Category Archives: Public Policy and Governance

Ballard Administration, Part 2

After my post yesterday, I got an email from a former Republican who is evidently no fan of our Accidental Mayor.

He had read the recent IBJ article–which he characterized as a “puff piece”–in which the reporter uncritically repeated the administration’s claim that the parking meters are “netting” additional revenues since they were privatized in a 50-year deal  with ACS.  As he wrote, the claim doesn’t hold up under even cursory scrutiny.

The IBJ wrote, in part:  “Total revenue from meter operations grew to $1.7 million in the quarter ended June 30 from $1.3 million in the same time frame a year ago. The city’s share of that revenue totaled $498,273, compared with $108,265 it made from meter operations from March through June a year ago—a whopping 360-percent increase.”

As my friend pointed out in his email, the IBJ simply ignored a number of issues, most significantly that these numbers were “apples and oranges” and accepted the 360% “increase” at face value, without noting the following: (1) Hours were increased from 7:00 PM to 9:00 PM every night  and ACS added a day to the week (it used to be Mon.-Fri., now it is Mon-Sat.); (2)  the rate increase by $0.25/hour in Broad Ripple and most of downtown.  Clearly, these increases would yield substantially more revenue whether ACS or the City had increased hours and raised rates–and if we hadn’t privatized the meters, the City would keep all of the increased revenues after the relatively modest investment in new meter technology.

The final point made in the email was that the math makes no sense: As he wrote, “According to the IBJ, the administration claims that revenues increased a total of $400,000 (from $1.3MM to $1.7MM) – which is a total increase in revenues of 30% ($400K over $1.3 million) TOTAL; however, the IBJ reports that the City’s revenues went from $108K to $498K – something doesn’t add up here… I think the IBJ is comparing apples and oranges (i.e., comparing (A) the City’s old “net-of-all-expenses” revenues after all costs and before increases in rates and hours, against (B) the City’s gross revenues under the ACS deal after increases in rates and hours that they could have instituted without sharing revenue with ACS), and even more significantly, (B) not asking what in my mind is the most pertinent question: HOW MUCH HAS THE CITY HAD TO CREDIT OR GIVE BACK TO ACS DUE TO BAGGED METERS?   Do the “totals” reported exclude the amounts the city is contractually obligated to remit to ACS as compensation for bagging meters under the terms of the contract?. ”

The email raises some pretty important questions, to which I’d add another. There is a rumor floating around that in addition to control of our parking meters, the City also handed over to ACS the collection of past years’ parking fines that remain uncollected. Does anyone know whether this is true, and–if it is–whether receipts from those collections are part of the reported numbers?

I do wish Indianapolis still had real reporters covering government……

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THIS is Troubling……

The Indianapolis Times posted a fairly lengthy piece today devoted to some troubling questions raised by the award of city contracts to Ballard’s largest contributors. For example, this paragraph:

“Ballard Raised More Than $1.3 Million From Contributors Who Have Received $300 Million In Contracts: Ballard has received $1,368,693 in contributions to his reelection campaign from businesses and/or the employees of those businesses contracted with the city while in office. The total sum of the contracts those businesses have had with the city is $309,476,510. (Marion County Election Board, Ballard Campaign Finance Reports, Indianapolis Contract Database)”

Now, the Times is a Democratic blog, and it can be expected to spin reports to make Republicans look bad, just as Republican leaning blogs can be expected to spin in contrary direction. But if these numbers–and others reported in the same post-are accurate, this behavior raises still more ethical issues for an administration that is facing several other allegations of impropriety. There’s the garage deal in Broad Ripple, the lease of space in Eastgate, and the shenanigans that allowed the parking meter deal to squeak through by one vote (cast by a member of the contractor’s law firm…).

Can we spell “appearance of impropriety”?

A Very Interesting Question

The New York Times reported today that well before their recent downgrade of the U.S. AAA credit rating, the Justice Department had begun an investigation into whether Standard & Poor had improperly rated dozens of mortgage securities in the years leading up to the financial crisis. As the Times reports, “In the mortgage inquiry, the Justice Department has been asking about instances in which the company’s analysts wanted to award lower ratings on mortgage bonds but may have been overruled by other S.& P. business managers, according to the people with knowledge of the interviews. If the government finds enough evidence to support such a case, which is likely to be a civil case, it could undercut S.& P.’s longstanding claim that its analysts act independently from business concerns.”

