet, there’s no way of not noticing Cantor’s success in fund-raising and the impact he is having on shifting the GOP away form the nightmare years of “W, Cheney and Rumsfeld.
    Unfortunately, Deeds is squandering the legacy that Democrats Mark Warner and Tim Kaine have built up. He has not taken advantage of the pro-business stances they helped create while being level-headed on social issues. There’s plenty in the press about how Deeds has stubbornly gone his own way, but when you consider his dearth of policy positions, that’s really no way at all.
    Don’t get me wrong. I find a lot about McDonnell objectionable As a former Tar Heel, I find it ridiculous and offensive that he wants to somehow tax motorists driving up from North Carolina on Interstates 95 and 85. His “Drill Here, Drill Now,” stances regarding offshore oil show a remarkable lack of concern for the environment or even global energy realities. The rest of his platform is the usual GOP stuff.

    But he is at least savvy enough to note the changes Virginia has gone through and he certainly should since he grew up in NOVA-land. Interestingly, the Post has tables showing the changes in the stater and in NOVA. IN 1999, the biggest employers in the state were Newport News Shipbuilding, retail and food chains and then old line manufacturers like Philip Morris or Vepco.
    Today, the top two are pretty much the same but there’s a big influx of government contractors such as Booz Allen Hamilton and SAIC. Philip Morris is off the list and Vepcom comes in at No. 15.
    So, it does appear a shift is in the winds.
    Peter Galuszka

  • The Pain Has Only Begun

    Posted on

    by

    James A. Bacon

    Bob McDonnell and Creigh Deeds would think twice about wanting to win the race for governor if they’d read the latest edition of The Virginia Newsletter, written by public finance expert Jim Regimbald. The headline of his essay says it all: “Virginia’s State Budget—A Train Wreck About to Happen.”

    The recession may be ending, writes Regimbald, but the hard work of balancing the state budget is only beginning. “Rainy day funds, other cash balances built up from better days, deferring various obligations and payments, and, most importantly, federal stimulus funds have kept state operating budget reductions from being reduced even further than they already have. Now the reserves are gone. The federal stimulus funding will soon be over.”

    In the next biennial budget, says Regimbald, “Virginia’s state budget will experience the full force of the worst economic downturn since the 1930s. Even more painful changes to state government policy are forthcoming.”

    The Kaine administration has used up all the one-time budget-balancing tricks, like delaying state contributions to the Virginia Retirement System. The Kaniacs made a few tough decisions, but left most for their successors. Writes Regimbald: “Over 60 percent of the budget reductions needed for the current biennium were accomplished through the use of one-time sources of funding. This means that the state operating budget is not yet ‘right-sized.’”

    Don’t count on long-term borrowing to bail us out. Says Regimbald: “The commonwealth’s ability to borrow additional funds and maintain its ‘Triple A’ credit rating is also restricted.” The Debt Advisory Committee calculated earlier this year that Virginia has the ability to borrow no more than $125 million in new tax-supported debt in 2010 and 2011 and meet the goal of keeping debt under five percent of blended revenues. And that was before the latest round of reduced revenue projections. Regimbald doesn’t say so, but one can’t help but wonder if the AAA bond rating is in jeopardy.

    Meanwhile, Virginia unemployment insurance fund has run out of money. Virginia is expected to borrow $252 million from the federal unemployment insurance trust fund.

    Want more bad news? How about this: “The reality is that the 2010-12 biennium current services operating budget is still at least $3 billion above forecasted available revenues. Virginia’s Medicaid budget alone will require all of the additional $2 billion in general fund revenues available in 2010-12 to keep the same eligibility and provider reimbursement policies we now have in place.”

    What do McDonnell and Deeds have to say about this? Nothing, as far as I can tell. They’re both living in la-la land. You can forget the promises they’re making about all the wonderful things they’re going to do when they’re elected. They’ll have one job in the next two years, and that’s balancing the budget. They won’t be spending one dime on anything new.

    The new age of fiscal austerity is upon us. Virginia is feeling the bite before the federal government does because the commonwealth is required by the state constitution to balance the budget. The federal government will continue on its merry way, spending “stimulus” money and adding new entitlements like health reform as long as it can continue borrowing. It’s only a matter of time before Uncle Sam can’t borrow anymore. Then things will get really ugly. Let’s hope Virginia stays solvent when the federal government cannot.

    The gubernatorial campaign has been a farce. Neither candidate is addressing the issues he’ll be dealing with as governor. The media is complicit, obsessing over Bob McDonnell’s graduate thesis. And the public is somnabulent, still demanding more services like better roads — as long as “someone else” pays for them. Our fiscal path is unsustainable. Our profligate use of energy is unsustainable. Our environmental impact is unsustainable — and I’m not even counting anthropogenic global warming, which I don’t believe in!

