• IN THE NEWS — CHINA

    At 3/23/09 6:21 PM On IN THE NEWS: VOLUME ONE, Groveton said…

    โ€œ…….. there is a slightly more important story in play:

    โ€œhttp://www.ft.com/cms/s/0/7851925a-17a2-11de-8c9d-0000779fd2ac.html

    โ€œFrom the article:

    โ€œThis is a clear sign that China, as the largest holder of US dollar financial assets, is concerned about the potential inflationary risk of the US Federal Reserve printing money,โ€ said Qu Hongbin, chief China economist for HSBC.

    โ€œI never thought I’d live in a world where the only people making economic sense are the Communist Chinese.โ€

    …………….

    Groveton is right to be concerned.

    The Chinese have been using their trade surplus to buy up US Treasury Bonds. Now they are threatening to sell them and / or not buy any more unless they have โ€œassurancesโ€…. In effect controlling the US of A economy.

    There are, however, other problems:

    China is using the excess profits from burning through its own Natural (and social) Capital and the Mass OverConsumption of its trading โ€˜partnersโ€™ to buy up resources on the cheap.

    โ€œChina Gains Key Assets In Spate of Purchases: Oil, Mineral Are Among Acquisitions Worldwideโ€ 17 May 2009 WaPo

    China is also suggesting that nation-states importing its manufactures provide China with carbon off-sets so they can continue Business-As-Usual.

    โ€œChina Seeks Export Carbon Relief: China has proposed the importers of Chinese-made good should be responsible for the carbon dioxide emitted during their manufacture.โ€ 17 March 2009 BBC

    EMR would amplify Grovetons observation (โ€œI never thought I’d live in a world where the only people making economic sense are the Communist Chinese.โ€) with this:

    โ€œChina governance structure is far more effective than the nation-states that purport to have democracies with market economies when it comes to managing what might be called โ€œLibertarian Capitalismโ€ or โ€œTop of the Ziggurat Capital Selfishnessโ€ that characterizes Supercapitalism and widens the Wealth Gap.

    As EMR spelled out in The Shape of the Future:

    In the quest to find a sustainable trajectory for civilization, THERE ARE NO VILLAINS.

    However:

    The vast majority of humans on the planet do not yet have governance structures or the information that would allow them to seek their individual and collective best interest.

    Much worse, the vast majority of citizens in US of A and other quasi-democracies with quasi-market economies are badly informed and thus do not understand the cumulative impact of their actions and do not take actions to further their individual / Household enlightened self-interest.

    Will China give other trading blocks, nation-states and Regions the incentive to undertake Fundamental Transformations?

    Or will China control because others fail to make Fundamental Transformations?

    The answer may be in the hands of the 20,000,000 who have lost their jobs recently in China. Will they understand the need for Fundamental Transformation in China?

    As Louise Omundson of Great Falls (Montana) said some time back:

    โ€œWant Change (Fundamental Transformation)?
    โ€œKeep it in your pocket.
    โ€œYour dollar is your vote.
    โ€œOppose the empire: Buy Local (Regional, โ€œlocalโ€ is a Core Confusing Word)โ€

    NB: This issue is key to the future of the Commonwealth and thus a candidate for discussion on this Blog. For those interested in the settlement pattern issue, the prior post has generated several useful perspectives.

    EMR


  • IN THE NEWS: VOLUME ONE

    Topics that have been the focus of past Baconโ€™s Rebellion Columns and Posts:

    Item One:

    The Wealth Gap was still getting wider in 2007 โ€“ the latest numbers from Federal Reserve.

    Fundamental Transformation of the economic system (as well as Fundamental Transformation of the settlement pattern and Fundamental Transformation of the governance structure) or Collapse.

    Item Two:

    Working at home seems to lead to layoffs for Teleworkers.

    Too bad that Telework was not more intelligently positioned as a strategy to support the evolution of Balanced Communities instead of a crutch for long commutes.

    Item Three:

    US Census says migration to โ€œthe Outer Suburbs nearly haltsโ€ in the National Capital Subregion

    Eat your heart out NVTA and the 12.5 Percenters.

    Item Four:

    Commonwealth Transportation Board has set new regs that will discourage cul-de-sad subdivisions. A favorite topic of Jim Baconโ€™s

    Only 35 years too late. EMR testified against them and in favor of inter-Cluster connections in 1973. Wake us when municipalities and the Commonwealth agree to retrofit / interconnect Orphan Subdivisions to create interconnected Clusters, Neighborhoods and Villages.

    Item Five:

    CNN has to updating itโ€™s running tab of newspaper closings hourly.

    Another Jim Bacon favorite: Who WILL gather and report the news? See THE ESTATES MATRIX

    EMR


  • Marlboro Countries

    When I worked in Moscow for a total of six years in the 1980s and 1990s, my office was a converted, two bedroom apartment with a small bathroom with a bathtub and a balcony that titled precipitously towards the nine-story drop. We crammed at least five people at any time in the news bureau of BusinessWeek where I was chief. My newspaper-reader and office manager was a KGB informant named Tanya with bobbed hair and penetrating Gypsy eyes. She smoked coarse, foul Russian cigarettes like a chimney. It made me sick, but to be honest, the work was so stressful that I resumed my habit, too.

    Russians like Tanya are perfect market material for Philip Morris International. Russia is a hot market for the Swiss-based firm that until last year, was part of the now-Richmond-based Altria family. PMI has introduced new products to get more people around the world to smoke, such as “Marlboro Intense,” a shortie cigarette that you can puff through in fewer drags while you take a break outside from your non-smoking restaurant, “Marlboro Wides” which are Marlboro fatties, and “Marlboro Mix 9” a higher potency Marlboro. The product have been test marketed in Turkey, Portugal and Indonesia, respectively.

    In Russia, 40 percent of all kids smoke by the time they are 18 and more than half of all men smoke. Smoking is one reason why Russia’s population has dropped by 6 million since the mid 1990s.

    PMI is now free to pursue its global marketing initiatives without behind held back by the kinds of health lawsuits that have shackled its sister, Philip Morris USA, back in Richmond, which until this December made billions of cigarettes for the overseas market at the huge factory off I-95.

    Neatly separated by new articles of incorporation, the two firms have different approaches. PM USA urges you not to use their products. PMI isn’t as supposedly health conscious and promotes like crazy. It does very well and an analyst calls PMIrecession resistant.” Its biggest markets are places like Russia and Ukraine and perhaps soon China through a JV with a Chinese firm.

    That may be great for shareholders, but not so world health. The World Health Organization reports that a staggering one billion people may die of smoking-related illness inthe 21st century. That’s far more than the Bubonic Plague and World Wars I and II put together. The ill effects will be forced upon poorer nations not capable of meeting their existing health demands.

