- Last Updated on Wednesday, 11 February 2009 20:15
- Published on Wednesday, 11 February 2009 20:15
- Hits: 391
Virginia, in the 21st century, has a diverse economy. There is manufacturing, mining, all sorts of agricultural products, a strong financial services industry, research and high tech engineering.
However, there was a time, not that long ago, when tobacco dominated our economy. Just 25 years ago the tobacco industry was responsible for 54,000 jobs in the Commonwealth. Today it’s substantially smaller. Until recently, save for some crusading anti-smokers who didn’t mind tilting at windmills, no one would ever think of uttering a word about regulating the industry or for that matter the consumption of its products.
Indeed, tobacco occupies an almost mystical part of Virginia’s history. If it hadn’t been for John Rolfe’s introduction of tobacco to the Virginia Colony back in 1612, it’s doubtful that the struggling settlement would have survived. The colonists had tried to make money in gold, silk, soap ash, and timber, but none of these were successful. It looked like the Colony in Virginia was headed for failure. But, tobacco changed all that.
Almost over night, the Virginia Colony turned into a financial success. Virginia tobacco, whose original breed was based on a plant grown in Trinidad, was in demand all over Europe. Fortunes were made and dynasties secured. Tobacco, as the lynchpin of the state’s economy was secure.
However, those days are past. Tobacco farming and cigarette production is still an important segment of our economy, but other concerns, about health and second hand smoke are finally being heard. Earlier in the year, the legislature considered an increase in the tobacco tax. It didn’t make it. But one change, that’s on the verge of becoming law, and frankly I never thought would see the light of day, is a restriction on the consumption of tobacco in restaurants.
There is strong statistical evidence that smoking isn’t just harmful to the smoker, it’s also bad for those around them. According to the Virginia Department of Health some 1,700 people die because of the effects of second hand smoke. Restaurant workers in particular are considered uniquely vulnerable since they have to put up with the smoke for their entire shift. The Governor has been a supporter of restricting tobacco use in restaurants for several years, but his proposals haven’t gotten very far in the past. However, this year it’s a different story. In a move that surprised both sides, Speaker of the House Bill Howell (R-Stafford) put aside partisan politics on this issue and has worked with Senate leaders and the Governor to craft a compromise bill. It’s one that is for the most part acceptable to all sides. It’s not an outright ban, but it represents the first statewide attempt to restrict smoking in a public place and it’s a major step forward in promoting public health.
Under the proposal smoking will be banned in restaurants. However, the owners, if they want to continue to allow their patrons to smoke, will be obliged to construct a separate and sealed smoking area. Some facilities are likely to do this while others might find it easier just to go along with the ban. Interestingly enough many restaurant owners don’t mind the idea of a ban, just as long as it applies equally to their competitors.
The hard core no-smoking advocates, and some of them aren’t happy with this deal, wanted a complete ban. No smoking in a restaurant, at all, no matter what. This has worked just fine in some states, but this is Virginia. Given the politics of the state, and its love affair with tobacco they should realize that this is a policy change of historical proportions and welcome it.
On the other side of the spectrum there are the folks who note, rightly, that tobacco is a legal product and further say that interfering with its consumption violates individual rights. They aren’t too interested in the second hand smoke argument. They consider the statistics dubious and want to smoke wherever they please.
At the moment, Phillip Morris, the state’s biggest tobacco producer, hasn’t taken a position on the ban, while the Virginia Hospitality and Travel Association is opposing it. However, with a majority of the State Senate, the strong and possibly firm handed support of Speaker Howell, Virginia, in an amazing step is likely going to regulate public the consumption of tobacco. From a public health standpoint this is a change that can’t come any too soon. It’s been said that the Virginia General Assembly, given its deep divisions and partisan hostility, has trouble agreeing on whether it’s day or night. Let alone passing needed legislation. However, if this bill passes, then all I can say is - nicely done.
- Last Updated on Wednesday, 04 February 2009 18:01
- Published on Wednesday, 04 February 2009 18:01
- Hits: 586
The only way to describe our current economic situation is as a modestly controlled panic. The numbers do most of the speaking. Unemployment in December was 7.2%, announcements by large companies of potential layoffs reached over 100 thousand last week alone, and many expect the number out of work to be substantially higher in February and March. It’s even possible, though I hope not, that the jobless rate could hit 10%. If so that would be the worst unemployment data since 1940. At the same time the Gross Domestic Product data isn’t good either. By the standard definition, namely two quarters, back to back that show a contraction, we’ve been in a recession for months now. However, the revised data for the fourth quarter of 2008 showed a drop of 3.8%. If you factor out the gains brought about by exports the number is closer to 5%.
