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Author Archive for JOHN ADAMS

Business, City, Corporate Welfare, Government Spending, Taxes/Taxation

A little consistency would be in order

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Around two years ago, the Wisconsin Department of Revenue changed the method by which municipalities valued private properties. The state concluded — correctly — that municipalities were often over-valuing and thus over-taxing private properties. For businesses, a correct, lower assessment meant less in taxes; for municipalities, an over-valuation was useful to extract as much in tax revenue as possible.

(I’ll write more tomorrow about what this meant for Whitewater’s failed tax incremental district 4. In brief: it was a convenient excuse for poor city planning.)

One of the businesses that benefitted from a correct assemement – rather than an inflated one — was Generac. As their assessment went down, so did their taxes owed.

An accurate assessment was the right decision — Generac shouldn’t have to pay on an inflated value.

And yet — and yet — consider what this means by consequence: Generac plays less into the public coffers in taxes, but now wants more from the public coffers in subsidies for a bus line to suit its own business needs.

Businesses that don’t want to pay more in taxes shouldn’t take more in taxes.

Whitewater’s municipal administration should have told Generac – or any other big business — exactly that.

Daily Bread

Daily Bread for 4.16.12

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Good morning.

It’s a rainy day in Whitewater, with a high temperature of fifty-five.

Whitewater’s Parks & Rec Board meets today at 5 PM.

The Wisconsin Historical Society recalls that on this day in 1916:

Wisconsin governor and comic author George W. Peck died. Peck was born in New York in 1840, but lived in Wisconsin from 1843 until his death in 1916. He was connected with newspapers in Whitewater, Jefferson, and founded the La Crosse Sun in 1874, which he later moved to Milwaukee. At one time he was the best-known Wisconsin writer in the nation, for his sketches titled “Peck’s Bad Boy.” He was also the author of Peck’s Compendium of Fun, and Peck’s Sunshine, as well as many other stories in some way connected with the mischief-loving, mirth-provoking “Bad Boy.” One of his books, Peck’s Bad Boy With the Cowboys, is online at Project Gutenberg. Peck served in the Union Army during the Civil War and was elected mayor of Milwaukee in 1890. He served as Governor of Wisconsin from 1891 to 1895 but was defeated for re-election. Peck is buried at Forest Home Cemetery in Milwaukee. [Source: Wisconsin Electronic Reader].

There were later films based on Gov. Peck’s characters.

Google’s daily puzzle asks about an animal: “What animal is nature’s only daily drinker, searching out naturally-occuring alcohol each night?”  I wouldn’t have thought that there were any such animals, but there’s at least one.

Daily Adams, Libertarians

FreedomWorks sides with Cato against the Koch Brothers

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The Tea Party activists at FreedomWorks have now condemned Charles and David Koch’s war to control the Cato Institute.

Though they value independence themselves, they’ve received Koch money, and funding like that softens resolve. To their credit, FreedomWorks stayed true to their oft-professed belief in independence:

The work of the Cato Institute – producing top quality intellectual ammunition unyielding in its defense of economic freedom and the unalienable rights of the individual over the encroachments of big government – is clearly threatened by the decision of Charles and David Koch to file a lawsuit against the Institute and Bill Niskanen’s widow, Kathryn Washburn. These actions put an internal governance dispute into the light of day, and the enemies of liberty are having a field day exploiting the distraction. We don’t always agree with individual Cato scholars, but that is precisely the point. They are independent, and their independence is their most valuable asset in the push and pull of the public debate.

It is our hope that the parties at Koch Industries will reconsider their ill-conceived actions so that Cato is there in the future, intact, aggressively holding both Democrats and Republicans to account for any and all efforts to grow the size and reach of government.”

Well-said, true, and welcome to the friends of Cato in their struggle to defend the finest libertarian research institute in the world.

Posted originally on 4.12.12 at Daily Adams.

Business, City, Corporate Welfare

A Local Flavor of Crony Capitalism

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Multi-city Generac, a large industrial concern, wants government money — federal, state, local — for a bus line to bring workers from the Janesville-Beloit area to its plant in Whitewater. The bus line’s really good for no one but Generac’s employees. The times for the proposed line are tailored not to community needs, but to Generac‘s shift-schedule.

It’s just crony capitalism, where the big get bigger at public expense.

Only a few months ago, in a grand announcement that Gov. Walker and Assembly Rep. Evan Wynn attended, Generac declared that it was hiring hundreds of new workers for its Whitewater plant. This was touted as the private initiative of a thriving manufacturer.

Now, one learns that it’s not really a private initiative: Generac’s grabbing $83,005 in public money to bus workers from other cities to its plant in Whitewater.

What’s Generac?

It’s a multi-billion-dollar company with factories in multiple locations. That’s literally true, as publicly-available data from the Wall Street Journal’s MarketWatch reveal:

Market capitalization: $1,600,000,000 (1.6 billion)
Average shares traded on the NYSE: 266,00 daily
Sales revenue 2011: $791,000,000
Revenue per employee: $356,264

Within the last three months, MarketWatch lists 17 insider (executive) stock purchases at Generac, totaling 134,697 shares, and in the last six months two sales totaling 19,591 shares.

