Category Archives: Business and Economy

Help for Small Businesses–One State Use of CARES Funding

By Dick Hall-Sizemore

I owe the Dept. of Small Business and Supply Diversity (DSBSD) an apology. In an earlier post, I questioned whether the agency would be able to quickly distribute $120 million in grant funds. It turns out that its first checks went out in mid-August and it had to stop accepting applications on Dec. 9 because the amount of money designated for the program had been exhausted.

The program is called Rebuild VA. Approved applicants received awards of three times their average monthly recurring eligible operating expenses plus COVID-related expenses, up to a maximum grant of $100,000. To be eligible for an award, an applicant could be a corporation, pass-through entity, nonprofit organization, recognized tribe, sole proprietor, or individual contractor who met the following criteria:

  • Principal place of business in Virginia
  • 250 or fewer full-time employees
  • Operating prior to 3/12/2020
  • Currently in good standing with State Corporation Commission (if applicable), and
  • Engaged in legal activity.

Continue reading

Buy Bacon’s Book

By Peter Galuszka

This is a shameless advertisement. Jim has written an excellent book and you should buy it and review it.

While some of Jim’s focus is at odds with a similar book I wrote eight years ago, “Maverick Miner” is a really well put together effort at research and writing.

In my reporting, I asked many people, mostly miners, what they thought about E. Morgan Massey. The response: tough on unions but good guy. I heard this over and over. I was told that if rank and file miners had a serious problem, they could call Morgan and he’d come to the mountains to work things out. I heard this a lot and it gives credence to Jim’s book.

You should buy the book, read it, and like it or not, post something on Amazon. Here’s something I did:

“In this book, Jim Bacon, a Richmond journalist, tells a fascinating story about 94-year-old E. Morgan Massey, the former head of coal company that would become highly controversial. Massey paid Bacon to write a private narrative about the Massey family and agreed to let Bacon write his own unabridged account. Taken as a biography and while understanding that this is from Massey’s viewpoint, the result works very well. Massey explains why he hired Donald L. Blankenship, who achieved remarkable notoriety as the boss of Massey Energy, a company spinoff. He ended up in federal prison. The book underestimates the human and environmental cost of coal mining in the Central Appalachians. It also takes Massey’s side in dissecting what caused the April 5, 2010 explosion that killed 29 miners – the worst such U.S. coal disaster in 40 years. Even so, Bacon’s access to internal sources and records is a welcome contribution to understanding a great story.

Peter Galuszka is author of “Thunder on the Mountain: Death At Massey and the Dirty Secrets Behind Big Coal.” (St. Martin’s Press, 2012)

What Texas’s Crisis Means for Virginia

by Peter Galuszka

The Texas freeze and ensuing energy disaster has clear lessons for Virginia as it sorts out its energy future.

Yet much of the media coverage in Virginia and certainly on Bacon’s Rebellion conveniently leaves out pertinent observations.

The statewide freeze in Texas completely fouled up the entire energy infrastructure as natural gas pipelines and oil wells stopped working, coal at generating plants iced over and wind turbines stopped working.

Making matters much worse, Texas opted not to have power links with other states. Its “free market” system of purchasing power meant utilities skimped on maintenance and adding weather-relative preventive measures such as making sure key generation components were weatherproof.

The result? Scores dead and millions without electricity. Here are more points worth considering in Virginia:

Climate Change is For Real

It is a shame that so much comment in Bacon’s Rebellion is propaganda from people who are or were paid, either directly or indirectly, by the fossil fuel industry. Thus, the blog diminishes the importance of dealing with climate change in a progressive way.  Continue reading

Signs of the Bubble Economy…

From Virginia Business magazine: Charlottesville-based Blue Ridge Bank has made it possible for customers to purchase and redeem bitcoin at its ATMs — the first commercial bank in the country to do so. Blue Ridge Bank cardholders can purchase and redeem the virtual currency at 19 locations across the state. A year ago, bitcoins were worth $6,000 each. Today, they’re worth approximately $45,000.

