Friday, January 16, 2009

Never Wonder How We Got Soft

It starts with school, or, in this case, lack of school. It's -10 degrees out there, and I say, "BIG DEAL". Get in the classroom and learn. 306 school closings in Central Indiana? There isn't even any snowfall!

They don't even walk to school anyhow. They ride a bus, or parents drive them in. The kids face the onerous task of going from house to vehicle, then vehicle to school. Wow, that's rough.

The lesson we teach with these school closings is this: It's cold? Give up. Don't bother. Education certainly isn't worth overcoming predictable circumstances. Just give up.

Think the kids in Winnipeg stop going to school as soon as the temps fall below zero? No. they attend. They cope. They overcome.

That would be a good lesson for our kids.

Tuesday, January 13, 2009

State of the State Reviewed

The speech sounded like one delivered by a governor re-elected to his final term by a landslide percentage. In fact, he sounded rather like a libertarian, sounding the call for tighter budgets as the only common sense approach to tough economic times.

It was certainly music to my ears. I have been calling here for a 5% across-the-board budget cut for the last three years. Although such cuts would have done even more good in positioning our state better than New York or California, it's better late than never, and all to the good.

The real question I have is how effective Mitch Daniels can be in lashing the legislature on to do his bidding. Republicans like to spend tax dollars just as surely as Democrats. Daniels did the Reagan thing by going to the public with his strong appeal for cuts. Was the public listening? Will the public assert to their representatives in the Indiana House and Senate their desire to implement the governor's call for cuts?

Here are some lines from the Governor's speech that could have as easily come from a Libertarian governor:
First, no tax increases. A state striving for economic greatness should constantly be looking for ways to reduce its burden on workers and enterprise. A time of recession is the very last time at which government should add to the struggles of the citizens for whom it works.

Preserving government intact at the expense of families and businesses would be wrong in human terms and backwards in economic terms. The dollars claimed by higher taxes would come from families who need them more than ever to get by. They would come from businesses which would otherwise use them to keep someone on the payroll, or add a new job. Let's agree right now that, whatever course we take this budget year, higher taxes will play no part in it.

Bravo! Could have been written by Andy Horning or Kenn Gividen. Excellent!

The other good news was that Daniels urged the shelving of funding for full-day kindergarten and guaranteed college tuition. The budget can't be maintained if this bloat is added.

There was no word about the State's legacy costs, beyond a promise not to rob the pension fund in order to suppliment the budget. That's a glaring omission in light of the wreckage legacy costs have visited upon Ford, GM, and Chrysler. Governments give the fattest benefit packages in the country. This will come home to roost, and should be dealt with now, before we have the kinds of problems California is already beginning to experience.

Daniels continued to push for his consolidation plan. I'm just not sold on it because it looks merely like a panacea for those who want smaller government. For those who have wanted it and never seen it, smaller government includes smaller budgets, eliminated departments, and significantly fewer bureaucrats. So, let's look at one area of proposed consolidation, from the Kernan-Shepard recommendations:

Consolidation of Township Assessors. Property is still going to be assessed, because it is still going to be taxed. In a county with 9 townships, consolidating to the county level doesn't mean that one person is going to do the work of 9. It means that those who did the work will simply be housed in one location. Ok, that yields the savings on office space, and that shouldn't be overlooked. But that's nipping at the fringe of the cost.

Worse, it will make assessment less accountable, not more. Currently, the resident of the township can go to the Township Assessor's office if there is a dispute over the assessment. One-ninth of the County elects the Township Assessor, so if the township's people are dissatisfied with the work of that official, they can back a candidate and run them in the next primary. Under consolidation, if the citizens of one township are completely dissatisfied with the work of the County Assessor, they not only have to win their township, they have to win the votes of the other 8 townships with their candidate at the primary. In fact, a County Assessor can screw one township completely and be re-elected comfortably, if that screwed township generally votes for the minority party.

If you want to see how this plays out, a nice parallel exists in Hamilton County, where the County Commisioners members ostensibly represent a district, but are voted on at-large countywide. They sometimes lose their districts while winning on the backs of the areas they do not represent.

If you want smaller government, don't goof around with consolidation. Cut a department. Cut budgets by 20% instead of 5%. That's the real deal.

