No, Coal Did Not Save the Grid in January


Contrary to a recent report that coal-generated electricity prevented a system collapse during January’s “bomb cyclone” deep freeze, PJM Interconnection, the regional transmission organization of which Virginia is a part, says it had plenty of reserve capacity. The reason PJM dispatched so much electricity from coal-fired units was that it was cheaper than electricity generated by natural gas, the price of which surged during the cold spell — not because there were inadequate supplies of gas.

“Natural gas and nuclear units were not unreliable or otherwise unavailable to serve increased customer demand, nor would PJM have faced ‘interconnected-wide blacksouts’ without the particular generating units dispatched, states PJM in a response forwarded to U.S. Energy Secretary Rick Perry. (Hat tip: Albert C. Pollard, Jr.)

Last week Bacon’s Rebellion summarized key findings of a report by the National Energy Technology Laboratory (see “How Coal Saved the Electric Grid,”) which noted that coal-fired generation increased dramatically during the extreme, 12-day chill. Nuclear energy output didn’t change (nukes run flat-out all the time, regardless), wind/solar output declined slightly, and gas output was constrained by pipeline constraints and other factors. The NETL report argued that without the backup coal capacity, “a 9-18 GW shortfall would have developed, depending on assumed imports and generation outages, leading to system collapse.”

But PJM says that the regional electricity transmission system maintained significant reserves during the bomb cyclone. “PJM reserves were over 23 percent of peak load demand, and there were few units that were unable to obtain natural gas transportation.” The reason coal-fired output leaped was that it was cheaper than gas — not that the gas was unavailable.

During the cold snap, the region experienced an increase in the price of natural gas, which made coal resources (which often did not run under periods of lower natural gas prices) the more economic choice during times of high gas prices. But one cannot extrapolate from these economic facts a conclusion as to future reliability within PJM. …

The fact that additional coal resources were dispatched due to economics is not a basis to conclude that natural gas resources were not available to meet PJM system demands or that without the coal resources during this period the PJM grid would have faced “shortfalls leading to interconnect-wide blackouts.”

The PJM report did confirm other parts of the NETL analysis. Electricity from nuclear power plants stayed constant through the 12-day weather event. Wind and solar output declined ever-so-slightly. And natural gas did suffer minor supply-related outages… but they accounted for less than 2% of the total load requirement at the time.

Bacon’s bottom line: Coal-fired units kicked in 13,000 megawatts of additional output during the deep freeze. That was roughly one-third of the system’s 32,600 megawatts in reserve capacity. In the absence of the coal surge, customers in Virginia and across the multi-state PJM system would have paid more for their natural gas, but they would not have faced blackouts in January. It seems safe to say that the impression created by the NETL analysis was wrong.

But PJM did not address the longer-term outlook in its report. The political reality is that in the U.S. and in Virginia, powerful interest groups seek to curtail coal production. There is a strong likelihood that Virginia will enter the Regional Greenhouse Gas Initiative, a cap-and-trade arrangement designed to cut carbon emissions, most likely through the closure of additional coal plants. Looking out a decade or more, some environmental and consumer groups oppose the plans of Dominion Energy Virginia to re-license its four nuclear power units that currently produce 30% of the company’s electric power. Furthermore, the same groups, worried by the contribution of natural gas to CO2 emissions, want to slam the door on construction of any more gas-fired power plants.

As can be seen in the chart above, which details the breakdown of electricity by fuel type in the PJM system before and during the deep freeze, coal and nuclear accounted for 65% of the interstate region’s electricity production before the event and 66% during the cold snap.

Put another way, coal accounted for 45,900 megawatts of system-wide output during the freeze, and nuclear contributed another 35,400. Compare that to the system’s 32,6oo megawatts in reserve capacity.

