Tag Archives: James A. Bacon

Civility as White Privilege, and Other Reasons why Higher Ed Might Be Losing Republican Support

Civility sucks!

Washington Post columnist Catherine Rampell fretted in a recent piece about the diminishing support for higher education she detects among GOP lawmakers. “Republican politicians,” she wrote, “clearly view beating up on colleges as a way to prove their conservative bona fides.”

Why, oh why, might that be? She offers two theories. First, that Republicans and conservatives have lost confidence in colleges. Schools are too liberal, they don’t allow students to think for themselves, and students are learning the wrong things. Or, in the worlds of Donald Trump Jr. last fall, colleges offer the following bargain: “We’ll take $200,000 of your money; in exchange we’ll train your children to hate our country.”

She quotes Arizona State University President Michael Crow to the effect that maybe there’s a teeny, tiny bit of truth to the accusation: “Crow acknowledges that even his prized university has not always had ‘intellectual balance,’ and notes that it has recently developed conservative-leaning programs.”

Rampell might gain some added insight by reading Steve Salerno’s op-ed in the Wall Street Journal today, headlined, “‘White-Informed Civility’ Is the Latest Target in the Campus Wars.” Salerno describes how in some quarters, professors are arguing that the concept of civility is a manifestation of white hegemony.

“Finally, there’s a recognition in the academic space that the way argument has taken place in the past privileges certain types of people over others,” Joe Leeson Schatz, director of speech and debate at Binghamton University, told the Atlantic. “Arguments don’t necessarily have to be backed up by professors or written papers. They can come from lived experience.”

In other words, no amount of mere “facts” or “logic” can trump the lived experience of the oppressed. Logic such as this, combined with the larger assault on the western intellectual canon of “dead white men,” creates the impression that colleges are spinning out of control. Admittedly, extreme examples plucked from places such as Howard University, Towson State, and even the University of Arizona are not typical of all universities everywhere, much less than the institutions here in Virginia. But extreme examples feed the sense that higher education is increasingly hostile to the values of Republicans and conservatives. And it is not illogical for legislators ask, “Why subsidize those who hate everything I believe in?”

Rampell sees another reason for the declining support — Americans are losing faith in the payoff from a college degree.

In an August Wall Street  Journal/NBC News survey, most Republicans, rural residents, and people who consider themselves poor or working class said college isn’t worth the cost. This is even though higher education averages a much bigger return than any other major investment: the occupations requiring at least some postsecondary education are projected to have the fastest job growth and highest earnings in the coming decade; and for those born at the bottom of the income distribution, a college diploma is key to achieving upward social mobility.

Wrong, wrong, wrong. The average college graduate encompasses a broad range of people from elite prep school valedictorians who scored double-barreled 800s on their SATs to those who were socially promoted through an inner city school and read at an 8th-grade level. Lump together Harvard-graduate hedge fund managers with State U shoe salesmen at JC Penney and, yes, they make a pretty good income on average. But the average is a meaningless figure for those on the margin. Most poor or working class kids will earn less than the average. What’s more, poor kids are at significantly higher risk of dropping out of college without graduating and accumulating significant student-loan debt in the process.

Rampell is an enabler of the higher-ed status quo, I surmise, because (a) she finds the college environment to be ideologically and philosophically hospitable, so bias against Republicans doesn’t bother her very much; (b) she buys the line that tuition increases are driven primarily by cutbacks in state financial support at the behest of mean ol’ Republicans rather than by out-of-control costs; and (c) despite her Princeton education, she cannot grasp the difference between the average and marginal utility of a college degree.

Dominion Energy to Acquire SCANA Corp. in $14.6 Billion Deal

SCANA halted work on the V.C. Summer Nuclear Power Station in July. Photo Credit: Post & Courier

Dominion Virginia Energy has agreed to acquire the troubled Cayce, S.C.-based SCANA Corp. for $14.6 billion in cash and stock, the two companies announced today. The deal is contingent upon numerous regulatory approvals and preservation of a South Carolina state law that allows the company to recover customer payments for two unfinished nuclear reactors costing $9 billion.

