Bacon's Rebellion

Well, Baconauts, I find myself in sunny Augusta, Ga. — except it’s not very sunny around 8 a.m. this morning: The town is covered with a thick fog. Anyway, I’m here to observe what has become one of the nation’s largest sporting events. At its peak, up to 150,000 people will crowd the fairways to watch a procession of middled-aged white guys — plus Tiger Woods — swing long sticks at little balls.

I’ve never played a single round of golf, and at 55 years old, I don’t intend to begin. I’m here because my wife likes golf and in a fit of madness bid on some tickets at the Collegiate school auction — and won. As ignorant as I am of the sport, I doubt I will have anything useful to say. If you want insight into the tournament, turn on the television!

In the first installment of Supercapitalism Redux I listed what I thought were Robert Reich’s key correct findings. Here are my suggestions on what we should do in Virginia about those findings for the common good in the Commonwealth.

Everyone has more money and stuff than 30 years ago. Our American poor are richer, materially, than they were three decades ago. They are considerably poorer, spiritually and in quality of life, than the poor from the 70 years ago – because of the destruction of the family.

Yet, the middle class has thinned out considerably. The squeeze increased the number of upper middle class and wealthy (is rich a better term?) folks. Likewise, the number of lower middle class people increased. If these folks don’t get new competitive skills or go into business, successfully, for themselves, they will not progress to the middle class. Ever.

What to do for the people at the bottom economically?

First, don’t destroy capital. Reich agreed (p. 4) that “Capitalism’s role is to enlarge the economic pie.” Build capital. Build capital as fast as it can – grow the economy just shy of cross-over point of inflation. Tax capital once – period.

The 3% growth in total tax burden in Virginia since the 70s means about $157 a month for the median family (earning $51k in ROVa and more in NoVa). Lower personal taxes.

Expand the supply of energy, as much as Virginia can, to lower the price. The cost of rising oil prices destroys the discretionary income – and even pushes into mortgage failure – too many working families. Build the double refinery capacity at Yorktown, build new nukes, build sea-based tide and windmills, etc.

Provide individual supported by community, not government, opportunities for the big expenses – health, retirement, job insecurity, and education – that will break marginal income families. I wrote in Bacon’s Rebellion about Commonwealth Trust Accounts for lifelong individual savings. Return the bogus $1.5 B sales tax increase (2004) into individual accounts ($200 @)) for all 7 million Virginians. Give generous tax cuts for folks who contribute to other folks’ accounts.

Elect Representatives and Senators to the Federal government who will morph Social Security into individual, personal accounts. Elect politicians who will morph Medicare, Medicaid and the drug benefits into sustainable health insurance accounts. But, don’t wait for the Federal government to reform to take action in Virginia.

The social pathologies that plague families of every income can’t be solved by government. Government shouldn’t promote the pathologies, like welfare did.

Coming up next…what to do about corporate excesses.

Norfolk Southern wants to build a $35.5 million intermodal facility in Montgomery County to transfer shipping containers from trucks to rail in an initiative that could remove 150,000 trucks a year from Virginia’s highways. Not only that, but the project could create as many as 2,900 jobs over a 14-locality area from Radford to Lynchburg, generate hundreds of millions of dollars in economic activity, and plunk down between $17 million and $71 million in taxes.

Wow, sounds like a winner. The project relieves traffic congestion. It’s good for the environment. It creates jobs in a section of the state where unemployment is still a problem. And it adds to the tax base. What’s not to like?

Well, apparently residents of the Elliston area, where the transfer center would be located, are worried that the project will adversely impact their quality of life by increasing traffic and noise, and degrading air and water quality. Now, Montgomery County, which endorsed the project in 2006, opposes it. (See coverage in the Roanoke Times and Times-Dispatch.)

There are two ways to approach problems like this. One way is to fight bitterly, refusing to yield an inch. The other way is to seek reasonable compromises in pursuit of the common good. I don’t know which path the people of Elliston will follow, but the situation does not look positive. Maybe Gov. Timothy M. Kaine, who is trying to organize a regional meeting, can pull off a deal that makes everyone happy.

