Bacon's Rebellion

I like to think that it takes a certain minimum IQ to be a BR Blogger. Discussing land use, patterns of human settlement, the woes of Virginia’s Republicans and Tri-O-G requires a certain amount of wit. Or does it?

Let’s find out.

In the spirit of the season, here is a simple Christmas quiz to see how much you really know about the holiday. Here goes (No Cheating!):

(1) Name all of Santa’s reindeers.

(2) What does the “nog” in “egg nog” mean?

(3) What is a “Tannebaum?”

(4) What was the name of the angel who announced the birth?

(5) What were the gifts the Three Wise Men brought? (extra credit for correct spelling.)

(6) On the 12th day of Christmas what was the gift?

(7) Who wrote, “Yes Virginia, There is a Santa Claus?”

(8) What was the nose on Frosty the Snowman made of?

(9) What is a Yule?

(10) Who were the stars in the movie “White Christmas?”

Good luck, Merry Christmas and Happy Holidays!

Peter Galuszka

TRILO-G Chapter 15 – Learning From Delmarva – spells out what can be learned about THE USE AND MANAGEMENT OF LAND from the small Urban Support Region that occupies the DelMarVa Peninsula between the Chesapeake Bay and the Atlantic Ocean.

Following completion of Chapter 15, the prospect of contemporary economic and social changed dramatically. (See Introduction to Vol II, BRIDGES about books never being ‘completed.’) Urban Support Regions have existed since the emergence of New Urban Regions following World War II – but they may not exist for much longer.

What Happened?

By the start of the fourth quarter of 2008 it was clear that the shelter bubble had burst in the US of A and in other nation-states that allowed Autonomobile driven (aka, autocentric) human settlement patterns to become dominant. See THE PROBLEM WITH CARS.

The ‘housing bubble’ had actually been deflating for two years and many – including the Chairman of the Fed – thought (prayed) that it was just another “adjustment” in the “natural business cycle.”

But no! The ill-conceived strategy to ‘solve’ the Affordable and Accessible Housing Crisis by driving up ‘home ownership’ Collapsed.

Pumping billions of dollars into the shelter market (and in the process funding and exacerbating the Helter Skelter Crisis and the Mobility and Access Crisis) was never a good idea. Freddie, and Fannie’s tragically failed speculation scheme put hundreds of thousands of Wrong Size Houses in the Wrong Locations and when this became obvious to all, the house of cards (aka, house(es) with bad loans) Collapsed.

Fannie and Freddie’s Collapse exposed shockingly shoddy lending and banking practices – and criminally negligent Agency oversight – that resulted in lending the wrong amounts of money to the wrong borrowers.

Much more important, the shoddy practices resulted in lending the wrong amount of money secured by the Wrong Size Dwelling in the Wrong Location. If it were just a bad loan to a poor risk, someone would buy the property when the defaulted. Massive numbers of bad loans on badly located properties lead to Collapse.

The shelter tragedy is:

• Personal for those who were bilked
• A just reward for those who will go to jail for fraud, and
• Completely avoidable but for the those who claim to be guided by the ‘free market’ but ignored the re real market and failed to come to an understanding of human settlement patterns and the forces that drive dysfunctional settlement patterns.

There is tragic irony because:

• During the run up to Collapse, sane professionals had evolved a “Location Efficient Mortgage” strategy. LEM is driven by ‘smart growth’ advocates but is based on the most intelligent lessons – as opposed the greatest short-term pay out – of 75 years of housing policy experience.

• The market demonstrates that most citizens prefer non-Autonomobile dominated settlement patterns.

• New Urbanism has provided life size working models of places at the Alpha Cluster-scale and Alpha Neighborhood-scale that work. The market is responding to these places. All New Urbanists need to do is to learn about Critical Mass, Balance, real Regionalism and the need for a comprehensive Conceptual Framework.

• Since at least 1973, intelligent voices have been predicting exactly what happened – although most had no idea of the massive scale of Financial Enterprise greed and fraud. The last 35 years of predictions were based on warnings first articulated in the early 1920s.