Delays, cost overruns and ultimately the abandonment of the V.C. Summer Nuclear Power Station in Fairfield County, S.C., left SCANA with a massive liability that has roiled South Carolina politics for the past year. According to the Post & Courier, South Carolina regulators and lawmakers are considering whether customers of SCG&E, a SCANA subsidiary, should continue to pay $37 million monthly for work done on a power plant that will never be completed.

The Dominion acquisition would stabilize the utility’s finances. The Richmond-based energy company has promised to make a $1.3 billion payment upon completion of the merger worth $1,000 to the average residential electric customer, reduce current electric rates by 5%, and write off $1.7 billion in V.C. Summer assets. The write-off would make it possible for rate payers to meet the remaining obligations on the nuclear plant in 20 years instead of 50 to 60 years.

Preliminary response in South Carolina to the deal was cautiously positive but noncommital. Gov. Henry McMaster praised the sale offer as “progress,” reported the Post & Courier. “This sounds like a better deal for ratepayers,” said state Rep. Micah Caskey, a Republican critic of SCANA. “But is this the best deal? I don’t know.”

The transaction will have no direct impact on Virginia rate payers. SCANA will be treated as a wholly owned subsidiary of Dominion Energy, comparable to Dominion Virginia Energy. There will be no co-mingling of assets, and both will answer to their own state regulatory bodies.

However, the deal does have implications for the proposed Atlantic Coast Pipeline.

“SCANA is a natural fit for Dominion Energy,” said Dominion CEO Thomas Farrell in a press release. “Our current operations in the Carolinas — the Dominion Energy Carolina Gas Transmission, Dominion Energy North Carolina and the Atlantic Coast Pipeline — complement SCANA’s, SCE&G’s and PSNC Energy’s operations. This combination can open new expansion opportunities as we seek to meet the energy needs of people and industry in the Southeast.”

If the merger goes through, observes the Dominion press release, Dominion Energy and its subsidiaries would have a natural gas pipeline network totaling 106,400 miles and would operate one of the nation’s largest natural gas storage system with 1 trillion cubic feet of capacity.

As currently envisioned, the Atlantic Coast Pipeline would terminate in North Carolina just north of the South Carolina border. Back in October, Dominion confirmed that it might extend the ACP south of the border, although it noted that such a project would have have to run the complete federal and state regulatory gamut to gain approval.

Bacon’s bottom line: Any such expansion should end widespread speculation that Dominion’s secret motive in building the pipeline is to ship natural gas to its soon-to-open Cove Point facility in Maryland for export. Clearly, Dominion is eyeing southern markets. According to the Post & Courier, the company plans to buy a $180 million natural-gas power plant in South Carolina to make up for some of the electricity the nuclear plant was expected to produce. The newspaper did not speculate whether that plant might be supplied by gas from the ACP or from competing pipelines. In either case, South Carolinians undoubtedly will experience the same debate over gas vs. renewables as we have seen in Virginia.

When the State Feeds Children, Children Go Hungry

Source: Center on Budget and Policy Priorities

Dorothy McAuliffe

I can’t say anything bad about Virginia’s first lady, Dorothy McAuliffe. Her cause is admirable: ending childhood hunger. Her compassion seems entirely genuine. And it appears that she had been very effective, if effectiveness can be measured by the resources she has mobilized to advance her goals.

Writing in a Richmond Times-Dispatch op-ed today, McAuliffe ticked off a series of accomplishments. Seven hundred Virginia schools now offer Breakfast after the Bell programs than did three years ago. State school breakfast funding has increased by $2.7 million during her husband’s administration. Schools served 10 million more breakfasts and two million more after-school meals and snacks than in 2004, while 37 more school divisions serve summer meals. Meanwhile, Virginia has built the capacity of the nonprofit sector such as food banks to help feed the poor.

But McAuliffe’s op-ed neglects to address a critical question: Has this activity contributed to childhood hunger getting better or worse? What exactly constitutes “hunger” anyway?

