Friday, July 29, 2011

Giving and Taking by EDGE. . . .

Giving:  A small firm is given $15,000 to expand and hire one employee via a county "micro enterprise" grant.
The grant program, administered by Mohawk Valley EDGE, uses federal Community Development Block Grant funding through the state Office of Community Renewal.
This is another example of federal spending that MUST be eliminated. Taxpayer money should not be given away to anyone. . . . More so taxpayers' children's money.    The federal government should not be allowed to borrow for this.

If the proprietor has a good idea that will work and generate income, he should look for a loan or sell a share to an investor to expand his business. The government should stay out of private business.

Taking:  Marcy woman forced to sell property in eminent domain battle with MV Edge
A Marcy woman has spent her golden years fighting her own government for land that's been in her family for more than 100 years and on Thursday, she lost that battle. . . .
Officials with Mohawk Valley EDGE said they need the property to make adjoining land more appealing to chip-fab plants, which they've been trying to lure to the area for years.
It is simply wrong for EDGE to use the power of eminent domain to deprive a person of their own property. What kind of country have we become to tolerate this?

This is Oneida County-sanctioned, folks.   Remember on election day which legislators and county executive are supporting EDGE.

Thursday, July 28, 2011

Actioni contrariam semper et æqualem esse reactionem . . .

Newton's Third Law of Motion: To every action there is always an equal and opposite reaction . . . That's what came to mind with all the chatter about the national debt crisis and the likelihood that the credit of the USA will be downgraded.

As the theory goes, the increased risk that the US will delay/default on payment of its debts caused by the bumbling in Congress will be reflected in a loss of our AAA credit rating among the various ratings agencies.  Action = Reaction.

A downgrading of our credit rating makes US instruments less attractive to investors. Action = Reaction.

A decrease in attractiveness of US instruments requires an increase in interest rates to make the instruments more attractive.  Action = Reaction.

Economics is not Newtonian Physics, but it seems to follow the same natural law.  For every action there is a reaction.

Three years ago we had an alleged "credit crisis" where money available for loans dried up. One would have thought that the natural reaction would have been for interest rates to have gone up to entice people to make loans. Instead the Federal Reserve intervened and started printing money -- loaning it out for a song or outright giving it away.We had "Quantitative Easing (QE) I" and then II pumping dollars into the system. The interest rates that should have gone up were kept artificially low by all the new money the government pumped into the system . . . nice if you were a borrower, but terrible if you were a saver. The value of the money had to decline, too, because if you double the $ supply without a doubling of the economy which backs it up, each dollar represents a smaller portion of the economy.  If money is cheap, it is treated that way, thrown around on risky or nonsense items.

If you constantly spend more than you make, your credit worthiness goes down because it becomes less likely for you to pay your bills on time.  If you have the ability to pay your debts with money that you print yourself, you might get away with it for awhile, but people will eventually figure it out. Your credit worthiness SHOULD go down because you are not returning value for what you initially received. 

Savvy investors, like the Chinese government, have figured this out and have slowly been shedding themselves of US instruments of late because the US has debased the value of its currency with QE I and II. They did not need a ratings agency to tell them what to do.

A downgrade in US credit must occur because the US is repaying its debts with money that is worth less.

While a downgrade would make the US look fiscally irresponsible, it is only because it is true. The good side of a downgrade is that borrowing will become more expensive . . . as it should have become three years ago before the Fed started pumping money into the system. Interest rates may actually return to normal levels from the ridiculously low rates they are at now.

Like Newtonian Physics . . . or Mother Nature . . . government tinkering can only get around the natural laws of Economics for so long.

Wednesday, July 27, 2011

Just What We Need (Not) . . .

It's difficult enough for the Utica area to compete in the world marketplace for jobs given New York's high cost/high regulatory burden status.

But now we have to compete with other areas of the state in a state-government "contest" for a share of a pot of money we are paying into?

This is apparently "Economic Development" a la Cuomo II.  Per the OD:
Cuomo's twist would pool $1 billion in tax breaks and aid for construction and infrastructure as prizes for the best proposals in 10 regions around the state that would compete for the resources.
What is state government's track record in deciding what is "best" for business?  The more "economic development" we fund, the less we seem to have to show for it.