But there is more going on than just a run of the mill recession. These recent numbers have all pushed the credit crisis, some would argue, the driving force behind this recession into the background. But, it’s still there. Banks are showing enormous losses, their asset values have dried up, and no one seems to have a grasp on just how much bad debt is out there. In trying to stem the bleeding the Department of the Treasury has already used up half of its bailout money. Originally Treasury’s plan was to buy bad assets and get them off the books. However, once they realized that this was just too hard, they turned to buying bank stock as a means to improve the capitalization for individual banks. It’s hard to tell whether it’s helped or not. The banks, in a sense, as the government owns more and more of their stock, are becoming nationalized, and the Treasury and the Administration want the other half of the bailout money to keep the process going.
All of this has created a crisis mentality. Washington and the new President want to do something. They sense, rightly, that the current economic crisis could be the first step in a much deeper contraction. That’s the argument behind the stimulus bill. The President, who began working on this before he was inaugurated, is pushing this $819 billion bill as a way to jump start the economy while at the same time making some needed investments in infrastructure, research, and education.
It’s appealing, but it’s also an incredibly huge amount of money. This is an expenditure that’s on top of a nearly $1 trillion deficit President Obama inherited from President Bush and the $700 billion financial bailout that the Congress approved last year. Added together this will put all other examples of deficit spending to shame. All told, the national debt, which just thirty years ago was below a trillion dollars, will likely reach or exceed $12 trillion.
The bill, no matter what the GOP says or does, is likely to pass. The President has the votes and the measure is popular with the country. Even a majority of GOP governors are supporting it.
But the question remains, will this bill do any good? That’s really hard to say. Is it an investment in job creating enterprises? Is it a broad investment in American infrastructure? Or, is it just a collection of favorite causes and projects? The answer is that it’s probably all three.
The current bill, passed by the House and headed for the Senate, is so big, with so many pieces, that it’s unusually hard to analyze. According to the House Appropriations Committee there is $275 billion for tax cuts. There is $90 billion for infrastructure, with roughly $30 billion of that for roads and bridges. There is $16 billion for expanding research facilities, $79 billion to help school districts that have been hard hit by the recession, $16 billion for the construction of education facilities, and $54 billion for renewable energy investments. Mixed in with this menu of new projects and programs is $130 billion to help the unemployed, $87 billion for Medicaid, $6 billion to build broadband networks, and a billion for veterans health care.
It’s a massive bill, and the numbers are staggering, but some of the thinking is that this massive infusion of funds could have an immediate impact on confidence, stemming the downward slide, while at the same time, promoting long term competitiveness and productivity.
To many, the Republicans included, it’s just a lot of spending and in the House, to a member, the GOP voted against it. Needless to say, some of their concerns might be justified. It’s a big bill, maybe too large and too diverse, with too much spending that doesn’t hit at the heart of the problem. However, at the same time, the current economic downturn isn’t like anything most of us have experienced. It feels like a meltdown, and President Obama isn’t anxious to follow in the shoes of Herbert Hoover and just watch while the situation deteriorates. This bill is a bit of a gamble. It may, or may not work. But right now, to borrow a phrase from Franklin Roosevelt, “one thing is for sure…we have to do something.”
- Last Updated on Thursday, 29 January 2009 03:03
- Published on Thursday, 29 January 2009 03:03
- Hits: 450
The Democrats in Virginia are riding high. Election 2008 was the culmination of one of the greatest comebacks in political history. Just a few years ago it looked like the Democratic Party of Virginia was headed for permanent minority status. However, beginning in 2001 things started to change. They captured, then held the governor’s mansion, took both U.S. Senate Seats, a majority of the State Senate, closed the gap in the House of Delegates, and last year, captured a majority of Virginia’s delegation to the U.S. House of Representatives. They also managed victories in dozens of local elections throughout Virginia.
The Democrats found a formula for victory and have managed to make it work in several successive elections. However, taking my Latin lessons from the movie Patton, they should remember the phrase “Sic transit gloria mundi.” It translates loosely into this bit of wisdom. “All glory is fleeting.” The advice is sound and applies just as well to politics as it did to ancient Roman generals. The tide in politics can change rapidly, and over confidence and even arrogance, something I sense in the party at the moment, can speed up the process considerably.
