Category: Political Matters

Bribing Paul with Peter’s money

The NY Times this week ran a fantastic — and I hope ground breaking — series that covered the fallacy and fraud of economic development policy in America. On Day 1 they honed right in on the way cities and states routinely make ridiculous and uninformed decisions for handing out money. On Day 2 they actually focused on Texas — a state with rabid rhetoric for markets and a penchant for cooking the books Enron-style with lots of debt and business subsidies — to make a larger point that ties in absolutely with our entire ponzi scheme narrative. The state by state breakdown was also stunning. Check it out.

(Chuck Marohn)

I agree that that the series is stunning. It’s too big for me to have digested yet. There’s a third part about poor Michigan – as if GM wasn’t enough – deciding that helping us amuse ourselves to death through movies is the economic wave of the future.

The state-by-state breakdown map helped me drill down to my community, where some of the recipients were surprising.

I acknowledge coming late the the realization that incentivizing companies to locate here rather than there adds nothing to the nation’s wealth:

Soon after Kansas recruited AMC Entertainment with a $36 million award last year, the state cut its education budget by $104 million. AMC was moving only a few miles, across the border from Missouri. Workers saw little change other than in commuting times and office décor. A few months later, Missouri lured Applebee’s headquarters from Kansas.

“I just shake my head every time it happens, it just gives me a sick feeling in the pit of my stomach,” said Sean O’Byrne, the vice president of the Downtown Council of Kansas City. “It sounds like I’m talking myself out of a job, but there ought to be a law against what I’m doing.”

(Day 1)

I’ll say it before anyone else does: the building in which I work and of which I’m part owner likely would not have happened without tax abatements, from which I benefitted. That third of a city block would probably be sitting vacant still. But someone else paid for police, fire, schools and every other state-or-local funded amenity for several years in gratitude to a group of already well-off guys who hoped to make money eventually.

Maybe there’s a principled difference between our project and the ones the New York Times highlights. Maybe not. On balance, I still think our project was a good one – maybe even worthy of tax abatements – because we were local established businesses fixing local blight and building a strong, increasingly walkable (if still less than ideal) city center. I’ll neither glower nor smirk if you disagree. I wasn’t a hypocrite in my involvement, if only because my consciousness hadn’t yet been raised. Today, I’m not so sure. That’s why I’m bringing the subject up.

One diagonal block to our northeast, at the opposite corner of the courthouse square, would be a blighted block were it not for incentives, I suspect (I don’t know the details on that big project, though some of my professional colleague were instrumental in it).

There’s another project proposed for about 4-5 blocks north of us, outside the downtown core, to cure blight (a full block of abandoned Rental Center – you know, floor sanders, big tools you only need once, table service for 100, etc.; it moved out to the periphery) with new townhomes. Private enterprise won’t do it, apparently, without incentives. I think it’s a good project, and will promote human-scaled population density, not automobile-scaled sprawl. I have no financial interest in saying that.

I’ll grant you this, too. Our city center feels a bit overbuilt at the moment. Occupancy is far from 100%. Maybe that’s just the recession. Maybe it will get better with whatever recovery we manage to simulate or stimulate. Or maybe it will get better because we don’t recover, and demand rises for dwellings and businesses near bus routes and within walking distance of locally-owned amenities.

Or maybe downtown revitalization, even without boondoggle convention centers and sports complexes, is  a failed experiment from which we need to learn what doesn’t work.

Thoughts?

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Some succinct standing advice on recurring themes.

Mitch Daniels

Our esteemed local Gannett newspaper has above the fold today the introduction to a pretty interesting tit-for-tat kerfuffle between Governor Mitch Daniels and the teachers union, which Daniels blames for illegal activities that supposedly brought down Superintendent of Public Instruction Tony Bennett.

I like Mitch. I’ve voted for him. I’ll probably like a lot about his tenure at Purdue starting next month (happy December, by the way). But I have two beefs with him:

  • The reckless glee with which he (though his FSSA head) destroyed our former system for administering Medicaid. I will now acknowledge that Modernization 2.0 is starting to work. But a lot of poor people fell through the safety net during Modernization 1.0, for which only the most willfully blind would have predicted success since the private contractors carpetbaggers picked to implement it had an unbroken record of failure in other states.
  • The sour grapes with which he’s greeting Tony Bennett’s defeat. I guarantee you, gentle reader, that Bennett’s defeat had to do with a lot more than ticking off the teachers’ union (and local school superintendents, be it noted), with vouchers and charter schools. Some of Bennett’s mandates were resisted as sheer, willful idiocy by teachers and staff in the very private schools that are accepting vouchers. Tipsy knows this with a high degree of confidence. Tipsy trusts his sources enough that he didn’t vote for Bennett.

