Bacon's Rebellion

  • Richmond: Community Blogging Center of the Universe?

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    James A. Bacon

    We all know my home town of Richmond is a pretty conservative place — perhaps even a stodgy one. It’s an old story how we lost our status as the leading city of the South to Atlanta, Charlotte and Raleigh. But things are changing. The economy continues to reinvent itself at a furious pace — a phenomenon that I’m able to observe at close quarters now that I’m publishing R’Biz, the Richmond.com business channel.

    As a sign of the times, the Richmond business community has given rise to two Initial Public Offerings in the past week. The first, Colfax Corp., is a $500 million-a-year company launched about a decade ago that is rolling up the global pipes and valves industry. Not sexy, but very, very profitable. On the sexy side, the second company, SouthPeak Interactive, is a global distributor and publisher of video games.

    It wasn’t long ago, that the greatest claim to fame Richmond could boast of as a center of cultural influence was festival flags. The practice of hanging those colorful festival flags over your front door originated right here in River City. Yeah, I know…. big whoop.

    Here’s something a little more cutting edge. It appears that the Richmond region is a hotbed of community blogging. Stephanie Brummell at Richmond.com quotes Jeff South, associate Professor in the School of Mass Communication at Virginia Commonwealth University as an authority:

    South was in the midst of listening to a presentation on participatory media during “Media Re:Public” a conference convened by the University of Southern California’s Annenberg School for Communication and Harvard’s Berkman Center for Internet and Society when he learned that Richmond “by far and away … ranked No. 1 for citizen journalism Web sites.”

    Sixteen citizen journalism Web sites exist in Richmond, including Rea’s Fan District Hub, Richmond community blog pioneer John Murden’s Church Hill People’s News, Hills & Heights¸ RiverCityRapids¸ Petersburg People’s News, River District News and that of the Richmond community site aggregator, RVANews, headed up by Ross
    Catrow.

    Richmond a center of community blogging? How did that happen? It’s a combination of two phenomenon, I would argue. First, the region is more tech-savvy than people commonly realize. We may not be creating new technology on a large scale, but successful Richmond businesses have gained competitive advantage by applying technology to traditional industries. (Capital One, which originated in Richmond before moving its H.Q. to NoVa, used technology to introduce disruptive change to the credit card industry.) Secondly, Richmonders truly are passionate about their community. They care what’s happening.

    Combine technology and community passion, and you get blogs.

  • Beyond “Just Say No to Taxes”

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    James A. Bacon

    I’m not sure what the provenance of this document is, but it has replicated in cyberspace as an e-mail from Del. Philip A. Hamilton, R-Newport News, to Tom Holden, a writer with the Virginian-Pilot. I re-publish it here because it is the best outline I’ve yet seen of why Republican legislators oppose Gov. Timothy M. Kaine’s proposed tax plan and what alternatives they propose to put in its place.

    Transportation Concessions
    Déjà vu all over again

    “If you continue to do what you have always done, you will continue to get what you have always gotten,” Delegate Phillip Hamilton (R-Newport News) said in reacting to Governor Kaine’s recent transportation proposal. According to Hamilton, the proposal is another attempt to address transportation needs with an out-dated strategy – increased taxation without any significant congestion relief – that has been rejected in the recent past.

    In addition to the lack of new ideas and innovation in the plan, “There is nothing to suggest a significant reduction in congestion that is choking Northern Virginia and Hampton Roads,” Hamilton said. “While mass transit should be included in any transportation plan, there is nothing to link the grantors tax being imposed in Buchanan County and bus purchases in the urban crescent. There also is no evidence that more government-subsidized mass transit will reduce the existing congestion problems in Northern Virginia and Hampton Roads.”

    From Hamilton’s perspective, one of the glaring omissions in Governor Kaine’s transportation plan was absence of any reference to transportation concessions and private sector involvement in financing possible congestion relief projects. Yesterday, Hamilton and other state legislators met with U.S.Transportation Secretary Mary Peters and other federal highway transportation officials in Washington, DC to discuss the possibilities for transportation concessions as a major strategy in addressing numerous congestion relief projects in Hampton Roads and Northern Virginia. “It was my perspective that the federal government is ready, willing and able to work with Virginia to advance significant congestion relief projects in the Commonwealth,” Hamilton said.

    During the meeting, Hamilton learned that Virginia was one of only fourteen states that enjoyed a preferred status from the federal government for such projects. He also learned that private investors had nearly $400 billion available worldwide for such transportation infrastructure projects.

