Category Archives: Random Blogging

Paradigm Shift

In a recent column about urban relocation, Neil Pierce noted that “for humans, displacement from their known settings may be exceedingly painful…the psychological impact of forced removal from a familiar neighborhood is like a plant being jerked from its native soil.” He went on to acknowledge that holding neighborhoods static isn’t practical.

Of course, it isn’t just neighborhoods that cannot remain static. The whole world is in a state of flux, what scientists might call a “paradigm shift,” and the pain and discomfort that undeniable fact is causing is manifest in our communications, our economy, and especially our politics. (How else do we understand the angry and frightened voices insisting that they want “their country” back?)

Most of us do manage to handle social change and the discomfort it brings without taking to the streets or indulging in paranoid conspiracy theories. We learn to accept new technologies and discard old prejudices, and to recognize the benefits that accompany the dislocations. But even those who welcome the new paradigm need to recognize its challenges, and that is especially true for those of us who care about our cities.

Let me offer just one example. When I was a young professional, civic leadership in Indianapolis was provided by people like Tom Binford and P.E. MacAllister, people who did not hold—or want—public office. They had deep roots in this community and believed they had a civic obligation to nurture it. Many leaders were drawn from locally-owned banks and industries—enterprises that depended for their viability upon the health of their city. Whatever the benefits of globalization and nationalization, those trends have largely robbed us of the corporate headquarters and local banks from which we used to draw people committed to the civic enterprise.

Political actors and elected officials can’t fill these roles. Furthermore, elected officials are less able to be effective without the help of a cadre of civic leaders who are committed to the long-term health of the community and who are not constrained by political considerations. (Long term to a politician, understandably, is ‘until the next election.’)   

The challenge we face is to simultaneously embrace our roots and our wings: to cultivate a city with a quality of life that rewards our allegiance on the one hand, and to welcome the opportunities that come with increasing globalization on the other. To meet that challenge, we need to figure out how we will cultivate the next generation of civic leadership.

A couple of years ago, a television commercial proclaimed “This isn’t your father’s Oldsmobile.” Today, of course, it isn’t your Oldsmobile either—it is no longer manufactured, and the American auto industry no longer dominates the economy. This isn’t your father’s Indianapolis or America either. If the old saying is right, if change is the only constant, we need to do what previous generations did: accept reality and inhabit the world as it is.

Our job isn’t to whine about the inevitable—our job is to make it better.

Political Con Game

The incessant political ads leading up to the primaries all seemed to assume that we voters are either children or idiots. Every candidate for every office will protect our perks and cut our taxes! For the record, guys, most of us know there is no such thing as a free lunch. We know—or we should know—that if we want government services, we have to pay for them, and that actually might mean paying taxes.

 On the other hand, perhaps the candidates are right. Perhaps we are children.

 Look at what is happening in Indianapolis right now: Six libraries are closing.  IndyGo—already one of the country’s most inadequate bus systems—is cutting out additional routes. My own neighborhood, the Old Northside, is working with other downtown neighborhoods on a plan to hire private police to supplement IMPD. In too many places, our streets and sidewalks are disintegrating. And don’t even look at the condition of our parks.

 When I worked for city government, back in the days when Bill Hudnut was mayor, there was a recognition that city services had to be paid for, and that there were better and worse ways to do that. Sinking funds (savings accounts) were preferable to bonds (borrowing from future taxpayers) for operating costs. Ongoing maintenance of infrastructure was more cost-effective than cycles of neglect and repair.

 The Hudnut Administration wasn’t perfect, but it was probably the last Indianapolis administration to operate on a pay-as-you-go basis.

 Hudnut was succeeded by Stephen Goldsmith.  Goldsmith (recently installed as Deputy Mayor of New York) was very good at convincing people that he could deliver government on the cheap. “Privatization” initiatives were used to shift costs from the operating to the capital budget; debt was refinanced over longer periods; maintenance skimped or deferred. The Peterson Administration chose not to confront the dire fiscal problems it inherited, resisting even modest tax increases as long as possible. Ironically, when an increase could no longer be avoided, the timing was politically disastrous.