    But hey, it’s profit and we Virginians love tobacco. Built the Commonwealth. Governments near and far shouldn’t be allowed to tell people what to do. Nossir. And, the very first act of our beloved General Assembly was to adopt price supports for tobacco back in the 17th century. Fighting malaria or dealing with Native Americans were second-fiddle to the Golden Leaf we all so worship.

    For details on the global crisis, consult my story in Style Weekly: styleweekly.com

    Peter Galuszka


  • Big Sister Is Watching You!

    It’s always amazed me how people tend to fall back to religion when they face confounding times.

    So it is with conservatives and free-marketers who have become unscrewed by the free-falling economy, the failure of laissez faire theories and the profound sense of apprehension and bewilderment as Barack Obama, an entirely unknown entity, gropes for solutions.

    It’s back to basics time and for many of this genre that means back to Big Sister. Ayn Rand is the secret St. Christopher’s medal for many who have lost their intellectual bearings. Want reassurance that the market is always right? Want to be patted on the head that government is always the enemy? Want to be told soothingly that “greed is good” and the ego is OK? Join the “Back to Rand” movement.

    Rand has had a lot of followers, including former Fed Chief Alan Greenspan, former SEC head Christopher Cox and Ronald Reagan. In Reagan’s case it was unrequited love. Rand despised him. Whatever. In Virginia, too, lots of members of the crazy, mixed-up Republican Party are turning Back to Rand for a reaffirmation of their ideas. It could be that in this regard, Rand is an even more potent elixir than the familiar Thomas Jefferson, even though Jefferson, like the Bible, is widely misinterpreted and his reality was far different from what is presumed.

    Rand was a victim of her times. As a Jewish girl in newly Bolshevik Russia, she came to loath the Communists since they shut down her father’s drug business in St. Petersburg. She jinked to the states on a temporary visitor’s visa and ended up writing screenplays in Hollywood. She despised all that was statist and regulatory seeing them as a form of theft. Individual freedom and responsibility are key. Altruism is nonsense. The ego is what matters. People serve themselves and society much better by adopting a selfish self-interest. Only free market capitalism can unlock true creativity and efficient production.

    In leftie Hollywood, Rand took being a reactionary to a new level and made it an art form. She fought against soft-headed actors, producers and screenwriters being sops for Jolly Joe Stalin and other Commies. Indeed, she was a rare “friendly” witness during the House UnAmerican Activities Committee which pursed its Red Baiting witch hunts in the late 1940s and 1950s. When called the testify, Miss Rand did so gladly. Afterwards, a snarky reporter asked her if she had any regrets about testifying. Her answer: “Yes, they didn’t give me enough time.”

    Her two best books are the “Fountainhead” and “Atlas Shrugged.” Both make heroes out of average guys who beat government regulation and other snake nests of evil. (I confess that I have never read the latter. I found the 1,100 pages too daunting).

    In her personal life, Rand had some interesting quirks. Though conservative, she was liberal on race and love. In fact, she often would try to re-mate members of her little salons with other people, concluding that their marriages had been mistakes. She, of course, knew better than the men and women involved.

    She embraced philosophy that she called “Objectivism” although many mainstream philosophers never quite saw it as distinct enough to be regarded as a separate school of thinking.

    After she died in the 1980s, her followers created shrines to her, including an institute near Los Angeles. Its advertising material shows lots of 1930s style skyscrapers like Rockefeller Center. The grandeur of capitalism, I suppose.

    Anyway, read any op-ed page. Ayn Rand is hot now and it is a sign of the times.

    Peter Galuszka


  • A Visit to Valladolid

    Pardon my lengthy absence from the blog — I’ve just returned from vacation in Cancun. I didn’t spend much time studying human settlement patterns — I was happy to spend most of my time in the Club Med compound, and there was nothing about Cancun, which was first developed only 30 years ago, that struck me as worth seeing. However, we did take one day trip to Chitzen Itza, the magnificent Maya ruins, and stopped briefly in the charming colonial town of Valladolid on the way back to Cancun.

    Valladolid is a “third world” urban area in terms of living standards. But the center city, serving a municipality of about 70,000, has a charm that I have found lacking in the cities of most developing nations that I’ve visited. Borrowing its city plan from the city of the same name in Spain, Valladolid has a large public square in the city center, which is flanked by the obligatory Cathedral as well as banks, shops, restaurants and small hotels — many of which are open to the air. Other than a cell tower emplanted in the square, the entire area was well kept, well maintained and attractive.

    The town center is so delightful that it has become a frequent stop for excursions from Cancun into the interior of the Yucatan peninsula. We stopped for the obligatory Margarita.
    What’s the lesson of the story? My takeaway is this: A community need not be wealthy to create quality places where people enjoy spending time. There was nothing arresting about any of the buildings, or even the park, in Valladolid. The building fronts were plain, and the Cathedral was not especially impressive in size or ornamentation. But the elements of the town center were laid out in a way that engendered pride among the people who live there and made it a place worth visiting.

  • UNDERSTANDING LOCATION VARIABLE COST

    WHY IS IT SO HARD TO UNDERSTAND LOCATION VARIABLE COSTS?

    EMR is awaiting Grovetonโ€™s examples of same house, same builder prices to support his assertions on THE ANATOMY OF AN ILLUSION post.

    In the meantime, Groveton has forgotten that EMR has outlined homework for Groveton to use to prove to himself the validity of location-variable cost calculations.

    Before we start lets be sure everyone understands that it is not Grovetonโ€™s fault that he does not pay his location-variable costs. No one does for reasons spelled out in The Shape of the Future. The same is true for the full cost of air travel โ€“ greatly subsidized by all tax payers and by all citizens but that is another story.

    First EMR is glad that he did not say that Groveton could not afford to live where he does if he had to pay the location-variable costs. EMR said Groveton would not have made the location decision if he knew the true costs and thought he would have to pay that cost. EMR stands with that.

    Based on his 8:30 AM comment of 14 March, Groveton probably could afford the true cost but he does not pay that cost and neither do his Clustermates and they may or may not be able to afford those costs.

    In the 8:30 AM post Groveton said:

    โ€œOK –

    โ€œIt’s tax time in the Old Dominion. I pay about $225,000 in state and local taxes. Not federal and I’m not even counting sales taxes, etc. Just plain old income and real estate taxes. I live on a 7 acre lot. I drive about 10,000 miles per year – total (commute and errands). My street is owned by me and the neighbors. We pay to pave it, plow it, repair it, etc. I have my own septic system and well water. I have five sons – one is in college (out of state), three go to private schools and one is in the Fairfax County system.โ€

    โ€œNow … just one more time … please explain how I am not covering my full costs.โ€

    It is clear that Groveton would pay the same state and municipal taxes if lived in a dwelling that was taxed the same amount REGARDLESS OF WHERE he lived in the Commonwealth and the municipal jurisdiction. So by definition, not much of the information provided gives a hint of total location-variable costs.

