A Telling Comparison

local scenePeople in small towns, nearly everywhere in this country, have access to national programming & news on television and online. As easily as one could subscribe online to something like the Janesville Gazette, one could subscribe to the Chicago Tribune or Washington Post.

Imagine, then, a choice between editorials in the Gazette and the Post on the state of labor in America. Just a few days ago, both papers published on this national topic: the Gazette in a Sunday editorial, the Post in a guest article from Lawrence Summers, former Secretary of the Treasury, and a longtime academic (for president, current professor, of Harvard).

The Gazette offers Economy, not unions, boosts labor, a 500-word editorial that contends that union membership has declined in the Janesville area, yet that the paper’s editorial board “cannot claim that the economy is worse off for membership declines. Indeed, poverty rates statewide have fallen to the lowest level in years, while unemployment rates are also near record lows. The labor market now favors skilled workers employers are competing for and struggling to find.”

I hold no brief for unions, although I think that they should be a robust choice available to workers, at any worksite, should they choose. The problems with the Gazette‘s use of these simple measures are obvious. Poverty is a measure of economic sickness, but its decline is no assurance of overall health. (Cancer rates might be low, for example, but a population still beset by anemia, high-blood pressure, alcoholism, for example.) The absence of the severe does not assure the presence of temperate. A low unemployment rate still begs the question of overall productivity and employee gains. Finally, a labor market that favors skilled workers (under the Gazette‘s implication that that’s Janesville) still doesn’t answer how many workers are skilled, how many are non-skilled, and how both groups are faring.

Look, instead, at the analysis that Summers offers in the Post. (Summers isn’t a libertarian, to be sure, but that’s not significant. What’s significant is how Summers presents a strong argument, even if one disagrees.) Here’s Summers on the state of labor, in It’s time to balance the power between workers and employers:

….Surely related to middle-class anxiety is the slow growth of wages even in the ninth year of economic recovery. The Phillips curve — which postulates that tighter labor markets lead to an acceleration of wage growth — appears to have broken down. Unemployment is at historically low levels, but the Bureau of Labor Statistics reported Friday that average hourly earnings last month rose by all of 3 cents — little more than a 0.1 percent bump. For the past year, they rose by only 2.5 percent. In contrast, profits of the S&P 500 are rising at a 16 percent annual rate.

What is going on? Economists don’t have complete answers. In part, there are inevitable year-to-year fluctuations (profits have declined in several recent years). And in part, BLS data reflects wages earned in the United States, even though a bit less than half of profits are earned abroad and have become more valuable as the dollar has declined relative to other currencies. And finally, wages have not risen because a strengthening labor market has drawn more workers into the labor force.

But I suspect the most important factor is that employers have gained bargaining power over wages while workers have lost it. Technology has given some employers — depending on the type of work involved — more scope for replacing American workers with foreign workers (think outsourcing) or with automation (think boarding-pass kiosks at airports) or by drawing on the gig economy (think Uber drivers). So their leverage to hold down wages has increased.

On the other hand, other factors have decreased the leverage of workers. For a variety of reasons, including reduced availability of mortgage credit and the loss of equity in existing homes, it is harder than it used to be to move to opportunity. Diminished savings in the wake of the 2008 financial crisis means many families cannot afford even a brief interruption in work. Closely related is the observation that workers as consumers appear more likely than years ago to have to purchase from monopolies — such as a consolidated airline sector or local health-care providers — rather than from firms engaged in fierce price competition. That means their paychecks do not go as far….

These two analyses aren’t the same in depth: the local editorial misses key points, either through ignorance or sophistry, that Summers easily covers in his succinct, general-readership essay.

Those reading Summers – even if in disagreement, and perhaps especially if so – will gain something from his observations. Those reading the Gazette will find only shallow contentions.

In a small town, one could read either. In a school district, one could teach either. At university, one could research either.

Why settle for less, why teach a new generation to accept less, when one could engage and think at a competitive national level, just as easily as any other person in America? Summers and others are as accessible to us as the Gazette, and offer so much more.

Anything less is short-changing onself and one’s community.

Anti-Immigration Measures, Wrong Yet Again

Embed from Getty Images

An anti-immigration position is for economics something like a flat-earth position would be for natural science: one may hold it only through either ignorance or disorder. (The ignorance would have  to be profound, as even the weakest grasp of economics would incline a rational person to acknowledge the benefits of a free, transnational  labor market; the disorder would have to be grave, as only obstinacy or prejudice would long resist a reasoned explanation.)

In this free, commercial republic, there are still some who are merely ignorant on immigration, but one has reason to believe that Trump pushes his line to fill empty vessels not merely with weak economics but with strong prejudices.

There are officials both in and outside the city who would bring Arizona-style ‘show us your papers’ laws to Wisconsin. They are wrong on economics, wrong on liberty, but at least they have this going for them: each and every one of these politicians (or the out-of-area mouthpieces on whom they rely) is an easily-identifiable troll for either ignorance or lumpen prejudices.

A quick note to the local officials of the city, school district, and university who are in the habit of inviting these anti-immigration politicians to public events: you debase the American tradition, and turn away from sound reasoning and thorough study, when you bring these few to your events. No supposed political necessity will justify their presence. One cannot profess a worthy education proudly and honestly while simultaneously offering a platform to the ignorant or biased. 

Just a bit of light reading in this regard —

Heather Long, It’s a ‘grave mistake’ for Trump to cut legal immigration in half:

President Trump endorsed a steep cut in legal immigration on Wednesday. Economists say that’s a “grave mistake.”

