Peter Carlberg

Peter Carlberg

Sunday, August 1, 2010

Your Mega-Government Future?

That stuff the Press was talking about the other day,” he started. “Government consolidation?” I asked. “Yeah, uh… I don’t think I like that idea.” Good instincts. What made him hesitate was the Grand Rapids Press’ repeated hammering on the issue with a voluminous snow-job of “proof” that it is a proven recipe for increasing government efficiency, lowering taxes and pleasing the local citizens. This earnest small-town citizen knew that his local taxes were much lower than in larger cities, the local schools were good and that local school and government officials were very devoted to pleasing citizens like him because they lived in constant fear of angering the locals and losing their jobs. So why was the Press trying “ to sell him the preposterous idea that he would be even better off if his schools were consolidated into huge districts and his local government was consolidated into a county-wide or larger Megalopolis. Of course it sounds fishy, because it is. The Movers & Shakers and their propaganda organ, the Press, labor under the delusion that The Lie, if repeated loudly and often enough, will eventually be swallowed by the public. “Eventually” is not a definite time period, but they’ve put numerous pet projects on the ballot over the decades and voters have always buried them by landslides. I know because I helped them do it. So I think the chances of the citizens of all the nice little communities around here giving up their local governments to become insignificant minorities in “Greater Grand Rapids – The City” anytime in this century are as totally implausible as the concept of Metropolitan Government. MetroGov, for short. These clowns plan on flogging this dead horse for the rest of the year – apparently so I can point out how silly they look. The spectacle of avowed “conservatives” proclaiming the virtues of Bigger-is-Better-Government, loud and proud, is high-comedy farce indeed. “And it will save you money, too!” Go on, tell me another one. “The only economies of scale in government consolidation are for lobbyists,” said Wendell Cox, a respected international authority on urban governance, in a recent interview. His 2008 report to the Association of Towns of the State of New York summarized the available statistical evidence and research studies related to the question of whether governmental consolidations actually result in cost savings, lower taxes, better services or other public benefits. The report is damning and the details are entertaining. Consolidation of smaller local governments into larger governmental units leads to higher costs and taxes, poorer quality services, diminished citizen influence, and slower economic growth. There is no reliable evidence of any consolidation like this producing the opposite of any of these effects – not in Indianapolis or anywhere else, period. As far as evidence goes, the Bigger- Is-Better theory of local government gets no traction at all, anywhere. Not even in Texas where cities still have strong annexation powers and gobble up their neighbors endlessly, without any of the expenses or complexities of consolidation. But there is very strong statistical correlation between population areas that have many smaller units of government per capita, rather than fewer larger ones, and lower taxes, lower costs of living and higher rates of economic development and job growth. Go figure. There is evidence that extremely simple strategic deals between small units of government, exactly like Godwin Heights and Wyoming Park school districts sharing a superintendent, actually do save money. Scale it up from there just a bit in size or complexity and it’s iffy. And the odds of two larger suburbs saving money by consolidating something like police and fire services are slim to none – long term. Initially, boosters brag about reduced personnel and cost savings. Years later they are employing as many or more personnel as before consolidation because the work, and managing it, has proved to be that much bigger and more complex. But this insane clown posse of local bigwigs, special interests, current and former Mayors and City officials, accompanied by an Amen Choir of leftish faddists, isn’t really interested in those kinds of small potatoes. They’re fishing for the Really Big Deal, the Full Monty, the Holy Grail of consolidation enthusiasts – Unigov, the Indianapolis 500 (as in how many people actually benefited from that weird and ruthless consolidation). The Press apparently thinks Indianapolis is the perfect poster child for the benefits of government consolidation. The Press is bucking to be the poster child for Comedy Central’s slogan “You can’t fix stupid!” It’s not like this happened yesterday and the Press hasn’t heard yet. The Indiana Republican Governor, Republican state legislature, and Republican Mayor of Indianapolis, foisted consolidation on Indianapolis and its suburban and rural neighbors to create Indianapolis City/County Unigov back in 1970, without even politely asking for voter approval. They had already worked it out. A few affluent suburbs were allowed to completely opt out. Most of the others were allowed to keep independent control over police, fire and other public services. All kept their independent school systems. And none were required to subsidize the higher police, fire, school system, welfare and public service costs in the former city of Indianapolis. But they all got to vote in city elections. One researcher dubbed it the “representation without taxation formula”. Residents inside the former city boundaries now pay tax rates and service fees as much as ten times higher than assessments elsewhere in Indianapolis. The rich and powerful special interests got control of the governing body and its taxing, economic development, planning and zoning authority, and wasted no time in cutting themselves huge tax breaks and lavishing taxpayer dollars on expensive economic development projects they made fortunes off of. The local newspaper spent bushels of money and years in court, but eventually forced city officials to do their official business in open public meetings instead of the backrooms at Republican Party Headquarters. Citizens actually being able to find and observe their elected representatives was only a marginal improvement, if that. Their most local unit of government had morphed into a vast maze of bureaucrats answering to elected officials, most of whom now represented farflung communities instead of nearby neighbors. And a lone citizen, or ten, or even a hundred didn’t matter very much anymore in the vast Diaspora of voters, interests and special interests. On the other hand, lobbyists, political insiders and special interests had a field day as ordinary individual voters diminished in importance and influence, and hardly ever found their way into the halls of power where decisions are made. Downtown development became all the rage and Indianapolis