Don’t Say You Weren’t Warned

Yesterday’s IBJ had an article about an all-electric car sharing program being promoted by Mayor Ballard.

I like the car-sharing idea a lot. However, as the article noted, the biggest expense of launching it will be what the city will have to pay ParkIndy–the private consortium that manages the city’s parking meters.

Our “deal” with the vendor, if you will recall, requires the city to pay the contractor every time we take a parking meter out of service, either permanently or temporarily. The city has already had to fork over a considerable amount to compensate the vendor for temporary blocking of curb lanes due to construction projects.

The vehicles and charging stations for the car-sharing program will take space currently occupied by parking meters. When the car-sharing program is fully implemented, the IBJ reports that the city will have paid ParkIndy 16.9 million dollars in order to use our own curb lanes.

That hurdle may doom the project.

There were two major objections to outsourcing the city’s parking infrastructure: 1) the private operator’s profit significantly reduces the amount the city could have realized had it managed its own meters; and 2) there would be unanticipated costs and problems associated with giving up control of the city’s curb lanes.

I see chickens coming home to roost.

Been There, Done That, It’s Not Quite So Simple….

In a recent post to Inforefront.comChris Cotterill plows some well-tilled ground, essentially pooh-poohing the notion that cities and towns need more taxing authority in order to provide a decent level of municipal services.

We just need to do more with less. It’s a tired trope.

Some of his recommendations are reasonable–consolidated purchasing and maintenance operations, for example. Some aren’t: outsourcing or outright sale of city functions (the “holy grail” of those who believe that the private sector can provide services more efficiently no matter what the nature of the service–a belief not supported by the evidence); a hiring freeze (several city departments are already headed for “decimated” status), the exclusion of spouses from healthcare coverage (you think it’s hard to get good employees now?), and outsourcing operations of golf courses (because that worked so well during the Goldsmith Administration).

These recommendations have been around–and many of them implemented–since I served in the Hudnut Administration. The problem is, even if they all worked as Cotterill thinks they would, they wouldn’t begin to generate savings sufficient to address the problems we face.

Of course, there are some major improvements that might generate substantial savings–although they didn’t make Cotterill’s list. The Kernan-Shepard report identified the incredibly wasteful Trustee system; and I’ve argued before for consolidation of the eleven school districts in Marion County that collectively serve fewer students than IPS used to enroll. Unfortunately, we not only lack the political will to make those changes, our antiquated taxing system–with its dedicated funds–wouldn’t allow those savings to be used where they are most needed.

Should government services be delivered efficiently? Of course. Are some local government priorities misguided? Yep. Will addressing either of those issues solve the very real problems facing our underfunded local government units? In your dreams.

Mayor Ballard defended the recent deal with the Pacers by pointing out that the money going to the CIB can’t be used for other things, like police. That’s true–and it’s a far bigger problem than a lack of consolidated purchasing.

We need meaningful home rule, and the ability to allocate tax revenues to our most pressing problems. Giving local government actual authority over its own decisions would also improve transparency and allow citizens to hold local lawmakers accountable.

Of course, our arrogant overlords at the General Assembly are unlikely to agree.

Welcome to the Oligarchy

study that will appear in the Fall 2014 issue of Perspectives on Politics, a very highly regarded academic journal, concludes that the U.S. is no longer a democracy. Instead, we have become an oligarchy, and a pretty corrupt one at that.

“Despite the seemingly strong empirical support in previous studies for theories of majoritarian democracy, our analyses suggest that majorities of the American public actually have little influence over the policies our government adopts.”

The study provides pretty conclusive evidence that the US government does not represent the interests of the majority of our country’s citizens, but is instead ruled by the rich and powerful. As the Telegraph reports:

After sifting through nearly 1,800 US policies enacted in that period and comparing them to the expressed preferences of average Americans (50th percentile of income), affluent Americans (90th percentile) and large special interests groups, researchers concluded that the United States is dominated by its economic elite.  

That domination helps to explain another recent study, this one by French Economist Gabriel Zucman.  Zucman looked at international data on what economists call investment positions (each country reports its assets abroad and foreign-owned assets at home). He found that the numbers don’t add up: globally, according to the reports, liabilities substantially outnumbered assets. But that’s mathematically impossible.

Zucman investigated further; He eventually concluded that the only way to explain such a result is if a lot of money is run through offshore havens, and the ownership doesn’t show up in any country’s national statistics. 

Zucman estimates that the world’s wealthy are using tax havens, including Swiss banks, to hide at least $4.5 trillion but more likely $6 trillion from the tax collectors. That’s $6,000,000,000,000—close to six percent of the entire world’s gross economic output for one year. In other words, as one pundit noted, not chickenfeed.

Not only are we being governed by wealthy oligarchs, for all intents and purposes–they aren’t even beneficent oligarchs. What’s ours is theirs, what’s theirs is theirs–and they aren’t sharing.

Welcome to our brave new global economy. The American republic was nice while it lasted.

Now THAT’S a Retirement Speech!

In the wake of the Great Recession, the SEC has come in for plenty of criticism from academics and pundits who follow financial regulation. But few critiques have been as blunt and biting as the one recently issued by a retiring SEC lawyer.