The residents of Montgomery County would do well to talk to the Piedmont Environmental Council, which backs the construction of new railroad sidings in Fauquier County. The rail link between Manassas and Front Royal is “the major chokepoint” on Norfolk Southern’s New York-to-Texas corridor, according to an article in the Spring 2008 Piedmont View. The residents of Fauquier are just as concerned about the impact of increased rail traffic as the residents of Montgomery County — this is the region, remember, where citizens are fighting a proposed high-voltage transmission line tooth and nail — but they are displaying a very different attitude.

The PEC acknowledges the public benefits of shifting container traffic from truck to rail. A train can haul one ton of freight up to five times further than a truck on the same amount of fuel, while emitting only a third as much carbon dioxide. Additionally, as the Piedmont View quotes The Plains resident Megan Gallagher, rail yards are “so much less destructive than a 500-foot roadbed with hundreds of thousands of vehicles.”

Accordingly, PEC has chosen to work with Norfolk Southern to craft an outcome acceptable to piedmont residents. Priorities include:

• Helping landowners get a fair deal in negotiations with the railroad
• Reducing noise by adding gates at road crossings so that trains don’t have to blow their whistles
• Diverting construction away from land under conservation easement, where possible
• Offsetting the loss of conserved land through the protection of nearby properties of comparable size

Let us all hope that the residents of Elliston take such a constructive approach.

Update: The Roanoke Times reports that the state might have to contribute more money than originally thought to the project: an additional $10 million to $15 million to build the “Ironto Connector” between the rail yard and Interstate 81.

(Map credit: Adapted from “Answers.com.” Blue dots show approximate location of proposed Montgomery County and Fauquier Count facilities.)

Re: Supercapitalism: The Transformation of Business, Democracy and Everyday Life by Robert B. Reich.

Jim Bacon asked his writers to read and report on this book by former Clinton cabinet official, Robert B. Reich. Here is my homework in several installments.

Reich describes the changes in America, and across the world, caused by the transformation from the Industrial Era to the Information Era. And, for the Third World from the Agrarian Era to the Industrial and Information Era at the same time. His findings of economic trends and facts, believe it or not, were the basic same things predicted by the long range study (the last of the Army 21 studies) I lead in 1990-92 for the period 2005-2015.

Interestingly enough, our study said the key to the future, domestically and abroad, was “the political perception of economic change.” And, that a “Gandhi with guns” could articulate the grievances of the Have Nots as a cultural identity issue.

Consequently, I reject Reich’s dichotomy of Democracy vs. Supercapitalism (Reich’s name for the new phase of economics). Every ‘government’ that makes rules, executes rules and adjudicates rules from the tiniest tribe to the greatest civilization – ever – has its hands in the economy.

One of the best courses I took in grad school #1 was “Government and Business in a Mixed Economy” taught by the late Dick Darman and Roger Porter. The course showed how intertwined government and the business are. Was, are, is and will be – forever. So, I reject Reich’s basic assumption. Yet, many of his findings were spot on. Those that weren’t, I’ll just ignore for now.

His findings include the following items I’d agree are valid:
• Widening inequality in incomes
• Reduced job security
• Plethora of products and services appealing to our basest desires
• Large companies spend on lobbyists, lawyers, experts, public relations specialists and donations to ‘drown’ out the voices and values of citizens

The result is “Americans are losing confidence in democracy” (Reich’s word for our government).

Also, the GDP grew threefold (300%) from 1973 to 2006 – adjusted for inflation.

Productivity grew by 80%.

CEO incomes went from 66 times the ‘typical’ worker (1968) to 900 times the ‘typical’ worker (2005).

And, ta da, the gains in real income from 1974 to 2004 are by quintile

Lowest 5th – 2.8%, 2nd lowest – 12.9%, middle – 23.3%, 2nd highest – 34.9%, and highest – 61.6%.

Chew on those finding fellow Virginians. I’ll post in another installment what I think are better answers of “what must be done” than Reich’s. IMHO.

The Bacon’s Rebellion e-zine publishes again. The April 7, 2008, edition skewers the forces of ignorance and lethargy. Check it out at db4.dev.baconsrebellion.com. Don’t miss a single issue — sign up for your free subscription here.