    In general taxes one pays DO NOT go to support location-variable costs. If one could reallocate payments to the location-variable cost categories Groveton, who pays $225,000 might come close,but on average those in his Cluster, Neighborhood and Village do not come close.

    There is further information from Grovetonโ€™s past posts that provide additional insights:

    Groveton says he โ€œlives Great Falls.โ€ By that we suspect he means that he lives in the 22066 Zip Code. (More on Zip Code data problems in a future post.)

    Groveton also implied that he is in the Difficult Run watershed and that this stream is close to where he lives. That means he lives in the far southeast (most Urban) corner of Zip 22066. His total location-variable costs will be lower here than in โ€œGreat Falls Properโ€ which is north and west of the Walker Road / Georgetown Pike Cross Roads (Village Centre). Places such as Richland Forest, Tally Ho or Beach Mill Downs to pick three names at random off the map

    Now about those costs:

    The first thing to do is to pick a nice house on Lake Audubon or Lake Thoreau that has about the same market value as his house.

    The following will remind Groveton that EMR suggested an exercise to get a grip on location variable costs.

    Start with electricity. How much is the cost of generation, transmission and distribution of a kilowatt to Grovetonโ€™s vis the alternative (capital cost and monthly delivery). Be sure to figure in line loss for low voltage transmission, the singe most clear demonstration of location-variable costs.

    There are 40 plus or minus services that vary in cost by location that are, by-in-large now charged on a flat fee basis.

    The original calculations were based on 1,000, 4 bedroom, two car garage Single Household Detached Dwelling Units (a nominal Neighborhood) located on 10,000 acres in four different patterns:

    10 acre lots

    functional but scattered Dooryards

    functional but scattered Clusters

    A functional Neighborhood.

    It was assumed this Neighborhood was adjacent to another Neighborhood but the location- variable cost savings at the Village, Community, Subregion and Region were NOT calculated.

    The best available cost were used and yes there were changes for water and sewer licencing, monitoring, and testing and off site impacts based on charges made in other Regions.

    There were assumptions about the cost of bussing children, the cost of mail delivery, parcel delivery, telephone service, etc.

    The data was collected and refined over a four year period. Two years after The Shape of the Future was published, and no one who bothered to take the time to understand the calculations challenged the assumptions or the numbers the data was recycled when EMR moved to from Inside the Clear Edge around the Core of the Subregion to a location inside the Clear Edge around a potentially Balanced but Disaggregated Village.

    In 2008, some of the costs will be higher, some will change completely โ€“ cell phones use for example — but overall the 10 X Rule would stand up quite well.

    Groveton said: โ€œThis is BS. The facts don’t support the conjecture.โ€

    This is not BS, it may appear to be inconsistent with the experience of those who do not bother to take the time to understanding human settlement patterns and location-variable costs.

    In the same string of comments, TMT said that โ€œNot EMRโ€ was smoking something AND inhaling.

    Actually โ€œNot EMRโ€ really does understand, he / she just can not bring themselves to admit it, and so they work to obscure and obfuscate reality.

    TMT also said: โ€œA semi-rural Great Falls is the best friend of county residents.โ€

    It would be it the residents paid their fair share of the location-variable costs.

    There is no reason for scattered Urban land uses outside the logical location of the Clear Edge around the Core of the Subregion โ€“ UNLESS THEY ARE IN COMPONENT OF A BALANCED COMMUNITY, in which case they would be within a Clear Edge of that Alpha Community.

    EMR


  • MORE ON TREATING SEWERAGE RIGHT

    What ARE you REALLY drinking? Yellow River Sweat Equity. Urban Development Zones. Five Acre Urban Lot Realty

    The 9 March Post TREATING SEWERAGE RIGHT generated several very useful comments. Separating the wheat from the chaff:

    What ARE you REALLY drinking? and what ARE you REALLY flushing into the ground water, the streams and the Bay?

    Most of those who comment on this Blog are 12.5 Percenters. It is pretty clear from the comments that they made that those who drink well water have no idea WHAT they are drinking. Some know there are not dangerous levels of the most common pathogens like e coli โ€“ at least when they last sent a sample to VA Tech. But beyond that?

    To find out what is really in that water will cost a lot more money than they are currently paying to tap into the Natural Capital that happens that flows under their property.

    In contrast, those who live inside the Clear Edge of Greater Warrenton get a six page analysis every year of everything known to exist in the water after multiple state-of-the-art testings. The report also notes what the best science says about the impact of the trace contents.

    That report is a good reason to evolve Agency structures and jurisdictions so that there is a Water and Sewer Agency for every Alpha Community. Those who get water from Fairfax County Water Authority have to rely on โ€œprofessionals.โ€ One of those โ€œprofessionalsโ€ testified at a hearing on Occoquan water quality some years ago that he did not care what was in the run off into the water supply. The Authority would put chemicals in the treated water to โ€œkill everything.โ€

    The water tastes like it. Who knows the impact of these Agency added chemicals? Who has a say about what they are? The only beneficiaries are the Agency bureaucrats (they extended their pipes) and the bottlers of โ€œspringโ€ water. What ever โ€œspring waterโ€ is. The residents of Menlough Cluster bought the DPW staff a buffet lunch in January to thank them for all the work they do on behalf of the citizens. That never happened in Fairfax County.

    What is even more important than what comes out of 12.5 Percenters pumps is to make sure that all up-flow neighbors (the ones Groveton calls โ€œcertified wing nutsโ€) do not put REALLY bad stuff in the water (surface or ground) that impacts all their down-flow neighbors. The cost of effective systems for licences, inspections and testing is not being paid by anyone.

    There is no assurance that those who live INSIDE the Clear Edge are protected from ALL potential harm but we are a whole lot safer than those who have no idea what they are drinking or what impact they have on those who drink what comes out of their clogged cesspool and saturated drain field. There are no bacteria to eliminate most pollutants and there are few on site systems that perform to spec without regular inspections.

    Sure, the persistent chemicals may be measured in parts per million, or perhaps parts per billion (like the concentrations one tastes coming from a black hose or of BPAs) but do they accumulate in the human body? If they do, it may not impact adults until they are too old to care but what about young folks thinking about raising child? Have you carefully read the warnings on prescription drugs? There are a number of common drugs widely used by men that are known to induce birth defects at very low concentrations if ingested by women. And NMM thinks it is smart to have a big yard so one can raise kids, right?

    What is the next microbe to jump to humans from cows, chickens, horses, crows or monkeys? Who would have predicted the spread of avian conjunctivitis when it jumped from chickens to the Eastern race of House Finches? You may have noticed an American Goldfinch that is blind in one eye last week. Next week it will be blind in both eyes. How about white nose among bats?