    Repent ye, Virginians, of your foolhardy ways! Repent before it’s too late!

  • WHO WILL GATHER AND DISSEMINATE THE NEWS?

    Posted on

    by

    James A. Bacon

    Who Will Gather and Disseminate the News. Volume 100, Number 1,000

    The same old story.

    Today’s WaPo features their new format and two must read articles for those who are concerned with the how citizens will get the information they need to make intelligent decisions in the market place and in the voting booth.

    Howard Kurtz: “Media Notes: The Same Old Story Turns Into a New One as Start-Ups Multiply” on C 1 and Leonard Downie Jr. And Michael Schudson “Finding a New Model for New Reporting” on A 19.

    The journalism types want FCC to subsidize “citizen journalism.”

    Citizen journalism is fine but what REALLY needed is Citizens Media. See THE ESTATES MATRIX.

    And the new formats? Ways to cut the cost of putting out the paper and ways to make it look more like a cluttered web page instead of a calm presentation of what citizens need to know from a source citizens can trust.

    The hype (in a new “Redesign Owner’s Manual) puts a spotlight on settlement pattern component reporting. As long as they call it “local” instead of sorting out what they are talking about by the location and the scale of the settlement pattern component they might as well dump their ink, their newsprint and their bytes in the Potomac.

    EMR

  • Would Someone Please Pay Attention to this Woman?

    Posted on

    by

    James A. Bacon

    One of the thought leaders in the arena of health care reform today is a Darden School professor, Elizabeth Olmsted Teisberg. She is virtually unknown in her home state of Virginia, but political leaders ought to make her acquaintance. She teamed up with Michael Porter, Harvard Business School’s competitiveness guru, to write a critically important book, “Redefining Health Care,” that should be must read for anyone legislating the makeover of the U.S. health care system.

    I haven’t read the book, but I’ve read the summaries, which I humbly digest for popular consumption.

    Much of the Porter/Teisberg critique will sound familiar. Americans spend more per capita on health care than anywhere else in the world, but we get less value than many other nations. The American system provides inadequate access to health care for tens of millions of citizens. Quality breakdowns are endemic: Medical errors contribute to some 200,000 deaths a year. The diffusion of medical knowledge takes years. Fear of tort liabilities distort the practice of medicine.

    Administrative costs, at 20-25% of expenditures, are staggering.

    Unlike politicians, Teisberg doesn’t demonize particular groups — greedy doctors, rapacious pharmaceutical companies, predatory insurance carriers, etc. She and Porter suggest that the problem stems from the way competition is structured in the health care industry.

    Health care competition is not focused on delivering value for patients. Instead, it has become zero sum: the system participants struggle to divide value when they could be increasing it. Although health care offers tremendous value, the unnecessary costs of zero-sum competition undermine and erode that value. It is the zero-sum competition in health care that has created … high costs, low or variable quality, under- and overtreatment, too many preventable errors in diagnosis and treatment, restrictions on choice, rationing of services, limited access, and a raft of costly lawsuits.

    Zero-sum competition in health care is manifested in a number of ways, none of which creates value for patients:

    Competition to shift costs
    Competition to increase bargaining power
    Competition to capture patients and restrict choice
    Competition to reduce costs by restricting services

    Shifting costs doesn’t provide more value for anyone, Teisberg argues. So, what’s the solution? Value-based competition.

    Healthy competition is competition to improve value for customers, or the quality of products or services relative to their price. It leads to relentless improvements in efficiency. Product quality and customer service improve. Innovation propels advances in the state of the art. Quality adjusted prices fall, and the market expands and more customer needs are met. Choice expands as firms work to distinguish their products or services from others. Excellent firms prosper while firms with low quality, poor service, or high costs decline or go out of business unless they make fundamental improvements in the way they operate.

    And how do we create value-based competition? In Senate testimony, Teisberg made the case for universal access, measuring results, and restructuring the payment system. I won’t linger on the universal access issue, as it is familiar to most. But the other two recommendations warrant elaboration.

    Measuring results. “Through meaningful outcomes measurement, clinical teams are able to accelerate learning about what truly improves health outcomes and what improves the efficiency of effective care,” Teisberg testified. Congress should require outcomes measurement and turn the data over to professional organizations for analysis. The purpose of measurement, she emphasizes, is not to enable consumer shopping. It’s to accelerate learning and improvement in medical practice.

    Payment. “In the current system, financial success and medical success are not aligned,” testified Teisberg. The reimbursement system covers treatments piecemeal: by procedure, by visit, by intervention and by hospital stay. It encourages poor coordination, redundant treatments and inattention to the patient’s full cycle of care. Instead, the system should pay clinical “teams” for treatment of a patient’s medical condition over the full cycle of care.

