Lost On The Shore

Don't Worry About the Slots...Yet

 
There's been a lot of public hand-wringing and breast-beating over the small number of bids received to operate slot machines in Maryland - only a total of six bids were received for the five possible sites.  Two of the bids came without the required deposit, suggesting that they might be less than serious and probably will be disqualified.  Many have said that the slots legislation needs to be changed already, before the first machine is in place or any bid has been accepted, to give the potential operators a bigger cut.

I say that's a bunch of rubbish.  In case anyone hasn't noticed, the economy is not doing too well these days and credit is tight.  It can't be easy for some to come up with the required deposit.  Further, there are still uncertainties about some of the sites that need to be cleared up.  But these problems will be solved eventually - the economy will improve, credit will loosen and the issues around a couple of the sites will be resolved.  There's absolutely no need to panic and start throwing more money at the potential slots operators.

We need to look no further than right here on the Shore where William Rickman, arguably the most experienced slots operator among all the bidders, submitted a bid to place 800 machines at his Ocean Downs race track.  Mr. Rickman, who is the principal in the Delaware Park slots operation just up the road is experienced, understands the cost and income from operating slot machines and has chosen to put up the required money, even given the relatively small share of proceeds that Maryland allocates to operators.  If he can do it down here, other operators can do it at the other sites.  It will just be a matter of time.

Similarly, Cordish, who has some experience in the business, submitted what seems to be a viable bid for the Anne Arundel County site.  It looks as though the bids for the Cecil County and the Baltimore City sites are also good.  All of the bids, except for Cordish's are for fewer slots than the legislation allows, but give them time and eventually the'll reach the cap. 

So don't panic and start throwing money at the slots operators.  They don't need it. 

[I've been offline for a while due to a combination of events.  I hope to get back to posting regularly soon!]

Stimulus That Will Benefit Us

It's good to hear that President-Elect Obama is planning on more fiscal stimulus for the American economy and even better to hear that he plans to stimulate the economy by investing in infrastructure rather than just sending out checks to everyone.  We have been ignoring our infrastructure requirements in this country for some time and the results are definitely showing.  So, since I know Barack is reading this blog, here are some suggestions:

High Speed Rail Most other industrialized countries are far ahead of us here.  Japan has been running their Shinkansen 'bullet trains' since 1964.  France began working on their TGV (train à grande vitesse, "high-speed train") in 1976 and the Paris-Lyon line opened in 1981.  The phenomenal success of the TGV has encouraged the French government to build six additional lines and other countries in Europe have built their own high speed networks - the Thalys in Germany, Belgium and the Netherlands, Eurostar linking Britain to France and Belgium as well as systems in Spain, Italy, Sweden and Norway.  High-speed rail networks are also being built in China, Taiwan and South Korea.

Here in the United States we don't have true high speed rail.  The Acela trains in the Northeast Corridor (Washington-New York-Boston) are called 'high-speed', but track conditions limit them to a top speed of about 125 mph rather than the 200 mph common on true high speed rail.

High speed rail doesn't make sense for much of the United states - the distances are too great to compete with air travel.  However, in the northeast corridor, the Chicago area and possibly the Dallas/Fort Worth/Houston area, high speed rail will produce city-to-city travel times that are considerably less than comparable air service while producing less pollution and being less subject to weather delays.  As an added bonus, the elimination of dozens of flights between Washington, Baltimore, Philadelphia, Boston and New York will do much to reduce air travel delays in the country by reducing congestion in the New York City area.

Construction of these lines will generate thousand of jobs and the construction of the trainsets, signalling equipment and other ancillary requirements will generate thousands more. A $50 billion commitment here will get us off to a good start. 

School Construction States and local jurisdictions have been falling behind on funding the expansion and replacement of existing school buildings.  Many existing school buildings were built in the 1950s and 1960s and need either replacement or substantial renovation.  Further, existing schools are being stretched well beyond capacity.  Temporary classroom buildings are a common sight throughout the country.  Finally, most of our existing schools do not meet today's technological requirements. 

