Bacon's Rebellion

  • Behind the Northrop Grumman, VITA Scandals

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    James A. Bacon

    The continuing woes of the Virginia Information Technologies Agency and the state’s $2.4 billion IT contract with Northrop Grumman raise questions about some particularly “Virginian” conceits. One has to do with the state’s self consciousness about being a “tech” state and its propensity for privatizing public operations.

    Northrop Grumman has been accused of cost overruns, delays and sloppy service with the 10-year contract it won in 2005 under Gov. Mark Warner to take the state’s antiquated computer system and turn into something that is “state of the art.”
    VITA was created in 2002 to oversee state IT work and it, too, has been racked by controversy. Its programs were hacked in April and a few weeks ago, its chief, Lemuel Stewart was cashiered for allegedly questioning the high costs of the Northrup Grumman contract. Now it appears that Northrup Grumman is at least six months late in its work upgrading state computers.
    Legislative watchdogs are starting to bark. This is bad news for outgoing Gov,. Tim Kaine, who is doing double duty as head of the Democratic National Committee still basking in the honeymoon glow of the Obama election.
    First, some perspective about the players:
    • Los Angeles-based Northrop Grumann is a major defense contractor with a huge footprint in Virginia. It operates many offices in Northern Virginia that serve the Pentagon and other federal agencies. Northoup Grumman is a specialist in federal IT and defense IT work. What’s more, it owns Newport News Shipbuilding, one of the largest employers in the state and the only shipyard in the nation that can build and service surface nuclear-powered vessels such as Nimitz class aircraft carriers and the next generation.
    • U.S. Sen. Mark Warner, who let the Northrop Grumman contract as governor, is a rising Democtratic star who cut his teeth on IT and related ventures. Back in the 1980s, Warner, not long out of Harvard Law, built a fortune estimated at the time of $400 million by brokering deals among nascent cell phone companies. The Federal Communications Commission had held auctions for band with needed for cellphones but the auctions sold off radio waves haphazardly. Ever the entrepreneur, Warner worked out private swaps among companies wanting to put togther cell networks in specific markets, thus earning himself a rep as a tech savvy guy.
    • Tim Kaine, Warner’s Democratic successor, has also positioned himself as a business-friendly, tech savvy politician.
    • The Republicans, notably former Gov. Jim Gilmore, first rode the tech wave back in the 1990s when the World Wide Web was exploding on the scene and NOVA became home to America Online, other Net-based firms and many telecoms. In 1998, Gilmore introduced the concept of the Secretary of Technology, the first ever in the U.S. Then, and now, half of the U.S. Intenet traffic still passes through NOVA. A lot of the telecoms and Net firms, however, went bust around 2001.

    Add it all up, and you have a state that is eager, maybe too eager, to be known as tech savvy. It’s as if a pale wallflower at a dance suddenly becomes almost as hot as Miss Cool Bay Area or Brainy Miss Boston. That’s a lot better rep than Massive Resistance or trying not to let the Confederate Generals on Monument Avenue in Richmond get soiled by an Arthur Ashe memorial.

    Another factor dates from the Jim Gilmore/George Allen years. Back then, when tech was hot, the economy was expanding and Bill Clinton was slipping from Bimbo to Bimbo, there came a neocon idea that privatizing the public sector was worthy and wonderful. Starting back in the Reagan-Thatcher years, the concept assumed that the free market was the best way to control costs efficiently and unleash creativity. Thus, private firms should be hired to run state functions, such as highways or IT functions.
    Although the ideas were hatched with the GOP, privatization and public-private partnerships were embraced by business-friendly Dems such as Mark Warner and Kaine. So, when Mark W. wanted to show his tech-savviness and pointed to antiquated, underfunded state IT systems, the obvious solution was to turn them over to the private sector, which in this case, was one of the state’s biggest and most politically powerful employers.
    Well, ahem, it hasn’t worked out that well, as the scandals with Northrop Grumman and VITA show. Maybe private business isn’t all that more competent than plodding old government bureaucracies. There’s plenty of evidence against the private sector, given its record leading up to the worst recession since the Great Depression. Arrogance, hubris and aggravating, short-term thinking come to mind.
    Maybe it’s time for Virginia to move on from this style of thinking that is stuck the nineties. The venture capital and IPO days are really so very yesterday. And isn’t the Net just a more advanced telephone system and not a god unto itself? How about some good old-fashioned service and keeping your word and upholding your end of a deal?
    Peter Galuszka

  • Surry’s Huge Coal-Fired Plant

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    James A. Bacon

    Coal-fired electricity generation remains one of the hottest issues in the Old Dominion and the nation. With some form of cap and trade law almost inevitable in Congress and with polls showing that 75 percent of Americans think that carbon dioxide and greenhouse gases need regulation, the issues really does have legs.
    In Virginia, for the past several years, the tip of the spear was in St. Paul’s in Wise County where Dominion plans to build a $1.6 billion, 585-megawatt coal-fired plant. That project has been a rallying cry for environmentalists nationally, some of whom such as the Sierra Club have pledged to fight any big, base-loaded, coal-fired plant anywhere. They have had some successes, notably in the Southwest.
    Now, the focus is shifting farther east, to the flat peanut lands of Surry County about halfway between Richmond and Norfolk. There, Henrico County-based Old Dominion Electric Cooperative plans on building twin 750 megawatt units costing perhaps $6 billion — in other words, a facility maybe three times as big as Dominion’s in Wise County.
    In a story I reported for Richmond’s Style Weekly, I note that the so-called Cypress Creek Power Station would be the second largest of its kind in the state. It would instantly become the state’s sixth biggest air polluter, air pollution officials say. The facility would be fed via a new rail spur from Norfolk Southern’s coal mainline to Norfolk. Water for steam would be pumped 15 miles from the James River and heated water would be pumped back into the estuary. Fly ash from the coal will be buried on the project’s 1,600-acre site, not far from the town’s well water supply, local opponents say.
    The plant would be in the town of Dendron, population 300, which is a flyspeck decorated with black “No Coal Plant” signs. These mimic the “No OLF” sings one sees throughout Tidewater Virginia and Northeastern North Carolina regarding local opposition to the Navy’s efforts to locate a new landing field so their F-18 Super Hornet jet fighters can simulate air craft carrier landings. The problem: Super Hornets are some of the loudest aircraft ever built.
    Old Dominion Electric Cooperative claims that the plant is needed to help them meet a shortfall by 2016 of some 4,000 megawatts Virginia will face in electricity unless new plants are built. ODEC has 11 mostly-rural; members in this state, Maryland and Virginia. It has begun the process of getting the 50 or more permits it needs to start construction.
    The U.S. Army Corps of Engineers needs to approve a plan for ODEC to tap water in the James River and then return heated water back into the estuary not far from the tourist havens of Jamestown and Williamsburg. According to ODEC data, Cypress Creek would annually emit 3,085 tons of nitrogen oxide a year, 3,685 tons of sulfur dioxide, nearly a half a ton of lead, 283 tons of sulfuric mist and 2,155 tons of particulates. The project needs another permit from the U.S. Army Corps of Engineers because construction will alter wetlands.
    Of particular concern to the state Department of Environmental Quality is ODEC’s estimate that the plant will emit 118 pounds per year of highly toxic mercury. By contrast, Dominion Resources’s Wise County plant will emit only 5.5 pounds of mercury a year. Given prevailing wind patterns in Surry, the mercury could fall onto the water of the James River and Chesapeake Bay and be dangerous to wildlife. “This is something we’re absolutely going to be looking at,” says state air pollution analyst Sparky H.L. Lisle Jr.
    Surry County, which has been home to twin nuclear reactors owned by Dominion for 37 years, could use the tens of millions the project would pay. Some 200 permanent jobs would help the rural, sleepy country.
    Yet there are more questions about the project than just its immediate pollution impact. For one thing, ODEC has recently lost its largest member, the Manassas-based Northern Virginia Electric Cooperative with 142,000 customers, terminated its relationship with ODEC Dec. 31 over a contract dispute. “We thought we could do better with a different power supplier,” says Virginia Burginger, a NOVEC spokeswoman. If this is so, why the urgency to build such a big plant?
    Another issue is if much-larger Dominion will fill the shortfall with new plants such as Wise, another nuke at North Anna, windmills and so on. A Dominion spokesman told me that the shortfall is actually larger — about 4,600 megawatts by the last part of next decade. Dominion should be able to add 4,200 megawatts of extra generation capacity by then. If so, this raises questions about why the ODEC project is necessary or if their real aim is to wholesale electricity beyond its members.
    Lastly, there are carbon dioxide and greenhouse gases. ODEC has not provided details about how they plan to capture CO2. A report by Synapse, a Cambridge, Mass. consulting firm funded by environmentalists, claims that depending on what kind of cap and trade law goes into effect, ODEC ratepayers could face extra costs of from $223 million to $1.76 billion to handle carbon dioxide. ODEC publicly dissed the report, calling it “speculative and inaccurate” but did not responded to a Synapse request to provide more information. ODEC claims that the plant will actually save its customers about $14 billion but doesn’t say how.
    A personal note: I tried to interview ODEC but they refused, saying that my blog postings on the site showed I was biased against the plant. I beg to differ. ODEC then went to the publications to whom I had tried to sell the story. Style Weekly, bless their hearts, told ODEC that they had reviewed my postings and didn’t see that I had raised anything to the level of advocacy on my part.
    True enough. I’m just asking questions like any reporter. I guess my questions weren’t too welcome.
    Peter Galuszka