insiders directed a tsunami of taxpayers’ dollars, tax breaks, abatements and subsides into a square mile of downtown Indianapolis for sports, convention, entertainment, condo, loft and office developments, arts and music centers, etc. - and skimmed off huge profits for themselves. They made windfalls in long-term lease deals by offering large non-profit organizations like the NCAA complete absolution from local taxes. “The Mile” is the place local boosters take important visitors to get them liquored-up and show-off the “Indianapolis Renaissance.” Except for the occasional chance to visit there, local taxpayers get less than nothing out of the deal because so few of its developers, owners or occupants pay much of anything in taxes that real taxpayers everywhere else in the city have to pay heavily to cover the deficit. Sounds eerily familiar somehow. Could this be why the Press, and the Movers & Shakers they shill for, are so enthusiastic about Indystyle consolidation? Duh! The Press portrays Indianapolis under Unigov as a Garden of Eden filled with happy citizens who would never dream of reversing consolidation. Research and Indy’s hometown media paint a very different picture: “harrowing property tax increases,” school systems short-changed by Unigov and “robbed” by tax exemptions and abatements, massive flight of businesses and higher-income residents out of Unigov jurisdiction to neighboring counties with lower taxes and better economic conditions. Indianapolis citizens actually mounted multiple public efforts to reverse or escape Unigov consolidation. But Indiana forced Unigov on them without any legal means to escape and they couldn’t even force a referendum. Except for minor legal provisions for depopulated villages, neither the U.S. or Canada provide any easy methods for citizens to dismantle larger units of government. In 2004, however, the Quebec Provincial Government offered the once-citizens of 200 former cities, forcibly dissolved and merged into large consolidated governments just years before, the opportunity to resurrect their former independent communities, IF they collected IN FIVE DAYS petition signatures from the US equivalent of 20% of all their former registered voters asking for a referendum, and IF the majority of voters voting to reverse consolidation in the referendum just a few days later amounted to at least the US equivalent of 68% of all registered voters - virtually impossible conditions. 89 of them did the impossible in five days and forced a vote. 32 actually reached the total number of votes for reversal requirements, averaging 80- 20 landslides for de-consolidation. Tragically, 25 turned out lopsided 60-40 majorities to resurrect their former independent cities but fell just short of the required total number of votes. So much for the Press’ assertion that people and communities that have tried government consolidation like it, and wouldn’t go back. The devoted admirers of Indianapolis Unigov as the best example of all the virtues and benefits of “Metropolitan Government” need to explain why, after 40 years of observing and rubbing shoulders with Indy-Unigov and all its achievements at close hand, none of its closest neighboring communities, or any of the still independent municipalities after 40 years lurking un-consolidated right in the middle of the Unigov miracle without being part of its benefits and delights, has ever shown any interest at all in joining the party. And why no other communities in Indiana have tried to emulate Indy’s Success Story. The state law that triggered Unigov is still on the books, with its requirement that when a city, county or metropolitan area reaches a certain population levels sweeping governmental consolidation is required. Not long ago, population growth in the Fort Wayne area approached the point that would automatically trigger a second incarnation of Unigov without any of the communities having to be guilty of causing it. They could all just sit back, let it happen and reap the benefits. But no, they ran to the state legislature for help and the old Unigov law was quickly amended to reset the trigger points more than twice as high so that nobody in Indiana would need to worry about Unigov for at least another 150 years. Except for the people who live there, of course. It’s not surprising to find GR Mayor George Heartwell among the loudest boosters of Big Consolidation. The fact that George has some goofy ideas can’t be a surprise to very many locals. He fairly thrums with intellectual dissonance all the time. Former Mayor John Logie’s verbose emphatic support is a bit harder to figure out. John has been even more verbose over the years about his high admiration for the late Jane Jacobs and former longtime Mayor of Milwaukee, John Norquist, now President of the Congress of New Urbanism. John seems especially proud of his personal friendships with them and endlessly extols the wisdom and good sense of their writings and opinions. And both have flogged governmental consolidation unstintingly over the years as bad in theory, brutal and costly in practice, and a political pipedream that wastes time and energy. John should be having the Mother of All Migraines with that kind of intellectual dissonance. Or maybe John is just having a fling with Myron Orefield for some variety. Orefield seems to be the top celebrity of the Halt Suburban Sprawl movement these days. His top recommended cure is “Regional Government,” which is a sort of Metropolitan Government or Government Consolidation as seen from the back side by earnest but naïve and nearsighted neo-progressives. That’s why the leftish Amen Choir is singing backup behind the mob of slimy, greedy, right-wing boosters of consolidation. I’ve heard Norquist in person demolish Orefield’s pipedream with relish. It’s unbelievably silly for these anti-sprawl wingnuts to imagine that if they could only create a system where all the different governmental units in a large area had to work together, they could eventually convince (or require) them all to follow their anti-sprawl agenda… and impose Oregon-style urban growth boundaries. How this could possibly succeed is mystifying. The local politicians with strong loyalties to their local interests and little if any interest in curbing development would vastly outnumber the anti-sprawl enthusiasts, ignore them, and set their own agenda. This is just like the left-wing pseudo-progressives who think restoring ruthless annexation powers to cities and letting them gobble up everybody else would cure all their problems. I always ask them, “Wouldn’t the people annexed against their will soon become a majority of voters? Wouldn’t they still be mad as hell? What would prevent them from taking control and wreaking revenge on the older, now minority, parts of the community that bullied them first?” On the issue of government consolidation, Wendell Cox noted in the same interview, the loony radicals from both the right and left “are of equal distastefulness.”