    In the Santa Inez Valley, the Watkins man used to lick DDT from the end of his pencil to prove to his farmer-clients that it was safe to put on tomatoes. Humans live in an ever changing environment an it is not getting safer. Public systems with Community scale control and Community Laboratories at every Community College with in a Regional system subject to national oversight is the best bet at this time.

    Those who say humans can never REALLY clean up the ground and surface water are afraid that they will have to pay their fair share of the cost of the clean-up. The same folks believe that creation of dysfunctional human settlement patterns INSIDE the Clear Edge over the past 80 years has created a property right (property value) OUTSIDE the Clear Edge to which they have an inalienable right protected by the Constitution.

    Yellow River โ€œSweatโ€ Equity

    Larry Gross makes a very good point about coming to grips with the human waste issue: Buy an RV. This is the point EMR made in the original post. With extensive โ€˜participationโ€™ the cost of treating sewerage โ€“ and other waste โ€“ can be lowered. However, not many relish carrying buckets of night soil. Most are queezy about taking stool samples to protect from colon cancer.

    UDAs (Urban Development Areas)

    Larry Gross asked about UDAs:

    This is a simple question to address:

    Until there is a state-wide Wright Plan then all the UDAs in the world will just be moving the deck chairs.

    What will a Wright Plan do? It will identify the future need for Urban land and quantify that need. It will then analyze the amount of vacant and underutilized land and allocate โ€“ on a Regional basis โ€“ the amount of land NEEDED for future Urban needs. It will then authorize a Regional process to locate the areas for โ€˜growth.โ€™ It would be prudent to designate twice the NEED on a rolling 20 year basis. Most of the NEED can be most efficiently met through REDEVELOPMENT and that will SHRINK the area within the logical location of the Clear Edge.

    When this is done, there would be a basis for designating UDAs. Until then they are just a political fan dancing as Larry likes to call it.

    Five Acre Lot Realty

    Most important of all is a comment by Larry Gross on 9 March at 4:22 PM:

    โ€œalso.. you’re gonna to have to reconcile the fact that most 5 acre lots do not have significant runoff problems – MUCH LESS have that runoff go into their sewage treatment facility – the septic tank/field.โ€

    Nice try Larry but this statement is reflects belief in a Myth that supports dysfunctional human settlement patterns.

    Consider the 83,000 acres in the Occquan drainage that was โ€œdown zonedโ€ by Fairfax County to support the Five Acre Lifestyle:

    Check out the pollution levels and flow levels at the monitoring stations before and after the massive explosion of five acre โ€œestatesโ€ and โ€œhorse farms.โ€

    Check out the before and after air photos of the cleared land for redundant septic fields and the two acre horse pastures where horses stand up to their fetlocks in mud.

    Check out the pesticides, fertilizer and other components of Mown Grass Pollution.

    Check out the flooded roads after every storm event and the eroded stream banks due to far higher rates of run off.

    On the other hand if half the 83,000 acres were in permanent Open Land and the other half developed for Balanced Communities (J / H / S / R / A) โ€“ with 40 percent Open Space WITHIN the Communities โ€“ there would be capacity for a minimum of 415,000 citizens ALL within R – 20. That means not just Jobs in the Community but they are in the Core and closer to jobs in the Zentrum and with patterns that will support shared-vehicle systems.

    415,000 plus is more than the total that have moved to Loudoun and Prince William since the 80s and they are scattered in the
    R = 20 to R = 30 Radius Band.

    Bottom line: There would be better water quality, better air quality, less driving, the land owners would have made far more money and the citizens would be living in the patterns that the market demonstrates have the highest value.

    It would all have happened if there was a fair allocation of the location variable costs. More on that in response to Groveton.

    EMR


  • THE ANATOMY OF AN ILLUSION

    IN TIMES OF IRRATIONAL EXUBERANCE, ILLUSIONS GROW LIKE KUDZU. BUT WHY DO THEY CONTINUE TO SURVIVE WHEN THE ECONOMY IS SHRINKING โ€“ AS IT MUST โ€“ AND AMONG CITIZENS SHOULD KNOW BETTER?

    SuperMassDenial cannot be the whole answer.

    One of the most frustrating aspects of working to create an understanding of functional and dysfunctional human settlement patterns is dealing with those who blithely claim that โ€œthe factsโ€ support their position when they must know at some level that they are absolutely wrong.

    It is one thing when the advocate of an Illusion if someone is heavily invested in an unfortunate decision. It is another for a person who claims to be young enough to know better continues to chan the mantra of dysfunction.

    Case in point: The comment of NovaMiddleMan (NMM) that โ€œthe vast majorityโ€ support scattered Urban dwellings stated a comment on the DISAPPOINTMENT CUBED post of 18 February. Here is part of that post (in italics) with comments.

    At 6:23 PM NMM saidโ€

    โ€œI agree the blog format is not the best way to communicate.โ€

    Great! An area of agreement to build on! In fact blogging may be the WORST way to communicate because it allows rabid defense of ridiculous positions.

    โ€œI can sense your frustration about the lack of a common nomenclature.โ€

    But then why do you continue to use Core Confusing Words? Do you understand that continuing to use Core Confusing Words like โ€œsuburbanโ€ makes no sense, literally?

    …………

    โ€œThe bottom line however is that the data suggests a vast majority reject your viewpoint…โ€

    Since EMRโ€™s position is the market favors more Balanced settlement patterns, this must mean that โ€œthe vast majorityโ€ support unBalanced settlement patterns.

    NMM must know there is no data to support his statement. Why does he make this statement?

    The numbers are clear 87.5 percent (1980 to 1990 data upon which the 87.5 Percent Rule is based) did NOT choose scatteration at the Dooryard and Cluster scale, even when the choices were limited. There has never been less than 80 percent of the market who favor Balanced over scatteration IF GIVEN A CHOICE regardless of income. Twenty percent is not โ€œa vast majorityโ€ it is an uninformed minority.

    NMM has not shown one case where the same unit by the same builder sells for LESS in a more Balanced component of human settlement than it sells for a less Balanced or unBalanced, monoculture component.

    The reason he has not cited the data is that it does not exist. From the 70s to the 90s there was a $100,000 difference between more Balanced vs less Balanced / unBalanced contexts.

    NB: IF the TOTAL cost of location variable costs were assessed, the scattered site (unBalanced) dwelling would cost far more but that is not the case under current conditions.

    The bottom line is that the market pays a premium for a more Balanced locations, period.

    The market proves that NMMโ€™s view โ€œThe American Dreamโ€ is sales hype when citizens ARE GIVEN A CHOICE.