  • METRO FINGER POINTING

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    James A. Bacon

    The finger pointing concerning the METRO Red Line Wreck is in high gear.

    There is one area of concern that you will not hear about in the MainStream Media:

    Dysfunctional human settlement patterns in the METRO station areas.

    The failure to evolve supporting settlement patterns (aka, ‘land use’) in the station areas is the primary reason that “most of the METRO trains leave most of the METRO stations mostly empty most of the time.”

    No shared-vehicle system can operate efficiently pumping one way in the morning and the other way at night PERIOD.

    If there was Balance between the station area travel demand and the METRO system capacity there would then be far more revenue to keep the system maintained and far more citizen support for the absolutely necessary stable funding sources.

    There would also be no need to push the system beyond it’s capacity to serve peak demand.

    Of course, there would also be far fewer wrong size houses in the wrong locations with underwater mortgages – but that is another story – see last post.

    Want the details on what needed to be done and what STILL needs to be done? Read EMR’s 1989 report “It Is Time to Fundamentally Rethink METRO and Mobility in the National Capital Subregion” most recently revised and updated 18 October 2004.

    Want to see a clear ‘blueprint’ for where and how Fundamental Transformation could be done? Google “Blueprint for a Better Region.”

    And before anyone gets off their hay wagon and tries to pitch cheap shots about how the ‘real problem’ is building a heavy rail based shared-vehicle system in the first place, read the full analysis of one of the leading anti-rail quacks recent scribblings summarized in this abstract:

    “Clifford Winston and Vikram Maheshri attempt to use benefit-cost analysis to make a definitive
    statement about the social desirability of urban rail transit in the United States. Their argument is
    deficient on several elementary analytic and statistical grounds. They underestimate total benefits, and therefore net benefits, and their failure to examine the suitability of their data and to pay attention to the usual caveats associated with benefit-cost analysis further undermines their
    assertions. As a result, these findings should not be used to inform either the debate or decisions
    about investment in urban rail systems.”

    The study can be found at www.vtpi.org

    Lets point the fingers at solutions, not the villains or the strawpersons. It has been 20 years and time is running out.

    EMR

  • BROOKINGS MetroMonitor

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    James A. Bacon

    A PATH TO UNDERSTANDING THE IMPORTANCE OF REGIONAL INTELLIGENCE AND THE IMPERATIVE OF EVOLVING REGIONAL STRATEGIES

    On 17 June Gooze Views posted “How Virginia’s Metro Areas Are Weathering the Recession” about the three largest of Virginia’s 11 Metropolitan Statistical Areas (MSAs). On the same day a WaPo story addressed the Washington, D. C.-VA-MD-WV MSA. As Peter noted, the data to support both stories came from an invaluable new research tool developed by Brookings Institution called MetroMonitor.

    MetroMonitor has just been launched but is already a very useful resource. It provides data on ten parameters covering – Gross Regional Product, Employment / Unemployment / Wages and Shelter for the largest 100 MSAs in the US of A. The MetroMonitor web site http://www.brookings.edu/metro/MetroMonitor.aspx?emc=lm&m=226673&l=2&v=41423 includes maps that are color coded by quartile for all ten parameters and a spread sheet. Brookings plans to up date this resource quarterly.

    Viewing MetroMonitor as a whole, the first thing that strikes one is the immense diversity among the 100 largest MSAs. The 100 largest MSAs encompass about 75% of the economic activity in the US of A. (There are 366 MSAs in the US of A and a whole alphabet soup of other “Census Defined” geographies. The New Urban Region data used by SYNERGY is based on the 68 largest urban agglomerations and represents over 85 percent of economic activity in the US of A.)

    The primary message to take from MetroMonitor? These data document that there is NO one nation-state-wide policy that will improve the economic, social and physical well being of all Regions. Further some of the most often touted “policy alternatives” (aka, ways to spend federal money) will damage many Regions.

    Three examples drive home this point:

    It is painfully apparent that MainStream Media and most Governance Practitioners are still dreaming that the Great Recession will be eclipsed by the two principle economic forces that have been relied on to end every recession since World War II. (It is worth noting in passing that it was World War II, and not specific economic policies that ended the Great Depression.)

    The sale of cars and houses have pulled citizens and their Organizations out of every recession over the past 64 years.

    It does not take Adam Smith, John Keynes or Milton Friedman to understand that policies that make shelter cheaper will damage, not help, all those Regions with depressed residential real estate markets and large numbers of lender owned housing. That is the focus of WaPo story noted above: “Region’s Economic Performance Ranks High: Housing Sector Remains a Drag.”

    The US of A is an Urban society and many believe most of the ‘urban ills’ of the past 64 years were CAUSED by Federal policies. Kirkpatrick Sales provides a thumbnail summary of this view based on his analysis of the demise of South Bronx in Human Scale.

    The other primary recession killer employed over the past six plus decades has been car sales. Policies to boost cars sales (especially Large, Private Autonomobiles) will help some rust belt MSAs over the short haul but it will damage EVERY Region in the long term because it will continue to drive dysfunctional human settlement patterns. Oh yes, then there is the matter of balance of payments / imported oil, air pollution, etc.

    EMR suggested in this forum (“Addicted to Autonomobiles,” 2 June 2009) that those who can afford an autonomobile already have two or three and those who cannot afford an autonomobile need functional settlement patterns, not a vehicle they will not be able to afford soon. (You have noticed that every time the stock market ticks up because someone “sees the bottom,” the price of crude jumps even thought there is now a glut of petroleum.)

    For all Regions, one-size-fits-all programs like “Cash for Clunkers” is just another way to dig citizens further into the Mobility and Access Crisis.

    Finally with respect to employment:

    Recent data shows that the National Capital Subregion (and other MSA-comparable geographies) have added jobs but also increased unemployment. EMR has pointed in this forum that what is needed in most Regions are jobs for those who are not highly skilled and are not highly motivated.

    There is a lot of debate about how much economic boost ‘green’ jobs will produce but no one is talking about the sort of jobs for which most of the unemployed now (or after training will) qualify. Broad brush federal programs to ‘add jobs’ may not add the right jobs in any Region. The bottom line is that jobs need to be the right ones for each Region, not a one-size-fits-all hole into which the fed pours newly printed dollars.

    All this points to the need for Regional Strategies to address Regional Conditions in order to evolve sustainable New Urban Regions comprised of Balanced Communities. Did someone say Fundamental Transformation of governance structure?