Election 2009 is supremely important to both parties. The Republicans want a comeback and the Democrats want to maintain their hold on state government. This is particularly important with redistricting coming up. The tide, for the most part should be towards the Democrats, but politics isn’t always that predictable and the Democratic Party is in a more vulnerable position than they seem to realize.
The big race this season will be for the Governor’s mansion. The Republicans, by virtue of winning the so-called down ticket races four years ago, have an advantage. They have a ready front bench of candidates who have already run statewide. What’s more, their only contested nomination is for Attorney General. Bob McDonnell, the current Attorney General is running for Governor, and Bill Bolling is running for reelection as Lieutenant Governor. It’s all pretty much decided.
The Democrats on the other hand are in the midst of a contentious primary. It looked like a simply fight between Delegate Brian Moran and Senator Creigh Deeds. Neither is a household name, but both are credible candidates. Moran understands Northern Virginia, and Deeds has a base in the southwest. But, then, and this is where the race took a turn for the weird, Terry McAuliffe, a Clinton intimate, and former chair of the Democratic National Committee decided he wanted to be Governor. He has no experience in Virginia politics and for that matter has only limited knowledge of the state itself. But he is in the race, he is energetic, and he can probably raise more money for the primary than both of his opponents combined.
However, he is, if the Democrats think about it, just about the worst potential choice they could make. Democrats in Virginia, as a rule, are moderate and when they run candidates who are moderate, they tend to win. This, by necessity, involves keeping a little distance between themselves and the national party. It can be argued that Virginia’s support for Obama in 2008 is a sign that things are changing. It probably is, but it’s doubtful that Virginia has changed its entire political culture overnight. When it comes to state politics, a moderate Democrat, running on a platform focused on statewide issues, the budget, schools, and transportation, is still the party’s best choice. Running a well known national liberal with no ties to the state just doesn’t seem like a good idea.
There is also the decision by the Governor to become Chairman of the Democratic National Committee. He says it is a part time job and it won’t affect his performance as Governor. Maybe it won’t, but the perception that he is taking time away from his duties as Governor, while the state is struggling sounds like good campaign fodder for the Republicans. Frankly, from a mildly partisan perspective, and if you haven’t figured this out yet, I lean towards the Democrats, I wish he hadn’t taken the job.
The Democrats still go into this election with a lot of advantages. Their coalition, anchored in the Northern Virginia inner and the outer suburbs, as well as support in the Hampton Roads area, has held. However, the Republicans running as outsiders in a tough period for the state and refocusing their message to be more sympathetic to Northern Virginia interests could prove to be powerful opponents. The Democrats need a strong candidate and a focused campaign. They can’t afford to take their success for granted or to assume that a winning streak can’t be broken. Because, in the lesson they gave to the Republicans, they proved it can be.
- Last Updated on Wednesday, 21 January 2009 21:29
- Published on Wednesday, 21 January 2009 21:29
- Hits: 420
Virginia’s culture is based on a moderate to conservative outlook combined with a certain amount of common sense. This approach is reflected in the way the state is governed. Our taxes are low and historically we have been recognized as one of the most efficient state governments in the country. We also, reflecting our conservative outlook, don’t like gambling, slots, or liquor sales outside of state control. To which I readily nod my head in agreement.
However, when it comes to payday lending, and let’s not mince words here, legalized loan sharking, we let our guard down. In 2002, in what was called the Payday Lending Act, our conservative lending laws were changed to allow storefront style lenders to charge more for loans than the previous cap of 36%. The idea, and this is how it was billed, is that those folks who need “short term” just in time cash, could take out a loan for a week or two, with their collateral being their next pay check.
It’s doubtful that even the bill’s strongest supporters in the legislature had any idea just how quickly this industry would catch on. In a matter of months pay day lenders started popping up all over the Commonwealth. Now there are hundreds. They are in strip malls, store fronts, and perhaps most ominously, on the main streets just outside military bases where there are large populations of young enlisted personnel. What can I say, these guys know their target market and aren’t afraid to exploit it.
This industry has also gotten its foot in the door when it comes to politics. They give campaign contributions to delegates and state senators, but most telling, is the amount of money they spend on lobbyists. Their outlay for lobbying was over a million dollars in 2007 and last year was probably substantially more.
The legislature, having heard complaints from religious leaders, community activists, as well as military advocacy groups, attempted to change the rules in 2008. The Assembly, who seemed more swayed by the pay day lending industry than the concerns of their constituents, only managed a few half hearted changes. They capped the interest rate and limited the number loans that a borrower can take out each year to five. While not going as far as some would have liked and banning these loan sharks entirely, it seemed like a move in the right direction. But the pay day lenders are a clever bunch, and they quickly managed to find and exploit a loophole.
