THE STATE OF MY STATE

DISCOUNTING OUR WAY TO PROSPERITY? (Pub date TBD)

2012-02-14T13:25:00.003-05:00

By the time this column is published we may know whether Royal Dutch Shell has awarded West Virginia the much discussed ethane “cracker” plant that brings with it the promise of 12,000 high-paying jobs. It’s a prize badly needed in West Virginia and one that has rightly concentrated the minds of the governor and legislature, who have put together a tax reduction package worth more than $300 million in an effort to lure the plant.

The $300 million figure was arrived at by Sean O’Leary in an analysis published by the West Virginia Center for Budget and Policy. (Note: The “Sean O’Leary” who authored the WVCB report and the “Sean O’Leary” who writes this column are different people.)

In his report O’Leary argues that the cost to the state and localities of providing the tax breaks is not trivial because the facility will create additional need for public services. Meanwhile, he says there is little evidence that tax breaks play a significant role in determining where businesses locate.

Regardless of whether the cracker plant ultimately comes to West Virginia, the question of whether tax incentives attract businesses and jobs is important because both political parties are committed to reducing business taxes as a means of stimulating economic growth. Indeed there seems to be a consensus that through tax cuts West Virginia can discount its way to prosperity.

This year, in the face of future cost increases for entitlements and other programs, West Virginia reduced business taxes by $15 million and Republicans in the legislature want to use growing natural gas severance tax revenues to create a permanent “tax reduction fund” that would be used to eliminate the tax on business equipment and inventory. Meanwhile, we’re in the midst of lowering the corporate net income tax rate from the current 8.5% to 6.5% by 2014.

It’s all being done in an effort to make West Virginia more competitive as a place to do business. And there’s a prima facie case for the need to do so because, West Virginia faces serious obstacles.

We have the oldest, least-educated, most disabled, and most impoverished populace in the country. Cultural opportunities are few. High speed internet access is sporadic and our environment is among the nation’s most toxic. These are serious drawbacks for companies looking to relocate.

So, we have a choice. Correct these flaws, which will be a daunting, time-consuming task requiring spending and investment. Or put the money that could be used to correct the flaws into tax cuts in the hope that potential employers can be bribed into locating here even as they hold their noses while doing so. But, are business tax cuts a big enough incentive?

It’s not likely. An examination of the economics of the cracker plant illustrates why.

First, we should note that, even without additional breaks, West Virginia’s business tax burden is already competitive. The Tax Foundation ranks West Virginia’s business tax climate as 23rd best in the nation, substantially ahead of our primary competitor for the cracker plant, Ohio, which comes in at 39th.

Still, we have offered Royal Dutch Shell about $12.1 million per year in tax savings for the next 25 years. That sounds like a lot of money, but Royal Dutch Shell will spend $3.2 billion to build the plant and something north of $500 million a year to operate it. So, over 25 years, the tax breaks will reduce Royal Dutch Shell’s operating costs by only about 1.5%, little more than a rounding error.

Meanwhile, through free market forces, West Virginia already offers much more significant cost advantages. On a position-by-position basis wages in West Virginia are 20% lower than they are nationally. For the cracker plant, that translates into a labor and supplier cost savings of more than $76 million annually –six times the amount the state is offering in tax reductions. We offer other significant market-based advantages as well.

Because these free market savings dwarf the proposed tax incentives, we have to ask ourselves whether the tax incentives are needed, or are we just leaving money on the table?

Companies deciding where to locate first must determine that there’s a qualified workforce, the necessary supplier base, and a quality of life that will make their managers open to relocating. Only then do they consider operating costs of which taxes are, as we have seen, a small part. That’s why, if West Virginia can meet businesses’ primary needs, our built-in labor cost advantages will usually enable us to win and tax cuts won’t matter.

The problem is that too often we can’t meet businesses’ primary needs. We’re vastly undereducated. Our supplier base is not well-developed. Due to geographic isolation and environmental degradation, our quality of life is not attractive. And our funding for education, especially higher education, remains low given the level of need.

Only by addressing these problems can we create an environment that’s attractive to business. And the money that would otherwise be squandered on superfluous tax cuts is necessary to do that. The cracker plant may come to West Virginia, but if it does it will be in spite of the tax breaks rather than because of them. The same can be said for most business relocations.

West Virginia has been a cheap place to do business for a long time. If we could have discounted our way to prosperity, it would have happened long ago.

Sean O’Leary can be contacted at seanoleary@citlink.net.

NEW PLAY COMMISSION: THE BOY IN THE BOX

2012-02-12T11:14:00.003-05:00

Just wanted to let everyone know that I'm very honored to receive an inaugural commission from Barter Theatre for their "Shaping of America" program. Over the next 15 years Barter will commission 15 new plays that "will investigate the shaping of America from its founding to its present". One of those will be my play, "The Boy in The Box", about the unusual witnessing of events by a 102 year-old man who spent the first 15 years of his life confined in a box. Barter Theatre is the State Theatre of Virginia and has a distinguished history having launched the acting careers of Gregory Peck, Patricia Neal, and Ernest Borgnine among many others. Barter is also a leader in American theatre in nurturing and developing new plays for the stage.

HOW JOE MANCHIN CAN SAVE AMERICA (Pub date TBD)

2012-02-07T08:57:00.005-05:00

From the moment he put a bullet through the “Cap and Trade” bill we’ve known that Senator Joe Manchin’s political instincts are keen. Since then, he has wandered Washington’s maze of issues, sometimes aligning with President Obama and Democrats and on other occasions with Republicans. And in both cases, his reasons are often opaque.

My grandmother would have said of Joe, “The boy’s just got his own ‘rithmetic”. But, whether motivated by principle or expediency or some mixture of the two which only he understands, Joe Manchin has navigated his way to the ever-shrinking center of American politics, which is to say, he is equally mistrusted by both sides.

That’s why Manchin is just the person to perform the ultimate jujitsu maneuver in American politics – unifying us all, including the extremes of political culture, the Tea Party and Occupy Wall Street movements.

Impossible you say? On May 8th Manchin will probably win West Virginia’s Democratic primary for the Senate and kick off his general election campaign -- an occasion on which he’ll try to appeal to voters from across the political spectrum. Here’s what he should say.

“Fellow West Virginians, I’ve been your senator for eighteen months and in that time I’ve never seen such deep division and fierce partisanship. I’m not talking just about senators and congressmen. I’m talking about you and me – plain folks. We call each other names – socialist, fascist, terrorist, traitor. But, you know what? As I listen to both sides I keep hearing us agree about something –something important, something so big that I think it can help us come together and solve some of our worst problems.

Everyday somebody tells me that our free market, the economic system we depend on to allocate resources and distribute wealth, is broken – seriously broken. And why is that?

Conservatives say it’s because there’s too much government and our tax system redistributes wealth, screwing up the system of rewards and punishments on which capitalism is based. Liberals and Occupy folks, say it’s because the system is rigged so that bankers, financiers, and CEO’s make fortunes whether the companies they buy, sell, and run do well or not.

And guess what. They’re both right! Our free market has been corrupted almost beyond recognition so that almost half of Americans pay no income taxes and, just as bad, the richest Americans pay less than folks in the middle. Meanwhile, working Americans are getting squeezed. So, tonight let’s start a campaign not just to get elected to the Senate, but to restore free markets and fair taxation to this country so that those who succeed are rewarded, those who fail are not, and those who are legitimately in need are helped.

Tonight I’m announcing that, if you elect me, I’ll sponsor a bill -- “The Free Market Restoration Act” -- that will do three things.

First, we’ll scrap the progressive income tax and all other individual taxes and replace them with a flat tax, not on work, but on what we own.

We all agree that government’s most fundamental responsibility is to provide security through policing, the courts, and national defense. These institutions are a form of insurance for all of us. And just like when buying insurance, we should all pay for it at the same rate. The total amount each of us pays should vary only according to the value of our assets – what we own.

For my conservative friends, that means everyone pays something and we do it at one flat rate. For my liberal friends it means that, because the richest ten percent of Americans own eighty percent of the assets, they’ll pay eighty percent of the taxes rather than the fifty percent they pay now. And most important, working Americans, the majority of you, will see your share of the tax bill drop from 48% to 20%.

It’s flat, it’s fair, and everybody pays. We should all agree about that!

Second, to maintain our competitive marketplace and make sure we never again have to bail out companies and industries, we’ll enforce financial regulations and anti-monopoly laws just like Teddy Roosevelt used to. When individual companies get so big that they can set prices, stifle competition, and put the entire economy at risk, we’ll break them up to preserve competition and we’ll do it without destroying shareholder equity or jobs. At the same time, we’ll enforce laws and regulations to make sure companies disclose their finances fully and accurately to the marketplace so that customers and investors can make informed choices.

Third, while preserving necessary incentives for inventors and innovators, we’ll review copyright and patent laws to make sure that new products and services can reach the competitive marketplace as soon as possible, especially in areas such as pharmaceuticals where Americans pay the highest prices in the world.

Finally, there are areas whose needs the free market cannot meet. We’ve already mentioned national defense, the court system, police departments, and patents and copyrights. To these we can add food safety, drug safety, immigration, environmental regulation, our children’s educations, and, helping those who are legitimately needy and cannot provide for themselves.

We’ll disagree about some of these issues because people have different ideas how large a role the federal government should play. But, if we have that debate against the backdrop of a revitalized free market, a thriving economy, and a fair tax system, there are no challenges we can’t face and issues we can’t resolve.

Please join me in restoring the free market and the greatness that is America.”

Sean O'Leary can be contacted at seanoleary@citlink.net

WEST VIRGINIA'S COAL TATTOO (for publication 2/11/12)

2012-01-27T22:45:00.009-05:00

A lyric from Johnny Staats’s song, “Coal Tattoo” goes like this --“Somebody said, ‘That’s a strange tattoo you have on the side of your head.’ I said, ‘That’s the marking of the number nine coal. A little bit more ‘n I’d be dead.’”

The tattoo mentioned in the song title is the indelible mark left when coal shards penetrate skin, injecting a black so pure that it appears blue against flesh. It’s a mark shared by West Virginia miners and figuratively by all of us who live in this state where coal isn’t just a commodity and a source of jobs, but a social, cultural, and psychological phenomenon. In large measure, coal is our identity.

To an economist unfamiliar with coal’s cultural and social significance this would come as a surprise because coal is neither West Virginia’s largest industry – healthcare, manufacturing and trade are bigger – nor its largest employer.

Coal mining accounts for just 6% of West Virginia’s gross domestic product, 6% of wages, and 3% of jobs. Even if we squint to see coal’s impact on downstream and supplier industries, the share of jobs and wages rises to just 8.7% and 10.7% respectively.

Most people, both inside and outside of the state, assume coal’s significance to be many times that. The mistake is understandable though because we’re saturated with impressions of coal -- from politicians’ rhetoric and images of the tops blown off of mountains to industry advertising and simple legend.

In popular myth coal is synonymous with West Virginia and its stature remains undiminished from past decades when the industry employed six times the number of people it does now and accounted for 20% of GDP. But, that was long ago. So, why has the coal industry’s influence in state government remained strong, even dominant, while its economic significance has plunged?

Coal’s leverage derives first from the disproportionate share of state and local taxes the industry pays. Although coal delivers only 6% of GDP, its share of state taxes is two to three times that much making coal more important to politicians than to residents or businesses. And, although coal mining occurs in just twenty-six of West Virginia’s fifty-five counties, those counties are highly dependent on property taxes paid by the industry, which in some places amounts to a third or more of total receipts.

As congressional donor lists reveal, coal also donates heavily to politicians and causes. Even West Virginia’s congressional districts -- especially our tortured second district -- are configured so that all are anchored in coal country. And in Charleston and southern West Virginia, coal’s influence is pervasive in the legal profession and among suppliers of professional services.

Political influence is important to the industry because its economic and environmental effects on the state and communities are at best problematic. A recent report by the West Virginia Center on Budget and Policy determined that the state spends more to support coal than the industry pays in taxes. Meanwhile, the impoverished conditions of counties where the industry is most active are legendary and not merely coincidental.