    A couple of suggestions:

    The MetroMonitor would be greatly enhanced by the addition of an indicator measuring Regional Consumer Confidence. If 70 to 80 percent of the US of A’s economy is consumer consumption then knowing Regional consumer confidence is critical.

    Citizens can do a lot if they have the right information, are motivated and confident that what they are doing will improve citizen well being and quality of life.

    Another improvement would be to aggregate the MSA data MegaRegion. Right now it looks like there is great diversity WITHIN MegaRegions.

    For example, the National Capital Subregion (Washington MSA plus) and the Baltimore Subregion (Baltimore MSA plus) do not fall in the same 20 percent category for a single one of the ten indicators.

    This suggests there is a need for not just Regional strategies but also MegaRegional strategies where Balance can be achieved from trade-offs within a MegaRegion.

    Brookings staff is aware of the “America 2050″ program that is focused on MegaRegions. This would seem to be a simple step to take on the path to creating ‘Real Regional’ data (aka, New Urban Region and MegaRegion Data) not just MSA data. Even more important will be to evolve subsets of the Regional Data to reflect Beta Communities and NOT state or municipal jurisdictions.

    This last suggestion illustrates how valuable MetroMonitor would be if Governance Practitioners had not been doing everything in their power to obscure and obfuscate an understanding of the evolution of the organic structure of Urban systems for the past 222 years.

    EMR

  • The Risky Business of Journalism

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    James A. Bacon


    The dramatic escape from his Taliban captors by New York Times correspondent David Rohde shows just how dangerous journalism can be.

    Yet journalists keep getting trashed, mostly from the right wing, for supposedly being biased or dim-witted dupes. Many actually work very hard risking their lives for little fame and, these days, less and less money. Instead of being spoon-fed information by sources with specific agendas, many painstakingly dig up information without fear or favor and put the pieces together as best they can before going into print, on the air or online.
    Rohde, a two-time Pultizer winner, knew the risks when he arranged a dicey interview in Afghanistan. He was kidnapped and held prisoner with two others for seven months. Waiting when the guard was down, he and another man scaled a prison wall and and raced to freedom.
    Much of the danger is overseas. The Committee to Protect Journalists reports that during this year alone. 17 journalists have been killed. Since the early 1990s, 138 have been killed in Iraq, 60 in Algeria and 50 in Russia.
    I am especially sensitive to Russia since I worked as a foreign correspondent there for a total of six years in the 1980s and 1990s and know some of the dead. I will never forget the coup against Boris Yeltsin on Oct. 3 and 4, 1993 where much of the action took place just outside our apartment.
    I’ll never forget the night of Oct. 3 when I drove alone in my Russian-made car (sort of like a 1972 Fiat) to the country’s TV complex. Skin-head “red-brown” thugs, some with Afghanistan War experience, were trying to break into the TV center to broadcast their propaganda that the Yeltsin government had fallen. Loyal troops held fast instead. A small crowd of journalists watched from very close quarters. Rebels tried to bash their way in with a truck. Finally, one launched a rocket-propelled grenade into the front door. Machine guns on both sides opened up.
    This occur ed minutes before I was driving to the tv complex. People were cowering on the roadway. I heard the machine guns and watched their tracer rounds make distinct lines from either side of the darkened road. The tracers crossed just at a point a few hundred yards where my car was heading. With no armor plating and armed with only a notebook, I turned around. Four journalists, including a Briton,. were caught in the bloodbath and were shot dead. A New York Times photographer was shot in the lungs. Three more would die before the two-day rebellion was over.
    Here are some more examples of death in Russia:
    • Cynthia Elban, an American stringer for Time, died in Chechnya in 1994. Her head was blown off in an air raid by Russian planes.
    • A friend of mine and a Russian investigative reporter, Yuri Shchekochikin, died mysteriously of “allergies” in 2003 just as he was to fly to the U.S. to interview the FBI about Russian organized crime. High-spirited Yuri was a kind and entertaining man. A great drinking buddy.
    • Paul Khlebnikov. An American of Russian descent, he had written critically of the Russian oligarchs and won their wrath. As he was starting a Russian edition of Forbes, he was shot down in an apartment. He was an acquaintance of mine.
    • Anna Politkovskaya, famed for her tough articles on Russian government and military corruption in Chechnya, was gunned down near her apartment.

    There are many more. None of these people took freedom of the press lightly. They paid for it with their lives.

    What about the here and now in the U.S. Frankly, I am scared that the ad-slammed, dumbed-down and otherwise almost-out-of-business news media industry in this country will continue trends to not do investigative reporting and will only print or broadcast what powerful institutions, such as governments, corporations or universities want them to. I am already seeing it happen.
    Peter Galuszka

  • How Virginia’s Metro Areas Are Weathering the Recession

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    James A. Bacon

    How’s Virginia faring in the recession? Northern Virginia and Hampton Roads are doing well among the nation’s metropolitan areas. Richmond is about in the middle.
    That’s the conclusion of a new Brookings Institution study of the nation’s top 100 metro areas.See: http://www.brookings.edu/reports/2009/06_metro_monitor.aspx.
    All in all Virginia isn’t in bad shape, the study implies. Hardest hit areas include California, such as the Bay Area, Los Angeles and the Central Valley and most of Florida. The rust belt from western Pennsylvania, across northern Ohio and on into Michigan are also hard hit. The strongest single area seems to be the central Southwest, including most of Texas and Oklahoma. The Northeast is mixed as is the Deep South.
    The obvious reason for NOVA’s and Virginia Beach-Norfolk-Newport News’ strength is the federal government. Both areas are filled with civil service and defense jobs.
    Richmond is a little harder to explain. With its chemical plants and cigarette factories, the Richmond area is more of a blue collar manufacturing area than its Old Dominion sisters. Although it is the seat of state government, Virginia’s public sector is taking its lumps with significant layoffs and budget shortfalls.
    Raleigh-Durham, another point of comparison for Richmond, fares better, Brookings reports. There are similarities with tobacco and state jobs, but the North Carolina capital region is home to the Research Triangle and its many pharmaceutical and health care jobs that are more recession-proof and simply outclass what Richmond has to offer.
    Brookings implies that we may be on the way to a weak economic recovery. I’ll take that. After the past 18 months, I’ll take anything.
    Peter Galuszka

  • What Does FDA Regulation of Tobacco Really Mean?

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    James A. Bacon


    Many years ago –38 to be precise — I was sweating in the Turkish bath of an Eastern North Carolina tobacco field working on a story about seasonal labor hired to prime and sucker the plant. It was just before dawn and a reddish tinge glowing over the country mist. Young teenagers were getting out of a ramshackle school bus to get to work on the bright green plants.

    I was a college kid working a summer on my hometown local daily. At the time, tobacco had a deep and lasting impact on states that grew it, including Virginia and of course, North Carolina

