Bacon's Rebellion

  • MORE VOCABULARY

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    James A. Bacon

    A Phrase for Larry’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 Larry’s Lexicon: “Green Sprawl:” 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 “Big Box Reuse”) 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 (“sprawl”) in a phrase that is clearly defined is a Core Confusing Phrase.

    2) Use of “Location Efficient Mortgage” 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

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    James A. Bacon

    On Jim Bacons post “The Coming Green Boom – and Bubble” 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 Bacon’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 “Breakthroughs” that are not now even imagined.

    There is no evidence at this point that there will be any “Breakthroughs” with more substance than cold fusion – 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 – 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 – 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 – those who could afford expensive Green Technology – 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 “prospered” 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 “enjoy” consumption based “prosperity” within dysfunctional human settlement patterns:

    Over half the population is losing ground – 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 “politics” and gamed the governance structure so that one or the other – but not someone with new ideas – gets 50.5 percent of the vote.

    They have done this by promising that a vote for their “principles” will allow everyone to continue to live a life based on Myth – 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 “Deer Hunting with Jesus” 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

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    James A. Bacon

    Most prophets of doom are a relentlessly dour lot – not only do they tell you why you’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.

    There’s no denying John’s doom-saying credentials, though. Bacon’s Rebellion highlighted his thinking in an article aptly titled, “The Housing Bubble,” in November 2003, in which he elaborated upon his book, “How to Profit from the Coming Real Estate Bust.” John, a former Hanover County resident and writer for Virginia Business magazine, followed up that book by coauthoring another, “The Collapse of the Dollar and How to Profit from It.”

    Now he’s written a third, “Clean Money: Picking the Winners in the Clean Tech Boom,” the first chapter of which lays out a case for looming environmental disaster that’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. He’s a great believer in the power of the marketplace to clean up its own mess.

    John’s themes are so similar to those we explore in Bacon’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 Obama’s porculus package promised to inject billions into “green tech,” 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 John’s pessimism.

    First, John very clearly foresaw the outlines of our current economic crisis: Too much debt. “The basic thesis [of “The Coming Real Estate Bust”] 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.” The phenomenal run-up in debt was unsustainable. And when the housing bust finally occurred, it didn’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. “From an investor’s standpoint, that’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.”

    A sidebar to John’s prediction of the real estate bust was the collapse of the dollar. That hasn’t happened yet, but he’s still convinced it will. There is no pain-free solution to the U.S.’s economic woes. “We have only two choices – collapse under all the debt, like the Great Depression. Or repudiate the debt by cranking up the money supply.” The latter path, the one the U.S. currently is pursuing, will ineluctably lead to inflation and a plunging dollar. “We’ll borrow as much as it take to keep consumers spending and banks from collapsing. We’ll end up destroying the dollar.”

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

    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. “Even if we had a healthy economy, we’re facing a resource-related crisis that’s pretty big challenge. Even in good times, it would be hard to fix.”

    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 “huge tail wind” 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 – 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.

  • EVEN MORE ON INTERSTATE CRIME

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    James A. Bacon

    EVEN MORE ON INTERSTATE CRIME

    On the INTERSTATE CRIME string Charlie said:

    “EMR: Regarding your first point, a lot of people would argue that this is what happened in Washington, and that is the source of traffic problems.”

    Not really. The InterRegional strategy for roadways stops major limited access corridors at the Clear Edge, not the Zentrum (aka, the “downtown.”)

    “Only two highways run downtown (66 and 395) — maybe 295 if you are stretching downtown a bit.”

    True, some of the penetrations were blunted but that just left the Core inside the Clear Edge neither fish nor fowl. Stockholm and Paris are fish, Houston is fowl, or rather foul.

    “Granted, since the Beltway was built, massive development has occurred outside.”

    The InterRegional strategy has “beltways” but they are designed to serve far different land uses at the Clear Edge. You can still have “parkways” into the Zentrum as well. As noted below the issue is Balance.

    “I’d argue the real beneficiary of that is not DC but the inside-Beltway suburbs.”

    If anyone was a “beneficiary,” you are right, it was the Greater North Arlingtons, etc. but compared to a similar area in Stockholm or even Toronto it is not that great.

    “Curious to hear your thoughts on the 66 expansion.”

    I presume since it is on the front burner right now that you mean I-66 inside the Beltway. So here is my take:

    “Anytime Agencies (fed, state, municipal) that control transport take actions to “expand” the capacity of a roadway without this expansion being part of a COMPREHENSIVE, Regionally endorsed and broadly understood strategy to BALANCE TRANSPORT SYSTEM CAPACITY WITH SETTLEMENT PATTERN TRAVEL DEMAND this action only postpones the day that the majority of citizens understand that Business-As-Usual will lead to Collapse.