Whereas most businesses prefer to operate in prosperous, growing communities, affluence and population growth pose problems for coal by driving up property values and raising demands for a clean environment and high standards of living and of public health, issues with which the industry struggles. In short, aside from a shared interest in keeping the lights on, coal mines and people do not coexist happily.

In this and in other ways the coal industry is an economic dinosaur – primitive, large, and not easily adaptable to a diverse modern society and economy. Even the marketplace in which coal companies operate is unique.

Most businesses must compete on multiple fronts – price, quality, innovation, customer service, and labor and material cost among others. But, coal is a commodity, so prices are rigidly set by the market with little or no opportunity for product innovation or differentiation. That’s a disadvantage economically because it precludes the kind of success that companies in other industries achieve by introducing breakthrough products and services. But, it’s helpful politically because the lack of multifaceted competition among coal companies produces a commonality of interest that encourages them to unite in political activism – which they do aggressively and successfully.

Strangely though, political factors – the EPA, global warming, and safety regulation – are not coal’s most immediate threats. The Wall Street Journal recently carried a story calling 2012 a “grim year” for coal, saying, “The two biggest threats facing U.S. coal companies are the low price of domestic natural gas, which is making thermal coal a less-attractive fuel for their utility-customers, and the shaky economic picture in Europe, which is damping exports of metallurgical coal.” This past week “The Economist” magazine seconded that opinion and pointed to longer term trends that signal the decline of coal.

For West Virginians who expect natural gas to be our financial savior it must be jarring to read that salvation, if it comes, will be at the expense of coal.

Still, for the reasons cited above, the coal industry’s political influence will probably remain disproportionately strong even as its economic contribution inexorably shrinks. Sadly that influence will probably divert attention and resources from other more promising and badly needed opportunities.

As Senator Robert Byrd wrote in 2009, “West Virginians can choose to anticipate change and adapt to it, or resist and be overrun by it.”
Sean O’Leary can be contacted at seanoleary@citlink.net.

WEST VIRGINIA UNDER THE KNIFE (for publication 1/28/12)

2012-01-16T08:43:00.001-05:00

In December 2006 Curtis Dubay, Senior Economist for the Tax Foundation, delivered a briefing from the floor of the West Virginia House of Delegates in which he admired Ireland’s Celtic Tiger economy and announced, “West Virginia should aim to be to the United States what Ireland is to Europe.”

A year later the Irish real estate bubble burst and Ireland became the first of the anvils that still threaten to drag the European Union under. But, we shouldn’t pick on Mr. Dubay because we were all insane that autumn.

In September of that year the Federal Reserve Board held a rollicking meeting at which Dallas Fed president Richard Fisher dismissed rumors of a housing bubble gleefully proclaiming, “ the only subject that has been more analyzed than the housing situation is the birth of Brad Pitt’s baby. (Laughter)”.

The parenthetical “laughter” is in the actual transcript reminding us that we didn’t just drive the economy off a cliff, but we did so with our foot on the accelerator and our eyes wide shut.

Ever since we’ve been trying to choose between two strategies for picking up the pieces -- the Keynesian approach, championed by President Obama, which prescribes fiscal stimulus to reignite the economy, or the Austrian approach, championed by Republicans, which prescribes austerity and a reduction in the size of government.

So far Obama’s strategy has generally held sway, but with major compromises forced on him when Republicans gained control of the House of Representatives in 2010. The result is a tepid recovery that pleases no one.

But, this election year gives us an opportunity to change as Republicans have realistic hopes of winning the presidency and the Senate while holding the House. Should that happen, something close to Wisconsin Congressman Paul Ryan’s austerity-focused alternative federal budget, called the “Path to Prosperity”, will probably be enacted. The question is, what would it mean for West Virginia?

On the spending side, the centerpiece of Ryan’s plan is entitlement reform, which would change Medicare into a voucher program and reduce Medicaid. On the revenue side, Ryan would end the payroll tax cut and return those rates to previous levels while preserving the income tax cuts first enacted under President George W. Bush.

Before calculating the cost of these changes to West Virginia and to appreciate their significance, consider that a few weeks ago it was front-page news when the state announced $56 million in tax cuts for 2012. So, it’s sobering to realize that, of the measures listed above, the one that would have the smallest impact – terminating the payroll tax cut -- would take more than $500 million out of West Virginians’ pockets – a loss almost ten times more than we saved with the state tax cut.

Cuts to Medicaid would cost West Virginia another $690 million annually. Finally, because changing Medicare to a voucher program would force recipients to pay market prices for medical care, beneficiaries would see an average cost increase of $6,250 annually. With more than 20% of West Virginians on Medicare, the cost to our state would be $2.4 billion.

The Ryan proposal contains other cuts as well, but these three items are sufficient to make a point. Taken together, they would remove more than $3.6 billion in discretionary income from West Virginians – more money than our entire coal industry pays in wages and severance taxes combined, $2,000 for every man, woman, and child in the state.

In short, it’s huge and it would take immense economic growth to offset so large a hit. So, how much growth are places that have pursued government austerity achieving?

Back to Mr. Dubay’s romantic Ireland. In the aftermath of the crash Ireland imposed huge government layoffs and pay cuts in a maniacal effort to reduce public debt and shrink government, hoping to reassure investors and spark growth. It hasn’t happened.

Before the collapse, Ireland’s unemployment rate like that of the US was about 4.5%. But, while our unemployment rate doubled before declining in recent months, Ireland’s rate more than tripled. And rather than spike and fall like the US rate, Irish unemployment has stayed above 13% for two years and currently sits at 14.3%. Similarly, whereas American gross domestic demand (GDD) for goods and services returned to pre-crisis levels last year, Irish GDD has fallen for 14 consecutive quarters and the economy is expected to shrink further in 2012.

In fact, all of the countries where austerity policies have been implemented -- Ireland, Greece, Spain, Italy, and Portugal -- are listed among "The Economist" magazine's ten fastest shrinking economies of 2012.

In other words, the notion that cutting government will trigger economic expansion is at best a wish and, from all available evidence, not a likely one. What is certain and frightening are the reductions to West Virginia incomes and the increase in out-of pocket-costs that the Ryan budget would impose.

None the less, when the Ryan budget was considered in congress last year, Representative Shelley Moore Capito voted “yea”. On the other hand, first district congressman David McKinley was one of just four House Republicans voting against the bill and specifically cited its impact on Medicare as the reason.

Hopefully this year Capito and other members of our congressional delegation, including Senator Joe Manchin who is a wild card on this issue, will put dogma and political expediency aside long enough to look at the numbers, see the amount of money that an austerity budget would cost West Virginia, and realize the false promise and threat that austerity poses.
Sean O’Leary can be contacted at seanoleary@citlink.net.

JERRY WEST AND WEST VIRGINIA'S DISEASE OF THE SOUL (for publication 1/14/12)

2011-12-29T22:36:00.000-05:00

Jerry West is the most famous West Virginian ever to wander from these hills. He was an all-American basketball player at WVU, the ninth greatest professional player of all time according to Bill Simmons’s encyclopedic “The Book of Basketball”, and he remains a literal icon of the National Basketball Association, which uses the silhouetted image of Jerry West driving hard to the basket as its logo.

Jerry West is also a tortured soul. In his recent autobiography, “West by West: My Charmed, Tormented Life” (written with Jonathan Coleman) this man who has earned virtually every reward and accolade society can offer an athlete tells us he is incapable of enjoying very much of it, that he cannot experience love in the way we all at least hope to, that he is, in short, a tortured and incomplete human being.

Although he doesn’t use the term, one could say that Jerry West is mentally ill.

Does that sound harsh? Some of us, perhaps West himself, will recoil at the phrase because mental illness carries a stigma. But, it shouldn’t, especially in cases where the causes are all too understandable. For West it was a father who beat -- not “hit” he tells us pointedly – beat him repeatedly. Meanwhile, West’s mother chose not to see the abuse taking place in their barren, wood frame house in 1950’s Chelyan, West Virginia.

Afraid to go home, young Jerry would spend endless hours on a dirt-patch basketball court, shooting baskets and fantasizing about game-winning buzzer-beaters -- imagined moments of triumph followed by the adulation and love he didn't find at home. West calls his relationship with basketball then and now an addiction. In therapeutic terms, he was using basketball to dissociate from his pain and its causes.

Jerry West’s story of abuse and his consequent behavior is unusual only in that, in the absurd lottery that is life, his chosen means of dissociation, playing basketball obsessively, happened to intersect with a freakish athleticism to produce a magic carpet ride that took him first to college, then to the Olympics, and eventually to Hollywood, far, far away from the sources of his pain. It’s the one-in-a-million coincidence of which all addicts dream as they anesthetize themselves with booze, gambling, junk food, cigarettes, pain killers, assorted drugs, and still sometimes basketball.

Although Jerry West remains emotionally damaged, he escaped at least partially. Most who are similarly afflicted don’t even have that. Their lives aren’t saved by miraculous coincidence and their dissociative behaviors, far from being a means to prosperity, are more likely to cripple and occasionally destroy them and sometimes their families as well. It’s an important issue for West Virginia because it happens here more often than in most places.

The National Institutes of Health and Centers for Disease Control rank West Virginia among the leading states for the prevalence of depression, anxiety-related disorders, and, inevitably, suicide. We’re nearly five times more likely to kill ourselves than we are to be killed by someone else. And suicide combined with accidental drug overdoses (usually prescription pain killers) kills more of us than even traffic accidents.

Of course not all premature deaths associated with mental illness are sudden and traumatic. Some play out over years of gnawing misery in the form of diabetes, heart disease, and cancers -- conditions often caused or nurtured by chronic apathy and disinterest in our own wellbeing. All of this results in West Virginia ranking 46th among the states in life expectancy, more than six years behind the leader, Hawaii, and only seventeen months better than last place Mississippi.

It’s a crisis, yet as a state we offer little support to those in need of help. Per capita state funding for mental health care is a third below the national average and we have less than half as many psychologists, social workers, and psychiatrists per capita as our neighboring states.

Instead West Virginia has largely narrowed and recast the problem of mental illness as one of drug abuse and attempted to counter it through policing and legislation designed to disrupt the illegal drug trade and punish perpetrators. However, these steps, although legitimate, address only symptoms of what is at its core a disease of the soul. The result is that, in West Virginia, prisons rather than hospitals and community-based programs are the primary repositories for many of our mentally ill while most go untreated at all.

Why do we choose not to address the underlying causes? A large part of the problem is our attitude toward mental illness. Many, including some political leaders, see depression and addiction not as illnesses, but as shortcomings of character – a lack of self-discipline, a failure of resolve, or even a dearth of religious faith – traits for which they believe people should be admonished or punished rather than treated. Even Jerry West, who has yet to escape the shadow of abuse six decades after it ended and who asks our understanding, admits that he only briefly tried therapy and quickly rejected it.

Until West Virginians dismiss the stigma surrounding mental illness and embrace depression, addiction, and other conditions as treatable diseases for which a sufficient number of qualified professionals are required, the statue of Jerry West that stands outside the WVU Coliseum will be as much a monument to West’s and West Virginia’s disease of the soul as it is to the athletic achievements it’s meant to celebrate.

Sean O’Leary can be contacted at seanoleary@citlink.net.

CURSED -- WEST VIRGINIA'S MARCELLUS SHALE

2011-12-19T12:36:00.000-05:00

With the recent enactment of rules regulating the extraction of natural gas from Marcellus shale, a process known as “fracking”, some believe West Virginia will experience an economic boom. Newspapers have called our Marcellus shale deposits “a godsend” and Bill Maloney, the recent Republican candidate for governor, described them as “the biggest opportunity for lasting growth and prosperity that West Virginia has seen in decades”.

Since “lasting growth and prosperity” is a phrase not often associated with West Virginia, it’s understandable that the subject of fracking has commanded the governor’s and legislature’s obsessive attention for the past few months.

But, what if it’s not true? Set aside for a moment the real and legitimate environmental concerns surrounding fracking. What if the gas drilling boom isn’t an economic game-changer for West Virginia?