    where bright leaf ruled in the east.
    So, it comes as a bit of a stunner and time trip to realize that the $89 billion U.S. tobacco industry may well be regulated by the Food and Drug Administration. It always seemed odd that it wasn’t. Nicotine is as much a drug as aspirin or morphine. Tobacco is a plant like peanuts, corn, soybeans or wheat. But the powerful tobacco industry managed to fight off decades of threats of regulation to avoid any interference by the feds that could question tar, nicotine or any of the other thousands of toxic and carcinogenic chemicals in every satisfying drag of a cigarette.
    Yet as overwhelming as the Senate vote was last week for FDA oversight, exactly what it means isn’t quite clear. Expected are strict new rule son cigarette advertising, a ban on candy or fruit-flavored smokes and possibly big limits on “snus” or smokeless tobacco products that tobacco companies such as Richmond’s Philip Morris USA have invested heavily in.
    Oddly, the FDA ruling has split the usually unified tobacco industry in two. Philip Morris has backed FDA regulation for years. Reynolds American and Lorillard Tobacco have continued to fight it tooth and nail. Opponents claim that Philip Morris wants the bill because it understands that strict regulation of tobacco is inevitable and backing FDA oversight could lock PM in its leading market positions with such popular smokes as Marlboro.
    I listened carefully on NPR when I was driving the other day when I heard PM spokesman Bill Phelps explain that his firm knows its products are harmful and is trying to deal with it. It’s the same argument PM has been issuing since the Master Settlement Agreement in 1998. It’s also a bit disingenuous because its recently split off sister company, Philip Morris International, is aggressively targeting international markets with higher tar and nicotine products. The World Health Organization predicts that one billion people will die of smoking related illness globally during this century.
    According to The Washington Post today, the old Eastern N.C. tobacco belt where I cut my teeth as a cub newspaper reporter is in turmoil over the FDA oversight possibility. Farmers are quoted saying that the FDA is overworked and incompetent. It can’t handle emergencies and they do have a point. They badly fell down on the job in this year’s tainted food scandal at Lynchburg-based Peanut Corporation of America that ended up with a number of deaths and many illnesses.
    In as much as we don’t know what FDA regulation of tobacco will mean — it won’t come close to banning the product — it does show how much times have changed in the Tobacco Belt. As the Post points out, North Carolina industries have moved away from tobacco to computers, software, banking and pharmaceuticals.
    That’s a little less true in Richmond where PM has a huge presence. If the FDA all but puts smokeless tobacco out of business, one wonders what will happen to PM’s $350 million research lab at the Virginia Biotech Park in downtown Richmond. It is the cornerstone of the park that struggled for years and now seems to be taking off.
    But the trend is clear. The question now is how much things will really change.
    Peter Galuszka

  • Can Bailouts Actually Work?

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    James A. Bacon

    When the financial world was turned upside down last fall, there was gnashing of teeth aplenty at what seemed to be the Bush Administration’s bailout after bailout of wayward banks.
    One side of the aisle complained that the government had no business tampering with free markets and the other complained that why should public money be used to save hubristic and overpaid corporate executives.
    As the Bush years faded into the Obama ones, lots of people conveniently forgot upon whose watch this fell. For instance, I interviewed U.S. Rep. Eric Cantor a few weeks ago and he was complaining that “we have to get the government out of the capital markets.” I pointed out that George Bush and Treasury Secretary Henry Paulson, both Republicans like Cantor, were the ones that inserted the feds into finance. He was silent for a full 15 seconds protesting that it was seen as a catastrophe. I guess Eric typically gets a free and unchallenged ride from the Virginia media.
    Anyway, on to my point. The news today is that 10 big bailout banks — J.P. Morgan Chase & Co., Goldman Sachs Group, Morgan Stanley, BB&T, U.S. Bancorp, American Express, Capital One, Bank of New York Mellon, Northern Trust and State Street — all want to start paying back their billions in bailout funds.
    Good news, to be sure. It shows that a recovery might actually be in the offing. And it shows that the banks want federal government restrictions brought on by the bailouts, gone.
    The news points out another thing. It is fairly common in financial crisis to have a government bail stuff out and it can be only temporary. A couple case points:
    • Chrysler was slammed by shoddy cars and bad decisions in the 1970s. It got federal loan guarantees worth $1.5 billion in 1979. New management saved the day and the firm paid everything back by 1983.
    • Long Term Capital Management, a big hedge fund, went bust in 1998, threatening plenty of investors. It came as much of the rest of the world, Thailand, Taiwan, Singapore, Japan, Russia, and Mexico were going through or had gone through bad times. The Ne York Fed arranged more than $3.6 billion in loans which were paid back by 2000.

    There are other example,s but you get the point. It is actually a tried ands trusted practice for the government to come in with bailouts and sometimes it works. If this sounds like I’m saying something positive about George W. Bush it may well be.
    I am not addressing, however, the massive bailouts of American International Group, one of those “too big to fail” firms. What has happened is shameless and I wish grand juries and Congressional probes on the perps. And, there is a legitimate question out if these types of bailouts tend to perpetuate a flawed financial system that got us into trouble in the first place.
    But I stand by my point -sometimes bailouts are good things and can work.
    Peter Galuszka

  • Free Markets Forever? Let History Judge

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    James A. Bacon

    “Let History Judge” was the title of the book of one of my favorite Soviet-era historians — Roy Medvedev. I used to visit him back in the 1980s in his yellow-colored apartment building in the northwest quadrant of Moscow.
    His type of five-story building was called a “Khruschovy” after Khruschev because lots were built in the Nikita years of the 1950s and early 1960s. Medvedev’s book also had a Khruschevian twist since it detailed the crimes of Josef Stalin — something permissible only after Khruschev’s “secret speech” of 1956.
    Now comes an exhortation of another dynamic Soviet-era leader. Mikhail S. Gorbachev writes in Sunday’s Washington Post that the West could use a little perestroika right now. And he’s damned right about that.
    Gorbachev will go down as one of the most important game changers of the late 20th century. He set the stage for the generally peaceful transition of a massive and hateful totalitarian state. His perestroika or “rebuilding” was flawed since it assumed the socialist state could be merely changed instead of dumped, but he still represents an uncanny honesty in analysis. For children of the Cold War such as me, that’s a bizarre irony since we were taught that Communist leaders only lie.
    Here’s the essence of Gorbachev’s argument:
    “In the West, the breakup of the Soviet Union was viewed as a total victory that proved that the West did not need to change. Western leaders were convinced that they were at the helm of the right system and of a well-functioning, almost perfect economic model. Scholars opined that history had ended. “The Washington Consensus,” the dogma of free markets, deregulation and balanced budgets at any cost, was force-fed to the world.
    “But then came the economic crisis of 2008 and 2009, and it became clear that the new Western model was an illusion that benefited chiefly the very rich. Statistics show that the poor and the middle class saw little or no benefit from the economic growth of the past decades.
    “The current global crisis demonstrates that the leaders of major powers, particularly the United States, had missed the signals that called for a perestroika. The result is a crisis that is not just financial and economic. It is political, too.
    “The model that emerged during the final decades of the 20th Century has turned out to be unsustainable. It was based on a drive for super-profits and hyper-consumption for a few, on unrestrained exploitation of resources and on social and environmental irresponsibility.”
    I don’t know of many who could say it better. I was in Moscow as a journalist during the Gorbachev era and then during Yeltsin. With Gorby, there was a great excitement, sort of like the mood in the U.S. in the 1960s when a number of big revolutions were underway, notably in race relations, sex roles and economic inequality. Gorbachev was much loved but when fast-paced history overtook events and the USSR fell apart in December 1991, there was an orgy of self congratulation in the West. Many, my New York-based editors included, said it was the triumph of Reagan-Thatcher free market policies, which, we now know, gives far too much credit to both conservative leaders.
    When I returned to my Moscow post in 1993, I naturally couldn’t believe the changes. The KGB didn’t follow me around, they were working at private security at upscale grocery stores and came up to say hello, knowing me by name and asking how it was to be back. Along showcase streets once tightly controlled to let the Zil limos of the Party bosses race past, there were occasional mob shootouts.
    But perhaps the most stunning change was how the U.S. Embassy no longer seemed very important. The sources you absolutely needed to have were at the International Monetary Fund.
    The West, lead by George H.W. Bush and then by Bill Clinton, pretty much handed over running policies for the New Russia to the bureaucrats of the IMF, who, of course, were pushing the standard medicine of free markets trump all everywhere. Moscow had better balance its budget, get control of its money supply, end government services and get with the program if it were to get its next tranche of $4 billion in aid.
    I’ll never forget what one Russian official, an old friend, warned me about. He was a little older than I and had been a Party apparatchik helping run a tractor factory. He was a pretty bright guy, ended up getting an MBA from Harvard and came back and took over the tractor factory in an LBO in the new privatization world. He was very worried saying that the West just didn’t get it. All the social services provided by the state, cradle to grave coverage of medicine, schools, vacations and funerals, went through the factories. After privatization, the social services were the first to be cut. Nothing was there to take its place. He said this was foolhardy, no matter what bullshit the IMF was pushing. The Chinese weren’t doing it this way and were a lot more successful.
    And guess what? He was right. That’s one reason we have Putin and his shadow government of siloviki or power players today.
    Gorbachev is dead on right about our need to rethink and restructure. We really need to stop thinking that the “free market” can solve all problems. Our supposedly wonderful economic model really only benefited the very rich. But today, everyone is paying the price for mindlessly following the ideas of laissez-faire conservatives.
    So, let’s chuck the absolutist dogma of free markets, and, as Roy Medvedev would say, “Let History Judge.”
    Peter Galuszka