Tuesday, June 1, 2010

A Night at the Museum

“Oh my God, the Old Museum was a wonderful place! I used to go there all the time. The New Museum just sucks – it doesn’t have a fraction of the stuff the Old Museum had.” It was the umpteen-millionth time I had heard such sentiments expressed by a common citizen “on the street,” as it were. Mention the former Grand Rapids Public Museum on Jefferson Street or its replacement on the banks of the Grand, among regular folks of a certain age, and you will hear similar opinions expressed emphatically and at length., as they tick off a long list of all the old collections, exhibits and features they remember and miss. Carping like this was very loud back in the mid-90’s when the new museum opened and the old one closed its doors to the public. A decade before, when my wife-to-be and I were dating, we loved to explore the old museum and spent many hours prowling its rambling maze of halls, galleries and displays. Despite a significant disparity in age, taste and opinion between us, we were in total agreement that the place down on Jefferson was (to use Cliff Robertson’s line from “The Great Northfield Raid”) a“wonderment.” By the ‘90’s, a lot of Baby-Boomers like us were too distracted raising kids to prowl much anymore. But, when chaperoning school fieldtrips to the new museum, almost every fellow-parent I spied looked puzzled. Presumably yearning for adult conversation, these complete strangers would sidle up and say, “This is it? They’ve got to be kidding.” A lot of landmarks in the history of Grand Rapids (and its neighboring environs, of course) have fallen under the Wheels Of Progress, regrettably. Most have been demolished and replaced with either parking lots or remarkably unremarkable modern structures. Large ornately-framed pictures of them are prominently displayed on the walls of almost every business, office or public facility downtown, sort of like weird stuffed and mounted hunting trophies - ironically apropos considering how complicit downtown business and political leaders were in destroying them in the first place. People gaze at these enlarged photos of Old City Hall, the Old County Building, etc., all the vanished landmarks, and wistfully regret their loss. But the appearance of sentimental attachment is illusory. Except for the bureaucrats who worked in these hives, how much real personal attachment can anyone else have had in these old government buildings? I got my first passport in the old Federal Building, which also housed the draft department that shipped my generation off to Vietnam. I had draft number 9. The recent bulldozing of the high school I graduated from was a bit of a shock. But, truth be told, most people recall their school days with mixed emotions, as in the ever-popular children’s song that begins, “Mine eyes have seen the Glory of the Burning of the School.” The old Grand Rapids Public Museum, on the other hand, generated strong sentimental attachments unalloyed with recollections of people one had an unquenched desire to push down an elevator shaft. Also unlike most of the other landmarks, it didn’t vanish under a wrecking ball. It’s been standing in the same spot at 54 Jefferson for the last sixteen years in all its late Art Deco glory with the huge letters on the front: GRAND RAPIDS PUBLIC MUSEUM, looking just like Old Times and taunting passing citizens with a constant reminder of the amazing treasures they used to find inside its doors . . . now locked. The main hall and galleries opened to the public 1940. Over time, numerous expansions and annexations of nearby buildings turned the place into a wonderfully quirky, rambling maze that one could spend hours exploring. All those newer parts have been converted into storage space for the museum and City and County government archives, but the original part has gone mostly unused and left as it was when the doors closed in 1994. Recently, a seeming miracle occurred – the doors were unlocked and the public was invited to visit. They packed the place. “We went there on opening night,” a friend told me, ”but we couldn’t see anything except wall to wall people. We had to go back another day to actually see the old museum.” I was a latecomer to the party - like, three days before it finished up its month-long run, and it was still pretty crowded. From all accounts, the place never had a “slow night.” “Wow!” my son commented when we got inside, ”Now this is what a real museum should look like.” Alex was only five when the place closed and was seeing it for the first time. He ate it up, despite the fact that most of the objects previously on display were missing and the place resembled the museums in Iraq – after looting. Surprisingly, the reason the doors were open and what the public was invited to see was advertised to be an “art exhibit.” According to the exhibition guide they handed out, students and faculty from Kendall, Calvin, Aquinas, GVSU and U of M were involved, plus others. Could have fooled us. There was a large fabric curtain shaped and colored like a whale hanging from the ceiling where the whale skeleton used to hang. Underneath it, taking up much of the central hall floor, stood a huge wandering stack of glassfronted boxes with handles that turned out