Tag Archives: Ballard

Questions

I get tired of beating the same dead horse, but the Star’s story this morning about the Litebox episode–a piece of real reporting that is becoming increasingly rare–raises additional questions.

The story makes vividly clear how slapdash the City’s vetting process has been, and how politically motivated the decision to announce “job creation.” But the story makes a bigger point, albeit implicitly, about the entire policy of “buying” jobs for one’s area by offering financial incentives to companies that will promise to move or expand.

The obvious arguments against such efforts are familiar: it puts government in the position of helping some businesses but not others that may be their competitors, which troubles those of us who believe in real markets; and it is a zero-sum game overall, since the company that moves its company from Ohio to Indiana is not creating more jobs–it is simply moving jobs from one place to another.

But the Litebox fiasco pointed up a problem I hadn’t previously considered. Even if competent people are running these programs–clearly not the case here–they are unlikely to know enough about the technologies and economic realities of very different industries to make truly informed decisions. This may not have been the case when local officials were competing to attract an automobile factory, but the same technological and cultural changes that increasingly challenge tech businesspeople and that make investment decisions risky even for savvy and knowledgable investors make it virtually impossible for government officials to accurately gauge the viability of tech business deals.

When you add in the inevitable politics involved–the huge pressures to score political points, to look like you are delivering on your campaign promises–it’s no wonder that the jobs don’t materialize. As the Star pointed out, even companies with sound performance records and none of the red flags that accompanied the Litebox proposal have more often than not failed to deliver on their promises.

It’s time to rethink these incentives. Even in competent administrations, as currently structured, they are bad public policy.

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Job Creation Delusions

Given the state of the economy, it’s understandable that candidates and incumbents alike would focus on job creation. It’s also understandable that the mayor and governor would make a big deal out of promises to locate new factories in Indianapolis.

But it’s beginning to look as if the “vetting” process could use some vetting of its own.

Yesterday, Mitch Daniels and Greg Ballard–along with representatives from Develop Indy–held a media event at a field in northwest Indianapolis to announce that a California businessman would be building a factory to manufacture huge TV screens mounted on trucks. (Reading the initial story, my husband opined that the business seemed goofy to him, but I reminded him that, at our ages, we’re tech dinosaurs, so what did we know?)

Turns out it isn’t just the business plan that’s goofy. First the IBJ ran a story noting that the owner of the enterprise lacked experience. Then this morning’s Star reported on the bizarre behavior of both the “entrepreneur” and a project manager from Develop Indy. The story also noted that Litebox, the company being applauded for bringing jobs to Indianapolis, had yet to purchase the land on which the factory was supposed to be built.

Economic development is never a sure thing. Well-conceived, well-financed projects may not make it. But surely, before they commit public resources to a project, the city and state could do a minimal amount of due diligence.

The media have raised questions before about the veracity of jobs claims made by both the state and city, and this embarrassing episode would seem to confirm their skepticism.

It’s hard not to to speculate over the timing of this announcement–apparently, it was rushed in order to help Ballard before the election. It blew up in his face, and didn’t add any luster to the Daniels administration, either. That’s what happens when people act out of desperation.

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It’s the Economy, Stupid!

Most of us remember James Carville’s admonition—the one that became the singular focus of the successful Clinton campaign—“it’s the economy, stupid!”

That laser-like focus on economic well-being was generally seen as a smart campaign tactic, which it was. But it was also smart policy.

Which brings us to the current campaign for Mayor of Indianapolis.

Partisans have argued about the candidates’ respective visions—or lack thereof—and there have been the usual competing claims about public safety, neighborhood revitalization, tax increases and the consequences of selling off city assets. But addressing those issues—in fact, addressing virtually every single issue that voters care about—depends upon the economic health of the city.

And that means good jobs.

It was Henry Ford who first recognized the importance of paying factory workers decent wages—not out of the goodness of his heart, or because he had some sort of humanitarian impulse (he wasn’t noted for either), but because he wanted them to be able to buy his cars. His logic—his recognition that success in business requires people with the means to buy your goods—seems to have escaped many of today’s officeholders.

The same logic applies to cities. You can’t create bike lanes, improve schools, hire police or pick up garbage without money. In Indiana, thanks to state-imposed tax caps that are starving units of local government, cities desperately need workers able to pay the taxes and fees we do impose. We also need to minimize the burden large numbers of jobless citizens place on municipal finances.

Which candidate is most likely to create the jobs we need?  Indianapolis voters have a choice between a former Deputy Mayor for Economic Development and an incumbent with a jobs record we can examine.

So how has Ballard done?

According to the Bureau of Labor Statistics, 62,000 fewer people were working in Indianapolis this year than were working here in 2007. As the IBJ reported in late August, “while Indianapolis was hardly alone in losing jobs during the recession….no other major Midwestern city has seen such a sharp decline.”  Among Midwestern cities, Indianapolis lagged Pittsburgh, Nashville, Columbus, Milwaukee, Louisville, St. Louis, Cincinnati, Minneapolis, Kansas City and Chicago.

