StamfordCT

Earmarks, nightlights and windfalls - Individual, or Community?

I've heard this point made a couple of times recently, but particularly liked the way Gail Collins expressed it in her recent column, George Speaks, Badly:

Besides being incoherent, this is a perfect sign of an utterly phony speech. Earmarks are one of those easy-to-attack Congressional weaknesses, and in a perfect world, they would not exist. But they cost approximately two cents in the grand budgetary scheme of things. Saying you’re going to fix the economy or balance the budget by cutting out earmarks is like saying you’re going to end global warming by banning bathroom nightlights.

The relative magnitude of earmarks relative to total federal spending or total discretionary federal spending may be rather small.  But earmarks do have tremendous potential to do good locally. They can fund projects that may not be feasible for local government to fund, which can contribute mightily to local economic activity and economic rent.

The question, I think, is what happens AFTER the earmark project. Will the local community that benefits from that federal spending collect the benefit from the local residents who are benefited, or will that benefit keep accruing to particular individuals, and continue to be just a nice permanent federal gift to them? 

Working harder, making others richer

Bob Herbert wrote, in his 3/11/08 column entitled "Sharing the Pain", in part,

The American dream is on life support because men and women by the millions who want very much to work — who still have in their heads the ideal of a thriving family in a nice home with maybe a picket fence — are unable to find a decent job.

For years, families have been fighting weakness on the employment front with every other option imaginable.

• Wives and mothers have gone to work.   
  
• People have been putting in more hours and working additional jobs.
• And Americans have plunged like Olympic diving champions into every form of debt they could find.

Who has gotten the benefits of women spending many more years and many more hours per year in the workplace?  Who has benefited from Americans carrying more and more debt?  How does this relate to the run-up in the price of housing?  I said I'd write about these issues in another post.   This is it.

The Taxpayer at 72nd and Madison

In a recent NYT, there is an article about the building on the southwest corner of 72nd and Madison in NYC. Twice in the article and once in the caption to the photos, the building is referred to as a "taxpayer" or "taxpayer-style building."

The article describes the 2 buildings which have occupied the 48' by 100' lot on the sw corner of 72nd and Madison: the first was a 5-story mansion built in 1894, which was occupied by an ex-wife of William K. Vanderbilt II.  On the northwest corner stood Louis Tiffany's grand house, and Gertrude Rhinelander was building her chateau, now the Ralph Lauren store, on the southeast corner.  The mansion remained a private home until 1951, when it was

... replaced with a two-story-high taxpayer-style building, designed by Boak & Raad with severe simplicity.

Ralph Lauren acquired the old Rhinelander mansion for its flagship store in 1986, and seven years later took over the taxpayer on the site of the Cutting house. It has operated a store there since then.

Bob Herbert's 3/11 column, Sharing the Pain: The "Near-Poor"

Link: http://www.nytimes.com/2008/03/11/opinion/11herbert.html

It begins with the statement,

Now that the economic crunch is reaching those near the top of the pyramid, there is finally a sense that the U.S. is facing a real crisis.

The article goes on to talk about the large group of  "near-poor" in America -- the 60 million people who are "just one notch above the official poverty line," with incomes that range from $20,000 to $40,000 for a family of four.

We have always gotten a distorted picture of how well Americans were doing from politicians and the media. The U.S. has a population of 300 million. Thirty-seven million, many of them children, live in poverty. Close to 60 million are just one notch above the official poverty line. These near-poor Americans live in households with annual incomes that range from $20,000 to $40,000 for a family of four.

It is disgraceful that in a nation as wealthy as the United States, nearly a third of the people are poor or near-poor.

You can read the statistics, expressed in terms of income multiples of the Federal Poverty Guideline here.  I think you'll find them moving.

It isn't that I don't agree there is a problem -- readers of this blog likely know that  -- but must point out that defining the problem this way, as the authors of "The Missing Class" do, misses the point that $20,000 or $40,000 for a family of 4 in rural Alabama is very different from $20,000 to $40,000 in New York City or San Francisco, or any of our other major metropolitan areas, where the vast majority of us live. [See data about the cost of living in America's low-cost counties, and in America's major cities.]

Fortunes Made in Real Estate

Americans have a tendency to respect those who are "self-made men." This seems to include people whose fortunes have been made in real estate.  The latest example in the news is the outgoing governor of New York, whose father, Bernard Spitzer, reportedly has a $500 million portfolio of properties, most or all in NYC.

I have nothing against real estate developers in their role as developers.  They bring large amounts of money and multiple talents to bear to create new modern buildings on sites previously occupied by more modest buildings suitable to another decade or century. And when they build they generally create the venues in which dozens, even hundreds, of entrepreneurial visions can be made into reality, and where thousands, sometimes tens of thousands, of people can be employed in a single building.  Appropriate development of choice sites, served by existing infrastructure such as NYC's elaborate transportation system and things as prosaic as city water, sanitary sewers, stormwater runoff, and all the other systems that are paid for by we-the-people: schools, public safety, public health, libraries, courts, hospitals, etc., means that specialized work can take in the center of the central business district, conducted by people who come from a 360 degree radius.  It minimizes sprawl on the fringe, and makes the economy work more smoothly.

But there are other facets of the real estate business that I think are "opportunities for plunder" that should be restructured to serve the common good instead of the private good.  This involves a revision of our notions of what is right, what is just, what is rightly private property and what legitimately belongs to the commons.

Affordable housing -- for all of us. What policies promote it?

