Red Clay Citizen

"Smart Growth is the New Jim Crow"

Love this from the Anti-Planner: That’s why Joseph Perkins, head of the Northern California Home Building Association (who happens to be black) says that “smart growth is the new Jim Crow.”

What Recession?

Commerce Department says we're still growing.
-Max Borders

Global Transpark: Good Money After Bad

The joke that just never seems to get any funnier.
-Max Borders

Bursting the Slow-Growth Water Rationing Bubble

Growth didn't drain Falls Lake.

Ouch.  There goes one more argument against all those slow-growthers.

But when faced with having one of their campaign planks ripped to shreds, the slow-growthers now change the subject... "we have to recognize both growth needs and the potential impact of climate change (and) increased evaporation," said Karen Rindge, chairwoman of WakeUP Wake County, a group advocating slower growth."

Oh sure, now it's "climate change" why we should conserve.  Whatever.  Just make up some good excuse to try to scare the people to think we're going to run out of water when Falls Lake is over 100% capacity.

Ewww... I Can See Cars!

Parking decks in downtown Raleigh are blight according to some of the city's central planners.  They want to hide decks either underground or in the middle of blocks where nobody can see them.

They wouldn't have a parallel agenda of hiding the parking decks to make people believe that there is a scarcity of parking downtown -- thus increasing a supposed "need" for more mass transit options (trains), now would they?

Time for Water Restrictions to Go?

WRAL has a story on how the water level at Falls Lake continues to rise, giving Raleigh and the surrounding communities a larger supply of drinking water. "The water supply, assuming no further rain, would last for 265 days, or until Dec. 4."

Yet, Stage 2 water restrictions remain in effect and the City is still conducting inspection raids of businesses to comply with water rationing measures.  Are the City leaders manufacturing a water "crisis" in order to further expand the arm of government into businesses and as a tool to be used to advance their no-growth (outside of Downtown) agenda?

Sure seems like it.

WhoTube? Complexity and Economics

Wanted to share these video entries to the APEE/MBM Communicators contest. Check 'em out while gnoshing your lunch, maybe learn a lil something:

Part One

Part Two

Thanks,
Max Borders

The Myth of "Essential Services"

This outstanding article by John Chapman offers a blueprint for NC municipalities. One primary culprit in stagnating economic growth for a city? A high ratio of public employees to citizens:

"the ratio of residents to city employees, a key measure of city government productivity, is 50:1 in Detroit, one of the worst in the United States, but is 203:1 in Indianapolis, one of the best."

Which city would you rather live in right now?

This flies in the face of the "progressive" chatter about the "essential services" that must be provided by an ever-expanding government bureaucracy to ensure an acceptable "quality of life."

Towns and counties concerned about balancing their budgets in light of current and future population growth? Privatize services:

"This is how Indianapolis cut 43% (1,200 workers) of its non–public safety workforce, and shaved $480 million from its budget in 8 years."

But what about all those public employees losing their jobs?

"In fact, during Goldsmith's (Indy's mayor) 8-year tenure, not one city employee became unemployed; the employer merely changed, ... And happily, the public sector union, AFSCME, generally applauded Indianapolis's public-private partnership excellence, especially when workers received incentive bonuses allowed by new ownership and governance."

Of course, we are also bombarded regularly about how citizens "demand" services from their local government. It must follow, naturally, that Indy's citizen's moved out of town because there's no way a reduced public service sector could accommodate such "demands," right?

"During his (Goldsmith's) eight-year tenure as mayor, the city's population increased by nearly 50,000 residents, induced by a more business-friendly environment and its corollary, smaller government."

So the city added 50,000 residents and simultaneously cut nearly half a billion from their budget? Yes, folks, it can be done.

The article is not exclusively devoted to Indianapolis, and is well worth the read. If nothing else, you'll get your money's worth with this quote from Green Bay Mayor Jim Schmitt: "entrepreneurs know what they're doing; the best thing we can do is get out of their way."