Under the 2008 legislation, while capped in interest charges, the pay day lenders were still allowed to charge their fees. This rather insidious practice allows them to continue to operate under an interest rate cap, but through charging fees, allows them an opportunity to still make a lot of money. If the fees are counted as something of a “defacto” interest rate, the cost of a loan, even under the new legislation, can quickly become exorbitant.
However, where the pay day lenders really scored a coup was in the business of open ended lending. Under the old rules lenders could only operate with fixed one week, or two week loans. But under the new rules, while they are capped in the number of loans they can give each year, it’s now perfectly OK to offer extended credit. However, unlike even the most outrageous credit card rates, this new structure, with the fees and interest rates factored in, can reach the equivalent of nearly 700%.
There are those who claim that payday lending, almost like a Good Samaritan, fills a valuable niche in the market. In other words, they are giving a line of credit to those people who couldn’t find a loan any other way. There is some merit to this argument, but that’s not really what these loans are about. The reality is that they are notorious for putting people most at risk in a no win position. Once they get into this cycle of debt, particularly at these outrageous interest rates, there is almost no way out.
In the upcoming General Assembly, with so many other worries, it’s hard to see either chamber moving ahead with new legislation. Rather, they will probably to take a wait and see attitude. In the meantime, however, not everyone has pursued such a laid back approach. Our neighbors in Kilmarnock, while having no authority to limit pay day lending, rather ingeniously used their zoning ordinances to deny these guys space in their town. Under the town’s zoning rules banks are allowed, but other “small lending businesses” are not. So, in this case a pay day lender who wanted to set up shop in Kilmarnock had to find somewhere else to do business.
However, the reality is that unless Virginia, like other states, to include Ohio, New York, and North Carolina, puts an effective clamp on pay day lending, this scourge is going to continue.
- Last Updated on Friday, 04 January 2013 10:19
- Published on Wednesday, 21 January 2009 21:15
- Hits: 431
This week we watched history. It was more profound, more encouraging, and more uplifting than most of the history we’ve had to face the past few years.
Barack Obama, a black man from Illinois, became the President of the United States. It was a moment that just a few years ago few doubted they would ever see. America, for all the progress we have made, just didn’t seem to be ready. Even some of Obama’s closest supporters, when he announced his intention to run for President, said the time wasn’t right. But, in the tradition of Martin Luther King, and our own Doug Wilder, the first African American ever to win a Governor’s race, he went ahead with his campaign anyway.
This week’s inaugural was profoundly moving and on a personal level it meant a great deal to me. As a native Virginian I am proud of the Commonwealth. We have the legacy of George Washington, my personal favorite, George Mason, and, of course, Thomas Jefferson. Our general assembly is the oldest legislative body in America and our state, in this century, is one of the most modern and efficient in the nation. When it comes to being a Virginian there is a lot to be proud of. However, the story of Virginia is a complex one, and sadly, there is a less than admirable side of our history and that concerns race.
Most of us over a certain age remember a different world. When I was little I recall waiting in the “whites only” section of the train station. My school was segregated. The black kids who lived just across the street were bused to a school that was miles away. I don’t recall ever asking why. I guess I was a victim, as were most adults, of the old refrain of, “that’s just the way things are.” But I also recall thinking it somehow the way things should be when these kids joined us for the start of the 1966 school year.
But, still, racism was a fact of life. It wasn’t until 1971 that a Republican Governor named Linwood Holton would demand the rewriting of the Virginia Constitution to cleanse it of the racist clauses governing schools and voting. A few years before the U.S. Supreme Court, in Virginia vs. Loving, said a black person could finally marry a white person if they chose to. Virginia argued against the ban on mixed marriages. It’s all a grim memory. A legacy, which until very recently, always seemed to get in the way of any meaningful resolution of the human relations issues dealing with race.
Like a lot of white people race and racism is something I tend to talk about in the third person. The reality, as much as I deplore it, or as a child growing up, observed the remnants of the Jim Crow system, was that racism happened to someone else. No one ever denied me access to someplace I wanted to go because of my race and no employer ever gave me a second look because I was white. Still, that kind of system, and the prejudice that goes with it, wasn’t just a burden for African Americans. They felt its cutting edge, but it was also a terrible burden on society as a whole. Racism sidelines talent and ability, and worst of all, creates deep anxiety and hostility.