    In our Vocabulary this “enhancement” just reinforces the Large, Private Vehicle Mobility Myth (L,PVMM) spelled out for NMM below.

    NMM said:

    “I would suspect then that LA has poor settlement patterns OR poorly designed road system which would explain the traffic issues.”

    NMM, you just cannot wing it on human settlement patterns. There are facts and there are Natural Laws that control the function of settlement patterns.

    The Los Angles NUR does not have bad settlement patterns on a Regional scale based on the intensity of land uses inside the Clear Edge. And there IS a Clear Edge for most of the Urbanized area – ocean, steep topography – much of it in public ownership e.g US Forest Service.

    The Los Angles NUR roadway system is not that bad either except that the interchanges take up huge amounts of land in areas that should be part of the Urban fabric and the “freeways” are impenetrable barriers between what are the logical components of Villages, Communities and SubRegions.

    The traffic congestion problem in the Los Angles NUR is caused by the failure to evolve Balance at the Village, Community and Subregional scales. Period. Too many people trying to go too many places at the same time.

    For the record the Los Angles NUR has the second highest AVERAGE density within the urbanized areas in the US of A. The New York NUR has the highest AVERAGE due to several very dense areas (but not ALL of “Manhattan”…).

    The New York NUR is still half the AVERAGE intensity of the Toronto NUR and one quarter of that of the Paris, Stockholm, Wien NURs and other large NURs with far more functional distribution of Urban uses and Openspaces within the Clear Edge. Ever notice all those big forested areas from the Eiffel Tower?

    “… The ultimate problem in this region may not be settlement patterns but road design and geographic problems (i.e. river crossing issues) Think about it of course there are going to be bottlenecks when the only way to get from Maryland suburbs to VA suburbs is over the American Legion Bridge due to the Potomac river.”

    NO, NO, NO. The problem is Balance. It is not possible for everyone to live where they want, work where they want, seek Services, Recreation and Amenity where they want and then be able to create a roadway (or shared-vehicle system) so everyone can go where the want, when they want and arrive in a timely manner. (L,PVMM) IT IS NOT POSSIBLE. It is not just the settlement patterns, it is not just the River, it is IMPOSSIBLE to design or build a system to accomplish that in a large NUR.

    By the way check out what TMT said about 83-million sq feet in the Zentrum of Greater Tysons Corner at 9:42 on the THANK YOU GROVETON string that started out dealing with school governance. You hear more an more planners these days admitting the L,PVMM is just that, a Myth.

    EMR

  • MORE INTERSTATE CRIME

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    James A. Bacon

    Some may recall the story about the Howard County Exec who won an upset campaign against the ruling party establishment in the 70s and then spent the next four years proving to those who voted against him that he would NOT do what those who voted for him were counting on him to do.

    Looks like a similar scenario is evolving because the new administration has a Secretary of Transportation that was chosen for ‘bipartisanship’ (NOT antiPartisanship) and who has little transport credibility. See “LaHood Talks of Mileage-Based Tax: White House Dismisses Controversial Idea to Fund Transportation Projects. WaPo 21 Feb 2009.

    In an attempt to not rock too many boats at once the White House has apparently nixed one of the most important opportunities to improve Mobility and Access now available. They could also reverse one of the three catastrophic mistakes in implementation of an InterRegional roadway system. See “Interstate Crime” 28 Feb 2005

    In summary the three problems are:

    1. Running the Interstate roadways inside the Clear Edge (or the logical location for the Clear Edge) instead of stopping at the Clear Edge as called for by the earlier InterRegional Highway plans. Stopping at the Clear Edge is the normal practice for limited access roadways linking New Urban Regions in Europa.

    2. Artificially holding down the true cost of the Interstate system by limiting the damages paid to Urban citizens in severance damages due to isolating land owners and citizens from the components of settlement that supported their quality of life and their property values. The Urban landscape is littered with orphaned Clusters, Neighborhoods and Villages. NonUrban land owners WERE compensated. This is one of the prime drivers of both Abandonment and Scatteration discussed in the first two chapters of ROOTS OF THE HELTER SKELTER CRISIS.

    3. Failing to develop a fair allocation of the cost of use of the Interstate System and Federal Aid Highways by failing to instituting a equitable weight distance levy on roadway use.

    Now for some reason correcting the only error that is still correctagle without massive expense is viewed as “controversial.”

    How can it be more “controversial” than Lexus Lanes or raising the gas tax enough to make a difference?

    Footnote: This post was drafted on 22 February. On 23 February WaPo carried a lead editorial that said about the same thing about the usefulness of considering at least a step toward fair and equitable weight / distance levies. Credit where credit is due.

    Now if WaPo could just focus on settlement pattern dysfunction…

    EMR

  • THANK YOU GROVETON

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    James A. Bacon

    Groveton:

    Thank you for the data on school performance on the DISSAPOINTMENT CUBED string.