A Washington Post survey of 18 economists in July found that 89 percent believe it’s a terrible idea for Trump to curb immigration to the United States. Experts overwhelmingly predict it would slow growth — the exact opposite of what Trump wants to do with “MAGAnomics.”

“Restricting immigration will only condemn us to chronically low rates of economic growth,” said Bernard Baumohl, chief global economist at the Economic Outlook Group. “It also increases the risk of a recession”….

Jeremy Robbins, Trump says the proposed immigration bill will raise wages for Americans. It won’t.:

But while moving to a merit-based immigration system, Cotton and Perdue also propose reducing the number of legal immigrants admitted into the United States every year by half — from about 1 million to about 500,000. They argue that having fewer immigrants will leave more jobs available for American workers.

But the economy simply doesn’t work that way.

Economists who study immigration overwhelmingly agree that immigration is an economic boon to our country. Indeed, nearly 1,500 Republican, Democratic and independent economists — including six Nobel laureates — recently released a letter stressing the “near universal agreement” among economists of all stripes on “the broad economic benefit that immigrants to this country bring.”

To that consensus, Cotton responds: “Only an intellectual could believe something so stupid.” He instead points to Canada and Australia as models for limited legal immigration. However, while it’s true that Canada and Australia admit far more high-skilled immigrants, they also admit more family-based immigrants. In fact, on a per capita basis, they admit 2.4?and 3.5 times as many immigrants, respectively, as the United States does….

Jennifer Rubin, A crass play to xenophobes will go nowhere:

Because the bill went nowhere in April and will not make it onto the Senate calendar for the rest of the year, it’s an obvious, typical play to Donald Trump’s base, once more using immigrants as scapegoats and distractions. (“Trump’s appearance with the senators came as the White House moved to elevate immigration back to the political forefront after the president suffered a major defeat when the Senate narrowly rejected his push to repeal the Affordable Care Act,” The Post reported. “The president made a speech last Friday on Long Island in which he pushed Congress to devote more resources to fighting illegal immigration, including transnational gangs.”)

When introduced in April the bill was roundly criticized by more than 1,000 economists. There is near-uniformity among respected economists that immigrants do not “steal” jobs from native-born Americans (in part because they have different skill sets and in part because they make the economy bigger), have almost no impact on domestic wages (except for non-high school graduates, where the impact is less than 2 percent) and are essential to keep the economy growing. By reducing the number of immigrants by a half a million, the bill would shrink the U.S. economy and exacerbate the problem of an aging workforce (immigrants statistically are younger than the native-born population).

Nevertheless, for anti-immigrant groups who often insist they oppose only illegal immigration, it’s a revealing moment. They cheer the idea that we should take fewer hard-working, pro-American immigrants through legal avenues. (Trump, by the way, continues to hire substantial numbers of foreign workers at his resort in Florida.) No, the anti-immigrant forces simply want to keep people unlike themselves out of the United States. Their economic arguments are tired, wrong and a pretext for xenophobia.

The notion that immigration restriction raises wages has been disproved by past experience. (Canceling the 1960s Bracero program, akin to the Cotton-Perdue plan for lowering immigrant numbers, had “little measurable effect on wages.”) A slew of conservative think tankers and former officials condemn immigration restrictionism as rotten for the U.S. economy. The plan was swiftly criticized by Democrats, pro-immigration activists and economically literate Republicans.  Trump’s promise of 3 percent annual growth was far-fetched; with a proposed reduction of 500,000 people, it becomes impossible.

This is a confidence game from Trump: the bill is for suckers who think Trump will actually get something passed, and it wouldn’t lift wages as promised even if it should pass.

Reading and Reviewing

There are two books I’m eager to review here at FW: Katherine Cramer’s Politics of Resentment: Rural Consciousness in Wisconsin and the Rise of Scott Walker (2016) and Amy Goldstein’s Janesville: An American Story (4.18.17).  Like many others, I’ve been awaiting Goldstein’s book for some time, knowing that significant works take time.

For both books, I’ll proceed with a chapter-by-chapter assessment. I’ve the luxury of taking my time, for two principal reasons: first, blogging allows a self-chosen pace; second and more significantly, both books are worthy of detailed reviews.

There is a third reason, too, and particular to Whitewater:  this city’s local policymakers have a position so weak that their particular maneuverings are of little value. For them, unfortunately, it’s the fate of a grinding attrition for the near future. These political few, and those who have been part of this small group over the last generation, will have little part in whatever successful short-term events Whitewater sees.

A sensible, productive person would stay as far away as possible.  This class is, with a few exceptions, composed of individually capable people who’ve collectively thrown away capability. See, Whitewater’s Major Public Institutions Produce a Net Loss (And Why It Doesn’t Have to Be That Way). A political critique of Whitewater is now less a matter of advocacy as it is a recollection and narration of cumulative political errors.

The better approach for the city is a true private charity and a true private industry, unconnected to political policy. See, An Oasis Strategy.

Of Whitewater’s local politics, what once seemed to me primarily a matter of advocacy grew to seem more like a diagnosis, and now seems like epidemiology.

There’s a history to be written about all of this, incorporating particular projects into a bigger work, but for now it’s a greater pleasure to consider what others have written.

I’ll start Wednesday, and continue chapter by chapter, taking time with it all.

Plain-Spoken in a Small Town? Not Most Leaders

localThere’s a quaint – but false – notion that people in small towns are uncommonly plain-spoken, even blunt.  One sometimes sees examples of this in films or books, where residents are depicted as folksy straight-talkers (“shucks, I don’t cotton to no one abusing nobody,” etc.).  I’ve never heard anyone in Whitewater speak so colorfully, and I’ve doubts that anyone not on a Hollywood set actually speaks like this.