  • Trani Gets Some Payback

    Posted on

    by

    James A. Bacon

    A word to the Wise: be wary when you mess with a street-wise Italian guy from Philly.
    That’s Eugene P. Trani, the outgoing president of Virginia Commonwealth University, to be precise.
    Trani’s 19-year tenure at VCU has been marked by huge successes and some serious questions about abusing his power. On the plus side, Trani has taken VCU, basically a third tier commuter school, and taken it clearly into second-tier status. He’s raised the level of student and expanded the programs the school offers, including a number of overseas outlets such as one in Qatar.
    Richmond’s renaissance around Monroe Park and Broad Street is also an achievement that only a very rare man or woman can claim credit for.
    On the negative side, Trani has been criticized for big-footing neighborhoods such as Oregon Hill as he’s rebuilt and expanded. He is a bit of a megalomaniac, renaming the venerable Medical College of Virginia as VCU med school, to the chagrin of legions of MCV grads. Trani did so because a USA Today reporter got MCV mixed up with UVA — not exactly a serious reason. Trani was also under heavy criticism for the scandal in which Richmond’s former police chief won a bachelor’s degree without meeting requirements.

    My issue with Trani was that he got so involved with the Richmond power structure that he threw his weight around with no checks or balances. He has been criticized for spending so much time on bricks and mortar projects that he squandered opportunities to enhance VCU’s rep as a research center.

    It badly needed it since on Trani’s watch, in 1999, the National Institutes of Health banned VCU (and MCV) from doing any research work on human bodies after failing to keep federal privacy rules in line. In recovery, Trani hired a well-regarded scientists to do a makeover of VCU research. The woman, a South African by background, did just that, but later quit in a controversy involving Trani’s backing of highly questionable, strictly confidential research contracts with Philip Moris USA.

    Many first rate schools decline to take tobacco money. Others that do, such as the University of Virginia and Duke, accept money only if they control the research. In VCU’s case, Trani gladly took the money and called the contracts “research service agreements” which supposedly meant they weren’t really research. In the original deal, anyone who questioned the contracts was to be immediately reported to Philip Morris. Groups such as the Association of American University Professors said that Trani’s view that the contracts were not research was nonsense.

    Trani wanted to protect Philip Morris because the tobacco giant bailed out his faltering Virginia Biotechnology Research park. So when the New York Times called a year or so ago when it was breaking the story about the secretive research pacts, Trani wouldn’t talk to them.

    I smelled something funny, especially since the local newspaper, which pushes Trani and VCU hard, had its “investigative” reporter take a look. He concluded that nothing was amiss because the University of Louisville, another low-ranked school in another tobacco town, had similar pacts.

    So, I did some of my own investigating which was published a year ago on richmond.com. My story, which somehow is no longer available on Richmond.com’s server after Media General bought the Website, outlined the research issues and noted that some faculty and administrators were fearful of Trani’s reaction if they questioned thet tobacco research. Later, as national attention stirred, a faculty panel put in place by Trani recommended against such future pacts. I also blogged on this site about the controversy.

    Well, this month, Richmond magazine has a cover on Trani. To wit:

    “On hearing the comments of a local blogger, describing his administrative atmosphere as “Neo-Stalinist,” Trani tilts his head as if playing Name That Tune and names the writer instead. “Is that Galuszka,” he guesses correctly, naming a contributor to the Bacon’s Rebellion blog, Peter Galuszka.

    “He doesn’t even now what neo-Stanlinist is!” Trani replies with a touch of amusement “I do! That’s my field!” (He is, in fact, an expert in Russian history).

    My, but Trani does have a long memory. He’s wrong, however, about me not knowing what neo-Stalinist is. I first visited the Soviet Union as a college student in 1971 and spent years studying the language. I later spent a total of six years in the 1980s and 1990s there as an American news correspondent, some of which involved me being followed around or phone tapped by KGB officials. I probably have more time on the ground in Russia than Trani does. As for him being a Russian history expert, perhaps, but as part of my job I spent lots of time talking with academics, economists and Russian officials, including Boris Yeltsin. I never heard Trani’s name but look forward to reading some of his books.

    Anyway, Trani’s getting some payback. His legacy is important but highly mixed.

    Peter Galuszka

  • From Cassandra to Sage

    Posted on

    by

    James A. Bacon

    Finally, Marleen Durfee has prevailed. The peppy, fast-talking, middle-aged woman is seeing what she warned about becoming reality and looks forward to a brighter day. For most of this decade, the Pennsylvania native has harangued the Chesterfield Board of Supervisors about their mindlessly pro-growth development policies. And now, the turkeys have come home to roost.


    We met for a story I wrote for Richmond’s Style Weekly about how a perfect storm of extremely tight financing, bad planning and steadily shifting demographics is starting to make profound changes in how suburban growth is emerging in the Capital area, if not in the rest of the country.

    Huge megaprojects such as the 4,600 house Branner Station project in eastern Chesterfield have come to an abrupt halt. Three more in eastern Henrico are delayed, as is the Roseland megaproject in western Chesterfield.

    The icing on the cake, however, is Magnolia Green, a southwestern Chesterfield megaproject on the books for 20 years. The project which would project more exurbia mess even farther down the crowded Hull Street corridor struck financing shoals. When an auction was held last month to sell off a half-built golf course and lots for most of the project’s 4,886 homes, there were no bidders. About three dozen or so homes have been built in piney woods of unbuilt roads and unpoured concrete.

    Since 2000, Durfee has acted as a self-styled watchdog on out of control growth. “Residential is a big drain on society and the board of supervisors didn’t understand this. They thought that building more homes paid for itself,” she told me in a restaurant’s outdoor patio.

    Durfee had been a professional activist against drunk driving and worked in Pennsylvania and Lousiana before moving to Chesterfield County in 1986. She used some of her experience in her field on growth policies when she realized was was happening with Chesterfield. “There used to be 20 temporary buildings to handle school overcapacity. Now they are 200,” he says. Police coverage is stretched much more thinly than the public realizes. When a new high school is built, catch-up style, it is almost immediately at full capacity.

    How come? A lot of it has to do with history and the political culture of Chesterfield County, which at more than 400 square miles is almost twice the size of Henrico, Richmond’s other big suburban county. Back in the 1950s, state road planners put Interstate 64 through Henrico, not Chesterfield, giving Henrico a better tax base because it provided commercial nodes for development at every cloverleaf.

    Chesterfield, meanwhile, was stuck in its sleepy Southern-style way of doing business. Elected officials were good old boys and girls who made a fetish about being “Chesterfield-born” and were sops for every development project that came down the pike. Trouble was, their proud insularity made them woefully ignorant of suburban growth and in the 1990s on, they made stupid decision after stupid decision.

    The good old boy and girl crowd never got the math that houses can’t pay for their demands on services. For that you need extra retail and industry. They never considered how dependent upon cars the residential projects they approved were, leading to a host of other problems, such as more street congestion, more air pollution, longer commuting times, and even, according to a recent American Pediatric Association study, a new generation of fat children.