    I wonder what the scores are for Dale City and Bristow profiled in ANATOMY OF A BAD COMMUTE where citizens have the highest average commutes so their children have the benefit of “good” schools?

    Think how much better South Lakes SATs would be if it were one of two high schools managed by a Reston Community Board of Education instead of the educational administrator dominated “consolidated” Fairfax County Board serving over 1,000,000 citizens. (EMR’s father was an elected school board member of a small pyramid in the 40s and fought consolidation…)

    Think how great it would be if all highschool pyramids were coterminous with a Beta Village and every Neighborhood had its own school and every Cluster had a preschool program to match its needs. That was advocated by many in the 60s and quashed by the educational “professionals” in the name of “efficiency” and big travel budgets – See today’s WaPo.

    Think how great it would be if every Zip Code was coterminous with a Beta Neighborhood so that there was data to guide citizens in their decisions concerning Balance and moving components from Beta to Alpha status.

    Think how great it would be if every Cluster was a Census Block (and every Neighborhood as Block Group) so there would be data to guide citizens in their decisions….

    Small is Beautiful and in the long term sustainable.

    EMR wonders if Adolfo Carrion Jr.(new director of White House Office of Urban Affairs), or Derek Douglas or anyone else Carrion hires to help him or to whom he listens would understand how great it would be…

    EMR is also concerned that there will ever again be the resources to implement this evolution — Yes, the Resources that have been burned up to create the Wealth Gap.

    EMR

  • PEC Still Pursues Fight against Big Grid

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    James A. Bacon

    The Piedmont Environmental Council case against the high-voltage transmission line across the Northern Virginia piedmont is still alive and kicking.

    First, the PEC scored a victory in the Fourth Circuit Appeals. This comes straight from a PEC email update:

    “The US Fourth Circuit Court of Appeals in Richmond yesterday released its decision in a case brought by the Piedmont Environmental Council, multiple States and parties, regarding rules set by the Federal Energy Regulatory Commission in implementing the Energy Policy Act of 2005. “The decision directly upholds a State’s right to reject a transmission line project without fear of the federal government stepping in to overrule that State’s determination. In plain language, the utilities do not get a second chance if the State rejects a line based upon the merits,” said Christopher G. Miller, PEC President.”

    Second, the latest numbers for electricity demand fall short of the projections that Dominion used to justify construction of the power line, the PEC contends. Reports the Fauquier Times-Democrat:

    “Economic data from the Federal Reserve of Richmond to PJM’s own data and forecasts highlight that the evidence and rationale for” the line “no longer exists” … Miller said in a statement. “Why should Virginia taxpayers be forced to pay for something that is not needed?”

    The online version of the Times-Democrat story does not say what that data is, nor does it include a response from Dominion.

    Miller said the SCC should reconsider its October 2008 approval of the transmission line, based as it was on now-outdated data.

    A host of new technologies are in the development pipeline that could transform the electric power industry, moving it decisively away from the Big Grid model of remote power plants connected to population centers by huge transmission lines to a Distributed Grid model based upon a “smart” grid and smaller, more numerous power sources in and near the population centers. The current recession, which is more severe than anyone predicted a year ago, undoubtedly will crimp NoVa electricity demand. That could buy time to put into place new energy conservation programs, renewable energy resources and the regulatory structure to tie it all together without the need to build the expensive and intrusive power line.

  • DISAPPOINTMENT CUBED

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    James A. Bacon

    On 29 January 2009 PewResearchCenter (sic) published a social and demographic trends report “Denver Tops List of Favorite Cities (sic): For Nearly Half of America, Grass Is Greener Somewhere Else.”

    The report was picked up by CNN and other media outlets. EMR downloaded it and read it with interest and disbelief.

    In Chapter 32 – The Land Resource concerning the problems with “best places” listings EMR said:

    “A recent survey by the Pew Research Center finds that nearly half of the citizens of the US of A believe that the grass is greener somewhere else and would like to move there if they could. See End Note Six

    6. The January 2009 report by the Pew Research Center titled “For nearly half of America, Grass Is Greener Somewhere Else” is at once an important land mark and an encyclopedia of bad Vocabulary with extensive use of Core Confusing Words and aggregation of data that obscures the importance of the work.”

    THE FIRST DISAPPOINTMENT is that a lot of money was wasted asking important questions using a Vocabulary that was not defined. This Vocabulary was guaranteed to generate a wide array of conflicting Neural Linguistic Frameworks – a topic discussed in Columns #s 71, 72, 73 and 75 and in TRILO-G Chapter 26. – Gibberish: The Vocabulary of Babel.