Most people – and certainly most leaders – in this small town don’t often speak bluntly and openly.  On the contrary, there’s bias against mentioning problems publicly, even if they stem from intentional, grievous misconduct.

Now, and in the years ahead, one can expect that a multi-ethic community such as this one will see heightened slurs and abuse, overuse of force against a few, and (much) official quiescence in the face of it. (Some will even encourage this, convinced that pressure is justified against others and feeling that it is cathartic for themselves.)

Early on, perhaps a few officials will try to stress the positive, hiding others’ wrongful conduct from view, on the theory that the worst of all this will go away.

It won’t.  Those who keep their heads down may later find that they’ve no longer the strength to lift them up again.  A difficult near-term for Whitewater is likely to get worse.  These actions will prove wrong in-and-of themselves, and secondarily will prove an effective retardant against discerning, prosperous newcomers. Such newcomers – much sought by local development officials – will go elsewhere.

No matter, sadly: most locally will carry on as they have been.

For communities choosing the quieter response, including this one, the die is cast.

Rapid Over Gradual 

There’s a policy study out from Cato entitled, 25 Years of Reforms in Ex-Communist Countries: Fast and Extensive Reforms Led to Higher Growth and More Political Freedom (via pdf Oleh Havrylyshyn, Xiaofan Meng, and Marian L. Tupy, Cato Policy Analysis 795, 7.12.16).

I finished it last night (the paper’s well-written, relatively brief, and persuasive). There’s no local implication, here, needless to say; the results are interesting in themselves. Here’s a bit from the executive summary, with the policy paper immediately following:

The transition from socialism to the market economy produced a divide between those who advocated rapid, or “big-bang” reforms, and those who advocated a gradual approach. More than 25 years have passed since the fall of the Berlin Wall in 1989, providing ample empirical data to test those approaches. Evidence shows that early and rapid reformers by far outperformed gradual reformers, both on economic measures such as GDP per capita and on social indicators such as the United Nations Human Development Index.

A key argument for gradualism was that too-rapid reforms would cause great social pain. In reality, rapid reformers experienced shorter recessions and recovered much earlier than gradual reformers. Indeed a much broader measure of well-being, the Human Development Index, points to the same conclusion: the social costs of transition in rapidly reforming countries were lower….

Download (PDF, 852KB)

The Growth That Uplifts

In a recent interview, Ana Revenga, senior director of the World Bank’s Poverty and Equity Group, talks about ending extreme poverty.  See, Ending Extreme Poverty: World Bank Economist Ana Revenga @ The Christian Century.

(The World Bank defines extreme poverty as living on less than $1.90 per person per day, and the article describes how they’ve arrived at that figure.)

Revenga is focused on Third World poverty, but her insights into poverty prevention are relevant even in less dire situations. 

Consider her answers to two questions from the interview:

What is the single most important contributor to the decline in world poverty?

The biggest driver of the success is economic growth—but not any kind of economic growth. What’s needed is economic growth that improves the income-generating opportunities of the poor. This kind of growth involves either raising the value of the agricultural products that the poor are producing or generating better jobs. Anywhere between two-thirds and 80 percent of the decline in poverty rates is due to this kind of economic growth….

Are there forms of economic growth that are not good for the poor?

Absolutely. You could have a country where all the growth comes from commodity extraction or from a pipeline. Those funds might generate income, but that money does not go back into the economy to improve the lives of farmers and is rarely invested in building further infrastructure….

Needless to say, Dr. Revenga is more than capable of setting the boundaries of her own views, yet it seems fair to infer that if not all growth should be valuable, then not all spending is valuable.

Whitewater’s conditions are milder than those Ana Revenga faces in her work, yet not so mild that some who experience them would describe them as mild at all.

This leaves us with a question: is it, can it be, a solution merely to buy capital, goods, or the means of their distribution at public expense?

‘WEDC has been a disaster from the get-go’

After years of defending the Wisconsin Economic Development Corporation, one newspaper (out of several in the area) finally concedes the obvious:  ‘WEDC has been a disaster from the get-go.’

See, from 11.28.15, http://www.gazettextra.com/20151128/our_views_consider_two_steps_for_salvaging_state8217s_job_creation_agency, subscription req’d.

Yes, it has been a disaster, as politicized intervention in the economy, to the benefit of one’s well-fed, white-collar executive friends, will prove to be.

Only eighteen months ago, when it should have been clear to a properly read man or woman that WEDC was conceptually wrong, Whitewater’s leading officials touted a second round of WEDC funding as though it were manna from God:

“For us to have gone through that first cycle so quickly means a lot of jobs and new entrepreneur start-ups here in Whitewater, including here in the Innovation Center,” he said. “This is a recognition of a great success story. They have invested in us a second time. Our job now is to drive that to even greater success.”

– Jeff Knight, Whitewater CDA Chairman

“I am selfish,” he said. “The reason I am selfish is that I want Whitewater to be a better city and our university to be a better place. Part of what we do is try to make this a better place to live, work, play and learn. I think that is very important. For the university, my selfish thing is that I want to keep the professors here, and keep our graduates here, and whatever we can do to make that happen, we need to do.”

– Richard Telfer, Chancellor, UW-Whitewater

It feels a bit like déjà vu to be standing here before you all today,” Clapper continued. “It’s been a little over a year since our first event; today, we are celebrating the start of round two and the first grants of that round….”

