Bacon's Rebellion

  • 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

  • Check Out the “Retirement Crisis” Blog

    Posted on

    by

    James A. Bacon

    Kudos to EMR and Peter G. for keeping Bacon’s Rebellion a lively venue for discussing real issues during my prolonged absence. I’m parachuting in just to say hello — and to let Bacon’s Rebellion readers know about my new blog, The Retirement Crisis.

    While Bacon’s Rebellion explores the theme of environmental sustainability, The Retirement Crisis tackles the theme of fiscal sustainability. Both are weighty. Both are game changers. No, that’s too mild. Both are civilization changers.

    But of the two, I believe that fiscal collapse is more imminent than the environmental collapse. And if we can’t forestall the one, the United States won’t have the resources to avert the other.

    The new blog focuses on the “retirement crisis” in a raw appeal to peoples’ self interest. Questions about multitrillion-dollar budget deficits, age wave-induced shortages of global capital, the overwhelming burden of carrying the national debt, and the disintegration of the retirement safety net are too abstract for most Americans to wrap their brains around. By making the case that the federal government will be unable to keep the promises made regarding Social Security, Medicare, Medicaid and other entitlements, I’m hoping I can make the case that these issues will impact readers directly.

    I urge Bacon’s Rebellion readers to bookmark The Retirement Crisis or sign up for the RSS feed. I promise you, we’ll have a lot of fun — and perhaps even nudge the needle of debate at the national level, just as we did with Bacon’s Rebellion in Virginia.

  • THE COST OF HEALTH CARE

    Posted on

    by

    James A. Bacon

    ONE ASPECT OF SETTLEMENT PATTERN’S IMPACT ON HEALTH CARE COSTS – UNDER USED MEDICAL OFFICES.

    The escalating cost of health care is a drag on society and a potential death threat for every citizen.

    The current administration has vowed to do something about escalating health care costs. One idea is to increase the number of doctors. However, doctors are not anything like widgets. Having a greater supply does not drive down the cost. Doctors have worked for centuries to raise the bar to becoming a doctor and thus limit the supply. That seems to have worked to the doctors advantage but it will not work in reverse without draconian intervention in ‘private practice.’

    In a CNN commentary titled “We don’t need more doctors” two well qualified observes today make good case for a proposition that all who want to cut the scale of Agency spending should applaud.

    While the Association of Medical Colleges advocates a 30 percent increase in medical school enrollment, Professor Christensen and Dr. Hwang at the Innosight Institute argue instead for transformational change in the delivery of health care. Their diagnosis matches EMR’s experience.

    Fundamental Transformation of health care anyone? It goes hand in hand with Fundamental Transformation (FT) of settlement pattern, FT governance structure and FT the economic system.

    What society needs is not just a better delivery system but better educated, better trained and more motivated citizens who can manage their own health care. Only the president and hypochondriac billionaires have doctors who know enough about the patient to ‘manage their health.’ All doctors can do is mitigate the crisis when the patient gets sick. Usually it is too late and that is why a quarter of what is spent an individual’s health care is spent in the last three months of their life.

    There is a settlement pattern perspective that will not save as much money as many aspects of systemic change in medical service delivery but one that needs to be considered if only to expand the universe of health system transformation options:

    Society does not need more doctors AND it for sure does not need as many doctors offices.

    How is THAT important? Thousands of new doctors offices have sprouted up in the past decade. Building and maintaining doctors offices that are not used full time is a waste and the cost is passed directly to those who need medical help and to all tax payers.

    How did this happen?

    Every doctor likes to get out of the office – a little golf on Tuesdays, fishing in Montana next week … and have someone to cover for them 24-7. No one can blame them but this means that group practices are very attractive. Group practices are attractive to both specialists and general practitioners. (The desirability of practicing in a group contributes to why many smaller Urban agglomerations in Urban Support Regions have no doctors – but that is another story.)