    For starters, the title is deceptive. The study focused on the 30 largest MSA’s, not “cities.” Boston (pop 590,000) is included by Charlotte (pop 611,000) is not. That makes a huge difference when one gets to DISAPPOINTMENT SQUARED. David Brooks, demonstrating typical journalistic Geographic Illiteracy, missed this point completely.

    Beyond the fact that nearly half of the citizens polled see the grass greener where they are not now living (See TRILO-G Chapter 1. – Wild Abandonment) most of the data is corrupted by poor Vocabulary and superficial analysis. One has to read the questions and the data aggregated to plumb the depth of the silliness but here is a peek:

    What do “city,” “suburb,” “small town” and “rural” mean to each of the participants?

    Lets take some examples from the northern part of Virginia:

    Is Clifton, VA (a Town under Virginia law) that exists in the middle of Fairfax County one of the largest municipalities in the US of A (Fairfax County CONTROLS most of the municipal level services and governance provided to citizens of the Town of Clifton and each of the “local” County Supervisors represents over 100,000 citizens) a “small town”?

    How about the Town of Vienna that is one of the Village-scale components of Greater Tysons Corner, the 8th largest commercial center in the US of A?

    Is the City of Fairfax City a “city” a “suburb” or a “small town?”

    Some who live in each of these three locations would give all four answers as to where they are and what they prefer, given their personal experience.

    Similar examples are endless, especially in the R=20 Miles to R=70 Miles Radius band from the Centroid of the National Capital Subregion.

    The study reinforced what has been said about Creative Class preferences and provided work for former WaPo staff (some of whom did similarly flawed work when working for the paper) but other than that, the study is largely a waste of time and a waste of a wonderful opportunity.

    DISAPPOINTMENT SQUARED

    On 16 February, David Brooks wrote an Op Ed for the NY Times. (Posted as a comment by an “Anon 8:15 AM” in BACK TO “BELTWAY BURDEN.”

    David Brooks, like many “journalists” likes to think of himself as a free thinker and is sometime viewed as an iconoclast. He is a “story teller” as defined in The Shape of The Future. Brooks gets paid because he is an entertaining writer. Most important to The New York Times, they can sell Autonomobile advertisements because Brooks along with John Tierney, Joel Kotkin and others appear in the paper. See THE ESTATES MATRIX.

    There is not much in the Brooks Op Ed that is “wrong” but it leaves a profoundly distorted impression with anyone who does not understand more that Brooks about Amsterdam and Denver and far more about human settlement patterns than Brooks.

    Is Brooks talking about the Zentrum of Amsterdam or the Amsterdam New Urban Region? They are different places and in fact some settlement patterns in the later would appeal to a wide spectrum of those seeking greener pastures.

    The places Brooks says people are attracted to are places where “the boundary between “suburb” and “city” is hard to detect.” Like that is not the case elsewhere? The BIG difference is most of the places Brooks lists – and not just Portland – have a Clear Edge around the Core of the New Urban Region unlike the Washington-Baltimore and Houston New Urban Regions.

    Brooks does not mention that ALL the places he lists as being attractive have had a explosion of share-vehicle system construction over the last two decades. And an explosion of transit related development. They are LESS auto dependent than many places in the National Capital Subregion – for example Dale City and Bristow.

    Denver is known for its Light Rail system and station area development and the BRT system in the Zentrum. There is the Lower Downtown / Coors Field, Invesco at Mile High, redevelopment of Stapleton and other urbane living and working environments. Some are approaching Balance.

    Sure there are critics of non-autocentric settlement patterns. Many paid directly or indirectly by Autonomobile Enterprises. The market makes clear that those who believe what the pro-Autonomobile shills spout make up about 20 percent of the population. Those who actually put their money where their mouth is and buy urban dwellings is the pattern and density that Wendell Cox, Joel Kotkin, John Tierney, the American Dream Foundation, Reason et. al. – and relish the David Brooks snarkyness – make up about 12.5 percent of the population.

    You would think from their writing that they are standing up for the oppressed masses who are being deprived of the American Dream by demon socialist forces.

    But go ahead and write this fun stuff. It sells papers and makes for “balanced journalism” just like Peanut Corp of America represents good old American competition.

    DISAPPOINTMENT CUBED

    Rather than try to use the Brooks Op Ed to understand how to change the unsustainable trajectory of civilization, the Brooks item is used by Bloggers to club EMR. They have not bothered to read the Pew report or consider what Brooks is really saying.

    NMM why are you so ready to abandon the market? Why are you so delighted to hop on yet another ideological hobby horse?

    The responses to ANATOMY OF A BAD COMMUTE and to BACK TO “BELTWAY BURDEN” show again how ineffective the Blog format is to help citizens understand how to evolve away from dysfunctional human settlement patterns.