    [NB: in a later comment in this string, NMM admitted he was basing his comment on the PEW survey noted in the DISAPPOINTMENT CUBED post. This survey was profiled because of the gross Vocabulary confusion and is not a basis for identifying informed opinions. Using this survey to establish preference has all the validity of going to a used car lot and asking the first 100 tire kickers: โ€œIf price and maintenance was not an issue would you rather have a Hyundai or a Mercedes?โ€]

    To further examine the blanket statement: โ€œa vast majority reject your viewpointโ€ vis a vis residential settlement patterns โ€“ that is that the vast majority prefer scattered, unBalanced settlement patterns as opposed to more Balanced settlement patterns. Here is a two step exercise for those who want to understand the basics:

    It is economically impossible for โ€˜a vast majorityโ€™ to own a Single Household Detached Dwelling. That is because given a normal distribution of disposable income in any First World nation-state from 60 to 95 percent of the population (depending on the state of the economy and the allocation of true costs) COULD NOT AFFORD a Single Household Detached Dwelling.

    Let us assume that, fearing an uprising from โ€˜a vast majorityโ€™ who favor scatteration, it was decided to pay a housing stipend to every Household so โ€˜the vast majorityโ€™ could afford to pay for โ€˜what they wantedโ€™ and they did in fact buy The American Dream per NMM.

    Under those conditions it would be physically (to say nothing of economically) impossible to provide services, especially โ€“ but not limited to โ€“ Mobility and Access.

    The following phrase was separated out from the rest of NMMโ€™s assertion because these last four words make the statement into a pure red herring.

    โ€œ… of urban dense living …โ€

    EMR does not advocate โ€œdenseโ€ Urban living. EMR does not advocate density for densityโ€™s sake. EMR advocates exactly what the market finds most attractive โ€“ Balance, especially at the Alpha Village- and Alpha Community scale.

    โ€œand prefer a โ€˜subโ€™urban lifestyle …โ€

    Intentional use of a Core Confusing Word such as โ€˜suburbanโ€™ is always a red herring. The user must define what they mean by โ€œsuburbanโ€ using lot size, dwelling size, persons per acre density and other metrics for each component scale of settlement pattern from the Unit to at least the Alpha Community (aka, lowest six components in the New Urban Region Conceptual Framework.)

    โ€œclose to a major metropolitan area.โ€

    If โ€œthe vast majorityโ€ lived some where else, there would be no โ€œmetropolitanโ€ area only scattered โ€œsubโ€Urban land uses.

    Even more important “close to” indicates this “vast majority” lives OUTSIDE major metropolitan areas. Since the majority of all residents live INSIDE major metropolitan areas this must be “the vast majority” of the minority?

    โ€œThose are the facts and that is what the market has demanded for years …โ€

    As noted above, that is not so. The MARKET provides a premium for well located units in more Balanced components.

    โ€œ… and still continues to demand.โ€

    Even the marginal โ€œdemandโ€ has slipped as the cost of dysfunction has become more painful.

    โ€œI would also add again a majority also prefer …โ€

    โ€œPreferโ€ if they believe they are among the few who can afford the total price. The larger the Region, the higher the price.

    โ€œ… and demand access to automobiles and driving.โ€

    There was never a time when driving would provide mobility for more than 50 percent of the population and that number is shrinking as the population ages and the cost rises and / or the ability to pay shrinks.

    โ€œThat is not an ideological hobby horse those are the facts on the ground.โ€

    Sorry, it is an Illusion AND a ideological hobby horse..

    โ€œI guess in all seriousness I question what you hope to achieve through this medium.โ€

    Learn if there is a way to cure Illusions and to understand the perspective of those gripped by Myth.

    โ€œI think after several months or years most of us understand what you are trying to do.โ€

    Apparently not since NMM has not yet gotten a handle on EMRโ€™s perspective.

    โ€œHowever you seem to fail to understand the reality of the situation.โ€

    See above.

    โ€œThe world is not a sandbox you can control at will.โ€

    Another red herring. NMM will not find a bigger advocate of the market, so long as it is a well informed market, that is citizens ca
    n make decisions that are in fact in their individual and collective best interest. What is it that the vast majority would choose, if they had a choice and understood the consequences of their actions.

    โ€œLike it or not the population has rejected and continues to reject your vision for the future.โ€

    See above.

    Without a Fundamental Transformation of the governance structure (and the economic structure) there will be no Fundamental Transformation of the human settlement pattern and thus no potential for a sustainable trajectory of civilization.

    The democracies with market economies are an impossibility without all three Fundamental Transformations.

    As luck would have it more and more are discovering this reality. See Lifestyle preferences are shifting by Bill Cunniff in the 27 Feb Sun-Times. For a summary of the marketing success of those who claim to sell dwellings in more Balanced environments subscribe to New Urban News.

    EMR


  • TREATING SEWERAGE RIGHT

    The cost of infrastructure to support functional human settlement patterns.

    In the comments following the 27 February MORE VOCABULARY post, Larry Gross made a very good observation:

    Current methods of treating sewerage adsorbs a lot of energy and are very expensive.

    Treating sewerage and other human waste is a cost of contemporary technology-driven Urban civilization. The cost of heath care, safety, education, shelter and access are also very high. Further, the real total cost is much more than is now being paid. That is why the infrastructure to supply these services is deteriorating.

    All the essential services could be far more efficient if there were functional human settlement patterns but they would will still cost a lot more than is currently being invested if citizens are to have anything like the level of health, education, safety, shelter and access that is expected in a technologically advanced society.

    The results of conventional sewerage treatment prove that what is now being spent is not effective. Humans are polluting the ground water, streams, estuaries and the oceans with their waste. That means a lot more has to be spent to get it right โ€“ even with functional settlement patterns, new technology and more efficient operation.

    By the citation Larry posted (โ€œYellow is the New Greenโ€ a 27 January story about land application strategies for sewerage in China) he is suggesting there must be a better way.

    This may be just another wan attempt to justify scatteration of Urban land uses by a died-in-the-wool 12.5 Percenter but EMR takes it as an attempt to make a constructive suggestion.

    Inside the Clear Edge.

    EMR has never been a fan of Big Pipe systems.

    There are no Regional systems in the US of A but the large SubRegional systems do not have good track records for on supplying water or treating sewerage. It is also clear that the Agencies have been major contributors to dysfunctional settlement patterns.

    The multi-Community water and sewer Agencies and Enterprises are rewarded (prestige, pay, etc.) for โ€œgrowth.โ€ This has led them to historically support higher per capita use and to expand their service to areas not well suited for Urban development. Like highway Agencies that have not negative feedback from dysfunctional settlement patterns, building more is โ€œgoodโ€ for the water and sewer Organizations if not for citizens or the environment. The examples of bad practice from the Fairfax Water Authority, the Washington Suburban Sanitary Commission, The Washington Aqueduct, etc. fill volumes.

    Like Hospitals and Colleges, every Alpha Community should have a Community Water and Sewer Agency that is directly responsible to the citizens of the Community, not Agencies that serve parts of Communities or parts of many Communities.

    One overarching problem with traditional Big Pipe systems is mixing clean water with waste and in many cases adding storm water to the same pipes. There is no way to efficiently treat that flow.