    Medical practice business advisors recommend from 5 to 25 in a group practice depending on the specialty and the settlement pattern. Because of the dysfunctionally low distribution of human settlements, getting a critical mass of patients to support a practice of 6 to 10 doctors in one location is not easy.

    The solution, especially in Beta Communities of under 10 persons per acre, is multiple offices. Under recent past conditions – cheap gasoline, luxurious Large, Private Vehicles, electronic connectivity, tax advantages and developers who profit from packaging a build to suit for a limited partnership made up of doctors – multiple offices are a win-win.

    The trend has been for group practices to have 2, 3, 4 or 5 offices where one or more doctor practices when the schedule is convenient. It is a grand slam. All the expenses, including depreciation on the building, can be written off and the doctors have flexibility as well as building equity in real estate. (What is the past tense of ‘building equity’?).

    It is not just doctors that are doing this. Dentists, especially specialists, do it too as well as most of health related professionals.

    How big is the problem? The doctors offices that sit empty much of the time would pay for building a lot of hospitals and walk-in clinics for those who really need health care provided by those who do not cost hundreds of thousands to train.

    How to cure the waste? Only allow a doctor’s practice to write off the cost of only one office per doctor. In a heartbeat there would be a whole new advocacy group for better settlement patterns. The benefit of grouping medical services is a current hot topic in the field – see “One-Stop shopping for Better Health” WaPo 21 April 2009. More on that soon.

    In the meantime, there are many ways to cut the cost of delivering health services but if the whole health care system were examined in a way that ferrets out waste such as the excess of Class A speciality office space, the cost of health care would be a lot different.

    EMR

  • A Trip Back to West Virginia

    Posted on

    by

    James A. Bacon

    When I was nine years old and was living in the Washington suburbs, my father, a Navy doctor, decided to retire. He chose to move us to central West Virginia and join a medical practice — a strange choice since we had no ties at all to the area. But Dad was always altruistic and thought he might be able to do some good. It was 1962 and community service, John F. Kennedy style, was the prevailing mood.

    So, we left affluent Bethesda, Md. for rural, coal-battered Harrison County. I had been taking French in the fourth grade back in Bethesda, but when I got to school in the Mountain State, I found that my arithmetic book had been in use since it was printed in 1903. Culture shock is probably too mild a world.

    But I learned a lot. At night we’d hear the throb of diesel locomotives as they pulled a coal haul up a branch line. I would walk for miles, hiking up the hills that had been laid open with big shovels on strip mines. Few laws were in place then, and people would find the beautiful vista next to them blown up and ripped apart for coal.
    Coal operators were supposed to shove the dirt back, but few did. The coal was heavily sulfuric, so leachate from rainwater created orange-yellow ponds of toxic water. We used to gather the skulls of animals next to them, and when we were old enough, blast them apart with the .22 caliber single shot, bolt action rifles that every boy in the Mountain State, including me, had to have.

    My point is that for the several years we lived in West Virginia in the 1960s, I grew to love the place. Some of my school mates’ dads were miners. Some worked on the strip mines. And there was an uneasy history kept quiet by the authorities. The famed rebel organizer Mother Jones was actually put on trial once in town, but I didn’t learn about it until years later. We still were living there when a deep mine explosion killed 78 miners at Farmington on Nov. 20, 1968, including the fathers of some grade school friends.

    So, I was glad that Style Weekly, the only print media outlet left in Richmond that actually does any real journalism, sent me out to southern West Virginia to do a piece about Massey Energy, the Richmond-based firm whose name is usually associated with cancer treatment centers and charity.

    Yet Massey Energy (the Massey family sold their interests years ago) is anything but their Richmond image. Run by a strong-willed CEO, the firm is regularly sued for any variety of matters, including safety issues, deaths, mountaintop removal and union bashing. Last year, the EPA ordered it to pay $20 million for Clean Water Act violations, the largest penalty of its kind. In 2000, a Massey sludge pond spill in Kentucky was judged to be several times the size of the Exxon Valdez tanker disaster in Alaska.