“In the physical sciences, a catalyst is defined as any substance that works to accelerate a chemical reaction,” Clapper explained. “Without the help of a catalyst, the amount of energy needed to spark a particular reaction is much greater. When a catalyst is present, the energy required for the reaction is reduced, making the reaction happen more efficiently. Without the help of a catalyst, chemical reactions might never occur or take a significantly longer period of time to react.

– Cameron Clapper, Whitewater City Manager

See, from 6.9.14,
http://www.dailyunion.com/news/article_c8e49416-efe6-11e3-b1b0-0017a43b2370.html.

Knight speaks in empty platitudes, Telfer should have stopped after his first three words, and Clapper’s idea of chemistry is more like alchemy.

From the beginning, this was an empty ideology, a Third-World-style cronyism.

Whitewater deserves better.

Boo! Scariest Things in Whitewater, 2015



Here’s the ninth annual FREE WHITEWATER list of the scariest things in Whitewater for 2015. The 2007, 2008, 2009, 2010, 2011, 2012, 2013, and 2014 editions are available for comparison.

The list runs in reverse order, from mildly frightening to truly scary.

10. The Coming Ferret Invasion. Alternative title: The Unprepared Will Be Doomed.  Earlier this year, I predicted that Whitewater would experience a massive invasion of ferrets.  Why?  Because I correctly guessed that New York City would not lift its ban on ferret ownership in that city.  In consequence, the aggrieved, hidden ferrets of the Big Apple are sure to decamp for ferret another location.

Whitewater, of course.

In my estimation, they were supposed to be here by mid-October, but perhaps they’re walking more slowly than I’d calculated.

In any event, there’s a way to protect ordinary, decent residents from the rodent takeover.  (It’s mistaken to say that this website does not offer solutions to problems.  It often does.  I would also
remind officials of Whitewater that the easiest way to avoid problems is not to take actions that cause problems.)

Here’s how to protect Whitewater against thousands of invading ferrets.  First, find a city official who has time on his hands.  That’s the easy part. Second, station that official miles from Whitewater, in a rural location between here and the ferrets’ path.  Third, as these small, voracious mammals approach, it will be the official’s job to associate a picture with food, happiness, etc., in the ferrets’ minds. That way, they will seek the location in the picture, and avoid residents’ homes and businesses.  The entire advancing horde will congregate only at the location depicted in the photograph.

I’ve just the place in mind:

WWMB

Problem solved.

9. Key People.  I heard a presentation recently where the presenter tried to reassure others that she would seek the input of key people.  There are no key people – at least not in a way that makes it worth using the term.  There are only key ideas.  All the rest is an attempt at flattery or an expression of insecurity.

A group of supposedly key people is no match for one ordinary man or woman with a key idea.

8. One’s Own Words.  They must be scary; one hears them so seldom.  There are a few who think that somehow they’re better off relying on poorly written and poorly read publications than speaking and writing on their own.   That’s a mistake.  Servile papers and websites will not prove enough, anymore; the readership dynamic in this city shifted irreversibly against their publications.

(Actual traffic measurements of various publications are nothing like how insiders or publishers want to portray them; realistic measurements show how far insiders’ publications have declined or stagnated, and how much others have gained.  One can be very confident about the future in this regard.)

Talented people – including many officials individually – are simply throwing away their opportunities when they rely on publications markedly inferior to their own abilities.

7. Potholes.  They must be scary, because we’re avoiding them, and spending more on big projects than we’d need for simple street repair.

6. Gaps.  The greatest republic in human history (ours) grew in liberty and prosperity though careful examination of projects and ideas.  We did not develop word-class technologies by believing ‘close is good enough’ on engineering or fiscal projects.  When, however, someone asks that American standards be applied to Whitewater’s projects, officials whine that identifying gaps is unfair, nitpicking, etc.

In what society do they think they live, for goodness’ sake?

America is great, in significant part, because she – unlike foul Third World autocracies, for example – expects high standards from her leaders and their proposals.

5. Open Government & Temporary Amnesia. Every public body has a website, on which they publish every big boast, but somehow these same officials can’t seem to remember how to post key public documents prominently.  They seem to forget, but only temporarily and selectively.

4. WEDC money.  Not just worthless – it is – but worse: a diversion of resources from far greater needs.  The many poor in this city get nothing from this money.

warg

 

3. Data.  Presenting scores in a realistic context is harder for Whitewater’s school administrators than facing a pack of savage wargs.

2. Filth, Scum, and the Flimsy Scheme to Bring Them to the City.  I’ve a series about this, in WHEN GREEN TURNS BROWN.  There’s a burn-the-village-to-save it quality to waste importation as a means of revenue.  (And yet, the sadness here is that the entire digester-energy project was unnecessary, and the obloquy it brings being wholly deserved for being unforced.)

1. The Ethical Indifference of Act Utilitarianism. Some of the large public institutions of this city show time and again that they care more about their reputations – and that means the reputations of their leaders – than the health and safety of their ordinary members.

The worst example of this has been the repeated downplaying of violent assaults against women on campus while touting accomplishments that cannot, ethically, matter as much as those injuries. These have been self-protective, morally empty, and ultimately futile attempts at diversion and subject-changing.

A climate like this has invited and will invite further tragedies; the worst of this, sadly, surely is not over.

Other officials who allow subject-changing are, themselves, culpable of a supportive wrong.  See, An Open Note to Leaders of the Municipal Government, the School District, and UW-Whitewater.  It’s right and fair that officials who aid in diversionary conversations should be called out directly & specifically when they make that attempt.

For it all, we’ll get to a better city, consigning these ways to the dustbin.

There’s the 2015 list.  We’re more than able to overcome these problems, for a stronger community.

Best wishes to all for a Happy Halloween.