    When citizens get serious about rebuilding the Urban fabric, systems that recycle blue, green and grey water and use waste to generate energy can be applied at the Cluster and Neighborhood scales (MIUS) within a Community system. That is if there are still resources available to support restructuring given the current trajectory.

    There are many ways to cut costs before there is fundamental change in settlement patterns. Some of them involve charging those who dispose of exotic compounds that drive up the cost of treatment โ€“ including kitchen garbage disposal units โ€“ that make the waste more complex than human waste that has already been digested.

    Outside the Clear Edge

    There are many excellent strategies to treat human waste in Non-Urban contexts.

    The implication that these systems are โ€œcheapโ€ or intrinsically better than Urban solutions or that these systems are a way to justify scatteration of Urban land uses is a terrible Illusion driven by a number of Myths.

    Some of Non-Urban waste system costs can be offset by โ€œsweat equityโ€ in both construction and operations but not many like the idea of digging ditches or carrying out pails of night soil.

    When the cost of a sophisticated system โ€“ including the energy to operate the system โ€“ and the cost of inspection and maintenance is totaled up, the real cost is as high per capita as Urban systems โ€“ sometimes higher.

    Why are there energy costs? Those microbes work for free but only in certain temperature ranges and only with the correct levels of oxygen.

    Why must there be inspection and maintenance costs? To insure there are no off-site impacts beyond that of a well managed, state of the art Alpha Community System.

    On the general topic of infrastructure, Bruce Katz of Brookings gave a very good talk at the National Governors Conference Winter Meeting in late February. โ€œStrengthening Our Infrastructure for a Sustainable Future.โ€ Not a thing he said was not on target. It was what Bruce he did NOT say โ€“ he never mentioned human settlement patterns and it is not possible to have functional infrastructure and dysfunctional settlement patterns.

    EMR


  • McMANSIONS AND LOCATION VARIABLE COSTS

    GROVETONโ€™S LEXICON AND TMTโ€™S LOCATION VARIABLE COSTS โ€“ NOTES FROM UNDERWATER MORTGAGE COMMENTS:

    Groveton, Good to hear from you.

    You are right that the term โ€œMcMansionโ€ is used to describe a range of inappropriately-scaled shelter options but as far as causing wide-spread confusion, it is not in the same league with the Core Confusing Words.

    Actually, the admittedly โ€˜roughโ€™ definition in Wikipedia is not bad. There is a list of characteristics which are stated to not ALL necessarily be present to be classified as a โ€œMcMansion.โ€

    As EMR sees it there are two general categories of McMansions:

    Mc Mansions INSIDE the Clear Edge

    Large, recently built houses on small lots. These Units are frequently the result of โ€œknockdown redevelopment.โ€ These dwellings are disconcerting and disruptive for the Dooryarders and Clustermates. However, in the long term they MAY represent a transition to larger units in a given location.

    When the dust settles from the ongoing housing bust, most of these McMansions will have far more square-footage than can be afforded by the vast majority of Households.

    These may be wrong size house but not necessarily Wrong Size House in Wrong Location.

    McMansions OUTSIDE the Clear Edge

    The other form of McMansions are Big Houses on Big Lots โ€“ especially in scattered, orphan subdivisions. They would be among the 12.5 percent of the Urban dwellings that fall OUTSIDE the 87.5 Percent Rule.

    These dwelling may be Big or REALLY Big but the key is that they are too Big for the actual income / lifestyle of owner. Real mansions are owned by people who could afford to throw parties that would fill up the entertainment areas and have out of town guests that fill the guest suites and / or they can afford to let them sit vacant for months at a time. There is a subset of McMansions called McLodges that are vacant most of the time.

    Many owners of McMansions know they bought more house than the can afford / use. These dwellings have been marketed as โ€œinvestmentsโ€ in the housing obesity binge over the past 35 years.

    From a settlement pattern perspective the problem is not the SIZE of the dwelling, it is the amount of land that is taken up for a single Urban Household.

    From an economic perspective it is the SIZE and the LOCATION of these dwellings and the fact that they have been subsidized by Agency and Enterprise actions that generates dysfunction.

    Others can speak for themselves but EMR does not live in a McMansion by any definition.

    The dwelling plus, library, office and studio / conference room are in a substantial structure but not far from the median in the municipality and it is the same size as the others in its Dooryard and about the median for the Cluster.

    The dwelling sits on a small lot (less than .2 acre) but the house is not too big for the lot. The Cluster is inside the Clear Edge around a Village-scale agglomeration and within walking distance of Main Street and a much shorter walk to a range of services in the Neighborhood via a path system. The Dwelling and Cluster would contribute to a Balance if the vacant and underutilized land within the Clear Edge were built out.

    On the other hand Grovetons use of โ€œsocialistโ€ IS a candidate for Core Confusing Words in the Fundamental Transformation of governance structure discussion because of its current wide-spread misuse.

    There are no โ€œsocialistsโ€ as classically defined just as there are not โ€œcitiesโ€ as classically defined and not โ€œruralโ€ as classically defined. The world has moved on. See Harold Meyersonโ€™s 4 March column โ€œWho You Calling Socialist?โ€ in WaPo. Even he is a โ€œdemocratic socialistโ€ not a โ€œsocialist.โ€

    Groveton may be correct in describing the Obama administration program. However, there may be no alternative to โ€œmore governmentโ€ given the state of the resources that citizens are left with after Supercapitalism has created:

    The obscene Wealth Gap in the US of A and other First World Nation States,

    The equally obscene Consumption Gap with the rest of the citizens of the planet, and

    The Global Financial Meltdown โ€“ back to those Wrong Size House in the Wrong Location…

    What did ANYONE expect would be the Global result when consumers were subsidized to buy stuff they could not afford and in the process provided Indians and Chinese with jobs making cheaper STUFF? Now they see no reason they should not Mass OverConsume too.

    TooManyTaxes:

    EMR thinks you were trying to slip in a trick question about Location Variable Costs.

    The answer is very simple:

    Both of the Households you hypothecate (as well as the neighbors who lives and works in Fredericksburg) would pay EXACTLY the same for the goods and services they actually used โ€“ no location-based subsidies or discounts.

    Then they could decide if their choice of job location / and efforts to mitigate costs made sense.

    EMR


  • UNDERWATER HOUSING

    Wrong Size House in the Wrong Location

    There is a lot of loose talk by 12.5 Percenters about how the โ€˜housing crisisโ€™ is all about California and Nevada.

    Todayโ€™s numbers: Virginia underwater mortgage rate is 19.6 percent. That is about one in five.

    As luck would have it, Virginians are Over-housed. There is plenty of room for second and third dwellings in well located structures.

    And there is plenty of room for chickens and goats in the walk-out basements of McMansions on one, two, five and ten acre lots that the 12.5 Percenters love.