By all means, let’s make it easier for small, unsophisticated investors to speculate in highly inflated and volatile cryptocurrencies!

Last August Michael Saylor of Tysons-based Microstrategy invested a quarter billion dollars in bitcoin on the premise that massive fiscal and monetary stimulus in the U.S. and other central banks around the world would be highly inflationary. His bet is looking brilliant at this moment in time. More recently, Elon Musk of Tesla fame — Tesla shares ballooned 7.4 times in 2020 on rampant speculation — has endorsed bitcoin. Don’t get me talking about the GameStop frenzy or the IPO boom for companies that have yet to make a profit. The scary thing is, we haven’t reached peak crazy yet. Continue reading

Is It Time to Say Goodbye to Virginia Coal Exports??

Norfolk Southern’s coal loading terminal at Lambert’s Point in Norfolk

By Peter Galuszka

Oilprice.com, a petroleum trade newsletter, has a story that could spell more bad news for the faltering Virginia coal industry.

For many years, the most valuable product from Virginia’s coal fields was coking or metallurgical coal that is exported to other countries for use in steel making.

China has been a crucial buyer of Virginia coal but recent pronouncements from the Communist Party leadership indicate that coal is on its way out after leader Xi Jinping outlined a far-reaching program that set a peak of carbon emissions in 2030 followed by net zero policy by 2060.

Correspondingly, steel companies are also setting net zero carbon goals including the world’s biggest steel makers ArcelorMittal of Europe, Baowu Steel of China and Nippon Steel of Japan.

The moves could erase Virginia’s coal experts because the demand for the steam coal used to generate electricity has already been undercut by the remarkable growth of renewable energy sources like solar and wind in China and India. As they expand, their costs go down – below those of coal.

Coking coal exports from Hampton Roads could get slammed as global steelmakers experiment with new manufacturing processes. Continue reading

Before There Was an Atlantic Gas Pipeline….

N&W coal train in West Virginia

…There Was the Coal Slurry Pipeline.

by James A. Bacon

The early 1980s were a momentous time for the U.S. coal industry, and for Virginia economic history and politics as well. As the world turned to coal in the wake of the Arab oil embargo, coal exports through Hampton Roads were surging. Loading terminals literally could not load the black rock fast enough, and dozens of ships were backing up in Hampton Roads waiting for their turn at dock. Meanwhile, the Norfolk & Western Railway (soon to become part of Norfolk Southern) and the C&O (soon to become part of CSX) exercised duopoly control over rail shipments to the ports, and, newly deregulated, they used their power to charge punishing tariffs. Thus commenced a years-long battle between railroads and coal operators over the spoils of a once-in-a-lifetime export boom.

E. Morgan Massey, president of the Richmond-based A.T. Massey Coal Co., took the lead in taking on the railroads. Not only did he build new terminals in Newport News and Charleston, S.C., to bust the railroad monopoly on loading facilities, he helped orchestrate a bid to build a 350-mile coal slurry pipeline across Virginia to bypass the railroads. Just one hitch: A coal slurry pipeline had to cross railroad rights-of-way, and only the General Assembly could grant the eminent domain. Thus began one of the greatest lobbying battles between business lobbies – VEPCO, the Transco pipeline company, and coal industry interests on the one hand, and the railroads on the other — that Richmond had ever seen.

Chapter 8, “Rails and Pipes,” of my new book, “Maverick Miner” tells the story of the clash between business titans from Massey’s perspective. Here, for the joy and delight of Bacon’s Rebellion readers, I excerpt the section that focuses on the coal slurry pipeline debate. There is no coal slurry pipeline in Virginia today, so it is not a spoiler to reveal that the railroads won the legislative battle. But Morgan and his allies, VEPCO and Transco, felt like they squeaked out a victory in the business war. Continue reading

Maverick Miner

I have been neglecting my duties at Bacon’s Rebellion over the past three years because I was engaged by E. Morgan Massey to write a history the Massey family and the A.T. Massey Coal Co. Under the terms of the deal I struck with Morgan, I was allowed to repurpose that book for a wider audience. The result is “Maverick Miner,” which focuses mainly on Morgan, whose 75-year career (he’s 94 years old now) spans the entire post-World War II history of America’s coal industry. 

