Bacon's Rebellion

Congratulations to “darrell…Chesapeake” on a 15 percent profit in 30 minutes. And thank you for documenting EMR’s point. You make all those who say the stock market is not a gambling venue look like duffuses.

James Atticus Bowden says one could made 7 percent (compounded?) from the stock market over the period 1790 to 2008. Well sure, if you want to take the short term view :>)

The James Atticus Bowden’s time frame is just about the 1800 to 2000 period EMR uses to bracket the Agrarian to Urban Fundamental Transformation. A 7 percent return is to be expected given the continent of nonrenewable resources that have been consumed. Did someone say there is a limit to nonrenewable resources? Can you say “Punctuated Equilibrium?”

Lets take a shorter period, say since 1973 when every citizen should have know that Fundamental Transformation from Mass OverConsumption to sustainability was imperative.

The same or perhaps even greater “growth” of the stock market might be calculated but that demonstrates why data that is not aggregated intelligently is more misleading than no data. This reality concerning data is critical to achieving an understanding of human settlement patterns but it is also important in this context.

Some stocks (or baskets of stocks) did a lot better than 7 percent compounded after inflation since 1973. These are the ones that brokers like to cite.

Then there are stocks (or baskets of stocks) that did a lot worse. One never hears about them.

One could have chosen what seemed like a great basket of stocks in 1972 and now find that none of them even exist now.

An “average” is fine but the investor must trade to keep the basket fresh and there in lies the gamble.

Who does one rely on for advice? A broker who makes profit every time you trade? Just hope she does not recommend Centennial Illinois, Lincoln S&L, Enron, WorldCom, Fannie or Freddie, AIG, …

You might invest in risk-minimizing mutual funds or other vehicles. Who do you rely on to rate these financial “products”? How about Moody’s, Standard and Poor’s or Fitch? See today’s coverage of yesterdays hearing on The Hill.

A favorite investing joke is about a car load of rotten sardines. The punch line is “What difference does it make if those sardines are rotten? They are not for eating, they are for buying and selling.”

Then there is Blogger Bob who champions that bellwether of functional settlement patterns, the pregnant-mother-of-two:

“A technologically driven society is more productive, and therefore costs are reduced.”

The crown prince of non sequiturs speaks.

The issue in not “productivity” it is consumption vs. capacity of a closed system. It is ecological footprint, it is the trajectory of consumption. By current measures of “productivity” driving a bus load of pregnant-mothers-of-two into a moving train adds to the GDP.

(More on pregnant-mothers-of-two soon.)

There needs to be an alternative to the negative trajectory of Business-As-Usual. How about Regional investing?

Garmeen Bank / mini-investing has won a Nobel prize. Why not Household investing, friend investing, Cluster investing, Neighborhood investing, Community investing, Regional investing – How about a diversified portfolio being an array of Regional investments in things that will make your life better.

Global speculation drives Supercapitalism.

Citizens should have the ability to investment in goods and services that they understand and the location of which creates functional and sustainable settlement patterns. A lot smarter than sardines for buying and selling.

Here is a specific: A Regional network of Community Enterprises that recycle / rebuild small batteries. As the Global supply chain atrophies one of the first things to come into short supply might be small batteries. The ones without which, hearing aids, hand held instruments, cameras, cell phones, alarm systems and millions of other devices will be useless, toxic junk.

“Rechargeable” is fine but rechargeables wear out and eventually do not hold a charge. An investment is a Regional system to redesign batteries so they can be rebuild and traded for spent ones might be a winner. There are thousands of battery sizes besides AAA, AA, A, C and D but one might start with “standard” sizes first. Right now all the big money is going to improve big batteries to propel Large, Private Vehicles. How do you market these new batteries? Well to the investors and their Households.

Billions of small batteries end up in the land fill every year. Well meaning “environmental services” try to keep car batteries out of the land fills but many of them still go there. A bigger problem is the small batteries.

In a primitive lab it is possible build a big 12 volt battery. Or get a jump start and use the generator. Try that with you cell phone. Standardize and redesign of batteries so they can be renewed. Not in China, but right in your Region.

Bill “Green Dean” McDonough could think of a thousand other “investments” but that will do to illustrate the concept of Regional investment.

EMR

Running a cost-efficient government means paying attention to the details. In his latest column, Mike Thompson, president of the Thomas Jefferson Institute for Public Policy, describes one idea that has saved the state millions of dollars — and points to other reforms that can save millions more.