    The firm’s CEO contributes heavily to West Virginia political campaigns, especially that for judges and drew controversy when he was photographed vacationing with the then-chief of the West Virginia Supreme Court on the French Riviera.

    I also visited with environmentalists worried about the threats of floods from sludge ponds and coal silos spewing coal dust next to elementary schools (see photo). But the most stunning thing I saw was mountaintop removal, which is strip mining on steroids. A fairly new concept, it was a topic for a report I did for BusinessWeek back in the 1990s. It is a quantum leap from the old strip mines I used to play on.
    See the story at:

    Let me know what you think.

    Peter Galuszka

  • What’s With VPA Going Private?

    Posted on

    by

    James A. Bacon

    The Virginia Port Authority has always been a kind of strange duck — not quite public, not quite private. Its leadership swings one way or the other as whims suited.

    If it needed money from the state’s transportation funds, it was suddenly more public. But if the news media wanted data about top officials’ salaries, its coloration changed, lizard-like, back to being private, at least until 2007, when salaries were finally disclosed.

    The VPA, an “autonomous state agency,” was created in 1952 and operates three major water cargo facilities in Norfolk, Portsmouth, Newport News as well as a transshipment facility in Front Royal. Just about all of Virginia-bound cargo containers, the most popular way of sending goods, goes through its facilities. The VPA boasts of some of the best deepwater facilities on the East Coast, although aggressive Savannah has beat out Hampton Roads in terms of volume and the global recession has cut shipments everywhere.

    For years, the VPA was run by J. Bobby Bray who helped built up its facilities, and while personable enough, was surrounded by a tough squad of gatekeepers who tended to regard him as a kind of deity needing protection. Until he left several years ago, Bray held court in posh offices on Norfolk’s waterfront and was frequently seen schmoozing with legislators and state officials in Richmond.

    So, one has to wonder what Bray’s role is with proposal to run the facilities and invest in them from CenterPoint Properties, which is an arm of CalPERS, the California state pension system. The Chicago-based firm has presented an unsolicited offer to lease the port with all kinds of goodies thrown about.

    Bray says he likes the idea and small wonder he does. The former VPA executive director is now with Kaufman & Canoles Consulting which has been hired by CenterPoint to help prepare its bid, according to The Virginian-Pilot.

    Bray told the Pilot’s editorial board that other groups are talking about the same kind of public-private partnership deal with the VPA but that they “just didn’t, fit whereas CenterPoint did.”

    Further details are somehow not available. We don’t know who the other supposed contenders are. Bray could not be reached when a Pilot reporter called for more details. But then, that’s par for the course, isn’t it?
    Consider that Virginia loves public private partnership deals. It is a cunning way that the state’s fiscal conservatives can unload public facilities onto private entities and not have to raise as many taxes while praising free market economics and letting somebody else make a profit. And, private entities can bail out projects after somebody in planning screws up on traffic volumes and tolls or other sticky little details.

    That’s just what the state did with the Pocahontas Parkway in Richmond when the superhighway and magnificent bridge spanning the James River did not live up to revenue expectations. Panicky state officials, worried about what a default would mean for the state’s pristine bond credit rating, got the Australian TransUrban firm to bail them out.

    So what goodies is CenterPoint Properties and/or the California Public Employees Retirement System offering? From what I can make out of the deal, CenterPoint pays VPA $500 million upfront, an ongoing profit share of up to $1.3 billion and greater cargo volumes if it lets CenterPoint manage its properties for something like 60 years.

    CenterPoint claims that the state would $8.9 billion in economic benefits. About half of that, $4 billion or so, would come from money the state would save by not having to run operations. The private firm would get the VPA’s annual claim on 4.2 percent of the commonwealth transportation fund which last year amounted to $36 million. CenterPoint would fund the deal with a 39 percent equity payment and 61 percent in debt that it would absorb.

    VPA would continue to get $987 million in annual payments from CenterPoint and pay local communities such as Norfolk which is still being paid for terminals VPA took over years ago.