    The data shows a pattern: the more dysfunctional the settlement pattern, the higher the rate of underwater mortgages.

    Good locations are still holding their own because even if the borrower is โ€œsubprime,โ€ the dwelling is not and โ€˜someoneโ€™ always needs a dwelling in a good location.

    If Agencies and Enterprises had started to allocate the fair, equitable cost of location-variable expenses when the problem was first articulated and the data was first available (BEFORE the 2000’s bubble) then the Affordable and Accessible Housing Crisis would not have become the โ€˜housing crisisโ€™ that led to the Global Financial Meltdown.

    You could have read all about it on the Original Baconโ€™s Rebellion.

    EMR


  • Why Shockoe’s a Good Spot for a Slavery Museum

    For once, the Richmond Times-Dispatch has gotten something right, Or, at least, columnist Michael Paul Williams has, but then he usually does.

    Williams says that instead of a major, $330 million ballpark and assorted retail, office and condos in Richmond’s Shockoe Bottom, Doug Wilder’s failed National Slavery Museum should be built there.

    That makes sense. The area was the second largest slave market int he U.S. next to New Orleans. Thousands of black Africans were shipped in in chains and then auctioned off to plantations in spots farther South such as Alabama and Mississippi. Families were broken. Marriages dissolved as overseers stood by with guns and whips.

    This sorry chapter in Virginia’s and Richmond’s history needs to be remembered and commemorated every bit as much as Confederate history is on Monument Avenue, at the museum near VCU’s Medical Center and by the stars and bars hanging next to the Virginia Museum of Art.

    Wilder, the cantankerous former Richmond mayor and first Black ever elected to be governor, had backed a National Slavery Museum just off Interstate 95 near Fredericksburg for years. But after seven or eight years of fundraising, the project is bust. In fact, its Website is still soliciting donations even though it is no longer authorized to do so. Characteristically, Wilder can’t be found.

    The region’s lack of leadership led to the Triple AAA Richmond Braves bolting to an Atlanta suburb last year. The awful Diamond was just too crappy a place to play and the region did nothing to fix it.

    North Carolina real estate company Highwoods Properties wants to put a new stadium in Shockoe Bottom as part of a new, privately-funded complex. But that, too, has issues since parking is already tight or non-existent in the area and it is too near the historic Church Hill neighborhood with its signature Georgian homes.

    Williams’ solution is a good one. Put the new stadium somewhere else and put in a slavery museum not far from the old auction blocks and the prison for slaves. The spot is literally right under I-95, a major north-south artery. Many families heading to Disneyworld could stop off and learn something. And as Williams points out, the Fredericksburg plan would have been part of a theme park, as if the tragedy of slavery is anything worth celebrating.

    As for the ballpark, rebuild the Diamond. It’s a great location where I-95 and I-64 meet. I’ve always been able to get there easily. Too bad a decent location isn’t available next to the James River. But Williams’ solution is the next best option.

    Peter Galuszka


  • MORE VOCABULARY

    A Phrase for Larryโ€™s Lexicon and a Cure for Major Mortgage Bail Out Defect

    1) We are a bit late on this but here is a phrase for Larryโ€™s Lexicon: โ€œGreen Sprawl:โ€ An energy efficient industrial, commercial or residential building in a dysfunctional location. It is now in the lexicon of MainStream Media. A recycled Wal*Mart with ground effects heating / cooling and a solar array on the roof (See โ€œBig Box Reuseโ€) or a LEED McMansion on a five acre lot or a 10 acre horse farm.

    We have to sort out if the use of a Core Confusing Word (โ€œsprawlโ€) in a phrase that is clearly defined is a Core Confusing Phrase.

    2) Use of โ€œLocation Efficient Mortgageโ€ criteria for any residential mortgage bailout would cure a major problem with giving money to those who made bad decisions. The phrase is defined, there are criteria. Implementation of a location efficient mortgage criteria would solve a major problem with the criteria-less mortgages consumed by Fanny and Freddie.

    Location efficient mortgage criteria and prosecution for fraud at every stage of the development process from the original raw land sale to the final loan signing including all participating agents would save the public $ billions.

    EMR


  • GREEN TECHNOLOGY BUBBLE AND BUST

    On Jim Bacons post โ€œThe Coming Green Boom โ€“ and Bubbleโ€ EMR noted something like the following (with corrected spelling and clarified intent):

    Green Technology and the investment in Green Technology will just be another Bubble and Bust too without:

    Fundamental Transformation in human settlement patterns;

    Fundamental Transformation in governance structure, and;

    Fundamental Transformation in the economic system.

    And THAT means there must be a Fundamentally new way to get citizens the information they need to make INTELLIGENT decisions in the marketplace and in the voting booth. See THE ESTATES MATRIX

    There are a number of good observations following Jim Baconโ€™s post and they caused EMR to give further thought to the topic:

    There MAY be a Green Technology Boom.

    There MAY be great future benefits from Green Technology โ€œBreakthroughsโ€ that are not now even imagined.

    There is no evidence at this point that there will be any โ€œBreakthroughsโ€ with more substance than cold fusion โ€“ or is it fission? Anyway, cold.

    What IS known is that whatever form Green Technology takes, is will cost a lot of money, especially in the area of energy generation, transmission and distribution. There is NOTHING as cheap as digging up (and burning up) natural capital โ€“ unless nation-states and Regions have to fight wars to get it.

    What is also known is that there are already a lot of expensive ways to replace cheap energy and there are millions of things to sell that will consume resources and occupy time โ€“ if citizens had time or money.

    (For the record: Those things will not solve the Helter Skelter Crisis or the Affordable and Accessible Housing Crisis and even FREE energy for Large, Private Vehicles will not solve the Mobility and Access Crisis.)

    The bottom line is that after 35 years of widening the Wealth Gap and the inevitable Global Financial Meltdown (Bust of the Household, Enterprise and Agency deficit spending bubble) there are not a lot of folks who can afford expensive energy or expensive Green Technology.

    That means it will not be attractive to invest in Green Technology because the market will be small.

    Those at the top of the Ziggurat โ€“ those who could afford expensive Green Technology โ€“ have demonstrated over and over that they would rather continue to ride on the Tiger because they make more money faster that way.

    Over the past 35 years the US of A could have lead the World in creating a lean, educated, happy human population with an ever smaller ecological footprint and thus a sustainable trajectory for civilization.

    The US of A has โ€œprosperedโ€ by creating an obese, opinionated, antagonistic, human population with huge Mass OverConsumption driven ecological footprints. The growth in consumption, the growth in population and the growth in the Wealth Gap are not sustainable.

    The net result of attempting to โ€œenjoyโ€ consumption based โ€œprosperityโ€ within dysfunctional human settlement patterns:

    Over half the population is losing ground โ€“ economically and socially.

    Most of the rest are Running As Hard As They Can and have no time or energy to understand why most of the benefit of increased productivity of the 95 percent is going to the top 5 percent of the Ziggurat.