While PJM has plenty of reserve capacity today, we have to ask ourselves, will the system have plenty of reserve capacity 10 or 15 years from now if coal- and nuclear-powered units continue to shut down? While the pipeline capacity exists today to supply today’s natural gas demand, will it be sufficient to meet demand when gas picks up much of the load for shuttered coal and nukes? While we can always purchase out-of-state electricity through PJM, will there be sufficient transmission-line capacity to get that electricity to Virginia load centers?

I don’t know the answers to these questions. Perhaps everything will turn out fine. But we can’t assume that it will just because PJM has ample reserve capacity today. As Virginians calibrate the balance between coal, nuclear, gas, hydro, solar, wind and battery storage, we need to consider the long-term outlook. The future will be upon us before we know it.

State Pension Problems Still Getting Worse

Map credit: Pew Charitable Trusts

Another year, and another analysis by the Pew Charitable Trusts on the deteriorating condition of U.S. states’ public employee pension plans. Drawing on data from 2016, Pew concludes that despite scattered actions by the 50 states to shore up their pensions, the funding gap only got worse.

In 2016, the state pension funds in this study cumulatively reported a $1.4 trillion deficit—representing a $295 billion jump from 2015 and the 15th annual increase in pension debt since 2000. Overall, state plans disclosed assets of just $2.6 trillion to cover total pension liabilities of $4 trillion.

There is considerable variability between the states, however. The funding ratio (assets as a percentage of liabilities) ranges from 99% for Wisconsin, which is in fine shape, to 31% for Kentucky and New Jersey, which are in deep doo-doo. The national average is 66%. Virginia is in modestly better condition than the national average with a funding ratio of 72%. Our net pension liability in 2016 was “only” $25.3 billion.

Admittedly, 2016 was a tough year in which state pension plans generated a mere 1% return on their investments, significantly short of the 7% to 7.5% returns that most plans are predicated upon. (Virginia assumes a 7% return.) Investment performance shined last year, which could improve 2017 performance when Pew gets around to calculating it a year from now.

However, investment returns are likely to become more volatile, Pew notes. As the gap between the return on 30-year Treasury bonds and equity returns has widened over the past two decades, pensions have shifted assets to riskier investments in the hope of generating a bigger payback.

The share of public funds’ investments in stocks, private equity, and other risky assets has increased by over 30 percentage points since 1990—to over 70 percent of the portfolio of state pension plans. As a result, pension plan investment performance now tracks equity returns more closely than bond returns.

That’s great news when the stock market goes up, as it did last year. But when interest rates rise and market multiples shrink, as is happening this year, pension funds are vulnerable to setbacks in stocks, private equities, and interest-sensitive real estate investments.

Pew has developed a set of analytical tools that allow a more penetrating look at a state’s pension posture. One of those is “net amortization as a percentage of payroll for each state.”

There are two ways for states to increase the assets in their pension plans. One is to earn a higher rate of return on its investment portfolio. The other is to contribute more (in employee contributions and government contributions) into the plan.

With the “net amortization” metric, Pew assumes that the pension plan earns the assumed rate of return (even though that assumption isn’t always justified). The idea is to determine whether state/employee contributions are putting in enough to cover new benefits earned that year. States the study: “Plans that consistently fall short of this benchmark can expect to see the gap between the liability for promised benefits and available funds grow over time.”

Some states are doing a horrible job — Kentucky, New Jersey, and Illinois are ticking time bombs. Kentucky paid in only 41% of its benchmark in 2016, and New Jersey only 33%. The national average was 88%. Virginia looked pretty good by comparison, paying in 101% and whittling down its net liability by one whole percentage point! Continue reading

How Not to Win Friends and Influence People

Last night vandals smeared the Thomas Jefferson statue at the University of Virginia with the phrase “racist + rapist,” reports WVIR-TV. Today marks Founder’s Day, which celebrates Jefferson’s 275th birthday.

The University of Virginia released a statement, saying, “The university is disappointed that individuals vandalized the statue of Thomas Jefferson on the Lawn on the day that we honor his contributions to our University and to our democracy.”