to be all the little stuffed birds and animals in mini-dioramas that used to be taken to schools for presentations. Alex found some drawings he liked, but most of the “art” was well camouflaged, made to blend in with the old museum surroundings and appear like leftover artifacts – sort of. Of course, most modern art these days could be best described as “sort of.” A lot of the big old dioramas were still there, complete with their original stuffed beasts. But in some, an object of modern art stood in the place where moose or whatever once stood. Still, I have to give these folks a lot of credit. I’m sure they surpassed the last record attendance for a student art exhibit ANYWHERE – and by several orders of magnitude. As a setting, the old museum itself was bound to upstage almost anything displayed there. So they just went with it and made it the main subject of EVERYTHING. They titled the exhibition “Michigan – Land of Riches” from an old display still hanging there and subtitled it “Re-examining the Old Grand Rapids Public Museum.” Looked pretty sly to me. If most of the visitors came because they wanted to see the old museum itself (and that was exactly what they appeared to me to be doing), the organizers could still claim they were doing exactly what they, and the “art” on display, had invited them to do. They had managed to get some objects from the museum collections put back in the display cases like remnants of their former contents. There were lots of other signs and symbols either left or restored. Sort of. The giant cell and many of the old human body displays were still there and lit up, although they had mixed up the order of the three-dimensional fetus development models. There were lots of other things that seemed to be deliberately not quite real or not quite in the right places. They gave “Brown Bag Tours” of the back rooms and museum collections in storage. The held (or fabricated?) public input-sessions on what people thought should be done with the old museum and scrawled their suggestion in grease-pen-like graffiti around the museum. The top suggestion seemed to be “re-open,” as in put the stuff back in the cases and open the doors. There were lots of suggestions for converting it to other uses, but those seem to miss the point that actually drew the crowds. Converting the place for completely different uses would erase almost everything about it that the public very evidently craved – something like the old museum. Whether any of this furthered the goals of modern art, I don’t know and don’t care. But if you were to claim that the organizers were actually agents provocateurs and the plot was to reignite debate over the public museum in Grand Rapids, I would find it very hard to disprove and highly admirable. The official name of the new museum is the “Grand Rapids Public Museum at the VanAndel Museum Center” (something like that), but the public and the media call it “The VanAndel Museum” because it just isn’t the same kind of place and doesn’t seem to be about Grand Rapids anymore – at least not like it once was. That it “sucks” isn’t really debatable because it’s almost impossible to find anyone outside of the previous and current administrators and financial supporters, and the Grand Rapids Press, willing to seriously argue that it doesn’t. “Sterile,” “soulless” and “boring” are the most common polite descriptions I’ve heard. I think part of what they mean is that it’s exhibits, the interactive ones included, are inherently didactic in character – like getting lectured to. “I’d rather they just put the objects out there and let me discover their meaning for myself,” says Alex, “like the old museum.” Some people assert that newer generations will be just as sentimental and nostalgic about the VanAndel Museum, eventually. “Not a chance,” says Alex. Similarly, people will claim that it’s just not possible to reopen the old museum, because it would “compete” with the new one, and they raise the “you can’t turn back the hands of the clock” argument. G.K. Chesterton would always retort that of course you can. You can wind the hands backwards as well as forwards to set the time. When people find they’ve gone the wrong way they go back to get where they want to go. Almost any contrivance of man can be as readily undone as done. The real reason people with power don’t want to fix the really big mistakes is because they don’t want to admit they were wrong – and they can spend taxpayer’s or investor’s money covering it up and holding out. In the early ‘90s, museum leaders claimed we had to have a new museum because they couldn’t retrofit the old museum with modern climate controls. But they’ve now done exactly that for the collections and archives. The other claim was that the new museum would allow them to exhibit much more of their collections. That claim looks pretty laughable now. Oh, and they had to display their carousel. In an absurd aluminum and glass igloo that prevents anyone from seeing much more than small glimpses of it at a time. Remember New Coke? The Coca-Cola company recognized their mistake fast, ditched the new version and turned “Classic” Coke into their flagship product. They took a lot of ridicule but in the end they could laugh all the way to the bank.