    The US of A ranks at the top in consumption and in an also ran in education, equity, health and happiness.

    The Elephant Clan and the Donkey Clan have broken โ€œpoliticsโ€ and gamed the governance structure so that one or the other โ€“ but not someone with new ideas โ€“ gets 50.5 percent of the vote.

    They have done this by promising that a vote for their โ€œprinciplesโ€ will allow everyone to continue to live a life based on Myth โ€“ forever.

    Both the Clans try to out promise one another. It is all about short-term benefit / immediate gratification and nothing about cost long-term / cumulative cost or a Balance of rights with responsibilities.

    Add to this the facts that:

    The NRA (aka, gun lobby) and the individual rights advocates have armed and primed the โ€œDeer Hunting with Jesusโ€ crowd.

    The alcohol lobby, the NRA and conflict generating agitators have armed and primed bros in the hood.

    Let us not spend time creating another bubble to bust over Green Technology. Green Technology would be nice but what has surfaced so far is Green Greed. Even pure Green Technology is not what is needed.

    How about creating a sustainable trajectory which requires:

    Fundamental Transformation in human settlement patterns;

    Fundamental Transformation in governance structure, and;

    Fundamental Transformation in the economic system.

    And, of course a Fundamentally new way to get citizens the information they need to make INTELLIGENT decisions in the marketplace and in the voting booth.

    EMR


  • The Coming Green Boom — and Bubble

    Most prophets of doom are a relentlessly dour lot โ€“ not only do they tell you why youโ€™re heading straight to oblivion, they scowl at you while they do it. But John Rubino is different. He leavens his gloom mongering with a joke, a grin, and tales of life in Moscow, Idaho, where he skis, hikes and rides off-road vehicles with his family. You might call him a jocular Jeremiah.

    Thereโ€™s no denying Johnโ€™s doom-saying credentials, though. Baconโ€™s Rebellion highlighted his thinking in an article aptly titled, โ€œThe Housing Bubble,โ€ in November 2003, in which he elaborated upon his book, โ€œHow to Profit from the Coming Real Estate Bust.โ€ John, a former Hanover County resident and writer for Virginia Business magazine, followed up that book by coauthoring another, โ€œThe Collapse of the Dollar and How to Profit from It.โ€

    Now heโ€™s written a third, โ€œClean Money: Picking the Winners in the Clean Tech Boom,โ€ the first chapter of which lays out a case for looming environmental disaster thatโ€™s as alarming as anything coming out of Greenpeace. Yet, in characteristic Rubino fashion, while sounding the alarm for peak oil, rising energy prices, chronic water shortages and a host of environmental maladies from overfishing to soil erosion, he manages to find that profitable silver lining. Technology may not single-handedly save modern democratic capitalism, he says, but it will help prop it up. Heโ€™s a great believer in the power of the marketplace to clean up its own mess.

    Johnโ€™s themes are so similar to those we explore in Baconโ€™s Rebellion, and our way of thinking is so similar, that I plan to dedicate this and my next two blog posts to explicating his views on our current predicament. In this first post, I plan to sketch out his doom-sayer bona fides. In subsequent posts, I will delve into the rise of renewable energy and the smart grid, and then reinventing the automobile. Even before Obamaโ€™s porculus package promised to inject billions into โ€œgreen tech,โ€ venture capitalists were stuffing the technological pipeline for several years. A wave of innovation is about to burst upon us that will change the economics of energy.

    Before we get into all that, let us return to the reasons for Johnโ€™s pessimism.

    First, John very clearly foresaw the outlines of our current economic crisis: Too much debt. โ€œThe basic thesis [of โ€œThe Coming Real Estate Bustโ€] was definitely right. We were borrowing too much money, and we were doing it via our houses. People would borrow against their houses to pay off their credit cards, and they would max out their credit cards to pay their mortgage.โ€ The phenomenal run-up in debt was unsustainable. And when the housing bust finally occurred, it didnโ€™t just lay waste to the residential housing industry, it took down consumer spending with it.

    Sound familiar? Sounds like a no-brainer now. But John was saying that five years ago.

    Is there anything he would have changed? If anything, John says, he was too prescient. It was 2003 when he predicted the popping of the housing bubble — too early. โ€œFrom an investorโ€™s standpoint, thatโ€™s almost as bad as being flat-out wrong,” he says. “If it had come out in 2006, it would have made a lot of people a lot of money.โ€

    A sidebar to Johnโ€™s prediction of the real estate bust was the collapse of the dollar. That hasnโ€™t happened yet, but heโ€™s still convinced it will. There is no pain-free solution to the U.S.โ€™s economic woes. โ€œWe have only two choices โ€“ collapse under all the debt, like the Great Depression. Or repudiate the debt by cranking up the money supply.โ€ The latter path, the one the U.S. currently is pursuing, will ineluctably lead to inflation and a plunging dollar. โ€œWeโ€™ll borrow as much as it take to keep consumers spending and banks from collapsing. Weโ€™ll end up destroying the dollar.โ€

    John has little faith in the Washington politicians. The Obama administration is making the same mistakes as the Bush administration โ€“ but on a larer scale. โ€œCrisis is paradise for politicians,โ€ he says. โ€œThereโ€™s no limit to what they can spend. Theyโ€™re actually under pressure to spend more. Theyโ€™re enjoying themselves right now. โ€ฆ But if they understood economics, they couldnโ€™t think they were actually fixing anything. Historians will not be kind to the people in charge for the last 20 years โ€“ or the voters who put them there.โ€

    Following the Bush borrowing binge with an even bigger borrowing binge will only hasten the inevitable reckoning. The Bush/Obama presidencies may well create a brief spell of economic growth, but the next economic cycle will lead to an even bigger bubble and a bigger bust-up down the road.

    Not only are our economic policies unsustainable, so are our environmental policies, John argues. โ€œEven if we had a healthy economy, weโ€™re facing a resource-related crisis thatโ€™s pretty big challenge. Even in good times, it would be hard to fix.โ€

    The fiscal crisis limits our ability to make major changes right now, but it needs to be done. One of the few redeeming features of the Obama spending plan, says Rubino, is the billions of dollars he will be pumping into new technologies. A whole slew of companies have been launched with a slew of interesting technologies. All that government money will create a โ€œhuge tail windโ€ for them, creating the next generation of fabled growth companies. Some of these companies will become household names like Amazon.com, E-Bay and Microsoft โ€“ with valuations to match.

    In all likelihood, the next financial bubble will be tied to green tech. Just as the Internet bubble transformed the economy in a mostly positive way, so should the green tech bubble. It may not be pretty when it ends, but it will re-shape our economy for the better. Although the trends John describes are national in scope, they will play out here in Virginia. If we don’t understand the nature of the problems we’re confronting, we cannot hope to address them.