This program really seems to be about awarding prizes to those people that will bring the most votes to Cuomo. How about a $ billion in tax cuts for everyone instead?

To put it bluntly, this sucks.

Sunday, July 24, 2011

Marriage Rites and Rights . . .

Today is the big day for a number of same-sex couples across the state to finally become legally married now that the "Marriage Equality Act" has been signed into law ... Everyone should be happy for them. Why not celebrate love when there is so much hate in the world?

But what about those who feel the whole concept of same-sex marriage is wrong? Town officials in Granby, Barker, and Guilderland have resigned from their positions over this issue rather than perform duties which conflict with their religious beliefs.  Why should people lose their jobs over this?

The name "Marriage Equality Act" implies that marriage to date has somehow been "unequal." The debate over the law was couched in terms of "civil rights" and "individual rights" vs inequality. But is that accurate?

My, how times have changed!

There was a time not that long ago when marriage was not the choice of the participants. Marriages were arranged by parents or by tribal chiefs to ensure perpetuation of a family or a tribe. Religion regulated marriage for the same reason -- to ensure perpetuation of certain beliefs. Marriage outside one's religion or ethnic group carried serious social consequences. Governments became involved to regulate marriage practices because of their repercussions to society, eg. to control the spread of diseases or to ensure that children are cared for. That is why one has to get a "license," a permission to marry in New York.

But if marriage is a civil right or an individual right, why is permission from the government even necessary?

As noted above, marriage did not necessarily start out as a civil or individual right, but, rather, as a right of society: a highly regulated practice for society to perpetuate itself. Over the years, however, our society has become narcissistic. People have become oriented more toward fulfilling their own desires rather than fulfilling responsibilities to others. In that milieu, the concept of marriage changed.  Activities reserved for married couples became allowed for singles. Marriage became easy to get into and get out of compared to times past. Single parenting became common and socially acceptable. Perhaps marriage has evolved into an individual right, but with that evolution, the beneficial structure that marriage once provided to society is barely there.

And if the benefits of marriage to society are barely there, why should the government continue to be involved with it at all?

Perhaps the time has come to end government involvement in marriage altogether -- leaving marriage as a religious rite, or a personal rite. Let people define their own relationships to each other. With no marriage under the law, there will be no divorce under the law.  Think of the court time that would save!   

This would have been a more fruitful debate for our legislators to have had. Ending government-sanctioned marriage would provide a means to avoid pitting one group's beliefs against another.

In the meantime, while we raise a toast to the happiness of the newlyweds, we should ponder what the ultimate implications will be to society's structure.

Thursday, July 21, 2011

That Didn't Take Long . . .

No sooner than a potential deal with state government workers is announced that would save the state millions of dollars, Governor Cuomo lays out a billion dollar plan for "economic development." Per YNN
On day two of phase two of his agenda, Governor Andrew Cuomo laid out an aggressive incentive program for bringing private investment and jobs to New York State, pooling existing state funds which will be available in the form of tax credits and grants. 

PLEASE, stop the nonsense.

You cannot sell a product (New York State) that is defective.

Economic development in the form of government-subsidized jobs simply does not sustain itself. We've done the tax-credit and grant thing in NYS for years with no real lasting results.

If the governor wants economic development in NYS, he needs to fix what is wrong with it: lower NYS taxes and fees (for everyone, not just the ones winning a government-sponsored "contest"), decrease regulatory red tape, and lower the cost of power.

But the governor is actually taking the opposite approach. There are more regulations and burdens that will harm New York, particularly Upstaters. For example, DEC is planning on new regulations to allegedly protect fish in the Hudson, but which will be so expensive to meet that it will either dramatically raise electric rates, or result in shutting down the Indian Point nuclear power plant about 30 miles north of NYC (the likely real objective) -- which will also raise rates.  

So much for this governor's fiscal conservatism . . .

Monday, July 18, 2011

"Balanced Budget" Baloney . . .And Other Things to Give Up Upon . . .