To understand why it might not be, let’s visit the African country of Angola, a nation of 19 million people most of whom live in grinding poverty. Two-thirds survive on incomes of less than $1.70 per day. Most are illiterate and average life expectancy is only 40 years.

This would be just one more heart-rending story from a hellish place were it not for the fact that Angola is the world’s fourteenth largest exporter of oil generating $3,600 annually for every resident. It’s also the world’s fourth largest exporter of diamonds and has other abundant mineral resources. In short, Angola is figuratively and literally a goldmine.

So, with lots of income and abundant resources, why are Angolans so poor and what does it have to do with us?

West Virginia is the Angola of the United States. West Virginia coal generates almost $11 billion in sales annually -- $6,000 for every person in the state. Yet, we have the nation’s lowest median income and staggering rates of poverty. While state GDP has increased in the last decade, population and wealth have barely budged. And the economic scourge is worst in places where coal is most prevalent – the southern counties whose economy has retreated to a nearly pre-industrial state and where average life expectancy is ten years below the national average.

Both Angola and West Virginia suffer from what economists call a “resource curse” – a phenomenon in which, for structural reasons, vast holdings of natural resources fail to translate into prosperity. This has been true of West Virginia and coal for a century and will probably be true of gas as well. Here’s why.

First, most of the wealth generated by gas won’t go to West Virginians. As with coal, almost all of West Virginia’s gas will be extracted by out-of-state companies that will repatriate the profits elsewhere.

Second, the royalties West Virginia residents will receive won’t be overwhelming. Do you remember Senator Joe Manchin dismissing the recent payroll tax cut as being paltry because it saved West Virginia families only $14.50 a week – so little “they probably don’t know they’re getting it”?

Guess what. That insignificant $14.50 a week translates into $750 million annually. At current market prices and assuming royalties equivalent to 20% of the selling price, even if gas sales increase at a compound rate of 13% annually, they won’t generate $750 million annually until 2017 and won’t equal the accumulated value of the payroll tax cut until 2022.

That kind of growth is still good and welcome, but not transformative. However, even those growth rates may not come to pass.

Drillers pump when the market price gives them an incentive to do so and, because gas is a commodity, prices fluctuate greatly. As Europe and Asia begin tapping their large shale gas reserves, supplies will increase and prices may drop. If so, production and royalties in West Virginia will drop as well.

It may be argued that this overlooks two other important benefits of the gas boom – job growth and severance taxes that will help balance the state budget.

Dr. George Hammond, associate director of the West Virginia University Bureau of Business and Economic Research, recently projected that job growth in natural resources and mining will slow significantly. He explained, “Lower coal production in West Virginia translates into coal mining job losses during the next five years. However, the job losses in coal mining are expected to be offset by job gains in oil and gas extraction.”

In other words, we’ll be treading water. And did you notice that, as gas grows, coal declines? The dynamic isn’t just coincidental. Future growth in gas depends in part on its ability to replace coal as a base fuel, which for West Virginia means that as one hand gives the other takes away.

Finally, gas drilling’s contribution to the state budget through severance taxes will be offset in large measure by added costs for inspectors and the maintenance of roads and infrastructure necessary to the industry. In fact, if gas turns out to be like coal, the costs may equal or exceed the tax revenue.

The most likely outcome of West Virginia’s natural gas boom will be the enrichment of a small number of property owners and industry workers, a burst of revenue and expenditures for the state, but, little change from the depressed status quo for most West Virginians.

Of course, we can always hope for “lasting growth and prosperity” from gas, but first we’ll need Harry Potter to remove the resource curse.

THE HOBGOBLINS OF JOE MANCHIN

2011-12-12T17:51:00.000-05:00

If this was the Comedy Network’s “The Daily Show”, you would now see a video of Senator Joe Manchin discoursing on the folly of ending tax cuts in time of economic distress. He would assure us that deficits produced by tax cuts can easily be offset by eliminating government waste. And he would seal his sermon by reminding us that he will “do anything to put more money in the pockets of West Virginians”.

Then John Stewart would appear confidently saying, “So, Senator Manchin’s vote on the payroll tax cut is entirely predictable”, whereupon we would cut back to Manchin who would continue with, ”. . . therefore, I do not support an extension of the payroll tax cut because this nation cannot afford another dime of debt. There’s no evidence this tax cut creates jobs and it only puts $14.50 a week in the pockets of taxpayers. Most people probably don’t know they’re getting it.”

Flash back to John Stewart and see his famous look of bafflement as he struggles to reconcile Manchin’s turnabout -- all the reasons the Senator gave for supporting tax cuts suddenly turned upside down because . . . because . . . ? Well, it’s hard to figure out really.

In fairness to Senator Manchin, the preceding statements were made at different times and were in fact pieced together from comments he made about two entirely different tax bills.

The first segment, supporting tax cuts, was assembled from claims he made prior to voting to extend income tax cuts originally enacted under President George W. Bush. At that time Manchin bucked his party and President Obama who charged that the Bush cuts added to the federal deficit, did little to create jobs, and disproportionately favored the rich.

The second segment, opposing tax cuts, came from remarks Manchin made last week when voting against an extension of the payroll tax cut originally enacted earlier this year under President Obama.

Given his contradictory arguments, we could wonder why Manchin would support one tax cut, but not the other. But, the better question is, if he was going to support only one, why would it be the Bush tax cuts since the well-being of West Virginia and of the country would seem to dictate the reverse as a simple comparison shows.

West Virginia is a great place to compare extensions of the two tax cuts because both return about the same amount of money, $750 million annually, to West Virginians. But, beyond that, their effects are quite different.

Under the Bush tax cuts, West Virginia fares poorly. Because the wealthy are favored and West Virginians have the lowest incomes in the nation, we receive only about sixty-seven cents in savings for every dollar that other Americans receive, also putting us last in the nation. Meanwhile, the Bush tax cuts add $330 billion annually to the federal deficit and, although they have been in place for nearly a decade, they show little evidence of generating jobs or growth.

The payroll tax cut, on the other hand, delivers the same total savings for West Virginians and does so at rate that’s much closer to parity with the rest of the nation. It adds only $182 billion to the deficit and the benefits are more broadly shared among West Virginia households than those of the Bush tax cut. The payroll tax cut hasn’t been around long enough to determine its effects on the economy or jobs, but a 2010 Congressional Budget Office analysis predicted that, all things being equal, the payroll tax cut has four times the job growth impact of the Bush tax cuts.

In short, whether you agree with the arguments Joe Manchin made in support of tax cut extensions or opposing them, the payroll tax cut seems the better option for West Virginia and the nation. Yet, his votes were exactly the reverse. Why?

It’s an important question because ending the payroll tax cut constitutes a major tax increase for West Virginians. Recently Senator Manchin dismissed as trivial the roughly $750 to $1,000 dollars a year it will take from each West Virginia taxpayer, although that figure dwarfs the amount Manchin cut in taxes as governor and for which he loudly and often takes credit.

These contradictions must register somewhere in Senator Manchin’s mind because he has resorted to a truly cynical defense of his vote claiming that an extension of the payroll tax cut “jeopardizes Social Security” by taking “hundreds of billions of dollars out of the funding stream”. However, the Social Security law stipulates that, in the event of a deficit, funding is automatically supplemented from the government’s general revenue fund making Social Security as stable as the rest of the government – a fact of which Manchin is aware if not forthcoming. So, again, why?

Since Manchin’s arguments on both sides of the tax cut debate cancel each other out, it’s hard to tell what his motives are. Maybe he’s a rare soul who can simultaneously hold conflicting beliefs and who, like, Oscar Wilde, considers “a foolish consistency” to be “the hobgoblin of little minds”. Or maybe he’s a victim of “doublethink”, the delusory state George Orwell’s novel “1984” describes as a precursor to becoming a pawn of Big Brother. But whether guided by hobgoblins or Big Brother, Joe Manchin’s actions on this issue are a mystery and a problem for West Virginia.

WALT WHITMAN'S SECRET script available

2011-10-16T12:45:00.000-04:00

I'm just starting to make submissions for public readings and productions. If you're interested or know someone who might be, please drop me a note and I'll send you a PDF. Here's a summary of the play, which is based on the novel of the same name by George Fetherling who asked me to do a stage version. The novel is published by Random House Canada and reached #6 on the Canadian best-seller list.

Love can be imponderable and unrecognizable even for someone who wrote about it as eloquently as Walt Whitman. In fact, Whitman never experienced a fully realized love. At the same time, as he aged, Whitman’s prodigious poetic talent eroded forcing him like most of us to come to terms with an incomplete and in some ways disappointing life.

Synopsis
For most of his life Walt Whitman promoted his work assiduously, but he is now an old man, so the task has fallen to a young friend and disciple, Horace Traubel, who seeks Walt’s love even as he works to spread the poet’s fame. But, Walt is oblivious to Horace’s desires due in part to his advanced age and also to memories of the painful conclusion, decades ago, of his only great love affair. Meanwhile, Horace, chronically unsure of his emotions and sexuality, is also courting Anne Montgomerie, an intelligent and accomplished woman.

Horace introduces Anne to Walt and she quickly becomes the poet’s friend, a searing critic of his later poetry, and an unattainable object of his romantic imagination. Walt’s feelings for Anne remind him of his great love, an uneducated hack driver named, Pete Doyle, who comes back to Walt in ghostly form to recall the evolution and tragic conclusion of their romance.

Smitten with the unobtainable Anne, Walt pushes Horace toward marriage with her and finally Horace acquiesces. But, the marriage soon begins to unravel when Horace is attracted to another man. Walt warns Horace not to pursue the doomed affair by recounting the painful story of his own relationship with Pete that ended when Pete told Walt a tale about his participation in the assassination of Abraham Lincoln.

Walt’s recounting of his past enables him to find reconciliation, but Horace fails to take the lesson and continues his ill-fated affair and destroys his once-promising marriage.

Can we ever agree on taxes? We already do.

2011-09-22T09:53:00.000-04:00

Partisan conflict and ideological differences about the role and reach of the federal government are at a zenith, but the odd thing is that, if all of us -- progressives, liberals, conservatives, and libertarians -- are true to our principles, we may actually agree about how the burden of paying for government should be shared even if we can't yet agree about which functions the government should perform and the associated cost.

How can this be when liberals cry that tax rates for the rich need to be increased while conservatives and libertarians demand that they be reduced? Let's try a simple thought experiment based on a few propositions that people of all persuasions can probably support.

First, although we may differ on the proper role of government, there are some functions that just about everyone believes the federal government must perform. These include providing for the national defense, enforcing federal law, and supporting courts of justice to resolve disputes in a fair and efficient manner. These functions are agreed upon by everyone because they are necessary to protect everyone's rights and property. They are a form of insurance that allows us to go about our lives feeling secure in our persons and possessions.

This comparison to insurance is apt because insurance is something that's bought and sold in the marketplace every day. In fact, few economic activities are more purely market-driven than acquiring insurance for our lives, homes, and cars. (For the moment we'll sidestep the different and more complicated issue of health insurance.)

The principle behind insurance is simple. The greater the value of that which you wish to insure and the greater the risk that it will be lost, the more you pay. Premium rates for people whose property is at equal risk are basically the same and the absolute amount they pay in premiums simply varies in proportion to the value of the property they insure. It's reasonable, fair, and the terms are dictated by the market.

Now, what if we applied those same marketplace principles to the way in which we pay for the federal government? Since we all share the same risks to our property, we would all pay at the same rate and the amount we pay would only vary according to the value of the property each of us insures.

Conservatives and libertarians have long called for a simple, flat tax, so they should be thrilled at the prospect. And while liberals may be shaking in their shoes, even they may like the outcome. So, let's run the numbers and find out how the tax burden would be shared by various segments of the population if the cost was calculated in the way insurance premiums are.