    What does CenterPoint get? Some pretty darned good cargo facilities built with considerable public money and (semi) public oversight, that’s what. And CenterPoint gets first rights to develop the gigantic Craney Island spoil site which has long been intended for a massive new cargo crane facility costing billions. Craney Island must be one of the best, and last, undeveloped deepwater port facility sites left on any American coast.

    CalPERS is one group that the financial community watches closely for market cues. It had been reputed to have some of the brightest and most aggressive investors short of TIAA-CREF. But don’t forget that in last year’s financial meltdown, CalPERS took some huge lumps by having invested in dicey California real estate, losing about 35 percent in its housing portfolio and forcing a shift in top management.
    So, forgive me for being simple, but am I missing something here? What’s the urgency? Why does a big time institutional investor like CalPERS so badly need to come swooping in to line up managing some of the best and most promising port facilities in the U.S., especially when it is taking a huge hit with bad real estate plays? Is VPA going under and we don’t know it? Can’t Virginia’s officials can’t help themselves when they hear the words “public private? They seem to absolutely love shoving public projects paid for with public money off to the private sector because it fits some kind of fiscal philosophy they all subscribe to, the real public be damned.
    Or is it inside baseball? Given Bray’s conflicted involvement, that’s probably a fair guess.

    Peter Galuszka

  • Megaprojects Fall Hard

    Posted on

    by

    James A. Bacon

    Nearly nine years ago when I was moving back to Virginia, I had to pick a place to live. Somehow, we ended up in southwestern Chesterfield with a house on a lot with huge loblolly pine trees — an attraction that I guess involved me somehow channeling Eastern North Carolina where I had lived off an on since I was 18 months old.

    It is the outer edge of fast-growing suburbia, exurbia, I guess, but I am sure EMR will set me straight. Traffic wasn’t too bad and here and there were old farms with giant oak trees still flanking U.S.360, better known as Hull Street.

    How things have changed. First, there was a mad rush of strip malls and new subdivisions. The old farm is now a Super Wal-Mart in the making. New restaurants of all types popped up, generally enriching the choices if you can get past the dearth of decent service. The labor pool out here in exurbia is truly thin. Last week, when a relative was visiting and we tried out a new seafood joint, it took three waiters and 45 minutes just to get our drink order straight.

    Now comes the news that one of the largest planned subdivisions — Lower Magnolia Green — has defaulted on a $96.9 million loan and the land is up for auction. The plan had been for 3,550 new homes although not that many have been built and even fewer occupied, leaving owners in the lurch because it seems that some promised amenities won’t be coming anytime soon. I wondered what was going on since every time I drove past, I saw some bulldozers, but they hadn’t been moved in weeks.

    This is the second time since the recession began that Chesterfield has seen a major subdivision tank. Last fall, as economic storm wailed, an even bigger project called Branner Station with 4,988 homes was put on indefinite hold. I know that plenty of projects in even faster-growing Loudoun and Prince William Counties have suffered similar fates.

    Not a bad thing, actually. Chesterfield needs a breather. The Magnolia Green project dates back to the early 1990s when Chesterfield’s Republican board was packed with pro-growth types. It wasn’t so much that they were bankrolled by developers, although they were, it was that growth became a kind of religious mantra for them. And we’ve been paying for the consequences ever since with overstuffed schools, roads, bad waiters, etc.

    The popping of the real estate balloon did Magnolia Green in. And that brings up another point. One of my favorite economic columnists is James Surowiecki of The New Yorker. His most recent work looks at the financial services industry and there is a tie to Chesterfield’s woes with overbuilding.

    To understand what has been happening in finance in the past few years, Surowiecki says we have to deconstruct the various phases of financing. Banking used to be considered a boring, plodding career path. Rather than being an end unto themselves, banks merely worked to serve more creative endeavors, such as setting up U.S. Steel and International Harvester in the late 19th Century or helping electrify cities and the countryside in the 1920s. My grandfather was part of that. We was a bank president in Western Massachusetts, among his other businesses, and helped wire his town with light bulbs. The next wave came with financing info tech in the 1980s and 1990s.