“Maverick Miner” is available in both print and ebook editions on Amazon.com.

Here follows the official press release announcing the book. — JAB

RICHMOND, VA—E. Morgan Massey made headlines in the 1980s as president of the A.T. Massey Coal Co. when he contested the railroads’ stranglehold on coal export traffic and challenged the powerful United Mine Workers of America in a long and bitter strike. If his career had ended in 1991 when he reached mandatory retirement age, he would have been one of the most consequential leaders in modern U.S. coal industry history.

But at 65 years of age, Massey’s adventures in the coal industry had just begun. Working out of a tiny office in Richmond, Virginia, he proceeded to compete with the international energy giants in opening the coalfields of China and South America to global commerce. Continue reading

Senate Taxes Less PPP, House Bill Almost All

by Steve Haner

First published this yesterday by the Thomas Jefferson Institute for Public Policy.

Majorities in both chambers of the Virginia General Assembly agree with Governor Ralph Northam and have voted to tax the federal Payroll Protection Plan grants that saved Virginia jobs in the pandemic. They only remain at odds over how much to tax.

The Virginia Senate has passed a bill 39-0 that allows employers, who used the money to maintain their workforce, to exempt the first $100,000 of their PPP grant from 2020. The rest is taxed. The bipartisan compromise allowed the bill to pass with the emergency clause it needs to go into effect immediately upon approval, in time for this tax filing season.

The average Virginia PPP grant was about $107,000, state officials reported. More than 20,000 employers would still see some taxes on their grants under the Senate bill. This state and its localities have received multiple billions of dollars of direct federal funding during the COVID pandemic, with more on the way, yet Governor Northam also wants to skim 6% off the top of what Virginia employers received.

It is that simple. Continue reading

Consumer Reports Misleads on Virginia EV Bill

Great Seal of Virginia

by James C. Sherlock

Few media outlets are as influential with their readership as Consumer Reports or as active in soliciting direct contact of public officials on issues that management feels are important to that publication’s political values. That is their right, but false statements in support of their positions is a violation of public trust.

I received yesterday afternoon in my email a solicitation for political action in Virginia pushed out by Consumer Reports to all subscribers. It read:

Earlier this week, the Virginia House of Delegates approved an exciting piece of legislation that would allow the state to make it easier for consumers to buy fuel-efficient and electric vehicles at car dealerships in the Commonwealth.

That in turn could help drivers save money on fuel and reduce our air pollution: a win-win no matter how you slice it.

But before the bill can get signed into law, it must pass through the Senate by next week. Can you send a message to your VA Senator now and ask them to vote YES on House Bill 1965?

Continue reading

Virginia’s Legendary Corruption Blocks Antitrust Enforcement

Great Seal of Virginia

by James C. Sherlock

Readers of this blog have indicated an unquenchable appetite for information about and discussion of Virginia’s Certificate of Public Need (COPN) law and its administration.

This essay informs on the negative impacts of the COPN law and the Virginia Antitrust Act (the Act) itself on the enforcement of antitrust laws against Virginia’s regional hospital monopolies.

First, know that the business activities that some of Virginia’s hospital monopolies exhibit can already be deemed illegal under both federal and state antitrust laws. But the Act gives them a special dispensation, complicates both state and federal antitrust enforcement and results directly in the in-your-face anticompetitive activities we see every day.

The federal government (and once even Bob McDonnell as Virginia Attorney General) occasionally have intervened to block interstate mergers or in-state acquisitions before they occur, but always within the federal administrative and court systems, and they have never challenged COPN decisions.

But no government agency has ever sued over the business activities of Virginia’s COPN-constructed monopolies. Continue reading

Where Is the Outrage?