Here is what I fear: All these school and nonprofit programs are creating a moral hazard in which poor parents, secure in the knowledge that government and charities will pick up the slack, are spending less money on nutritional food for their children. While McAuliffe’s good intentions are unassailable, her op-ed offers no evidence whatsoever that children are any better off as a result.

As can be seen in the chart above, the Supplemental Nutrition Assistance Program (SNAP), better known as the food stamp program, increases payments based on family size. Maximum payments for the most destitute households — around $140 to $150 per child per month — are spartan. But they should be sufficient if the money is spent carefully. Part of the problem in America today is that food stamps are not spent wisely.

The best documentation comes from a study published in November 2016 by the United States Department of Agriculture, which oversees the food stamp program. That study plumbed a vast reservoir of data assembled by “a leading grocery retailer” and accounted for 80% or so of the money that households spent through their SNAP cards.

Most notoriously, that study found that 9.25% of all expenditures by SNAP households went to “sweetened beverages,” mostly soft drinks. The New York Times used the data in a 2017 article to point out that PepsiCo, Coca-Cola and other food companies had lobbied heavily against efforts to prohibit the use of food stamps to purchase soft drinks and junk food. But the scandal is bigger than soft drinks. Money spent on sweetened beverages, prepared desserts, salty snacks, sugars, candy, juices, jams and jellies accounted for more than 22% of total food stamp expenditures at the grocery store. The actual percentage was likely higher because these numbers did not reflect expenditures, at neighborhood convenience stores where food offerings are heavily tilted toward soft drinks, snacks and other junk food.

Even if we don’t take convenience-store expenditures into account, food stamp recipients spend a higher percentage of their resources on junk food than non-recipients — about 23% compared to 20%. They also spend considerably more on the most expensive food category — meat, poultry and seafood, leaving less for healthy staples.

No wonder kids in poor neighborhoods are 2.7 times more likely to be obese than children from affluent families. The problem is not a lack of calories. The problem is the wrong kind of calories. Which raises the question: what kind of hunger are we talking about? Are poor children hungry because they’re not getting enough to eat — or are they consuming empty calories that temporarily satiate them but leave them feeling hungry later?

“Ending hunger in Virginia requires an ‘all of the above’ set of solutions,” McAuliffe writes. I would agree. But I would suggest that we’re not following an all-of-the-above approach. Schools are providing free breakfasts, free lunches, and afternoon snacks. Nonprofits are sending kids home on weekends with backpacks with food. Nonprofits support food pantries, soup kitchens, and emergency food programs. Charities raise funds to feed families on Thanksgiving and Christmas. The underlying assumption is that poor families lack the money to feed themselves, and that society must intervene to ensure that children are fed. But the ultimate responsibility rests with parents.

The headline of McAuliffe’s op-ed reads “End of childhood hunger is in sight.” She probably did not write that headline. Regardless, I will venture to say that it is dead wrong. Here is a counter-intuitive prediction: The more that well-intentioned government and charities do to end childhood hunger and absolve parents of primary responsibility for feeding their children, the more pervasive hunger will get.

Electric Plant Construction Costs Getting Cheaper

Graphic credit: Ars Technica

As everyone knows, the cost of renewable energy is getting cheaper all the time. But so are the costs of competing energy sources such as natural gas and nuclear.

Integral Molten Salt Reactor (IMSR) nuclear power technology, which uses molten salt as a cost-effective means to dissipate heat, is making its way through the regulatory hoops in Canada, according to The Next Big Future. Proponents claim that IMSR plants will be so much simpler and less expensive to build than conventional nuclear plants that they can be financed by conventional means. Construction time will be four years instead of eight; construction costs less than $1 billion compared to $6 billion. The levelized cost of electricity (which includes construction, financing, and fuel costs), advocates say, will be less that of super-efficient combined-cycle natural gas plants.

I know nothing about this technology or the claims made on its behalf, so I cannot say if they are credible or not. The larger point is that the nuclear industry is not static, and that new nuclear technologies have the potential to be game changers.