With all the buzz and excitement about Grand Action proposing to build a brand new indoor/outdoor “urban market” in downtown GR – at an estimated price-tag of $27 million – I’m a little bit reticent to throw a wet blanket on all the glee. But I will anyway. An independent commercial entrepreneur proposed a similar project on the same site six years ago (at about a third of the cost) but failed to find enthusiasm and financing. Now that Grand Action has proposed something three times as expensive, the odds of it getting built have increased dramatically. And the GR Press’s Editorial Board says it “could be Grand Rapids’ next big thing”. Let me demur. Not that I think it can’t be built. Not that I think it won’t be gold-plated and impressively “just spiffy” with all the bells and whistles. Not that I think that local Boho’s aren’t already quivering with anticipation at the mere thought of it. It’s just that I wouldn’t bet that the eventually-built reality will really amount to “all that.” Russian intellectuals have a word – “poshlust” – meaning something grand and grandiose-looking on the outside, with a little worm or weakness gnawing away at its innards. The creators of such things are often motivated by a sort of overwhelming lust to be posh, the gnarly little lizard heart of arriviste nouveau riche Grand Rapids. One of their irrepressible boosters boasted that this market could rival Faneuil Hall in Boston. Last time I was there, with a busload of teenagers, it was a place to drop them off to eat and buy a T-shirt – an alternative to the suburban Mega-Mall food court, with little else to recommend it. Another booster compared the project to Pike Place Market in Seattle. This kind of hyper-boosterism is just jaw-dropping. Pike Place Market is more than one hundred years old, covers nine acres with more than 250 yearround vendors and even more in season. The Grand Action proposal envisions 16-20 yearround vendors with spaces for forty more outside, weather permitting. The difference is, as Mark Twain used to say, “between lightening and a lightening bug.” According to fans of the market on local blog sites, this next big thing is expected to work economic miracles, not the least of which is the prediction that it will successfully revitalize downtown shopping. That would indeed be a miracle, but don’t hold your breath. It may not sound like it, but I’m actually a huge fan of farmers’ markets in cities. Over the last ten years I’ve researched them, promoted some local ones and visited many in other cities. The problem with Grand Action’s scheme is that many of the potential economic spin-off benefits are highly at-risk of being thwarted by other realities likely to be a factor at their chosen site, just a short stroll down Ionia Avenue from the VanAndel Arena. The expert consultant hired by Grand Action makes some extraordinarily rosy predictions for this market – $25 million a year in sales with $2 million in rental income for the market and only $1.5 million in operating expenses – and an estimate that the market could generate 1,270 jobs and have a $775 million economic boost for the region, over ten years. Those would be record-setting achievements for even well-established successful urban markets, let alone initial start-ups. Most markets take years to break even. A 33% profit margin would definitely fall in the miracle category. According to other experts on urban markets, the key to success for most markets has been to keep initial expenses extremely low. Higher cost start-ups, especially built-from-the-ground-up year-round indoor markets, are considered the hardest business model to get to a break-even point. And Grand Action admits that their market plan is smaller “in conceptual form” (i.e. number of vendors) than successful urban markets they studied and supposedly emulated. I suspect the consultant is presuming the $27 million start-up cost is a gift, not a construction debt to be paid off, which would definitely be an advantage. Still, the cost of maintaining and operating 40-plus thousand square feet of indoor space plus a lot more outdoor space year-round will not be dirt cheap. The economic impact and jobs numbers are even harder to parse. Urban markets that start-up in lowrent commercial neighborhoods, with plenty of already existing inexpensive retail or commercial spaces available nearby for spin-off and start-up businesses, can have very large economic benefits. Not the least of which would be revitalizing a business district and launching a lot of local Mom & Pop business ventures – businesses that tend to re-circulate their revenues in the local economy. The site proposed by Grand Action, bordered by the towering retaining wall of US 131 on the west, Wealthy St. overpass on the north, Ionia Ave. on the east and Logan St. on the south, doesn’t really match that description. For neighbors, the site has a freeway, Heartside Park, some empty lots and a few large old factory/ warehouse buildings. The closest buildings with retail storefront spaces are along Division Avenue, a long steep climb up the side streets to the east. The nearby buildings are not easily usable by the kind of spin-off and start-up retail businesses that urban markets are capable of generating. There are plenty of other likely obstacles to Mom & Pop businesses locating nearby. The site is very close to the arena and other redevelopment projects. The urban market plans have not been a secret. The odds that the nearby property is not already owned or optioned by downtown real estate speculators or Grand Action insiders are slim to none. And, if the market gets built, they’re not likely to offer space at the kind of bargain lease rates typical market spin-off businesses can afford. The Press, downtown and Grand Action leaders have mentioned the kind of “revitalization” they envision for the area around the market. Surprise! Bars, restaurants and loft apartments. Like, you really thought they would come up with anything else? Their site plan for the market predictably includes spaces for a bar and restaurant. Ixnay on the downtown shopping revival pipedream. Expanding the Arena-area “entertainment district” southward a few more blocks is the only business plan city business leaders grasp. “Entertainment