Bacon's Rebellion

  • Check Out the “Retirement Crisis” Blog

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    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

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    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

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    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?

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    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

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    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

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    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

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    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

  • A & A HOUSING

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    James A. Bacon

    What one has been reading about Affordable and Accessible Housing for the last five years at Bacons Rebellion is confirmed by WaPo.

    Some clarifications:

    1. Aggregating data by municipal jurisdiction is deceiving. “Upper Montgomery County” (Radius = 25 Miles) is more comparable to Eastern Loudoun County (Radius = 25 Miles) than it is to “Lower Montgomery County” (Radius = 5).

    2. Municipal borders to not identify organic components of human settlement pattern – Fairfax County contains all or most of 9 Beta Communities.

    3. “Average” prices are poor measures of real conditions with widely varying parameters over large areas – Fairfax County is 244,000 acres.

    4. WaPo uses the word “core” but the WaPo “core” is 13 times smaller in area than the Core of the National Capital SubRegion (area inside the Clear Edge) as defined by Regional Metrics.

    With these reservations, see the map in WaPo’s 2 May 2009 Real Estate section on home values.

    Appraisals for refinancing (not foreclosures) of even well located dwellings in the Radius = 40 to Radius = 50 Miles Radius Band suggest values are down 50 percent from late 2006.

    That brings them to about where historic trends would put shelter values but for the Agency fueled housing bubble and HyperIndividualism – the erosion of the balance between private rights and community responsibilities.

    There must be Balance of J / H / S / R / A at the Community scale if there is to be Affordable and Accessible Housing to support a economic, social and physical sustainability.

    Trickle Down and ‘drive-til-you-qualify’ was never an intelligent choice for providing shelter but now that humans (led by the US of A’s citizens) have burned through much of the Natural Capital accumulated over the last 2 Billion years it is time for Fundamental Transformation or Collapse.

    EMR

  • Broadband’s Problems in Poor Areas

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    James A. Bacon

    Years after the introduction of the Internet, it seems amazing that some citizens of the Old Dominion do not have access to broadband, but that’s the way it is.

    For-profit companies ignore mountainous areas or poor flatlands because they claim it costs too much to pay the installation costs. For several years, governments have promised to fill the gap. Indeed, Barack Obama identified the problem in last year’s campaign and promised solutions which could cost $7.2 billion in stimulus package money.

    But as The Washington Post points out today, even government involvement is dicey. It looks at two small Southwestern communities — Lebanon and Rose Hill — and shows just how different their broadband experience has been.

    In Lebanon, a small burg where the tobacco fields end and the coalfields begin, Rep. Rick Boucher and Gov. Mark Warner put together a $2.3 million grant package to wire the area. It was wise move because defense contractor Northrup Grumman and software maker CGI swooped in to take advantage of the new, nearly instantaneous communications and created 700 jobs paying about $50,000 a year.

    Poor Rose Hill had a different story. Boucher brought grants worth $700,000 in part for the multi-billion settlement with four tobacco companies in 1996 and other sources to wire Rose Hill. But only three homes have signed up for the service which costs about $50 a month.

    It is stories like these that make the U.S. a Johnny-Come-Lately in broadband. Among advanced industrial nations it comes in pathetic 15th place, down from 13th place a few years earlier. South Korea, Japan and some European countries are farther ahead.

    Some argue that it is easier to wire the crowded neighborhoods of Tokyo or Seoul and there’s truth in that. But the lame performance hurts the U.S. as it struggles through recession and tries to make a tech comeback amidst tough global competition.

    Part of the problem is the easy-profit, next-quarter thinking of the big U.S. communications firms. It is much easier for Comcast or Verizon to wire concentrated downtowns or rich suburbs faster since they can jack up their prices and go for a triple play of broadband, digital phone and cable television all in one expensive monthly price of about $200. Doing so gets them a faster and fatter return on equity and makes them look better on Wall Street.

    That sure was the case in Philadelphia a few years ago when I wrote a story about the problem for a national business magazine. Inner ghetto areas were left behind as rich, white neighborhoods got wired. One African-American small business owner told me that he wanted broadband for his business but doesn’t want to also have to pay hefty fees for HBO, Starz and ESPN which he doesn’t watch when he is working.

    Philadelphia’s government bravely launched a $15 million broadband project and Earthlink won the contract. But it was a bad play since Earthlink was hit hard by its exposure to antiquated DSL technology and got in such financial trouble it dropped Philly. Some private investors got the project for a song and few residents have signed up for broadband.