The UVa administration is “disappointed.” Not “indignant” about vandalism to the founder of the university and a founding father of the nation. Not “shocked.” Not “outraged.” Just “disappointed.”

The latest vandalism follows an incident last September in which someone draped the statue with a sheet that read, “Black Lives Matter. Fuck White Supremacy.”

Vandals, let me tell you what university administrators can’t bring themselves to say. If you’re trying to change things for the better, you’re not helping. If you want to convert people to your cause, you don’t get it by desecrating the revered symbols of the people you’re trying to convert. In fact, you do the opposite. Want more rednecks flying big-ass Confederate battle flags just off the Interstate? This is how you get more rednecks flying big-ass Confederate battle flags just off the Interstate.

I could say something similar to the rednecks. Want more defilement of Thomas Jefferson statues? This is how you get more defilement of Thomas Jefferson statues. Here’s the difference. You are University of Virginia students — you’re attending one of the most prestigious universities in the country. You’re supposed to be well-informed and articulate. The rednecks are just… rednecks.

Go back and study your history. See how Frederick Douglas acquitted himself. See how Harriet Tubman acquitted herself. See how Booker T. Washington acquitted himself. See how Thurgood Marshall acquitted himself. See how Martin Luther King acquitted himself. They didn’t use vulgar profanity. They didn’t desecrate the founding fathers. They appealed to peoples’ better nature. And they made a difference.

If you want to discuss Jefferson’s historical legacy — his role in articulating and advancing human freedoms, his sins as a slave holder, his views towards race, his role in abolishing the international slave trade — by all means, let’s have that discussion. The man was not a saint. It is reasonable for every generation to reinterpret his contributions for good and for ill in this country. But vandalizing his statue doesn’t contribute to the conversation — it shuts the conversation down.

Leveraging Offshore Gas Drilling to Build Offshore Wind

Can allowing this…

The Trump administration is opening up the East Coast of the United States to oil and gas drilling, but it’s not clear how much enthusiasm there is. A recent sale of drilling rights in the Gulf of Mexico has attracted only “moderate” interest, reports the Financial Times, an indication that the oil & gas industry is more focused on expanding production in the country’s vast shale basins.

… help us get to this?

Last year the Department of the Interior cut the royalty rate it had been charged on production from leases in shallow water (less than 200 meters deep) from 18.75% to 12.5% in the hope of stimulating greater interest. But drillers submitted bids for only 148 of 14,000 tracts offered.

If the Trump administration can’t gin up much excitement in the Gulf of Mexico, where a mature oil & gas exploration and drilling infrastructure exists, it’s unlikely to do any better in the southern Atlantic states where no such infrastructure is to be found. Also discouraging interest is the reality than any effort to start drilling would ignite a firestorm of opposition. Why bother when shale can be fracked elsewhere with minimal fuss and muss?

But that’s today. Who can say what economic conditions and public opinion will look like in three or four years? What if public opinion could be swayed to look upon offshore drilling as a pathway to developing a viable offshore wind industry?

Environmental groups and Virginia Beach civic interests oppose offshore drilling, raising the specter of another Deepwater Horizon disaster — even though (a) any drilling off the Virginia coast would be in shallow water, while Deepwater Horizon occurred in… you guessed it… deep water, and (b) most, if not all, of the drilling would be for natural gas. I’ve never heard of a natural gas spill, and neither have you.

Indeed, the Commonwealth’s official energy policy supports offshore oil and gas drilling, with the caveat that no drilling occur within 50 miles of the shore. A 2005 study by the Virginia Secretary of Commerce and Trade found that natural gas exploration was safe, although if oil is discovered that the Commonwealth must “carefully consider the risk of spills.”

Is it not possible to work out a compromise that could allow drilling to move forward when market conditions permit while providing tough environmental safeguards? Here’s how we can do it.