As time passes the over-inflation of Wrong Size Dwellings in the Wrong Location – scatteration of urban land uses and dysfunctional human settlement patterns – drive more and more mortgages under water and the pain spreads. See 23 December report from Nat Ass of Realtors.

The ill-conceived shelter strategy and the shoddy lending and banking practices exposed the gross negligence of Agency regulators and Enterprise ‘valuation’ and underwriting services which allowed and facilitated the proliferation of collateralized debt obligation ‘securities’ and other Ponzi schemes – classic and freshly conceived – to deflate the entire Global financial structure.

These events exposed the frailty of an economic system primarily driven by consumer consumption without regard to finite physical limits of resources and the importance of settlement patterns.

When consumers are not happy and safe – aka, scared – they do not buy.

They do not by new Autonomobiles and the Autonomobile industry has to be bailed out. They do not buy things they do not really need and the retail and service sectors go down. Even “developers” want a bailout. The dropping oil prices are a barometer of “trust” and the cumulative result of individuals balancing Need and Desire (See Chapter 23).

For reasons spelled out in THE ESTATES MATRIX few believe what they read in MainStream Media. Soon they will not believe advertising of any kind and the source of revenue to provide information to citizens will disappear.

As noted in GENERATIONAL GENERALIZATION:

The emerging reality is Collapse of the Mass OverConsumption ‘civilization’ that has been driven by those at the top of the Ziggurat who are wasting Natural Capital to:

• Pay the total cost of a ‘driven-to-frenzy-by-technology’ society, and

• Subsidize the full cost of dysfunctional settlement patterns.

So what does this have to do with Urban Support Regions?

As Chapter 15 points out there is a great deal to be learned about the USE AND MANAGEMENT OF LAND – or rather the misuse and mismanagement of land – from Urban Support Regions. The Urban Support Regions have proven to be a bellwether and some of the most damaging aspects of dysfunctional human settlement patterns – scattered urban land uses and the proliferation of short grass pollution – are clearly demonstrated.

The bottom line is that Urban Support Regions depend economically, socially and physically on interRegional transfers of wealth, goods and services that are dependent on long-distance, high-energy consumption activities:

• Second homes
• Tourism
• Climate / topography delimited Recreation
• Colleges and Universities in Communities in the Countryside
• Export of food and fiber
• Export of energy and raw materials

The cost of everything that involves energy will go up, and up – unless no one has money to buy the good or services – see the gas price at the pump this week.

Exporting energy will be very costly because the energy will have to be ‘green.’ If the energy is converted to electricity there is line loss; and coal is heavy; and… there is no escape, PERIOD

Enjoying a cappuccino on a front porch along Talbot Street (‘main street’ in Saint Michaels, MD – a special place in DelMarVA that exists to support second homes and tourism), EMR noted trucks delivering building supplies from the Cores of the three primary New Urban Regions that make DelMarVa an Urban Support Region. (They are, of course, Washington-Baltimore NUR, Philadelphia NUR and Hampton Roads NUR. New York NUR and Richmond NUR also contribute, but not as much.)

Having three potential sources of doors and windows is “competition” in a Friedman Flat Earth economy. It is “unsustainable inefficiency” in a finite resource economy with high energy costs.

Where to from here?

There are three possible directions for all or parts of Urban Support Regions:

One. They may become small New Urban Regions through intelligent use of import replacement to reduce the Critical Mass necessary to support their Balanced Communities.

Two. The may becom
e SubRegions of the dominate NUR – Expand Philadelphia NUR down the DelMarVa Peninsula or expand the ties to Hampton Roads NUR through the bridge-tunnel or span the Chesapeake Bay to the Washington-Baltimore NUR. With high energy / transport costs for Autonomobility (and for trucks) one can easily figure out the probabilities.

Three. De-urbanize. Vast parts of Urban Support Regions will go the way of the proposed Buffalo Commons.