Amen.

Freedom Will Help Africa

Franklin Cudjoe and Thomas Ayodele of IMANI are two freedom fighers in Africa doing great work. I've meet Franklin and he's a great guy doing yeoman's work. Here's their new website. Check it out. Peace and free trade in Africa!
-Max Borders

Bali: Behind all the Hissing and Booing

Apparently there was tumultuous end to the Bali meeting, which resulted in the US being booed and hissed. The US - rationally - wanted developing nations to be bound to any climate agreement. So, if you believe that climate change is anthropogenic and that carbon reduction targets will help mitigate it (all of which is beyond belief -- particularly the latter premise), then you still have the problem of defection.

See, if China, India and other developing nations get to opt out of any agreement, the rest of the world suffers economically while these countries reap all the gains as legacy energy migrates to their shores. Since they're not bound, why would they comply? They're getting richer as we speak and they know they won't get rich if they artificially drive up the price of the master resource. Now, all the booing and hissing is coming from countries that stand to benefit from carbon sink schemes. It's an end-run around traditional foreign aid channels. And who pays (again)? That's right: we do.

So as you listen to all the environmental posturing and moralizing, remember that behind any boo or hiss are a bunch of greedy b*#@rds ("bootleggers") trying to benefit from green regulation that will do nothing to abate climate change (that is, if it's, indeed, human-caused).
-Max Borders

Contrast: Detroit and Bangalore

Interesting contrast ... OK, so what the hell are we to make of Durham?
-Max Borders

Government Planning = Bad Planning

If the road to hell is paved with good intentions, hell itself is planned by government functionaries (also with good intentions). Randal O'Toole offers a cool drink of water in his interview -- of which the following is a sliver:

Well, I’ve often heard people say, “I’m not against planning, I’m just against bad government planning.” After 30 years of looking at government plans -- forest plans, park plans, transportation plans, city plans, state plans, all kinds of plans -- I’ve realized all government planning is bad. Government planning -- that is to say, comprehensive, long-range planning that often tries to plan and control other people’s land and resources -- always does more harm than good because the planners don’t have an incentive to make sure that their plans are the right plans. Cities, forests and so on are just too complicated to plan, so they oversimplify, and since they don’t pay the costs of their mistakes, they don’t have an incentive to try to get it right.

I'd add that there is no "right" to start with, as cities are composed of a million different people with different interests, values, and ends. The planner's fallacy is that he knows what's best for everyone else, or that he has the best compromise. But he is a victim of both special interest capture and a hubris that is in his job description.

The anti-planner's interview is a good antidote to the urban planning fetish and all the armchair planners who feed it. Read the whole thing.
-Max Borders

Climate Change Prisoner's Dilemma

Ben Lieberman explains one of the problems of trying to control carbon from the top-down, revealing an international prisoner's dilemma for the ages:

It is important to note that China isn't slowly edging past America; it is roaring ahead. Emissions of carbon dioxide, the byproduct of fossil-fuel combustion and the greenhouse gas of greatest concern, are exploding along with China's economy. New coal-fired power plants are reportedly being added in China at the rate of about one per week, and these facilities are less efficient and higher-emitting than their western counterparts. According to the Netherlands Environmental Assessment Agency, which believes China has already surpassed America, emissions in China rose 9-percent in 2006, on top of a 12-percent increase in 2005. Meanwhile, America's emissions have been growing much more slowly, averaging little more than 1-percent per year. They actually declined by 1.3-percent in 2006, according to the Department of Energy.

The U.S. was easily the biggest emitter during the 20th century, but future carbon-dioxide emissions will come less from American sources, and more from Chinese ones. Even if the U.S. saddled itself with economy-damaging energy constraints, it would barely begin to offset China's projected increases. But so far, China has adamantly refused to agree to any controls, arguing that economic growth is their top priority. Other fast-growing developing nations have said the same thing.