First, let’s just take oil drilling off the table. Let’s make it official Virginia policy to permit no oil drilling because we want zero risk of oil spills. Drilling and production should be limited to natural gas only. (Do some wells produce both oil and gas? Can the gas in such wells be extracted while the oil is kept in the ground? I concede that some technical questions may need to be answered.) The vast majority of the energy wealth off the Atlantic coast is natural gas, so imposing an anti-oil restriction should not cripple the economics of offshore energy production.

Second, Virginia should get the first-mover advantage of establishing an East Coast offshore drilling industry. As the largest metropolitan area on the Atlantic coast between Miami/Fort Lauderdale and New York — and one with a large ship repair industry, at that — Hampton Roads would be the logical location for offshore companies to set up and do business. Thus, Virginia could get a significant economic-development bonus from the opening up of offshore drilling.

Third, an offshore drilling industry was the precursor in Europe to developing an offshore wind industry, and it could be the precursor in Virginia, too. The two sectors share many skills, competencies, services and specialized equipment. If Hampton Roads can develop an offshore drilling industry, it can lower the costs and risks of getting offshore wind companies to locate here. The lack of an existing industry is perhaps the biggest barrier to developing Virginia’s offshore wind resources — a desiderata of environmentalists and economic developers alike.

The immediate hold-up to large-scale development of wind resources is the need to test the performance of wind turbines in the Atlantic Ocean, which has different seabed conditions and is subject to hurricanes. That won’t happen until the State Corporation Commission approves Dominion Energy’s proposed VOWTAP project, two costly test turbines that could never be justified on the basis of their electricity production alone.

But if the SCC approved VOWTAP, and if the turbines proved their efficacy in Virginia offshore conditions, and if a gas drilling business ecosystem had a toehold in Virginia, then the chances would improve immeasurably to persuade European wind companies to invest in Virginia for the purposes of building and maintaining a fleet of offshore wind turbines at an economical price. Virginia then could become the hub of offshore wind production for much of the entire Atlantic coast.

If we play our cards right, it should be possible to fulfill former Governor Bob McDonnell’s dream of making Hampton Roads the energy capital of the East Coast while not only protecting the environment but improving it.

Hey, Uber, Over Here! Over Here!

Dara Khosrowshahi. Photo credit: Fortune

So, Uber decides to use Washington, D.C., as a test bed for its vision for urban mobility. CEO Dara Khosrowshahi visited Washington Wednesday to publicize company plans to expand its ride-hailing app so customers can access and pay for bike share, car rentals from private car owners, and eventually mass transit.

And what does Washington do? Mayor Muriel E. Bowser has proposed increasing the gross receipt tax on ride-hailing companies from 1% to 4.75%. The tax revenue would pay for about 10% of Washington’s $178.5 million share of increased funding for Washington Metro. (Virginia and Maryland and providing the balance — without taxing Uber.)

Interesting economic development strategy Bowser has there: Tax businesses in the growing innovation economy to subsidize enterprises in the stagnant, money-losing old economy.

Uber’s idea is potentially so transformative that slapping $18 million added tax on the ride-hailing industry may not prove debilitating. (Not for Uber anyway. I’m less sanguine about its weaker competitors.) But one thing we can say for sure: The tax will not accelerate Washington’s evolution toward the transportation future.

“What we want to make sure is that you’re not taxing one form of shared transportation for another form of shared transportation,” Khowrowshahi said in a public meeting with Bowser, reports the Washington Post. “We’re in this to promote shared transportation in general. We want to make sure that proposals like this are not unconstructive to that goal.”

City officials, notes the Post, say the ride-hailing services have benefited from Metro’s problems so it’s only fair that they be part of the solution.

 

 

Bacon’s bottom line: Hey, Uber, come look at Virginia — we won’t tax you!

Your one-stop-transportation-shopping app sounds like a fantastic idea. I can hardly wait until you develop AI that allows people to map multimodal trips integrating everything from walking and biking to gypsy vans and buses to hour-long car rentals. I’m eagerly waiting for a full range of transportation services at varying levels of convenience, comfort and price. If you put a few money-losing public mass-transit enterprises out of business, I won’t have a problem with that. I’d love to put an end to the drain on taxpayers. Likewise, if you force public enterprises to adapt by cutting costs and becoming more responsive to customers, I’m totally cool with that, too!