I wish our Republican members of Congress would get off this "Balanced Budget Amendment" (BBA) baloney. Assuming for the sake of argument that the BBA passes both houses (unlikely), that it is signed into law by the President (unlikely), that it is ratified by the requisite number of states (unlikely), what would it accomplish?

At best, the BBA would only create an annoyance for the big spenders/borrowers . . . something to be gotten around. . .   The evidence for this is New York State, which is required to have a balanced budget, but continues to spend and borrow big via a "creative" labyrinth of authorities, public benefit corporations and financial gimmicks (destroying the economy of the former "Empire" State in the process).

At worst, the BBA could significantly delay or prevent appropriate action in case of war (a real one) or an emergency of national scale (like Japan's earthquake/tsunami/nuclear meltdown).

Like morality, fiscal responsibility cannot be legislated.  Our representatives are either responsible, or they are not.  I think most people on the street intuitively know this ... and know that discussion of the BBA is a waste if time.

If the Republicans don't give up on the BBA, it will come back to haunt them.

Another thing to give up upon is the "No New Taxes" stance.  Yes, Bush No. 1's breaking his "No New Taxes" pledge lost him the election.  And Yes, a recession is NOT the time to raise tax rates.  But do Republicans really believe that the American Public will not support their offering to eliminate tax loopholes which subsidize the export of American jobs?  The Tax Code is so Byzantine there are probably many loopholes that can be closed.

Ladies and Gentlemen of Congress, here are your assignments:
  • Republicans, since you hate raising taxes, it is now your assignment to come up with a list of the loopholes that can be closed. 
  • Democrats, since you like spending so much, come up with a list of spending programs that can be cut.  

If you don't do your assignments, you will be failing the country.

Now . . . Stop posturing and Get to work.

Saturday, July 16, 2011

It's a SPENDING Problem . . .

Recent headlines from the Observer-Dispatch:

Schumer pushes for funds for worker training
Sen. Charles Schumer, D-N.Y., announced on Wednesday that he would push for a grant that would bring more than $3 million in job training money to area community colleges.
Gillibrand wants to boost high tech manufacturing
Among the top items on Gillibrand’s agenda is the creation of a block-grant program. This legislation would establish a competitive grant program so small- to medium-sized manufacturers in communities with high unemployment could retool operations and retrain staff.
DEC announces availability of clean-air grants
The U.S. Environmental Protection Agency provided the DEC the funding for the grant program, which has $60,000 available
Housing authority to build homes, spruce up downtown businesses
Within the next month, Furman and Herbowy say they expect construction to begin on six handicapped-accessible homes, scattered between Neilson, Elm and Miller streets in Cornhill.
Total cost: $1.39 million, funded through the federal Section 811 program and the city’s HOME allocation.
$4.2M grant to be used for volunteer firefighting efforts
The Firemen’s Association of the State of New York announced that it was awarded a $4,270,570 grant from U.S. Department of Homeland Security.

The grant will help strengthen the response of fire departments throughout the state by promoting and maintaining adequate volunteer firefighter staffing.
Contractor chosen for Oneida Sq. roundabout
The city Board of Contract and Supply unanimously approved Barrett's bid of $1.6 million at its Thursday meeting . . .
The project will be funded 80 percent by the federal government...
New Hartford OKs shorter Rayhill Trail expansion
The town received a federal grant in 2006 to cover $841,600 of the trail extension costs.
Bridgewater meat processing plant set to expand
The company plans to expand, hiring 14 employees immediately and increasing the size of the building’s footprint by a third, using a $210,000 Community  Development Block grant
Grant for 8 Utica firefighters awarded
The Utica Fire Department has been awarded a federal grant for nearly $1 million to fund eight firefighters, U.S. Sen. Charles Schumer, D-N.Y., announced Wednesday.
Schumer, Hanna: Don’t take away Utica’s lead grant
Two federal legislators are lobbying the U.S. Department of Housing and Urban Development to give the city another chance to meet the requirements of a $2.1 million lead abatement grant it is in danger of losing.
Area gets first local food policy council in state, $100,000 grant
Rust to Green Utica, Cornell Cooperative Extension, the Resource Center for Independent Living and the City of Utica have created the state’s first local Food Policy Council and have received a $100,000 grant via the United States Department of Agriculture’s “Hunger Free Communities” program.
County using grant funds to add 2 probation positions
Two positions created Wednesday by the Oneida County Board of Legislators are not a sign that the county’s fiscal constraints are loosening. Instead, the county is paying for the salaries of a probation assistant and probation officer using funds it received from a federal grant.
While the above are nice, the country can survive without them.  They are more appropriately the responsibility of local government, private business owners/shareholders, charities, and individuals who would be more careful with how money is spent if they had to raise the money themselves.   