 The Ballard Administration has taken a leaf from the Goldsmith book. A simple transfer of our sewer and water utilities to Citizens Gas actually might make a lot of sense, fiscally as well as politically.  But as the Star recently documented, the up-front “payment” is nothing more than a deferred tax that will be paid by ratepayers in the future.

 The money to fix our decaying infrastructure has to come from somewhere, and our childish belief that we can expect something for nothing—a belief nurtured by years of dishonest political rhetoric—means the administration will not raise taxes directly. The problem is, when these “creative” tax mechanisms are employed, they end up being much more arbitrary and unfair than property or income taxes. In this case, ratepayers living in million-dollar homes will pay precisely the same amount as ratepayers living in hovels, so that we can pave our streets and fix our sidewalks without admitting that we are raising taxes.

 Shouldn’t we all just grow up?

Patriotism and Taxes

Much of today’s angry rhetoric is constructed around two dubious claims: (1) taxes are unjust, because my money is the result of my own hard work; and (2) people helped by government are indolent leeches.

 One problem with the latter claim is that people who look down on welfare recipients who are poor have a remarkably benign view of welfare recipients who are rich. They see nothing wrong with paying USA Funds and similar enterprises lots of money just to give away federal dollars for student loans—a cushy deal with absolutely no downside risk—or with politicians who rail against government “handouts” while raking in big farm subsidies. (Tennessee Congressional candidate Stephen Fincher, a darling of the anti-tax folks, gets $200,000 a year from the government; “anti-socialist” Rep. Michelle Bachmann gets $250,000.)

 The more insidious claim, however, is the first: I worked hard for my money and government has no right to tax it for anything other than police and armies to protect me and my property.  

 Ian Welsh points out some “inconvenient truths” about that claim. He compares the average American to the average citizen of Bangladesh. The average American makes $43,740 annually; the average Bangladeshi, $470.

 Why the difference? American children are less likely to suffer from malnutrition, which adversely affects intellect later in life. American children are far more likely to get good educations. When a Bengali child grows up, there are fewer available jobs. If he starts a business, the market will be much smaller than the equivalent American market. As Welsh says,

 “The vast majority of money that an American earns is due to being born American. Certainly, the qualities that make America a good place to live and a good place to make money are things that were created by Americans, but mostly, they were created by Americans long dead or by Americans working together. ..Since the majority of the money any American earns is a function of being American, not of their own individual virtues, government has the moral right to tax.”

 Welsh isn’t the first to come to this conclusion. Thomas Paine, perhaps the most eloquent of the Founders, expressed similar sentiments in his pamphlet “Agrarian Justice.”

 “Separate an individual from society, and give him an island or a continent to possess, and he cannot acquire personal property. He cannot be rich. So inseparably are the means connected with the end, in all cases, that where the former do not exist the latter cannot be obtained. All accumulation, therefore, of personal property, beyond what a man’s own hands produce, is derived to him by living in society; and he owes on every principle of justice, of gratitude, and of civilization, a part of that accumulation back again to society from whence the whole came.”

 Patriotism isn’t just about being willing to die for your country. It’s also about being willing to pay your fair share to maintain the social infrastructure that makes life more pleasant—and more profitable—for us all.

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Debate and Hate

Coincidences over the past few weeks have made me think a lot about civility.  A colleague and I were asked to lead an after-play discussion on that topic at the Phoenix Theater; we disagree politically, but have often commiserated about the increasingly toxic tone of public argumentation.  I later participated on a panel at Butler University on the same subject.

And then there was the appalling conduct of the anti-healthcare Tea Party demonstrators in Washington who greeted Andre Carson and John Lewis with the “N” word, called Barney Frank a “faggot” and actually spit on other Representatives.

Locally, we’ve had another eruption of nastiness aimed at people who work at Planned Parenthood. Not satisfied with picketing the organization’s clinics, these protestors have taken to disrupting residential neighborhoods by screaming obscenities and threats at the homes of Planned Parenthood staff members and volunteers.

