Bacon's Rebellion

  • 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

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    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

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    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

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    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

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    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

  • Uncle Miltie vs John Maynard Keynes

    Posted on

    by

    James A. Bacon

    Often, BR discussions have fluctuated about the remedies for the current financial crisis. The arguments seem endless, but then the problems are huge. And, properly, I think, they surround real concerns about massive government deficits and massive injections of liquidity.

    One place for some perspective is the June 11, issue of the New York Review of Books which has discussions among seven top economists including “Dr. Doom” Nouriel Roubini of New York University and Paul Krugman, of Princeton and The New York Times.

    I found some of the most insightful contributions coming from Niall Ferguson, a Harvard historian. As he puts it — and this explains the confounding elements of the crisis as alluded to by BR bloggers — there are two completely contradictory remedies being put in effect at the same time.

    One is the free market prescription of the late Milton Friedman who might have urged massive amounts of capital from the Federal Reserve to keep the banking crisis from going Great Depressional. At the same time however, the government is going about a good old John Maynard Keynes solution — massive fiscal deficits in excess of 12 percent of GDP to pump prime the economy.

    “There is a clear contradiction between these two policies and we’re trying to have it both ways,” Ferguson says. “You can’t be a monetarist and Keynesian simultaneously — at least I can’t see how you can, because if the aim of the monetarist policy is to keep interest rates down, to keep liquidity high, the effect of the Keynesian policy must be to drive the interest rates up.”

    Indeed, the negatives stemming from this two-faced recovery policy might have slunk along OK if the financial credibility of the U.S. isn’t tarnished. But it is fast becoming not the case. China used to scarf up all the T-bills we could issue but, as Ferguson notes, “the marriage between China and America is coming to an end. Maybe it’s going to end in a messy divorce.”

    Other participants in the published discussion bring on their own perspectives, but I think Ferguson nails it. Finance guru George Soros adds to the contradictions idea by saying, “The interesting thing is that what needs to be done in the short term is almost exactly the opposite of what needs to be done in the long term.”
    Maybe that’s why I can’t really tell much difference between the policies of Bush-Paulson-Bernanke and Obama-Geithner-Bernanke. I find it amusing how so many Republicans trash Obama for continuing the very same policies they voted for last fall. And I find it amusing that Democrats continue to trash Bush-Cheney when they go along with Obama’s very similar approach. It could be that nobody knows the answer.

    BR bloggers have gone through a litany of causes. I think it was Groveton who said, “Fed, Fed, Fed” and he’s probably right, right, right. Alan Greenspan, the deity loved by all sides of the aisle, gave us tons of cheap money by pretending to fight a phantom inflation. The SEC helped by letting banks leverage themselves by three times what they were allowed to do. Fannie and Freddie played a role as did subprime, Wachovia, Countrywide, etc.

    As for me, I remember when I took Econ 101 back in the early 1970s, the orthodoxy at most liberal Northeastern uni verities was that Keynes is OK, deficits don’t matter. Within a decade Uncle Miltie had changed every one’s tune, especially after the big, deficit-generated inflation rates of the 1970s that only Paul Volcker could cure. Now, the free market Milties have run their course. No one seems to know what’s next. And we’re stuck with a weird hybrid of both men’s policies.

    Peter Galuszka

  • ON WAL*MART

    Posted on

    by

    James A. Bacon

    At a party over weekend a regular reader of BR suggested that EMR needs to go back and make sure that a failure to respond to some of Larry’s “summaries” does not suggest Larry is right or that there is no sound counter argument.

    As luck would have it, even though EMR has been very busy, he has copied some of the more important ones and will re-post the comments and respond as time allows.

    Here is a recent comment from Larry that was posted on Jim Bacon’s new Blog The Retirement Crisis. Jim is so prolific that if one does not respond right away the comment is buried. This post was the topic of settlement patterns, not Boomers retiring so EMR pulled it over here out of the fast lane.

    In the 22 May Malls: the Ticking Time Bomb post on Empty Malls Larry said:

    “I dunno EMR.. I strongly suspect when the dust clears – the WalMarts are going to still be around.”

    First, what causes you to come to the conclusion that the dust will clear?

    But to make sure the issue is clear:

    Over the past decade Wal*Mart would not have shown a profit if all the location-variable costs were fairly allocated and Wal*Mart was not subsidized directly and indirectly. We lay this all out in PART THREE – THE PROBLEM WITH CARS – Chapter 10 – Learning from Big Boxes. There is now some good research on the issue.

    That is only the start. Wal*Mart is not the cheapest place to buy a lot of items. One member of our Household recently paid 46 percent more per square foot for a product by the same manufacturer (different size package) in Wal*Mart as another member paid on the same day at Sears (nee Kmart). We use a lot of it and both knew we were getting low.

    Wal*Mart is cheap on SOME things but they make it up on the items that their research shows customers will ALSO buy when they go to Wal*Mart for an advertised bargain or an item that is frequently price compared. They use package size and other factors to make things appear cheaper than they are.

    Wal*Mart did not become the largest Enterprise in the US of A (for a while) by giving anything away.