Despite these vast sums, Generac wants public money from the City of Whitewater, UW-Whitewater, the State of Wisconsin, and the United States of America.

That’s what passes for initiative: They’ve hit up all the usual public entities they could find.

If Generac can’t pay its full weight — despite a record of huge private growth — who can?

No one.

One newspaper’s account of the ten-month cost of this service is false and misleading.

The total cost is $128,310. The actual public cost to support Generac is $68,005 in state and federal money, and $15,000 in funding from the City of Whitewater and UW-Whitewater. That’s a total of $83,005.

It’s simply not true that Generac’s portion of $26,058 is a majority of the cost — it’s not even a match for the public portion of the cost. Reporting the ‘local sponsorship cost’ (Generac, Whitewater, UW-Whitewater) conceals the true burden on taxpayers to support Generac.

Publishing big companies’ and local officials’ talking points isn’t reporting — it’s stenography.

Why can’t Generac pay even $7,500 more – the City of Whitewater’s share — for its own needs?

It can, but why should a business pay when it can take from others?

When Generac, Gov. Walker, and Rep. Wynn announced this deal, why didn’t they say they’d need public funds to make it work?

I’ve read announcement after announcenmet of this project, including the press release from Gov. Walker’s spokeman Cullen Werwie, and they never mention that only months after this supposedly private accomplishment, someone would hit up every part of the government one could to subsidize Generac.

What makes Generac’s needs more important than those of other businesses?

They’re not more imporant, but Generac’s more influential. It could easily pay Whitewater’s portion, but by committing Whitewater now, they’ll have a thin-entering wedge to get more from the city later.

What happens next year?

Let’s assume these workers are still working at the Whitewater Generac plant next year. If Generac can’t get money from the state and federal governments, it’ll be sure to ask for more from Whitewater.

If it does, it’ll have incredible leverage. What will Common Council say to this business then? They’ll have nothing to say, because if they object to Generac’s demands, Generac will say that Council’s putting jobs at risk.

(That’s not true — it’s Generac that’s putting jobs at risk by not providing for its workers or not hiring locally. Still, it’s what Generac will say, and it will work.)

In response to a claim like this, Council will be forced to cave, and give a thriving buisness whatever it asks, despite that business’s ability to pay its own way.

If you had $7,500 to give for a Whitewater need, would you put Generac at the top of your list?

The question’s rhetorical. No one (possibly excepting an executive at Generac) would put this at the top of his or her list.

What does it say about the actual state of Whitewater’s economy that Generac can’t find workers here?

It’s certainly not because we don’t have prospective employees here. We do — we’re not (as a sharp reader recently reminded me) anywhere close to full employment.

I don’t believe Generac deserves a penny of Whitewater’s public money, and I’m skeptical of their claims, generally. But if Generac should be right, and there aren’t enough people here worth hiring, it’s a big problem for the city.

Giving wealthy Generac money isn’t a garden-variety mistake — it’s a gross embarrassment to every official who supported this idea.

Daily Bread

Daily Bread for 4.13.12

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Good morning.

Friday ends Whitewater’s week with a chance of showers and a high of sixty-two.

NPR asks a question about catastrophes: Why didn’t the passengers panic on the Titanic? (They did panic when the Lusitania sank.)

David Savage, an economist from Queensland University in Australia, has a theory:

There were a lot of similarities between these two events. This ships were both luxury liners, they had a similar number of passengers and a similar number of survivors.

The biggest difference, Savage concludes, was time. The Lusitania sank in less than 20 minutes. The Titanic took two-and-a-half hours.

“If you’ve got an event that lasts two-and-a-half hours, social order will take over and everybody will behave in a social manner,” Savage says. “If you’re going down in under 17 minutes, basically it’s instinctual.”

Plausible, one supposes.

Google’s puzzle asks a question about another kind of accident: “You’re piloting a plane without skis over the Antarctic. Suddenly, you have engine trouble and see a patch of blue ice below. Should you aim for it?”

Elections, Recall, Unions

The Wisconsin Unions’ Doomed Primary Pick

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Kathleen Falk, the choice of every Big Labor board in Wisconsin, received fewer than half the votes in a Democrats’ straw poll in her home base of Dane County.

It’s hard to overestimate how telling this is: union leaders are sure she’s the best candidate to take on Walker, but even Democrats she knows aren’t sold. (An alternative explanation is that especially Democrats who know her have doubts about her candidacy.)

The big Wisconsin story will be whether Gov. Walker is recalled, but there will be another, close behind: how ordinary Democrats chose to reject a heavily-endorsed union candidate in favor of someone else to face Walker.

The talk outside the state is that the recall is a battle against overreaching unions. The truth inside the state is that union endorsements aren’t enough to assure a candidate’s victory, even in the May 8th recall primary.

This must look to Democratic rival, and Milwaukee mayor, Tom Barrett as tailor-made: it’s as though Falk were a foil to give Barrett someone to beat in a primary to convince voters he’s independent of union machinations.

That doesn’t mean Barrett will win in June, it simply means he’ll win in May, and thereby receive the right to campaign to June. Big institutional support not required…

Posted originally on 4.12.12 at Daily Adams.