Thompson serves on the Regulatory Reform Commission, a bi-partisan group appointed by Attorney General Bob McDonnell, and he sits on the infrastructure task force chaired by Lt. Gov. Bill Bolling. He reports this success story:

The General Assembly transferred the responsibility for maintenance of the state’s automobile fleet of 4,669 vehicles from the Virginia Department of Transportation (VDOT) to the Department of General Services (DGS). The DGS then opened auto maintenance to private sector providers to compete with VDOT’s expertise in this area. Since this competitive sourcing process began, we have found that in only some areas does VDOT provide the best service for the best price, and in other cases the private sector provides the best service and best price. But far more importantly, the state has saved fully 25% on the cost of auto maintenance by bringing competition to the table of vehicle maintenance.

Then Thompson turns his gimlet eye toward higher education. Building costs on Virginia campuses, Thompson had heard, were 20 percent higher than comparable buildings off campus — presumably the consequence of state regulations. The task force called in a Virginia Tech official for details, only to find out that the cost padding was far worse. At Virginia Tech, the per-square-foot cost of buildings on campus is 70 percent higher than buildings in the research park adjacent to the campus.

One reason is a Virginia Tech specification that every building must be constructed of “Hokie stone,” a dolomite limestone that is a defining feature of the campus. From Wikipedia: 80 percent of the stone is quarried from a 40-acre, University-owned quarry a few miles from campus, the rest from a second quarry on a local farm. Some 25-30 Virginia Tech employees “use black powder each day to dislodge the stone into block sizes and finish the blocks by hand using hammers and chisels.” Sounds expensive.

As expensive as it is, Hokie Stone accounts for only a portion of the inflated construction costs. It would be interesting to know what other factors are responsible for the bloat. The next time Virginians are asked to approve another $100 million+ bond offering to support higher-ed building construction, we might press for answers first.

In his column, Thompson cites other examples of absurd regulations and easy savings. As long as legislators adopt the attitude that it’s easier to stick the costs on taxpayers than the review state regulations with a fine-tooth comb, Virginians will pay higher taxes than they need to, and our periodic fiscal crises will be worse than they need be.

John McCain’s faltering presidential campaign keeps grasping desperately at straws. The former beauty queen from Wasilla is one; NASCAR and country music is another.

It amazes me just how the GOP scrapes for the support of the working classes it has so badly screwed over in the past eight years. And the McCain campaign and its party are trotting out just about every cliché they can think of.

Consider Sarah Palin’s showing at Richmond International Raceway this week. According to the adoring – and so typically out-to-lunch – editorial writers at the hapless Richmond Times-Dispatch, Palin:

“… drew a huge throng of enthusiastic red-state voters. Jerry Kilgore warmed up an already perspiring crowd by leading the Pledge of Allegiance and offering a prayer for the country — and for the safety and well-being of the Republican ticket. Not a moment too soon, some wags might respond.

Country-music legend Hank Williams Jr. crooned the national anthem with gusto, if not entirely on key. This was an all-American crowd. The gaping chasm between the audience and those covering the event was illuminated by the British reporter who leaned over to ask, “Who is that?”

“It’s Hank Williams Jr.” an editorial writer responded. “His son?” the Brit queried. “Well, he can’t sing.” The gentleman missed the point. Moments later, Williams launched into a revised version of his hit song “Family Tradition.” The first line? “The left-wing, liberal media are a real close-knit family.” The audience bellowed its approval.”

So let’s try to follow the logic: Palin equals redneck equals working class approval equals Hank Williams Jr. equals putting down the “left-wing liberal media” equals GOP victory in November.

My, how smug. But let’s take the cliché apart. For one thing, every working class, pickup truck driving, deer-hunting good ole boy an girl in ole Virginny does not mindlessly go for every iconic symbol the khaki pants and Navy blazer GOP crowd can come up with. Certainly not all country musicians fall into the Hank Williams Jr. mindlessness set.

Just after I read ther RTD’s editorial this morning, something I try to avoid normally, I was driving my car and heard bluegrass patriarch Ralph Stanley on the radio for Obama, noting that eight years of misery is enough. Stanley, for those of you who don’t know, is from the Dickenson County coalfields and has been a legend in Virginia bluegrass since the 1940s. Unlike Hank Williams Jr., who when sober merely grooves on his daddy’s aging karma, Stanley has some brains and serves on the local school board from time to time when he’s not on the road.

I can think of a few other country music stars who aren’t exactly in the Bush-McCain-Palin just-us-folks camp. They include the Dixie Chicks, obviously, and Steve Earle whose powerful lyrics can really light a political fire.

If you want a truly scathing attack on the financial mess and the Bushies who created it, take a listen to bluegrass mandolin star Del McCoury’s new CD “Moneyland.” It is dedicated to the working class who have been badly hurt by eight years of GOP mismanagement and, interestingly, contains a clip or two of an FDR fireside chat.