    For a quick confirmation go to Wegmans and check out their comparison shopping posters updated every few days – Wal*Mart, Costco, Giant, Safeway, Wegmans – milk, bread, etc.

    Finally Wal*Mart us rolling out small (15,000 sq ft) shops so they can be closer to the customers because some shoppers have started to baulk at driving long distances to their super stores. Did someone say Balanced components of human settlement.

    “To me.. they are like king-sized, modern-day versions of the old mom&pop country stores….”

    You can only say that because you have not yet come to grips with locational and scale reality.

    “We’ll know that we REALLY are in trouble when WalMarts start going belly-up… right?”

    One would hope most realize that humans are “in trouble” now even if Wal*Marts are still showing a profit due to subsidy.

    EMR

  • A Love. A Lie. A Foreclosure.

    Posted on

    by

    James A. Bacon


    BR bloggers, you know who you are. You live in economically-distressed, forlorn areas such as Great Falls, McLean or the Countryside subdivision of Henrico County. Your brains are secretly hard-wired to the platform committee of the Republican Party. You project tolerance, but well, not exactly so.

    In your collective opinion, the housing crisis has been brought on by Freddie and Fannie lowering standards and giving money away to undeserving, dark-skinned Latinos or African-Americans or under-class whites. They have no right to aspire to a better way of life and a bigger house in a classier neighborhood. Who do they think they are? You?

    So it is indeed revealing that today’s Wall Street Journal has an intriguing book review. The author is Edmund Andrews, an economics reporter for The New York Times, who reveals all in “Busted,” how he fell for another woman and got divorced, how much alimony and child support he had to pay out, how he lied to get that huge house and how it all fell apart. Somehow, his experience rings very, very true.
    Like myself, Andrews is a member of the liberal news media. He was pulling down about $130,000 clams a year, not exactly BR bucks, but enough. Then, at age 50, he went through a midlife crisis.
    He rediscovered a high school flame who was “brainy, regal, sexy, fiery and eclectic.” The affair cost him his marriage and big payouts of alimony and child support. Still, the new wife and he had to live well. So, he bought a $460,000 house.
    Problem was, the net from his $130,000, given all the messy alimony and support, meant that in real life, there was no way he could qualify for a mortgage that big. But his mortgage broker said that he could use a “liars” mortgage application in which he didn’t have to list all of those painful liabilities. He didn’t have to pay principal for five years and given the skyrocketing market, he could simply refinance if things didn’t work out.
    Well, guess what happened? Things didn’t work out. Andrews started to miss the big payments. Pretty soon, he was in deep doo-doo. As for the trophy, No. 2, wife, she skeedaddled, and filed for bankruptcy (the reviewer notes that Andrews left this detail out).
    The lesson learned? “This crisis would not have been possible without breathtaking cynicism on the part of the brainiest people and the biggest institutions in American finance.” Everyone let themselves believe what they wanted, bottom line be damned.
    It also goes to show what can happen when mid-life crisis get out of hand. Andrews had to have the big house. Some people want Corvettes. Personally, I wanted, and got, a 20-year-old center-console fishing boat which I was lucky enough to sell at a good price after I realize that no one else in my family was interested in going out in it and the damned thing was eating up about $1,000 each season in repairs.
    Andrews points to a higher truth. If you want to understand the kind of greed that caused the financial crisis and the worst recession since the 1930s, don’t blame dark-skinned, poor people. Look in the mirror. Fellow BR bloggers, I am not going to name any names. But you know who you are.
    Peter Galuszka

  • Who Will Pick up the Pieces?

    Posted on

    by

    James A. Bacon

    It’s the thesis of my new blog, “Boomergeddon” (or, “The Retirement Crisis”) that the federal government will reach the brink of financial insolvency within the next two or three decades. If you buy my argument, another question logically poses itself: Who will provide essential government services when the feds go broke?

    Not California, that’s for sure. In the aftermath of Tuesday’s referenda, in which voters roundly rejected some $16 billion in tax increases, the finances of the “tarnished gold” state are looking more precarious than ever. California is an instance of a state whose governance system has failed. Blame the Ds, blame the Rs, blame whom you choose, but the fact remains, the state is all but ungovernable. And when the federal government follows suit, circa 2030, where would you prefer to be living?

    I explore that question in my latest blog post, “Who Will Pick up the Pieces,” where I include a table that might be helpful in making that decision: the current bond ratings of the 50 states. If If California is a prelude to a larger, society-wide disaster, only the fiscally strong will survive. Virginia is one. Go see who the others are.

  • “Cap and Trade” Part Two

    Posted on

    by

    James A. Bacon


    Funny how movements spring from nowhere.