Speaker Eileen Filler-Corn and House Clerk Suzette Denslow
Photo Credit: Ned Oliver, Virginia Mercury

By Dick Hall-Sizemore

I have waited all day for the howls of protest on this blog concerning the high-handed action of a House committee chairman who would not allow a bill even to be considered and voted on in committee. She just sat on it. Shades of Ed Willey! And we thought these Democrats were going to be transparent, but there has been no complaint from those who are usually so quick to condemn the legislature and its “plantation elite” ways.

Oh, wait. That was Lee Carter’s bill (HB 1755) that would have repealed the right-to-work law. I guess the conservatives on this blog are OK with such dictatorial behavior when it comes to bills they hate. And we thought those Democrats were going to be so liberal and wreck one of the state’s business-friendly pillars. Heck, they don’t even want to talk about it.

If a Delegate or Senator introduces a bill, he or she deserves the courtesy of at least a subcommittee presentation and vote. Chairmen should not be allowed to protect members from having to “go on the board.”

Here is the Richmond Times-Dispatch’s account of the Democratic leadership squelching Delegate Carter. You have to give him credit—he went down fighting and did not hesitate to take on his party’s leaders

State Tax on PPP Grants Reduced Only Slightly

by Steve Haner

A Senate Committee voted today to reduce the amount of tax that Virginia will impose on the Paycheck Protection Plan (PPP) grants that saved Virginia jobs, but not by much. It remains clear many legislators think employers owe Virginia tax on those dollars.

Declining to tax the entire amount is being packaged as a gracious concession on the state’s part.  Continue reading

And They SWaM and They SWaM

By Dick Hall-Sizemore

Governor Northam is moving to increase the amount of business that goes to companies owned by women or minorities.

A little background would help put the pending legislation into perspective. There have long been programs at the federal, state, and local levels that serve to give some preferences to small businesses, as well as to businesses owned by women and minorities. These programs have generally been upheld by the courts. Indeed, one of the leading cases in this area arose out of a suit brought in Virginia—City of Richmond v. J.A. Croson Company, 488 U.S. 469 (1989). The case law surrounding this issue is fairly complicated.  A summary can be found here in the recent diversity report commissioned by the Department of Small Business and Supplier Diversity (DSBSD). A more detailed analysis can be found here in an earlier report. Continue reading

Probably a Coincidence – COPN, the Monopolization of Health Care and the Marginalization of the Poor

by James C. Sherlock

The Business of Healthcare in Virginia

I have been asked many times about how freer markets in healthcare can coexist with our need to treat the poor. I will try to briefly cover some of the complexities of the answer to that question.

And I will show that of all of the government healthcare control systems, COPN is the only one that has proven to disproportionally hurt poor and minority populations by its decisions and their effects.  

And it does so by design. Continue reading

DePaul Hospital’s Closing Presents a Unique Opportunity for Hampton Roads

De Paul Medical Center Jan. 29, 2021. Photo Credit: James C. Sherlock

by James C. Sherlock

Not too long ago, before the decline of the malls and COVID, the healthcare community coined what they called the Nordstrom Rule.

The meaning was that if you wished to optimize profits in your healthcare business, build it close to a Nordstrom. The theory was that Nordstrom had already done the market research to identify concentrations of wealthy customers.

I wrote yesterday about the Sisters of Charity and Bon Secours, Catholic charities both. The Sisters were not in it to serve wealthy patients. They purposely located their hospitals among the poor. So 19th and 20th century of them.

Sentara, a more sophisticated public charity, avoids locations close to the poor.

In 1991, Sentara purchased the Humana Bayside Hospital in Virginia Beach, renaming it Sentara Bayside Hospital. That cleansed Virginia Beach of a competitor. But Bayside served Virginia Beach’s largest concentration of economically disadvantaged minorities. So Sentara closed it at the first opportunity.

The Virginia Department of Health brokered the closing of Bayside in 2008 under the cover of the Certificate of Public Need (COPN) process that fatally wounded DePaul, allowing Sentara to relocate the Bayside beds to the new Sentara Princess Anne, far from the minority citizens of Bayside.

The closest hospital for many residents served by Bayside was then, you guessed it, DePaul. No longer. Continue reading