But first, before completing our experiment we should acknowledge a couple of points often made by conservatives who want to reduce tax rates for top income earners. They justify their position by correctly pointing out that the rich already endure the highest rates and pay the majority of taxes. And they're right. According to a recent Internal Revenue Service report, in 2009 the top 5 percent of income earners paid 44 percent of all income taxes and the top 10 percent paid more than 50 percent. On top of that conservatives also correctly point out that 45 percent of households don't pay any income tax at all.

But, the interesting thing is that when those figures are compared to the percent of wealth and property owned by the richest Americans -- the property the federal government protects for them -- it turns out they're getting quite a break under the current system.

If the wealthiest 5 percent of Americans paid taxes in proportion to the value of what they're paying to protect -- the way we pay for insurance -- instead of contributing 44 percent of tax revenues, they would instead have to contribute 61%. And the top 10 percent, instead of contributing just over 50 percent, would contribute 83 percent. Meanwhile, the bottom 90 percent of taxpayers, the middle class and working poor who currently contribute about 48 percent of tax revenue would see their share drop to just 17 percent.

Conservatives and libertarians who are faithful to their principles will recognize this as the true "fair tax" for which they have argued for two decades. And for liberals this approach accomplishes the redistribution of the tax burden that relieves the middle class for which they have argued for just as long.

Plus, this approach would also raise standards of living across the board and powerfully stimulate the economy by putting more income in the hands of people who would spend it rather than bury it in trust funds. None the less, the political reality is that this plan has no chance of being enacted or even considered and in many ways that is a measure of our hypocrisy and timidity.

Of course, even if it were enacted, we would still have to come to agreement on which additional functions the federal government should perform and the associated cost. Still, as the President and Congress enter the next round of tax and budget negotiations, it's good to be reminded of what equally shared sacrifice as determined by the market looks like and how far from it we are today.

Essay on Faith for "This I Believe"

2011-09-22T09:18:00.000-04:00

(The following essay was written for the "This I Believe" oral history program and will be recorded on November 21, 2011 at Shepherd University.)

Last year while filling out a computer dating profile and trying to offset the truth conveyed by my pictures, which can be summarized as, “bald, middle-aged, pencil-neck geek”, I experienced a small identity crisis. It happened when I came to the question about faith.

The options were generous – Baha'i, Buddhist, Christian Catholic, Christian Protestant, Jewish, Muslim, and others along with atheist, agnostic, and the ambiguous “spiritual but not religious”, which sounded suspiciously like taking credit for believing without the responsibilities. Anyway, the question stopped me for two reasons. First, I was looking for a date and . . . well, you know. But, I bravely defeated the temptation to dissemble only to encounter a bigger problem – I didn’t know what I was.

It wasn’t for lack of consideration. After all, I was once a philosophy major and had even been confirmed in the Lutheran church. But that was never more than a formality for my parents or me.

We just weren’t religious, which didn’t mean there weren’t occasional clerical encounters. Once while hitch-hiking at age 14 I was picked up by a tent preacher who was holding a revival. He asked if I was a Christian and, being a precocious snot, I opined that I thought not because at the time I was reading Hugh Schonfield’s book, “The Passover Plot” that purported to debunk the miracles of Jesus. The preacher gave me a dire look and said archly, “You know that book was written by a Jew!”, his implied meaning eluding my adolescent understanding altogether. At about the same time, the reverend at the Lutheran church where I was confirmed (and had ever since been absent) showed up on our front porch expressing concern for my soul to my equally unconcerned mother. Otherwise, I’ve been pretty much religion-free and I suppose faith-free as well.

But, the question on the profile demanded an answer. Although I could have checked “Christian Protestant”, it would have been hypocritical. And “atheist” was too dogmatic. Even “agnostic” missed the mark by suggesting a depth of contemplation about faith that far exceeded the amount I’d given it. For the truth is, thoughts of God and faith rarely cross my mind I suppose because their absence triggers no anxiety, creates no void, leaves no questions disturbingly unanswered.

Our understanding of the physics and biology of our world, although never completely settled, seems sufficient to me and, as important, moral principles such as love, compassion, duty, and charity are comfortable as well because I feel them spontaneously as I think all or at least most people do. And while I don’t always agree with others about how those values should be interpreted and applied, I know we share a common impulse to nurture and care. In that spiritual bond I comfortably place my trust.

So, in my dating profile I became “Spiritual but not religious”, because, I realized, it confers all of the responsibilities even in the absence of belief.

Coal was West Virginia (for publication December 10, 2010)

2010-12-03T21:15:00.000-05:00

Weren’t those commercials in which Joe Manchin put a bullet through the Cap and Trade Bill cool? Isn’t it neat that John Grisham’s bestselling novel, “The Appeal”, was based on a coal company CEO’s attempt to buy a Supreme Court seat right here in West Virginia? And don’t you remember back in the sixties when WVU football could be heard on radio and every commercial break featured God’s own choir on loan to Consolidation Coal Company singing the glorious refrain, “Coal is West Virginia!”?

As recently as last month an editorial in this newspaper declared, “No other issue even approaches the importance of coal for West Virginians.”

That’s a very large claim to make about a state that has the nation’s lowest average income, the highest rate of disability, the lowest level of educational attainment, the highest prevalence of half a dozen diseases, as well as the highest rate of death by drug overdose.

Of course, some people will argue that the revenue West Virginia earns from coal is critical to addressing these challenges, while others will argue that coal is a cause, either directly or indirectly, of many of them. And both groups have some justification. Either way, the issue of coal still rises to the top reminding us that our embrace of coal was always a Faustian bargain.

We’ve always known that the thing which sustained us was also killing us and, thus, in addition to all its other roles, coal became our greatest source of drama and pathos. From the coal wars of the 1920’s, so effectively memorialized in John Sayles’s movie, “Matewan”, through assorted strikes, a murder of a union president and his family, the Buffalo Creek flood in which 125 people died and more than four thousand homes were destroyed, and including any number of mine explosions and cave-ins always accompanied by days-long vigils marked by hope and nearly always a tragic ending, coal has been the beginning and the end, the alpha and the omega.

It was all summed up neatly by Mother Jones, the union organizer who famously declared, “When I get to heaven, I shall tell God Almighty about West Virginia” – and, of course, she was talking about coal.

So, it is with a touch of regret, but also with overwhelming relief that I, a native son of West Virginia, steeped in its history and mythology, am here to tell you that coal is dead. And the sooner we begin thinking and acting as though we’re a post-coal state in a post-coal economy, the better off we’ll be.

When did coal die? It’s hard to fix a precise date. Certainly a line was crossed at some point as the number of coal mining jobs in the state declined from 130,000 in the 1940’s to only 20,000 today. It could have been when the number of disabled miners first surpassed the number of working ones. Or maybe it was when we started blowing the tops off of our mountains to get at the stuff. But, more likely it was when coal fell to only fourth place as a contributor to the state’s gross domestic product behind government, manufacturing, and healthcare. Shall we have the choir sing, “Medicare is West Virginia”?

In fact, today coal generates only 9% of West Virginia’s GDP even if you include all of its supplier industries. The number is just 6% if you confine the analysis to the coal industry itself. And only three West Virginia households in a hundred have a worker in the coal industry. Finally, this year the West Virginia Center on Budget and Policy released an analysis showing that the cost to state government to support the coal industry actually exceeds the amount the industry contributes in taxes and fees.

But, the most withering fact may be that where there is coal there is misery. The West Virginia counties that are most dependent on coal are also West Virginia’s poorest and those which are losing population the fastest.

Perhaps it would be different if the wealth extracted from our soil stayed in the state and in those nearly shuttered coal communities that are increasingly populated only by the old and infirm. But, less than 5% of West Virginia coal is mined by West Virginia-based companies. So, a few of us get paychecks and the state gets some taxes, but the profit, the big money, goes elsewhere.

What did the editorial say? “No other issue even approaches the importance of coal for West Virginians.” Maybe that was true once, but no longer.

Coal is now West Virginia’s issue of mass distraction, commanding more attention and more public resources than its contribution warrants. That’s dangerous because, whether Cap and Trade comes to pass or not, coal’s value to West Virginia will continue to decline and, as it does so, those who are most dependent on coal will clamor even more loudly for West Virginia to increase subsidies to an industry on which the rest of the world is turning its back.

More and more effort for fewer and fewer returns. It’s a game we can’t win and hopefully our leaders won’t try. Instead, they must begin to develop a vision and strategy for a post-coal West Virginia.

What will that West Virginia look like – maybe Vermont with a twang? I don’t know. But, as I compare that state’s economy with ours, it doesn’t sound so bad.

Assume The Position, West Virginia (for publication November 12, 2010)

2010-11-03T11:07:00.000-04:00

Get ready. This is going to hurt.

In business there’s an old saying. High quality, great service, low price – pick two . . . because you can't have all three. In economics, there is an equivalent troika. Low taxes, no deficits, high growth. Again, pick two.

In times of economic downturn, you can have low taxes and high growth, but you will necessarily run large deficits. Or you can have low taxes and no deficit, but you will starve the economy of liquidity and choke off growth. Finally, you can have no deficits and high growth, but at least moderate levels of taxation are necessary because, in the end, to use another apt cliché, there’s no free lunch.

But last week we gave control of the House of Representatives to a party that’s largely under the sway of people who believe, along with Herbert Hoover, that there is a free lunch, that we can have all three. And they are determined to resurrect the often failed but zombie-like theory of supply-side economics in the magical belief that all we have to do is get government out of the way and the free market will reward us with pain-free prosperity -- or at least that any pain will be limited to those who deserve it.

The problem is that, if our experience with supply-side tax cuts between 2002 and 2008 is a predictor of the future, those who deserve to suffer pain will be the 90% of US households that have incomes of less than $200,000 a year and whose purchasing power and disposable income actually diminished during this time of supposed prosperity . . . and that was before the economy went off the cliff.

So, we may be getting teed up to be whacked again. And this time, West Virginia is likely to be among the places most badly hurt.

That’s because, to make a significant dent in the federal deficit, never mind eliminate it, the latter day Hooverites will have to cut heavily in areas that are vital to West Virginia's economy.

They will have to go after big budget items such as Social Security, Medicare, and entitlements that are essential to West Virginia in a way they are to no other state. Contrary to what Governor, now Senator-elect, Manchin tells us, the comparative durability of our economy during the recent financial crisis was not due to private enterprise and job growth as much as it was due to the fact that West Virginians derive a greater share of their incomes from entitlements than do the residents of other states. And, while the private sector economy has faltered, entitlements have not. Consequently, West Virginia came through comparatively unscathed.

But, the flip side is that, if Social Security and entitlements are cut, West Virginia will suffer more than other places. Incomes will be reduced in a state that already has the nation’s lowest median income. In short, serious cuts to entitlements would be an Exocet missile aimed at the heart of our economy and should strike fear into the heart of every local politician and merchant.

Is this dire prediction just fear-mongering? No. Look at the numbers the Hooverites will face when they show up with their meat cleavers. Interest on the national debt, which they cannot touch, represents 8% of the federal budget. Defense spending, which they believably say they won’t touch, consumes another 20%. Meanwhile, the deficit they’re trying to eliminate represents 36% of the budget, and that amount is what will have to be taken out of the remaining 72% of the budget since interest on the debt and defense are being held harmless.

In other words, we’re talking about cuts of one half and not just to the National Endowment for the Arts, National Public Radio, and the much maligned Department of Education. We’re talking about major cuts at the Treasury Department, the Justice Department, the Food and Drug Administration, and, yes, Social Security and Medicare – cuts that will make all but the most doctrinaire and extreme libertarians blanche.

But, draconian budget cuts that reduce incomes won’t be West Virginia’s only problem. When cutting taxes, the new Hooverites’ first priority will be to extend the now famous Bush tax cuts which, aside from increasing the deficit, deliver the majority of savings to just the top six percent of income earners, among whom there are few West Virginians.

Again, the numbers tell the story. Because West Virginia incomes are so low, for every dollar the average US household saves as a result of the Bush tax cuts, West Virginia households save only 67 cents. So, regardless of how much stimulative effect the tax cuts have, West Virginia sees less benefit than every other state making us less competitive and less attractive as a place to do business -- another fact that should bewilder local politicians and merchants.