We’ve got a great line-up this week:

First, Shoot All The Cars

While Virginians seem hell bent upon raising taxes and building roads, Ameri-kiwi Claude Lewenz envisions a different path to a superior quality of life: Auto-free villages.

by James A. Bacon

Newseum
The D.C. attraction opening this week celebrates freedom of the press, the rise of the news and the decline of the newspaper.

by Doug Koelemay

Space to Drive and Park

Cars consume huge amounts of space for roads and parking, which disaggregates human settlement patterns, co-opts transportation alternatives, and… increases dependence upon cars.

by EM Risse

Two Spheres of Fraud

While the media salivates over the subprime lending fiasco, journalists are overlooking the main reason why Americans can’t afford housing: the building of the wrong kind of housing in the wrong places.

by EM Risse

How to Save $1 Billion Without Even Trying

Think Virginia lawmakers are serious about restraining state government spending? Consider this: Simply freezing 7,627 vacant positions could have saved $1 billion in the next two-year budget!

by Mike Thompson

You Call This Conservative?

A self-proclaimed “conservative” transportation plan appears to be animated by the conviction that Virginians really don’t know what’s good for them. When did conservatives become central planners?

by Norm Leahy

Creating a New Segregation

When Richmond combined Jim Crow with urban planning in the 1940s, the result was expressways, the destruction of African-American neighborhoods and white flight.

by Peter Galuszka

Reaching the Promised Land

In his lifetime, Martin Luther King empowered African-Americans. By his death, he stimulated Southern, evangelical whites to search their hearts and embrace all children of God.

by James Atticus Bowden

Nice & Curious Questions

Bottled Poetry: Wine Trails of Virginia

by Edwin S. Clay III and Patricia Bangs

Rydell Payne runs the nonprofit Charlottesville Abundant Life Ministries, and he has a plan to lift up poor African-Americans living in the city. He wants to develop three acres of Woodlands off Prospect Street, building about 20 residential units in single-family homes and duplexes, a multi-purpose educational and vocational center, and perhaps some retail space for a coffee shop or launderette. The “Prospect College” would provide job training and financial literacy courses, and possibly include some dormitory rooms.

Abundant Life was formed as an alliance of local church members and neighborhood residents. The organization has raised $100,000 on its own, and hopes to gain access to $67,000 in federal funds through the City of Charlottesville. The organization also is partnering with Habitat For Humanity to build some of the houses, and the ambitious Payne has held discussions with the Virginia Employment Commission about opening a satellite office there and hopes Piedmont Virginia Community College can offer workforce development and job training courses as well.

Churches appear to be the main institution in inner city neighborhoods that African-Americans rally around. Not-for-profits such as Abundant Life Ministries are the leading agents of enterpreneurial action. The poor and working class people who participate in this project will gain far more than places to live — they’ll gain skills it takes to succeed in the world… Not just the formal skills that can be taught in a classroom, as important as they are, but the organizational skills to set goals, raise money and execute projects.

Building communities from the bottom up through projects like this will accomplish far more to lift inner-city African Americans out of poverty than well-meaning but bureaucratic anti-poverty programs out of the Great Society mold that breed passivity and dependency. Let us wish Mr. Payne the best of fortune in his endeavors.

(Read Seth Rosen’s story in the Charlottesville Daily Progress. Photo Credit: Charlottesville Daily Progress.)

The meeting the Hampton Roads/Tidewater members of the General Assembly had with the HRTA folks yesterday in at the state-funded Suffolk modeling and simulation facility held an interesting moment.

I got an email telling how it was revealed that the funds to model Hampton Roads traffic were cut from the budget. So, multi-billion dollar decisions are made on the basis of the bogus analysis I read back in 2002. Even that flawed work projected that building the big projects dreamed up in 1997 – pour concrete, pour concrete, pour concrete – would actually INCREASE congestion when they were completed in 20 years or so.

Oops.

We don’t need no stinking models to make decisions. Do we?

Speaking of which, guess which Commonwealth doesn’t have a econometric model of its state economy?

I’ve been referred to a spread sheet model which is a modification of one made for Texas about a decade ago. I saw that one. Is there another out there?

I suggested to my Delegate to put the money in the budget for our public universities to put together a consortium to develop a very good model of our economy. It would help to analyze spending and taxing options. Didn’t happen.