    While Hamilton was pleased that the Governor’s plan abolished the HRTA and included the Hampton Roads Bridge Tunnel in the list of project priorities for the Hampton Roads region, he does not believe the plan will ever provide the needed level of funding for the projects to ever be completed with the traditional funding streams.

    For Hamilton, the focus of the Governor’s plan was the maintenance of existing highways, bridges and tunnels. Acknowledging that maintenance funding is important, the plan’s maintenance funding projections seems to be based on no improvement in the Virginia economy over the next six years. As a result, the plan seems to ignore statewide funding increases and policies for maintenance that were implemented last year.

    After his Washington meeting yesterday, Hamilton is more convinced than ever that private-sector financing through long-term transportation concessions for the tolling revenue is the best strategy to address the congestion issues facing the Commonwealth today. “Virginians want congestion to be addressed and they believe the users of the roads should bear the burden for their construction and maintenance. Virginia should be more aggressive in seeking these public-private partnerships that build on our existing transportation facility assets to reduce congestion through new or improved highways, bridges, and tunnels.

  • The Clustering Force Be With You

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    James A. Bacon

    A debate that periodically erupts in the comments sections of this blog centers on a perceived solution to traffic congestion on Interstate arteries, unaffordable housing and other ailments of large, dysfunctional metropolitan areas. Why don’t employers just move the jobs closer to where to where people live? In the words of blogger Ray Hyde, why don’t we just create more new places instead of cramming people into the old ones?

    Good question. Indeed, it’s such a good question that Richard Florida devotes a full chapter to the topic in his new book, “Who’s Your City?” Florida posits the existence of a “clustering force” — a set of economic imperatives that drive businesses and people closer together. Despite the existence of cell phones, laptops, BlackBerries and Internet connectivity, which in theory should liberate people from the need to cluster, Florida contends that the Knowledge Economy puts a premium on physical proximity.

    Florida frames the issue this way:

    “If we postulate only the usual list of economic forces,” the Nobel Prize-winning economist Robert Lucas wrote in 1988, “cities should fly apart.” After all, Lucas reminds us, land “is always far cheaper outside the cities than inside.” Why, then, didn’t businesses and people move en masse out to where costs are substantially lower?

    To answer that question, Lucas posed another: “What can people be paying Manhattan or downtown Chicago rents for, if not to be around other people?”

    Economy 4.0: Clustering offers social and economic advantages that non-clustering does not. “The benefits in terms of innovation and productivity,” Florida writes, “far outweigh the higher costs of living and doing business there.” As faithful Bacon’s Rebellion readers know, Florida is employing the same vocabulary I use in my Economy 4.0 analysis (See “Peak Performance in a Flat World.”) The quest for innovation and productivity drive the Knowledge Economy just as the quest for low labor and raw material costs drove the industrial economy.

    While the industrial economy required a limited amount of clustering — proximity to a sufficient supply of unskilled and semi-skilled labor, which could be found in any small town where excess labor was migrating off the farms — the Knowledge Economy is arising around industry clusters, in which people with highly knowledge, skill sets and relationships interact in a highly collaborative basis.

    Florida concedes that clustering creates drawbacks and obstacles to growth: traffic congestion, rising crime rates and unaffordable housing. “Eventually,” he says, “they are likely to pose significant barriers to a city’s future development.” But somehow, super-congested places like San Jose, Calif., Manhattan and Boston keep forging ahead. They transcend those limitations, Florida suggests, because clustering creates so much wealth through innovation and productivity gain that the advantages outweigh the hassles. “Cities become wealthier and more creative the bigger they get.”

    This is the force that Florida believes is driving metropolitan areas to fuse into mega-regions (which I discussed here). I’m not persuaded yet that the concept of “mega-regions” reflects any meaningful social or economic reality beyond an unbroken expanse of urban development of varying densities. But I do believe that Florida has identified one of the central economic forces shaping urban economies at work in the world today.

  • LED Instead!

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    James A. Bacon

    The University of Virginia will install a light-emitting diode pedestrian crosswalk at the intersection of University Avenue and Culbreth Road. According to the Daily Progress, the LED crosswalk will be similar to one installed previously on Emmett Street near Alumni Hall.

    This blurb of a story strikes me as highly significant. It opens up a whole line of questions. Why aren’t more Virginia municipalities installing more LED lighting?

    In crosswalks LED lights decrease the risk of pedestrian accidents. In all public lighting applications, LED technology is highly energy efficient.

    To quote Wikipedia: “LEDs are currently more expensive, price per lumen, on an initial capital cost basis, than more conventional lighting technologies. The additional expense partially stems from the relatively low lumen output and the drive circuitry and power supplies needed. However, when considering the total cost of ownership (including energy and maintenance costs), LEDs far surpass incandescent or halogen sources and begin to threaten compact fluorescent lamps.” (My italics.)