These items all come from our local newspaper.  Now, just think of all the similar stories that can be found in newspapers in every city, town and village across the nation.

We don't have a taxing problem.  We have a SPENDING problem. Raising the Debt Ceiling will only allow for more.

Wednesday, July 13, 2011

Negotiation for What?

Utica housing authority looks to develop Bossert site
"The Utica Urban Renewal Agency, which owns the vacant former industrial site adjacent to the North-South Arterial, voted unanimously to give the housing authority site control of the property."
"But neither city nor housing authority officials would release the exact nature of the proposed project – saying to do so would hamper the negotiation process." 
"Whatever the project is, it appears it will not be similar to other housing authority endeavors, which mostly focus on housing. The Bossert site restricts residential development." 
In fact per DEC press release, the site is to be used only for commercial or industrial purposes.

So which is it?  Commercial?  Industrial?   We are left to guess.

While the need for confidentiality in both negotiations and project details is appreciated, what is not appreciated is being left in the dark as to the range of possibilities.  That will affect what OTHER people do with THEIR properties.  Knowing the range of possibilities is the function of a Master Plan . . . but the Draft Utica Master Plan, unfortunately, does not fulfill this function.

I guess the people are expected to swallow whatever they are given. The future of the City should not be determined behind closed doors.

Monday, July 11, 2011

Another $1B for Albany -- Another Plant to Close in Buffalo

The Times Union reports that an R&D center is being proposed by Global Foundaries, Inc. for Malta (just north of Albany) as part an expansion for a SECOND chip fabrication plant.
Plans for the R&D center were part of the pitch that GlobalFoundries made to the state as it reportedly sought more than $1 billion in new public financing to build another factory.
Meanwhile the Buffalo News reports that American Axle & Manufacturing is threatening to close its last WNY plant in Cheektowaga, employing 100,  if labor costs are not reduced. The plant opened in 1999 with a lower labor-cost structure when the company employed 2,800 at two other WNY plants.  The other plants have since closed.  The company's CEO
. . . keeps pressing for more-extensive changes, such as lowering starting pay for workers to $10 an hour from the current $11.50 per hour.  . . .
Starting pay currently $11.50 and hour?  Isn't manufacturing supposed to be high paying?
American Axle has increasingly shifted its production outside the United States, to places such as Mexico. At the same time, Wheaton said, the company has put more pressure on workers at its remaining U.S. operations to accept reduced compensation.
In both stories People are being pressured to contribute to corporate bottom lines.

In the first story, the People are the taxpayers who have already given the company over a $Billion in grants and infrastructure.  In the second story the People are the workers who have already made pay concessions.

The moral to both stories is that those with the means to pressure for more will do so. . . . and in both the government has supplied the means.

In the first, the State government uses its power of taxation to take from the taxpayers and give to Global Foundries.  In the second, the Federal government's power over international trade has been perverted to allow American Axle to avoid labor and environmental laws by relocating overseas the jobs that produce products which are consumed here.

In both cases governmental power has been used to reward private interests at the expense of the average person. When the government teams up with private businesses, the average person loses.

Saturday, July 09, 2011

The GOP is Done!

Washington Post: Boehner abandons efforts to reach comprehensive debt-reduction deal

There simply is no reason to support Republicans anymore.  They were put into the House Majority to repeal Obamacare . . . The Debt Ceiling issue presents the only opportunity to get that done NOW. . . but now the GOP is caving in on even cutting spending significantly...  The GOP has outlived its usefulness as an alternative. Most likely a third party will rise, split the GOP votes, and continue the country down its current path, despite the voters' desires last November to change course.