Bottom Line: Good speech, with nice substance for libertarians, even if it doesn't go nearly far enough towards more appropriately sized government.

Text of the speech.
For Your Listening Pleasure

...Or discomfort. I'll be on a special edition of WXNT's "Abdul in the Morning" show, this evening at 7pm, to discuss the governor's 'State of the State' speech. I will represent the Libertarian Party, alongside the other guys. Tune in to 1420-am, or listen online at

Many thanks to Abdul for having me again. I was on a similar special show two years ago with him.
We Vote With Our Feet

This is a theme I have returned to many times over the years, because I myself have done it a few times.

I once lived in Cleveland and worked in suburban Parma, OH. Each city had a municipal income tax of 2%. When I finally gave up on my rough, decaying Cleveland neighborhood and moved to Parma, I gave myself a 2% raise. I got to thinking that I had to be an idiot to stay where the schools sucked, the crime rate was high, my auto and homeowners insurance rates were higher, and my commute was longer besides.

Later, I moved to Indianapolis. The Indiana tate income tax was lower than Ohio's, 3.1% to 7%; the sales tax was lower, then 6% to 8%; the property taxes were then about a third of what Ohio's were. Again, I thought what an idiot I would have to be choose Ohio.

Then we moved to Fishers. Again, the schools are better, the crime lower, the property taxes lower, the county income taxes lower, the insurance rates lower. Yet again, the thought of what kind of idiot I would have to be to choose Indy over Fishers came to mind, and continues to every time I learn of a violent crime in our previous neighborhood.

I expect to see a lot of migration in the next few years, as high tax jurisdictions are exposed for their empty rewards. From an AP report:
The number of people leaving California for another state outstripped the number moving in from another state during the year ending on July 1, 2008. California lost a net total of 144,000 people during that period — more than any other state, according to census estimates. That is about equal to the population of Syracuse, N.Y.

The state with the next-highest net loss through migration between states was New York, which lost just over 126,000 residents.

Two high-tax states lose population- before the economy really began to tank! It isn't news to me. We're going to see a lot more of it. Just wait until the legacy costs of those states and their cities do to them what they've done to GM, Ford, and Chrysler.
Among other things: California's unemployment rate hit 8.4 percent in November, the third-highest in the nation, and it is expected to get worse. A record 236,000 foreclosures are projected for 2008, more than the prior nine years combined, according to research firm MDA DataQuick. Personal income was about flat last year.

With state government facing a $41.6 billion budget hole over 18 months, residents are bracing for higher taxes, cuts in education and postponed tax rebates. A multibillion-dollar plan to remake downtown Los Angeles has stalled, and office vacancy rates there and in San Diego and San Jose surpass the 10.2 percent national average.

What I observed first-hand about Cleveland seems to hold true anywhere: The combination of high taxes and lousy schools is lethal. People of means and high values flee. Cities become magnets for the poor and the stupid.

In 1950, Cleveland's population was a shade under 915,000. By 2006, Cleveland had lost more than half its population. Chart.

Cities don't learn. Rather than lowering the taxes so as to attract people of means, they are wed to the glories that are their 'services', so they raise taxes evermore in order to keep revenues up, thereby chasing evermore people from their jurisdiction. The population gets poorer and dumber.

There are exceptions. Places like New York can get away with it because of the incredible cultural offerings. But, Detroit? Cleveland? Indianapolis? I think when the legacy costs come home to roost, you will see an exodus from NYC as well.

Blame the highways. Blame 'white flight'- although blacks with means flee all the same. Blame anything, but unless you start looking at tax policy and ask people of means just how much they value the 'services' provided by government, you're going to miss the mark. Notice that people of means leave the places with the most services, and taxes. They prefer to leave what they built behind for others, starting completely new in another area, just to be left alone, away from the greedy hands that gobble taxes.

I will probably vote with my feet again, if Fishers continues to grow, and add services, and employees, and legacy costs. I don't want any of that stuff, but the Bigger Brains create it and fatten it, so I'll eventually flee it.

It should become an environmental cause to lower taxes. Hey- it would prevent sprawl!

(h/t: Duncan Adams, for the California article)