    According to Treehugger.com, the City of Ann Arbor, Michigan, is installing more than 1,000 LED streetlights beginning next month. The city anticipates a 3.8-year payback on its initial investment. The LED lights typically burn five times longer than the bulbs they replace and require less than half the energy.

    LEDs can be used not only in crosswalks but traffic signals, road signs and, most importantly from a public policy perspective, street lights. Virginia municipalities need to explore this money-saving, greenhouse gas-reducing option more aggressively.

    (Image cutline: Treehugger.com.)

  • Mega-Regions Redux

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    James A. Bacon

    Richard Florida, the man who brought us “The Rise of the Creative Class,” is back. After his unfortunate second book, “The Flight of the Creative Class” (read why I panned it here), he has more than redeemed himself with “Who’s Your City?” This volume is vintage Florida: spitting out original ideas and backing them up with thought-provoking research. Once again, he has elevated the study of regional economic competitiveness to new peaks of understanding.

    I will explore several of those ideas in later columns and posts. Today, however, I want to revisit a previous post, “The ‘Mega-Region’ and the Creative Class,” in which I questioned the utility of one of Florida’s concepts: the emergence of mega-regions as the driving units of economic develompent. Because I based my comments upon a column he wrote in the Wall Street Journal, I hedged my conclusions, subject to reading his full treatment in the book.

    Well, I’ve read the book. And while I will have great things to say about much of it, I stand by my earlier conclusions regarding mega-regions.

    Florida opens “Who’s Your City” by taking issue with Thomas Friedman, author of the now-classic volume on globalization, “The World Is Flat.” A far better metaphor, Florida contends, is to say that the world is spiky. Yes, globalization is spurring the outsourcing of manufacturing and back-office operations to developing nations, but scientific research, innovation and the most value-added economic activity remains concentrated in a relatively small number of large urban clusters, Florida argues. (So far, so good. I totally agree.)

    To map those agglomerations, Florida drew upon the work of Timothy Gulden at the University of Maryland’s Center for International and Security Studies. Gulden had published maps in Atlantic Monthly in 2005 that showed, in 3-D spikes overlaying a map of the globe, where the world’s population was concentrated, and then, based on light emissions detected by space satellites and calibrated with World Bank estimates of Gross Domestic Product, where the world’s economic activity was concentrated. This visual analysis showed that the world remains very spiky indeed. (So far, so good.)

    Working with Florida’s research team, Gulden went on to map innovation, using patents and scientific R&D as proxies. The global map of innovation became even spikier, with towering spires set amidst vast plains of Business As Usual. Two dozen or so of the biggest spikes, according to Florida, account for an overwhelming percentage of the world’s innovation. (So far, so good.)

    From this, Florida then created an economic model to emulate the real world. Here’s what he sees going on: “These city-regions expand outward until they are forced to combine with other city-regions. Through this process of nucleation, these city-regions merge together as a mega-region.” Large mega-regions, he says, have more economic staying power; smaller mega-regions rise and fall at a faster clip. “Our model … forecasts a world increasingly dominated by massive mega-regions.” (Hmmm…)

    What Florida’s model lacks is any support for the idea that mega-regions comprise meaningful units of social or economic interaction other than the fact that they have spilled out of their original urban nucleii and run up against one another. As I argued in my first post, the Boston-Washington “mega-region” is comprised of very distinct metropolitan regions, each with its own urban core at the center of a commuter-shed, or labor pool. The economies of these metro regions have very different industry mixes, and their workforces have very different competencies. Florida presented no evidence whatsoever that there is any more economic or business integration between, say, Philadelphia and Washington, D.C., than there is between Los Angeles and Washington, D.C.

    The evidence does exist to test Florida’s proposition. Richmond economist Chris Chmura has measured the level of economic integration between Charlottesville, Richmond and Hampton Roads. Many companies conduct business in multiple locations. Presumably, companies that spend money to maintain offices, factories, warehouses or other facilities in a location have a greater economic presence there. As I recall, Chmura mapped the number of technology companies that maintained locations in two or more of the three regions to demonstrate the extensive economic linkages between them.

    This would be a useful follow-up phase in Florida’s research: Map the business linkages between metropolitan areas within a “mega-region.” If metro regions within a mega-region interlink with one another more than they do with other nearby metro regions, there may be some basis for Florida’s economic model. If those business regions are strongest among primary industries, as opposed to McDonalds, Wal*Mart, Office Depot and other retail chains, then his case becomes even stronger.