The Rise and Fall of the Chinese Economy

You’ll find in the video above a concise, balanced assessment of China’s economic prospects from economist Tyler Cowen. The short-term is sure to be rocky, but there are good, long-term prospects for China. (Prof. Cowen doesn’t say so, but those long-term prospects are likely to include – indeed, to require – a China without the Party.)

One may be absolutely certain that Whitewater is not China; the video isn’t meant to offer a comparison between that big country and our small city. It’s just an informative summary on its own merits.

One can say, though, that even a few minutes of Prof. Cowen’s assessment illustrate how mediocre Whitewater’s own economic development specialists are – even his simple video summary is superior to any analysis ever offered from Whitewater’s CDA, Tech Park Board, etc.

Don’t think so? Fair enough: produce anything of comparable, concise understanding that any of our self-declared experts has ever demonstrated concerning local municipal finance and development.

Here’s the simple – and cold – truth:

One American university economist surpasses the combined competency of all local development specialists entrusted with millions of dollars from thousands of taxpayers in the city. Even worse, many residents of this city have children living at the poverty level, and still they’re supposed to defer to a local understanding that’s laughably thin, for projects that are utterly worthless to their well-being.

See, The rise and fall of the Chinese economy @ MARGINAL REVOLUTION.

Business v. Free Markets

Over at Cato, David Boaz writes about The Divide between Pro-Market and Pro-Business. (I’ve also linked to Boaz’s post at my libertarian website, Daily Adams.)

Boaz observes that, too often, business (especially big business) is an opponent of free markets:

In 2014 big business opposed several of the most free-market members of Congress, and even a Ron Paul-aligned Georgia legislator who opposed taxpayer funding for the Atlanta Braves.

The U.S. chamber jumped into a Republican primary in Grand Rapids, Mich., to try to take down Rep. Justin Amash, probably the most pro-free-enterprise and most libertarian member of Congress. Free-market groups, including the Club for Growth, Freedomworks and Americans for Prosperity, strongly backed Mr. Amash.

And now the chamber plans to spend up to $100 million on the 2016 campaign. Roll Call, a Capitol Hill newspaper, reports, “Some of business’ top targets in 2016 will be right-wing, tea party candidates, the types that have bucked the corporate agenda in Congress by supporting government shutdowns, opposing an immigration overhaul and attempting to close the Export-Import Bank.” Politico adds a highway bill to big business’ list of grievances against fiscal conservatives.

This clash between pro-market and pro-business is an old one. Adam Smith wrote “The Wealth of Nations” to denounce mercantilism, the crony capitalism of his day. Milton Friedman said at a 1998 conference: “There’s a common misconception that people who are in favor of a free market are also in favor of everything that big business does. Nothing could be further from the truth.”

Locally, which side would one choose, in a contest between (a) Smith, Hayek, & Friedman on one side, and (b) on the other side the economic manipulations of the WEDC,  UW-Whitewater chancellor, Whitewater city manager, Community Development Authority, and (with some of the same ‘development’ gurus) the Greater Whitewater Committee business lobby?

Honest to goodness, that’s no choice at all.

When one contends in support of free markets, doing the best one can to understand, apply, and defend the arguments of Smith, Hayek, Friedman, et al., one embraces a tradition incomparably superior to the crude, deceptive, and ineffectual manipulation of the economy to the benefit of a few, favored businesses.

One can be confident about this not because there’s anything special about oneself (in my case there certainly isn’t), but because the tradition of which one is a proponent is vastly better than the views of those on the other side.

A strong tradition uplifts its advocates; a weak tradition diminishes its adherents.  Personality doesn’t matter more than sound principle; sound principle creates the world in which personality, of whatever type, may be freely expressed and enjoyed.

 

 

Methods, Standards, Goals

Whitewater doesn’t have, and hasn’t had, a legitimate press that would serve as a check on political or corporate power.  On the contrary, what’s passed for reporting in our area is merely written sycophancy.  In this way, Whitewater has been ahead of a national trend toward a weaker press, or no press at all.

Yet, before plentiful newspapers, before a vigorous press, America had vigorous inquiry and debate. We’re now returning to something like our early era of pamphleteering, made incomparably better for being both audio-visual and also more dynamic between readers and authors.  For the waning press, the new way represents a shock of inclusion, but that shock is all to the good.

What, then, shall we do, in this new (but in some ways old) world?

This world will not be won through grand pronouncements, but through daily work, repeated over months, seasons, and years. One begins every day with new work to do, knowing there is always more to do, tenaciously approached from the perspective of a dark horse underdog.

That sort of work requires methods, standards, and goals.

Methods.  One should have a method, in the case of a blogger, with Steps for Blogging on a Policy or Proposal.  There should be a discernible pattern to one’s work.

Critically, though, method should meet one’s standards and goals.  Just as the Romans had to build a fleet, mostly from scratch, to battle Carthage, so one sometimes has to build new things to achieve one’s goals.  In those cases when a new method or medium is required to carry the day, one learns, builds, and deploys those methods or media accordingly.

If one needs ships, and doesn’t have them, one learns shipbuilding, and then builds ships.

Standards.  We are an advanced people, as are many of our friends abroad.  We deserve more than dodgy data, deceptive claims, and lazy work.

The overwhelming number of people in any community are sharp and capable; society would not be possible otherwise.  Libertarians (as I am) do not hold this as true because we say it; we say it because it is true.

(Some number of people in any community are permanently disabled or disadvantaged.  We do not need obligations from them; they need comfort from us.)

For our city, then, we owe ourselves the best of Wisconsin, of America, and of civilized places beyond, for all Whitewater.