    If citizens want challenging work, the most interesting companions and access to a sustainable Countryside they need to figure out how to evolve functional Urban settlement patterns. The alternative is places like Dale City and Bristow and in the end, Collapse.

    Ok, there are will be places where one can make a living by “taking in one another’s laundry,” over winter by eating root vegetables and driving to 20 year old cars – Cuba in the Heartland.

    A sustainable trajectory for civilization that is anything like the current level of amenity depends on real research and real journalism, not story telling.

    EMR

  • Understand Economics By Reading History

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    James A. Bacon

    BR readers must read Niall Ferguson’s “The Ascent of Money: A Financial History” (2008).

    This historian, I say again – historian, nails the current economic crisis when he is writing back in 2007. Calling it blow by blow and laying out the options so accurately validates his credentials.

    Ferguson’s book is a tour de force on the modern history of economics.

    He describes how the financial revolution preceded the Industrial Revolution. He makes the case for money as the root of most progress. (I try to project that in the future in my writing about a Munificent Destiny based, in part, on growing capital).

    He shows the influence of culture. And individuals innovate. New ideas make a difference. Economics evolve.

    Yet, it always comes back to capital and the essentially human influences – fear and greed rage – that shape the economy.

    Socialism and special interest statism transform personal theft into public theft.

    Ferguson shows how China and the U.S. are like England and the U.K. in the 19th Century.

    Likewise, he shows how catastrophes are overcome.

    And, that this current crisis isn’t unique as the politicians are bleating. It’s a bubble. The U.S. – and other countries – have gone through other bubbles.

    This bubble doesn’t compare to a real catastrophe. Like what happened in the South when the capital value of the money went to zero in 1865. It took 90 years and 3 generations to come back.

    Great book. Easy reading. No math skills needed other than recognizing which numbers are bigger than others – when the author lays out what happens and why.

    Super perspective on the current crisis. How President Bush screwed things up with his bailout actions. And how President Obama’s actions so far are precisely the wrong things to do. Likely, soon to be followed by more wrong – and detrimental – actions.

  • BACK TO “BELTWAY BURDEN”

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    James A. Bacon

    The ULI, et. al. report BELTWAY BURDEN that Larry Gross called to everyone’s attention at

    http://commerce.uli.org/misc/BeltwayBurden.pdf

    is a very good piece of work. The Real Estate Section of the 14 February WaPo has a brief summary under the title “Factoring In the Cost of Getting Home.” By the way the entire Real Estate section (usually printed in two parts) was six pages on the 14th.

    The report is a very useful contribution to understanding EMR’s post ANATOMY OF A BAD COMMUTE.

    Upon further review a few comments:

    EMR wonders why it was call “BELTWAY BURDEN?” The burden is not the “Beltway,” it is dysfunctional location and the radial distance from the Core focused job locations.

    The data is collected on a Census Block Group basis – which is very good – but it is aggregated by municipal jurisdiction. Think how much more clear the message would be if:

    • It was noted that 85 percent (or more) of the jobs in the National Capital Subregion that are not jobs that directly support residential land uses at or below the Village scale (e.g. food and beverage, etc.) are located in the little red boxes on the maps, and

    • The data was aggregated by Radius Band and by organic component of human settlement pattern. If it is too much to ask to be aggregated by organic component of human settlement pattern, how about Radius Band and Census Designated Place?

    Equally important, it would have been much more effective it the report included all the territory that is in the National Capital Subregion. That would mean putting back in the MSA, the areas taken out for political reasons after the 2000 census such as Winchester and Frederick County VA., Culpeper and King George Counties, etc. While they were at it they should have included Rappahannock and Madison Counties in Virginia, the relevant counties in West Virginia and Maryland so that all the jurisdictions within a 70 mile radius from the Centroid of the Subregion are included. That is clearly what the 2000 Census indicated is in the commuting shed.

    A complication that comes from multi-state Subregions is indicated by the listing of Fredericksburg, VA as the jurisdiction with the lowest cost. Also if Maryland treated “cities” as independent entities as Virginia does, Frederick, Md might well rank as well as Fredericksburg, VA. Lumping Frederick, Maryland with Frederick County Md. makes it look like the Maryland city is $10,500 higher in average total cost.

    Another suggestion would be to not interchangeably use “community” and “neighborhood” and to clearly define what is meant by both terms.

    Then there are two overarching issues:

    No where is there a discussion of the need to evolve Balanced Communities in order to bring down the costs.

    Second, and related, is implicit reinforcement of the Large, Private Vehicle Mobility Myth.

    On the front page of the 14 February WaPo three is a story about the Regional impact of the latest federal stimulus package. “Regional Impact: Billions Slated For Area Schools, Transportation.” Buried six paragraphs down on the jump page is the following:

    “The more than $1.6 billion for transportation represents a fraction of what officials (sic) said is needed to unclog roads in the region beset by some to the country’s worst commutes.”