Meanwhile, says Ars Technica, the cost of building natural gas generators dropped 28 percent between 2013 and 2015, as super-efficient combined cycle plants came on line. Lower construction costs combined with technologies that capture more heat from a BTU of gas as well as vast and inexpensive supplies of of the fuel from the Marcellus and Utica shale basins have made natural gas more competitive economically than anyone expected only a few years ago.

Bacon’s bottom line: The energy industry is highly competitive and highly innovative. Refining and processing technologies under development could even revitalize the fortunes of the coal industry. The dynamism of the energy sector makes it difficult to make long-term predictions about the comparative economics of gas, coal, nuclear, wind, solar, and hydro with any degree of confidence. When we ponder the regulatory future of Virginia’s electricity industry, we should design a system that is nimble, adaptable, and does not lock the state into a particular energy path.

Snuff Out the Smart-Scale Revolt before it Grows

True, I-95 traffic north of Fredericksburg is a nightmare. But circumventing Smart Scale to widen the interstate for 44 miles is a bad idea.

Smart Scale prioritizes road and highway projects in Virginia by collecting metrics for congestion, safety, the environment, economic development and other indicators. Ideally, the scores ensure that scarce road construction dollars will be allocated on the basis of merit, not political pull.

But Smart Scale isn’t working for the Fredericksburg area, argues a Free Lance-Star editorial. A stretch of Interstate 95 between Fredericksburg and the Springfield interchange in Fairfax County has been identified as the location of two of the worst traffic hotspots in the country. Writes the newspaper:

The Virginia Department of Transportation … needs to prioritize the 44-mile project.

VDOT’s Six Year Improvement Program does include $125 million for the southbound Rappahannock River Crossing project, but the last round of Smart Scale did not recommend funding the corresponding northbound river crossing, much less the two-lane expansion Cole envisions.

Instead, Smart Scale directs millions of limited transportation dollars to less-urgent projects, such as pedestrian trails, bike lanes and commuter parking lots.

For 2018, VDOT has greenlighted seven projects in the Fredericksburg District, which includes turn lanes, intersection reconstruction and improving commuter parking lots totaling more than $10 million. Another $14.4 million project will widen Exit 126 off I–95 and Route 1 at Southpoint Parkway.

There’s nothing wrong with these projects. But when they take priority over keeping traffic flowing on the busiest interstate highway in the nation, there’s something wrong with Smart Scale.

Del. Mark Cole, R-Stafford, has introduced a bill for the 2018 General Assembly session that would add an additional north and southbound lane to Interstate 95 from Massaponax to the Springfield interchange: ““Such project shall be funded from existing appropriations to the Commonwealth Transportation Board and shall not be subject to the [Smart Score] prioritization process.”

The changes of the bill passing are just about nil. Why would any other legislator wish to privilege Cole’s transportation priority over their own? Passing this bill would open the floodgates for other legislators asking for exemptions for their own pet projects, effectively scrapping Smart Score as an objective means for funding road projects.

I will readily concede that the aforementioned stretch of I-95 is a nightmare. While I don’t commute on I-95, I use it with some regularity to visit my mother in Fredericksburg and my son in Fairfax. The logjams are so frequent and so bad that I periodically vow to never travel that way again. However, while adding lanes would alleviate congestion temporarily, there is ample evidence to suggest that improving travel times would induce more people to live in Stafford/Fredericksburg/Spotsylvania and commute to work in Northern Virginia. Without changing land use patterns, spending billions of dollars on congestion relief would achieve only temporary benefits.

Adding two more lanes for such a distance would cost billions of dollars. The Smart Scale methodology forces us to compare high-profile mega-projects like widening I-95 to smaller projects that may create more value for the money invested. The small projects don’t generate nearly as much attention, but there are a lot of them, and they add up. Smart Scale represents a big advance over the way Virginia used to allocate transportation dollars. We need to keep it, and that means saying no to legislators who want to carve out special exemptions.