Thus, notwithstanding questions about the seriousness of the global-warming problem, any bills that single out U.S. emissions will be a fast-shrinking part of the solution. As China's emissions race ahead of ours, Americans will begin to realize that unilateral action is not the way to go.
-Max Borders

Are Corporate Incentives Anti-Slow Growth?

The voters of Raleigh and Cary spoke loud and clear yesterday that they favored a slow growth path for their respective cities.  Yet, look what happens today...

INC Research, based in Wake County has been given $14.8 million in state incentives to add almost 1,100 workers to their existing workforce.

Well, where exactly do these city leaders think these 1,100 new workers and their families are going to live?  I would bet a great many of them would like to live in Cary or Raleigh.

It seems rather contradictory to embrace incentives as a way to attract new businesses and jobs to an area at the same time you tell home builders that they can't build new homes because growth is out of control.

Is this the new NIMBY-ism?  Please come work and shop in our community, but please don't live here, our schools and roads are overcrowded.

Does Coercing Density Improve Livability?

Randall O'Toole has an antidote to the kind of smart growth fetishism that gave breech-birth to Wake County's ridiculous open space bond.
-Max Borders

Healthcare: Coletti Spells it Out for the Demogogues

This is an excellent piece on some of the issues in healthcare reform. Those who blindly blame greedy corporations for our healthcare woes never look to the actual source of all the pathologies -- the government.

Coletti doesn't go as far as to accuse the left of trying to destroy healthcare markets with regulation. For the record, I do. Lemme borrow from an upcoming piece I wrote:

I believe the majority party actually knows about these pathologies. In fact, I believe they are making concerted efforts at the state and federal levels to exacerbate these problems in the name of consumer protection and insuring children. Whether through expanding children’s Medicaid into the middle class (which drives up premiums), increasing the number of state mandates (which drives up premiums), or limiting competition through keeping the tax code intact (which drives up premiums), the party in power is using regulation to crank down the government vise in anticipation of a final outcry from Americans who are tired of paying these rates and who have no idea why it’s happening. And with that outcry, they will then be able to sell America a single-payer system like Castro’s.

Open Space or Affordable Housing?

Would you like to preserve open spaces in N.C. cities?  Would you like for there to be affordable housing for lower-income families?  How about preventing urban sprawl? Want enough tax revenue to support vital infrastructure? Most of us would answer these questions in the affirmative. The trouble is all these values compete. It may not be obvious, but there is a little known and less well-understood thing called the Law of Scarcity. “Wolde you bothe eate your cake, and have your cake?" people have been asking since at least 1546.

A new report by the Partnership for North Carolina’s Future (PNCF) says you can have it all. In a new brochure called “Reality Check for North Carolina,” PNCF demands infrastructure, open space, affordable housing, and more – all of which will they claim can be produced by government.

But to see why we can’t have all these things, we have to think holistically:

What happens when government “protects” open spaces (private property) from being developed? It means there is less of something people value. If there is less of that thing but people still value it, what happens to the price? You guessed it. And when the price of developable land goes up, that means it’s less affordable. People of lesser means will have fewer opportunities to own their own home, much less rent it cheaply. But at least advocates who didn’t want open space badly enough to pay for it will get it anyway.

Now, the lucky few who can afford the remaining scarce property must pay more in taxes. This is probably unpleasant for those owners. But the problems don’t stop there. Know how much tax revenue all that open space generates for vital infrastructure? About the same as enjoyment generated by eaten cake.  Maybe there will be enough tax money generated by those lucky remaining owners’ whose property values have been artificially inflated. Maybe. But the more people have to pay in taxes, the less they have to spend or to invest in the economy. Diminished economic activity means fewer job opportunities; lower income people have now been hit doubly. But at least wealthier people get subsidized and have open spaces at others’ expense.

But what about all those people who can’t afford to live in the city where there are fewer jobs and housing is expensive? (Also suppose, like in North Carolina, they’re still coming from out of state.)  They move to the suburbs. And that, folks, is called urban sprawl. So it looks like we can’t have everything. Or can we?