Thursday, July 07, 2011

EDGE + Utica . . .The Worst That Could Happen!

EDGE, Utica officials meet to discuss merger
City Hall needs its head examined on this one! Why?  Let me count the ways:
  1. EDGE is controlled by private interests rather than the taxpayers.  It works through a host of subsidiary organizations making it difficult to track its activities.
  2. EDGE's performance has been unsatisfactory, causing Herkimer County to dump EDGE and Whitestown Business Park (Old O.C. Airport area) tenants to complain.
  3. EDGE is unaccountable.
  4. EDGE is incompetent.
  5. EDGE is lazy.  
  6. EDGE encourages sprawl.
  7. EDGE is dishonest.
Need I say more?

Tuesday, July 05, 2011

Departure of a Class Act . . .

There is an interesting article in the Utica Daily News about the departure of Urban and Economic Development Commissioner Soggs.
Former Utica Urban and Economic Development Commissioner Randy Soggs said that his decision to resign last week came down to the simple issue of time and balancing his private business with public service. . . .  
". . . And, I told myself when I took the position, I never wanted to be in a position where I was working for the city and couldn't give a 100 percent to the people city."
Mr. Soggs was on the receiving end of much criticism (including from this quarter) for his positions on the HSBC Building and housing next to the Arterial.
. . . but Soggs said that good people can disagree and he didn't take it personal.

"Listen, I'm not the kind of guy that doesn't get his way and then takes his ball and goes home," he said. "It's really as simple as I had one way of thinking and some other people had another. I think my way will prove to be the best way in the end, but right now that's just my opinion."
Now THAT is a class act! Don't you wish we could see more of his kind of attitude in City Hall instead of the confrontational shouting and name-calling that seems to happen all too often?
He said he sees his old job as going regional, possibly partnering with Mohawk Valley EDGE so that resources can be shared and the city can shape itself with a regional vision.
This might be where we could have had a little debate had he stayed in office.  Utica residents have "shared" their "resources" by paying into EDGE via County taxes for many years, but have seen precious little in return. EDGE should have put together a Brownfield redevelopment and marketing strategy by now, but it isn't even on their radar with most of EDGE's efforts being directed to Rome.  Utica residents have also "shared" their water supply and sewage treatment systems with the suburbs.  True, those are now in "regional" forms of ownership, but, as the population center, UTICA RESIDENTS still pay the bulk of the purchase and maintenance costs for these systems, making development in suburban areas less costly, and making suburban growth possible. In effect, the suburban parts of the region are able to finance their growth on the backs of Utica water and sewer users. Even with the 911 service, which finally will be consolidated County-Wide, Utica residents have been paying into the County system for years but receiving nothing in return.

Here I think Mr. Soggs has it backward.  Utica should not shape itself with a regional vision.  Rather, the Region needs to shape itself with a Utica vision.  Regional progress will not occur until this happens.

That said . . .
Soggs said that he would still volunteer if the mayor or other city officials asked for his advice or help in the future.

 . . . and I hope that city officials take him up on this offer. Even though I think he was wrong on several issues, Mr. Soggs has a lot of experience in the development world and a track record of success.  His insights should be brought into the decision making mix.   
In the more immediate future, however, Soggs said fiscal issues will dominate city politics and operations.

"We have to get our financial house in order," he said. "There are some very unpleasant decisions to make, but somebody's going to have to make them soon. Otherwise, the numbers are going to force them to be made."
On that last statement we can agree. Utica's finances are precarious . . . and options are now more limited with the 2% tax cap.  Expenses need to be cut, or revenue needs to be grown by expanding the tax base.  The latter cannot be done unilaterally by the City.  Rather, Utica needs to cultivate confidence in its day-to-day operations before private businesses see Utica as the obvious place to set up shop. When the latter happens, Utica will be on a more secure financial footing.  But there will be no confidence until Utica officials clean up their behavior.   

Here is where we can all learn a lesson from Mr. Soggs: Have disagreements, but don't take things personally.

Yes . . . a Class Act, indeed.