    It would be equally interesting to see the linkages between metropolitan regions that are not geographically proximate. To what extent, for example, is Northern Virginia’s IT sector inter-linked with Silicon Valley’s or Boston’s? To what extent is New York’s financial sector interlinked with Charlotte’s? Such a map, I think, would be far more revealing. Richard Florida, call Chris Chmura.

  • And the GOP Alternative Is…. ?

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    James A. Bacon

    House Republicans have declared Gov. Timothy M. Kaine’s transportation-funding plan to be Dead on Arrival. As Jeff Schapiro and Jim Nolan report the story for the Times-Dispatch:

    They said they have only to decide how to kill it — “whether we send it into a conference or if we just go home,” said House Majority Leader H. Morgan Griffith, R-Salem.

    “I don’t think you’re going to see the governor’s plan succeed or anything close to it,” Griffith said.

    Griffith and Del. M. Kirkland Cox of Colonial Heights, the chief House Republican whip, declared the economy in recession, adding that Kaine’s proposed new taxes — on among other things, motor vehicles and real estate sales — would only slow recovery.

    “It’s tax, tax and more tax,” Griffith said.

    I’m glad to hear it. I didn’t have anything good to say about the plan either. (See “There Is No Health In Us.“) But here’s my question for Republicans: If you don’t like the plan, what do you propose in its place?

    Kaine appeared to adopt key elements of the plan — a motor vehicle sales tax, a vehicle registration fee and a grantor’s tax — because House Republicans embraced them last year when they crafted HB 3202, although not in precisely the same configuration. In his naivite, the governor no doubt assumed that if GOP legislators liked those levies last year, they would be OK with them this year. So, how did those charges become so unpalatable all of a sudden? It’s hard to avoid the suspicion that they are just opposed to anything that Kaine might propose.

    Here’s what we need from Virginia Republicans: a set of clearly enunciated principles to guide transportation funding. Such principles need to do a number of things. They must:

    (1) Create a mechanism for actually raising money. We can’t build a transportation system for the 21st century with fiscal tricks and legerdemain.

    (2) Be sustainable over time, and they need to be structured so that legislators can’t lay their hands on the tax money for other purposes.

    (3) Display a direct and transparent nexus between who pays and who benefits from transportation projects.

    (4) Address the “demand” side of the transportation equation, in other words, incentivize people to seek alternative means of mobility and access.

    (5) Incentivize citizens and developers to adopt more transportation-efficient human settlement patterns.

    I’ve shown how it is possible to raise billions of dollars to pay for new transportation projects while adhering to these principles. (See “User Pays.”) From what I can tell, those musings have evoked zero interest among Republicans, who, judging by their rhetoric, should be inclined to spending restraints and free market principles. But, unless Republicans can devise a message more positive than “Just say no to taxes,” they are signing their electoral death warrant. Virginians may not trust the politicians to spend their tax money fairly and wisely, but they are looking for solutions.

  • Life in the “Fast Lane”

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    James A. Bacon

    Via Jim at Bearing Drift comes a most interesting blog sighting: The Fast Lane, a blog from the USDOT that features contributions from, among others Sec. Mary Peters and even a few guest posts from folks like Tim Kaine.

    Sure, there’s plenty of rah-rah, and I would be surprised if the Secretary, or many of the other listed contributors, actually writes her own material. But it’s another transpo resource for the ever-hungry Bacon’s crowd to consume (just make sure you have a few grains of salt nearby).

  • There Is No Health In Us

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    James A. Bacon

    My reaction to the Gov. Timothy M. Kaine’s $1 billion-a-year transportation will surprise no one. I’ve spent years making the case that transportation funding should (a) be structured as a user-pays system and (b) be linked to reform of human settlement patterns. Kaine’s proposal does neither. It may be a political winner — I sense that it might be, given the general exhaustion on the subject and the desire to “do something” and be done with it — but it is a public policy loser.

    If this plan is enacted, it is only a matter of time — four years, maybe six?? — before it is abundantly clear to everyone that $1 billion isn’t nearly enough under the Business As Usual model of allocating transportation dollars to solve anything, Virginians will be complaining as bitterly as ever about traffic congestion, and the usual suspects who make money from the tax-and-build cycle will resume their full-throated cry about the transportation “crisis.”