    That’s the case with the Waxman-Markey “Cap and Trade” bill to restrict greenhouse gases that I filed about yesterday. There’s no question that the bill has legs given the orgy of lobbying over it that seems to have sprung from nowhere and is supplanting the economic crisis and the still-sizzling financial meltdown.
    Why, for example, are right-wing groups suddenly having seminars about Cap and Trade? Why are conservatives such as U.S. Rep Eric Cantor equating the Waxman bill as a threat on the level of global terrorism and Iran? What’s with the timing of the sudden anxiety?
    According to the Center for Public Integrity, a group that tracks lobbyists, the renewed interest quietly gained steam in this years first quarter when the business community realized that Barack Obama’s presidency meant that some kind of global warming law was likely. As many as 140 companies started circling their wagons, including makers of blue jeans, computer serves and sneakers. Food firms such as Land O Lakes, Tysons and the National Turkey Federation grabbed sand bags. Other than Duke Energy, whose CEO backs Cap and Trade, many utilities had been quiet but not any more.
    The Center lists the “Climate Top 10” of big-time lobbying firms that lead the lobbying pack. Richmond’s very own Hunton & Williams makes the cut with seven power, oil and gas companies.
    Right wing advocacy groups, such as the so-called Thomas Jefferson Institute for Public Policy, are setting up seminars to pump out their propaganda about the Waxman bill. Their call to arms is the supposed expense to stop global warming. The Jefferson crowd, which unfortunately was given and has seriously degraded the Bacons Rebellion e-zine, picked three speakers at a recent seminar at the Lewis Ginter Botanical Garden in Richmond who were obviously dogmatically correct and in tune with the institute’s world view which is shaped by the many lobbyists who run the organization.
    One speaker claimed that Waxman-Markey would cost the average family $3,000. Funny but the Congressional Budget Office puts the figure at $1,600, but what’s $1,400 when you’re trying to frame an important environmental initiative as needless and costly?
    As for Cantor’s concern, consider that for the past four of his election campaigns, Cantor has received money from powerful electric utility Dominion. The firm has given him a total of $88,097, according to the OpenSecrets, a contribution data base, and has been among the top five Cantor donors each time.
    To sure sure, lobbyists are springing to action because so much money is at stake with whatever approach goes to cut greenhouse gas emissions. The flurry of activity now means one thing: Waxman-Markey really does have a chance.
    Peter Galuszka
     

  • Is “Cap and Trade” Finally Here?

    Posted on

    by

    James A. Bacon

    Is a serious plan finally in the making to limit carbon dioxide emissions in the U.S.?

    It very well could be since a number of key Democrats in Congress, including Rick Boucher from the Virginia coalfields, have agreed to a number of closed-door compromises that might make it fly. The bill is being shepherded by Rep. Henry Waxman, a California Democrat.
    If passed, the bill could have huge implications for Virginia. For one reason, it would affect how much CO2 that Dominion, one of the largest coal-burning utilities in the country, can pump into the air. Ditto American Electric Power, the nation’s No. 1 coal-burner, and Old Dominion Electric Cooperative, a Henrico County-based utility serving rural areas in Virginia, Maryland and Delaware, that wants to build a monster $6 billion coal-burning plant in Surry County, not all that far from the tourist havens of Williamsburg and Jamestown.
    As it now stands, the bill would set a limit on greenhouse gases. Carbon dioxide would have to be cut by 17 percent by 2020 compared with 2005 emissions, and 83 percent by 2050. Unlike a policy favored by President Barack Obama, the right to emit greenhouse gases — making up 85 percent of the total — would be given away. Obama wanted them sold at auction.
    Utilities would get 35 percent of the allowances and billions of dollars would be spent to help research new technologies that would capture CO2 at big generating plants and somehow send it deep in the earth into a kind of permanent storage. Doing so, would keep utilities using coal and thus help the Virginia coalfields. Boucher helped orchestrate the idea and it has support from such coalfield groups as the United Mine Workers of America.
    Not everybody likes the effort. Eric Cantor, the Henrico Republican who is Minority Whip, told a luncheon at the World Affairs Council of Greater Richmond Monday that the bill “would do nothing but raise costs.” I was at the luncheon since I am a WAC member and later spoke to Cantor who said that the Waxman bill is much more restrictive than another proposal shot down last year that had been pushed by Senator Joe Lieberman and our own John Warner. I find Cantor’s position curious since his own party’s candidate for president last year backed some kind of cap and trade law.
    The Waxman bill is drawing fire from the other side of the aisle, too. Greenpeace USA says that Waxman’s initially laudable effort has been undermined by lobbyists.
    So, what to make of this? First off, something needs to be done about CO2 and global warming despite the head-in-the-sand naysayers, including (dare I say it) our very own and beloved Jim Bacon, founder of this blog. Secondly, giving away rather than selling allotments in “cap and trade” does favor utilities and that is reason for pause. Thirdly, finding a way to deep six CO2 in the earth sounds good but the technologies aren’t mature and it might further other bad aspects of coal, such as mountaintop removal. Clearing the way for more coal use (55 percent of electricity in the U.S. comes from coal) might only aggravate the serious damage mountaintop removal is doing to Central Appalachia.
    True, the economy is still a mess, but what happens with Waxman’s bill will have huge long-term implications, such as whether large portions of the Eastern Shore and Virginia Beach face a waterlogged future.
    Peter Galuszka

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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