Enter government again. Since there aren’t enough Open Space advocates to pool their resources and pay for the property they want, they can use the machinations of special-interest politics to have government grab the land at everyone else’s expense. Then government can give lower-income families tax-subsidized handouts so they can afford the otherwise unaffordable housing. Government planners can then have developers build upwards—mandating high-rise buildings so people don’t seek out suburban life, which creates sprawl. (Indeed, you might take a leaf from the Chatham County playbook and limit building permits in suburban areas, too—never mind the affront to private property rights, or the retirement investment now lost to a property owner.) How to pay for all this? Well, there’s always the wealthy. While their increased taxes may no longer be going to producers of goods and services that create jobs for poor people at the margins, government can always soak the rich a little more to pay for the earned income tax credit (EITC) and increased welfare for the poor.

As economist Mark Henderson wrote recently in a popular piece on government intervention in the energy sector:

[G]overnment intervention designed to benefit certain members of society inevitably imposes costs on others. Those who are inconvenienced by intervention—especially because they have seen that government is willing and able to alter the market that would exist in the absence of government intervention—will seek intervention that offsets the undesirable side-effects of the prior intervention. However, any new interventions will themselves generate new side-effects, new costs, on other citizens, and so the political process lurches clumsily but powerfully in the direction of ever-greater government control that, taken to its logical conclusion, leads us further down the path of socialism.

Now, I’m not writing here to argue that open space alone is the path to socialism. But I do want to show the government Rube Goldberg contraption that is created simply by trying to satisfy special interests like the Open Space crowd. And when you add up all the special interests out there and give them government goodies, the road to socialism does get wider and longer. The main thing to remember is that when we try to implement too many contradictions, we are not only causing unwanted effects, but trampling on the values we hold most dear. -Max Borders

Laughable

After first proposing to buy the 306 acres of the Dorthea Dix property for $40 million, the City of Raleigh has "revised" its offer and has now come up with a $10.5 million offer for the property.

Some might call this a low ball offer.  Others would call it highway robbery or grand theft.

If I was the Governor's office, I'd be insulted.

That works out to a little over $34,000 an acre.  Doing a quick search of comparable property available Inside the Beltline, the price varies anywhere from $200,000 for 0.1 acres to $275,000 for 0.51 acres, depending on location.

Say we take the high figure, and go with a rough estimate of $500,000 per acre, that would give the market price of the land for Dix somewhere in the $150 million range.

If the state wants money for the mental health system, they should sell Dix to the highest bidder and not take the insulting offer proposed by the City.

It's a great conundrum for the liberals... mental health funding or open space... which is more important?

Doug North Needs Madder Props

I can only agree with the sentiments of Arnold Kling in this article about Douglass North. Developing institutions as reducing transaction costs is a lesson that can be applied at all levels of government, too.

Dwindling tax base

There is a lot of talk going around about how counties pay for growth and whether new revenue streams (transfer tax, impact fees, etc.) are needed, especially in my home county of Wake.

Then I read today that the Town of Cary has bought up 45 acres of prime real estate for $6.5 million to "preserve the land" for a open space and a park.

Every parcel of land snatched up and held by government is property that does not generate any tax revenue.   So when all those people complaining about not having enough money to pay for growth come to raid the equity in your home when you sell, just think about how much land is taken off the market and "preserved" each year.  As the tax base dwindles, those who do pay taxes will be required to pay more.

Hot Lanes, Baby

Another great idea (pdf) North Carolina will pick up on in twenty years.

The 'Progressive' Answer to Everything

More taxes. Says Greg Flynn at the Progressive Pulse:

There is an alternative to property tax that 7 NC Counties already have: a Land Transfer Tax option that 6 of those counties exercise. But that authority needs to be delegated by the NC General Assembly to each of those remaining 93 counties

It is time for all NC Counties to have the revenue options that some counties enjoy. It's time to support the Transfer Tax option to provide fair funding for good growth and to ease the property tax burden for seniors and others on fixed or low incomes.