    Realigning the payment system would restructure the way health care is delivered. Providers would compete on their ability to deliver the best outcomes at the most reasonable price. Competition then would become a positive force rather than a negative one.

    Sadly, while legislation discussed in Washington strives to deliver universal access, it does little to address the underlying problems of escalating cost and sub-par outcomes. Rather than creating healthy competition over how best to deliver value, legislation would perpetuate, perhaps even intensify, the zero-sum gamesmanship and cost shifting that is the bane of American health care. Is it too much to ask for Senators Mark Warner and Jim Webb to consult one of Virginia’s intellectual superstars in order to rechannel health care reform in a more positive direction?

  • Virginia’s Mediocre R&D Showing

    Posted on

    by

    James A. Bacon


    Despite all the hype put out by the state’s universities, the fact remains that Virginia is distinctly an “also ran” when it comes to research and development.

    In fact, its leading R&D institution, Virginia Tech, is losing ground. It fell from 42nd to 46th place in the Survey of Research and Development Expenditures at Universities conducted by the National Science Foundation released Oct. 1. Tech lost $7 million in R&D funding in the past year, making total R&D spending $373 million.
    To find other Old Dominion schools, you have to go pretty far down the list. U.Va. ranked No. 70 with $258 million in funding. Virginia Commonwealth University, despite all the attention focused on R&D by former President Eugene Trani, ranks 108th with piddling $149 million in spending. That’s pretty modest, to say the least, and shows that VCU still hasn’t quite graduated from the ranks of the commuter school.
    None of this is particularly impressive, especially in VCU’s case. Trani made a big deal of pushing the Virginia Biotechnology Research Park down near the MCV campus in downtown Richmond.
    The state’s and Richmond’s R&D status was supposed to have gotten a big boost when Philip Morris USA built a $350 million R&D center there. And Trani risked his school’s reputation by entering into highly restrictive R&D deals with Philip Morris that brought a dunning by his faculty and a national black eye to the school’s reputation.
    After all this, one wonders, “Where’s the Beef?”
    The leading schools are the usual ones, Johns Hopkins ($1.6 billion), University of California at San Francisco ($885 million) followed by Wisconsin, San Diego, UCLA and so on. Regionally, Duke makes a decent showing in the No. 7 spot at $767 million. Except for Duke, the Top 7 saw their R&D funding increase from 2007 to 2008.
    True, we’re just coming out of the worst recession since the Great Depression and that has to account for some of the lackluster showing. But NSF data shows that federal funding for R&D actually plateaued in 2004, or halfway through the administration of George W. Bush.
    Those were pretty good economic times. Yet I remember doing a cover story for Chief Executive magazine around then that was based on a survey of what 500 or so CEOs at top companies felt about Bush’s performance. He got a mediocre “C plus.” One big reason was his lack of concern about R&D. Many of the CEOs operate globally and have to compete with well-funded researchers in Asia and Europe and were very concerned about the U.S. losing ground in competitiveness.
    Back to Virginia, I remember organizing a survey of the Old Dominion’s tech performance at a regional business magazine earlier this decade. It wasn’t all that impressive. Universities didn’t account for many patents. Most were obtained by the Navy or Philip Morris and neither institution is particularly “Virginian.”
    It’s hard to tell where gubernatorial candidates Bob McDonnell are on this issue. Republican McDonnell says he wants to create jobs, but he seems more intent on drilling for gas and oil miles off the coast than boosting state college labs. Democrat Creigh Deeds has run a confused, reactive campaign and doesn’t seem to weigh in on the issue. But he doesn’t seem to weigh in on any issue other than McDonnell’s master’s thesis back in the 1980s.
    So, next time you hear some bombast about how great Virginia is doing, keep the NSF survey in mind.
    Peter Galuszka

  • ON INVESTING

    Posted on

    by

    James A. Bacon

    (This is too long to post as a comment under the GROVETON AND RECESSION VS DEPRESSION post)

    To inspire application of homo sapiens full capacity, investing and the profit from investments of capital, labor, intelligence and land are the most useful incentives humans have found – at least so far.

    But investing and profit have proven it inspire the use of full human capacity for good AND for ill. Those who suffer the most are at the bottom of the Ziggurat.

    Fundamental changes including human literacy, instantaneous communications, technology of mass consumption and weapons of mass destruction require a far different distribution of resources and responsibility than existed when the pre-SuperCapitalism of A. Smith ascended or later when totalitarian states learned to harness the power of capital accumulation.