How to decide which way to go is sketched out in THE USE AND MANAGEMENT OF LAND. A Window on the process is provided by the discussion of MegaRegions – the expansion of the Los Angles NUR to Las Vegas and emergence of three ‘new’ MegaRegions based on the Denver NUR, the Salt Lake NUR, and parts of the Southern Rocky Mountain Urban Support Region morphing into a “New Mexico” Mega Region. See Chapter 13.

(Note: References to other part of TRILO-G are left in this post to indicate where additional resources can be found when TRILO-G is completed.)

EMR

Chesapeake City officials say it would cost $300 million to replace the aged Jordan Bridge across the South Branch of the Elizabeth River.

Fellow BR bloggers.

I don’t know if you’ve seen the new Bacons Rebellion -E-Zine which seems to be little more than a marketing effort for privatization of government. Only one former Zine writer is on the list — the rest are PR flaks or “anonymous” state workers, which is a cute gimmick.

However, I have tried to pull up some of my old stories from the zine and I can’t. Can you? Could it be that the new operators have erased all of our work from servers into the dustbin of history? All those hundreds of hours of work and dozens upon dozens of columns all gone?

If so, this is truly awful.

Let me know if you can pull up your pieces. If you can’t I think we need to start a campaign with Jim Bacon to fix this.

Peter Galuszka

On Salom.com, Michael Lind excoriates Southern states for leading the attempt to “kill” the North’s auto industry by opposing the multibillion-dollar bailout of the Big Three (or should we now call them the Midsized Three?) automakers in Detroit. He accuses Southern states, led by “Neo-Confederate” elites, of engaging in beggar-thy-neighbor economic development policies to advance the interests of their own foreign-owned automobile manufacturing interests.

He finds this “race to the bottom” economic development strategy to be “shocking” and a threat to national prosperity.

Today the division is no longer between slave and free states, or agrarian and industrial states, but between two models of industrial society — the Northern model, based on adequate public service funding and taxation and unionization, and the Southern model, based on low-tax, low-service government and low-wage, non-unionized, easily exploited labor. If the industrial North and the industrial South compete for global capital investment, then the industrial South is likely to prevail, because Northern advantages in the form of a skilled workforce and superior public services are unlikely to overcome the South’s advantages of low wages and low taxes and state and local tax subsidies. The result, sooner or later, will be the Southernization of the North and Midwest, as states in the historic middle-class core of the U.S. are forced by economic pressure to emulate the arrangements of Alabama and Mississippi and Texas.

The alternative to the Southernization of the U.S. is the Americanization of the South — a process that was not completed by Reconstruction and the New Deal and the Civil Rights era, which can be thought of as the Second Reconstruction. The non-Southern states, through their representatives in Congress and the executive branch, and with the help of enlightened Southerners, need to use the power of the federal government to put a stop to the Southern conservative race-to-the-bottom strategy once and for all.

Lind brushes up against the truth in one regard, although he really doesn’t understand the meaning of it: Southern states do subsidize economic development projects, and such beggar-thy-neighbor competition is indeed harmful, insofar as it undermines the state/local tax base. To a large degree, the states of the old Confederacy concentrate resources on corporate and industrial recruitment, an outmoded economic development model. But the solution isn’t unionism and government. The path to prosperity and higher living standards in a globally competitive economy is through productivity and innovation, achieved through the development, recruitment and retention of human capital (Economy 4.0 in Bacon’s Rebellion parlance).

Lind’s prescription of achieving industrial prosperity led by unionism and government is tragically wrong-headed. The states that have tried it, like Michigan, are sliding down the economic drain pipe.

Lind is obtuse on so many levels that it is hard to know where to begin. Let me try.

First, he seems oblivious to the fact that opposing multibillion-dollar subsidies with no accountability is not a long-term solution to the woes of the Northern automobile industry; subsidies are no more than a license to pick the pockets of taxpayers nationally and will accomplish nothing more than delay the painful but necessary restructuring of a failing industry. Furthermore, Lind evinces no awareness that Southern employees of automobile manufacturers might legitimately resent subsidizing unionized competitors that countenance unproductive work practices and support health care benefits for workers and retirees that are not only more generous than those of Southern auto workers but more generous that those of just about anyone in the country — excluding, possibly, federal employees and members of Congress.