Those still working also lost ground; wages for private workers have declined 8.6 percent during the past four years.

This is stunningly bad performance.

To be fair, one reason for our pathetic showing is Governor Daniels, who believes that government should slash public employment to balance budgets—despite the loss of tax revenue and the added stress on social service budgets that accompany such measures. Most economists believe such actions trigger a self-reinforcing downward spiral.  If Ballard recognized the consequences of Daniels’ policy for Indianapolis, he certainly didn’t protest.

Indianapolis needs leaders who understand the connections between government actions and private-sector reactions–leaders who understand that employers don’t relocate their businesses just by comparing tax rates. (Don’t believe that? Look again at the list of cities outpacing us.) Businesses don’t move to places with bad public schools, troubling crime rates and other elements signaling a poor quality of life; they move to—or stay in—cities offering amenities like well-tended parks, efficient government agencies and convenient public transportation.

Given Indiana’s tax caps and other fiscal constraints, the only way the next mayor will be able to do anything other than continue selling off public assets (and our children’s futures) is to create jobs and grow the tax base.

We aren’t stupid, and it really is the economy. Indianapolis—which used to lead—is lagging well behind our peer cities. Kennedy’s right—we can do better.

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Ballard Strikes Again

Is Mayor Ballard trying to give people reasons to vote for Melina Kennedy?

The Administration is spending a part of the proceeds from the sale of the water company to demolish unsafe, abandoned houses. Most of us have no problem with that–but, just as with the “if it moves, pave it–but only during rush hour and don’t check with the utilities” program–the administration has decided to use a mallet when a flyswatter is called for.

As news reports have noted, the City has greatly increased the number of structures being demolished, and the pace of demolition. In its haste, the Administration has decided not to bother with pesky procedures like checking with the affected neighborhoods, insuring that the buildings slated for demolition are structurally unsound, or checking on the historical or architectural significance of the targeted structures.

A few days ago, the City demolished a park structure in the Butler Tarkington area designed by noted architect Ed Pierre. To add insult to injury, they announced plans to replace it with a $200,000 pre fab “toilet facility.” The neighborhood wasn’t consulted, and many Butler Tarkington residents are furious.

As Ericka Smith wrote in her Star column this morning, once a building is gone, so are the neighborhood’s options. Once a historically significant building is gone, it’s gone–once a structurally sound structure is eliminated, so is the potential for its reuse. That doesn’t mean you never tear anything down; it means you do your homework first.

Decisions made by each administration limit the ability of future generations to shape our city. That’s why it is so important that those decisions be made thoughtfully, and in consultation with those affected. The Ballard Administration seems oblivious to that reality.

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What’s He Smoking?

I concluded yesterday’s blog by asking what Ballard is smoking. That reference to smoking rather naturally led some Facebook friends to raise the issue of the smoking ban–the one Ballard supported when he was a candidate, and refuses to support now that he’s Mayor, arguable pissing off people on all sides of the debate.

I’m pretty libertarian; I don’t think the government has the right to prohibit people from smoking either tobacco or marijuana. But I do support the smoking ban (and I’d support a ban on smoking marijuana in public places), for several reasons.

1) The health of workers (not customers). No worker should have to choose between health and a paycheck, and let’s not pretend that those working in bars can just walk away and get another job. Not in this economy.  Mayor Ballard says those who work in restaurants and bars are “transients.” I know some people who’ve worked in the same establishments for 20+ years, but even if these workers do move around, is Ballard saying the life and health of “transients” aren’t a concern?

2) Believe it or not, there is a sound economic development argument for smoking bans. Indiana and Indianapolis are falling behind the rest of the nation, the rest of the world and major cities everywhere – convention cities, NFL cities, NBA cities, etc. Among our immediate neighbors, Wisconsin, Michigan, Illinois and Ohio are all smokefree. We’re the ashtray of the Midwest, and if we don’t clean it up, we’re going to lose convention business–not to mention some long-term businesses that don’t want to pay higher “sick-Hoosier” health insurance costs. Which brings me to

3)  A smoking ban will lower health-care costs. What my friend Bruce Hetrick calls “the three-legged stool”–smoke-free workplace laws, FDA regulation of tobacco companies, and higher cigarette taxes–is the most effective way to encourage people to quit smoking. Getting people to quit lowers health-care costs for individuals and those who fund their health care.

By itself, this last argument would not be sufficient–there are lots of things we might do to lower healthcare costs that the government cannot require. But given the overwhelming evidence of the harm done by passive smoke and the competitive disadvantage caused by our failure to act, it’s worth noting that doing the right thing has its benefits.

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