    EMR will leave it to others to debate if Nader has ‘the answer’ – donations by the super-rich. So far those at the top of the Ziggurat have always used their wealth to protect their wealth and to grow their wealth, not to narrow the Wealth Gap to a margin that reflects a sustainable trajectory for civilization.

    In The Shape of the Future , EMR documented that Fundamental Change (Transformation) of human settlement patterns was necessary to secure a sustainable trajectory for civilization. To achieve that a Fundamental Transformation there also must be a Fundamental Transformation of governance structure.

    That is because democratic processes and a free (aka, well informed / intelligent) market must be harnessed so that the majority of the citizens can establish Agencies, Enterprises and Institutions to meet the needs of all humans. At the present those who enjoy the fruits of civilization are those who control Agencies, Enterprises and Institutions to the detriment of those at the bottom of the Ziggurat.

    In TRILO-G , EMR documents the need to add Fundamental Transformations of economic structures to the two other Fundamental Transformations.

    SYNERGY is working to articulate the details of the first two Fundamental Transformations.

    Thankfully we are hearing more and more comments such as this one from Tuesday: “You know that seminar you did six years at the Community College? You need to present it again because now more are ready to listen.”

    But not nearly enough citizens are REALLY ready to listen as the posts on this Blog document.

    As documented in PROPERTY DYNAMICS, the majority are RHATC’s (pronounced “ratzzies”) who do not have time to consider the trajectory of civilization much less the ways to a achieve sustainability.

    For this reason EMR and SYNERGY need to stick to the first two Fundamental Transformations and let other articulate the details of third.

    There are some threshold ideas on the topic of ‘Investments’ that may be of help:

    A good place to start is TMT’s tax on short term profits – perhaps the level of tax should be at 2 percent less than the profit realized, with a bonus one percent reduction in the tax rate for every year the investment is held?

    There are the ideas of Robert Reich in SuperCapitalism starting with the fact that corporations are not people. In the Vocabulary of SYNERGY: Enterprises are NOT citizens. Make the citizens who own Enterprises accountable and taxable.

    There is a crying need to start enforcing anti-trust and anti-competition laws.

    Larry might agree that NO Enterprise should be too big to fail. There should be Critical Maximums for Enterprise size with automatic divesture at predetermined thresholds. Economies of scale benefit Enterprises not consumers when all costs are fairly allocated. Wal*Mart is a perfect example when the total Community scale costs are considered.

    In general, Larry is more right on ‘investing’ than Groveton.

    Groveton may make more money but, that is not the point.

    He who dies with the most toys does NOT win – individually or in Households, Enterprises, Institutions or Agencies much less by Community, Region or nation-state.

    Peter is right there is a need for incentives to invest. The important question is what should the incentives for investment be?

    A basic rule of investing might be: “Know well that in which you invest.” In this context, location / proximity and transparency is key. Regional stock markets with Community sectors would be a first step.

    Tax profits from investing outside ones home Region at twice the rate as those inside the Region. Make profits from investments inside ones home Community at half the rate of the Regional rate. Profits from Neighborhood and Village investments could be taxed at half the Community rate. Encourage impoart replacement at all scales.

    The primary need is for innovation to improve is governance and civility, not increase consumption.

    It is axiomatic that Agencies should be taxing consumption, not just profit. The use of Agency taxation might morph to tax consumption and EXCESS profits – short term, remote, speculative, etc. Further, move from taxes to fees for service.

    Encourage conservation with increased rates for increased use of water and energy, not the reverse.

    And of course Agencies must fairly allocate location variable costs instead of subsidizing wasted transport.

    The only way to achieve profound reduction in consumption without loss of the amenity of a modern technology supported civilization is Fundamental Transformation of human settlement patterns.

    Tax advertising, entertainment, salt, fat and sugar. Use caffeine, alcohol and recreational drug revenue to support Regional health care systems. If citizens cannot trust the medical perfession to contorl these substances civilization needs to revert to witch doctors.

    All these strategies may decrease the short-term rate of growth but will increase the equity of distribution of growth and resource consumption and will help insure there are resources for future generations.

    To bring the US of A into parity with the world need to cut per capita consumption of to one quarter the current rate.

    Do not underestimate the need for Global equity and a fair distribution of true total costs that has become mandatory by human literacy, instantaneous communications, technology of mass consumption and weapons of mass destruction.

    The bottom line:

    There must be a new way to measure the value of investment and it needs to be something beyond gambling venue receipts.

    PART FIVE of TRILO-G is titled NEW METRIC FOR CITIZEN WELL BEING.

    EMR

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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Bacon’s Rebellion is Virginia’s leading politically non-aligned portal for news, opinions and analysis about state, regional and local public policy. Read more about us here.

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