Virginia’s Top 10 Stories (Told and Untold) of the Year

Phew! I finally made it through the all-consuming Christmas season, and I’m still alive to tell the tale. Christmas is a wonderful but grueling time of year for the Bacon family, marked by numerous feasts, expanding waistlines, excessive gift giving, shrinking bank accounts, and considerable out-of-town travel to distant relatives. But I’m back in the saddle at the Bacon’s Rebellion global command headquarters and eager to get the blog cranked back up.

Many publications publish a retrospective look at the “Top 10 Stories of the Year.” I have never done this at Bacon’s Rebellion, but perhaps it is time. A few obvious candidates for the Top 10 stories in Virginia’s political-public policy realm come to mind. Please feel free to add, subtract, modify or opine upon this list in the comments.

  1. Republican wipe-out in the November 2017 election. In a wave election driven largely by anti-Trumpism, voters obliterated the seemingly insurmountable Republican majority in the House of Delegates and elected Democrats to all three statewide offices. The Northam administration will look and act a lot like the McAuliffe administration, but it will have more friends in the legislature.
  2. Civil War statues and the Charlottesville riot. Virginia became the cockpit of U.S. culture wars and the debate on race as national and local media alike fixated on statues that memorialize Civil War generals. The controversy exploded as outsiders flocked to participate in, and oppose, the United the Right rally in Charlottesville.
  3. Virginia’s lagging economy. The U.S. economy gained momentum during the first year of the Trump administration, but Virginia’s economy, once a national growth leader, continues to under-perform. Caps on military spending have hobbled growth in Northern Virginia and Hampton Roads, while Virginia’s rural, mill-town economy continues to struggle. Governor Terry McAuliffe has shined as the superlative state salesman, but his policies have not budged economic fundamentals.
  4. Dominion on the defensive. Dominion Energy, a dominating political presence in Virginia, was a big loser from the election, as an unprecedented wave of anti-Dominion politicians was elected to the General Assembly. Despite making great progress toward solar energy, the electric utility found itself under attack for its rate freeze, the Atlantic Coast Pipeline, and coal ash disposal. In a dramatic, end-of-year gambit, Dominion proposed upgrading its transmission and distribution systems to a more resilient, renewable-friendly smart grid.
  5. Higher-ed mobilizes to defend status quo. The year began with sharp criticism of Virginia’s public colleges and universities for runaway costs, tuition and fees. The year closed with an industry P.R. blitz highlighting the link between higher ed and economic development. Virginia is nowhere near a consensus on how to balance the competing imperatives of affordability, access, workforce development, and R&D-driven innovation.
  6. Death spiral for Obamacare. The Affordable Care Act health insurance exchanges in Virginia entered the year in a slow-motion death spiral due to internal flaws and contradictions. Policies enacted by Congress and the Trump administration accelerated their swirl into oblivion, while offering nothing obvious to replace them. The election of Democrat Ralph Northam will renew the debate over expansion of Medicaid, all but guaranteeing that the focus in Virginia will be on the zero-sum question of who pays for health care rather than how can we improve productivity and outcomes in order to lower costs for the benefit of all.
  7. Interstate 66 and HOT lanes. The McAuliffe administration advanced its signature contribution to Virginia’s transportation infrastructure by developing major upgrades to Northern Virginia’s I-66 transportation corridor. The opening of HOT lanes inside the Beltway erupted in controversy over the fairness and effectiveness of using dynamically priced tolls to ration scarce highway capacity.
  8. Accountability in K-12 education. By some measures, Virginia’s system of public schools made progress in 2017 but by other measures it continued to struggle. One of the most important trends, neglected by the media, is the continued effort by state bureaucrats to use Standards of Learning tests to hold local schools accountable and the continued gaming of the rules by local officials to avoid accountability. Meanwhile, revisions to disciplinary policies to advance social justice concerns has undermined school discipline and made a difficult job — teaching disadvantaged kids — even more difficult. The breakdown in discipline makes it ever harder to recruit teachers to the most challenging schools.
  9. Salvaging the Metro. The Washington Metro heavy rail system needs billions of dollars to compensate for past failures to invest in maintenance, even as it struggles with union featherbedding, declining ridership, and an unwieldy governance structure. Representatives from Virginia, Maryland, Washington, D.C., and the federal government can’t seem to agree on much. Metro is critical for the functioning of the Northern Virginia economy, but Virginia wants to see labor and governance reforms before coughing up billions of dollars to prop up a failing system that, lacking those reforms, inevitably will come back and ask for more in the future.
  10. Turn-around at Virginia’s ports. This end-of-the-year list is gloomy, with an emphasis on crumbling and failing institutions. But there is at least one good news story (which I have neglected to cover on this blog): the revival of the Ports of Virginia. Traffic is booming and profitability has revived.