I regard Bowser’s logic — Uber is part of Metro’s problem, therefore you should be taxed to help fix it — as wildly illogical. You should be allowed to compete on a level playing field with all other transportation business models. I hope you understand, however, that does include paying your fair share of the cost of maintaining and building the road and highway infrastructure that you rely upon. Who knows, you might end up paying more in taxes that way. But at least you wouldn’t be subsidizing the competition.

One more thing, Virginia has localities that would love to cooperate with you. Take Virginia Beach. The resort city has plans for development of its waterfront that include a drop-off zone for ride-hailing services. How cool is that? If cities can provide drop-off zones for buses — typically referred to as bus stops — why not drop-off zones for ride-hailing services? That’s something that municipalities can do at next-to-no cost.

Here in Virginia, we want to accelerate the development of a 21st century model for transportation, not tax it. Use us as a test bed. Please!

Put-up-or-Shut-up Time for the Sun Spot Theory

Recent sun spot cycles. The last time the sunspot cycle was almost as weak as the current one was in the 1970s, a period of declining global temperatures that prompted widespread concerns of a new ice age. Image credit: sunspotwatch.com

I have frequently expressed skepticism of dire Global Warming scenarios by noting that the increase in global temperatures over the past 20 years fits the lowest range of forecasts made by the climate models. Sorry, folks, I just can’t get exercised about warming-generated calamities, no matter how many after-the-fact justifications are proffered to explain the failure of reality to conform with theory.

On the other side, the anti-Global Warming crowd has advanced an alternative explanation for climate change. The extreme skeptics suggest that solar activity — sun spots, or the lack of them — have a far greater influence on earth’s climate than the level of CO2 in the atmosphere. According to this theory, solar radiation interacts with the earth’s magnetosphere to block cosmic radiation from penetrating to the atmosphere and seeding cloud formation. Boiling the argument down to its essence, more sun spots predict higher temperatures on earth, fewer sun spots predict lower temperatures. We may have reached put-up-or-shut-up time for that theory as well.

The skeptics are getting excited now because the incidence of sun spots is crashing. Indeed, sun spots have almost disappeared. The last time the sun exhibited similar characteristics was in the 1600s, the so-called Maunder Minimum which coincided with a decline in global temperatures known to history as the Little Ice Age. If the solar warming rejectionists are correct, “global warming” could disappear in a hurry.

Writes Robert Zimmerman with the Global Warming Policy Forum:

If the solar minimum has actually arrived now, this would make this cycle only ten years long, one of the shortest solar cycles on record. More important, it is a weak cycle. In the past, all short cycles were active cycles. This is the first time we have seen a short and weak cycle since scientists began tracking the solar cycle in the 1700s, following the last grand minimum in the 1600s when there were almost no sunspots.

If the planet is entering a new solar minimum, the theory would predict falling temperatures. Perhaps not immediately — there may be buffering effects that aren’t well understood — but in not too many years.

Here’s the nice thing about the sun-spot theory: It’s a testable hypothesis. The theory states in no-uncertain terms that solar radiation as measured by sun spots is a key driver of earth’s climate. The theory says that cycles in earth’s temperatures closely match cycles in sun spot activity. We appear to be entering a phase in which sun spots are going dormant. Temperatures should drop — not just for a year or two but in a sustained matter. We should be able to confirm or disprove the sun-spot hypothesis within a few years.

If the sun-spot hypothesis is confirmed by the data and we see a decisive shift in temperature trends, the theory that posits CO2 as the driving climate variable will be dashed. Conversely, if the sun-spot model  is proven incorrect, a lot of moderate Global Warming skeptics (like me) will be more receptive to the CO2 model — although it still has to explain the two-decade-long pause. (“Pause” is not quite the right word. Global temperatures have crept higher. They just haven’t conformed to predictions.)