Goals.  A community’s future may take diverse ideological hues, of left, right, or center.  That will always matter less than that our  community – each person, individually – is assured the rights of all of America, and all of Wisconsin, for all of Whitewater.

One can see that a community’s fixation on a few key people, stakeholders, or influencers is both childish and destructive.  It’s to the good that this way of thinking slowly wanes in Whitewater: it’s been bad for our politics, and not a single mature & reasonable person will ever miss it.

Those who glory in personality are proud; those who submit to such people are pitiful.

The goal, then, should be rights universally upheld, but the obstacle is bias, partiality, and the overweening entitlement of a few against the many.  It’s to the best, all things being otherwise fair, to balance against power, as Churchill observed of Britain in the nineteenth century: “We have in all occasions been the friend of the second strongest power in Europe and have never yielded ourselves to the strongest power.”

So it should be with commentary: balancing against the conflict-riddled, influence-seeking of a few, who would manipulate politics or economics to their illegitimate ends.

In method, standards, and goals this is decisive: a dogged commitment each day, assuring a better future.

 

 

 

Fog Lifts

Whitewater started the day with fog, but there has never been a place, anywhere or ever, in which the fog did not lift.

There’s reason for confidence that even befogged places see, in the course of events, clear skies.

I’d guess, though, that most policymakers in town (such as they are) don’t believe that policy follows underlying social forces or structural limits the way, for example, weather develops in accordance with natural forces (that people can explain and predict).

Just the opposite is probably true, actually: to listen to economic development officials at the Community Development Authority or in the city administration is to hear something closer to stream-of-consciousness fiction than social science, let alone meteorology.

In this sort of befogged environment, it makes sense that self-styled public relations men, incurious and servile reporters, avaricious big-business interests, mendacious officials, academics who distort data, administrators who discard individuals and individuals’ injuries for the sake of their own undeserved reputations, etc., would play an outsized role.

These few of overweening ambition and underwhelming results have one thing, at least, in common: they think that accomplishment – and even truth – is found simply in the declaring, in the insisting, of it.

The people of this beautiful city are far more capable, far more clear-sighted, than the town’s political leaders and economic policymakers.

Good policy, like meteorology, is more than hoping the day will be sunny; it requires understanding what makes a day cloudy or bright.

The Limits of China Under Communism

A single paragraph from Jacob Soll puts China in perspective: 

There is no historical example of a closed imperial economy facing large capital-driven, open states and sustainably competing over a long term. That is not to say that China isn’t an economic powerhouse and a remarkable site of energy and potential. It is certainly both. But we also know Chinese debt — as secret as the state likes to keep it — is enormous, and that its financial system is like any other bubble. It is predicated on inflated earnings reports and expectations.

The great “Beijing Consensus,” China’s absolute commitment to showing 8% growth every year, is unsustainable, at least through legitimate means. And without it, China is beginning to look like an enormous totalitarian ponzi scheme — a phenomenon common enough in world history, but extremely dangerous to be near in the long run.

Via China: The new Spanish Empire?

Film: From Dishwasher to Award-Winning Restaurateur

I suppose that if I wanted to curry favor with others, I’d talk about the need for immigration restrictions, or at the least I’d avoid taking a contrary view (a restrictive position being so popular these days). That would seem to me a timid way to face the world, unfit for robust Americans. One should be direct in one’s views.

So, I’ll say what I do believe — in the ethical and practical value of free markets in capital, goods, and labor.

A major party that once embraced these views has turned away from them. We who are libertarian will not do the same. We are confident that an economic philosophy of free markets was right yesterday, is right today, and will be right tomorrow.

Hugo Ortega crossed over the Mexican border and arrived in Houston, Texas, without documents and without knowing any English. Over the next few years, he would become a citizen through President Reagan’s amnesty program and go from washing dishes to owning multiple restaurants. Now, he and his wife, Tracy Vaught—whom he met while working as a dishwasher in her restaurant in the 80’s—are the “reigning powerhouse couple of Houston’s competitive restaurant scene.”

In this documentary produced by Katherine Wells for The Atlantic‘s American Dreams series, Ortega reflects on his journey within the industry. “I have a great responsibility to represent the Mexican cuisine in a proper way,” he says. “It’s a magnificent cuisine.”

The WEDC Taints Walker (and local officials even more)

The WEDC is a state and national story that has local implications.

Some of the toughest political battles are intra-party ones: Republicans or Democrats fighting against fellow party members for their respective primary nominations.  For rival Republicans, Gov. Walker’s creation of the Wisconsin Economic Development Corporation will offer a legitimate and compelling line of attack against his candidacy.  (The former Wisconsin Department of Commerce was no great shakes; the WEDC is worse. )

Republicans like Gov. Walker, but there’s more than one national GOP candidate who is well-liked within the party.  In fact, they’ve a large field of candidates who, regardless of relative standing in the polls, are well-regarded among the party faithful.    That’s Gov. Walker’s self-created problem with the WEDC: it’s a bad idea that other Republicans will legitimately use as a point against his candidacy.

Peter Suderman (himself a libertarian, not a Republican) makes the argument that, if necessary, others will make along the way to the GOP national convention next year:

Walker’s jobs agency is better understood as a model of what not to do. The persistent struggles of his perpetually mismanaged, publicly funded business development facilitator highlight just how inept government-designed agencies can be at spending taxpayer money to create jobs, and the perils of a politically driven, get-something-done approach to economic growth. And, in combination with his flawed arguments for the stadium deal, they offer a stark reminder of the sort of dismal results that can occur when politically connected corporate interests team up with politicians under the banner of happy economic boosterism: Businesses benefit, and so do politicians—but only at taxpayers’ expense. Despite Walker’s campaign-trail claims to be a champion for the little guy, what he’s inadvertently shown in Wisconsin is how the special interests win.