The need is tremendous.  In 1995, the General Accounting Office estimated the backlog of school construction needs at $112 billion.  In 1999, the Education Department estimated the cost at $127 billion.  The National Education Association in 2002 came up with a number of $322 billion including technology improvements.  There's no doubt the backlog has grown.  Right here in my local jurisdiction of 50,000 people there are more than $100 million in unmet needs.  The State of New Jersey estimates a $30 billion backlog in that state alone. 

An investment of $400 billion will go a long way toward eliminating the backlog.  Further it will provide work for thousands of smaller construction firms around the country and for hundreds of thousands of construction workers who are out of work due to the housing slump.  As a bonus, the Department of Energy estimates that such a program would reduce energy costs for schools by some $2 billion a year.

Roads and Bridges We haven't done a good job of maintaining our road system let alone pay for the expansion needed to meet current demand.  Tens of thousands of bridges are deficient, pavement is crumbling all around the country and huge traffic backups are way of life.  A new commitment of $500 billion in Federal money will make a major dent in the backlog here, will stimulate the construction industry all across the country and put many Americans back to work.  There's no reason to delay here.

Mass Transit Along with expanded spending on roads and bridges must come renewed investment into mass transit.  We need our cities to work efficiently.  Like it or not, the vast majority of economic activity in the United States is generated in cities, not in rural areas.  An investment of $100 billion now will generate huge dividends in the future in terms of increased efficiency and lower energy use. In addition, of course, we'll see tens of thosuands of new jobs created. 

Let's start now.  We have no time to lose.

[The photo is of a Eurostar and a Thalys train in the Gare du Nord in Paris]

Sidetracked

Well, it looks as thought the bid by the Club For Growth to put their man, Andy Harris, into Congress, may have been sidetracked.  After the first round of counting absentee ballots, Democrat Frank Kratovil's lead has increased to 2,003 votes.  Tomorrow the election boards will look at provisional ballots and then go on to count the remaining absentee ballots.  At this point it doesn't appear as though there are enough of these to help Andy Harris overcome Kratovil's lead.  Indeed, the Associated Press has called the race for Kratovil.

The First District was designed to be a Republican District.  Before this election, the Republicans had held the seat for 18 years.  A large majority of state legislative seats in the District are held by Republicans.  So how did Kratovil manage to eke out a victory?  Everyone has their opinion, of course.  Michael Swartz over at Monoblogue has this interesting take on the election.  I see four factors that led to Kratovil's apparent victory.

First, of course, is the defeat of Wayne Gilchrest in the primary.  Gilchrest was a moderate Republican who was much loved by many on The Shore, Republican and Democrat alike.  His defeat in the primary but the more right-wing Andy Harris with substantial out-of-state financial support was disheartening to many Eastern Shore voters and opened the door to a Democratic challenge.  

Second is the candidacy of Barrack Obama.  While John McCain handily won the Eastern Shore jurisdictions, Obama's candidacy bought a surge of new voters and bought many to the polls that may not have voted otherwise.  It appears that a large number of African-American voters, in particular, may have provided the margin to help push Kratovil over the top.

Kratovil was able to compete financially with Harris.  With Gilchrest out of the race, Kratovil was able to attract funds from the DCCC and other national sources to offset the resources that Harris was able to get from out of state.  If Gilchrest had won the primary, Kratovil would never have gotten that money and it would have been no contest, like many in the past.

Of course, having the Libertarian Candidate, Davis, in the race helped too.  If Andy Harris had gotten those votes, he would have been victorious.  

Republicans seem to think that Frank Kratovil is going to lay down a liberal voting record in Washington that will help defeat him in two years.  I don't think so; Frank seems to me to be a more conservative, 'Blue Dog', Democrat who will build a moderate voting record, splitting with his party when necessary to reflect the temper of his district.  In 2010, with two years of incumbency behind him, he will be in a stronger spot to defend his seat, particularly if he couples a moderate voting record with good constituent service and good fundraising.

After 2010, of course, the situation will change.  The surge in Democratic registrations this year will provide some flexibility to shift more Democratic voters into the First District when redistricting rolls around.  

So, for now, let's keep our fingers crossed that the AP is right and the 2,003 margin holds up.  Then we can take some time to relax and hopefully savor a victory before we start to look at 2010. 