It's a refrain they never seem to grow weary of. Like children on the way to the beach singing "99 Bottles of Beer". Never a thought to better budgeting. Nor redirecting resources wasted on other things. The bureaucrat and the progressive learn one thing in their paltry Public Administration graduate programs (and it ain't supply side economics): find new ways to tax. 

Now, as abominable as more taxes on property is, taxing transfers of property is not some ingenious alternative. First, inward migration assumes that people are coming here, buying property and paying more in taxes. So it's not clear that there's a real infrastructural shortfall at the county level. If there truly is, it's surely because resources are being gobbled up by our wasteful state government. But really: could we really count on a transfer tax to be a replacement for any of our property taxes? Since when has government ever behaved this way?

Given the fact that older people are very often transferring their property - (downsizing and using the equity for retirement) - it's not clear that such a policy would be beneficial to elderly people.

Is there no waste in these local budgets? Adding yet more to North Carolinian's tax burden (which is higher than all of our contiguous neighbors) isn't likely to encourage newcomers. Maybe progressives don't want newcomers, but they're propping up the economy right now -- despite the state's irresponsible fiscal policy. And what about affordable housing? How would this make housing more affordable for people climbing the property ladder?  Sure, we need to find ways to fund infrastructure. But why not lets look for funds in places governments currently squander them, rather than fancying it creative to introduce more taxes.

Here's a comprehensive case against transfer taxes.

Gub'ment Bitness: Oxy Moronic

Here's another reason why government shouldn't be in the business of, well, anything. Government's don't have profit motives, which is why municiple wifi may sound great at the face of it -- but the economics are just not there in most cases. If they were, businesses would find a way to offer the service.

It was no good for this California town and it won't be good for N.C. towns either.

Unemployment up

The NC Employment Security Commission reported today that the unemployment rate for April jumped from 4.5% to 4.8%.

Sure would be a good time for some good ole' economic stimulus.

Hmm... what do you think might be a good idea for that?

Maybe something like $300 million in temporary taxes we've been owed for 4 years?

N.C. Budget Roundup

For a roundup of Civitas policy briefs on the N.C. state budget, visit here.

The Paradoxes of Place

The paradox of place?  The more "they" come, the less appealing it will be. 

Asheville (#1) and Cary (#4) make the top 5 in a list of America's best places to relocate. Is this great news for North Carolinians? Well, maybe.  First, what makes these places so appealing is in no small part that they're nice areas with relatively reasonable property values (Asheville, which topped the list, is the most expensive area state-wide, but still better than many areas around the country):

"The average home price in town is $265,000, according to the site, and the housing stock includes new construction, older Victorians, condominiums, single-family homes and town houses."

And yet Asheville has aggressively pursued so-called "smart growth" policies that have made it tough for developers to build there. (Cary, too, has its own increasingly draconian development ordinances.) And yet people are still attracted to these places.  So affordable housing will become increasingly elusive as these places become magnets only for the wealthy. Those lower-income denizens?  Their fate isn't yet certain. But given the leftish make-up of Buncombe County's electorate, some affordable housing social engineering is likely in the offing. In any case, as these places inflate the value of housing, they will probably drop off of these lists.

If you can overlook the fact that you can't find an economics book in Maloprop's, Asheville has its appeal. Big box stores in the outlying areas have allowed a boutique downtown to emerge. The problem is, soon only rich people will be able to really enjoy it. The rest of Asheville's plebs are increasingly becoming a vast service sector (paying expensive rent) built around those who can more afford to live there--particularly as the town shuns other types of industry. This can be somewhat maddening to the bohemian contingent there that the rich lefties find so charming. We'll see how this plays out in the future. My guess is that the government-designed rich/poor gap in real estate will show strains in the next couple of years.  To talk to ordinary people there, it already has.