SeeScott Walker, Crony Capitalist: The Wisconsin governor has a long record of doling out corporate welfare to political allies @ Politico.

The WEDC is also a local story, as so many political officials, moribund print publications, and the self-described ‘Greater Whitewater Committee,’ a 501(c)(6) business lobby entwined with the CDA, erroneously believe that WEDC-like projects and spending will uplift the community and advance the reputations of those involved.

It’s hard to believe that these few local men could have been so ignorant and foolish, but they have been. They’ve committed to a selfish and sham policy that has not the slightest chance of genuine local gains. This banana-republic economics has nothing behind it.

Gov. Walker is far more capable that any local official in the city; our town squires have no chance whatever of achieving what he has (and indeed, could) not.

The full measure of cheerleading from Whitewater’s reflexive flacks, and their dutiful friends in the press or online, is useless to rehabilitate, let alone justify, years of economic error.

On neither Left nor Right, from among the many fine American economists designated Nobel laureates, for example, there’s not one – not one – who would defend the white-collar cronyism of the Whitewater CDA, Tech Park Board, city manager, or like-minded print & online publications.

By contrast, the most insightful thinkers (among them, Hayek, Friedman, Coase, Buchanan, Krugman, Stiglitz) – of whatever ideological position – would be united in rejecting anything like these local efforts.

A critic of cronyism has centuries of learning in support of his or her criticism; a defender, however crafty or insatiable in self-promotion, has not a single, worthy argument on which to rely.

That’s why efforts in support of these development schemes are destined only to rust, rot, and ruin.

The case against this cronyism, by contrast, is incomparably stronger and imperishable.

Retrospective and Prospective Costs

There are few more useful ways of looking at expenditures made and expenditures contemplated than as retrospective (sunk) or prospective (future) costs. 

Consider the example of a man building a boat to catch one-hundred pounds of fish per day.  The fisherman spends seventy-five thousand building his own boat, and is partly done.  If he spends another twenty-five thousand, he’ll have completed his project, and be able to catch his desired quantity of fish.

He then learns that there’s a boat he could buy for fifteen thousand that would enable him to catch as many fish, and as well. 

His goal is to catch a hundred pounds a day, and now he has a choice: finish his own maritime creation at a remaining cost of $25,000, or buy a completed boat that will perform the same task for $15,000.

What’s the better option? 

He’s already spent a lot (his sunk cost), but he can achieve his goal (fish-catching) and save money ($10,000) if he simply buys a completed boat. 

Placing sunk costs in perspective, rather than being bound by them for subsequent expenditures, allows someone to spend money and allocate resources wisely.  (There are limits on any perspective, but this one is often useful.)

Looking back at a recently-held Common Council meeting, it’s clear that one can be elected, mature in age, and professionally-credentialed, and still misunderstand or ignore this useful perspective. 

That’s Councilmember Ken Kidd’s mistake, in part, when discussing whether to accept the work of the Donohue Engineering firm for wastewater upgrades and a waste importation scheme:

So then are we going to have a third independent if there’s a [laughter]…are we going to break the tie if there’s not agreement?….We worked really hard to choose somebody we trusted, and then we’re going to say Cameron go find some guy that’ll come in and are we going to trust that person? I mean, it would be nice if somebody with credentials comes in and says, ‘this is the best plan I’ve ever seen’ and that’ll be easy. But if he doesn’t, then I think we have to at least think about what’s our next step. Then are we going to engage an alternative engineering firm?

Dr. Kidd doesn’t want to look elsewhere (that is, to commit to a prospective cost), because he feels that “we worked really hard to find somebody we trusted” (that is, he thinks he’s put in enough work already).

But that work’s done, and the only forward-looking question should be what to do next (as Dr. Kidd himself comes close to seeing). 

It’s just that he doesn’t want to face that question, having (at least by his own account) done a lot of work already. 

It’s prudent to consider a future cost; it’s a mistake to lead with an emphasis on sunk costs.

(This leaves aside the question of whether Donohue’s work is, as Dr. Kidd implies, an independent study; it’s nothing like a genuine, independent study.  It’s a third-party sales presentation tailored to city officials’ narrowly-defined, revenue-generating goals.  See, on this point, Studies and The Scope of Donohue’s Work (Part 2).) 

One can conclude two things about this.  First, credentials are not enough (medical doctor, university administrator, dog groomer, whatever).  Careful reading and testing of ideas in politics and economics are what a small town’s government needs.  A mere title assures none of that. 

Second, this careful reading and testing of ideas in politics and economics is an ongoing pursuit.  Neither political office-holding nor political commentary is a reward for past accomplishments, as though they were gold watches. 

What one did is yesterday’s work; it’s done, and one should look to what is – and should – yet to be done

The State’s WEDC and Whitewater’s Facsimiles

Ongoing revelations about the Wisconsin Economic Development Corporation are a double concern: they’re stories of statewide malfeasance, and those revelations beg the question of how local officials in Whitewater are managing their own pools of public money.

First, the latest stories (it’s a steady stream) of state-level error, waste, and negligence:

Madison— Failing to run adequate checks, Wisconsin’s flagship jobs agency gave two awards worth more than $1.2 million to a financially troubled De Pere businessman who had not disclosed his problems to the state, a Milwaukee Journal Sentinel review has found.

Despite those omissions in 2011 and 2012, Gov. Scott Walker’s administration kept working with Ron Van Den Heuvel and his clean energy company, Green Box, into 2014, state records show.