    NO, NO, NO

    There is no amount of money will “unclog” roads if the money is spent just on transport facilities. There must be a redistribution of demand (aka, functional settlement patterns). This redistribution must match the capacity of the transport facilities with the demand. Building more facilities just induces more widely scattered urban land uses that generate more per capita demand and more congestion.

    Belief that there is a way to build ones way out of congestion is the Large, Private Vehicle Mobility Myth as documented by Tony Downs cited in THE ANATOMY OF A BAD COMMUTE.

    On a related note under the THANK YOU LARRY post, Larry asked:

    “If the “right sized house in the right location” includes homes that are near “shared vehicle” facilities – would that include the use of “shared vehicles” 50 miles from work – as long as they still lived in a “right sized” home?

    “In other words – is there also a requirement that the “right location” not use shared vehicle systems for home to work commutes?”

    EMR believes Larry already knows the answer to this question but…

    Functional and intelligent application of “commuter rail” and “inter-urban” service started as a way to get a few of the residents of what was already a relatively Balanced urban enclave to a job location. By definition most of the residents of the enclave – large or small – lived, worked and secured services IN the enclave. Later day illusions that most residents can hop on the train (or on a PRT or a heavy or light rail shared-vehicle system) is just the shared-vehicle version of the Large, Private Vehicle Mobility Myth.

    That is why station-area Balance AND system wide Balance between system capacity and settlement pattern generated demand is so important. Today, most of the METRO system trains leave most of the METRO stations essentially empty most of the time due to a lack of Balance and thus the huge cost.

    Now back to Larry’s question.

    If the shared-vehicle system serves origins and destinations that are 50 miles apart and if most of the station-areas are Balanced then there is no reason A FEW of the station-area workers cannot travel 50 miles if that is what works best for their Household.

    EMR

  • Southern-Fried Management

    Posted on

    by

    James A. Bacon

    The horror story of Lynchburg’s Peanut Corporation of America only gets more gruesome. This little company that operated out of a backyard garage is involved with the deaths of nine people and illness of 637 others in 44 states and Canada from Salmonella due to egregiously unsanitary working conditions at PCAs plants in Georgia, Texas and Virginia.

    Stewart Parnell, the company chief who sold tainted peanut butter in food products used by school children, soldiers and the elderly, took the Fifth when interrogated by a Congressional committee this past week. His firm is now bankrupt, the plants are closed and Parnell faces possible criminal charges and a raft of civil suits.

    Media accounts, especially by The Washington Post and Georgia newspapers, note that Parnell’s factories operated under horrific conditions. Rat and other rodent feces were widespread, roofs leaked and allowed defecating birds to fly about inside, salmonella-tainted vats of peanut butter continued on in the production process although company officials knew it.

    And workers who complained were fired or otherwise intimidated.

    What is amazing is how such treatment of non-union labor, coupled with food processing conditions straight out of the 19th Century, are still tolerated while the Employee Free Choice Act, which would level an uneven playing field when it comes to union elections is the Big Bogeyman across boardrooms and among right wing pundits especially in the South.

    This reactionary behavior just shows how things really don’t change in the anti-union South and how workers are “simply luck to have a job, Boy,” and should have no say in how they organize, how they work or what contributions they might make to their safety and that of the company they work for and the public. I know of what I speak. My first job 38 years ago was at a rabidly-anti-union small town newspaper in North Carolina. I was a labor organizer and negotiator at The Virginian-Pilot when it was trying to force the local bargaining unit the recertify in the 1970s (it failed) and later worked twice for anti-labor Media General as a reporter and a manager.

    The free choice act would allow workers thinking about exercising their legal right to organize to do so more easily. They would merely have to sign a card. Right now, the local or bargaining unit must hold a formal secret ballot supervised by the government’s NLRB. Problem is, the voting gives management a major and easy target to turn up the screws and intimidate workers into rejecting the union.

    Right-wing editorial writers and pundits, putting on their funny glasses, naturally see it the other way. Here’s a gem from a December editorial in the Richmond Times-Dispatch:

    “The comically named Employee Free Choice Act, more popularly known as the card check bill, would essentially eliminate the secret ballot from union organizing elections and force companies to accept the unions’ most outlandish demands when negotiating workplace contracts. It would open workers to blatant intimidation by union partisans — forcing employees to declare publicly whether they support efforts to organize.”

    The big and secret joke here is that Media General, owner of the newspaper, forces new workers to sign a document saying they have read and condone a “corporate philosophy” that Media General wants to be union-free. This is what has been known as a “Yellow Dog” contract that tries to take away the legal rights of workers to organize. We’re back to “You lucky to have a job, Boy!” Who is intimidating whom here?