Districts,” the latest stale incarnation, permutation and direct linear descendant of the misbegotten “Festival Marketplace” redevelopment schemes from the 1950s, have a 60-year perfect track record of never, ever resulting in a significant revival of downtown shopping. Anywhere. But most urban business leaders, here and elsewhere, don’t have track records of retail success either. They make their fortunes on real estate, government contract, bar, restaurant and condo/ apartment development deals. They have no profit motive whatsoever to be the least bit concerned that City residents have to get in their cars and drive to the suburbs to buy most of their conventional consumer goods. This might explain Peter Secchia’s wild ravings last September. In a Public Pulse letter, Secchia asserted, “In November 1976, we had six retail shops on Monroe Plaza” and that Republican leaders considered canceling or rerouting the Welcome Home festivities for Jerry Ford (after his untoward displacement from the White House by Jimmy Carter) so that he wouldn’t have to see the economic desolation of downtown GR. This is self-interested mythologizing (“lying” in Abe Lincoln’s parlance) of a mindboggling order. The Monroe “Plaza” designation didn’t exist in 1976. Without counting the plethora of service shops, banks, bars and restaurants on Monroe, or the many businesses on other downtown streets, the 1977 City Directory (the closest chronological collection of 1976 business information) lists 47 shops selling retail consumer goods on Monroe Ave. between Sheldon and Lyon streets - four major Department stores and shops selling jewelry (7), shoes (6), women’s clothes (4), men’s clothes (4), specialty food (4), furs & leather goods (3), cards & gifts (3), sporting goods, cameras, electronics, records, drugs, art, and more. There were only a couple of vacant storefronts, far fewer than the average today. “Six retail shops” is closer to the meager number of surviving purveyors of consumer goods on all of downtown’s streets today – after Secchia and his ilk saved us from ourselves. So it’s understandable that they would want to promote an alternative revisionist history that portrays them as saviors rescuing us from a far worse fate. Grand Action’s Urban Market plans similarly lack plausibility in key aspects. Even visibility from the freeway, which Grand Action inexplicably considers to be its paramount virtue, is dubious. The site is deep in a hole below roadway level and only a lone tower rises high enough to be noticeable to freeway drivers. It is significantly undersized in vendor numbers and potential product variety, which compromises its customer appeal. Potential alternative assets – office, commercial kitchen, storage and distribution space (or art studios, restaurant and bar) – are unlikely to compensate for weaknesses in shopping attractions. And its realistic potential for generating retail synergy and expanding shopping opportunities in downtown GR is likely to be minimal. Managers and supporters of the existing Fulton Street Farmers’ Market don’t consider Grand Action’s market plans any kind of serious competitive threat to their enterprise. That doesn’t do much to bolster Grand Action’s predictions of phenomenal economic impact. On the positive side, a few property owners, speculators, developers or business proprietors are likely to hit jackpots on some bar, restaurant or condo/loft apartment development deals. But why ordinary citizens like you and me should wish them such windfalls is a mystery. Local skeptics (besides me) have publicly asked why, with our City budget imploding, huge police, fire and public service personnel layoffs, City service reductions and restrooms in our City parks padlocked (which doesn’t eliminate, but merely relocates where normal deposits are made), City leaders would even consider spending $27 million on such a project. The actual local taxpayer subsidies would probably be a small component. But the very idea of funding such a dubious and lavish project in the middle of a City budget crisis, with voters being asked to raise their own income taxes, implies seriously misplaced priorities on the part of downtown business leaders.
Monday, March 1, 2010

Race to the Bottom

It would be ironically amusing, if it wasn’t just so sad and plausible, given the history of recent decades. I’m referring, of course, to the recent transparently self-serving recommenda-tions of the GR Press and local “business lead-ers” that the solution to Michigan’s business woes is for Michigan workers to accept lower wages and benefits as the necessary sacrifice for economic recovery. Permanently, they mean. The is the same old Turn--Michigan-Into-Mississippi recovery plan we’ve been following since the ’80s and Engler… and it still hasn’t worked. Our local “business leaders” sound as dumb as Mississippi’s political leaders in Congress, who howled that General Motors should be “liq-uidated,” not saved, then scurried away from the cameras to ask automotive industry analysts if it would have any effect on their Mississippi Nissan plants. The expert analysts (from Michi-gan, of course) had to patiently explain to them that Nissan and other foreign-owned plants in the US get most of their parts and raw mate-rials from the same US suppliers as American auto companies, not from Japan, and that liq-uidating GM would wipe out all those suppliers (parts, rubber, plastic, glass and steel suppliers and mills – you name it) and shut down foreign auto plants in the US for months, if not years. Because – get this – it’s too expensive to make parts and assemble raw materials overseas and ship them here, even from China. American au-to-parts manufacturers and raw materials sup-pliers are cheaper and faster. These supposed “business leaders” are either rich village idiots or craven robber-barons who profit on the misery of others – lots of oth-ers. Rising wages and incomes are a funda-mental requisite for a thriving economy. And when average wages are stagnant or declining, it eventually undermines the real incomes of almost everyone, small-business folks, profes-sionals, factory-owners and corporations and their shareholders included. Overpaid large corporation managers and other shady fellows with