    Durfee, often put down as a Yankee “come here” by professional Southerners, says she got involved in “smart growth” policies after consulting her twin brother, who is an urban planner. She attended scores of planning and board of supervisors meetings, endured insults that she was a stupid meddler and faced the wrath of Realtors, builders and other parts of housing-industrial complex. For a number of years, Chesterfield’s board acted as anything but a democratic institution. Citizens asking tough questions at public meetings were routinely shouted down and put down and in one case, arrested after refusing to obey orders to shut up.

    “I would go meetings think they’d be pro-active, but they were using outdated plans from 1989 to 1991. They just didn’t understand, Durfee says. Magnolia Green, for instance, was approved for rezoning in 1991 and like many projects in Chesterfield, sat dormant for years.

    Superviors did not heed long-term predictions that the demographic patterns that favored Chesterfield’s family-oriented growth patterns in the 1980s and 1990s were coming to an abrupt halt now. Baby boomers who wanted the house and lot and land for their kids now aren’t willing to upsize after their kids move on. The kids themselves tend not to want big, single family houses on big lots, preferring smaller units closer to urban centers.

    The result, according to Chesterfield’s planning deparment, is that the county has about 50,000 rezoned lots not yet built upon. That’s more than the rest of suburban Richmond combined and exceeds even the number in Loudoun County, once the nation’s fastest-growing suburban area. Builders complain that a lot of these rezoned lots are in places where people don’t want to live, ignoring the fact that they were cheerleaders for rezoning back in the day. And, due to peculiarities in state law, it is very hard to downzone upzoned property. So who knows what will happen to places such as Magnolia Green.

    As for Durfee, she prevailed in 2007 elections and won a supervisor’s position in a tight, four-candidate race. She says that the county is upgrading its comprehensive plan and for the first time in decades will look at growth on a holistic, rather than piecemeal, basis. And for someone treated like the County Idiot for many years, she’s suddenly looking pretty savvy.

    Peter Galuszka

  • ADDICTED TO AUTONOMOBILES

    Posted on

    by

    James A. Bacon

    ADDICTION TO AUTONOMOBILES – AND THE SETTLEMENT PATTERN THAT AUTONOMOBILES SPAWN – IS THE DRIVING FORCE COLLAPSING A SOCIETY THAT HAS BECOME DEPENDENT ON LARGE, PRIVATE VEHICLES FOR MOBILITY AND ACCESS.

    General Motors filed for bankruptcy yesterday. This is only the latest in a string of events that document how the Autonomobile Industrial Complex in the US of A is suffering.

    How can one explain why some of the largest and most revered Enterprises on the Planet got to this place? (See “Inexhaustible Icon: GM Has Left Its Brand on the Cultural Landscape” in today’s Wapo.)

    The simple answer is:

    • Households that can AFFORD a new Large, Private Vehicle already have one – or two or three. Not only that but many new cars have three or four years of free maintenance and a 100,000 mile warranty. If one lost 40% of their shelter ‘investment’ and 60% of their retirement nest egg in the past year, why would they buy a new car?

    • Households who NEED a new vehicle cannot afford one now that loans do not grow on trees. What those Households NEED is a small efficient vehicle. They ALSO NEED settlement patterns that require far less driving. (See German / American comparison noted below.)

    No major Autonomobile Enterprise is offering vehicles that match citizen needs and Agencies, Enterprises and Institutions are not yet evolving functional settlement patterns.

    What manner of a Enterprise strategy results in a whole industry sector selling themselves out of a market?

    The one that comes to mind is aggressive drug cartels. Sell, sell, sell – push the product until there is almost one left who is not addicted and broke or already has a big stash.

    Autonomobile Enterprises have acted exactly like drug cartels. With the help of Agencies (voters LOVE Large, Private Vehicles so long as they do not have to pay the full cost) and workers (unions LOVE high wages), Autonomobile Enterprises have addicted five generations of citizens to cheap energy and big, status-establishing / ego-messaging Autonomobiles.

    These Autonomobiles demand a disaggregated and dysfunctional settlement patterns to operate.

    After 90 years of selling four wheeled drugs, there is no alternative for Mobility and Access for the majority of Americans.

    When the economy hit a rough patch due to dependence on unsustainable growth, unsustainable debt and Mass OverConsumption, citizens found themselves without any need for a new car and / or trapped with settlement patterns that are the inevitable result of Autonomobile dependence.

    Bottom line: Citizens of the US of A are addicted to Autonomobiles. (See again US of A / German comparison below)

    Many citizens are coming to grips with the reality that they and their Organization have:

    1. Created a Global Financial System that has turned investment into gambling

    2. Fueled a feeding frenzy that resulted in the Wrong Size House / Wrong Location Shelter Implosion

    3. Paid no attention to the imbalance of trade, the widening Wealth Gap or unsustainable debt – public and private.

    4. Championed Mass OverConsumption funded by depletion of Natural Capital

    In their May newsletter, Ecocities Emerging’s Kirsten Miller makes a nice case for Autonomobiles being “The Sacred Cow of consumption.” (EMR would say the Sacred Cow of Mass OverConsumption) Ms. Miller uses the impact of the Tata mini in India as a jumping off place.

    Icons that are ‘sacred’ normally reside in the Social Sphere. The addiction to Autonomobiles is also an Economic Sphere catastrophe and a Physical Sphere impossibility. (See The Large, Private Vehicle Mobility Myth.)

    Citizens need smaller, more durable, more easily repaired and FAR more fuel efficient vehicles to bridge the gap until settlement patterns evolve to require fewer vehicles of any kind.

    That is not what the current administration is betting on to recover the billions it has invested in GM. They are talking about slightly less consumptive vehicles and no Fundamental Transformation of the settlement pattern. (See today’s WaPo headline: “U. S. Bets Billions on GM’s Resurgence. Also see the two stories under the full page banner headline: “Flickers of Hope for U. S. Economy Belie the Distance From Recovery” and “Obama Unveils Plan for Brief Bankruptcy, Nationalization.”

    For a very good summary of why the US of A did not have to get into this predicament see the April 2009 study from Brookings “Making Transportation Sustainable: Insights from Germany.”
    The report documents how the US of A could have used far less land for urban land uses and created a far smaller ecological footprint with increased quality of life for all – including the 12.5 Percenters.

    The question is: Is it too late to obtain a sustainable trajectory? Without Fundamental Transformation of settlement patterns, conditions will only get worse.

    The expectations are unrealistic. On the day GM filed for bankruptcy that gambling venue call the NY Stock Exchange jumped over 200 points on rumors and shadows. (See WaPo story above “Flickers of Hope…”

    Oil is up again on the hope that consumption will increase.

    There is also hope of economic recovery is based such solid indicators of economic rebound as a rise in the Indian stock market last week. That is not a reflection of the Blackfeet and the Sioux selling more cattle, it is the response to an election in India that some think will allow the citizens of India to ride the Tiger a little longer.

    Irony of irony’s is that for every recession since WW II selling cars and houses has been the cure for economic pain. Now they are the root cause of the Great Recession (See Steven Mufson’s story “Once a Recession Remedy, GM’s Empire Falls” in today’s Wapo.

    EMR

  • WAL*MART AND THE DECLINE OF CIVILIZATION

    Posted on

    by

    James A. Bacon

    WAL*MART WILL NOT BE THE CAUSE OF CIVILIZATIONS COLLAPSE BUT IT IS A GOOD BELLWETHER ON THE CURRENT TRAJECTORY

    Two comments on the recent post NOTE ON WAL*MART require further consideration.

    On 5/28/09 at 3:49 PM TooManyTaxes said:

    “I’m not sure whether this one has been asked before. If so, I apologize.”

    No need to apologize TMT, it is hard to tell in the midst of all the baseless filibuster.

    TMT asked about Wal*Mart’s subsidy. Before EMR responds to the specific questions it is important to note that TMT put his / her finger on one of the most important overarching problem facing contemporary society:

    NO ONE is YET paying the full cost of contemporary, technology and competition-driven human ‘civilization.’ The current debt is overwhelming and grows every day.

    EMR plans to address the consequences of the failure to acknowledge the size and scope of this negative balance in a future post.