    Ditto, the pathetic Bacons Rebellion, the formerly erudite e-zine that has been taken over by a bunch of right wing public relations people, marketing salesmen, spin doctors and other hacks. Here’s an excerpt:

    ” . . . a major U.S. labor leader has already boasted that the passage of the Act will enable unions to gain 15 to 20 million new members in the next 10 years, thus essentially doubling union membership in our country. Labor union dues and revenues would increase by five billion per year resulting in increased union economic and political clout. Instead of simply leveling the playing field, the Wall Street Journal has recently opined that the EFCA would result in “union supremacy.”

    Lawdy!

    What’s needed in Virginia, especially in this downturn, is a major and sophisticated rethinking of labor relations. Unions should not be seen as a bunch of Hoffa thugs, workers can make important suggestions about safety and efficiency, and they can be partners with management.

    For an example, consider a new book called “Why GM Matters,” written by a close friend of mine, Bill Holstein, with whom I have worked on and off for 23 years. Bill is an expert, former foreign correspondent with long experience writing about business in China, Japan, and other places. He was with UPI in Kabul when the Soviets showed up and he knows a lot about American and Japanese car companies. In his timely book, he contrasts how Toyota treats its workers and how GM used to:

    “Part of the profound knowledge was based on a deceptively simple axiom. Toyota managers relied on workers to make cars, so it built a manufacturing system around their needs. For Toyota, this had led to a completely different relationship between management and labor. In the bad old ways at GM, management dictated what would be built and with what equipment. It really didn’t care how the workers made the vehicles, consequently, workers didn’t really care how good the cars were.”

    I’d like to think that at some point, the Old South can get more sophisticated. But old ways, such as union-bashing by newspapers and “think tanks” along with corporate behavior like that of the Peanut Corporation of America, die hard.

    Peter Galuszka

  • The End of our “Mall-Centric” World?

    Posted on

    by

    James A. Bacon

    I commend to your attention a brilliant essay, “Ghost Malls,” by James Quinn in The Prudent Bear on the dismal future of retail development in the United States. I then invite you to ponder the implications for (a) commercial development in Virginia, (b) the public fisc, and (c) human development patterns.

    Permit me summarize the key points.

    Retail developers have built thousands of malls and shopping centers around the country predicated on the assumption that consumer spending would continue on the same trajectory as seen over the past two decades. In light of the vast liquidation of wealth in the housing sector and the stock market — a sum measured in the multiple trillions of dollars — American consumers have been shocked to their senses. They are retrenching, restoring their collective savings rate from about zero to a figure that could approach eight percent of income, the level that prevailed before the great credit bubble commenced.

    “No amount of fiscal stimulation will reverse this trauma,” Quinn writes. “Consumer spending has accounted for 72% of GDP. It will revert to at least the long term mean of 65%.” That’s a shift of massive proportions, and the impact on the retail economy cannot be overstated. While some economists think that consumer spending eventually will rebound as consumers satiate “pent up demand,” Quinn is not so sure. “Americans have bought everything they’ve desired for the last 20 years. There is no pent-up demand if you own 20 pairs of jeans and 60 pairs of shoes. The over-spending and over-leverage will take a decade to unwind.”

    I agree with Quinn, and I would add to his argument. Consumer spending is dominated in the United States by the Baby Boomer generation. Not only do Boomers have to pay down debt, they are awakening to the fact that retirement is fast approaching. And while a majority of Boomers have resigned themselves to working a few years longer than anticipated in order to fund their retirement, they also know they have to build up their savings. Accordingly, I would not be surprised to see the national savings rate shoot past 8 percent — perhaps into the 10- to 12-percent range.

    So, what are the consequences for developers of retail property? Major retail chains are already dropping like flies — Circuit City, Linens N Things, Bombay Company, Sharper Image, Foot Locker and Pacific Sunwear, just to to mention the bigger ones. Other retailers are scaling back expansion plans. Quinn expects to see 15 percent of the nation’s retail base disappear by 2011, and for vacancy rates in new malls to shoot up to 25 percent.

    The next dominoes to fall will be the commercial real estate developers who speculated that consumer spending would increase without end. Writes Quinn:

    Most of the retailers that are closing, lease their locations from mall developers. Many of these developers borrowed heavily to finance massive mall expansion. The term of these loans were generally five to seven years. The Wall Street wiz kids and their collateralized debt obligation (CDO) machine generated the vast preponderance of such financing in the last five years. According to commercial real estate expert Andy Miller, the collapse will come more rapidly than the residential collapse.

    Billions in debt needs to be refinanced in the next two years and there is no one willing to make those loans, Quinn continues. As night follows day, we will see spectacular developer bankruptcies, and we’ll see regional banks take huge hits on their original loans. I would add one point: While all retail developers will suffer, those who have built in fast-growth counties on the metropolitan fringe in the expectation of population growth that may never materialize, will be hit the first and the hardest.