    In Southwest, other anomalies come into play. Lebanon has a high high school graduate rate and is the locus of a coalfield economic development authority. These people were highly annoyed with me some years back when I did a piece on the coalfields that didn’t paint the rosy picture they wanted. I noted that coal is dirty, dangerous and cyclical. Locals have trouble getting adequate health care given their isolation. One hospital in Clintwood, the only one for miles around, shut down abruptly because the Ohio company that owned it went out of business.

    Still, Lebanon had an edge over Rose Hill which has a much lower education rate, the Post reports.
    The jobs that Lebanon got are good deals because too many times, the only new employment people find is with call centers that shut down as fast as they set up.

    The problems also raise questions about Virginia’s tobacco commission which decides how to divvy up the oodles of bucks the state gets from the tobacco settlement. Years ago I wrote about how the first act of the highly-politicized commission was not to pay for health care or infrastructure or educate kids not to smoke. No. They gave thousands away to holders of tobacco quotas, some of whom lived in Brooklyn, Las Vegas or the Gold Coast of Chicago and had very little to do with Virginia. This was done on the theory that they were going to lose money. Go figure.

    Anyway, the tale of two towns in the mountains shows the problems of providing broadband in poor or isolated areas. It’s amazing since it is already 2009 and most of us take broadband for granted.

    Peter Galuszka

  • Why Can’t Richmond Be Charleston?

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    James A. Bacon

    I took a pleasant spring break trip last week, but my love-hate relationship with Richmond came roaring back to life. That gnawing emotion came back when my wife and I traveled to the Low Country of South Carolina and spent a rainy night in charming Charleston. When I left, I asked myself the usual question — why can’t Richmond ever get it together?

    I’ve been visiting Charleston off and on since the 1970s and have stayed at a number of hotels. This time it was Elliott House with our own brick entrance just a little North of Broad. Dinner was a cheap, oyster-stuffed happy hour at a local bar and the next morning, we did the usual rounds of the market, some art galleries and the Battery where the elegant homes run vertically to tap every sea breeze and some have special supports to avoid the same kind of damage wrought by an 1886 earthquake.

    As we drove off, I kept wondering why Richmond, which has arguably more history and is a bigger deal as a city, comes nowhere close to its Southern cousin as a glamorous tourist destination. True, Richmond doesn’t have the dramatic setting between two wide, tidal rivers or the mild, subtropical climate where the sticky sweet perfume scent of gardenias wafts everywhere.

    But Richmond surely has the history from Patrick Henry to the antebellum South to the War. The conflict may have started at Charleston but it was run from Richmond. Architecture is different, with Charleston having more Latin influences but Richmond’s no slouch given Church Hill’s Federalist townhouses, the stately mansions on Monument and the Victorian porches in the Fan, not to mention Jefferson’s magnificent state capitol.

    So why does Richmond give me the blahs? Why is its downtown so lackluster? Where are the tourists when its not Race Week at RIR or Folk Festival time? How come Broad Street still looks like Atlantic Avenue in Brooklyn and Schockoe area has never reached its cobble stoned potential? After all, Richmond is a lot closer to major population centers and, unlike Charleston, is right next to the major north-south interstate.

    From what I know of Charleston, which isn’t that much, the city wasn’t all that big a deal until the 1970s. It was pretty much a Navy town with strip joints and lots of earmarks from Mendel Rivers, its military-crazed overseer in Congress.

    A lot of what is Charleston today is the brainchild of long time mayor Joseph P. Riley who started unlocking the city’s tourism potential when he arranged for the unusual if not unlikely Spoleto Festival back in the late 1970s. This celebration of the arts modeled after one in an Italian town immediately drew tourists — so many, in fact, that Riley urged city residents to rent out rooms in their homes because there weren’t enough hotels. Thus was born a booming Bed & Breakfast industry.

    Charlestonians managed to remake and renovate their town’s various charms. They didn’t want to turn into a tourist trap where nobody lived like Williamsburg or an out-of-control party town like New Orleans. Charleston, despite its small population of about 126,000, remains one of the top five travel spots in the U.S. and from all appearances from our pedestrian tour, it is thriving.

    Why can’t Richmond? A lot of reasons, I guess. One is that we just don’t have a Riley who is competent enough and has enough staying power to get things done. Doug Wilder had the potential, but ruined it by perpetual squabbling. The white and black city leadership never can get it together. Despite their lip service, the whites actually moved out to Innsbrook years ago. The Broad Street revival hasn’t happened yet and one wonders if a few new court buildings will be worth driving miles to see on a Friday night. True, First Friday is a hit, but it has limited appeal pretty much to teenagers like my daughters.