Now, I would be the last person to deny these folks their First Amendment right to express their opinions, and to do so in ways that I personally find repulsive.  But I can’t help but wonder what these angry and hostile people think they accomplish with such behaviors.

Take the attacks on Planned Parenthood. I understand being opposed to reproductive rights for women (and let me hasten to say that most opponents of abortion rights do not engage in these tactics), but Planned Parenthood is primarily about women’s health, not abortion. It provides cancer screenings, testing and treatment for STD’s, along with contraceptive advice and education. (In fact, nearly 95% of Planned Parenthood’s work is focused on pregnancy prevention; ironically, that means that no organization does more to reduce the actual incidence of abortion.)

Do the people screaming all night in front of the homes of Planned Parenthood staff members and volunteers really believe that Indiana would be a better place for women and children and families if the organization stopped serving its nearly 90,000 mostly low-income patients with pap tests and birth control and treatment for STDs?  Do they really think any other provider would fill that void? Or are they simply willing to sacrifice women’s health in order to get their way? 

For that matter, do they really think these tactics will help them get their way? Do they think this is how you persuade other people of the merits of your position?  

I sometimes have to remind myself that we live in uncertain and anxiety-filled times; a certain amount of irrational behavior is understandable, if unhelpful. I do recognize that a very tiny percentage of Americans actually engage in these despicable behaviors. My concern is that these expressions of bile are doing real damage to our ability to engage in genuine debate.

While few partisans are spitting on elected officials or threatening local volunteers, many more are engaging in fact-challenged arguments and distortions in an effort to win political points. Health insurance reform will not allow government to euthanize granny. Planned Parenthood is not encouraging young women to abort.

It’s time to get a grip.

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Outsourcing The Taxing Power

There is a lively debate currently raging over the apparent intent of the Ballard Administration to sell Indianapolis’ water and sewer utilities. Most of the criticism centers on allegations that the decision-making process has been less than transparent—that whatever the merits of an ultimate deal, the public has been largely shut out of the discussions.

In response to such criticisms, the Administration points out that its Request for Expression of Interest and all of the twenty-plus responses have been posted on the Mayor’s website. Fair enough (although that defense reminds me of the scene from A Hitchhiker’s Guide to the Galaxy, where the Vogon spaceship is preparing to destroy Earth to make way for an inter-galactic highway. When the hero protests that Earth has had no opportunity to appeal the decision, the Vogons respond that “The plans have been posted in the appropriate offices on Alpha Centuri for fifty of your Earth years.”). There have also been public hearings, although those have been focused more generally on the subject of Indianapolis’ decaying infrastructure.

Transparent process or not, it is now generally believed that the City is negotiating to sell the water and sewer utilities, probably to Citizens Gas and Coke Utility. Such a sale would consolidate management of the three utilities, and may well make sense, at least from the City’s point of view.

The Water Company is struggling to pay the bonds issued when the Peterson Administration bought it for what critics said then was an inflated price. Furthermore, substantial outlays will be required to bring both systems up to basic environmental and safety standards after decades of deferred maintenance, and the Environmental Protection Agency will insist that those repairs be done. The real question is, why would Citizens—or any other buyer—pay a billion-plus dollars for two utilities that—according to the City’s own reckoning—are somewhere between four and five billion in the hole?  

The simple answer is that a buyer can “monetize the income stream.” In plain English, that means that a buyer isn’t buying a bunch of fixed, decaying capital assets. It is buying the right to charge—and  increase—water and sewer rates.

The city would have to increase rates too, of course, but doing so would incur the wrath of citizens who have made it quite clear that they resent paying for even essential city services. The current Mayor owes his job to the anti-tax fervor that demands more for less, and who can blame him for learning that lesson?

Governor Daniels showed the way with the sale of the toll road. By selling an asset rather than paying to maintain it, a Mayor or Governor achieves two goals: an immediate infusion of cash, and deniability when rates or tolls go up.

There is a copious literature about the pitfalls of privatization. What is curiously lacking in that literature is a recognition that in too many situations, what we are really outsourcing is that quintessentially governmental power—the taxing power.

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