    Here, in summary, is what is wrong with the Kaine plan:

    Users don’t pay. An increase in motor vehicle registration fees and automobile sales tax will raise only a fraction of the $1 billion from automobile owners as a class. Even then, there will be no connection between how many miles someone drives (and, thus, how much wear and tear he inflicts upon the transportation system) and how much he pays. Neither will there be any connection between how much someone stresses the system by driving on the most congested roads during periods of peak demand and how much he pays. This highway funding mechanism will do nothing — repeat N-O-T-H-I-N-G — to encourage drivers to seek alternate modes of transportation or otherwise change the behavior that has created this crisis in the first place.

    As for the balance of the new revenue — sales taxes and grantor’s taxes — there is not even a remote connection between those who pay the taxes and those who benefit from them. This is nothing less than a wholesale transfer of wealth from people who do not drive (or who drive only a little) to those who do drive (or drive a lot). Poor people get hosed. Bike riders get hosed. Telecommuters get hosed. Retired people get hosed. Road warriors who traded off cheaper mortgages for longer commutes will benefit.

    Beneficiaries don’t pay. Investing billions of dollars in new transportation capacity will create a huge pay-off to those who own land in locations where the infrastructure improves mobility and access. Property owners will reap billions of dollars in windfall profits through the increased value in their property. But there is no mechanism for capturing any of these gains for the public benefit. Accordingly, the incentive will increase for developers and land speculators to influence election outcomes and to otherwise manipulate the political system to their advantage.

    Slush fund for rail and transit. I totally believe that rail and transit are part of Virginia’s long-term transportation solution. But they won’t do ourselves any favors by raising taxes and dumping the proceeds them into a slush fund for projects that, by their nature, will require continued operating funds from state government. All we’ll do is increase our future obligations to support transportation modes that can’t support themselves. Rail and transit can be made to work if they are supported by changes to land use patterns characterized by greater density around transit stops, walkable communities and a balance of jobs, housing, shopping and amenities. But there is no provision in this proposal to ensure those things happen.

    No objective methodology for setting priorities. Nothing in this bill requires the commonwealth to establish an objective methodology for prioritizing projects based on their effectiveness at mitigating traffic congestion. There is nothing to prevent the usual suspects with the most to gain from boring into the political system like beetles into tree bark, canoodling administrators, making donations to elected officials, attending obscure public hearings, and bird dogging projects through the bureaucratic maze.

    I am not a religious man, but a phrase from the Book of Common Prayer comes to mind:

    We have left undone those thinges whiche we ought to have done, and we have done those thinges which we ought not to have done, and there is no health in us, but thou, O Lorde, have mercy upon us miserable offendours.

  • Kaine Unveils $1 Billion Transportation Tax Plan

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    James A. Bacon

    Gov. Timothy M. Kaine has unveiled a $1 billion-a-year package of tax increases to pump more money into Virginia’s transportation system. As it is the only comprehensive proposal on the table for addressing Virginia’s long-term transportation needs, it will set the terms of debate when the General Assembly convenes June 23 in a special session on transportation.

    I’ll save the commentary later. Here are the highlights of the proposal as outlined by the governor:

    Statewide tax hikes. Depicting Virginia as facing a “shortfall in highway maintenance funding” that drains money from new road construction, Kaine spins his proposed tax increases as an investment in “safety.” Most highway maintenance funding goes to addressing safety issues – “repair and operation of bridges, tunnels, traffic signals, and streetlights, as well as installation of guard rails and rumble strips, and plowing and paving the third largest highway system in the U.S.” The governor proposes:

    • Increasing the existing statewide motor vehicles sales tax from 3 percent to 4 percent and dedicating all motor vehicle sales tax funds to maintenance;
    • Increasing the statewide annual vehicle registration fee by $10 and dedicating those funds to maintenance.

    The General Assembly approved both of those increases on a regional basis in HB 3202 last year, the governor noted.

    NoVa and Hampton Roads tax hikes. To address traffic in the two most congested regions of the state, the governor’s plan would fund “critical, targeted projects” through new funds raised on a regional level. They include:

    • Increasing the retail sales tax in both regions by 1 percent (exempting food and drugs);
    • Dedicating regional sales taxes to the Northern Virginia Transportation Authority, consistent with current law; and
    • Dedicating regional sales taxes to seven regional projects in Hampton Roads, including the Hampton Roads Bridge Tunnel, while abolishing the Hampton Roads Transportation Authority.

    Transportation Change Fund. Acknowleding that Virginia’s transportation challenges cannot be addressed by roads and highways alone, the Governor proposes creating a special fund to pay for mass transit, rail and “innovative solutions” like teleworking and ridesharing. Three-quarters of this fund would be dedicated to transit and rail projects, increasing transit and rail investment by over 30 percent. The fund also would make dollars available for transportation projects to support economic development through aviation, port, and innovative highway investments.