The Voters Have Decided

It was an exhausting campaign that seemed to go on forever, but the voters have spoken (although it's not clear in some cases what they say) and it's time to look ahead.

Slots

After many years there is finally a clear decision that we will have slot machines in Maryland.  The vote was not close; slots won in every jurisdiction with a 400,000 vote margin statewide.  The issue now moves to implementation.  The Governor is already moving to identify and appoint commission members who will oversee the bidding for the licenses.  In Baltimore, the city has already moved to purchase land in South Baltimore which the city hopes will be used for a casino there.

Those opposed to slots haven't given up, of course.  There are going to be zoning battles and other rear-guard actions.  The fact that slots won in every jurisdiction, though, is going to give local politicians pause in how hard they can fight to delay the inevitable.  In Anne Arundel County, for example, slots won overwhelmingly, as they did in Baltimore City, Allegany County and Cecil County.  Here in Worcester, it was a little tighter although there was a majority in favor of slots.  

The state is going to have to be very open and transparent in how they issue regulations, select operators and manage the process.  Any hint of collusion or back room deals could delay things for a long time.

Early Voting

The constitutional amendment to allow early voting also passed by a large margin.  To me it seems that the primary effect of this will be in the large jurisdictions of the Western Shore where voters frequently encounter large lines on election day.  Given the busy lives that many live, the ability to choose one of several days on which to vote seems as though it will make life a bit easier and perhaps improve turnout.  Since the large jurisdictions are primarily Democratic, it will likely improve Democratic margins statewide, but it's hard to tell how much.  I guess we'll find out in 2010.

First District

It's definitely a nail-biter here.  As expected, Frank Kratovil did well on the Eastern Shore while Andy Harris did better on the Western Shore - particularly in Harford County.  Kratovil's 900 vote margin in Tuesday's voting will have to withstand more than 28,000 absentee ballots that have been returned in the district.  Registered Dems outnumber Republicans by about 300 in the number of returned ballots and the majority of the ballots are from the Eastern Shore, where Kratovil led in every county in Tuesday's voting.  While counting might continue for several more days as more ballots arrive, chances are we'll know the winner tonight.  I'm hoping Frank will pull it out - I think the odds are in his favor.

Presidential Voting

Barack Obama received 61.4% of the votes on Tuesday compared to 37.0% for John McCain.  As expected, Obama's huge margins in Baltimore City, Baltimore County, Montgomery County, Prince George's County and Howard County overwhelmed McCain wins in the smaller jurisdictions. 

The impact of the large number of newly registered voters was felt across Maryland, though, as John McCain trailed George Bush's 2004 share of the vote in virtually every jurisdiction.  The Republican Party is going to have to rethink its strategy if it is going to have any chance in 2010 to win a statewide office or elect a significant number of state legislators.  It will be interesting to watch. 

Maryland Voter Registrations Surge

Voter registrations continue to surge in Maryland and most of the surge is going in the Democrats' direction as recent numbers from the Maryland State Board of Elections confirm. 

As of October 15, there were 3,360,846 registered voters in Maryland of which 1,898,571 were registered as Democrats and 919,240 as Republicans with the remainder being either independent or members of smaller parties.  This represents an increase of 83,622 registered voters just since September 19. 

Those 83,622 voters include 58,099 registered as Democrats and 10,090 registered as Republicans - a stunning advantage of more than 5 to 1 over the last 26 days.  Projections by the Board of Elections indicate that, for the full year, Democratic registrations will outnumber Republican registrations by about 3 to 1. 

Indeed, the interest in this election has generated a very high number of new registrations.  Hopefully the Board of Elections has deployed enough voting machines and election workers to accomodate all those who wish to vote.

With turnout expected to be very high, it's important that there be enough machines and election workers to allow everyone to vote.  This is particularly important in areas such as Prince George's County which registered almost 17,000 new voters in the last 26 days.

Montgomery County registered almost 15,000 new voters during the same period and Baltimore City registered nearly 11,000.