Maybe a measure of willfulness is the dark underbelly of a genius at political reform. There’s no doubt that Medicaid reform is a necessity (just listen to Purdue’s Larry DeBoer talk about the challenge of state budgeting some time). But I don’t have to pretend the underbelly isn’t dark because the top is cute and furry.

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Some succinct standing advice on recurring themes.

Live and Let Live

One of the lamest tropes in our political discourse (not known to lack for vacuity) is “imposing morality.”

The light isn’t always very good at the border, but there is a border between mala prohibita and mala in se. Positive law forbidding mala in se are necessarily impositions of morality when viewed by those who greatly crave something malum in se.

I have tended toward liberalism in the sense of allowing certain mala in se to occur lawfully so long as all competent participants agreed. One needn’t think this is all about sex, either (although that’s an area where the law has retreated pretty dramatically during my lifetime, with the Supreme Court finally striking down laws in holdout states). Boxing and other contact martial arts involve consenting to the battering of one’s body by another, which is certainly wrong without consent.

But just how much do I want government to micromanage? How badly is society harmed if a few outliers want to do this particular bad thing? How, short of police state tactics, would a ban on such-and-such mala in se be enforced?

But there are increasing signs that I’ve committed the grave strategic error of unilateral disarmament, and that there is a party that wants to impose its transvalued values (evil is the new good, good the new evil) by requiring me and others to participate, not just tolerate, their proclivities.

A current example is the employer contraception (and abortifacient, be it remembered) mandate.  It’s not enough that Catholics who consider “artificial contraception” malum in se not be allowed to prohibit it by law. They (and Protestants, who may oppose only the abortifacient part) must, as the price of working in their own business as an employer, be forced to pay 100% of it for employees. Life-saving drugs and treatment come with a co-pay; chemical sterility is “on the house.”

That’s aggressive imposition of (im)morality by the government. I don’t look for the Culture Wars to end until “live and let live” becomes a two-way street, and I’m seeing no signs of that happening.

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On a somewhat related topic.

As soon as you allow something as vague as Big Brother protecting your feelings, anything and everything can be punished …

In every genuinely diverse community I’ve ever lived in, freedom of speech had to be the rule . . .  I find it deeply ironic that on college campuses diversity is used as an argument against unbridled freedom of speech.

Greg Lukianoff, president of FIRE (the Foundation for Individual Rights in Education) on How Free Speech Died on Campus.

Perhaps Lukianoff’s characterizations are a bit exaggerated. Both sides in the Culture Wars have their anecdotal horror stories. I don’t have the time or the sociology chops to measure whether the sorts of examples Lukianoff cites in this Wall Street Journal piece are the exception or the rule.

But I’ve followed FIRE for several years now, and I sure as heck am glad it exists. It’s sort of the new ACLU of free speech on campus.

The pairing of (1) “something as vague as Big Brother protecting your feelings” and (2) diversity being used as a argument to limit free speech seems to me to be akin to the motivation for Human Relations Ordinances that add sexual orientation as a protected class.

Maybe things are different elsewhere, but I sat through every minute of every public meeting on our local Human Relations Ordinance amendments, listening for evidence of economically significant discrimination. Not only did I not hear it, I heard credible evidence of not even one isolated incident that would fall within the Ordinance. To my knowledge, no complaint of discrimination based on sexual orientation has yet been sustained locally, and very few have been lodged at all. I haven’t tried to follow execution as carefully as I followed implementation, but I was involved in establishing that Human Relations Commissions must operate under Open Door laws, and the press should be covering them to the extent their activities are newsworthy.

What motivates college administrators to act so viciously? “It’s both self-interest and ideological commitment,” Mr. Lukianoff says. On the ideological front, “it’s almost like you flip a switch, and these administrators, who talk so much about treating every student with dignity and compassion, suddenly come to see one student as a caricature of societal evil.”

My feelings are hurt, but my status as “a caricature of societal evil” is not a protected class. It’s okay, therefore, to impose the new morality on me.

Yes, I’m aware of development gurus like Richard Florida arguing that it’s important to get ahead of the curve by signaling tolerance to attract creative types. That doesn’t really change my analysis, because it’s still big brother protecting feelings, even if there’s a business development motivation behind (or façade in front of) it.

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Some succinct standing advice on recurring themes.