We know the new Hooverites won’t compromise on the Bush tax cuts. And we can only hope that, when they are required to provide specifics on where they will cut the budget and by how much, something they have studiously avoided doing so far, they will flinch. Or, better yet, perhaps the American people will flinch for them. But, regardless, the difference will be one of degree and not direction. And the direction is unmistakably one that will hurt West Virginia. The only question is, how badly?

What Hath God Wrought? (For publication 10/15/10)

2010-10-14T08:14:00.000-04:00

In 1957 a Senate committee named Henry Clay of Kentucky one of the five greatest senators in U. S. history. Abraham Lincoln called Clay “my beau ideal of a great man”. Clay was so well known and highly respected that hundreds of buildings and places, many far beyond his native Kentucky and including Clay County, West Virginia, are named in his honor. And there is not a school child who, if he or she pays attention, does not learn about Henry Clay, “The Great Compromiser”.

Whoops! What was that? Compromise? As in sitting down with the enemy . . . er . . . opponents to cut deals? The very phrase, “cut deals”, is slimy. Everyone knows that in a democracy the majority rules! So, how can we have a democracy if politicians are going to compromise? Compromise -- just a fancy name for appeasement and treason!

If a recent poll conducted by Pew Research is accurate, that seems to be the prevailing sentiment among many Americans. When given a choice, 49% of us say we prefer, “political leaders who stick to their positions without compromise” while only 42% prefer political leaders who “make compromises with someone they disagree with”. And among Republicans the percentage preferring politicians who refuse to compromise is 62%.

No wonder today’s most endangered political species isn’t Democrats or even liberals. It’s RINO’s, “Republicans in Name Only”. So, it’s ironic that Henry Clay, The Great Compromiser, was a member of the Whig party, predecessor of today’s Republican Party. If today’s sentiments prevailed in his time, he most certainly would have been branded . . . well, I guess since he was a Whig . . . a WINO.

The problem with this kind of categorical thinking is that it inevitably leads to extreme positions usually based on oversimplified and corrupted interpretations of doctrine and history that are more the product of idolatry than of critical thinking. Our founding fathers, men of often strikingly different and opposing political and religious views, are suddenly transformed into a monolithic vanguard guided by the hand of God. And their handiwork, the Constitution, is seen not as an epitome of successful compromise, which it is, but rather as the word of God only slightly more heavily edited than the Ten Commandments.

Similarly, the free market is seen not as an economic device that societies employ to the degree necessary to achieve prosperity. Instead, the famous “invisible hand” becomes the hand of God making free markets as much an instrument of morality as of economics. And so people rail against the apostasies of TARP and taxes as socialist sins that prevent the market from performing its ordained function of rewarding the virtuous and punishing the evil.

If in the next couple of elections people holding these beliefs carry the day, they and those of us other unfortunates they drag along in their wake may have to deal with the implications and consequences of their fundamentalist dogmas.

Unimpressed by the recent catastrophe into which the financial markets they worship plunged us and forgetting the earlier Great Depression, they will refuse to countenance deficit spending to provide economic stimulus, never mind another TARP. They will do so despite virtually unanimous opinion among economists that it was only through TARP that another Great Depression was avoided. This point was recently demonstrated in an analysis performed by Mark Zandi, former chief economic adviser to John McCain, which showed that, without TARP, unemployment would now be at 15% or more. They will also ignore history, which shows that the only problem with depression-era New Deal programs that were financed with deficit spending was that they didn’t go far enough. It took World War II to get the government to indulge in the kind of deficit spending necessary to lift us from the depression.

Knowing now what we do of the Great Depression it seems incomprehensible that at the time, some people actually believed it was a good thing. The banker, Andrew Mellon, saw the Depression in highly moral terms and encouraged then President Herbert Hoover to let the contagion run its course and by doing so “purge the rottenness out of the system”. But, that kind of self-righteous cant wore thin after a few years with people who had friends and family members or were themselves homeless or out of work and whose only discernible sin was that they had the temerity to be born.

Of all Americans, West Virginians, who have seen entire communities wasted and half of our population migrate to other states, should understand that economic markets have no moral dimension and treat human beings like they do corn or pork bellies -- as one more commodity to be bought and sold or, if they have no use, abandoned. A knowledgeable and honest free marketeer must admit that in a free market world there would be no minimum wage and no barriers to immigration.

The absence of these policies from the platforms on which today’s self-described fans of the free market run would be encouraging if it meant they recognize that markets are amoral agents that are occasionally apt to go haywire and, therefore, need to be regulated. But, the sad truth is that most are probably simply unaware of the contradictions between their philosophies and policies. And those who are aware keep silent as a matter of political expediency.

May God save us from them since it seems increasingly unlikely that we will save ourselves.

Putting West Virginia Last (for publication 9/17/10)

2010-09-02T09:11:00.000-04:00

One would think that a candidate for political office would sooner live on a diet of rat droppings than support a tax bill that does less for his or her state than it does for every other state in the union. Especially if that bill also put the state at a competitive disadvantage and harmed the nation as a whole by increasing the deficit while generating little economic growth.

Yet Representative Shelley Moore Capito and Republican senate candidate John Raese are doing just that. Both support renewal of the income tax cuts passed under the George W. Bush administration.

But, wait! It was a tax cut. That should be a good thing, right? Besides, how can a tax cut be worse for West Virginia than it is for other states?

Tax cuts aren’t good when they produce $2 trillion in deficits in their first six years and continue to do so today. They are worse when they largely fail to stimulate demand in the marketplace because they lavish more savings on the top 6% of taxpayers than they do on the remaining 94% who would actually spend the money on houses, cars, and other goods and services. And they are the worst when they begin to tear at the fabric of society by increasing income inequality not just between the super-wealthy and the rest of us, but between regions of the country.

Nationwide, the average taxpayer sees 50% more in savings from the Bush tax cuts than does the average West Virginian. For every dollar West Virginians save, the rest of America saves $1.50 and Connecticut taxpayers, the nation’s wealthiest, save $2.50.

That puts West Virginia dead last in benefits derived from the Bush tax cuts and we just keep falling farther behind. Meanwhile, as the federal deficit grows and the funds to pay for it are shifted to other taxes that West Virginians continue to pay at existing rates, our share of the national tax bill actually increases.

So, why would the aforementioned congressional candidates from West Virginia support such a policy?

They would argue that these inequities are inevitable, that because the rich, who by and large do not live in West Virginia, pay more in taxes, they’re also bound to see the greatest savings when taxes are cut. Thus, it’s unavoidable that individuals and regions of the country that are least in need of tax relief will get most of it and those most in need will get the least.

The good news is, it’s not true. In fact, it’s eminently possible to design tax policies that produce comparable savings, stimulate more economic activity, and do so more equitably and in a way that will benefit the country as a whole and West Virginia in particular.

First, income tax brackets should be made more progressive by allowing the Bush tax cuts to lapse for those making more than $250,000 per year and by reducing taxes on middle and lower income taxpayers by an equal amount. This will increase demand for goods and services and reward workers who have seen the least income growth in the past ten years. Put another way, the savings will be used to purchase groceries, homes, and cars in Martinsburg, Romney, and Huntington rather than to pad trust funds in Greenwich, Darien, and Westport.

Second, we should begin paying down the deficit by creating more tax brackets for the super- wealthy. As James Surowiecki recently pointed out in the “New Yorker” magazine, at present our top tax rate of 35% kicks in at an annual income of $375,000and even someone making $175,000 pays 33%. As a result, local businesspeople, doctors, dentists, and other professionals who earn $200,000 a year find themselves with nearly the same tax rate as Bill Gates, Tiger Woods, and Warren Buffett who can make a hundred million dollars a year. Absurd.

The addition of high-end tax brackets would bring in tens of billions of dollars per year much of which should be used to reduce the deficit, but some of which should be devoted to another initiative that could prove invaluable to West Virginia and other economically depressed regions of the country.

William Grimes, former CEO of ESPN, the sports network, and a native West Virginian, made a fascinating proposal a few years ago during a commencement speech at his alma mater, West Virginia Wesleyan College. Observing West Virginia’s withering private sector economy and the state’s comparative lack of venture capital and other assets that are necessary to attract entrepreneurs, Grimes proposed that the state establish a venture capital fund to provide necessary incentives and means for West Virginia entrepreneurs to start businesses and for out-of-state entrepreneurs to locate start-ups here.

Funds from the new tax brackets used in this way could reignite private sector entrepreneurial activity in West Virginia and in economically distressed places nationwide.

The combination of these policies would have the beneficial effect of reducing deficits, stimulating the private sector economy, and doing so for families and in places where stimulus is most needed. We can only hope that in the upcoming consideration of renewal of the Bush tax cuts and future tax bills our representatives will fight for these kinds of tax policies rather than those that literally put West Virginia last.

Our Better Half

2010-08-13T13:16:00.000-04:00

They are apparitions that haunt us in the vacant buildings of Wheeling and Huntington and in the empty, tumble-down houses that line the hollers of southern West Virginia coal fields. They are two million souls who were or would have been West Virginians, but who instead were sucked from the state by social and economic forces that for decades have made a mockery of the efforts of politicians and business leaders to stem the flow.

The rush of emigration is so great and so sustained that it seems natural, endemic and as uncontrollable as the weather, although it is not much discussed. It should be however, because emigration defines and shapes the economy, culture, and politics of West Virginia more than politicians, more than the coal industry, and more than the Appalachian Mountains themselves.

The numbers only begin to tell the story. In 1950 there were over two million West Virginians. One out of every 76 Americans was a West Virginian. Since then America’s population has nearly doubled to over 300 million, but the number of West Virginians has actually declined by 10%. So now, instead of representing one in 76 Americans, West Virginians are only one in one hundred and seventy-six. Had West Virginia’s population grown in proportion to that of the nation as a whole there would be more than 4 million of us today, but there are only 1.8 million. Where did the others go? And, more importantly, what have they taken with them?

Demographers will tell you that West Virginia is the domestic equivalent of Mexico except for the fact that the immigrants we export are legal. Of course, that doesn’t mean they are any more welcome.

In the 1960’s and 70’s it was commonplace to hear Ohio politicians complain that West Virginia was exporting its problems north. In fact, the southern suburbs of Columbus, the state capital, sometimes felt and still feel more heavily populated by refugees from West Virginia and Kentucky than by native-born Ohioans. The same is true of Charlotte, which has traditionally had the same magnetic pull on young people in the southern part of West Virginia that Columbus had on the northern part.

But, politicians in those states were wrong to complain because we weren’t exporting our problems. We were exporting our future, our best and brightest. The simple fact is that, collectively speaking, our emigrants are better than those of us who stay behind. They are younger, better educated, and more entrepreneurial. Their emigration constitutes a brain drain on a scale typical of third world countries and the consequences range from the absurd to the devastating.

It has become routine to hear our Governor happily announce that West Virginia’s unemployment rate is at or below the national average. What he neglects to point out is the reason. Our success owes not to our performance in creating jobs, but rather to our astonishing ability to eliminate workers. We do it in three ways.
First, we send those who want to work but can’t find jobs in West Virginia to other states. Second, some of those who remain simply stop looking for work and are, therefore, not counted among the unemployed. And third, we are the nation’s leader by a wide margin in the percent of workers who have been designated as disabled and, consequently, not employable.

These trends have reached absurd proportions in the coal fields of southern West Virginia. The populations in Logan and Mingo Counties are less than half of what they were in 1950. And the population of McDowell County has declined by an almost incomprehensible three-quarters. Of adults who remain in McDowell County, half are officially disabled. Today there are only 5,500 jobs in McDowell County to support a population of 27,000. Once upon a time the population there was nearly 100,000.

But what the numbers fail to communicate is the damage done to families and to the fabric of life in our communities. When populations go into decline the corresponding decline for some enterprises is merely proportional.

A community that has three gas stations may end up with only two. But social, cultural, and entertainment enterprises often vanish altogether and that, combined with an absence of educated and able workers not only impoverishes life in those communities, but removes any incentive that individual or corporate entrepreneurs might have to locate there. When that happens, communities go into an economic death spiral such as the one that has left McDowell County with almost no private sector economy.