For some people the election of Barack Obama represents a profound departure from that world. However, what really mattered, and this is the defining point, was that for many Virginians the election wasn’t about voting for a black man or a white man. It was simply about voting for the person they wanted to see as the next President. That alone could represent the most remarkable transition in Virginia’s modern history.
Twenty years ago, Douglas Wilder, a moderate, and arguably even a conservative Democrat, was elected Governor. As we celebrate the Virginia of the 21st century we forget that in 1989 Virginia elected the nation’s first African American Governor. But there is a footnote to that story. The polls in that election all showed Wilder with a decisive lead going into Election Day. However, and this is still debated, it seems that enough voters had a sudden change of heart, probably based on race, to make his election one of the closest in history. In 2008 there was no evidence of the so-called Wilder effect. Times really have changed.
Barack Obama’s election doesn’t mean our national debate, and some would say, our national obsession, over race is over. But it does mean that when it comes to race in America nothing about the discussion is ever going to be the same again. To which I say, with a relieved sigh, “thank goodness.”
- Last Updated on Wednesday, 07 January 2009 19:35
- Published on Wednesday, 07 January 2009 19:35
- Hits: 484
It’s a familiar scene in a number of Cold War era spy movies. A train is entering East Germany, always at night, on its way to East Berlin and a police officer is walking down the aisle saying, “papers, papers, please...” The highlight is that particularly tense moment when the officer, eyeing the passenger suspiciously, gives the paperwork the once over.
In all Communist countries, from the Soviet Union, to the smaller states, national identity cards were a given. No repressive national government can live without them. Citizens were tracked and monitored all the time. It was just part of life in a totalitarian state.
While most of the Communist block has withered away, even today, national identity cards and internal travel papers are still common in some countries. But in the United States, with the exception of the way we use social security numbers, there has never been anything remotely close to a national identity system.
Nearly forty years ago President Nixon was presented with a proposal to create a national identity program, but he dismissed the notion out of hand saying it was “Un-American.” Ronald Reagan, in the early 1980’s, was shown a similar proposal. Reagan said he was thoroughly opposed to any kind of national identity card.
When President Clinton, in the early days of his administration, proposed a national health card, there was an immediate outcry that this was the first step in creating a national identity card. This charge was quite a stretch. His health care proposals died for other reasons, but that complaint didn’t help any.
Now, however, thanks to a bill enacted in 2004, it seems we’re on our way to a national identity card after all. In a way, it sort of snuck up on us. The “Real ID Act,” passed by a Congress that would approve anything as long as it had the word security in it, requires the standardization of state driver’s licenses.
On the surface that doesn’t sound particularly menacing. That is, until you read a bit more. What the federal government wants to do is substantially enhance the data carried on all licenses and then connect all of the state driver’s license data bases through one hub so that they can be easily searched. The Department of Homeland Security says that this is for the purposes of making sure that holders don’t have duplicate licenses in other states. But somehow that doesn’t seem like a convincing argument.
Real ID is more than just a driver’s license. The legislation includes a number of new information requirements, ones that don’t have a lot to do with operating a vehicle to include fingerprints, biometric information, machine readability and possibly a data chip. This all takes time and money to implement, and to make it a reality, the states, and each legislature has to do this, have to pass special legislation.
The federal government is pushing hard on this one and is threatening not to recognize a state’s driver’s license, for say, purposes of air travel, unless it conforms to the Real ID requirements. That’s a powerful incentive, particularly, if on some date in the future, people without a nationally approved driver’s license can’t travel.
As the result of this mandate most states, some reluctantly, have gone along with the idea. There has been relatively little resistance. However, with the deadline approaching several states, and even a few who have already approved the legislation, are having second thoughts. Virginia is one of them.
Under the law, everyone born after 1964 will have to have a nationally approved driver’s license by 2014 and anyone born before that will have until 2017. These requirements are going to make getting a driver’s license more expensive and time consuming than it already is. The data requirements are considerable, and could involve, at least in some cases, some form of a modified background check.
However, there are several legislators in Virginia who are having second thoughts about complying with the federal mandate. They think that Real ID is an invasion of privacy and they aren’t at all comfortable with the notion of a national identity system. Many in the state are also concerned about the cost and inconvenience drivers will face in getting a license in the future.
Real ID has been approved, almost effortlessly in most states, and the modest uprising the Virginia General Assembly, may be too little, too late. The legislature has a lot to worry about during the upcoming session. But, the bills that have been introduced, with the support of civil libertarians and conservatives, may at least add a hint of caution to what seems to be a rush towards a national identity card.