    This fund would rely upon a revenue stream created by a statewide 25 cent grantor’s tax.

    For each of these proposals, Kaine proposes a “lockbox mechanism” specifying that the fund shall expire if it is used for any purpose other than transportation.

    Update: The governor has posted details on his website. These include:

  • Transportation Plan – PowerPoint | PDF
  • Transportation Plan Funding – Excel | PDF
  • Overview of Taxes in Virginia – PowerPoint | PDF
  • Video of the press conference
  • Audio of the press conference

  • Vege-Taxes

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    James A. Bacon

    With all the chatter about raising Virginia’s gas tax (an idea that didn’t make it into the Governor’s proposed tax grab-bag), this story in the LA Times offers the cautionary tale of Dave Eck, and what can happen when some folks decide to put cooking oil, rather than diesel, into their tanks:

    “All of a sudden they nailed me for a road tax,” said Eck, who drives a Hummer converted to run on vegetable oil. “I said, ‘Not a problem. I’ll do my part. But what do I get? At least let me into the carpool lane.’ “

    No such luck. The state offered Eck only a potentially large fine — and not just for failing to pay taxes. He can also get in trouble for carting kitchen grease away from eateries without a license from the state Meat and Poultry Inspection Branch.

    Or for not having at least $1 million in liability insurance, in case he spills some of the stuff. Or for not getting permission from the state Air Resources Board to burn fat in the first place.

    In the article, we also learn that Gov. Ahnuld burns cooking oil from Costco in his Hummer, but has not paid the 18 cent per gallon road tax (though he will from now on). And, of course, a lot of rogue cooking oil burners simply refuse to tell the nice man from the government they’ve made the switch so as to avoid the taxes, fines permits and sundry regulations they would otherwise face.

    Are they economic “free riders”? Yes, at least under the pennies per gallon gas tax. They can counter that their use of an alternative fuel mitigates a host of other problems created by those who do pay the tax. A way around all of this, should fuel substitution really catch on, would be to drop the gas tax entirely and move toward a more rigorous tolling system or a miles traveled tax — neither of which would be, or ought to be, an easy sell.

    Of course that sort of system might lead to some bright person developing a hover car that doesn’t use roads at all and runs on the muck they scrape from movie theater floors.

  • Need Room for Affordable, Accessible Housing? There’s Plenty in Office Parking Lots.

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    James A. Bacon

    Where do we put new housing for Virginia’s growing population? That’s an enduring public policy issue in Virginia, and it’s become even more pressing as the collapse of housing values in outlying juridictions have exposed the extent to which homeowners prefer shorter commutes and living close to the urban core. Some observers raise the argument that urban areas and inner “suburbs” are fully developed already — there’s no space for new housing. But that argument ignores the potential to re-develop land previously developed at extremely low densities.

    Start with parking lots in office parks, suggests a recent study on moderate-income housing in Westchester County, N.Y., according to the New York Times.

    Converting office parking lots to housing makes sense in a number of ways. They’re already zoned for high-density occupation. They’re already served by roads and infrastructure. And they create an option for some residents to live near where they work.

    We’re seeing similar thinking here in Richmond. Markel Corp., a leading underwriter of specialty insurance products, applied a year or two ago to convert much of its parking lot in the Innsbrook corporate center into housing and retail. The lost parking spaces would be offset by structured parking. (I’m not sure what the status of the project is: It did face some opposition from neighboring residential NIMYs.)

    Development that utilizes existing infrastructure is preferable to development that requires new roads and utilities. Likewise, development that integrates mixed uses and connects them with pedestrian-friendly streetscapes so that people can take fewer car trips is preferable to development that segregates land uses, imposes low densities and requires people to drive cars to reach every destination. As Virginia politicians find they can’t raise taxes fast enough to salvage a transportation system that becomes increasingly expensive to maintain with each increase in the price of a barrel of oil and ton of steel, the conclusion is inevitable: People will have to live in closer proximity to one another — hopefully in communities with a balance of jobs, housing, retail and amenities at both the neighborhood and the regional levels.

    Ritual disclaimer: I’m not advocating that anyone be forced to live in the kinds of communities they don’t want to live in. I am not advocating social engineering. Indeed, I am advocating the opposite: Municipal governments need to dismantle barriers that prevent developers from building, and people from moving into, the kinds of communities for which the marketplace has documented tremendous latent demand. The alternative, as shown in the transportation-funding plan that Gov. Timothy M. Kaine was expected to roll out at noon today, is to raise taxes to perpetuate a transportation system and pattern of land use that is hopelessly out of date, expensive to maintain and unaffordable to expand.