There are a few signs that state political leaders are beginning to recognize emigration and the brain drain as problems. A bill in the statehouse that would provide tax incentives to college graduates who remain in-state. However, it will only be effective if college graduates have jobs to go to. That will require new thinking within state government in the areas of taxation and economic development to focus less on extractive industries, light manufacturing, and other traditional businesses and more on providing supportive environments and funding for small start-ups and the entrepreneurial self-employed whose services can be sold to out-of-state clients.

West Virginia has few such businesses now, so there is little political pressure within the state to develop such policies. Politicians are more inclined to do things that benefit existing constituents rather than hypothetical ones. But, for West Virginia to succeed, that will have to change.

An Examined Life (For publication July 16, 2010)

2010-07-05T21:39:00.000-04:00

Robert Byrd was born into a world of hard-edged racism, anti-intellectualism, and the fundamentalist penchant for seeing doubt as weakness and compromise as surrender. To this he added a bounding ambition and emerged an utterly assured, reflexively hawkish politician for whom hubris might have been just a water-stop on the way to megalomania.

But, fate intervened. While pursuing an education he hoped would make him more electable, Byrd, perhaps inadvertently, paid attention to what was being taught. So, on March 19, 2003 an older and different Byrd, seasoned by decades of experience and animated by an astonishing commitment to unflinching self-examination, spoke these words in the United States Senate as the nation plunged toward war in Iraq.

“I believe in this beautiful country. I have studied its roots and gloried in the wisdom of its magnificent Constitution. I have marveled at the wisdom of its founders and framers. Generation after generation of Americans has understood the lofty ideals that underlie our great Republic. I have been inspired by the story of their sacrifice and their strength. But, today I weep for my country. I have watched the events of recent months with a heavy, heavy heart. No more is the image of America one of strong, yet benevolent peacekeeper. The image of America has changed. Around the globe, our friends mistrust us, our word is disputed, our intentions are questioned.’

‘Instead of reasoning with those with whom we disagree, we demand obedience or threaten recrimination. Instead of isolating Saddam Hussein, we seem to have isolated ourselves. We proclaim a new doctrine of preemption which is understood by few and feared by many. We say that the United States has the right to turn its firepower on any corner of the globe which might be suspect in the war on terrorism. We assert that right without the sanction of any international body. As a result, the world has become a much more dangerous place.’

‘We flaunt our superpower status with arrogance. We treat UN Security Council members like ingrates who offend our princely dignity by lifting their heads from the carpet. Valuable alliances are split.’

‘After war has ended, the United States will have to rebuild much more than the country of Iraq. We will have to rebuild America’s image around the globe.’

‘The case this Administration tries to make to justify its fixation with war is tainted by charges of falsified documents and circumstantial evidence. We cannot convince the world of the necessity of this war for one simple reason. This is a war of choice.’

‘There is no credible information to connect Saddam Hussein to 9/11. The twin towers fell because a world-wide terrorist group, Al Qaeda . . . .’

‘The brutality seen on September 11th and in other terrorist attacks we have witnessed around the globe are the violent and desperate efforts by extremists to stop the daily encroachment of western values upon their cultures. That is what we fight. . . . .’

‘But, this Administration has directed all of the anger, fear, and grief which emerged from the ashes of the twin towers and the twisted metal of the Pentagon towards a tangible villain, one we can see and hate and attack. And villain he is. But, he is the wrong villain. And this is the wrong war. . .’

‘There is a pervasive sense of rush and risk and too many questions unanswered. How long will we be in Iraq? What will be the cost? What is the ultimate mission? How great is the danger at home?’

‘A pall has fallen over the Senate Chamber. We avoid our solemn duty to debate the one topic on the minds of all Americans, even while scores of thousands of our sons and daughters faithfully do their duty in Iraq.’

‘What is happening to this country? When did we become a nation which ignores and berates our friends? When did we decide to risk undermining international order by adopting a radical and doctrinaire approach to using our awesome military might? How can we abandon diplomatic efforts when the turmoil in the world cries out for diplomacy?’

‘Why can this President not seem to see that America’s true power lies not in its will to intimidate, but in its ability to inspire?’

‘War appears inevitable. But, I continue to hope that the cloud will lift. Saddam will yet turn tail and run. Perhaps reason will somehow still prevail. I along with millions of Americans will pray for the safety of our troops, for the innocent civilians in Iraq, and for the security of our homeland. May God continue to bless the United States of America in the troubled days ahead, and may we somehow recapture the vision which for the present eludes us.”

He counseled humility when we would brook no doubt, dissent when we demanded conformity and restraint when we craved the cathartic orgy of “shock and awe”. And in every particular Senator Byrd was proven right and the President, the Vice President, 97 senators, and the majority of Americans were proven wrong.

He was courageous, prescient, and articulated American values even as they evaporated. His words will forever belie the excuse that “everyone believed Saddam Hussein had weapons of mass destruction” and will stand as a monument to self-examination and those with the courage to practice it.

Giving Ideology a Holiday (For publication June 11, 2010)

2010-06-04T08:09:00.000-04:00

In “Civil Disobedience” Henry David Thoreau gave us some of the most frequently quoted lines in political discourse.

He wrote, "That government is best which governs least” and, rethinking the point, modified it to say, “That government is best which governs not at all and when men are prepared for it, that will be the kind of government which they will have.”

These lines are favorites because there’s something for everyone. Republicans and Libertarians love “That government is best which governs least”. Anarchists adore “That government is best which governs not at all”. And liberals see the wry, “and when men are prepared for it, that will be the kind of government which they will have” as a reminder that minimal government is not the means to a good society, but rather an end which is only produced after men become so virtuous they no longer need law and governance, a situation we haven’t yet attained.

Thoreau probably thought he was enunciating a single, coherent principle and would be astonished at the range of ideologies that make use of his words; a reminder of how malleable principles can be and how lazy ideology can make us.

Ideologues, whether Marxists, Christians, Libertarians, or Socialists, feeling possessed of one big truth often disregard smaller truths – those of history, economics, biology, and physics for instance. Libertarian and Republican Senate candidate Rand Paul of Kentucky recently demonstrated breathtaking unconcern for two centuries of racial strife when he blithely dismissed the need for civil rights laws based on his dogmatic belief that free markets inevitably wring parochialisms such as racism from commerce and, therefore, from our souls – history be damned.

So, if mutable principles and ideological myopia can produce such silliness, maybe they also explain why people sometimes support policies that history and economics suggest would not only be disastrous, but would harm them most of all.

I’m speaking of positions promoted on the web site of We The People of Jefferson County, a local Tea Party affiliate.

Take as an example opposition to healthcare reform. The Tea Party’s stand for the elimination of wasteful spending makes its defense of our traditional healthcare system quite mysterious because, whether measured by cost or outcomes, the US system has been the most expensive and least effective of any in the industrialized world.
In 2007 we spent $7,290 per person for healthcare, twice that of “socialized medicine” punching bags Canada, the United Kingdom, France, and Germany. Yet, those countries enjoy longer life spans and lower infant mortality than we do. Plus, they cover everyone.

If we were as efficient, the US would save a trillion dollars annually – enough to eliminate all budget deficits. Plus, we’d live longer. To rage against virtually any role for the federal government in healthcare can only be classified as a case of ideology trumping performance and it amounts to a defense of our right to be gouged.

Tea Party opposition to government regulation has a similarly self-destructive quality. The litany of recent disasters attributable to insufficient or non-existent government regulation is staggering. Since the 1980’s, the dawn of the privatization and deregulation era, we’ve endured successive fiascos starting with the Savings and Loan crisis, followed by Enron, and culminating in the housing market meltdown, which precipitated the near collapse of the financial system. In every case the losers have principally been the middle class.

Contrary to the dogma of free market purists, experience demonstrates that markets, while useful, are neither flawless nor self-correcting. You don’t have to be a socialist to recognize that markets are a tool to be used, not a god to be worshipped and that effective government regulation is an aide, not a barrier, to stability and prosperity.

Then, there are taxes about which the We The People web site uses terms such as tyrannical, confiscatory and redistributive. In fact, tax rates on the highest earners are at their lowest rate since 1931 except for a brief period from 1988 to 1992. And, those who campaign for elimination of Estate and Capital Gains taxes, must be unaware that these taxes have little or no impact on middle class Americans and that elimination can only result in increased budget deficits and/or increases in other taxes that are paid by the middle class.

Of course, that would just continue a pattern of wealth redistribution that, for the past two decades, has gone not from rich to poor, but from the poor and middle class to the rich. And, haven’t the results been great? Middle class families have been working harder for years for little or no increase in wealth and standard of living . . . and now the bottom has fallen out.

Under the circumstances it’s not surprising that many in the middle class, not just Tea Partiers, resent bailouts of banks and automobile companies and worry about increasing deficits. So, perhaps we can set ideology aside and consider the notion that best the way to prevent bailouts is to impose effective regulation that prevents individual commercial entities from becoming so large that their failure threatens the entire economy. And, while working to eliminate wasteful spending, a point on which we can all agree, let’s also consider that the last president to try to balance the federal budget during a recession was Herbert Hoover -- and we got the Great Depression.

A Rage Not Felt (for publication 5/14/2010)

2010-04-26T14:08:00.000-04:00

“In the big world the old people do be leaving things after them for their sons and children, but in this place it is the young men do be leaving things behind for them that do be old.”

So says a bereaved mother lamenting the loss of a son in John Synge’s play, “Riders to The Sea”. But, it’s a lament that could have been uttered by mothers of coal miners in Farmington, Sago, and most recently Montcoal where families lost the bet that a $20 an hour pay check could compensate for the ever-present risk of death.

It’s a gamble requiring a calculus familiar to those who wrestle with the paradox that the means by which they gain their livelihoods may also kill them. And make no mistake, all who enter the mines do the calculus.

At one time we all did because in nature sustenance always comes at the risk of death. It’s a measure of civilization’s progress that most of us are spared from that paradox. So, from the safety of our insulated lives, we watch with compassion but also curiosity the anguish of the Montcoal families whose plight is ancient and strange to us now. And, try as we might to be with them and support them, we know we are not of them and we are grateful.

Of course, miners are not the only ones who do the calculus. Others include regulators and mine owners among whom none is more accomplished than Don Blankenship, CEO of Massey Energy, owner of the Upper Big Branch mine. The fact that Massey’s stock price has not dropped catastrophically since the disaster is evidence of Blankenship’s acumen. He didn’t know the disaster would happen, but he knew it could and that it was cheaper to invest in liability insurance than in changes to the mine that might have prevented it.

Still, Blankenship can be forgiven for saying that nothing is more important than miner safety. Such statements are and are understood as expressions of sentiment rather than of fact. The question is whether Blankenship even shares the sentiment. It’s doubtful.

According to “The State Journal” the Mine Safety and Health Administration “issued 48 withdrawal orders in 2009 at the Upper Big Branch Mine for repeated significant and substantial violations that the mine operator either knew, or should have known, constituted a hazard.” Meanwhile, Massey mines were placed on potential “pattern-of-violation” status 13 times since 2007, more than one third of all such citations in the industry. But, what’s damning is Blankenship’s attitude toward enforcement of safety regulations. In 2007 Massey contested 97% of the major safety violations at the Upper Big Branch mine.

Finally there was the news conference at which Blankenship was asked about the implications of the Upper Big Branch disaster. Pivoting neatly on the graves of his dead employees, he used the occasion to bemoan the possibility of more federal regulation, something he self-assuredly asserted, “no one wants.”

No one? Really? Are we that helpless, that cowed? Would we hold harmless a company whose negligence may have caused miners’ deaths rather than risk the loss of jobs? Is our fear so reflexive that we’ve forgotten basic economics which teaches that, if the mine has value and we drive out Massey, a new owner will step forward to preserve jobs and almost certainly be more committed than Massey to safety since they could hardly be less so?