Here on the Lower Shore, the numbers are much smaller. In Worcester County, 730 new voters were registered between September 19 and October 15.  318 are Democrats and 264 are Republican.  In Wicomico County there have been 1,154 registrations during the period including 669 new Dems and 269 new Republicans.  Over in Somerset, of 262 new voters, 173 are Dems and only 53 are Republican.

Of course, as others have pointed out, these new registrations affect not only this election but the state and local elections coming up in two years.  Former Governor Ehrlich, who indicates he wants a rematch with Martin O'Malley, will have that much harder a time.  And Republican chances of gaining ground in the state legislature will be that much slimmer. 

[Note: the painting Canvassing For Votes was done by William Hogarth in 1755 and is one of his series of four on The Humours of an Election.]

Winter Is Coming

We know both from the calendar and from the changes in the weather that winter is on the way.  On top of the economic problems we already face, the Energy Information Administration has already issued warnings that the cost of many heating fuels will be higher this winter than the last.  Homeowners that heat with oil will face bills that will be about $450 higher than last year and those who heat with electricity, natural gas or propane will also face increases.  On top of that, there are indications that this winter could be colder than last winter, particularly in the east.

We should begin planning now to prepare our homes for the winter so that we can keep our bills within reason and do what we can to conserve energy.  But many Marylanders lack the resources to weatherize their homes and may be faced with heating bills this winter that they cannot manage.

  Fortunately the state Office of Home Energy Programs offers assistance in a number of ways for low-income Marylanders.  The Maryland Energy Assistance Program offers assistance with home heating bills.  They also offer limited assistance in repairing or replacing broken furnaces.  The Electric Universal Service Program offers assistance to low income customers with electric bills.  The Weatherization Assistance Program offers help to certain low income residents for things such as weather stripping, caulking, plastic window covers, etc. 

Information on all these programs can be found here.  On the Lower Shore you can contact your local Shore Up! office.  Shore Up! is the coordinator of home energy programs for the Lower Shore.  You can also find information and apply for these programs at your county social services office. 

The economy is bad; lots of people are without work and energy costs are high.  But these shouldn't be a reason for going without heat this winter.  If it looks like you or your neighbor might not be able to afford to heat your house this winter, contact the Energy Assistance Program now.  Help is available.

[The painting was done in 1839 by Andreas Achenbach and is in the Hermitage Museum in St. Petersburg]

More Clowns

The financial resuce bill which was introduced in the House today represents a compromise that was negotiated between the Rebublican and Democratic leadership and which addresses most of the objections to the administration bill which I raised here earlier. 

Well, we saw more clowns today in the House vote on the financial rescue bill.  While the Democrats delivered the votes to pass the bill, Republicans, voted against the bill in large enough numbers to sink it.  Apparently and incredibly, they claim that they voted against the bill because Nancy Pelosi hurt their feelings by pointing out how badly the Bush administration had mismanaged the economy.  

Rather than do what is necessary to try and save the economy and the country, the Republicans decided, like spoiled children, to hold their breath until the economy turns blue.  And amazingly, they did this on a Monday after five large bank failures over the weekend - one in Belgium, one in Germany, one in the UK, one in Iceland and Wachovia here in the U.S.  (Of course the FDIC insists that Wachovia didn't 'fail', but Citicorp snapped it up for $1 per share vs. $60 per share it was trading at a year ago and FDIC had to absorb a lot of the losses.

Of course, once it was apparent that the bill was failing, the stock market dropped like a stone - down 600+ as I type this.  Lest you think that this affects only big investors, keep in mind that more than half of Americans have their retirement savings invested in the stock market.  

Look for more corporate failures in the next several days as the Republican members of Congress pout.  It would be nice if they cared about their country more than they care about defending their disgraced President. 

Update on the Maryland Presidential Money Race

The Federal Election Commission posted the August fundraising reports from the presidential candidates and, at least here in Maryland, it's not really much of a horserace.  Let's go to the numbers.

Statewide, McCain has raised $2,475,320 from Marylanders through the end of August - certainly an impressive sum.  Obama, on the other hand, has raised $10,198,452 - more than four times as much.  This is certainly an indication of where Maryland's political sentiments lie.  So, where in Maryland did the money come from?