    (Hat tip: Gay Leahy.)

  • Dems Favored in Southern Shift

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    James A. Bacon

    It’s been 40 years since Richard M. Nixon came up with the “Southern Strategy” so aptly named by political analyst Kevin Phillips. Nixon took advantage of the once solidly Democratic South by playing upon upheavals caused by integration and civil rights and Southern conservative disgust with 1960s cultural change.

    The GOP lock on the South helped presidents including Nixon, Ford, Reagan and Bush. It also helped the GOP win Congress in 1994 along with innumerable state contests.

    But if you read Sunday’s New York Times, Republican influence on the South is waning seriously and has been for years although not many have noticed. Barack Obama’s big win in North Carolina last week only underscores the changing politics and demographics in Dixie. Donkey successes reverberate through Mississippi, South Carolina, Florida, Tennessee and elsewhere.

    Writing in the Times, author Jack Bass notes: “The story is most dramatic in Virginia, which in 1976 was the only state in the South that failed to back Jimmy Carter for president.” While Virginia Republicans still dominate in Congress, Democrats have won back-to-back governorships and are likely to take a U.S. Senate with Mark Warner.

    “The trends suggest a region in transformation, with dynamic economic growth, an expanded black middle class, the arrival of millions of white migrants, the return of scores of thousands of African-American expatriates, and an emerging native white generation with little or no memory of racial segregation. The result has been greater tolerance, an expanded pool of talent, and growing openness to new ideas,” according to Bass.

    When intolerance raises its ugly head, it is now beaten down. Witness George Allen’s loss in the Senate to Jim Webb after his ill-thought, racist heckle of “macaca” to a dark-skinned Virginia. Grinning, cowboy-boot-wearing Allen had been a perennial favorite whose “Aw, Shucks” demeanor seemed to play well in the Old Dominion. Well, not any more.

    This is enormously positive change. Yesterday, for Mother’s Day, I took Mom out to a restaurant in a shopping mall in Henrico County’s West End. She was getting pretty tired of food in assisted living, so we went expensive. I was pleased to see that many of the families enjoying the pricey holiday specials were African-American. It was a scene hard to imagine 25 years ago when I last lived in Richmond.

  • White Women Rule

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    James A. Bacon

    Well, white women may not rule yet, but they will. Give them 25 years. Think of Hillary Clinton as a leading indicator: It doesn’t look like she’ll win the 2008 Democratic nomination, but she’s paving the way for the next generation.

    I got a glimpse of the next generation at the Phi Beta Kappa induction ceremony at William & Mary held in the Wren Chapel yesterday. One of my daughters, I’m proud to say, was among the 43 graduates honored. (Some 40 other students were inducted as well last fall, bringing the total to seven percent of the senior class.) Phi Beta Kappa represents the cream of the crop: students who demonstrated either outstanding leadership or academic abilities.

    Two thirds of the inductees last evening were women. Nearly all were white. One young woman had a Vietnamese name; two honorees had what appeared to be Hispanic surnames but were pigmentally indistinguishable from the rest. (For those interested in regional disparities, out-of-state students were well represented among the group, but most of the Virginia students came from Northern Virginia.)

    William & Mary is one of the nation’s leading universities, and its top-performing students are likely to ascend into the ranks of the business, professional and political elite (unless they pursue graduate degrees in arcane, dead-end fields like linguistics, grrrrr, but I won’t mention any names). Of course, W&M is only one school, and it may not be typical of what’s happening nationally. Virginia has a relatively small Asian population, and I suspect that students of East Asian and South Asian ancestry, like white women in Virginia, may be over-represented among the academic elite elsewhere.

    Regardless, of the major demographic groups here in Virginia, white women are attending college in the greatest numbers. And, it appears, they are excelling in the greatest numbers. Young white women are entering the adult world best equipped with the cultural attributes and educational backgrounds required to succeed in an increasingly global, knowledge-intensive economy. Some people may take pleasure at the impending comeuppance for white males, who will be hard-pressed to maintain their traditional dominance, but for anyone hoping that Virginia’s top ranks will make more room for minorities, the Phi Beta Kappa indicator does not look promising.

  • 5th Installment on SuperCapitalism

    Posted on

    by

    James A. Bacon

    Perhaps the last Installment on “Supercapitalism”, by Robert Reich. If I missed some key point of the book, please advise and I’ll post again.

    The issue is money and influence. Power to move power. It’s as old as governments are in ancient civilizations and as American as apple pie. The difference in the transforming Information Era economy is how much money there is to influence politics and who has access to vast sums of money.