    In the meantime, here is a quick summary of four Spheres in which US of A citizens are going into debt to pay for unsustainable contemporary lifestyles and settlement patterns:

    1. Total Debt – public and private: The numbers run from around $50 Trillion to over $70 Trillion for the total debt depending on ones assumptions. Total debt has grown steadily since 1973 when everyone should have known it was time to tighten belts. It has grown exponentially since 1980. Currently every Household of four owes about $675,000 to pay off public and private debt.

    2. External Debt – the part of $50 Trillion to $70 Trillion Total Debt that is owed to those outside the US of A – is $13.7 Trillion according to the table Larry Gross cited recently. That is 99.95% of GNP which is not shrinking. It is immoral to pass Total Debt on the future generations without the resources to repay it or any benefit from the ‘investment.’ It is impossible to ignore debt to those outside the US of A. Jim Bacon recently asked the question: When will the Chinese stop loaning the US of A money to pay for deficit spending?

    3. The cost of burning through Natural Capital is a far larger amount than Total Debt. This debt includes the cost of both non-renewable resources but also hard to renew resources. The cost of the Mass OverConsumption is stupendous. Even if citizens and their Agencies had the money, there is no place to ‘buy’ replacements. The debt is not quantifiable because the total cost includes the price of consumption of as yet un-calculated impacts. The Total Cost of the unsustainable trajectory is beyond current comprehension.

    4. The infrastructure deficit. Infrastructure has been allowed to deteriorate without reinvestment. There is also the problem that the existing infrastructure – including most of that to be repaired with ‘stimulosus’ funds – supports unsustainable settlement patterns.

    If one wants a chilling experience and a rude awakening, thumb through Kirkpatrick Sale’s book Human Scale published in 1980. Sale provides a comprehensive list of the reasons why there needed to be Fundamental Transformation in 1980. None of his examples are new but Sale provides a very comprehensive summary of what MIGHT happen from a 1980s perspective. It turns out to be a listing of what DID happen since 1980.

    1980 was just after what Reich calls “The Almost Golden Age.” A lot of folks were living quite well, thank you – but the trends were already running against those in the bottom half of the Ziggurat.

    In 1980 the Total Debt (Sphere 1. above) was around $12.5 Trillion in 1980 dollars – one fifth of today’s total.

    In 1980 there was a positive trade balance (Sphere 2. above) and it had not been long since the US of A stopped being a net exporter of energy.

    In 1980 the resources to support an advanced civilization were in much better shape (Sphere 3. above) ground water was not depleted and contaminated, marine resources were not in steep decline and more petroleum was being discovered that consumed.

    In 1980 the infrastructure (Sphere 4. above) could have been much more easily evolved to support functional human settlement patterns.

    Sale was not alone in seeing the cissies on the horizon but his listing of the components is compelling. EMR did not know Sale but shared most of his concerns at the time and had since the 1973 Wake-Up call.

    Readers may recall the 1980 was the year the citizens elected a president that declared “Morning in America” and ridiculed all who were concerned about the trajectory of “American Exceptionalism” – “there you go again…”

    The comments concerning population (by TMT) and on having passed the tipping (by Larry Gross) on the Climate Change Post of 30 May are on point. Larry may be right – it may be too late to salvage civilization as we know it. More on that in a later post.

    Now to the specific questions that TMT raised:

    “Let’s assume that Walmart does NOT pay its full locational costs. Who pays those costs?”

    We go into this in detail and cite sources in PART FOUR – THE PROBLEM WITH CARS Chapter 10 – Learning From Big Boxes. The short answer is that to the extent these costs are now being paid by ANYONE (and not just piling up in the four Spheres noted above), the majority of the costs are picked up by all tax payers to pay for transport, infrastructure and training and by customers. (Customers do not account for the time and resources they expend to secure the “bargains”)

    “How do we know that? How much do they pay?”

    Actually there are simple calculators on line to calculate “the cost of a Wal*Mart” – one plugs in their Community and Region numbers and reads out the Wal*Mart costs. These back-of-the-envelope calculations document that if one added up ALL the costs the deficit would be very substantial.

    “Does Walmart keep its subsidy? Or does it pass it along to its customers?”

    They “pass along” only enough to maintain the APPEARANCE of offering bargains. After all, Wal*Mart is an Enterprise and Enterprises have been successful spending more on advertising the ILLUSION of a bargain than in passed on real savings.

    “If, the latter is true, is there any overlap between those who pay subsidies to Walmart and those to whom Walmart passes along the subsidies?”

    There is some overlap but not nearly enough to cover the costs – see note on drug costs below.

    “Please note that I am not arguing for subsidies. I just want to understand EMR’s position.

    “TMT”

    Footnote: Since the Wal*Mart post last week, EMR had a conversation with a woman who had just completed a comprehensive comparison of the costs of Drugs for a couple on Medicare. Both Wal*Mart and the on-line drug company which was the “preferred” vendor of the drug supplement coverage provider were calculated. When a real market basket of drugs was evaluated the local Safeway was cheaper than Wal*Mart OR the on-line source. Now consider the elderly folks who drive miles to get to a Wal*Mart to “save money” on their drugs. While they are there, they will buy a lot of other stuff that is not a bargain either.

    On 5/28/09 at 7:33 AM Larry said

    “The problem I have with EMR’s stance on Walmart is this.

    “He does not acknowledge the validity of a worldwide logistics supply network for goods and services…”

    Larry, please document ANYPLACE EMR has EVER indicated he does not acknowledge the existence or ‘validity’ of long supply chains. The issue is NOT ‘validity,’ it is paying the full cost.

    See EU environmental group T&E’s calculations on fair allocation of both surface and air freight. Long supply lines mean high costs, Period. These costs, and other location-variable costs are subsidized in many direct and indirect ways.

    The higher energy prices go, the more Regional import replacement makes sense.

    “it appears that there is absolutely no version of any kind whatsoever of a WalMart that is acceptable under any circumstances.”

    All EMR asks it that those who ship long distance pay the full cost of their activities – level the playing field.

    “In other words, the concept itself is unacceptable.”

    If you mean the concept of living off subsidies in unacceptable, you are right. See prior comment on the value of debt racked up to pay for Mass OverConsumption.

    “If he objects to the underlying concept that WalMart exploits to maximum advantage…
    then, he’s also essentially rejecting any other retailer than also bases their business model on the same concept”.

    That is true.

    “So.. you can wipe off the map… Target, Home Depot, Lowes, McDonalds, etc, etc, just about every national chain that one can think of.”

    Unless they pay the full cost of their activities they are eroding the potential for achieving a sustainable trajectory for civilization.

    “He touched on this a couple of times before and what I got out of it was that he thinks that virtually all products need to come from the NUR and the USR but he’s always been mostly murky about what USRs are (and are not) and what the logistics supply functionality looks like between the USR(s) (?) and the NUR(s).”

    Not ‘murky’ at all, Larry has just never bothered to read or try to understand.

    “and perhaps the most paradoxical is the fact that the modern logistics supply network.. is a couple thousand years old and always evolving and optimizing. We find jugs of wine ..that old in the Mediterranean that were on their way from somewhere to somewhere else … as opposed to being grown locally and consumed locally.”

    Larry has already forgotten that EMR is familiar with the history of trade and the importance of the emergence of Regional Neolithic Trading Villages 10,000 to 13,000 years ago and the extensive trading systems that have evolved since that time.

    If buyers are willing to pay the FULL cost for items shipped long distances – no problem.

    Those wine jugs “in the Mediterranean” went down with vessels that carried a knowledgeable wine buyer. Wine buyers had direct relationships with those from whom he bought the wine. Further if the person to whom he sold the wine in Rome, got sick he might lose his head. Those relationships do not now exist with current long supply lines.

    Footnote: To keep perfumed wine fresh it was stored in airtight lead lined jugs and that resulted in lead poisoning of the elite who could afford imported wine. Testing for lead poisoning was not available in Imperial Rome so some wine merchants got off the hook.

