Money matters

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My parents were visiting over Columbus Day weekend when the inevitable question arose. “So, Nell, have you been following the crisis on Wall Street?” my father asked. “I’ve been trying. I’ve been reading the paper but…” “But what?” “But that doesn’t mean I understand it!” My father then proceeded to summarize what I already knew from the paper but still did not understand.

I have no doubt my dad understands the crisis better than I do, but understanding is not something that can be explained. You have to do that legwork yourself. And so I asked my economist friend, whose job it is to understand these things called “global financial markets,” for help. I asked him what I should read online that would take my basic “knowing” and elevate it to at least a rudimentary level of understanding; he pointed me in the direction of The New York Times blog of the newly minted Nobel Prize winner in economics, Paul Krugman, as well as in the direction of the blog for the Times’ chief financial correspondent Floyd Norris.

But he also suggested a pretty readable blog called Calculated Risk, the writer of which is a former senior executive at a public company and who predicted the mortgage crisis and its fallout as far back as 2006, when the housing market still hadn’t begun to crumble. Lately, the guy has been posting six or seven times a day trying to keep up with the latest news of our doom, and those posts include everything from JP Morgan conference calls to clips from “The Daily Show” to Census Bureau reports to press conferences with Henry Paulson. It’s an overwhelming amount of information, especially if your basic vocabulary for the stuff is as unimpressive as mine is, but I’ve got to start somewhere and it’s going to be here.

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Money matters

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Money matters

You know, there’s a reason we rarely allow arcane fiscal matters to intrude upon our little bi-weekly political rant here at The Odd Dominion. Yes, we know that the collection and apportionment of funds is the very lifeblood of government, and that focusing on the foibles and electioneering idiocy of vain politicians does nothing to further the public’s understanding of the vital issues that confront our noble commonwealth and blah blah blah. But come on. Honestly, just typing the phrase “apportionment of funds” made us so drowsy that we’re still Q-tipping the drool out of our keyboard.


Could there be a link between Democrat Brian Moran coming out against the gas tax and his possible run for governor next year? Nah.

But we also know that sometimes a political junkie has to stop mainlining the latest Beltway bathroom-sex scuttlebutt and, if only for a moment, take a half-hearted sip of that bland governmental gruel called “fiscal policy.”

Of course, it’s much easier to choke down the deadly dull accounting arcana when it’s sweetened by a teaspoon of delicious intra-party intrigue, and the latest budgetary battles being waged in Virginia’s legislative terrordome have all that and more.

First, however, a little background. If you need to know one thing about Virginia’s various governors, senators and delegates, it’s this: They love to blow up sources of tax revenue whenever possible, but aren’t really all that good at putting the budgetary pieces back together. From Governor Jim Gilmore’s ill-conceived slashing of the car tax to Governor Tim Kaine’s ill-advised scrapping of Virginia’s 2-million-bucks-and-above estate tax, politicians from both parties have long embraced a “starve the beast” approach to the Commonwealth’s coffers, while simultaneously expressing surprise and dismay as popular programs languish and expire as they beg scraps from the government’s stripped-bare buffet.

Lately, this “slash-now-pay-later” approach has come back to bite the good folks in Richmond in the collective butt, producing some truly comedic budget-balancing backflips in the process. First there was the brilliant “abusive driver fees” gambit, engineered by Delegate (and DUI-defending ambulance chaser) Dave Albo, which sought to raise cash by soaking speeders, red-light-runners, and various other scofflaws and automotive miscreants. Then, when the Assembly was forced to repeal this misbegotten piece of revenue-enhancing hogwash, the panicked politicos quickly considered and rejected a number of other more conventional measures, including a 5-cent-a-gallon gas tax increase intended to help fix up Virginia’s increasingly pothole-heavy highways.

And this is where things get interesting. See, in a sort of bicameral one-two punch, while the House Finance Committee was putting the kibosh on the gas tax hike (thereby exacerbating the already huge $360 million transportation budget deficit), the Senate was busy killing a popular tax-relief proposal known as the “Homestead Exemption,” which would have allowed certain homeowners to lower their ballooning real estate assessments by up to 20 percent.

Now, we don’t have the time (or, quite honestly, the intestinal fortitude) to delve into the labyrinthine legislative details of this monetary mishigos, but we are more than willing (as is our wont) to proclaim who really got the short end of the stick on this one: Democratic Senator (and gubernatorial hopeful) Creigh Deeds. After all, not only did he have to watch a popular tax cut he supported go down in flames, but he also had to stand helplessly by as a sure-to-be-unpopular tax increase that he voted for in the Senate was strangled by a Republican-controlled House committee, with the Kevorkian-esque assistance of two high-ranking House Democrats.

And who just happened to be the loudest Democratic voice against the proposed gas tax? Well, that would be Delegate Brian Moran, who—what a wacky coinkydink!—just happens to be mulling a run for governor next year.

Wait a minute—crass electoral politics has invaded the Assembly’s mind-numbing budget battles? Well, they’d better be careful—they might just get us to pay attention, after all.

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Money matters

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I write to set the record straight regarding a recent story about the University’s future arts center.
The proposed center was not “stalled over donor’s $22 million” as the headline proclaimed. Nor was the “theater space scrapped” because the gift is “on hold.”
Had the reporter done a bit more homework for the story she would have learned the following:
• The arts center project is, in fact, alive and well, and continues to evolve into a broader, more comprehensive project than the original concept. While the new concept has not yet been finalized, it now includes not only a new art museum, but also a residential college. The project will be phased, and the theater will be included in the second phase.
• The family of Carl W. Smith continues to be engaged with the University, and Mrs. Smith is an active participant in helping shape the future arts project.
• The Smiths’ original challenge commitment of $22 million in April 2003, made through a combination of personal and Richmond Community Foundation pledges, was contingent on commencement of construction by June 2005. While $1 million of the gift covered early architectural renderings, the remainder lapsed under its own terms when the initial project did not move forward. The gift is not “on hold.”
• Mrs. Smith—well known for her enthusiastic support for the arts, the community, and the University—has indicated that she is looking forward to reviewing the concept once the proposal is finalized.

Carol Wood, assistant VP for public affairs, UVA
Charlottesville

The editor replies: Ms. Wood’s concern for our reportorial homework is misplaced in this case. Nowhere in Meg McEvoy’s article did we assert that the arts center was anything but “alive and well” (as Wood put it). In fact, the art museum and residential college were specifically noted by McEvoy, as was the “phasing” that characterizes the entire arts center project. It was University Architect David Neuman who used the phrase “on hold” to describe the Smith family’s gift. If that language offends Ms. Wood, she is respectfully advised to take it to the source.
Moreover, nowhere did McEvoy assert that the Smith family is not engaged with UVA. Additionally, efforts were made to ascertain the specific terms of the $22 million gift, now detailed by Ms. Wood, but, as noted in McEvoy’s article, Development Officer Alison Traub did not return repeated calls by press time.

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