What’s the Matter with Hampton Roads? It’s Name.

Around the time I joined the start-up staff of Virginia Business magazine in 1986, the civic leaders of Norfolk, Virginia Beach and nearby jurisdictions decided that the name “Tidewater” did not properly describe their metropolitan area. The term also referred to the lowlands of Virginia below the fall lines and carried a rural connotation. The region’s muckety-mucks successfully lobbied to change the name of the Metropolitan Statistical Area to “Hampton Roads,” and, as editor of a Richmond-based magazine trying to curry favor with the Norfolk business establishment, I ensured that Virginia Business dutifully embraced the new nomenclature.

Now, it seems, the Tourism and Recreation Cluster Committee of the GO Virginia Regional Council for Hampton Roads has concluded that the “Hampton Roads” designation is not an asset but a liability. Some three decades after the region adopted the name, according to a new report, “Hampton Roads” means nothing to people outside of Virginia.

Reports the Virginian-Pilot:

“While challenges remain in finding consensus on both strategy and implementation of a regional tourism initiative, the single greatest impediment is the regional identity of Hampton Roads,” the report states. “Hampton Roads does not evoke any sentiment that would support a regional tourism marketing initiative. There is little value in collaborative marketing under a brand name that is ineffective.”

“I can’t say, ‘Come to Hampton Roads and vacation.’ That means nothing to anyone …” said Gold Key | PHR CEO Bruce Thompson. “ ‘Hampton Roads’ does not have a geographic identity or put any evocative notion as to where you are.”

Thompson said representatives from the Hampton Roads Chamber, Hampton Roads Planning District Commission and Hampton Roads Economic Development Alliance all said “Hampton Roads” does nothing to describe the area and they have to take a significant amount of time explaining where and what the area is to companies outside of the state.

Unfortunately, no one can agree on what to call the MSA instead of Hampton Roads. The committee discussed “Coastal Virginia” as a potential brand, but apparently no formal action was taken.

Bacon’s bottom line: In my observation, the region is best known by outsiders as “Norfolk-Virginia Beach.” That doesn’t fly well with residents of Hampton, Newport News and other communities north of the James River who regard themselves as distinct from their brethren south of the river. But I live in Henrico County, and I don’t get my tighty-whities in a knot when people refer to the MSA as “Richmond.” A couple million people live in Northern Virginia, but they’re perfectly happy to tell outsiders they come from “Washington.” If civic leaders want a moniker that will stick, then they should go with either Norfolk or Virginia Beach, and the other communities just need to get over it. 

The GOP’s Hail Mary Pass

House Speaker Paul Ryan savors his biggest legislative victory.

Faced with a chronically slow-growth economy, expanding deficits, mounting federal debt, and a looming funding crisis for the U.S. welfare state, Republican congressmen are, to borrow a football metaphor, throwing a hail Mary pass into the end zone in the desperate hope of scoring a winning touchdown. They are gambling that tax cuts combined with President Trump’s deregulation agenda will boost economic growth from roughly 2% per year to 3% or more, reducing the tax burden for millions of Americans, creating new jobs, boosting wages, and bending the curve on long-term deficit projections.