    It is clear that only a few in Rome or Carthage enjoyed imported wine. Most got their wine from the Region.

    The bottom line is that if all the cost of transport and of monitoring, inspections, testing and enforcement to insure a safe product were added to the costs of the goods they would not be cheap. Ask the owners of those sick and dead pets or those exposed to toxic chemicals in manufactured products what sort of testing they would like to see.

    “Just about every port in the world ..is an integral part of the settlement pattern it is part of.
    sometimes.. the settlement pattern itself came second…and actually grew up around the port….”

    Not sure what this has to do with the real price of tea or pet food.

    “such ports are definitely not New Urban Regions… they are very clearly the ORIGINAL Urban Regions..with grid streets, shops at street level with living space above… etc..etc…”

    Again Larry is lost in scale. Worse, he has never bothered to understand what a New Urban Region is. The only possible rationale for this statement is that Larry thinks ‘New Urban Region’ has something to do with Cluster-scale, Neighborhood-scale and Village-scale projects designed by New Urbanists. It does not.

    Places that were major ports historically – even those that were silted in like Brugge – are now integral components of New Urban Regions. For example Ostia in the Roma NUR.

    “virtually everything that NEW Urban Regions seem to be trying to emulate now days..”

    ?EMR has no idea what this means?

    “EXCEPT when it comes to the logistics supply network… of which…advocates such as EMR are mostly mute and when they do speak of it.. they do in broad terms… with opinions that WalMarts ..are NOT..the Correct Way to do it.”

    “so.. I ask….

    “what is…

    “and the silence is deafening.”

    If one chooses not to listen or to learn…

    EMR

  • Could Virginia Become a Christian Theocracy?

    Posted on

    by

    James A. Bacon

    One of my recurring nightmares is that I wake up one morning to find Virginia and the U.S. transformed into a right-wing theocracy.

    If I go to a public library, I find my Internet access is severely restricted to information that a government committee has deemed morally and politically acceptable. A bourbon and water in my home at 6 p.m. is verboten. Dancing: forget it. Bible study classes are mandatory. If I falter in any way from the proscribed “norm,” cultural G-men and women (“G” for “Government” and “God”) will remove me to a self-help and brainwashing group.

    In the past couple of years, I will admit, this nightmare has been on the wane. Political fortunes have eluded Virginia’s religious right with the election of moderates such as Mark Warner, Jim Webb, Tim Kaine and, of course, Barack Obama who represented the first time the Old Dominion has gone Democratic presidentially since the mid-1960s.

    The state Republican Party, following disaster after disaster, is still trying to get its act together, meaning that the radical, social and religious wing of the party has been on the run.

    But maybe not. The GOP, meeting in Richmond over the weekend, nominated hard right former attorney general Bob McDonnell for governor and state Sen. Ken Cuccinelli for attorney general. McDonnell is a grad from Regent University Law School, a creation of televangelist Pat Robertson who has for decades projected his own version of Christ-driven government. Cuccinelli is a pro-life fanatic, who, according to The Washington Post, is unwilling to follow fellow Republicans’ advice and tone down any divisive social conservatism that turns off voters.

    While this is happening, controversy rages in Lynchburg, where Liberty University, the creation of another televangelist, the late Jerry Falwell, is all but banning a Democratic Club for students. Incredibly, Falwell’s son, the school’s leader, says that the Democratic Party has immoral ideals, so the club is being done away with.

    Religious schools have their place and there are many fine ones, indeed. But Liberty seems to go way over the top in policing student behavior. According to Kevin Roose, a Brown student who spent an undercover semester at Liberty pretending to be an evangelical Christian, students must follow a 46-page “Code of Conduct” that forbids drinking, smoking, dancing and “hugging” that lasts for more than three seconds (do they all carry stopwatches?). In an interview with National Public Radio, Roose says that the courses he took were difficult and informative. But he balked at one exam question: “Was Noah’s Ark big enough to accommodate various species of dinosaurs?”

    That reminds me of a story the Richmond Times-Dispatch did long ago, back when it actually did some reporting rather than just holding Phil Donahue-style encounter groups and calling it community service. At one class infiltrated by a TD reporter, the professor was ranting against rebellious Danish philosopher and theologian Soren Kierkegaard, but the professor had badly misspelled his name on the blackboard. At the time, founder Falwell was moving the school from some temporary mobile homes to real buildings. But the reporter noted that in admissions brochures, the pamphlets showed the multi-story Virginia National Bank building downtown but with the VNB logo airbrushed out. The idea seemed to be to pretend the building was part of the university.

    From these humble beginnings, Liberty is now banning the Democratic Party.

    There’s another school in the category. Patrick Henry College in Purcellville in far western Loudoun County has a conduct code very similar to Liberty’s. It was founded in 2000 by Michael P. Farris, a right wing constitutional lawyer who gained fame pushing home schooling.

    Loudoun, some of you may remember, had some controversies about seriously restricting the Internet at the county’s public libraries because some little Pugsley feeling his teenaged hormones might pick up some porn. It was quite a tussle. And now we find that Patrick Henry grads have been interning in the library system.

    That’s not all. Taking advantage of its proximity to Washington and its government agencies, Patrick Henry has courses tailored to get “Christian” minded men and women to find work at the CIA, DIA, DEA, FBI, NSA, Homeland Security and so forth. Terrorism is a threat and patriotism is fine, but how do you know that some religious fanatics might go over the line and start monitoring your email and telephone conversations for information they consider ethically subversive and “anti-Christian?”

    This is not to say that such schools produce Bible thumping robotons. The lifeguard at my neighborhood pool is a Liberty student who is very conscientious watching the little kids and has a knack for getting along well with them. I worked once with a Liberty grad who was good at what he did and had a sense of humor. We joked about moving to Lynchburg and starting an alternative newspaper titled  “Beelzebub.”

    But it’s not the grads themselves that I really worry about. It is the bosses at these schools who wrap themselves in the American flag and then trash American principles of freedom of speech and political choice. All the while, they evoke the usual Virginia political thinkers such as Patrick Henry, Thomas Jefferson and James Madison whose views are actually the polar opposite of theirs.

    Peter Galuszka

     

  • NOTE ON CLIMATE CHANGE

    Posted on

    by

    James A. Bacon

    Today CNN carried a story about a new report on Climate Change (“Climate Change Crisis ‘Catastrophic’”) by the Global Humanitarian Forum (GHF) of UK with quotes from Kofi Annan.

    Bottom line: 300,000 are now dying each year and 300,000,000 – the population of the US of A – are already effected by the impacts of Climate Change.

    Before anyone starts ranting about the ‘cause’ of Climate Change here is the SYNERGY position noted in TRILO-G Chapter 24 – Greed, Excess, Ignorance, Myths, Entitlements, Windfalls and Subsidies and restated in Chapter 31 – What Don’t You Understand?:

    “SYNERGY’s long standing position is that it does not make ANY difference whether human action is ‘causing’ Climate Change or not.

    “What Agencies, Enterprises and Institutions must do IF Global Climate Change IS caused by human action are EXACTLY the same strategies that must be implemented:

    1. If Global Climate Change is NOT caused by humans, OR
    2. If the Earth is not really warming at this time, OR
    3. If, after warming, the Earth starts to re-cool due to some, as yet unknown cause.

    “Humans must SHRINK THEIR ECOLOGICAL FOOTPRINT regardless for the direction in which the Global Climate is now tending, regardless of the level of Carbon Dioxide in the atmosphere and regardless of the size of the hole in the Ozone Layer.

    “Shrinking humans ecological foot print is a prerequisite to civilization achieving a sustainable trajectory. Denial of this reality is nothing short of high treason against humanity.”

    Do BR Bloggers have evidence based in SCIENCE of what can be done that will make a difference?

    Other than Fundamental Transformation of human settlement patterns, that is.

    Are there well documented sources that question the assumptions of the GHF report?

    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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