license to fleece shareholders are the only possible exceptions I can think of. I grew up in an extended family of small-business owners, managers and professionals. I’ve started and managed a number of small businesses and organizations. I’ve been part-owner of a small manufacturing company (au-tomotive and office furniture parts) for decades and now chair its board of directors. And I’ve experienced first-hand the rise and fall of busi-ness earnings mirroring the rise and fall of real wages and incomes. This has been so amply demonstrated by the ups and downs of Michi-gan’s economy over the years that it’s hard to believe that there are still some business folks who fail to comprehend it. Unfortunately, human nature seems to be at odds with a sensible understanding of eco-nomics. Henry Ford was called a traitor to his class by other “business leaders” for paying his workers higher wages. Ford wisely predicted that it would ultimately pay off if factory work-ers could afford to buy the cars they made. Back in the ’70s, the American automotive business was still running in overdrive, wages were constantly rising and average working folks were buying new cars as often as every two years. Local manufacturing was humming along profitably too and shareholders were ac-customed to fat and growing dividend checks. There were complaints about “inflation” but most folks actually benefited from it. So did most business – there was an incentive to buy now because prices were expected to rise the longer you waited. In front offices there was regular grousing that production workers were making way too much money (this was back when we could af-ford large harems of managers). I thought the complaints rather odd at the time, because we calculated managers salaries from what we paid our production workers. If production work-ers earned less, so would managers. But some managers had the absurd notion that high pro-duction workers’ wages were somehow holding back managers’ salaries. I’ve learned from experience that most people tend to pick on people below them in the pecking order or food chain. Thus, in politics, the endless voter complaints about welfare and other benefits for the poor. Even the working poor draw sparse sympathy. At work, people complain endlessly about folks below them on the ladder and obsequiously agree with man-agers above them. Good owners and managers fight it and wish it were the other way around. But the set-up has always been ripe for exploi-tation. Beginning with the Japanese invasion and accelerating with the rapacious corporate takeovers, liquidations and downsizings of the Reagan era, wages and real incomes for average Americans began to stagnate and even decline and it began to require the earnings of two full-time adult workers in a family just to hang on to a middle-class existence. Corporate raiders and destructive business practices were rewarded with huge profits, while smaller businesses struggled to survive. At a seminar on Japanese business practices in the early ’80s, we were instructed on how to emulate their high manufacturing and quality control standards, but the real business model of the Japanese auto makers was inadvertently revealed – they screwed the hell out of their workers and companies that supplied them. That lifetime employment for workers stuff was always a myth. Only a fraction of their workforce was ever covered. The rest were frequently laid-off or fired. Retirement was mandatory at age 50, even for managers, and pensions amounted to little more than a year’s salary in a one-time check. Retirees had to resort to the supplier companies for employment, despite very low wages, just to survive. The suppliers got high-skill workers for pennies, and could hire or fire them at will. They needed every advantage they could get. They were captive to the auto companies they served and ruthlessly squeezed for cost cuts. I remember commenting at the time, “To catch up with the Japanese, do you think the Big Three are going to choose to completely change their whole way of doing business…or just screw their suppliers?” Duh-h-h!. Not long after, GM announced that it was going to cut off 75% of its suppliers and demand steep price cuts from the rest. As Henry Ford might have predicted, the Japanese model has not been working out so well in the long run for the Japanese. Their economy has been in a “recession” for more than a decade, with high unemployment, declining incomes and no end in sight. They are in a “deflationary spiral” perpetuated by the factors mentioned above. With the persistent threat of unemployment (job guarantees are long gone) and retiring into poverty, their domestic economy is almost dead because people are understandably hoarding their incomes instead of spending. And there’s no incentive for consumers to buy, because prices decline the longer you wait. Business earnings are deflating along with everything else. Some economists believe that the US has been sliding into a similar deflationary spiral, the usual signs and symptoms masked by rising oil prices, health care costs and middle-class lifestyles subsidized by the real estate bubble and borrowing. Deflationary spirals are as much psychological as economic. Most Americans used to be pretty confident that their incomes would continue to rise, despite a few bumps in the road, and that they, and their children, could reasonably expect a higher standard of living in the future. The real estate bubble collapse and imploding economy have shaken that confidence. Deflationary spirals are brutal and hard to reverse because the psychological damage – depression and pessimism – only reinforce the spiral. At a business meeting not long ago, one hard-nosed local businessman became very heated on the subject of lowering wages. “It’s the worst thing you can do! It’s demoralizing and sends the message that they’re worth less. How hard do you think they’re going to work for you after you cut their pay? It costs more in low morale and lost productivity than it will ever save you. I never, ever cut wages!” I think the advice is equally applicable to state and local economies and governments, which some folks are so fond of saying should be run like businesses. In this case I agree with them.