    The rich African-American culture just steps away in Jackson Ward was ruined back in the 1950s when white leaders dug a superhighway right through the neighborhood, moving thousands of black residents each month in the process. Eugene Trani, the empire builder and outgoing president of VCU who got his usual fawning treatment from the Times-Disgrace Sunday, hasn’t helped matters by throwing up lots of ugly, bland, boring college buildings from Oregon Hill to MCV.

    Even Norfolk, once a Navy town hell hole of unspeakable ugliness, has remade its downtown to take advantage of its watery venue, albeit the effort is now showing its age.

    So why can’t Richmond be Charleston? I just don’t have a good answer.

    Peter Galuszka

  • DISPERSAL VS FOCUS

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    James A. Bacon

    DISPERSED RENEWABLE ENERGY SUPPLIES VS FOCUSED SETTLEMENT PATTERN ENERGY DEMAND

    Time again to consider things that directly impact humans ability to achieve a sustainable trajectory for their civilization.

    First, two great items from CNN today:

    1. Time has “The Great Recession: America Becomes Thrift Nation.” A lot of great Timesqe poster material.

    2. EMR does not often quote former Speaker Hastert’s staffers but John Feehery has some good things to say about “What’s Driving the U.S. Over the Cliff?”

    BOTTOM LINE FROM BOTH: If a nation-state sets out to create a consumer driven economy, they better have a comprehensive strategy to educate the citizens in something beside Mass OverConsumption.

    Now to Energy:

    Readers of this Blog may recall EMR’s perspectives concerning the dispersed distribution of renewable energy sources and the focused energy demand of Urban civilization.

    WaPo today tees off in a good direction with “In Green Energy, an Environmental Paradox: Wind and Solar Projects May Carry Costs to Wildlife.” Well, it is not JUST wildlife…

    Those interested in the topic of spacial distribution of human activities will find the graphics on the jump page (A 14) of critical importance.

    Check the “demand for land” graphic and then recall that at MINIMUM densities that functional Urban settlement patterns for the projected 2050 population would occupy less than five percent of the Lower 48.

    See where the renewable sources are located and then recall where 85 percent of the population is – in a dozen MegaRegions. The demand is not close to the foci of the renewable resources.

    The article focuses on the impact of transmission lines on wildlife. It does not even mention the gross waste of transmission line loss carrying mega watts past Open Land.

    Nor does the story mention the need to cut energy demand, recycle waste heat and carry out the other energy conservation strategies that result in even more compact settlement patterns.

    The area per Terawatt-Hour graphic is worth the cost of the paper today.

    EMR

  • Religious “Freedom” in Virginia

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    James A. Bacon

    It’s Good Friday and thoughts turn to the resurrection. But that begs some questions about Virginia, religion, bias and other oddities, not to mention myths.

    A couple of months ago, I was driving and listened to a “Fresh Air” segment that actually ran on NPR a year before. The guest was Steven Waldman who had written a provocative book called “Founding Faith: Providence, Politics, and the Birth of Religious Freedom in America.”

    It was a fascinating interview for me since I have long heard all the old saws here in Virginia about how our beloved state was a torch of religious freedom, that it was the bedrock of a “Christian” America and about how all over our founding fathers, such as the beloved Thomas Jefferson, rang the bell of Christian freedom.

    Bunk, says Waldman (I went back and listened to his interview).

    For one thing, Virginia was anything but a hotbed of religious freedom. As in most of the pre-revolutionary states, freedom involved “toleration of various Protestant sects and did not involve Jews or Catholics or atheists,” says Waldman.

    Indeed, Catholics (I was raised one, by the way) were regarded as unwholesome and dangerous “papists” and their church was a “whore” for taking money offerings. Our freedom-loving colonist forefathers prohibited Catholics from holding office in 1640 unless they took an oath of allegiance to the Church of England. “Popish” priests were to be deported. Jews likewise didn’t exactly receive a welcome mat by the so-called freedom-loving “Christians.” They were kept out of Virginia for at least a couple of generations in the 1600s. Also not welcome: Quakers and Puritans.

    Christian conservatives love to characterize Virginia and the U.S. as a “Christian” nation. Not exactly, says Waldman. With the revolution came the idea, albeit a somewhat limited one, of religious tolerance. George Washington, for instance, encouraged the rapid anti-Catholicism among his troops to end. Why? He realized they needed help from mostly-Catholic French Canadians against the British.