Sadly, the answer to these questions may be, yes. And the sadder truth is that some no longer have to suppress rage before acquiescing because they no longer feel rage at all . . . so conditioned have they become.

We are complicit in a system that often allows malefactors to “pass along to consumers” the costs of their misdeeds, which brings to mind Benjamin Franklin’s observation that those who give up liberty to obtain a little safety deserve neither. Isn't justice as precious as liberty and might not the same be said of it?

It’s an infuriating tradeoff in this day of populist outrage. But, even populism is strangely directed anymore. Ten years after deregulated energy markets produced the Enron meltdown that plunged thousands into financial ruin and two years after nearly unregulated financial markets destroyed wealth and jobs on a scale not seen since the Great Depression, the fear voiced by our most active populist group, the Tea Party movement, is not that there will be too little government regulation, but that there will be too much.

Of course, Blankenship did that calculus as well. He and fellow directors of the U. S. Chamber of Commerce donated a million dollars to the Tea Party movement among whose organizers is former Congressman Dick Armey who was a driving force behind both energy and financial deregulation and whose Institute for Policy Innovation received $200,000 from Enron.

Maybe that’s why at recent West Virginia Tea Party events, there wasn’t a sign condemning Blankenship or Massey. Quite the opposite, Blankenship is an invited speaker at Tea Party rallies.

So, as miners do the calculus they must every day, Tea Partiers can lash our President and other suspected socialists to a post and follow Don Blankenship and Dick Armey who will direct the formation of a circular firing squad before retreating to the safety of their corporate board rooms from where they will give the order to fire, aim being unimportant.

Of Incest & Authenticity (For publication April 16, 2010)

2010-04-03T16:31:00.000-04:00

“They are a curious and most native stock, the lanky men, the lost, forgotten seeds spilled from the first great wave-march toward the West and set to sprout by chance in the deep cracks of that hillbilly world of laurel hells . . . And if you yearn to meet your pioneers, you’ll find them there, the same men, inbred sons of inbred sires perhaps, but still the same . . . They are misfit and strange in our new day.”

Thus did Stephen Vincent Benet describe the people of Appalachia in his book-length poem, “John Brown’s Body” that won the Pulitzer Prize for literature in 1922.

We can be reasonably sure that West Virginia Governor Joe Manchin has never read this passage because, if he had, the campaign to rescind the Pulitzer Prize would be well underway.

There are few slights of Appalachia and West Virginia that don’t draw the Governor’s ire. His targets have included NBC television for contemplating a reality show called “The Real Beverly Hillbillies”, Abercrombie & Fitch for selling a T-shirt that featured a map of West Virginia and the slogan, “It’s all relative”, and even then-Vice President Dick Cheney who found himself in the Governor’s cross-hairs when he remarked that he had Cheneys on both sides of his family, "and we don't even live in West Virginia."

But, does any of it make any difference? Perhaps.

A few years ago the artistic director of a major theatre told me that, if I wanted my play, “Rain in The Hollows” (since retitled “Claudie Hukill”), to be produced in New York, I should change the play’s setting from the hollers of West Virginia to the west coast of Ireland. He even offered suggestions about how the play’s dialogue might be tweaked . . . no major revisions, mind you . . . to lend it the necessary “authenticity”.

What the artistic director didn’t explain was why a change in setting unaccompanied by any change in the play’s substance should make theaters and audiences more receptive. On reflection, it’s fairly clear that he felt “Rain in The Hollows”, a play that employs magical realism to explore the nuances of family relationships, would be more “accessible” to audiences if it were set in Ireland.

Why should that be the case? One answer is that Ireland, unlike West Virginia, has produced a stream of playwrights– Synge, O’Casey, Friel, McPherson, and others – who have written highly nuanced works in this vein, so perhaps audience members are able to relate more readily to the “Irish peasant experience” than they are to the less frequently staged, “Appalachian mountain experience”.

That’s the polite way to describe it. There is, however, a darker interpretation that goes like this. Audiences either can’t or don’t want to identify with characters whose lives they associate with ignorance, provincialism, and bigotry. In other words, audience members might not be able to get past their caricatured notions of Appalachian hill people to find their underlying shared humanity.

Whichever interpretation is more accurate, the episode reminds us that the mere mention of place can evoke waves of emotions, images, and preconceptions, a phenomenon that good playwrights use to imbue their plays with color, texture, and context without having devoting pages of dialogue to tedious description. That’s a good thing, but it’s a good thing that can have a distressing consequence.

Calling upon preconceptions also means calling upon prejudices. And, by willfully employing audiences’ prejudices, playwrights, whether intentionally or unintentionally, validate them.

An example is the frequently produced play, “The Spitfire Grill”, in which a young woman recently released from prison travels to a remote lake town in Wisconsin to start over. When we hear that the crime for which she was imprisoned was murder, we are also told that she killed her father at whose hands she was the victim of incest.

Normally this kind of revelation is the proverbial hand grenade that a playwright can’t simply roll on to the stage and leave unexploded. INCEST! My God! The audience wants to know.

But, if that’s not really what the play is about and the playwright needs to move on, what does he do? The playwrights of “The Spitfire Grill” (James Valcq and Fred Alley) simply added a line explaining that the young woman is from West Virginia.

Why does that simple factoid bring closure to the issue of incest . . . defuse the hand grenade so to speak? Because incest is what audiences expect to happen in West Virginia. No further explanation is required and, in fact, the playwrights give us none. Would further explanation have been required had the young woman hailed from New York, California, Florida, or other more presumably cosmopolitan places? Certainly.

I won’t go into statistics showing that incest is no more prevalent in West Virginia than it is elsewhere, but will merely observe that the writers of THE SPITFIRE GRILL weren’t deterred by statistics either. But, does this tiny exploitation of audience members’ preconceptions do any damage? I don’t know, but I wonder if THE SPITFIRE GRILL might have been seen by a woman I met in New York recently who, upon being told that I live in West Virginia, looked at me with furrowed brow and asked plaintively, “Why?”

A Disease of The Soul (For publication 3/12/2010)

2010-03-04T07:56:00.000-05:00

They are called “malady maps” – maps of the United States that use shading to illustrate the prevalence by state of crime, disease, natural disasters and afflictions of every type. They are human misery measured in degrees of blackness, with pure black signifying the most afflicted. And, for a bewildering litany of maladies, black is the color of that little armless frog that represents West Virginia.

Diabetes, heart disease, high blood pressure, high cholesterol, drug use (pain killers primarily), tobacco consumption and, yes, tooth loss are conditions for which West Virginia is a national leader. Among the fifty states and the District of Columbia we rank 46th in life expectancy, five years behind Hawaii. Imagine that. Five extra years, living in Hawaii. Some people definitely have it better.

And it’s not as though the brevity of our lives is compensated for by their quality. According to the Census Bureau West Virginians between the ages of 22 and 64 are the most likely in the nation to be disabled and the margin of our lead over second-place Mississippi is a staggering four percentage points.

In one sense it’s not surprising that a state with a high prevalence for any one of these medical conditions should also rank highly for the others since many of them are biologically related. But they bear one other distressing relationship. They are all in varying degrees conditions of choice -- conditions whose presence or severity is caused or exacerbated by the ways in which we choose to live.

I say this as a matter of fact – not to scold or nag any more than we scold or nag family members and friends even as we watch them contribute to their own destruction. Of course, we worry about them and sometimes may even risk a comment. But, most of the time we watch in respectful silence accepting “Dad” for who he is, reasoning that he knows the implications of his actions and it’s his life to live . . . or not live, as he chooses.

Still, we must ask why we West Virginians are demonstrably less interested in living than other Americans.

Demographic factors partially explain the phenomenon. Our population is the oldest in the nation, a situation attributable to a decades-long exodus of young adults – and not just any young adults. We lose those who seek educational and economic opportunities they cannot find here – in other words, the most enterprising, entrepreneurial, and healthy among us.

Attempts are being made to stop the exodus. A bill currently in the state Senate would try to entice college graduates to stay in state by reducing their taxes. But, this column isn’t about those who leave. They will take care of themselves. It’s about those of us who stay.

As the nation’s poorest state, any explanation of our plight must begin with the issue of poverty and what comes with poverty -- an endemic absence of aspiration or belief that we can control or significantly alter our destinies. It’s a disease called fatalism and we suffer from it prodigiously. You don’t need a survey to recognize that poverty wearies many West Virginians into surrendering to circumstances even as we anesthetize ourselves with pain killers, cigarettes, and Ho Ho’s . . . sometimes the only luxuries we can afford.

Inculcation in that barren attitude begins at a young age. At first it’s almost romantic. As teenagers an absence of expectations allows us to be easy and carefree. But, by middle age it looks more like carelessness and, by old age, it morphs imperceptibly into powerlessness and resignation – the disease of the soul.

In search of an antidote, I turned to a friend who grapples with the disease daily. She is an elementary school teacher who retains her passion after years of working with children who come from difficult circumstances.

She told me about two of her students, a boy and a girl who show promise. But, when I asked about their futures, her face darkened. So, I asked what it would take to nurture their promise. What enables some kids from challenging backgrounds to transcend their circumstances while others are consumed by them?

In answer my friend smiled wanly and suggested without much confidence that they might be aided by the presence of an adult who has hope and aspiration for them – a parent, a relative, a friend . . . herself? But, she is clearly someone who has tried many times to share her hope only to see it fail to take hold or worse, to take hold briefly and then be gradually destroyed by the corrosive drip of day to day life.

Still, she is a romantic for whom hope and aspiration are easy to expend even when they are dashed, as they regularly are, because they are richly, outrageously rewarded when they are realized. And, though poor, wouldn’t we be better and happier having had hopes that are crushed or frustrated, than to have never had them or to have never tried? Can’t we always carry hope, especially for our children?

Oscar Wilde said, “We are all in the gutter, but some of us are looking at the stars.” Those who are looking at the stars may suffer from many maladies, but not from the disease of the soul.

Our "Negro Problem" (for publication 2/12/10)

2010-01-21T20:56:00.000-05:00

Senator Hilary Clinton was desperate prior to West Virginia’s 2008 Democratic primary. A surging Barack Obama had erased Clinton’s delegate lead and shattered the aura of inevitability that surrounded her candidacy. Trying to build a fire-wall, Clinton turned to West Virginia.

Some commentators seized upon Appalachia’s reputation for ignorance and poverty and castigated Clinton’s strategy as a cynical appeal to the uninformed. “The electorate’s lowest common denominator” one pundit called Appalachian voters. Others suggested a darker appeal to racism which was thought to pervade West Virginia. So, when Clinton won with 67% of the vote, the suspicion was confirmed in the eyes of some.

“West Virginia voters revealed they are the most racist in the country”, John K. Wilson said flatly in The Huffington Post.

But, if Wilson was right at the time, then white West Virginians experienced a miraculous transformation because in the general election they gave Democratic nominee Barack Obama more than 40% of their votes, a figure that exceeded Obama’s share of white votes in twenty other states including two, Virginia and North Carolina, that he won. Were West Virginia’s black population proportional to its size nationally, Obama might have won here as well.

While the election results exposed as myth Wilson’s claims of rampant racism, stereotypes and exaggerations such as his, even grievous ones, require some basis in fact. Those facts are supplied by Dr. Henry Louis Gates Jr. in “Colored People”, a memoir of his childhood in Piedmont, West Virginia.

Gates, a Harvard University professor, has written numerous books and hosts a PBS television series, but he’s probably best known for last year’s confrontation with a white Cambridge, Massachusetts policeman that ended up being resolved with President Obama over beers on the White House lawn.

Gates was born in 1950 when West Virginia was racially bifurcated. Restaurants, theatres, jobs, and public transportation were segregated as was the educational system. After the Supreme Court’s 1954 “Brown vs. The Board of Education” decision, West Virginia University waited until 1962 to welcome its first black varsity athlete.

Gates notes the collective impact of institutional racism and he discusses the more subtle forms of discrimination that continued after integration and to this day. But the power of his narrative is in stories about individuals and relationships damaged by a forced separateness that bred mistrust and misunderstanding, truncated friendships, smothered aspirations, and kindled a corrosive resentment on both sides of the color line.