    But this latest banking boom is very much a different animal. As Surowiecki writes: “The housing bubble was unique, and uniquely awful. Each of the previous waves had come in response to a profound shift in the real economy. With the housing bubble, by contrast, there was no meaningful development in the real economy that could explain why homes were suddenly such much attractive or valuable. The only thing that had changed, really, was that banks were flinging cheap money at would-be homeowners, essentially conjuring up profits out of nowhere.”

    As banks joined in the party and raked in profits, at least for a while, we ended up with “acres of empty houses in Phoenix,” Surowiecki writes.” Or, for that matter, lots of ripped up red clay and idle bulldozers in Chesterfield.

    What’s next? Perhaps a rethink of how Virginia’s county boards and their planning staffs consider such mega-projects in the future. They may be distracted with budget shortfalls, but the chance is right now to make a major shift in philosophy. Will they seize it? I hope so.

    Peter Galuszka

  • NOTES ON A & M SETTLEMENT PATTERN COMMENTS

    Posted on

    by

    James A. Bacon

    TMT:

    EMR read that WaPo story about “commuters” from Page County too. It was painful.

    Steve and Ricky made location decision that they THOUGHT were in their best interest.

    But it turns out they were not in their best interest.

    What they believed to be good decisions turned out to be bad decisions because many other equally uninformed citizens believed the same things.

    They watched the same evening news and the same sit coms, they consumed based on the same advertising… They all made mistakes and the collective impact is dysfunctional human settlement patterns.

    If Steve and Ricky had only known something about the collective impact of least-common-denominator settlement pattern and consumption decisions …

    But then Steve smokes so his decisions about human settlement patterns (and other forms of consumption) might have been just as bad as his decision about human health…

    If location-variable costs had been fairly allocated Steve and Ricky (and their “wifey’s” and all the others who made similar decisions) would never have been tempted to make those bad decisions.

    The Steves and Rickys of the world are why if markets are to work they must be informed. The playing fields need to be leveled, not tipped in favor of the Masters of the Universe.

    The Steves and the Rickys are why there needs to be an end to the Business-As-Usual political duopoly. Both parties try to dupe citizens into NOT looking out for their own REAL self interest. (Want a current example? Try the McDonnell / Bolling “More Energy, More Jobs” Program. Or the programs of the candidates from the other clan.)

    The Steves and Rickys are the reason there must be an end to what now passes for ‘journalism,’ The current pap fails to get to the root causes of most citizen concerns about the future – and makes those who are caught in reality seem like victims rather than coconspirators. See THE ESTATES MATRIX

    Steve and Ricky might have learned about the how to make smarter decisions. Books and journals written since the 1920s lay the issue out in detail.. The 1920s was when the impact of today’s settlement patterns first started to draw attention and criticism.

    More when we get to Larry’s observations.

    Accurate:

    Good to learn the details of your relocation decision.

    You will find a lot more folks in the Houston NUR that agree with your outlook on life than you did in the Portland NUR. Tom DeLay is a local hero. Many seem to hold Bob Barr, Ron Paul and Mike Huckabee in high regard.

    EMR knows something about Houston – an A & E firm for whom he was a Sr. VP planned and engineered large projects in the Region, SPI had an office there for a few years and EMR visits from time to time.

    Let us know how you like the weather in July, August, September and October. Some really like it. Some, not so much.

    Where did you decide to buy your $100k home? Is it near your new work and great places to get Services / Recreation / Amenity?

    Have you been riding the new Light Rail system? Let us know what is happening around the stations? Does it look anything like what is happening around the Light Rail stations in the Portland NUR?

    Has TexDOT figured out a way to pay for more circumferential expressways?

    After you have been there a year and add up ALL your costs, let us know what you think about the total cost of living. One reason house prices are so low in the Region is that the property taxes are so high.

    Depending on what you choose to do, living CAN BE cheaper in Texas and in the Houston NUR than many other places. That is because Households, Agencies, Enterprises and Institutions have been subsidized by the consumption of Natural Capital, not just in Texas but world-wide.