    Or, take Thomas Jefferson, the demigod that everyone in the Old Dominion reveres and some have named their neo-con think tanks after, even if they have no idea of what TJ was really thinking. Although deeply religious, TJ was not exactly your faith-healing, Jesus-praising evangelical that you might see on TV all bundled up in the American flag while clutching a crucifix.

    TJ had a lot of trouble with the Bible. He thought Jesus Christ was a brilliant social philosopher but he didn’t buy miracles, divinity and a lot of other stuff. Nor did he especially like Christmas or Easter.

    In fact, in later life, TJ got out a pair of scissors and started cutting up the Bible to eliminate the parts he didn’t buy. Gone were a lot of miracles. Christmas? Gone. And so was Easter. He ended his TJ Bible edition with the rock moved against the tomb on Good Friday. “It never moved again,” says Waldman.”

    The end. As Waldman says, “This guy would never be elected today.” Happy Easter!

    Peter Galuszka

  • The Economy: Weapon of the Future

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    James A. Bacon

    Consider this, a “Wait, wait, there’s more” posting. Jim Bacon just noted the interest of the Chinese and Russians in using the Internet to disrupt American infrastructure such as electrical grids and the like.

    Well, Politico reports that the Pentagon has been getting into the act in its own way. Last month, it staged a two-day exercise about how to respond to the threat of foreign nations using whatever economic means available to screw over the U.S.

    The two day event near super secret Fort Meade in Maryland worked in a Dr. Strangelove-style “War Room.” Hedge fund managers and economics professors replaced bomber jockeys and nuke theory gurus as the players. Their game: blunt attempts by China, Russia or anyone else to toast the U.S. economy through any variety of plays, such as currency manipulation or shorting stocks.

    According to Politico, various scenarios acted out included the collapse of North Korea, the Kremlin playing around with natural gas prices, flare ups between Taiwan and China and other crisis. Players assumed roles of Russia, China and the U.S. China won, since the U.S. and Russia spent so much time one-upping the other that they were diverted.

    When you think about it, economics is really the prime reason for many wars. It was behind the American Revolution (not the gleaming thoughts of Patrick Henry, Thomas Jefferson and other rhetoric stars). Ditto Japan’s economic ambitions in Asia. Hitler, of course, was bent on ideology.

    War games can be fun. When I was in college majoring in international relations, my dorm was near the Fletcher School of Law and Diplomacy, a big deal foreign affairs graduate school. It was controversial because these were the Vietnam years and Fletcher hosted lots of CIA, Foreign Service and military types. I found some of them interesting because they had actually had experience in the field, unlike many of my professors who were more bent on protest alone.

    Anyway, I got to know an Air Force colonel who was doing a mid-career teaching stint at Fletcher and he invited me to participate in a game he was doing with students. It lasted two days without sleep and it was fascinating (although I can’t remember exact details).

    The point of the Ft. Meade exercise seems to be that the weapons of the future won’t be Stealth destroyers or F-22 Raptors but Sovereign Wealth Funds, Credit Default Swaps and hot money currency plays.

    Might be interesting to know where Virginia, the nation’s No. 2 defense industrial state, fits in with this.

    Peter Galuszka

  • If You Liked Oil as a Strategic Weapon, You’ll Love This

    Posted on

    by

    James A. Bacon

    There are sound economic and environmental reasons to build a distributed grid system for producing and distributing electricity, as we have explored on this blog. Here’s another reason: cybersecurity. As reported today in the Wall Street Journal, Cyberspies traced to Russia and China have penetrated the U.S. electrical grid and left behind programs that “could be used to disrupt the system.”

    You like being hostage to Middle Eastern oil sheikhs? Let’s put it this way, if the oil sheikhs have a hand metaphorically clamped firmly around our privates, anyone with the power to take out our electrical grid has our privates encased in one of those Medieval “lemon squeezer” torture devices and a hand on the tourniquet. Writes the Journal:

    The espionage appeared pervasive across the U.S. … Many of the intrusions were detected no by the companies in charge of the infrastructure but by U.S. intelligence agencies, officials said. Intelligence officials worry about cyber attackers taking control of electrical facilites, a nuclear power plan or financial networks via the Internet.

    Authorities investigating the intrusions have found software tools left behind that could be used to destroy infrastructure components, [a] senior intelligence official said.

    I’m not terribly worried about going to war with Russia or China anytime soon, but you never know how geopolitical alignments might look a decade from now. Moreover, if Russian and Chinese intelligence can penetrate our electrical infrastructure, who’s to say that terrorists couldn’t as well?