My favorite song on the CD is “Forty Acres and a Fool,” which decries the exact, same suburban sprawl policies that have so defined development-happy, GOP-led boards of supervisors in such places as Loudoun and Prince William Counties. In the song, a newly-rich market trader buys a house in the country. Some lyrics:

“He’s got a pretty trophy wife.
Set her up in a McMansion
But now he’s trying to wreck my life
He’s driving out in his new Hummer
I tell my kids don’t walk to school
Took out my mailbox, squashed a possum
Forty Acres and a fool.”

Now that it’s a song even EMR can sink his teeth into. You betcha!

Peter Galuszka

Presidential candidate John McCain drew a crowd tens of thousands strong at his campaign rally in Hampton Roads earlier this week, and it wasn’t just because the former naval aviator was once stationed at Oceana Naval Air Station. While his supporters share McCain’s flag-waving patriotism and his larger world view, material self interest undoubtedly lurks beneath the surface. Many Hampton Roadsters undoubtedly believe that local military establishment will fare far better under a McCain administration than an Obama one.

I’m not making a partisan statement or casting a value judgment here. My point is not to dredge up the rights and wrongs of U.S. foreign and military policy. I’m simply observing that the Elephant Clan, for better or worse, funnels more money into the military than does the Donkey Clan. Commuities dependent upon military spending, such as Hampton Roads, fare better during Elephant Clan administrations.

Back in the 1990s, the Hampton Roads economy lagged the nation in per capita income growth. That’s because the Clinton administration was spending the “peace dividend”: cutting back the size of the military and curtailing military pay. The Bush administration instituted a dramatic reversal, pumping up military expenditures and payrolls, and Hampton Roads prospered.

As James V. Koch, former Old Dominion University president, writes in his 2008 State of the Region report, “DoD spending is responsible for more than 70 percent of the economic growth of Hampton Roads since the start of the new millennium and perhaps as much as 45 percent of our gross regional product. … The most important component of defense spending is military compensation, which accounts for 56 percent of spending in the region.”

Koch does not speculate on what a Barack Obama administration might mean for Hampton Roads. But I will. Unlike Clinton, who faced no major perceived military threats in the 1990s and felt safe drawing down the military, Obama has promised to contiue fighting the war on radical Islam by escalaating the American presence in Afghanistan. There won’t be a “peace dividend” for him to spend. Still, he will likely look for ways to shave military spending — and that may impact the Navy, which is a less-than-critical player in the anti-insurgency wars.

What can the inhabitants of Hampton Roads reasonably look forward to? Lower pay raises, for starters. Since 2002, compensation of military personnel has increased 63 percent, according to Koch. Even McCain would be unlikely to replicate such an increase. The prospect of Obama doing so is just about nil. Koch also raises the possibility of the loss of an aircraft carrier, which, along with accompanying task force and base support, could take $800 million a year out of the regional economy.

One could reasonably argue that an Obama presidency would be better for the United States economy as a whole (I would not share that sentiment, but I concede that it could be reasonably argued). But that logic does not extend to Hampton Roads. There is every reason to fear that the region will turn from an outstanding performer of the 2000s decade into an economic laggard. The non-military presence there just isn’t dynamic enough to make up the difference.

In a bold stroke of investigative journalism, WaPo has nailed the Washington Airports Authority for excess travel by Board members and their families at Agency expense. (“Airport Board’s Travel Spending Has Few Limits” 13 October)

Great Work! Got them dead to rights…

But where is WaPo on the big problem: Plowing $100s of millions into the wrong transport projects?

• Overbuilding the Regional airport capacity and thus raising the cost of long distance travel

• Overbuilding the Regional capacity for short flights that are inefficient, pollute the ground with noise and pollute the air excess atmospheric emissions

• Dumping money into an airport that is in the wrong Regional location with short runways and cannot avoid creating world class noise pollution with the Core of the in the National Capital Subregion

• Agreeing to build a ground transport system the does not serve the needs of air travelers and without insisting on functional settlement patterns in the station-areas that would help pay for the cost.

But WaPo nailed those travel expenses …

Why? See THE ESTATES MATRIX

EMR

Jonathan Mallard, a Bacon’s regular and a candidate for the 4th District School Board seat in Richmond, has created a budget game, of sorts. Or perhaps it’s more of an experiment. Using data from the RPS he’s created a spreadsheet that shows where the money went. It’s a mind-bending list of numbers, to be sure. But it also offers an opportunity for anyone to go in and tinker with them and come up with a budget of their own.

My results always come back as “0”.

It feels like we’re on an economic roller coaster these days, so why not plot real estate values since 1890 on a virtual roller coaster and go for a ride? Just remember to hold on tight.

(cross-posted at Tertium Quids)