Monday, February 1, 2010

Forget “Consolidation”

In case you missed it, former Mayor John Logie recently made a speech to the Grand Valley Metropolitan Council, saying voters should support a constitutional convention to rewrite the State Constitution. Logie said needed changes to the constitution just can’t be properly accomplished by the usual methods of piecemeal amendment at the ballot box. Among the changes Logie deemed needed were restructuring the entire state tax system, promoting the consolidation of local units of government, changing the method of selecting state Supreme Court justices, and replacing the state House and Senate with a unicameral legislature. “We prefer to get our protein one worm at a time and not open up a whole can of worms,” riposted David Bertram, legislative liaison for the Michigan Townships Association. I side with the townships on this one. Calls for consolidating local units of government make them circle the wagons the fastest, with good reason. They haven’t forgotten the voracious annexation appetites of the cities and likely never will. The Grand Rapids Press’ anonymous editorial voice (1/19) pompously boomed in on Logie’s side, nominating the Kelloggsville School system for immediate consolidation and recommended various legislative plans that would force smaller school systems and local units of government to consolidate. All the plans shared one common trait – the local schools or governments, and their voters, wouldn’t get any choice in the matter, except maybe the small choice of who to get absorbed by. The supposed payoffs to local citizens for such ruthless forced mergers are claimed by Logie and the Press to be saving money, and (Logie) curbing urban sprawl. The irony of Logie’s curbing urban sprawl claim is amusing. Logie’s audience, the Metro Council, was intended from its inception as a way to grab control of state and Federal funding for local transportation away from  IGE local governments. Thus our lo-while the Metro Council directed transportation funding to building M-6, a highway totally unneeded by local communities but desired by special interests, who expected to grow rich off the suburban sprawl that will follow in M-6’s wake. The claim of money to be saved is just as comical. Does anyone really believe that if their school system, small town or township is forcibly merged with another, that their taxes will be lowered, services significantly improved or their children receive a richer educational experience? If so, then why don’t consolidation proponents want to make it conditional on getting voter approval? The example they love to cite is Godwin Heights and Wyoming Park school districts sharing a superintendent But it was Godwin and Wyoming’s own idea and didn’t require new legislation. They didn’t have to get anyone else’s approval. And they pocket the savings without the huge complexities of consolidation. I know next to nothing about the Kelloggsville Schools, except that they are larger than the Godwin Heights school district student population-wise. The demographic profile of Godwin is daunting - high numbers of underprivileged, low-income students, usually a predictor of below-average performance. But Godwin schools have attracted national attention for performing well above state and national averages in educational achievement. And (my favorite item because I was there in Ford Field last Halloween day) their high school marching band walked away with the Flight IV State Championship trophy, second year in a row, again a whopping five points ahead of their nearest challenger. By the criteria of consolidation proponents, Godwin Heights and Kelloggsville districts would be among the first victims to disappear in forced mergers. Who would benefit from this? Nobody I know. Large consolidated school districts, both urban and rural, are notoriously wasteful unresponsive underachievers. The statistical correlation between large size and poor performance is so lopsidedly compelling that some education researchers have concluded that “who governs” is the single most determining factor in the quality of a school district’s education. If the parents are the dominant political force, districts give them what they want. If the bureaucrats hold power because the district is so large that they can divide, isolate and defeat any effort by parents to organize against them, the district becomes successful at denying parents everything they want. We have a fine local example of a large consolidated school district – the Grand Rapids Public Schools, infamous for chasing students, parents and families out of the district. Almost a dozen on my little street alone. Weekday mornings in my City neighborhood, a veritable caravan of minivans and cars, full of schoolchildren, head out to various suburban public and charter schools. If we didn’t have school choice, plus many private and parochial school options, many more families would have abandoned City neighborhoods entirely. I spent several years working with parents and neighborhood groups trying to reform the GRPS. One candidate for the school board we interviewed said right to our faces, ”Parents are stupid.” She is currently President of the School Board. We threw in the towel and enrolled our children in a small school district just outside the City – four elementary schools, two middle schools, one high school - a highly rated, awardwinning system, run by a handful of administrators. You can drive by their administration building (the size of a tiny branch bank) and count the cars in the employee parking – seven, which includes the secretaries and clerks. Their nervous administrators treat parents like gold. A hundred angry parents at a GRPS school board meeting would be a slow night. Here, it would guarantee replacement of the superintendent or the school board, or both. Small size matters a lot when it comes to lo-lages, small towns and larger cities into larger Something wrong with that? Except that it cal units of government. Elected officials and units or huge megalopolises save the state or isn’t as cheap and easy for the developers as a bureaucrats in small school districts, town-state taxpayers any money? Does anybody re-single regional authority with one-size-fits-all ships, small towns and villages have to be very ally believe that if their local government was standards. My heart bleeds borscht for them. responsive and solicitous to their voters and forced to merge into a larger governmental unit The “crazy-quilt” provides folks with a lot parents or kiss their jobs goodbye. Conversely, that their taxes would go down? Do people in of very important side benefits for not much large units of government, regional, state, and larger cities pay lower taxes than residents of cost. We have a wonderfully wide choice of Federal, are very unresponsive and unsolici-small towns, villages and townships? Of course places to live, work and educate our children. tous of local desires and needs. not. And most of those places are very responsive The repeated claims that “Michigan can no Developers and special interests are fond to our wants and needs. Despite Logie and longer afford [insert total number of local gov-of waving regional maps of local governmental the Press, there is no compelling argument to ernments or school systems in the state here]” units and decrying them as “crazy-quilts” of change that.