    Sidebar: (I didn’t think that big money could matter that much in the very short election season following Rep. Jo Ann Davis’s untimely death last year. Old party horse that I am, I was shocked still to find out how much money could be spent in the 3 weeks I was a politician running for her seat – and how much huge money meant to key activists.)

    Consider the problem of scale – big money. The money won’t go away. Prohibiting the sale of alcohol would be more effective (and we know how that worked) than every foolish attempt to ban money from politics. Money can’t be separated from power anymore than sex can be taken out of prostitution.

    Virginia can’t fix the dysfunctional federal electoral legislation, like McCain-Feingold (or the extended Voting Rights Act for that matter). Yet, our Commonwealth can keep and improve the openness and easy access to information for our elections. Sunshine is the best disinfectant.

    Consider the problem of concentration of power – who has the money. It can be very wealthy persons, corporations, unions, or advocacy groups (ostensibly yet laughably ‘non-profit’). If it is impossible to prevent them from using their accumulated wealth, then perhaps the remedy is to redistribute the resources they are willing to spend to buy power. Tax every contribution, fund-raising events themselves, services and the assets of every registered lobbying organization. Tax like a Democrat with a grudge.

    If you tax at a high rate you increase the opportunity cost to pay to play for power. The government can use those taxes for more audit capabilities to the point of diminishing returns. Perhaps, the rest of the taxes could be put into a pot for a vox populi – to pay for public access multi-media. The rules for access, obviously, will open and close doors for participation in the political process.

    As long as humans remain human, buying influence will be part of politics. The real issue is how legislation and moral suasion shape “who gets what” – which is Lasswell’s classic definition of ‘politics.’

    Begin with electing Virginians to Congress who will repeal the worst and most odious election laws. Then, push towards openness, freedom and accountability in the pursuit of paying for power. Consider the taxing and redistribution of the resources spent on influence.

  • Looming Disaster in Allegheny Power Territory?

    Posted on

    by

    James A. Bacon

    The millions of Virginians living in Dominion Virginia Power service territory aren’t the only ones facing onerous rate increases in the near future. Potomac Edison, a subsidiary of Allegheny Power, which supplies electricity to Winchester and several nearby counties, has asked the State Corporation Commission to raise rates to stave off an impending financial disaster.

    At one point Allegheny was losing $100,000 a day and stands to lose up to $100 million, reports Garren Shipley with the Northern Virginia Daily. Those losses are unsustainable for a company that generates only $187 million a year in revenues in Virginia. If the SCC grants Allegheny the rate relief it requests, the average retail electric bill could increase from $70 to $90 monthly.

    Allegheny’s financial crisis traces its roots to the re-regulation of electric power in Virginia. Potomac Edison had a power purchase agreement with another Allegheny subsidiary to meet its obligations at capped rates through July 1, 2007. After that date, Potomac Edison was planning to buy power at market prices, which it expected to be able to pass through to customers. But the General Assembly re-regulated the power industry that year, extending the caps on electric rates through December 31, 2008. That left Potomac Edison in a position where it had to buy expensive electricity on the open market but continue to supply it to customers at the old, capped rate.

    Anticipating the problem, Potomac Edison filed with the SCC to raise rates by 20 percent to recover the estimated costs for power it purchased after July 1. The SCC rejected the request on the grounds that Allegheny had voluntarily transferred its electric generating units to a different subsidiary back in 2000 and had agreed to roll its purchased power costs into its base rates. Potomac Edison is appealing that decision to the Virginia Supreme Court.

    Allegheny then filed an application for a smaller increase, contending that it was entitled to recover $42.3 million on grounds too technical to explain here. The SCC granted $9.5 million a year in relief, but rejected the rest of the request.

    Meanwhile, Potomac Edison is hemorrhaging cash, and the company is issuing dire warnings. States the annual report:

    At this time, there can be no assurance that Potomac Edison will be able to recover most of the cost of power purchases in excess of the capped generation rates. … The inability to recover such costs is expected to have a significantly negative effect on Potomac Edison’s income and cash flows … which in turn may have an adverse effect on its overall business, results of operations and financial condition.

    Potomac Edison’s management is currently reevaluating planned capital and other expenditures and may postpone or eliminate all or a portion of those expenditures or take other measures in response to the expected negative impact of these regulatory decisions.

    Consumers in Potomac Edison territory no doubt appreciate the lower electric rates. But they may not be terribly happy if the company curtails its ability to respond to ice storms, wind storms or other power outages, or if it lacks the capacity to upgrade sub-stations to serve new subdivisions. Things could get ugly.

    • 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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