As you might expect, the bulk of the money came from wealthy Mongtomery County residents.  People living in ZIP codes beginning with '208' contributed $1,057,182 to John McCain's campaign - almost half of his statewide total.  Contributions to the Obama campaign from that area totalled $4,807,624.

Prince George's County residents opened their wallets for Obama who garnered $1,298,178 from residents in ZIP codes beginning with '207'.  McCain did poorly in this heavily African-American area getting only $118,022 in contributions, less than a tenth of Obama's take.

Another area with a huge disparity has been the Eastern Montgomery/Western Prince George's area where the ZIP codes begin with '209'.  This ethnically diverse area has gone solidly for Obama, contributing $1,191,017 to his campaign and only $98,623 to the McCain campaign.  That's about a 12:1 ratio in favor of Obama.

Where did McCain do well?  In the 210xx zip codes in Harford County and northern Baltimore County, McCain hauled in $315,725 while Obama got $746,182 in contributions - not exactly a McCain victory but at least a better showing than in the DC suburbs. 

Of course you've all been waiting to see how the candidates are doing here on the Eastern Shore.  If McCain can win anywhere, you would think it would be here among the deeply conservative Eastern Shore residents.

As we've known for some time, residents of the Eastern Shore are not big political donors.  But for what it's worth, here are the numbers.

Eastern Shore Presidential Campaign Contributions through 8/31/08

	McCain	Obama
Lower Shore (ZIP 218xx)	$46,019	$39,075
Mid Shore (ZIP 216xx)	$139,333	$193,176
Upper Shore (ZIP 219xx)	$12,004	$14,082
Shore Total	$197,356	$246,333

So, even on the Shore, Obama is running ahead of McCain in donations.  Only here on the Lower Shore does McCain come out ahead in contributions.  It will be interesting to see how this plays out in the election.

Taken for a Ride Again

I have to depart today from my usual practice of focusing on Maryland politics and issues to comment on the financial debacle unfolding in Washington and New York.  Once again the taxpayers and citizens are being taken for a ride by the Paulson, Bernanke, Bush and the other clowns who pretend to manage the economy.

Let's take a look at the background first.  With the deregulation of the banking system in 1999 let by Senator Phil Gramm - now John McCain's chief economic advisor and with full and vocal support by Senator McCain himself (who, until last week was an ardent foe of any kind of regulation) - large commercial banks moved full speed into the brokerage and insurance business while every other financial institution spread into mortgage banking and investment banking. 

When things started to go sour due primarily to the banks investing in securities they didn't understand, the mightly capitalists on Wall Street turned, of course, to Washington for help.  Bernanke and the Federal Reserve obligingly started lowering interest rates and, several times pumped billions of dollars into the financial system through the Federal Reserve.  When that wasn't enough, Bernanke and Paulson jumped in with more taxpayer money to rescue the unregulated investment bank Bear, Stearns.  After this rescue Paulson announced that the problem was contained.

A few weeks ago another $35 billion of taxpayer money was commited to bail out Fannie Mae and Freddie Mac whose managers had unwisely decided to forget what they were created for and decided to fund mortgages and mortgage-related debt for people who couldn't afford them.  At that point, Mr. Paulson again expressed confidence that the crisis was being managed.

Last week another investment banking firm collapsed and Mr. Paulson, in his wisdom decided that we, the taxpayers, needed to spend $75 billion of our money to support the unregulated and private insurance firm AIG, which was so badly managed that it had lost 95% of its market value.  Of course, those same managers are still in place being richly rewarded by you and me.  

Now Mr. Paulson, echoed by Mr. Bernanke and Mr. G.W. Bush comes to us saying that we need to let them spend $700 billion of our money to rescue the firms on Wall Street from their own stupid mistakes.

Let's take a look at what they're proposing:

First of all they are asking for carte blanche for Mr. Paulson to acquire on our behalf any asset (not just the mortgage-related securities which he says are the problem) of any kind at any price he wishes to pay.  Further he is asking that his decision not be subject to review by anyone else - congress, the courts - anyone.

Mr. Paulson also says that his purchases will not be limited to assets of U.S. corporations or banks, but that he should be able to acquire assets from foreign banks and companies even though no foreign government is participating.