    Concludes Quinn: “As Americans realize that they don’t “need” a $5 Starbucks latte, IKEA knickknacks, Jimmy Cho shoes, Rolex watches, granite counters and stainless steel appliances, our mall-centric world will end.”

    I don’t know if our mall-centric world will “end” but I do believe the United States is transitioning into a very different economy. What applies to the U.S. as a whole certainly applies to Virginia. The painful restructuring of the economy will send tidal waves ripping through state and local tax revenues. Former fast-growth counties will find themselves particularly hard hit. To avoid being inundated by the waves, Virginians need to re-examine all the old assumptions — from population growth and tax revenues to the need for and location of new road capacity and other infrastructure. Failure to re-think fundamental assumptions will only compound the inevitable misery.

  • TIME’S LIST OF 25 TO BLAME

    Posted on

    by

    James A. Bacon

    Before it goes away, you might take in Time’s list of 25 people to blame for the Global Financial Meltdown. (Time just calls it a “financial crisis.”)

    The list is fun, the voting by citizens on the rankings is very interesting.

    Note that Phil Gramm comes in number one in the “Average Rank” voting but in total votes “The American Consumer” gets the most nods (well deserved) followed by G. W. Bush and Alan Greenspan.

    All in all it is a great summary – except of course it is all about people and nothing about location, settlement pattern or Wrong Size House in the Wrong Location.

    Look forward to thoughts about who else should be on the list. Time just listed one from each “category” (circle of Hell) so the list could easily be the top 75 with more bankers and more hedge fund types on the list.

    EMR

  • Whatever happened to sustainable industries?

    Posted on

    by

    James A. Bacon

    For better or worse, here’s a story I did for Richmond’s alternative newsweekly, Style Weekly. The topic involves how lots of bets go bad when it comes to economic development.

    A few examples:

    Republican Governor George Allen went heads over heels with Motorola showed interest in two silicon chip making plants in the Richmond area back int he 1990s. One was finally built with about $80 million in public goodie money. Well, Qimonda, a German firm, is going through its death throes and just about everyone at the Henrico County facility faces job extinction.

    Democratic Governor Mark Warner went heads of heels when Wachovia Securities wanted to move after merging with Prudential Securities about a decade later. The goodie basket was opened again. Well after staying in downtown Richmond for maybe four years, the firm merged with brokerage A.G. Edwards and split for St. Louis. You know the rest of the story — Wachovia is now owned by San Francisco-based Wells Fargo after it got screwed by buying up a lot of toxic, subprime mortgages.

    There’s plenty more. Here’s the URL:

    http://www.styleweekly.com/ME2/Audiences/dirmod.asp?sid=&nm=&type=Publishing&mod=Publications::Article&mid=8F3A7027421841978F18BE895F87F791&tier=4&id=7A5BF133D55A4499A7D807A1FC72232D&AudID=AE6FBAD9A9574D429566425E856C8C66

    Let me know what you think.

    Peter Galuszka

  • THANK YOU LARRY

    Posted on

    by

    James A. Bacon

    Your citation to BELTWAY BURDEN

    http://commerce.uli.org/misc/BeltwayBurden.pdf

    is a real service.

    Since moving to a Beta Village in the Countryside in 2002 EMR’s focus has been on understanding the economic, social and physical reality outside the Clear Edge around the Cores of New Urban Regions.

    EMR was not aware of this work but it is a worthy successor to the 6th item listed in ANATOMY OF A BAD COMMUTE. In fact those little red “employment centers” are the “activity centers” that could grow to be the Cores of Balanced Communities.

    BELTWAY BURDEN is consistent with all the well founded work EMR has seen over the past three decades.

    There are a few problems:

    The great graphics make the file very large to download and print.

    The work was done just before the roof fell in vis a vis gasoline prices, so some will discount the work because gas in now “cheap.”

    Of course the data is aggregated by municipal jurisdiction and there is some use of Core Confusing Words but one cannot have everything.

    Someone needs to step up and look at these issues in light of the new reality. In the meantime all those interested in evolving functional human settlement patterns should have this in their libraries.

    EMR

Now Available

Book cover of 'Dust Mites: A Second American Revolution' by James A. Bacon, featuring astronauts planting a flag with a blue and white emblem on a lunar landscape, with Earth visible in the background.
For sale on Amazon.com

The year: 2075. The American colonies on the Moon are getting restless under Washington’s tyrannical rule….

This second edition of “Dust Mites” has a snazzy new cover, includes helpful lunar maps, and is 5,000 words tighter than the original. The sequel, “Trogs,” is scheduled for publication this summer.

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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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