Convinced that the tax cuts will prove to be a disaster for everyone but the rich, Democrats and the mainstream media have subjected the tax plan to relentless, unremitting attacks. Viewed in terms of static economic analysis, we are told, the tax cuts will inflate federal deficits by a cumulative $1.5 trillion over the next ten years. Suddenly, deficits matter!

Republicans respond that measures in the bill — accelerating write-offs for business investment, encouraging the repatriation of hundreds of billions of dollars in corporate profits to the U.S., and making the corporate tax rate more competitive internationally — will stimulate economic growth. Unlike the Democrats, I think that much will prove to be true. My question is: Will faster economic growth generate enough new tax revenue to offset that $1.5 trillion? Longer term, will it avert Boomergeddon?

Let’s dig into the numbers. The Congressional Budget Office’s current 10-year budget forecast assumes a modest 2.1% annual growth rate over the next ten years, a slight uptick from the trend established during the Obama years. But economic growth has accelerated to roughly 3% in the past couple of quarters, and the Trump administration’s deregulation + tax cuts strategy could nudge it even higher. Let us assume for purposes of discussion that, thanks to the tax cuts, the U.S. can grow the economy at a sustainable rate of 3.1% annually. What does an extra percentage point in economic growth get us in deficit fighting?

Well, the latest CBO federal revenue forecast for the next ten years is $43 trillion. A 1% boost in federal revenues will yield $430 billion, not nearly enough to close the $1.5 trillion gap. The analysis gets a bit more complicated because economic growth and higher incomes push Americans into higher tax brackets while a roaring stock market generates massive capital gains. So a 1% increase in economic growth could produce more than a 1% increase in federal revenue. Let’s go for the gusto and double the growth-to-revenue ratio, assuming that federal taxes increase actually increase by $86 billion per year over current projections. That’s still doesn’t close the ten-year $1.5 trillion gap.

Could the economy grow much faster than 3.1% over the decade ahead? I’m skeptical. First, Baby Boomers are retiring in droves, and the working-age population is stagnating. A growing labor force supports economic growth; a stagnant labor force undermines it. Second, the Federal Reserve Board, intent upon unwinding the monetary stimulus of the Obama years, will continue to raise interest rates. It goes without saying that higher interest rates are a damper to economic growth.

In summary, in my untutored opinion, I think that the U.S. will see modestly faster economic growth over the next few years. The Dems have predicted economic Armageddon. They won’t get it. The lives of millions of Americans will improve… in the short run. But Republicans are deluding themselves if they think modestly faster economic growth will reduce the nation’s long-term structural budget deficit. Entitlement spending is still running out of control, and the nation still faces a hideously painful fiscal reckoning. Our 20-year future still looks like Boomergeddon.

The “Food Desert” Theory Does Not Reflect Reality

Inner-city convenience store responding to what local demand.

A large social-scientific literature has documented that low-income neighborhoods are far more likely than affluent neighborhoods to be “food deserts,” that is to have low access to healthy food. The big question is why. Does the food-desert phenomenon reflect institutional racism, in which corporate grocery-store chains are unwilling to serve neighborhoods dominated by poor minorities? Or does it reflect the fact that poor people just aren’t interested in eating what a patronizing intellectual class deems best for them?

A new study argues that food deserts are primarily a demand-side phenomenon: They exist because poor people have different tastes in food and place less value on nutrition.

“Using a structural demand model, we find that exposing low-income households to the same food availability and prices experienced by high-income households would reduce nutritional inequality by only 9%, while the remaining 91% is driven by differences in demand,” report the authors of, “The Geography of Poverty and Nutrition: Food Deserts and Food Choices Across the United States.”

The authors draw upon a rich combination of datasets, including a 60,000-household panel survey of grocery purchases, a 35,000-store panel of sales data that covers 40% of all grocery purchases nationally, and data on the entry dates and locations of 1,914 new supermarkets from national grocery chains along with data on real establishments in each zip code.