Secondly, Lind makes appalling generalizations about the political economy of economic development in the South. The industrial recruitment approach to economic development doesn’t emanation from “conservatives” or “neo-Confederates.” It reflects the conviction of both Democrats and Republicans and politicians of all races that the creation of jobs and expansion of the tax base is a worthy object of public investment. That philosophy has its flaws, as I have enumerated on this blog. But it has nothing to do with “conservatism,” nor even the South — just look at the tax breaks handed out by New York City in years past to prevent the flight of its leading corporations.

Thirdly, Lind ignores the extent to which many Southern metropolises have pushed beyond the industrial-recruitment economic development paradigm by focusing on entrepreneurial growth. Northern Virginia, Austin, Atlanta, Charlotte and the Research Triangle are the best examples. Sadly, not a single one of the unionized/big government cities of the Midwest have reinvented themselves to the same degree.

Fourthly, as for the “race to the bottom,” decaying Midwestern and Northeastern states are far better illustrations of that phenomenon than even Mississippi or Alabama. Although progress is measured in incremental gains over decades, Southern states are slowly but surely closing the wage gap between themselves and the rest of the country. The states that have adopted Lind’s paradigm have squandered their lead despite enormous advantages, including a better educated populace, the presence of corporate headquarters and major industry clusters, world-class universities and massively endowed not-for-profit institutions that underwrite community initiatives.

Lind seems totally unaware that he is defending a failed governance model: the idea that taxes don’t matter, that corruption doesn’t matter, that productivity-stifling work rules don’t matter, that higher levels of state/local public spending miraculously inure to the benefit of the general good and not to the benefit of politically powerful constituencies. He would use the coercive power of the federal government to impose an antiquated and ruinous philosophy upon the entire nation. I don’t think he will find too many “enlightened southerners” willing to go along.

Virginians need to be concerned about what the federal government will do to screw up the economy – like Hoover and FDR did. Bad ideas come from both sides of the aisles and in and out of state. This is a critique of some wrong-headed ones coming out of our Commonwealth. I’m sure there are many more here and across the country.

The federal government is supposed to regulate commerce – set standards – for commerce across state lines. It isn’t the federal government’s job to provide “a helping hand to businesses in need.” States can do as they please. But, it isn’t in the Constitution for the U.S. Congress “to create solutions that will both help industry stay afloat and protect taxpayer investment.”

See James Madison’s notes on the Constitutional Convention and the Federalist papers for original intent. See 20th Century Federal Court (including SCOTUS) decisions for contempt of intent and writing legislation from the bench.

Furthermore, it’s just bad business. Legislators will make presumptions like this one for the Automobile industry; “the most important piece of any recovery package to be considered by Congress is that the company in question be required to provide a viable restructuring plan. This plan must clearly demonstrate how a business would return to profitability in the long term.”

As if members of Congress will recognize which plans are viable. How can the Congress, which is incapable of running its own budgets in the black, know which plan demonstrates long term profitability? Who are these automotive industry experts serving as Congressional representatives and senators? What justifies any presumption of competence about what is best for business among politicians of every stripe?

Congress should stay out of the business of picking winners and losers in business – and dumping money on them. Even if Congress requires ‘a plan’ before they start throwing money.
Yet, elected politicians think “Another option that should be considered, either prior to or in conjunction with federal loans, is a program of private financing with federal guarantees. There is no doubt that shaky credit markets have adversely impacted the availability of credit, particularly for firms that are struggling for survival. However, Congress can create a program whereby the federal government provides insurance on private investment for businesses in need. This insurance would be funded by the participants with a modest FDIC-like fee and would cover up to 50 percent of the losses of new investment in the case of a default. Such a program would help to unlock large amounts of private financing, while simultaneously protecting taxpayers.”