    Look forward to getting your report.

    Groveton:

    You have a point about Mosquitoes and Alligators.

    In the context that Larry presented, however, EMR still goes with the reverse roles. It is human settlement patterns that have citizens and their Organizations in their jaws – folks like Steve and Ricky. They think it is ‘the economy’ but it is the distribution of human activity at and near the surface of the planet.

    In the long term and with respect to collective impact, mosquitoes HAVE BEEN far more deadly – like dysfunctional human settlement patterns.

    No one pays much attention to the settlement pattern until it bites them – like it did to Steve and Ricky in Page County.

    Mosquitos and alligators or alligators and mosquitos, either way, human settlement patterns control the economic, social and physical trajectory of society.

    Larry:

    You did not bother to read Deep Economy before you started asking questions about the small Urban enclaves in Georgia.

    EMR could provide you with insights based on small towns in where he has lived, worked and visited in Georgia, Montana or in the Heart Land (See Column of 3 Oct 2005) or on jobs (24 May 2004) but then you would not believe EMR if he took off a month a spelled it all out for you again. You would dive into the pepper silo looking for flyspecks.

    If you are serious about finding some answers to your questions, here are some places to start:

    You could read Mike Shuman’s Going Local: Creating self-Reliant Communities in a Global Age. Many specifics are compatible with McKibben’s perspectives in Deep Economy.

    You could look in on Rosseta, PA to get some clues – or at least read about it in Chapter 1 of Gladwell’s Outliers.

    It you do not want to go that far, check out Abingdon to see why it is different than Luray (in Page County).

    Or if you want to do your research in Georgia check out why Tifton, Dahlonega, Madison and St. Marys make ‘best small towns’ and ‘most charming towns and villages’ lists and the places you describe do not.

    You could become a leader in one of these places and attract other ‘Lone Eagles’ to build Balance. Or you could help them evolve a Water Buffalo Commons when everyone moves to the Atlanta NUR, one of the smaller MSAs or one of the 12 Micropolitan Areas in the state.

    Bet there are a lot of Steves and Rickys in the Georgia towns you describe. Hope they make good decisions about where to go next.

    Some time ago EMR suggested that if a nation-state sets out to create a consumer driven economy, they must have a comprehensive strategy to educate the citizens in something beside Mass OverConsumption.

    Bad information and Myths about the way the world works wastes a lot of lives.

    EMR

  • A & M SETTLEMENT PATTERNS

    Posted on

    by

    James A. Bacon

    There is no escaping the economic, social and physical importance of human settlement patterns.

    Larry Gross has it ‘almost’ right concerning human settlement patterns in his comment following A & A HOUSING. He just has the alligator and the mosquitos mixed up.

    It is human settlement pattern that is the ALLIGATOR.

    Economic Prosperity (including the type and location of Jobs), Social Stability and Physical (environmental) Sustainability are more than just MOSQUITOES but they are determined and controlled by human settlement patterns.

    Sorry Larry, the cumulative impact of 12.5 Percenter decisions cannot be papered over with cute analogies.

    For a refresher on reality check out Bill McKibben’s Deep Economy: The Wealth of Communities and the Durable Future. McKibben presents a profoundly important but partially flawed and a little out of date perspective on the trajectory of civilization. More on both the good and the bad of this important book soon.

    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.

Advertisement

Advertisement

Advertisement

Advertisement

About

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

Fund the Rebellion

Shake up the status quo! Your contributions will be used to pay for faster download speeds and grow readership. Make a one-time donation by credit card or contribute a small sum monthly.

Can’t wait until tomorrow

For your Bacon’s Rebellion fix?

Enter your email address to receive immediate notifications of new posts by email.

SUBSCRIBE

Search Bacon’s Rebellion

Categories

Archives

The Jefferson Council

Protecting Thomas Jefferson’s Legacy at the University of Virginia

Forgot Your Password?

Shoot me an email and I’ll generate a new password for you.

Latest