While healthy food costs more per calorie than unhealthy food, the authors write, the difference is attributable almost entirely to the cost of fresh produce. In food categories other than fresh produce, health food is actually about 8% less expensive. Therefore, they conclude, price is not the major obstacle to the eating of healthier food.

Also, the “food desert” effect is exaggerated. “Americans travel a long way for shopping, so even households who live in ‘food deserts’ with no supermarkets get most of their groceries from supermarkets. ” Households that move from food deserts to non-food deserts do not significantly alter their eating patterns.

Therefore, the authors conclude, the strategy of coaxing supermarkets to set up shop in food deserts will have only a nominal effect on household nutrition. The most important variable they identified in influencing the consumption of healthy vs. unhealthy food is the level of education. They suggest that improving public health education would have a more positive impact than worrying about the geographic distribution of grocery stores.

Bacon’s bottom line: Food deserts are one more example of people with good intentions mis-identifying a problem and squandering resources on solutions that don’t work. The food-desert theory appeals to liberals and progressives because it reinforces their conviction that a market failure exists for food, which only government intervention can remedy. Observing that poor people have different tastes in food, I have long inveighed against this idea. For the most part, the free market provides poor people exactly what they want to eat. If you wish for poor people to change their nutrition, you need to change their taste infood. Otherwise you’re just wasting everyone’s time and money.

(Hat tip: John Butcher)

Virginia Tech’s Nutritional Aristocracy: Student Athletes

Virginia Tech football coach Justin Fuente (right) shakes hands with President Timothy Sands, with athletic director Whit Babcock in the background. Photo credit: Roanoke Times

Virginia Tech has just received the largest philanthropic gift in its history, a $15.2 million anonymous donation for… a 17,000-square-foot enhanced dining hall for student athletes. The state-of-the-art “performance center” will serve as a dining room for athletes in the university’s 22 sports programs, reports the Roanoke Times.

“This is a big step in our journey to being the best in the ACC,” said Virginia Tech athletic director Whit Babcock at a news conference yesterday. “What we aspire to is to be a leader across the board, and we will get there in our conference.”

About half the ACC schools have a sports nutrition program, and Virginia Tech is one of them. With five dedicated dieticians, the university has the largest staff in the league. The Hokies spend $2.5 million to $3 million per year to feed their athletes.

Tech athletic officials see a strong emphasis on nutrition as one of the best way to improve athletic performance. “We’ve seen more gains through not doing anything different in the weight room but feeding our kids on a more consistent basis,” said football coach Justin Fuente. “It you just give them money, they’re not going to buy food. And if they do, it’s not going to be good food.”

By making the athletic dining hall a reality, the gift clears the way to the athletic department’s future goals of expanding the strength and conditioning area in the football building, renovating Cassell Coliseum, making improvements to Lane Stadium, and addressing funding for scholarships.

Volunteers at the food bank near Virginia Tech. Photo credit: Roanoke Times

Bacon’s bottom line: People should be free to spend their money how they please, and if someone wants to give $15.2 million to create a state-of-the-art dining room and sports nutritional program, well, that’s their right. But I really do question the donor’s priorities. College affordability and access have reached such a crisis stage that some Virginia Tech students are skipping meals and resorting to food banks.

When the term “starving students” is to be taken literally, here are questions that local media should be asking: What will it cost to maintain and operate the dining hall, and who is paying? To their credit, the anonymous donors established an endowment that will provide additional funding for upkeep in future years — a generous gesture and wise precaution. Here’s what we don’t know: Will that endowment cover the entire cost or just a portion?

By the way, who pays for those five dieticians — Virginia Tech’s athletic department? If so, where does the athletic department’s funding come from? TV revenues and ticket sales? Tuition revenue? State support for Virginia Tech?

Virginia Tech has a three-tiered nutritional regime: one tier for student athletes, another tier for those who can afford the Hokies’ renowned dining facilities, and a third tier for those who have recourse to food banks. If I were a betting man, I’d guess that the creation of the top tier is funded entirely through donations and athletic department revenues. But I don’t know that for a fact. The public has a right to know, and the media have a responsibility to find out.