James Kidney had joined the SEC in 1986. He made a speech at his retirement party last month that has garnered considerable attention, not least because his audience was composed primarily of SEC lawyers and alumni.

Kidney had campaigned within the agency to bring charges against more executives, especially in the SEC’s  case against Goldman Sachs Group Inc. (GS)

According to a copy of his remarks that found its way to Bloomberg News, Kidney said the SEC had become “an agency that polices the broken windows on the street level and rarely goes to the penthouse floors. On the rare occasions when enforcement does go to the penthouse, good manners are paramount. Tough enforcement, risky enforcement, is subject to extensive negotiation and weakening.”

Kidney said his superiors were more focused on getting high-paying jobs after their government service than on bringing difficult cases. The agency’s penalties, Kidney said, have become “at most a tollbooth on the bankster turnpike.”

“I have had bosses, and bosses of my bosses, whose names we all know, who made little secret that they were here to punch their ticket,” Kidney said. “They mouthed serious regard for the mission of the commission, but their actions were tentative and fearful in many instances.” 

Kidney’s remarks serve as a reminder that no senior executive at a major financial firm has gone to jail; for that matter, the SEC has brought civil charges against only a handful. 

The revolving door between government agencies and those they are supposed to be regulating is an open secret–and a clear impediment to vigorous enforcement of the laws.

Sometimes, it takes an inside guy to remind us outside folks why things aren’t working the way they should.

Spelling Out the Koch Agenda

Reasonable people who don’t follow politics closely can be forgiven for dismissing Democrats’ focus on the Koch brothers as just a political tactic– not unlike the Republicans’ attacks on George Soros.  They’re all rich and politically active. So what?

Senator Bernie Sanders begs to differ–and so should we.  Sanders points out that the brothers are worth 80 billion dollars (including an increase of 12 billion in the last year alone), and he points to the extent of their involvement in the political process–and the degree to which they have used their enormous resources to misinform and confuse, most recently funding political spots that flat-out lie about the Affordable Care Act, which–along with Medicare and Medicaid– they are intent upon repealing. (I guess when poor people get health care, it offends their peculiar version of justice.)

David Koch ran as the Libertarian Party’s vice-presidential candidate in 1980. And Sanders suggests we take a look at the platform on which he ran:

  • “We urge the repeal of federal campaign finance laws, and the immediate abolition of the despotic Federal Election Commission.”
  • “We favor the abolition of Medicare and Medicaid programs.”
  • “We oppose any compulsory insurance or tax-supported plan to provide health services, including those which finance abortion services.”
  • “We also favor the deregulation of the medical insurance industry.”
  • “We favor the repeal of the fraudulent, virtually bankrupt, and increasingly oppressive Social Security system. Pending that repeal, participation in Social Security should be made voluntary.”
  • “We propose the abolition of the governmental Postal Service. The present system, in addition to being inefficient, encourages governmental surveillance of private correspondence.  Pending abolition, we call for an end to the monopoly system and for allowing free competition in all aspects of postal service.”
  • “We oppose all personal and corporate income taxation, including capital gains taxes.”
  • “We support the eventual repeal of all taxation.”
  • “As an interim measure, all criminal and civil sanctions against tax evasion should be terminated immediately.”
  • “We support repeal of all laws which impede the ability of any person to find employment, such as minimum wage laws.”
  • “We advocate the complete separation of education and State.  Government schools lead to the indoctrination of children and interfere with the free choice of individuals. Government ownership, operation, regulation, and subsidy of schools and colleges should be ended.”
  • “We condemn compulsory education laws … and we call for the immediate repeal of such laws.”
  • “We support the repeal of all taxes on the income or property of private schools, whether profit or non-profit.”
  • “We support the abolition of the Environmental Protection Agency.”
  • “We support abolition of the Department of Energy.”
  • “We call for the dissolution of all government agencies concerned with transportation, including the Department of Transportation.”
  • “We demand the return of America’s railroad system to private ownership. We call for the privatization of the public roads and national highway system.”
  • “We specifically oppose laws requiring an individual to buy or use so-called “self-protection” equipment such as safety belts, air bags, or crash helmets.”
  • “We advocate the abolition of the Federal Aviation Administration.”
  • “We advocate the abolition of the Food and Drug Administration.”
  • “We support an end to all subsidies for child-bearing built into our present laws, including all welfare plans and the provision of tax-supported services for children.”
  • “We oppose all government welfare, relief projects, and ‘aid to the poor’ programs. All these government programs are privacy-invading, paternalistic, demeaning, and inefficient. The proper source of help for such persons is the voluntary efforts of private groups and individuals.”
  • “We call for the privatization of the inland waterways, and of the distribution system that brings water to industry, agriculture and households.”
  • “We call for the repeal of the Occupational Safety and Health Act.”
  • “We call for the abolition of the Consumer Product Safety Commission.”
  • “We support the repeal of all state usury laws.”

The Koch brothers want to repeal every major piece of legislation that levels the playing field or protects the middle class, the elderly, children, the sick, and the most vulnerable in this country, and thanks to Citizens United  and McCutcheon, they can spend unlimited amounts of money to buy the American government they want.

They’ve realized that the Libertarian party can’t deliver their particular version of “liberty”–but properly funded, they hope the GOP can.

They may be right.