Perhaps I’m being naive to think that reality will settle the debate. Reality has a way of being frustratingly complex and ambiguous, and zealots are endlessly creative at devising fallback theories. We didn’t account for the effect of increased particulates in the atmosphere. Or temperatures didn’t rise as expected because the missing heat is lurking undetected deep in the ocean. 

The stakes of this scientific debate are huge. Climate change advocates want to de-carbonize the economy in order to fight what they fear is runaway and calamitous global warming. That means converting motor vehicles to electricity, and it means converting electric power generation to renewable sources. Market forces are pushing the electric power industry toward renewables — especially solar here in Virginia — but not rapidly enough to suit the warmists. The next big debate is whether Virginia should join the Global Greenhouse Gas Initiative a cap-and-trade regime to squeeze out electric-power carbon emissions. Ancillary debates are occurring on how Hampton Roads should deal with the rising sea levels expected to accompany the higher temperatures.

Here’s another hypothesis: The urgency of combating global warming is a driving force behind the insistence of the social engineers to restructure the economy. If global temperatures cool, that sense of urgency will diminish. Hard-core believers won’t change their minds, but the general public will. Conversely, if temperatures rise in the face of a new sun spot minimum, the warmists will be vindicated.

About those Student Loan Default Rates…

The distinction of having the highest student-loan default rate of any higher-education institution in Virginia goes to Everest College in Chesapeake. The default rate at the for-profit college (now doing business as Altierus Career College), which prepares students to be dental assistants, HVAC technicians and the like, is 36%, reports WVTF Radio IQ.

In absolute numbers, non-profit Liberty University took the top spot. A 10% default rate translated into 2,903 students.

The highest default rates tend to be small, for-profit vocational schools. Although the Radio IQ data doesn’t show it, some public colleges have a fairly high default rate as well. Low-income students are disproportionately likely to drop out of college — whatever the institution — and find themselves unable (or unwillling) to repay their loans.

Many progressives purport to be concerned about minorities and the high default rate blame for-profit colleges. The Radio IQ article quotes Diane Standaert with the Center for Responsible Lending (CRL) as noting that many for-profits are converting into non-profits to avoid state and federal regulations aimed at curbing “abusive practices.”

Acccording to CRL’s Virginia state profile, for-profit colleges disproportionately harm: low-income families, communities of color, and women.” Undergraduate enrollment at for-profits is 54% low-income, 45.4% African-American, and 60.9% female. Students at for-profit institutions in Virginia are less likely to graduate, more likely to take out student loans and graduate more indebted, and are more likely to default on their college debt, according to CRL.

What this analysis ignores is that there is considerable variability in the default rate for for-profit, private non-profit, and public non-profit institutions. The best for-profit institutions have lower default rates than the worst non-profits. Public institutions such as Norfolk State and Virginia Union University that cater to lower-income African-Americans have default rates comparable to many for-profits. Conversely, the for-profits cater to adult African-Americans — look at their television ads if you doubt me — who didn’t get a chance to attend college immediately after high school but, as adults, would like to advance their career and obtain a better job.

If mean ol’ fiscal conservatives wanted to shut down for-profit institutions with high default rates on the grounds that they were costing taxpayers, some progressive group would describe the disproportionate impact on upwardly striving African-Americans as racist. But the impetus for shutting down for-profits isn’t coming from the Right. It’s coming from the Left, hostile as always to the idea of someone somewhere making a profit.

The real problem isn’t whether an institution is for-profit or non-profit, it’s the fact that the federal government hands out student loans indiscriminately. Federal loans are not granted on the basis of a student’s likelihood to repay, whether based on SAT scores, class standing, credit score, years in the workforce or any other relevant factor. Why? Because objective lending criteria might impact minorities more than whites, which would constitute a different type of discrimination and invoke the inevitable cries of racism.