Of course, you know he's going to pay more than the going price for these assets because otherwise there would be no reason for anyone to sell them.  He wants to use our money to protect the banks from having to write down their assets. 

And who's going to manage all these 'assets' when he's purchased them with our money?  The same people who screwed things up in the first place - the Wall Street money managers.  They're already maneuvering for a piece of the pie which will be worth billions of our money each year.

Let's be real clear.  If we're going to purchase the toxic assets of these banks, then we should get a big share of the banks stock, too.  This has worked in other countries, notably Sweden, and it will work here.  And the people who have run these banks - and our economy - into the ground need to be fired, with no 'golden parachute of millions of dollars and no consulting fees. 

And let's remember that Mr. Paulson, before Bush appointed him Secretary of the Treasury, was an investment banker on Wall Street!  No wonder he's so anxious to bail out his buddies.  I'm sure he has his eye on a good job up there when his stint as Treasury Secretary is over.  Let's hope that is sooner rather than later.  If we're going to have to pay for this, we need someone other than clowns running the show.

A Kink in the Electric Line

There's a lot of enthusiasm for wind energy these days, and rightly so.  It's an enormous untapped energy source and wind energy is basically pollution-free, once the turbines are built and installed.  There are a couple of problems, though that need to be addressed. 

The New York Times published an excellent article a few days ago describing how the limitations of our existing power grid are going to limit the amount of wind energy we are able to use. 

Maple Ridge Wind Farm, pictured above, was completed a few years ago at a cost of some $320 million.  Located in upstate New York, the facility consisting of almost 200 wind turbines can generate more than 300 megawatts of power at peak output.  Yet at times the owners have had to shut the facility down, even when the wind is blowing, because the transmission lines were inadequate to handle the power.

The greatest resources for wind power in the United States are located in the great plains, far from the populated areas that consume most electricity.  Our current electricity grid is completely inadequate to move even a relatively small amount of electricity from the plains to the east coast, much less the large amounts that are potentially available.  And every new transmission line that would add capacity faces tremendous local opposition and interminable hearings from every jurisdiction it crosses.

Here in Maryland, we need to import about twenty percent of our electricity from other states because our generating capacity is far short of our demand.  But the transmission lines that bring electricity to Maryland from out of state are running at capacity.  The extra price we pay for the congestion on these lines increases the cost of electricity for everyone in the state.  Our regional grid manager - PJM, has predicted that the DC/Baltimore area and the Eastern Shore face the possibility of rolling blackouts during periods of high demand as soon as 2011 unless new generating capacity comes on line or new transmission lines are completed.

Three new transmission lines are being planned to bring additional power to Maryland.  The Mid-Atlantic Power Pathway (MAPP) proposed by PEPCO would run from the Western Shore past the nuclear plant at Calvert Cliffs, under the Chesapeake Bay to Vienna and then north through Delaware to New Jersey.  The Trans-Allegheny (TRAIL) line proposed by Allegheny Power would bring electricity from the west across Pennsylvania and West Virginia to near Frederick Maryland.  Dominion Virginia Power is proposing a transmission line which would bring power from Ohio and West Virginia to the fast growing areas of Northern Virginia and the Washington, DC area.  All of these face significant local opposition and are unlikely to be completed in the next several years.

In Maryland, of course, the Maryland Energy Administration says the solution is energy conservation and, at their urging, the legislature passed the EMPOWER Maryland Act which requires electricity providers to reduce per capita consumption by fifteen percent by 2015.  But that's too late to have a significant impact upon the projected shortfall three years from now.  Besides, I haven't seen any action yet except for some subsidized CFL bulbs and some efforts to reduce peak demand by some of the smaller providers like SMECO. 

No one wants a big transmission line near them.  But if we're serious about exploiting wind energy - and solar energy and other renewable resources, we need to have a modern, reliable electricity grid which will bring the electricity from where it is generated to where it is needed.  In Maryland, the state needs to stop wavering and provide strong political support to the construction of these lines for the benefit of all its citizens, otherwise we could be in for some hot summers and cold winters - both outdoors and indoors.