There is no record of the Wisconsin Economic Development Corp. notifying the city of De Pere about the company’s money troubles even though Green Box was working with the city in an unsuccessful attempt to get tax-exempt bonds — in part to repay the state’s soured loan.

It’s the second case disclosed in recent weeks in which WEDC failed to catch omissions by businesses about their troubled finances and then continued to work with them….

Via Jobs agencies loaned $1.2 million to businessman with troubled finances.

Yet make no mistake – even after being thrust into the spotlight WEDC is pressing on in issuing unmonitored awards. Just this past Monday [7.20.15] – four days ago – Walker took a break from his campaign to drop in on the agency’s quarterly board meeting. While that $500,000 loan [for William Minahan] was on the public agenda and one board member openly wondered why there hadn’t been “a giant red flag to cease and desist all activities,” the agency’s staff quietly presented a different proposal: to cut the number of tax credits [that] the agency audits from a required 100% (which it has never managed to comply with), to just 25%.

Via Brian Murphy @ Talking Points Memo

Second, inevitable concerns arise about local distributions after a stream of state-level reports: should a reasonable man or woman believe without careful inquiry & verification that state officials have managed these kinds of public funds poorly but that local officials (the CDA, Tech Park Board, etc.) have performed better? 

Put another way: Does anyone think that state officials are less competent and diligent than their local counterparts?

I don’t know.

At the very least, Whitewater – her city government, her Community Development Authority, all with pools of taxpayer money to dole to so-called startups, etc. – the officials responsible owe as much of an accounting of actual performance as any state official. 

In a well-ordered community, these local distributions would be periodically and independently audited. 

Libertarians (and others of different views) know well that any number of special interests – business, labor, political – will seek to ensconce themselves into government positions, directing government work to their own selfish ends. 

One would prefer a community requiring no political concerns.  A serene place like that would perhaps be a world only of cat videos and puzzles; we do not live in such a place. 

Grants and loans of public money to white-collar firms, an addiction to tax incremental financing, sketchy claims of job creation, expensive buildings at public expense, public men who present themselves as development gurus, the selling of public property to business interests too cheaply – this gutter economics infects the CDA and other public agencies in Whitewater. 

In a city with so many who are poor, these distributions to white-collar professionals have been utterly ineffectual for the many, and useful only to a few (for their immediate gain or in scrapbook headlines).

In any event, no one owes these few their claims on faith alone; they’ve wasted too much already in this city. 

Perhaps it is enough – Dieu aidant – that some are naturally inclined to review, first from curiosity and thereafter in root-and-branch scrutiny. 

Meetings & Motivations

WGTB logo PNG 112x89 Post 11 in a series.

This is series about a proposed digester energy project for Whitewater, one that would rely on importing other cities’ unwanted waste into Whitewater for processing.

A series like this is only indirectly about general wastewater upgrades, at whatever price. It’s about waste importation, and officials’ claims that importation would be clean and profitable. It’s necessarily and directly about the consequences of waste importation, fiscally, economically, environmentally, and as an expression of a city’s business and political culture.

Updated 6.9.15 with video.

Planning for a Public Meeting from John Adams on Vimeo.

During a recent Common Council meeting from June 2nd, at item C3, Common Council discussed a public presentation about upgrades to the wastewater facility. Part of that discussion implicates the digester proposal, but much concerns other matters.

During that discussion, at C3 and again later, City Manager Clapper expresses his confidence in the full project, including implicitly a plan to import waste into Whitewater (he’s not alone in that confidence, among those in attendance).

Part of City Manager Clapper’s confidence comes from a mild or positive reception that he’s received from selected stakeholder groups.

This raises two questions, not needing to be enumerated, but implicated in the entire project and this series.

First, why would anyone doubt that the response to city officials, from among selected audiences, would be other than mild or positive?

Second, does anyone at the 6.2.15 meeting actually believe that my questions are designed simply toward a political vote on the project?

Of the first, there are good examples from across America of waste-importation projects like this one, and how local government approves or rejects them. I’ve no idea what Whitewater’s various engineering firms have said about these votes (if anything), but then, it’s always better to do one’s own research. What Mr. Clapper is now seeing is common, almost predictable, in the short-term in these situations.

Of the second, I’m not interested solely in the short-term, of Whitewater getting or rejecting an importation plan. If City Manager Clapper wanted a vote on this project tomorrow, including importing as much waste into Whitewater as he could shovel, he’d receive easy political approval for that idea.

But looking at this project as a matter of approval or rejection isn’t looking at this project, it would be looking at approval or rejection of it.

Looking at an importation plan (and that’s what this series is about) has value far beyond Whitewater, as an examination of how communities consider, approve, and implement these supposedly green and supposedly energy-generating ideas. What matters most happens only after a program like this starts running.

There’s Whitewater’s importation plan, there are the longterm implications of Whitewater’s plan for Whitewater, and there are the implications of Whitewater’s plan generally, for any community, as a supposed digester-energy project.

These three aren’t the same.

I’ve a guess – and it’s just a guess – about why the obvious, long-term motivation of my series doesn’t (at least doesn’t seem) apparent to City Manager Clapper.

I’ll write about that tomorrow, using an observation a longtime resident sent me about marketing efforts for Whitewater.

Original Common Council Discussion, 6.2.15
Agenda: http://www.whitewater-wi.gov/images/stories/agendas/common_council/2015/ccagen_2015-0602.pdf
Video: https://vimeo.com/129697983

WHEN GREEN TURNS BROWN: Mondays @ 10 AM, here on FREE WHITEWATER.