So, if you think with a leftist mindset, instead of insisting that the federal government establish standards to reduce the number of students defaulting on their debt, which would be racist, you attack for-profit institutions… even thought, by leftist standards, limiting educational opportunities for minorities by this indirect means also could be construed as racist. But if you think with a leftist mindset, that’s OK because you’re suspicious of for-profit enterprises anyway. Furthermore, you control the commanding heights that shape public opinion formulation — the media, academia, the educational bureaucracy — so you have the power to frame the issue the way you want.

That, folks, is democracy at work in America today.

Subsidies for Thee, but Not for Me

Jamestown Settlement — tax thyself!

The economy of the Historic Triangle — Williamsburg, Yorktown and Jamestown — depends heavily upon heritage tourism. Visitor spending reached $1.08 billionand employed 11,000 workers in 2012, according to one report. But last year tourism and hospitality officials were complaining that growth had stagnated.

So, what do you do to boost the region’s No. 1 industry?

Raise taxes, of course. This year the General Assembly passed a bill backed by Senate Majority Leader Tommy Norment, R-James City County, to impose a 1 percentage point surcharge on the sales tax to raise revenue to be split equally between a new effort to rekindle Historical Triangle tourism and the three Triangle localities of Williamsburg, James City County and York County, reports the Daily Press. Williamsburg would use the funds to roll back the admissions tax and hotel and meals taxes it approved last year.

Sen. Monty Mason, D-Williamsburg, had opposed the tax all along on the grounds that it impacted poor people the most. After the bill sat on the desk of Governor Ralph Northam for three weeks, he prevailed upon Norment to amend the tax. The revised version would exempt the sales tax on food and add a $2-a-night hotel surcharge to recoup the lost revenue.

“I think this could be transformational,” Norment said.

Bacon’s bottom line: I don’t normally agree with Democratic Party politicians, but Mason is absolutely right about this. It’s one thing to tax hotels and restaurants, as Virginia Beach does, to raise funds to pour into marketing, promotion and infrastructure building. Although local residents do pay more for eating out, the tax is largely paid by the industry itself. But levying a sales tax on the general populace to benefit the industry is quite another thing. Such a tax would indeed impact the poor, who spend a disproportionate share of their incomes on food — not eating at restaurants but food purchased at grocery stores.

The workforce of Williamsburg, York and James City is about 70,000. In other words, five out of six people do not work in the hospitality industry. Undoubtedly some businesses provide goods and services to the sector, thus benefiting indirectly from its presence, but major employers like the College of William & Mary and the Anheuser-Busch brewery do not. The tax would represent a massive subsidy for the tourism sector at the expense of everyone else.

Don’t get me wrong — I personally love heritage tourism. I love visiting Colonial Williamsburg. But is that really the future that Triangle localities want to build for themselves? William & Mary, one of the highest regarded public universities in the country is located there. The Kingsmill Resort, which caters to affluent retirees, is located there. NASA Langley and Thomas Jefferson National Accelerator are located a few miles down Interstate 64. For $25 million a year, the community can’t come up with any better economic development initiative than promoting tourism?

As the dominant industry, the tourism sector is converting its political clout into public subsidies in order to perpetuate, even increase, its dominance. While a 1% sales tax surcharge might not seem like a lot, it will have a small dampening effect on economic activity not related to tourism. For example, the surcharge could encourage affluent retirees to select somewhere else to settle down and spend their money, thus impacting Kingsmill Resort-like development in the future and driving away citizens who pay lots in taxes but demand little in the way of government services.

I’m all in favor of not damaging your existing industry by refraining from enacting burdensome regulations and taxes. But if you want to nudge your community into the innovation-driven Knowledge Economy, you don’t do it by taxing the new economy to subsidize the old economy.