Huh? How does paying 50 per cent of losses help taxpayers? That is the Fannie Mae and Freddie Mac model of putting full faith and guarantee of the U.S. treasury behind bad loans. This is precisely what started the financial bubble. It’s bursting created a financial crisis. So, let’s do it all over again for another industry. Sheer genius.

Finally, another way to throw money is through tax policy. Like, “Legislation allowing a $10,000 tax deduction on the purchase of a new car would certainly benefit the auto industry. So too would a bill that allows the deduction of the state and local sales taxes on new car purchases from federal income tax. Initiatives like these can easily be extended beyond the auto industry to help any number of ailing businesses, with little or no taxpayer exposure.”

This is way to get bigger campaign contributions from car dealerships and automotive suppliers. And it is a crock for tax policy. Only people who pay $10k in taxes could benefit. Ah, these are the same people who can give significant tax contributions.

If over half of Virginia’s families earn under $52k a year ( 2004: median family of four), they don’t pay $10k in federal taxes. So, the lower financial half of Virginia gets little to nothing. Thanks, Congress.

And, can the taxpayer use the $10k deduction to buy a Toyota? Consider that Toyota and one of the Big 3 U.S. manufacturers both sold about 9 million cars last year. Toyota made billions in profits and the Big 3 firm made billions in losses. Increased sales may not go to the companies with the structural problems in their business model, nor may they help. It’s feel good politics for telling voters you gave them a $10k knock off the price of a new car.

The better tax policy is to just cut corporate taxes. To the bone. How much could that help a GM with over $60 billion in liabilities?

Cut income taxes. That capital will create jobs for people who will buy cars. Cut spending so the Fed borrows less – and there is more money to loan in the economy.

What are these “any number of other ailing businesses who will get tax breaks from the Feds?” This is how the tax code grew to thousands of pages. Special deals for special interests. How political –politics as usual. How anti-Constitutional. What an open door to more corruption in government.

The good news is that the legislation introduced for these ideas will die under other party chairmanship of committees – unless there are the right Liberal co-sponsors.

Sound economic policy isn’t so complicated. Spend less than you take in. Cut the sham corporate taxes. Cut individual taxes.

Good governance isn’t so difficult to understand. Don’t use the Federal treasury as an un-Constitutional piggy bank. Don’t give pork to special interests.

If one believes that “without a doubt, the federal government has a duty to assist in the country’s economic recovery,” then the answer is to not be such a big part of the problem. No bail outs. No buying votes and support for behavior modification. No backing up bad loans. No selective tax reductions for special interests.

It’s one of Jim’s topics, I know, but this post from a former Richmond Times-Dispatch employee, lays out the topic in sobering detail. Snip:

So here’s the thing: here’s why they’re even trying to keep the RTD going, despite its inevitable funeral, despite that it’s dead already and they keep kicking the corpse around: because they have to. As bad as the situation is, the paper is still bringing in revenue — just not a profit. Online advertising is nowhere near replacing the revenue that print advertising brings in. Sure, they’ll keep reducing the staff as circulation drops lower and lower; they’ll redesign the look not to make a better product, but to cut page count, and thereby newsprint costs. They’ll save money where they can, but revenue will continue to fall . . . because the core product, the newspaper, has been replaced by news on television and the Internet.

The RTD may or may not be dead — that’s sometimes very hard to tell. But I take responsibility for taking part in its demise, because I am a former subscriber.

Little did I know that, as a Richmond.com columnist, I might also be part of the effort to keep the print paper alive:

That’s why the purchase of Richmond.com was considered a sound investment: a massive increase of page views and potentially an increase of ad revenue.

Happy to be of service. But there’s more than a grain of truth here. many locals I know read Richmond.com. The RTD? Eh, not so much. If they subscribe at all, it’s more from a sense of habit than a need for information. And that habit is an increasingly easy one to kick.

Where will the impetus for Fundamental Change in Virginia come from? One source is concern about climate change, and the resulting push to conserve energy. Another is the price of gasoline, which, though temporarily depressed, will shoot back up again as soon as the economy recovers. To those two, we can add a third: the age wave.