After the housing bubble burst, many of us questioned the ethics of a ratings system in which the issuer of the debt being rated paid the rating agency–to those of us uninitiated into the arcane processes of mortgage banking, this seemed to constitute a clear conflict of interest, a practice that suggested the agencies might be, oh, let’s just say “ethically insensitive.” This morning’s report raises the question whether that insensitivity, or ethical blind spot, might have played a role in the recent downgrade of the US credit rating.

Perhaps it was less a matter of acting on the basis of genuine concern (misplaced or not) and more a matter of retaliation for daring to launch an investigation?

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Tea and Very Little Sympathy

Ever since the emergence of the Tea Party–with its intransigence, ideological rigidity and hostility–there has been a robust debate about who they are, what they want, and whether they are a genuine grass-roots movement or the product of some canny (and wealthy) Republican operatives. Other than poll results, however, there has been very little empirical research informing that debate.

That has changed. In a recent issue of “Perspectives on Politics,” a peer-reviewed journal published by the American Political Science Association, Vanessa Williamson, Theda Skocpol and John Coggin published “The Tea Party and the Remaking of Republican Conservatism.” I don’t know Williamson or Coggin, but Theda Skocpol is a widely-respected Harvard Professor who–among other things–has served as the President of the American Political Science Association.

The article is worth reading in its entirety, but here are some highlights:

  • The Tea Party is a new incarnation of “long-standing strands” in American conservatism.
  • Tea Party opposition to the Affordable Care Act is not a manifestation of hostility to social programs per se; the opposition is based upon resentment of “perceived government handouts to “undeserving” people. (Tea partiers see themselves as entitled to Social Security and Medicare.) Their definition of “undeserving” “seems heavily influenced by racial and ethnic stereotypes.”
  • The Tea Party owes its emergence not only to the Republican elites that initially bankrolled it, but to Fox News. The authors believe that “the best way to understand Fox News’ role is as a national advocacy organization actively fostering a social protest identity.” (63% of Tea Party members watch Fox, as opposed to 11% of the general population.)
  • Tea Party members are a very small minority of Americans. Only one in five of those who claim to be members have actually attended an event or donated money. Members are older, white and middle-class, and a majority are men. The vast majority are conservative Republicans.

There is much more, but the central finding (in my opinion, at least) was that at the grassroots level, Tea Partiers judge social programs “not in terms of abstract free-market orthodoxy, but according to the perceived deservingness of recipients.” It will not come as a shock to most of us that deservingness is “an implicit cultural category.” Hence the hysteria over immigration (the study finds–surprise!–that “fears of immigration are closely linked to the ethnic identity of the immigrants in question”). Support for the Tea Party “remains a valid predictor of racial resentment” even after controlling for ideology and partisanship, and this finding goes a long way toward explaining what seems to most of us as an irrational hatred of Obama. As the authors put it, “At a fundamental level, Obama’s policies and his person are not within the Tea Party conception of America, so his election seems like a threat to what they understand as their country.”

And they want “their” country back.

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Trust and Transparency

A couple of years ago, I wrote a book titled “Distrust: American Style” in which I argued that much of our current social dysfunction and polarization results from a massive loss of trust in our common institutions–not just government, but also big business and even nonprofits. Think of Enron and World Com, think of the Red Cross scandals, think of doping sports stars.  Think of the Catholic Church cover-up scandal.

Things haven’t improved since I wrote the book. In the wake of the fiscal collapse triggered by big investment banks and too-cozy relationships with the people responsible for regulating them, there has been enough information to tarnish our confidence in a whole raft of financial and governmental institutions. Pre-eminent among them were the ratings agencies–the entities most of us had long trusted to serve as “grey eminences” protecting us from accounting shenanigans and other trickery by carefully examining the books of those issuing debt instruments. That they operated with little transparency was rarely noted. What we discovered after the proverbial shit hit the fan was that the ratings agencies–paid by the issuers–weren’t above looking the other way in order to collect their very handsome fees. Somehow, this very real conflict of interest had escaped everyone’s notice.

So I must agree with Senator Bernie Sanders, who issued the following statement when Standard and Poor downgraded U.S. debt this weekend:

“I find it interesting to see S&P so vigilant today in downgrading the U.S. credit rating. Where were they four years ago when they, and other credit rating agencies, helped cause this horrendous recession by providing AAA ratings to worthless sub-prime mortgage securities on behalf of Wall Street investment firms?  Where were they last December when Congress and the White House drove up the national debt by $700 billion by extending Bush’s tax breaks for the rich?”

Fair questions.

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