Link: http://www.sun-herald.com/Newsstory.cfm?pubdate=030808&story=tp1ch5.htm&folder=NewsArchive2

A front-page article in the 3/8/08 Charlotte (County, FL) Sun entitled "Not Affordable Enough" speaks to some interesting and important issues regarding Florida's housing.  A few excerpts:

The current downturn in residential real estate sales has created the closest thing to a buyer's market Florida has seen since the 1990s.

While that might be great news for a Northern couple looking to retire in Punta Gorda or Port Charlotte with their life savings, Charlotte County's median home price -- about $175,000 according to recent Florida Association of Realtors figures -- is still a barrier for many local wage earners ...

Despite North Port's reputation as a haven for working families, the median sale price in the Sarasota-Bradenton market remains about $260,000

Referring to recent problems in the housing market,

"It's a blip on the screen really, and in a year, we're going to be thankful that we did some investing in affordable housing," said Ron Thomas, executive director of Enterprise Punta Gorda, the city's economic development bureau. "When everybody says that there's plenty of affordable housing, we have to qualify that by saying that there is plenty of affordable housing for people who are in the 80 percent or above the median income. This doesn't have any positive effect for anybody in the 30 to 80 percent median income bracket."

"Even as low as (housing) has come down, it still might not suit firefighters, police, and school teachers. They're still struggling," said Bill Albers, Punta Gorda city councilman. Albers is the council's liaison to the Punta Gorda Housing Authority.

Closet Georgists and Georgites: Bill Buckley, and others

Link: Jay Nordlinger on Impromptus on National Review Online.

Since Bill Buckley died a few weeks ago, I've read numerous tributes, and a few have mentioned Buckley's abiding interest in the ideas of Henry George.  The newest reference comes from the opening paragraphs of a National Review article today:

Friends, a week ago I put some notes on WFB in Impromptus. (That column is here.) Want a few more notes? Just a few more?

You know that he loved peanut butter. Ate it every morning of his life. Took it everywhere he went (because sometimes you couldn’t get it). But did you also know he had a thing for coffee ice cream? Yes — a real jones for it. I introduced him to Ben & Jerry’s Coffee Heath Bar Crunch — one of the best things on the planet.

(Yes, I know that they are communists or whatever. Just eat the ice cream.)

Note 2: Years ago, I had a spot of trouble finding housing in Manhattan. And he said to me, “Do you know I’m a closet George-ite?” He meant the 19th-century American economist and social thinker Henry George (author of Progress and Poverty).

How I wish that Bill Buckley, and others whose education was good enough to include exposure to the ideas of Henry George, had left/would leave their closets.  (Perhaps the reason has something to do with something related to pluralistic ignorance; perhaps it is something more nefarious.)

Bill Buckley did mention Henry George repeatedly in his writings and on the air, but in passing, as if to run it up the flag pole, rather than as a confident advocate of an idea that might not be popular with his constituency. 

Landholders, windfalls, productive effort and community revenue

I attempted to post this response to a blog, and ran into a technical error.  But even without the post to which it was responding -- which praised the so-called FairTax -- I though it worth sharing here. 

I'm still in Henry George's camp. Why tax the results of individual human effort -- stealing from the individual, or for that matter the corporation that which he/it created -- BEFORE collecting the economic value of that which the community created?

Financing Municipal Spending through Sales Taxes: an Inferior "Solution"

Chicago will soon have the highest sales tax of any major city in the US.  Not the highest sales tax in the US -- there is a town in northeastern Alabama, Arab, which imposes sales taxes as high as 12% -- but the highest of any major city.  (Alabama's sales taxes -- designed to place the maximum burden on poor people, while making life easier for upper-income residents, particularly the property-owners -- typically tax even groceries!)   An AP article reports:

Among the things Chicago wants to be known for, having the highest total sales taxes of any major U.S. city is probably not one of them.

But that's what it's getting after the Cook County Board voted Saturday to double the county sales tax to 1.75 percent. When added to the city's sales tax, the county' increase has the cumulative effect of setting a 10.25 percent sales tax on goods bought in Chicago.

When the county rate increase takes effect in November, someone buying $100 worth of merchandise in Chicago would pay $110.25.

The rates in New York and Los Angeles are below 8.5 percent. The next highest rate in the country is in Memphis, Tenn., at 9.25 percent.

The tax increase is expected to add about $426 million annually to county coffers, and the money is meant to close a projected $234 million deficit. The budget is also designed to create more than 1,000 new county jobs.

Private (homeowner) Associations, their Private Beaches, and the Local Assessor

I live in a small city within easy commuting distance of New York City.  It includes some lovely waterfront communities (with property values to match), a downtown with many corporations, a 1- and 2-acre zone, neighborhoods that include children who collectively speak 30 or more different languages and many whose families live below the "self-sufficiency level", multiple high schools, a few magnet schools.

There are a number of subdivisions which have some common property, and it turns out that the local assessor has been very generous with them.  Is this legitimate, or is it a privilege (private law, for the benefit of a few at the expense of the rest of the community)?   I can't see how it is anything but a privilege, a free lunch for special people. (To which I say, eschew privilege!!)

I'll start with the waterfront communities.  There are several of them.  Within one, there are are several private associations.  No gates, no signs, except the "no trespassing" signs on their private beaches; other than the beach signs and the real estate ads, which invariably mention "deeded beach rights," they don't seem any different from other streets on their peninsula.  But each of the three sub-neighborhoods has some private property on the waterfront.