We all know our society is aging. While we can make intelligent guesses about energy prices and climate change, we can predict with near certainty that the inexorable advance of Baby Boomers into their 70s and 80s will swamp America’s existing institutions. Yet, as acutely aware as we are of the age wave’s ramifications wave for Social Security, Medicare and Medicaid, we have given little thought to its implications for transportation and land use.

It’s inevitable: As Boomers get older, their cognitive processes will decline, their reaction times will slow, and increasing numbers they will be unable to drive. Unless technology reaches the point where drivers can punch a destination into a dashboard, turn over the driving to a computer and lean back to enjoy the ride, Virginia will find itself with unprecedented numbers of old Boomers living in social isolation, unable to care for themselves.

A benefit of working for the Boomer Project is the opportunity I’ve had to look at some issues of long-standing personal interest, such as transportation, land use and the environment, through a new lens: the generational perspective. Each generation — the Silent/G.I. generation, the Baby Boomers, GenX and GenY — has a unique zeitgeist shaped by the times in which they were raised. As a result, individuals as far apart politically as, say, Gooze and myself, have strong generational similarities. Like other Boomers, we largely define ourselves by our work. We value being in control. We challenge authority.

John Martin, the CEO of the Boomer Project, brings generational analysis to many of the same fields of interest that I have examined on the Bacon’s Rebellion blog. John also happens to run the BP’s sister company, the Southeastern Institute of Research (SIR), where he has conducted extensive marketing surveys for a variety of transportation agencies. One of his many insights is that GenY, weaned on electronic media and the green movement, approaches transportation very differently than do the Boomers who are now in charge of government agencies and public policy making.

Recently, John addressed the George Washington Regional Commission in Fredericksburg in a session that was covered by the Free Lance-Star. I quote liberally from the coverage published in last week’s newspaper:

Generation Y–people born after 1982–are constantly updating their whereabouts in real-time through text messaging, cell phones and the Web.

This need for constant social interaction and feedback means ridesharing will come naturally to them, said Martin…

“They’re so hyperconnected,” Martin said. Generation Y’s interest in the environment, volunteerism and civic duty will combine with this trend.

During the summer spike in gas prices, all age groups said they reduced their driving — but the greatest reduction was among Generation Y drivers, Martin said.

Though many Generation Y members are still in school, they have already organized online. According to Martin’s presentation, if MySpace were a country, it would be the 11th largest nation in the world.

This technology-savvy population will be comfortable working on the go, and telecommuting will undergo a shift, Martin predicted.

Generation Y workers will demand greater schedule flexibility to balance family and social time. Baby boomers see work as part of their identity, and will be reluctant to stop working. …

Around 4 million workers telecommuted in 1990. Today, that number has grown to 24 million people. By 2010, 40 million people will work from off-site locations, Martin predicted. … Soon enough, even the language to describe the practice will change.

“Telework is really remote work,” Martin said. “It’s work. Eventually, work is going to be work no matter where it’s done.”

Could bloggers have stopped Hitler?

Yes, says Jean-Marie Gustave Le Clezio during his acceptance speech for the Nobel Prize in Literature on Sunday.

“Who knows, if the Internet had existed at the time, perhaps Hitler’s criminal plot would not have succeeded — ridicule might have prevented it from ever seeing the light of day,” the author of such works as “The Book of Flights” and “Terra Amata” said.

Blogging may have it limits in that it is only as good, as accurate and as honest as the writer. But blogging is diffuse and completely bypasses the traditional gatekeepers at newspapers, magazines, television programs and even e-zines.

As one level of the media becomes corporatized, sanitized and emasculated another has arisen that can be free of all of those concerns. One doesn’t have to submit to someone else’s idea of what the right “tone” is or if a thought is “civil” or “high-minded” enough.

So, be glad that this blog is free, at least for now.

Gee, I wonder what Thomas Jefferson would say?

Peter Galuszka