It’s stunning to think that this is the lived experience of people only in their 50’s and, while racism is hardly extinct, remarkable that there has been so much improvement. The point was driven home when, not long after reading “Colored People”, I visited the National Civil Rights Museum at the Lorraine Motel in Memphis Tennessee, site of Dr. Martin Luther King Junior’s assassination.

The exhibits are supplemented by a succession of closed circuit TV screens that run a continuous loop of contemporaneous newscasts ensuring that Bull Connor will turn dogs and fire hoses on peaceful demonstrators from now until eternity.

Amid those images of dignity and chaos there appeared a young Senator Robert Byrd whose luscious pompadour was even then three years out of style in New York and Washington, but not in Charleston and not at the WWVA Jamboree. His softly rounded nose and chin defeated the chiseled cracker look to which he aspired, but the pompadour was flawless, a signal as certain as Sarah Palin’s dropped “g’s” that its owner was a tribune of the common man . . . the common white man.

Byrd was a former Klansman and backslapping raconteur of the Dixiecrat persuasion. On screen he was playing the brooding Cassandra, warning of the sinister Communist hand lurking behind the trouble-making “coloreds”.

Suddenly the screen cut to another image and Byrd was gone. I emerged from the museum wondering if it had been a dream and how such a man could have evolved to become what some now call “the conscience of the United States Senate”. And how could we white West Virginians have evolved from enthusiastic segregationists to become an electorate that gave a black presidential candidate more than 40% of our votes?

One of Gates’ stories suggests an explanation. His older brother, Rocky, then an eighth grader, had apparently qualified to become the first black student to win a Golden Horseshoe Award . . . the state's Nobel Prize for achievement in West Virginia history. But, Rocky was denied not by legal discrimination, which was then past, but by the personal prejudice of a school board member. The injustice was reported to Gates’ father by another board member who was moved to remorse by his conscience and too much to drink.

It seems fitting, even necessary, that change began in such small, squalid ways and gradually evolved into something greater and more principled.

Robert Byrd has said that his greatest regret was his vote against the 1964 Civil Rights Act. He has since compensated mightily. Perhaps by voting for a black presidential candidate at nearly the rate of white voters nationwide and possibly in proportion to the way we would have voted for any Democratic candidate, white West Virginians have acknowledged our regret. And we and our senator, whose pompadour remains flawless, can know we have grown.

THE STATE OF MY STATE (for publication 1/15/10)

2010-01-05T23:49:00.000-05:00

I once read that between the years 1900 and 2000 three-quarters of West Virginia towns vanished -- ceased to exist. Most were probably remote coal camps abandoned when the mines that sustained them were exhausted. We’ve seen photographs of the refugees: gaunt men, women, and children dressed in smudged and tattered clothing, standing in front of wood shacks, looking doubtfully at a stranger who inexplicably insists on taking a picture. And from a distance of decades we thank God their unhappiness is only a memory . . . except that it’s not.

It’s true that much of the physical pain of poverty has been mitigated, so there aren’t as many heart-rending pictures. But the absence of opportunity and the accompanying loss of security and hope are still very much with us in West Virginia as is the resulting abandonment of communities and of the state by those who must concern themselves more with the future than with the past.

The statistics are stunning. West Virginia’s largest cities – Charleston, Huntington, and Wheeling – have lost nearly half of their populations in recent decades. The same trend applies in varying degrees to smaller cities. And West Virginia’s coal fields have also emptied as an industry that once employed more than 120,000 now employs fewer than 25,000.

Today West Virginia’s economic map consists of just three islands of prosperity amid an ocean of decline. The three counties forming the hook of the eastern panhandle are one island. Monongalia County, home of Morgantown and West Virginia University, is another. And Putnam County, wedged between Charleston and Huntington, is the third. These are the only counties out of fifty-five to experience population growth in this decade.

This picture of devastation may seem surprising because, as the current economic crisis rumbles through the country, political leaders boast that West Virginia has avoided much of the damage inflicted on other states. Personal incomes and employment have remained fairly stable as have home values except in a few areas and, although the state faces a $120 million deficit next year and mounting deficits in later years, that is mild compared to the struggles of other states. But, the bad news is that West Virginia’s resilience is best explained by the adage, “When you haven’t risen far, you don’t have far to fall.”

Personal incomes have remained stable because our population is the oldest, poorest, and most disabled in the nation, which results in a disproportionately large share of our incomes deriving not from work, but from entitlements that are unaffected by the recession. Much state revenue comes from transfer payments and coal severance taxes, which are also less affected. Finally, West Virginia’s housing market was depressed before the recession, so there were few new mortgages created during the period when most of the famously flawed lending practices took place.

But, while these factors insulate West Virginia against the immediate scourge, they do nothing about the more severe long-term problem. And, because no one gets rich from entitlements, to the degree West Virginia is spared from the current crisis, we’re also likely to be spared from the recovery.

If the direness of this portrayal seems out of kilter with what we usually hear, it’s because the media tend to focus on the present and recent past while the dynamics of degradation at work in West Virginia are gradual and epochal. Another is that politicians often emphasize the optimistic and anecdotal, particularly if they fear that the forces responsible for devastation transcend government’s ability to counteract them. But, whatever the reasons, a failure to grasp the severity and nature of West Virginia’s economic decline contributes to popular support for policies that would worsen it.

In the last twenty years the nation has seen a redistribution of wealth from middle and lower class households, of which West Virginia has many, to wealthy households, of which we have few. The Bush tax cuts delivered to West Virginians only 60% of the savings delivered to other Americans. Other trickle-down proposals popular among conservative populists, such as eliminating the capital gains tax and the Federal estate tax or “death tax, would follow the same pattern. West Virginians are among the least affected by these taxes and, consequently, would see the least benefit from their repeal. In fact, the death tax is almost comically irrelevant in West Virginia where it applied to only 183 households in 2008.

Repealing or cutting progressive taxes such as these would produce a “catch-22” for West Virginia. If the cuts cause deficits to grow, they must be funded by remaining taxes of which West Virginians pay a greater share. If, on the other hand, deficits are offset by spending cuts, those cuts almost certainly must come from entitlement programs and transfer payments on which West Virginians depend more than other Americans. Finally, even if the cuts were to fulfill the supply-side fantasy by becoming self-financing, nearly all of the economic growth would be realized elsewhere leaving West Virginia still farther behind.

Solutions to West Virginia’s economic crisis are elusive, but surely we must begin by first recognizing the nature and severity of the crisis and then by avoiding tax policies that would do further harm.

40th Anniversary of Farmington #9

2008-11-20T08:42:00.000-05:00

As measured by the number of people killed, West Virginia is the scene of four of the ten worst industrial disasters in US history, a remarkable record for a state whose population is smaller than that of Brooklyn, NY.

The worst disaster in both West Virginia and US history, The Hawk’s Nest Incident of 1927, killed more than 700 men who were digging a tunnel through silica-laden rock for a hydroelectric project. Workers wore no face masks and those who survived the project did so with fiber-encrusted lungs that crippled and eventually killed them.

The Monongah mine explosion of 1907 killed 361 miners and the Buffalo Creek Flood of 1972 killed 125 people when a coal company’s rain-saturated earthen dam burst and flooded a hollow destroying a succession of towns.

On this day in 1968, explosions at Consolidation Coal Company’s Farmington #9 mine took 78 lives, fewer than the other disasters, but with far-reaching consequences. Farmington was the first major industrial disaster to take place during the “media age” and the events were broadcast live around the world as families and TV crews maintained a days-long vigil in the hope that some of the 78 men trapped underground could be saved.

None were and nineteen were permanently entombed when the decision was made ten days after the first explosion to seal the mine. But, by putting a human face on what otherwise would have been mere statistics, Farmington #9 led to the enactment of the first national mine safety legislation.

Today it’s unlikely that the death tolls achieved in those disasters will again be equaled. Whether we’ve become more humane or merely more intimidated by the greater financial liability associated with negligent death, the safeguards against such accidents are considerably greater now.

In hindsight, it’s stunning how little compensation or consideration was accorded the families of the victims of these disasters. The widows of Farmington accepted payments of $10,000 each from Consolidation Coal, which, even when adjusted for inflation, is a pittance compared to the average $2.1 million given to families of the 9/11 victims.

West Virginia Public Radio and National Public Radio have two excellent reports on the Farmington #9 disaster. The first, aired in January 2006. The second, which aired just yesterday, provides not only a retrospective, but also reveals that a memo has been discovered that suggests the deaths of the miners may have been the result of an intentionally disabled alarm.

Of Incest and Authenticity

2008-11-08T15:31:00.000-05:00

A few years ago the artistic director of a major theatre told me that, if I wanted my play, RAIN IN THE HOLLOWS (since retitled CLAUDIE HUKILL), to be produced in New York, I should change the play’s setting from the hollers of West Virginia to the west coast of Ireland. He even offered suggestions about how the play’s dialogue might be tweaked . . . no major revisions, mind you . . . to lend it the necessary “authenticity”.

What the artistic director was less clear about was why a change in setting unaccompanied by any change in the play’s substance should make theaters and presumably their audiences more receptive. On reflection, I think it’s fairly clear that he felt RAIN IN THE HOLLOWS, a play that employs magical realism to explore the nuances of family relationships, would be more “accessible” to audiences if it were set in Ireland.

Why should that be the case? Well, Ireland unlike West Virginia has produced a stream of playwrights over the last century – Synge, O’Casey, Friel, McPherson, and others – who have written highly nuanced works in this vein, so perhaps audience members, although most of them have probably never set foot in Ireland, are able to relate more readily to the “Irish peasant experience” than they are to the equally distant, but rarely staged, “Appalachian mountain experience”.

That’s the polite way to describe it. There is, however, a darker interpretation that goes like this. Audiences either can’t or don’t want to identify with characters whose lives, which they associate with ignorance, provincialism, and bigotry, they look down upon. In other words, audience members might not be able to get past their caricatured notions of Appalachian hill people to find their underlying shared humanity.

Whichever interpretation is more accurate, the episode reminds us that the mere mention of place can evoke in audiences waves of emotions, images, and preconceptions . . . a phenomenon that good playwrights use to imbue their plays with color, texture, and context without having to devote pages of dialogue to tedious description – what playwrights call “exposition”. That’s a good thing, but it’s a good thing that can have a distressing consequence.

Calling upon peoples’ preconceptions also means calling upon their prejudices. In fact, by willfully employing audiences’ prejudices, playwrights, whether intentionally or unintentionally, validate them. An example is seen in the frequently produced play, THE SPITFIRE GRILL, in which a young woman recently released from prison travels to a remote lake town in Northern Wisconsin to start over. When we hear that the crime for which she was briefly imprisoned was murder, we are also told that she killed her own father at whose hands she was the victim of incest.

Normally this kind of revelation is, as my mentor and fellow playwright Ernie Joselovitz would say, a hand grenade that a playwright can’t simply roll out in the middle of the stage and leave unexploded. INCEST! My God! The audience wants to know about it. But, if that’s not really what the play is about and the playwright needs to get off the topic and move on, what does he do? The playwrights of THE SPITFIRE GRILL (James Valcq and Fred Alley) add a line explaining that the young woman is from West Virginia.

Why does that simple piece of information bring closure to the issue of incest . . . defuse the hand grenade so to speak? Because incest is what audiences expect to happen in West Virginia. No further explanation required and, in fact, the playwrights give us none. Would further explanation have been required had the young woman hailed from New York, California, Florida, or other more presumably cosmopolitan places? Certainly.

I won’t go into statistics showing that incest is no more prevalent in West Virginia than it is in other places, but will merely observe that the writers of THE SPITFIRE GRILL didn’t feel compelled to look at the statistics either before dropping this little tidbit in the play. But, does this tiny exploitation of the preconceptions that audience members hold about West Virginia really do any damage? I don’t know, but I do wonder if THE SPITFIRE GRILL might have been seen by a woman I met in New York recently who, upon being told that I live in West Virginia, casually asked, “Why?”