    Primary responsibility for overseeing the electrical grid here in Virginia is the State Corporation Commission. The SCC needs to begin studying this problem immediately and (1) determine to what extent it is a real threat (as opposed to a threat conjured up by some high-level bureaucrat looking to scare up more funding for his program), (2) how vulnerable Virginia is to disruption, and (3) what strategies we can pursue to offset the risk. A central question: Would a decentralized, distributed grid employing more locally generated power sources (including household-level wind and solar) be less vulnerable?

  • Is Passenger Rail Finally Leaving the Station?

    Posted on

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    James A. Bacon

    Could it be that there is life in passenger rail in the Old Dominion after all? Such could be the good news now that the Commonwealth Transportation Board has agreed to spend $25.2 million over the next three years to add two new passenger trains from Washington — one to Richmond and the other to Lynchburg.

    The board wants to see how ridership goes. Lynchburg already has one daily train, descendant of the famed Crescent which raced from D.C. to New Orleans. The Lynchburg route starts in October and another extra will go from Richmond to D.C. in December.

    Hats off to Norfolk Southern for agreeing to put up 30 percent of the $41.5 million cost to improve both passenger and rail service in Lynchburg which is easing the deal. Now if CSX will improve its north-south artery through Richmond and clean up chronic delays at the Acca Yard, the Old Dominion could really be high-balling along.

    Suddenly, there finally seems to be movement on passenger rail. A little more than 15 months ago, I quoted Norfolk Southern CEO Charles W. Moorman as saying that the cold reality was that the the political will didn’t exist to boost passenger rail. Freight carriers like NS and CSX must tend to their principal responsibilities of improving shareholder value and they do that by providing good freight service. Only Amtrak offers national passenger routes.

    I got fried for running Moorman’s comments as BR’s intrepid readers thought I was dissing passenger rail. Nothing could be farther from the truth. Anyone who knows me well realizes that I am a “foamer” or an individual so enamoured with choo-choos that I start foaming at the mouth when I hear the mournful horn of a diesel. When I had a basement I had a sizeable HO layout and long to rebuild one.

    How to explain the turnaround on rail? Part of it comes from Barack Obama’s push for massive infrastructure improvements and the federal and state spending to pull it off. He’s got my vote on this. America’s and Virginia’s rail, port, highway, water and sewer and electrical systems badly need upgrades. The last time the U.S. launched any serious major infrastructure project was the 1950s when Dwight Eisenhower started Interstates.

    Broadband also needs to reach out to rural parts of the state since big-time carriers like Comcast tend to wire up wealthier middle class neighborhoods and suburbs first because they can bundle Net, digital TV and digital phone service into one expensive and profitable package. Poor rural and inner city folk may need broadband to start up a business, but they can’t spend upwards of $200 a month buying Starz, TMC and ESPN, too. Maybe some relief is on the way.

    The rising popularity of infrastructure improvements is based in part on getting out of the recession but it is suddenly in vogue and that is breaking some political barriers to thinking about the possibilities of rail. The shift in thinking is becoming evident as “pay as you go” and “public private partnership” ideas so popular since the 1990s with neo-cons and other conservatives suddenly seem so yesterday and so limited. They might be fine for a small stretch of superhighway or a bridge (entailing lots of patterns of human settlement issues well known on BR) but they can’t really do much to bring on rail and all of its benefits.

    And, you have to wonder just how these deals are funded and how much the foreign highway operators back in Sydney or Barcelona can raise tolls to meet their debt obligations. Unless the Australians and Spaniards who often run such public-private projects are geniuses at financial planning — and the current crisis has shown that very few are — Average Joes commuting by car to work are just going to avoid their highways and bridges if they jack up the prices too much. Then, they go bust, dashing hopes that private enterprise and not government is the salvation for everyone and everything.

    Rail is a perfect alternative to a lot of these problems. Improvements require massive amounts of money but the rail fares will be cheap and the trips less polluting. To be sure, the steps so far are tiny and they will require public funding.

    Virginia has a great tradition of railroading and some of the first ever roads went through the Old Dominion. The Confederacy was saved for a while by the old Wilmington and Weldon that ran war supplies to Richmond from blockade runners docking in the Cape Fear, N.C. area. Famous passenger trains include the Chesapeake & Ohio’s “George Washington” that ran from Newport News and D.C. to points West, Norfolk & Western’s bullet-nosed “Powhatan Arrow” and, of course, Southern Railways’ “Southern Crescent.”
    Could trains like that ever come back? One can only dream.

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

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