Map of the Day: Changes in Probability of Death

Map source: Wall Street Journal

It’s not new news anymore that gains in life expectancy have leveled off in the United States, driven by startling and unexpected declines among young and middle-aged whites. The so-called “deaths of despair,” including drug overdoses, are on the rise. So are liver disease (associated with alcoholism) and suicides. Chronic diseases associated with obesity such as diabetes, heart disease, and stroke are up, too.

The map above shows changes in the probability of death among 20- to 50-year-olds in the 50 states between 1990 and 2016. There is a remarkable divergence — health for this age group has improved significantly for some states, including Virginia, and gotten worse for others.

A breakdown by county in Virginia would be revealing. I hypothesize that western Virginia, especially the far Southwest, would show patterns similar to neighboring West Virginia and Kentucky. Although a more granular look at the data might reveal a different pattern, it appears that Central Appalachia is ground zero for deaths of despair.

NAEP Results Are In. No Answers to Important Questions.

Source: National Assessment of Educational Progress

There is some mildly good news for Virginia from the latest National Assessment of Educational Progress (NAEP) tests, commonly called the Nation’s Report Card. Virginia 4th graders improved their performance in mathematics, while 8th graders made incremental gains in both math and reading. Virginia students also maintained a significant edge over their peers nationally in math and reading in both grades.

“For the first time, 50 percent of Virginia fourth graders achieved at or above the proficient level in mathematics, with 12 percent earning advanced scores,” states the Virginia Department of Education press release. “Students in no other state performed at a statistically higher level.”

NAEP results are based on representative samples of students in each state. The 2017 NAEP sampling of Virginia students included approximately 2,300 fourth-grade students and 2,200 eighth graders.

As is their wont, state officials took note of “achievement gaps between white students and their black and Hispanic peers.” The press release elaborates: “The percentage of black eighth graders achieving proficient or advanced math scores increased by eight points, to 20 percent in 2017, compared with 12 percent in 2015. While this represented a significant gain for black students, the improvement did not translate into a statistically significant narrowing of the achievement gap with white students.”

No mention of Asian students who comprise 8% of Virginia’s population. Why would that be? Perhaps the answer can be seen in the charts atop this page. There we can see that Asian/Pacific Islanders (which in Virginia means Asians because there aren’t many Pacific Islanders here) achieved the top scores. Thus, the “achievement” gap can also be seen as an Asian-white achievement gap, an Asian-black achievement gap, and an Asian-Hispanic achievement gap.

Why do state officials make whites the standard against which blacks and Hispanics measured? In order to advance the dominant narrative about race, of course. Setting Asians as the standard for comparison would confound the conventional wisdom. Perhaps Virginians would be compelled to ask why Asians out-perform other ethnic groups, including “privileged” whites. We would have to ask ourselves, do Asians attend better schools… or do they tend to out-perform in all schools? Don’t they face discrimination? If not, why not? Why are they disciplined at lower rates than other groups, including whites? Are they less likely to be disruptive in class? Do they study harder?

Setting Asians as the standard against which others are measured would force us to consider the role of intact families, personal behavior, and cultural norms and expectations rather than view racial/ethnic disparities through the lens of white privilege and minority oppression.

The focus on the white-black/Hispanic gap also conveniently ignores the English-fluent/English-as-a-second-language gap. For example, according to NAEP data, the score gap between 4th grade whites and Hispanics is 23 points. But the gap between English-fluent and English-as-a-second-language students is 36 points. Given the fact that Hispanics are more likely to not be English fluent, facility with the English language likely explains much of the white-Hispanic gap.

How much of the gap disappears when you compare whites with English-fluent Hispanics? How much of the broader white-Hispanic gap should be attributed to white privilege and how much should be attributed to the influx of poor, ill-educated immigrants from Mexico and Central America who have an immense amount of catching up to do? That question never gets asked.

Unfortunately, the searchable NAEP database does not allow us to make that comparison. What a surprise. I guess it never occurred to NAEP officials that such a comparison would be worthwhile. It would be nice if state educators would get over their black/white obsession and begin asking a wider range of questions.